Annual Report 2013

Transcription

Annual Report 2013

JT International Berhad
Annual Report 2013
JT International Berhad (9244-D)
jti.com/Malaysia
Annual Report 2013
6th Floor, Menara Manulife
No. 6, Jalan Gelenggang
Damansara Heights
50490 Kuala Lumpur
We Reengineer
Processes With
Innovation
And Technology
We Expand
Distribution
Channels
To Harness
Growth
We Focus
Strategically
To Create
Winning
Performances
Innovation.
Growth.
Winning.
Our Formula
For Success
annual report 2013
i
Contents
annual report 2013
04
06 Board of Directors & Audit Committee
Corporate Information 07
08 Chairman’s Statement
Perutusan Pengerusi 13
16 Managing Director’s Review
Ulasan Pengarah Urusan 23
28 Profile of Directors
Management Team 34
38 Financial Highlights
Corporate Philanthropy 40
45 Kedermawanan Korporat
Financial Calendar 48
50 Statement of Corporate Governance
Statement on Risk Management and Internal Control 56
58 Audit Committee Report
Promoting Sustainability 60
62 Financial Statements
Analysis of Shareholdings 114
117 Particulars of Properties
Notice of Annual General Meeting 118
120 Statement Accompanying Notice
Our Brands
Proxy Form
1
Our goal
is
JT International Berhad (JTI Malaysia)
is a member of Japan Tobacco Inc. Group of Companies. Its headquarters is located at Menara Manulife,
Damansara Heights, Kuala Lumpur. JTI Malaysia has nine sales offices throughout the country with its
manufacturing facilities located in Selangor. It markets world-renowned cigarette brands such as Winston,
Mevius, Camel and Salem. For the fiscal year ended December 31, 2013, the Company’s revenue amounted
to RM1,273.3 million and profit before tax was RM164.3 million.
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annual report 2013
clear:
To be the most
successful and
respected tobacco
company in the world.
Enterprising
We have the courage to do things differently.
We work together to achieve our long-term goal.
This leads to new ideas resulting in fresh perspectives and innovation.
This is fuelled by our creative energy and agile minds.
Open
We believe in openness and transparency in everything we do.
Diverse cultures inspire us, knowledge informs us and integrity guides us.
This means making the right decisions, earning us the reputation as the
trusted voice of authority within our industry.
Challenging
We strive for continuous improvement. This means embedding quality into
everything we do and never accepting second best.
We set the standards which become benchmarks for the entire industry.
This enables us to challenge the status quo and be ahead of the market
– a leader not a follower.
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annual report 2013
Our Brands
5
Board of Directors
& Audit Committee
Dato’ Sri Mohd. Nadzmi bin Mohd. Salleh
Independent Non-Executive Chairman
Robert John Stanworth
Managing Director
Thean Nam Hooi
Executive Director
Igor Kosinskiy
Executive Director
Brian Conor Hannon
Non-Executive Non-Independent Director
Pierre Henri Emeric Binetter
Datuk Henry Chin Poy-Wu
Independent Non-Executive Director &
Chairman of Audit Committee
Keong Choon Keat
Member of Audit Committee
Leong Wai Hoong
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annual report 2013
Corporate
Information
Country of Incorporation
Malaysia
Registered Office
No. 6, Jalan Gelenggang
Damansara Heights
50490 Kuala Lumpur
Telephone : (03) 2094 9011
Facsimile : (03) 2095 0230
Company Secretaries
Wong Kwai Yin
(MAICSA No. 7008652)
Yong Lai Chin
(LS 0009679)
Share Registrar
Insurban Corporate Services Sdn Bhd
149, Jalan Aminuddin Baki
Taman Tun Dr Ismail
60000 Kuala Lumpur
Telephone : (03) 7729 5529
Facsimile : (03) 7728 5948
Auditors
Deloitte & Touche
Chartered Accountants
Solicitors
Raja, Darryl & Loh
Principal Banker
Deutsche Bank (Malaysia) Berhad
Stock Exchange Listing
Main Market of
Bursa Malaysia Securities Berhad
7
Chairman’s
Statement
Dato’ Sri Mohd. Nadzmi
Bin Mohd. Salleh
Chairman
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annual report 2013
To all our shareholders,
I am pleased to present you
our Company’s performance
for the financial year ended
December 31, 2013.
Financial Performance Review
For the year under review, the Group
achieved revenues of RM1,273.3
million as compared with revenues of
RM1,234.3 million for the corresponding
period last year. The marginal increase
in revenues was attributed to higher
cigarette prices and better product
mix, offset partially by a 4.4% decline
in sales volume and higher marketing
investments. Profit before tax was higher
at RM164.3 million as compared with
RM141.5 million for the corresponding
period last year, driven by the same
factors mentioned above. In addition,
there was a one-time restructuring charge
of RM12.2 million last year driven by
the impact of the closure of the Group’s
tobacco leaf and stemmery operations.
Turnover
(RM Million)
2013
1,273.3
2012
1,234.3
2011
1,197.8
300
600
900
1,200
Despite facing significant external
challenges, the Group achieved a market
share growth of 0.2 percentage point
to 19.6% from 19.4% last year (Nielsen
Retail Audit Report). Mevius, premium
brand, recorded a market share growth
of 0.1 percentage point, increasing its
market share to 4.4% compared with
4.3% in 2012. Winston, leader in the subpremium segment, grew its market share
to 10.0% from 9.7% in 2012, despite
the continued impact of illicit cigarettes
and the sales of cigarettes below
the government mandated minimum
cigarette price.
Dividends
For the financial year under review, the
Company declared and paid out a total
dividend of 43 sen per share, inclusive of
a special dividend of 21 sen per share as
part of the Company’s initiative to reward
shareholders for their support.
9
Chairman’s Statement
JTI Malaysia remains confident that
with comprehensive and innovative
business strategies, a highly motivated
workforce and strong focus on
execution and delivery, the Company
is well-positioned to meet its overall
objectives and deliver another
credible performance in 2014.
External Operating Environment – 2013
Looking Forward
2013 marked a year when the industry continued to
experience strong market competition, increased
regulations and persistently high levels of illegal cigarettes
trade in the country.
JTI Malaysia expects continued challenges in the tobacco
industry’s operating environment in 2014, particularly
in the regulatory landscape which is expected to be
increasingly restrictive. Our position has always been that
while we acknowledge appropriate and proportionate
regulation of the tobacco sector is both necessary and
right, it should be evidence-based. We hope that the
Government would ensure that any further regulations
introduced would take into account the impact it would
have on the burgeoning illegal cigarettes trade in the
country.
Following two years of no increases in the excise tax, the
Government had increased excise duties on cigarettes by
14% in October 2013, a move that triggered a mandatory
price increase of tobacco products and increasing the
price gap between the legal and illegal segments in the
market.
JTI Malaysia and the industry acknowledge the
Government’s continued prudent and pragmatic approach
to address the illegal cigarettes problem that remains a
persistent challenge to the legitimate cigarette industry.
In line with JTI’s global position on this issue, JTI Malaysia
takes a zero tolerance approach to illegal cigarette trading
and strongly supports all efforts by the Government
to enhance enforcement measures against the illegal
trade. This illegal trade results in approximately RM2
billion losses in Government revenue annually as well as
undermines the country’s economic and social agenda.
We appreciate the continued enforcement efforts taken
by the Government’s Law Enforcement Agencies (LEAs)
in 2013, which resulted in many successful raids and
seizures of illegal cigarettes, including apprehension
and conviction of suspected illegal traders. The effort
to address illegal cigarette trading requires a concerted
cooperative effort between the legitimate industry and
Government. Together with other industry players, JTI
Malaysia will continue to cooperate with the Government,
particularly the relevant LEAs to combat this issue.
10
The illegal cigarettes trade will undoubtedly be a
persistent and significant threat to JTI Malaysia and the
industry. JTI Malaysia will continue to advocate that the
right path to address this issue in the medium to longer
term is by maintaining the two-pronged approach of a
prudent excise policy and stronger enforcement. JTI
Malaysia also hopes that the Government will take the
opportunity to explore further strategies that involve
Government-industry cooperation on this issue of
common concern.
JTI Malaysia remains committed to strengthening its
position within the retail trade and will continue to invest
resources and build equity behind its Global Flagship
Brands – Mevius and Winston. Cost optimisation and,
where appropriate, cost reduction will continue to be a
focal point in driving increased operational efficiencies.
The Company will also emphasize on managing
the existing talent pool and maintaining continuous
investment in human capital, as employees are as
important as the Company’s brands.
annual report 2013
JTI Malaysia remains confident that with
comprehensive and innovative business strategies,
a highly motivated workforce and strong focus
on execution and delivery, the Company is wellpositioned to meet its overall objectives and deliver
another credible performance in 2014.
Corporate Responsibility
Corporate governance and compliance with laws and
regulations are amongst the most valuable principles
held by JTI Malaysia. They form the basis of the JTI
Code of Conduct, which represents the Company’s
commitment to uphold the principles of integrity and
transparency in the way it conducts its business.
JTI Malaysia firmly believes in implementing
responsible corporate practices and upholding the
agenda of sustainability, which are fundamental
to sustainable business growth from a strategic
perspective. The Company is fully committed towards
ensuring its various Corporate Philanthropy and
Corporate Social Responsibility initiatives impact
positively upon the communities it serves and the
environment it operates in.
As part of JTI Malaysia’s effort to improve and
enhance the lifestyle of the underprivileged, various
programmes have been realized with the active
participation of its employees. The Company has also
The Board of Directors at the 40th Annual General Meeting
been instrumental in supporting and nurturing the
culture and arts industry in Malaysia via continued
financial assistance that has benefitted many local
budding talents while providing the Malaysian
community the opportunity to experience local and
international theatre performances. The dedication
and commitment shown by employees in supporting
these causes is highly commendable.
Board of Directors
On behalf of the Board, I am pleased to welcome Mr.
Brian Conor Hannon who joined the Board as NonExecutive Director on May 21, 2013. Mr. Hannon is
the Chief Financial Officer and Vice President of JT
International Asia Pacific, based in Hong Kong. He
replaces Mr. Nobuaki Hayashi who resigned from the
Board as Non-Executive Director on May 21, 2013.
I would also like to welcome Mr. Igor Kosinskiy who
was appointed to the Board as Executive Director
on May 21, 2013. Mr. Kosinskiy takes on the role of
Asia Manufacturing Vice President for the Company’s
factory in Shah Alam. He replaces Mr. Hirakazu
Otomo who resigned from the Board as Executive
Director.
My heartfelt thanks to Mr. Hayashi and Mr. Otomo for
their contribution and services to the Company and I
wish them the very best in their future endeavours.
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Chairman’s Statement
A Word of Appreciation
In this highly challenging operating environment, JTI Malaysia rose to the challenges
and delivered a commendable performance in 2013. I would like to take this
opportunity to thank the Board of Directors, management and employees for their
invaluable contribution and cooperation. Their unwavering support has allowed the
Company to build on its position as a significant player in the industry.
Finally, I would like to thank our shareholders, customers, distributors, business
partners and Government stakeholders for their continued support and kind
cooperation.
DATO’ SRI MOHD. NADZMI BIN MOHD. SALLEH
Chairman
Mevius – Malaysia’s Leading Charcoal Filter Brand
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annual report 2013
Perutusan Pengerusi
Para pemegang saham yang
dihormati, dengan sukacitanya
saya melaporkan bahawa pada
tahun 2013, JT International
Berhad (JTI Malaysia) telah
mempamerkan prestasi yang
membanggakan meskipun
berhadapan pelbagai cabaran
dalam persekitaran operasinya.
Tinjauan Prestasi Kewangan
Tinjauan bagi tahun 2013 menunjukkan
Syarikat telah memperolehi pendapatan
berjumlah RM1,273.3 juta berbanding
RM1,234.3 juta bagi tempoh yang sama pada
tahun lalu. Peningkatan yang kecil dalam
pendapatan ini berpunca daripada harga
rokok yang lebih tinggi, penawaran produk
yang lebih baik yang mampu mengimbangi
sebahagian daripada 4.4% penurunan dalam
volum jualan dan pelaburan pemasaran yang
lebih tinggi. Keuntungan sebelum cukai
sebanyak RM164.3 juta adalah lebih tinggi
berbanding RM141.5 juta yang diperolehi
pada tempoh yang sama pada tahun lepas
didorong oleh faktor-faktor yang sama seperti
yang telah dinyatakan diatas. Selain itu,
terdapat caj sekali sahaja untuk penstrukturan
semula berjumlah RM12.2 juta bagi tempoh
yang sama tahun lepas yang terhasil kesan
daripada penutupan operasi daun (stemmery
operations).
Perolehan Pendapatan
(RM Juta)
2013
1,273.3
2012
1,234.3
2011
1,197.8
300
600
900
1,200
Sungguhpun berhadapan dengan cabaran
besar dari luar, Kumpulan telah mencapai
pertumbuhan dalam penguasaan pasaran
sebanyak 0.2 titik peratusan kepada 19.6%
daripada 19.4% pada tempoh yang sama
tahun lepas. (Laporan Audit Runcit Nielsen).
Produk premium jenama Mevius telah
mencatatkan kenaikan 0.1 titik peratusan
dalam penguasaan pasaran, justeru,
meningkatkan penguasaan pasarannya kepada
4.4% berbanding 4.3% pada 2012. Winston
yang merupakan peneraju dalam segmen nilai,
telah melebarkan penguasaan pasarannya
kepada 10.0% daripada 9.7% pada 2012
meskipun masih wujud kesan berterusan
daripada rokok tidak sah serta penjualan rokok
di bawah mandat harga minimum kerajaan.
Dividen
Bagi tahun kewangan semasa, Syarikat
telah mengisytihar dan membayar dividen
berjumlah 43 sen sesaham, termasuk dividen
khas bernilai 21 sen sesaham sebagai
sebahagian daripada inisiatif Syarikat untuk
memberi ganjaran kepada para pemegang
saham di atas sokongan mereka.
13
Perutusan Pengerusi
Persekitaran Operasi Luaran – 2013
Tinjauan Masa Depan
2013 merupakan tahun di mana industri terus berhadapan
dengan persaingan pasaran yang sengit, pertambahan
di dalam peraturan kawalan tembakau dan peningkatan
peratusan perdagangan rokok tidak sah.
JTI Malaysia menjangkakan persekitaran operasi industri
tembakau akan terus berhadapan dengan pelbagai cabaran
pada tahun 2014, terutamanya dari landskap peraturan
kawalan tembakau yang dijangka akan membawa lebih
banyak kekangan. Pihak Syarikat sentiasa percaya bahawa
pengenalan peraturan kawalan tembakau yang berpatutan
serta berperingkat adalah penting dan diperlukan, sejajar
dengan kerberkesanannya berasaskan bukti yang kukuh.
Syarikat juga berharap agar Kerajaan dapat memastikan
bahawa sebarang peraturan yang bakal diperkenalkan akan
mengambil kira kesannya terhadap perdagangan rokok
tidak sah yang sedang berkembang luas di dalam negara.
Berikutan tiada kenaikan cukai eksais selama dua tahun
berturut-turut, Kerajaan telah menaikkan cukai eksais terhadap
rokok sebanyak 14% pada Oktober 2013, yang secara
langsung telah mendorong kepada kenaikan harga mandatori
bagi produk rokok serta meningkatkan lagi jurang harga antara
segmen rokok sah dan tidak sah di dalam pasaran.
JTI Malaysia dan pihak industri menghargai pendekatan
Kerajaan yang penuh berhemat dan pragmatik dalam
menangani masalah rokok tidak sah yang masih menjadi
cabaran berterusan kepada industri rokok sah.
Sejajar dengan kedudukan global JTI berhubung isu ini, JTI
Malaysia mengambil pendekatan toleransi sifar terhadap
perdagangan rokok tidak sah dan memberi sokongan
padu kepada semua usaha yang dilaksanakan oleh
Kerajaan bagi memperhebatkan langkah penguatkuasaan
terhadap perdagangan tidak sah. Aktiviti perdagangan
tidak sah ini telah mengakibatkan Kerajaan kerugian
kira-kira RM2 bilion setahun dalam bentuk kutipan hasil di
samping mengganggu-gugat agenda ekonomi dan sosial
negara. Kami menghargai usaha-usaha penguatkuasaan
berterusan yang diambil oleh agensi penguatkuasaan
undang-undang Kerajaan pada 2013 yang telah
membuahkan banyak kejayaan dari segi serbuan dan
rampasan rokok tidak sah, termasuk penangkapan dan
pendakwaan terhadap para pedagang yang disyaki terlibat
dalam aktiviti perdagangan tidak sah. Usaha menangani
perdagangan rokok tidak sah memerlukan kerjasama
dan usaha bersepadu di antara industri yang sah dan
pihak Kerajaan. Bersama dengan para penggerak industri
yang lain, JTI Malaysia akan terus bekerjasama dengan
Kerajaan, terutamanya dengan agensi penguatkuasaan
undang-undang yang berkaitan bagi menangani isu ini.
Perdagangan rokok tidak sah pastinya akan terus menjadi
ancaman yang besar dan berterusan kepada JTI Malaysia
serta industri. JTI Malaysia akan terus mempertahankan
bahawa kaedah terbaik untuk menangani isu ini bagi
jangka masa sederhana ke jangka masa panjang adalah
dengan mengekalkan pendekatan secara serentak
melalui dasar eksais yang lebih sistematik serta
pemerkasaan bidang penguatkuasaan. JTI Malaysia
juga berharap Kerajaan akan mengambil peluang untuk
meneroka strategi seterusnya yang melibatkan kerjasama
antara Kerajaan dan industri tentang isu yang menjadi
kemusykilan bersama.
JTI Malaysia terus beriltizam untuk mengukuhkan
kedudukannya dalam rangkaian perdagangan runcit dan
akan terus menjuruskan pelaburan serta membangunkan
ekuiti Global Flagship Brand (GFBs) – Mevius, Winston
dan Camel. Pengoptimuman kos dan pengurangan
berdasarkan kesesuaian akan terus menjadi titik tumpuan
dalam memacu peningkatan kecekapan operasi. Syarikat
juga akan terus memberi penekanan terhadap pengurusan
para pekerja yang sedia ada di samping mengekalkan
pelaburan yang berterusan dalam modal insan,
memandangkan para pekerja adalah sama penting dengan
jenama Syarikat.
JTI Malaysia terus yakin bahawa dengan berbekalkan
strategi perniagaan yang menyeluruh dan inovatif, tenaga
kerja yang bermotivasi tinggi serta tumpuan yang jitu
terhadap pelaksanaan dan penghasilan, Syarikat berada
pada kedudukan yang tepat untuk memenuhi matlamat
keseluruhannya dan mampu mencapai prestasi yang lebih
membanggakan pada 2014.
Kilang bertaraf dunia di Shah Alam, Selangor
14
annual report 2013
Tanggungjawab Korporat
Pentadbiran korporat serta kepatuhan peraturan dan
undang-undang adalah di antara prinsip paling penting
yang dipegang oleh JTI Malaysia. Ia adalah asas kepada
Kod Tatasusila JTI yang menzahirkan komitmen Syarikat
untuk mendukung prinsip kewibawaan dan ketelusan
dalam mengendalikan perniagaannya.
JTI Malaysia percaya bahawa perlaksanaan amalan korporat
yang bertanggungjawab dan usaha berterusan untuk
mendukung agenda kemampanan adalah asas kepada
pertumbuhan perniagaan yang berterusan dari sudut
pandangan strategik. Syarikat beriltizam sepenuhnya ke
arah memastikan pelbagai inisiatif Kedermawanan Korporat
dan Tanggungjawab Sosial Korporat memberi impak yang
positif terhadap masyarakat di mana ia beroperasi.
Sebagai sebahagian daripada usaha JTI Malaysia untuk
memperbaiki dan meningkatkan gaya hidup golongan yang
kurang bernasib baik, pelbagai program telah direalisasikan
dengan penglibatan aktif dari kalangan pekerja. Syarikat
juga telah memainkan peranan penting dalam memupuk
dan menghidupkan semula industri seni dan kebudayaan
di Malaysia melalui sokongan kewangan yang berterusan
untuk dimanfaatkan oleh kalangan bakat-bakat tempatan
yang baru muncul disamping memberi peluang kepada
masyarakat Malaysia menikmati persembahan teater
tempatan dan antarabangsa. Dedikasi serta komitmen
yang ditunjukkan oleh para pekerja dalam menyokong
usaha bakti ini harus dipuji.
Lembaga Pengarah
Bagi pihak Lembaga Pengarah, saya dengan sukacitanya
mengalu-alukan kehadiran Encik Brian Conor Hannon
yang menyertai Lembaga Pengarah sebagai Pengarah
Bukan Eksekutif pada 21 Mei, 2013. Encik Hannon
merupakan Ketua Pegawai Kewangan dan Naib Presiden
JT International Asia Pasifik, yang berpusat di Hong Kong.
Beliau telah dilantik bagi menggantikan Encik Nobuaki
Hayashi yang telah meletak jawatan dari Lembaga Pengarah
sebagai Pengarah Bukan Eksekutif pada 21 Mei, 2013.
Saya juga ingin mengalu-alukan kehadiran Encik Igor
Kosinskiy yang telah dilantik menganggotai Lembaga
Pengarah sebagai Pengarah Eksekutif pada 21 Mei,
2013. Encik Kosinskiy memegang jawatan Naib Presiden
Perkilangan Asia untuk kilang Syarikat di Shah Alam.
Beliau menggantikan Encik Hirakazu Otomo yang telah
meletak jawatan dari Lembaga Pengarah sebagai
Pengarah Eksekutif.
Sukarelawan JTI Malaysia dalam Misi Kemanusiaan
Saya ingin merakamkan ucapan terima kasih kepada
Encik Hayashi dan Encik Otomo di atas sumbangan serta
khidmat mereka kepada Syarikat dan berharap mereka
akan terus beroleh kejayaan dalam segala usaha mereka di
masa hadapan.
Sekalung Penghargaan
Dalam persekitaran operasi yang amat mencabar ini,
JTI Malaysia telah bangkit menghadapi cabaran dan
menghasilkan prestasi yang harus mendapat pujian
pada tahun 2013. Saya ingin mengambil kesempatan
ini untuk merakamkan ucapan terima kasih kepada
Lembaga Pengarah, pihak pengurusan dan kakitangan
di atas sumbangan serta kerjasama mereka yang tidak
ternilai. Sokongan mereka yang tidak pernah goyah telah
membolehkan Syarikat memantapkan kedudukannya
sebagai penggerak penting di dalam industri.
Akhir kata, saya ingin berterima kasih kepada para
pemegang saham, pelanggan, pengedar, rakan niaga serta
pihak berkepentingan dalam Kerajaan di atas sokongan
dan kerjasama mereka yang berterusan.
Pengerusi
15
Managing
Director’s
Review
To all our shareholders,
I am pleased to report that
(JTI Malaysia) delivered a
commendable performance in
2013, despite persistent and
continuous challenges faced
in the operating environment.
Strengthening Jti Malaysia’s
Market Position
JTI Malaysia remains focused on
strengthening its market position as the
second largest tobacco manufacturer
in Malaysia. Despite numerous external
challenges, core strategies and initiatives
continue to be implemented and effectively
leveraged to further strengthen the
Company’s business base in positioning itself
for future growth.
I am pleased to report that the Company
saw positive improvements in various
key functional areas of the business. The
Company reported an increase in its profit
and market share in 2013 compared to 2012
despite the external challenges faced and
strong market competition.
16
Growing Our Business Base
•
Brand Portfolio Optimisation
JTI Malaysia continued its investment
and focused resources to drive growth
and further build the Company’s Global
Flagship Brands (GFBs) namely Winston,
Mevius and Camel.
In 2013, the Company made significant
efforts to increase brand equity and
awareness across the Company’s
portfolio. Continuous improvements
in product innovation, packaging
enhancement and improved distribution
and presence of JTI Malaysia’s brand in
the retail universe enabled the company
to maintain its share in an exceptionally
challenging market, where the growing
illicit market and price increases
impacted the legal market volumes.
GFBs Share of Market
(%)
2013
14.9
2012
14.5
2011
14.7
4
8
12
16
annual report 2013
Managing Director
17
Managing Director’s Review
•
•
•
•
Mevius – Malaysia’s Leading Charcoal Filter Brand **
Mild Seven changed its name to Mevius in May 2013
and has continued to strengthen its position within the
Premium segment. Mevius recorded a year-on-year
increase of 0.1 percentage point market share in 2013
driven by the name change to Mevius, brand equity
building programmes which focused on its innovative and
modern image that reinforces its position as the No.1
Charcoal Filter Brand.
Winston – Malaysia’s Leading Lower Tar and Subpremium Brand *
Winston maintained its leadership in the Lower Tar and
Sub-premium segment despite challenges from illicit trade
and registered a year-on-year increase of 0.3 percentage
point market share 2013*. The success of this is attributed
to the introduction of the innovative flip top Limited
Edition tins for Winston Full Flavor and Lights along with
the distribution drive and brand equity building program
for Excel Mint Capsule. The combination of innovative
packaging and brand equity building programmes has
reinforced the brand’s position in the market.
Salem – Malaysia’s Leading Menthol Brand *
Malaysia’s leading Menthol brand, Salem, affirmed its
position as the Menthol expert in 2013 and went through
a successful pack rejuvenation across the entire Salem
range (Menthol, Elite and Nova) in December 2013.
Delivering Best-in-Class Manufacturing
Capabilities
JTI Malaysia’s Shah Alam factory continues to deliver quality
products and services of international standards to meet the
needs of the JTI Asian markets. In 2013, the production volume
of cigarettes increased by 22.4% over previous year due to higher
demand from export markets. Production of processed tobacco
and cut filler for exports grew 4.4% compared to previous year.
The factory continued to enhance four areas namely - Safety,
Quality, Service and Cost.
•
Safety JTI Malaysia’s work safety programme intensified the
awareness and brought home many safe work methods
and ethics. The factory, by end of December 2013, had
operated 2,174 days without Lost Time Injuries. This
remarkable achievement is attributed to the hard work and
commitment of all employees.
•
Quality
Tireless efforts by all to attain set targets which require
continuous improvement in the way quality is managed.
•
Service
Every year the factory has maintained its excellent
service delivery to the markets. Good planning system
and frequent discussions with the markets are essential
in matching factory production output to meet the needs
of the markets. The Company has in place a world class
planning system and trained the relevant personnel
to fully utilize the tools in helping the high standard of
customer service.
•
Cost
The company continuously works on projects to optimize
manufacturing costs without sacrificing quality. In 2013
the Company continued to invest in people and machines
and enforced the back to basic training programs to
bring up to speed all new employees and reinforced the
message of efficiency to improve volume output.
Camel - The Originator Of American Blend Cigarettes
JTI Malaysia focused its resources on maintaining
distribution for Camel Regular and Camel Filter. Activities
were centered on building focused distribution and driving
price awareness of the brand’s unique position in the subpremium segment in Malaysia.
Source – global market research agencies
* Nielsen Retail Audit - 2013
** Euromonitor International, 2011
Winston – Malaysia’s Leading Sub-premium Brand
18
annual report 2013
Improving Environment, Health and Safety Practises
JTI Malaysia is committed to the continuous improvement of Environment, Health and Safety (EHS)
throughout the organization.
Various safety measures, programme, activities and communications are continuously implemented or
disseminated to further enhance a safe working environment. Employees received training from internal
and external experts to acquire new knowledge on fire safety, first aid, CPR, Risk Assessment, Chemical
for storage, handling and labelling, Use of LOTO (Lock Out Tag Out), Waste Management, Noise and Dust,
Machine Guarding and other relevant topics which are necessary for EHS practices at the workplace. They
were also educated on applying correct ergonomic positions when carrying out their daily tasks, particularly
those in the manufacturing facility. Furthermore, back support belts have been provided for Make Pack Boxer
Station employee to reduce and eliminate back pain during the daily activity. In addition, safety signs were
prominently displayed to further enhance the workers’ awareness on safe working practices.
Improvements were also seen in areas of productivity, cost efficiencies and product quality. JTI Malaysia
continued to implement projects on efficiency of energy consumption and conservation in various sections of
the factory. A strong focus on the reduction of energy usage, and increasing the Recycling Rate of waste to
98%; represent best in class performance.
Continuing to Leverage Human Capital
In 2013 JTI Malaysia continued its aggressive investment in developing the Company’s most important asset
– its employees. Strong emphasis was continuously placed on ensuring the Company continues to prepare
the current workforce to ensure they succeed in their current roles, and rise to the challenge of growing
into the future leaders, not only of JTI Malaysia but across the JT Group of companies. The Company
constantly reviews and updates its approach to training and development programmes to ensure these
programmes remain relevant for the current environment while ensuring we provide opportunities to high
potential employees to practise and hone their leadership skills through a mix of classroom training and real
world case studies. This comprehensive approach to Talent Management allows JTI Malaysia to assess and
leverage employees’ strengths more accurately and address their development gaps, which enhances their
career opportunities while driving the Company’s business performance.
Emphasising open and transparent communication throughout the entire organisation
19
Embedding passion for excellence in execution
As a result of the action plans developed following the
Employee Engagement Survey, which was conducted
across the global JTI organization in May 2012, the
Management championed various initiatives designed to:
•
•
•
Drive open and transparent communication
throughout the entire organization;
Leverage our workforces’ diverse skills and
experience through more cross functional
involvement in all that we do;
Embed the “Play to Win” mentality throughout
across the whole organization.
Like in prior years, JTI Malaysia continued to place critical
emphasis on its ability to attract and retain talent. In 2013,
further efforts were made to enhance its Compensation
and Benefits platform through an effective balance
of competitive base and incentive pay, benefits and
perquisites to ensure the Company’s workforce remains
motivated and engaged, resulting in a more productive
and ultimately a more competitive Company.
20
JTI Malaysia is constantly striving to create a workplace
that combines passion for professional excellence, as well
as an environment that encourages passion for excellence
with the opportunity for both professional and personal
development and growth.
Complying with Corporate and Legal
Compliance
Throughout 2013, the Compliance function continued
to focus on improving the efficiency and usability of its
Compliance programmes and initiatives in JTI Malaysia.
This included the revision of a number of Compliancerelated Corporate policies and the associated online
applications which support different approval and
certification processes. The Know Your Customer
programme online application was upgraded to reflect
revisions made to the Policy, and the Gifts, Hospitality
& Entertainment (GHE) online register was enhanced to
ensure increased visibility and transparency for all GHE
requests in line with revisions to the JTI GHE policy.
annual report 2013
JTI Malaysia is committed to ensuring that its employees
adhere to and enforce the principles set out in the JTI
Code of Conduct. All reported breaches of the Code are
taken very seriously by the JTI Malaysia management
team and corrective actions are taken as necessary in
proportion to the misconduct. In 2013, over 90% of JTI
Malaysia employees completed online or face-to-face
training on the 2011 Code of Conduct, and ongoing
training and communication initiatives around Compliance
activities remain key elements to the success of JTI’s
business in Malaysia.
Although the legal and regulatory environment has
become more stringent over the past years especially
with the introduction of the latest amendment to the
Control of Tobacco Product Regulations 2004 (“CTPR”) in
June 2013, JTI Malaysia Legal has consistently ensured
that the Company’s business activities remain compliant
with the existing laws and regulations and continually
provide legal training to its staff to create awareness of
the development of local laws and regulations. In 2013,
the Legal Department has implemented the following key
initiatives to the organisation:
•
•
Provided legal input and insights as well as views on
the latest amendment to the CTPR to the business
in order for the business to be fully compliant with
the latest amendments; and
Provided various legal training from the regulatory,
competition, marketing and contractual aspects.
Combating Illegal Cigarettes Trade
Based on the results of the Illicit Cigarettes Study (ICS)
commissioned by the Confederation of Malaysian Tobacco
Manufacturers (CMTM), the incidence of illegal cigarettes
in the country remains high for the full year 2013 at
35.7%, an increase of 1.2% from the previous year. This
incidence reflects an estimated 8 billion sticks of illegal
cigarettes are sold per annum in the country which is
equivalent to one out of every three packs of cigarettes
sold in the country being illegal.
In 2013, the Government announced an excise duty
increase for cigarettes from RM0.22 per stick to RM0.25
per stick, a 14% increase in duties after two years (2011
and 2012) of no increase. The excise increase and the
subsequent price adjustment have added pressure on
legal volumes, especially with continued inflationary
pressures and weakening consumer sentiment in the
Malaysian market.
Unfortunately, the price of illegal cigarettes continues
to remain constant at between RM3.00 and RM3.50
per pack of 20 sticks. The affordable pricing of such
contraband continues to attract consumers to switch
to buying illegal cigarettes. Due to the great demand,
retailers tend to sell such illegal products in a discreet
manner, despite knowing the penalties of law of being
involved in illegal cigarettes trade.
The Government’s Law Enforcement Agencies (LEAs)
such as Royal Malaysian Customs (RMC), Ministry
of Domestic Trade, Cooperatives and Consumerism
(MDTCC), Malaysian Maritime Enforcement Agency
(MMEA), Anti-Smuggling Unit (ASU) and Royal Malaysian
Police (RMP) continue to intensify enforcement activities
at both border and retail levels nationwide.
JTI Malaysia takes a zero-tolerance approach to illegal
cigarettes and together with the members of the CMTM
work with LEAs in providing information and support
to develop strategies to address the influx of illegal
cigarettes in the country. By forming smart partnerships,
we aim to understand and address the growing illegal
cigarettes trade issues. The industry continues to share
with all key LEAs the ICS results in order to understand
the incidence and trend of illegal cigarette trade in
Malaysia. This assists the LEAs to strategise their
enforcement programmes to combat illegal cigarettes
trade in the country.
The Government suffers loses of approximately RM2
billion in revenue per annum with tax loss per day is
estimated at RM7 million. Based on the report Asia 11:
Illicit Tobacco Indicator 2012 Report by ITIC & Oxford
Economics published in September 2013, Malaysia
ranked the 3rd highest amongst 11 Asian markets in illegal
tobacco trade, behind Brunei and Hong Kong.
JTI takes a zero tolerance approach to illegal cigarettes
21
Maintaining high standards of manufacturing with commitment to environment, health and safety policies
Together with the other players in the tobacco industry
(CMTM), JTI Malaysia commenced educational and
awareness programmes involving MDTCC officers
nationwide to address the alarming issue of local looka-like illegal cigarettes brands that violated the Trade
Description Act and Price Control and Anti-Profiteering Act
2011 which were flooding the Malaysian market.
As part of the effort to create greater awareness amongst
key stakeholders including members of the media, the
industry conducted a briefing on the topic of AIT, focusing
on the issues and impact of illegal cigarettes trade to the
society, country and economy.
Widespread education initiatives amongst retailers
nationwide also continue where JTI Malaysia and the
industry shared updates on regulations and penalties
pertaining to AIT through various trade tools such as
leaflets and notices. The Industry also continues to assist
the LEAs to utilise the media to highlight the raids and
court prosecutions to raise greater awareness amongst
retailers and all involving in illegal cigarettes trade.
Looking Ahead
JTI Malaysia expects 2014 to be an exceptionally
challenging year for the tobacco industry. Notwithstanding
this, the Company is confident that by staying focused
behind its core business strategies, it will deliver a strong
performance in the coming years and further strengthen
its position within Malaysia’s tobacco industry.
Managing Director
Salem – Malaysia’s Leading Menthol Brand
22
annual report 2013
Ulasan Pengarah Urusan
Para pemegang saham sekalian,
saya dengan sukacitanya
melaporkan bahawa pada
tahun 2013, JT International
Berhad (JTI Malaysia) telah
menghasilkan prestasi yang
menbanggakan, sungguhpun
persekitaran operasi berterusan
berhadapan dengan cabaran.
Mengukuhkan Kedudukan Pasaran Jti
Malaysia
Pada tahun 2013, JTI Malaysia telah mengekalkan
tumpuan untuk memperkukuhkan kedudukan
pasarannya sebagai syarikat pengeluar tembakau
kedua terbesar di Malaysia. Walaupun terpaksa
mengharungi pelbagai cabaran, namun strategi teras
dan inisiatif terus dilaksanakan dan dimanfaatkan
secara efektif untuk memperteguhkan lagi asas
perniagaan pihak Syarikat agar dapat mengukuhkan
kedudukannya demi pertumbuhan masa hadapan.
Saya gembira melaporkan bahawa Syarikat terus
mencatatkan peningkatan positif dalam pelbagai
fungsi utama perniagaan. Syarikat melaporkan
peningkatan dalam keuntungan dan penguasaan
pasaran pada tahun 2013 berbanding pada tahun
2012 biarpun berhadapan dengan cabaran luar dan
persaingan sengit dalam pasaran.
Pegangan Pasaran GFBs
(%)
2013
Pengoptimuman Portfolio Jenama
JTI Malaysia mengekalkan pelaburannya dan
menumpukan sumber-sumber demi memacu
pertumbuhan dan seterusnya membina Global
Flagship Brands (GFBs) milik pihak Syarikat –
Winston, Mevius serta Camel.
2012
14.7
2011
14.7
4
8
12
16
Pada tahun 2013, pihak Syarikat telah berusaha gigih
untuk memantapkan ekuiti dan kesedaran jenama
merentasi seluruh portfolio Syarikat. Meskipun
berhadapan dengan cabaran daripada pertumbuhan
pasaran rokok tidak sah dan kenaikan harga,
namun jenama JTI Malaysia telah meningkatkan
volum menerusi inovasi produk, kenaikan taraf
pembungkusan, serta peneguhan daripada segi
pengedaran dan kewujudannnya di pasaran.
•
Mevius – Jenama Penapis Arang Terunggul di
Malaysia**
Mild Seven telah memulakan langkah penjenamaan
semula menjadi Mevius pada bulan Mei 2013
dengan menyatukan reka bentuk global di mana
ia telah memperteguhkan lagi kedudukannya
dalam segmen Premium. Mevius mencatatkan
peningkatan dalam penguasaan pasaran tahunke-tahun sebanyak 0.1 titik peratusan pada tahun
2013, yang diraih menerusi reka bentuk semula
pembungkusan dan program pembangunan ekuiti
yang tertumpu kepada imej moden yang inovatif
yang meningkatkan kedudukannya sebagai Jenama
Penapis Arang No.1.
•
Mengembangkan Asas Perniagaan
•
14.9
Winston – Jenama Bertar Rendah dan
Subpremium di Malaysia*
Winston mengekalkan kedudukannya sebagai
peneraju dalam segmen Bertar Rendah dan
Subpremium walaupun menghadapi cabaran
berterusan daripada perdagangan tidak sah.
Jenama ini telah mencatatkan peningkatan dalam
penguasaan pasaran tahun-ke-tahun sebanyak 0.3
titik peratusan pada 2013*.
Kejayaan ini berpunca daripada pengenalan tin
Edisi Terhad dengan penutup berselak (flip top)
untuk Winston Full Flavor dan Lights disertai usaha
memacu pengedaran dan program membina ekuiti
jenama untuk Excel Mint Capsule. Hasil gabungan
pembungkusan yang inovatif serta program
pembangunan ekuiti jenama telah mengukuhkan
lagi kedudukan jenama ini di pasaran.
23
•
Salem – Jenama Menthol Terunggul di Malaysia*
Salem yang merupakan peneraju bagi jenama
Menthol di Malaysia, mengekalkan kedudukannya
sebagai pakar Menthol pada tahun 2013 dan telah
berjaya melalui proses rejuvenasi pek bagi seluruh
rangkaian Salem (Menthol, Elite dan Nova) pada
bulan Disember 2013.
•
Camel – Perintis Rokok Adunan Amerika
JTI Malaysia telah memberi tumpuan kepada usaha
mengekalkan pengedaran Camel Regular dan Camel
Filter. Aktiviti berpusat ke arah membangunkan
tumpuan pengedaran dan mendorong kesedaran
harga terhadap kedudukan unik jenama ini dalam
segmen subpremium di Malaysia.
Sumber – Agensi-agensi penyelidikan pasaran global
* Audit Runcit Nielsen - 2013
** Euromonitor International - 2011
Menghasilkan Keupayaan Pembuatan yang
Terbaik dalam Kelasnya
Kilang JTI Malaysia di Shah Alam terus menghasilkan
produk berkualiti serta perkhidmatan bertaraf
antarabangsa bagi memenuhi keperluan pasaran JTI di
Asia. Pada tahun 2013, volum pengeluaran rokok telah
meningkat sebanyak 22.4% berbanding tahun sebelumnya
berikutan permintaan yang lebih tinggi daripada pasaran
eksport. Pengeluaran tembakau yang telah diproses dan
cut filler untuk dieksport telah meningkat 4.4% berbanding
tahun sebelumnya.
Kilang ini terus memantapkan lagi empat bidang iaitu –
Keselamatan, Kualiti, Perkhidmatan dan Kos.
24
•
Keselamatan
Program keselamatan kerja JTI Malaysia telah
memperhebatkan kesedaran serta menekankan
banyak kaedah serta etika kerja yang selamat.
Menjelang penghujung bulan Disember 2013, pihak
kilang telah beroperasi selama 2,174 hari tanpa
sebarang kecederaan. Pencapaian luar biasa ini
berpunca daripada usaha gigih serta komitmen
kesemua kakitangan.
•
Kualiti
Semua pihak berusaha gigih demi mencapai sasaran
yang telah ditetapkan di mana ia memerlukan
penambahbaikan berterusan dalam cara pengurusan
kualiti.
•
Perkhidmatan
Setiap tahun kilang ini telah mengekalkan
perkhidmatan penghantaran yang cemerlang
ke pasaran. Sistem perancangan yang jitu dan
perbincangan yang kerap dengan pasaran adalah
penting dalam menyesuaikan output pengeluaran
kilang untuk memenuhi keperluan pasaran. Pihak
Syarikat mempunyai sistem perancangan bertaraf
dunia dan telah melatih kakitangan yang berkaitan
untuk menggunakan sepenuhnya perkakas bagi
membantu mencapai mutu perkhidmatan pelanggan
yang tinggi.
•
Kos
Syarikat terus-menerus mengusahakan projek - projek
yang berupaya mengoptimumkan kos pembuatan
tanpa mengabaikan kualiti. Pada tahun 2013, Syarikat
terus melabur dalam latihan pekerja dan mesin, di
samping menguatkuasakan semula program latihan
asas untuk memahirkan semua kakitangan baharu
serta mengukuhkan mesej tentang kecekapan bagi
meningkatkan jumlah pengeluaran.
Meningkatkan Amalan Persekitaran,
Kesihatan dan Keselamatan
JTI Malaysia beriltizam untuk terus meningkatkan
Persekitaran, Kesihatan dan Keselamatan (EHS) di seluruh
organisasi.
Pelbagai langkah keselamatan, program, aktiviti dan
komunikasi terus dilaksanakan atau dihebahkan untuk
terus meningkatkan persekitaran kerja yang selamat.
Para kakitangan mendapat latihan daripada pakar-pakar
dalaman dan luar untuk memperoleh pengetahuan
baharu mengenai keselamatan ketika berlaku kebakaran,
pertolongan cemas, CPR, Penilaian Risiko, Bahan Kimia
untuk Penyimpanan, Pengendalian dan Pelabelan,
Penggunaan LOTO (Kunci Keluar, Tag Keluar), Pengurusan
Sisa, Hingar dan Habuk, Adang Mesin serta topik-topik
berkaitan yang lain yang perlu untuk amalan EHS di
tempat kerja. Mereka turut diajar mengaplikasi kedudukan
ergonomik yang betul sewaktu menjalankan tugas harian,
terutamanya kakitangan di bahagian kilang pembuatan.
Malah, tali pinggang penyokong belakang turut disediakan
untuk kakitangan di Make Pack Boxer Station bagi
mengurang dan menghilangkan sakit belakang sewaktu
melaksanakan aktiviti harian. Di samping itu, tandatanda keselamatan juga dipaparkan dengan jelas untuk
meningkatkan lagi kesedaran pekerja mengenai amalan
kerja yang selamat.
annual report 2013
Penambahbaikan juga dapat dilihat dalam bidang
produktiviti, kecekapan kos dan integriti produk. JTI
Malaysia terus melaksanakan projek - projek berkaitan
kecekapan penggunaan dan penjimatan tenaga di
beberapa bahagian kilang. Tumpuan terhadap pengurangan
tenaga dan sisa menyaksikan Syarikat meningkatkan
kadar kitar semula sisa sehingga 98%, yang mewakili
pencapaian terbaik dalam kelasnya.
jurang dalam perkembangan mereka, agar dapat
meningkatkan peluang kerjaya mereka di samping memacu
prestasi perniagaan Syarikat.
Hasil daripada pelan tindakan yang dirangka berikutan Kajian
Penglibatan Pekerja yang dijalankan di seluruh organisasi JTI
di peringkat global pada Mei 2012, pihak Pengurusan secara
agresifnya mendukung pelbagai inisiatif untuk:
•
Usaha Berterusan Memanfaatkan Modal
Insan
Pada 2013, JTI Malaysia meneruskan kecenderungannya
melabur dalam pembangunan aset yang paling penting
kepada Syarikat – iaitu kakitangannya. Penekanan yang
bersungguh terus dilakukan bagi memastikan Syarikat
mempersiapkan tenaga kerja sedia ada agar mereka berjaya
menggalas tugas semasa, bahkan mampu menyahut
cabaran serta berkembang menjadi pemimpin masa
hadapan bukan sahaja di JTI Malaysia, malah di serata
Kumpulan Syarikat JT. Syarikat sentiasa membuat penilaian
semula dan mengemaskini pendekatannya terhadap
program latihan dan pembangunan insan bagi memastikan
program ini kekal relevan dalam persekitaran semasa; dan
memberi tumpuan kepada usaha menyediakan peluang
kepada kakitangan yang berpotensi tinggi untuk berlatih
dan mengasah kemahiran kepimpinan mereka melalui
gabungan latihan berbentuk bilik darjah dan kajian kes dunia
sebenar. Pendekatan Pengurusan Bakat yang komprehensif
ini membolehkan JTI Malaysia menilai dengan tepat dan
memanfaatkan kekuatan tenaga kerja serta menangani
•
•
Menggalakkan komunikasi yang terbuka serta telus
merentasi seluruh organisasi;
Memanfaatkan pelbagai kemahiran dan pengalaman
yang dimiliki oleh tenaga kerja menerusi lebih banyak
penglibatan bersilang fungsi dalam semua perkara
yang kami lakukan;
Menerapkan pemikiran “Play to Win” di seluruh
organisasi.
Seperti tahun-tahun terdahulu, JTI Malaysia terus memberi
penekanan yang kritikal terhadap keupayaannya untuk
menarik dan mengekalkan bakat. Pada tahun 2013, usaha
lanjut telah dilakukan untuk memantapkan dasar Pampasan
dan Faedah melalui keseimbangan hakiki antara pembayaran
gaji asas dan insentif, faedah serta prasyarat yang berdaya
saing, Ini adalah untuk memastikan tenaga kerja Syarikat
kekal bermotivasi dan terlibat, lantas menjadikan JTI
Malaysia lebih produktif dan akhirnya lebih kompetitif.
JTI Malaysia sentiasa berusaha mewujudkan tempat kerja
yang menggabungkan kecintaan terhadap kecemerlangan
profesional, serta persekitaran yang menggalakkan
kecintaan terhadap kecemerlangan dengan peluang untuk
maju dan berkembang dari sudut profesional dan peribadi.
Usaha berterusan untuk menarik bakat berpotensi tinggi, termasuk di ekspo kerjaya
25
Mematuhi Kepatuhan Korporat dan Perundangan
Sepanjang tahun 2013, fungsi Kepatuhan terus memberi tumpuan kepada usaha menambah baik
kecekapan dan kebolehgunaan program serta inisiatif Kepatuhan di JTI Malaysia. Ini termasuklah
mengkaji semula beberapa dasar Korporat berkaitan Kepatuhan serta aplikasi dalam talian yang
berkaitan dengannya, di mana ia menyokong proses kelulusan dan pengesahan yang berbeza.
Aplikasi dalam talian program Kenali Pelanggan Anda (Know Your Customer) telah dinaik taraf bagi
mencerminkan semakan yang telah dibuat terhadap Dasar, dan pendaftaran dalam talian untuk
Gift, Hospitality & Entertainment (GHE) telah dipertingkat bagi memastikan kebolehlihatan dan
ketelusan terhadap semua permohonan GHE agar sejajar dengan semakan ke atas dasar GHE JTI.
JTI Malaysia komited demi memastikan bahawa kakitangannya mematuhi dan menguatkuasakan
prinsip yang telah ditetapkan dalam Kod Tata Susila JTI. Semua laporan berkenaan berlakunya
kemungkiran dalam ruang lingkup Kod adalah dianggap serius oleh pasukan pengurusan
Malaysia dan tindakan pembetulan yang diambil adalah sebagaimana perlu, agar seimbang
dengan salah laku tersebut. Pada tahun 2013, lebih 90% daripada kakitangan JTI Malaysia
telah menyempurnakan latihan Kod Tatasusila 2011, sama ada secara dalam talian (online) atau
secara bersemuka, dan latihan serta inisiatif komunikasi yang sedang dijalankan berkaitan aktiviti
Kepatuhan tetap menjadi unsur utama kejayaan perniagaan JTI di Malaysia.
Sungguhpun persekitaran undang-undang dan pengawalseliaan menjadi lebih ketat sejak
beberapa tahun kebelakangan ini, terutamanya dengan pengenalan pindaan terbaharu kepada
Peraturan Kawalan Hasil Tembakau 2004 (“CTPR”) pada Jun 2013, Jabatan Perundangan JTI
Malaysia sentiasa memastikan bahawa aktiviti perniagaan Syarikat tetap mematuhi undangundang serta peraturan sedia ada dan terus-menerus menyediakan latihan undang-undang
untuk kakitangannya bagi mewujudkan kesedaran tentang perkembangan undang-undang dan
peraturan di dalam negara.
Pada tahun 2013, Jabatan Perundangan telah melaksanakan inisiatif utama yang berikut terhadap
organisasi:
•
•
Menyediakan input serta pemahaman mendalam tentang undang-undang dan juga
pandangan tentang pindaan terbaharu kepada CTPR terhadap perniagaan agar pindaan
terbaharu tersebut dapat dipatuhi sepenuhnya oleh perniagaan; dan
Menyediakan pelbagai latihan undang-undang dari aspek pengawalseliaan, persaingan,
pemasaran dan kontrak.
Memerangi Perdagangan Rokok Tidak Sah
Berdasarkan hasil Kajian Rokok Tidak Sah (ICS) yang telah dijalankan oleh Gabungan Pengilang
Tembakau Malaysia (GPTM), insiden rokok tidak sah di dalam negara kekal tinggi pada tahap
34.5% sepanjang tahun 2013, iaitu meningkat 1.2% dari tahun sebelumnya. Insiden ini
menunjukkan anggaran 8 bilion batang rokok tidak sah dijual setahun di dalam negara, yang mana
ia bersamaan satu bagi setiap tiga pek rokok yang dijual di dalam negara adalah rokok tidak sah.
Kerajaan menanggung kerugian kira-kira RM2 bilion daripada segi pendapatan setahun dengan
kerugian cukai sehari dianggarkan sebanyak RM7 juta. Mengikut laporan Asia 11: Laporan 2012
Petunjuk Tembakau Tidak Sah oleh ITIC & Oxford Economics yang telah diterbitkan pada bulan
September 2013, Malaysia berada pada kedudukan ke-3 tertinggi di kalangan 11 pasaran Asia
dalam perdagangan tembakau tidak sah, di belakang Brunei dan Hong Kong.
26
annual report 2013
Pada 2013, Kerajaan telah mengumumkan kenaikan
duti eksais ke atas rokok daripada RM0.22 sebatang
kepada RM0.25 sebatang, iaitu kenaikan 14% dalam
duti setelah tiada kenaikan selama dua tahun (2011
dan 2012). Kenaikan eksais dan pelarasan harga
yang berlaku kemudiannya telah menambah tekanan
terhadap undang-undang, terutama dengan wujudnya
tekanan inflasi yang berterusan serta sentimen
pengguna yang semakin lemah dalam pasaran
Malaysia.
Malangnya, harga rokok tidak sah terus kekal malar
di antara RM3.00 dan RM3.50 bagi setiap pek 20
batang. Harga yang mampu dimiliki bagi rokok yang
tidak sah tersebut terus menarik pengguna untuk
beralih kepada pembelian rokok tidak sah. Disebabkan
oleh permintaan yang hebat, para peruncit cenderung
menjual produk tidak sah ini secara berhati-hati,
walaupun mereka tahu tentang hukuman undangundang akibat terlibat dalam perdagangan rokok tidak
sah.
Agensi penguatkuasaan undang-undang
Kerajaan seperti Kastam Diraja Malaysia (KDRM),
Kementerian Perdagangan Dalam Negeri,
Koperasi dan Kepenggunaan (KPDNKK), Agensi
Penguatkuasaan Maritim Malaysia (APMM), Unit
Pencegah Penyeludupan (UPP) serta Polis Diraja
Malaysia (PDRM) terus memperhebatkan lagi aktiviti
penguatkuasaan di peringkat kawalan sempadan dan
peruncitan di seluruh negara.
JTI Malaysia mengambil pendekatan toleransi sifar
terhadap rokok tidak sah dan bersama dengan
ahli GPTM telah bekerjasama dengan agensi
penguatkuasaan undang-undang dalam memberi
maklumat dan sokongan bagi merangka strategi
untuk menangani masalah kemasukan rokok tidak
sah yang begitu banyak ke dalam negara. Dengan
membentuk perkongsian pintar, matlamat kami adalah
untuk memahami serta mengatasi isu perdagangan
rokok tidak sah yang semakin berkembang. Industri
ini terus berkongsi hasil kajian yang diperolehi
daripada ICS dengan semua agensi penguatkuasaan
undang-undangutama supaya wujud pemahaman
tentang insiden serta trend perdagangan rokok tidak
sah di Malaysia. Usaha ini dapat membantu agensi
penguatkuasaan undang-undang menyusun strategi
dalam program penguatkuasaan mereka demi
memerangi perdagangan rokok tidak sah di dalam
negara.
Bersama dengan para penggerak industri tembakau
yang lain, JTI Malaysia telah memulakan program
pendidikan dan kesedaran yang melibatkan pegawai
KPDNKK di seluruh negara bagi menangani isu yang
semakin membimbangkan berkenaan jenama rokok
tidak sah tempatan yang kelihatan serupa dengan
rokok sah dan membanjiri pasaran Malaysia, di mana
ia melanggar Akta Perihal Dagangan serta Akta
Kawalan Harga dan Antipencatutan 2011.
Sebagai sebahagian daripada usaha untuk
meningkatkan lagi kesedaran di kalangan para
pemegang kepentingan, termasuk anggota media,
pihak industri telah mengadakan taklimat tentang
topik Anti Perdagangan Rokok Tidak Sah (AIT), dengan
tumpuan kepada isu dan kesan perdagangan rokok
tidak sah terhadap masyarakat, negara dan ekonomi.
Inisiatif pendidikan secara meluas di kalangan para
peruncit di seluruh negara juga diteruskan, di mana JTI
Malaysia dan pihak industri telah berkongsi maklumat
terkini mengenai peraturan serta hukuman berkaitan
AIT menerusi pelbagai alat perdagangan seperti risalah
dan notis. Pihak industri juga terus membantu agensi
penguatkuasaan undang-undang memanfaatkan
pihak media bagi mengetengahkan serbuan serta
pendakwaan di mahkamah agar dapat menerbitkan
kesedaran yang lebih tinggi di kalangan para peruncit
serta semua pihak yang terlibat dalam perdagangan
rokok tidak sah.
Memandang ke Hadapan
JTI Malaysia menjangkakan tahun 2014 akan
menghidangkan cabaran luar biasa kepada industri
tembakau. Meskipun demikian, Syarikat berkeyakinan
bahawa dengan terus memberi tumpuan kepada teras
strategi perniagaan, Syarikat akan dapat menghasilkan
prestasi yang cemerlang pada tahun-tahun mendatang
dan mengukuhkan lagi kedudukannya dalam industri
tembakau di Malaysia.
Pengarah Urusan
27
Profile of
Directors
Igor Kosinskiy
Independent Non-Executive Chairman
Executive Director
Managing Director
28
annual report 2013
29
Thean Nam Hooi
Leong Wai Hoong
Executive Director
Chairman of Audit Committee
Brian Conor Hannon
Keong Choon Keat
Profile of Directors
Dato’ Sri Mohd. Nadzmi bin Mohd. Salleh JSM, PMK, DIMP
Malaysian, aged 59, MA (Econs & Statistics), BA (Econs),
BSc (Chemistry & Mathematics)
Dato’ Sri Mohd. Nadzmi bin Mohd. Salleh was appointed as Independent
Non-Executive Chairman on December 1, 1996. Dato’ Sri Mohd. Nadzmi
started his working career as a lecturer at Universiti Pertanian Malaysia before
embarking his corporate journey, of which 12 years was spent with Edaran
Otomobil Nasional Berhad and Perusahaan Otomobil Nasional Berhad. He is
a much sought-after leader who is also currently a Chairman and Managing
Director of Konsortium Transnasional Berhad and Transocean Holdings Berhad,
as well as Director of VS Industry Berhad, Syarikat Kenderaan Melayu Kelantan
Berhad, Kumpulan Kenderaan Malaysia Berhad and Park May Berhad. An
upstanding citizen, he has won several awards namely, “Great Entrepreneur
Brand ICON Leadership Awards 2013” by The BrandLaureate, “Conferred The
Honorary Doctorate In Entrepreneurship in 2012” by Universiti Teknikal Malaysia
Melaka, “Asia HRD Awards 2012” by Contribution to Society, “2011 Lifetime
Achievement Award” by the Kuala Lumpur Malay Chamber of Commerce,
“Entrepreneur of the Year 2009” by the Enterprise Asia, “Malaysia’s Ernst &
Young Entrepreneur of the Year 2003” and “Ernst & Young Master Entrepreneur
of the Year”. “Achiever of the Year 2003” by The Chartered Institute of Logistics
& Transport in Malaysia, “Tokoh Usahawan Melayu Anak Kelantan 1996”, “Global
Leaders for Tomorrow” by the World Economic Forum, the “Outstanding Young
Malaysian” in 1993 by the Junior Chamber of Commerce and “Man of the Year”
by the Malaysian Business Magazine in 1986.
30
annual report 2013
British, aged 40, BSc (Business Studies)
Mr. Robert John Stanworth was appointed as Executive
Director and Managing Director of JT International Berhad
on March 1, 2013. He has 14 years of extensive working
experience with both Gallaher Group and JT International (JTI)
Group of Companies. Having joined the Gallaher Group in
1999, Mr. Stanworh has held various positions of increasing
responsibilities in its Purchasing division. Thereafter, he was
appointed as the Managing Director and General Manager for
Gallaher Romania. In 2007, he joined JTI Austria as the General
Manager and Managing Director. He was also appointed as the
General Manager of JTI Hungary in 2008, concurrent with his
role in JTI Austria. Prior to assuming his current role in Malaysia,
he was the General Manager and Managing Director of JTI
Germany.
Thean Nam Hooi
Malaysian, aged 53, MBA (Finance) BSc (Industrial Engineering)
Mr. Thean Nam Hooi was appointed as Executive Director on
May 14, 2001. Mr. Thean is currently the Chief Financial Officer
for JT International Berhad. He joined the company in January
1991 starting out as a Financial Analyst and has since moved on
to serve the company in various financial capacities including
Manager, Financial Planning and Analysis, Senior Manager and
Director of Financial Control. Prior to joining JT International
Berhad, Mr. Thean was attached to Texas Instruments.
Igor Kosinskiy
Russian, aged 44, BSc (Mechanical Engineering)
Mr. Igor Kosinskiy was appointed as Executive Director of
JT International Berhad on May 21, 2013. He has 16 years of
extensive work experience with JT International (JTI) Group of
Companies. He joined JTI in 1997 as a Financial Analyst and
has since held various positions of increasing responsibilities
including holding the post of Making & Packing Director at
JTI Petro, St. Petersburg, Russia and subsequently as Global
Manufacturing Director at JTI SA, Geneva, Switzerland. Mr.
Kosinskiy undertook the role of General Director at JTI Ukraine
in 2006 and he was thereafter appointed as General Director
Vice President at JTI Liggett-Ducat, Moscow in 2007. Prior
to assuming his role in JT International Berhad, he was the
Manufacturing Vice President responsible for the coordination
and supervision of all manufacturing activities within the region
of Middle East, Near East, Africa and Turkey, based in Izmir,
Turkey.
31
Profile of Directors
Brian Conor Hannon
Irish, aged 48, FCA (Ireland)
Mr. Brian Conor Hannon was appointed as Non-Executive
Director of JT International Berhad on May 21, 2013. He has 12
years of working experience with JT International (JTI) Group
of Companies, having joined JTI Russia as the Chief Financial
Officer for Global Supply Chain, CIS & Baltics in 2001. He brings
with him a wealth of global market experience having served in
the regions of Middle East, Near East, North & West Africa and
Russia as Chief Financial Officer and thereafter as Regional CFO
for Southern, Western Europe & Baltics markets as well as for
the enlarged Western Europe region. Mr. Hannon is currently
the Chief Financial Officer and Vice President of JT International
Asia Pacific, based in Hong Kong. Prior to joining JTI,
Mr. Hannon served in various corporations including Pepsi-Cola
International, Masterpork Group and Price Waterhouse.
Belgian, aged 42, Master of Laws
Mr. Pierre Binetter, a qualified solicitor in England and Wales,
was appointed as Non-Executive Director of JT International
Berhad on August 13, 2010. He graduated from the University of
Kent at Canterbury with a Bachelor of Laws and subsequently
pursued his Master of Laws at King’s College, London.
Mr. Binetter joined the JT International (JTI) Group of
Companies in 2006 as Regional General Counsel Middle East
and Africa, based in Cyprus and subsequently moved to JTI’s
headquarters in Geneva before assuming his current role as
Regional General Counsel Asia Pacific, leading the regional legal
function for the JTI Group, based in Hong Kong. Mr. Binetter
has held various legal positions in both private practice and
corporations in London prior to joining JTI.
Datuk Henry Chin Poy-Wu PSD, PGDK
Malaysian, aged 76
Datuk Henry Chin Poy-Wu was appointed as Independent
Non-Executive Director on November 1, 1993 and was
subsequently appointed as Chairman of the Audit Committee
on February 16, 1994 and as a member of the Nominating and
Remuneration Committees on December 11, 2001. He had
served the Government of Malaysia for almost 39 years before
retiring in 1993 as the Commissioner of Police, Kuala Lumpur.
Datuk Henry currently also serves on the Board of Glenealy
Plantations (Malaya) Berhad and as a Consultant to Hap Seng
Consolidated Berhad, as well as Chairman of Chinese Global
Investors Group Limited (Singapore). Datuk Henry contributes
to society by serving as the Honorary Life President of the
Asia Karate Federation, Chairman of the Datuk Seah Tee Sui
Foundation, Kota Kinabalu, Sabah, Deputy Chairman of the
Kinabalu Foundation, Sabah, Vice Chairman of the Malaysian
Crime Prevention Foundation, Board Member of the Universiti
Malaysia Sabah.
32
annual report 2013
Keong Choon Keat
Malaysian, aged 69, FCA (England & Wales), CPA (M), CA (M)
Mr. Keong Choon Keat was appointed as an Independent
Non-Executive Director and member of the Audit Committee
on August 2, 2000 and as a member of the Nominating and
Remuneration Committees on December 11, 2001. A Chartered
Accountant by profession, Mr. Keong brings with him more
than 30 years of business and professional acumen to the
Board. Mr Keong currently also serves on the Board of Chin
Teck Plantations Berhad, Negeri Sembilan Oil Palms Berhad and
Crest Builder Holdings Berhad.
Leong Wai Hoong
Malaysian, aged 68, BA (Hons.)
Mr. Leong Wai Hoong was appointed as Independent NonExecutive Director on November 12, 2003 and as a member
of the Audit Committee on January 10, 2000. Mr. Leong is
currently the Chairman of the Nominating and Remuneration
Committees. He was previously appointed as Executive Director
on June 3, 1996 and following his resignation as Executive
Director, he became a Non-Executive Director on January 10,
2000. Prior to this appointment, he had served as JTI’s Regional
Vice President (South East Asia) and Managing Director of JT
International Berhad up till his retirement on January 10, 2000.
Individual members of the Board of Directors do not have any family relationship with any other Director and/or major shareholder
of the Company, nor do they have any conflict of interest with the Company.
33
Management
Team
34
Gary Tullidge
Managing Director
Director of Leaf
David McShee
Rohizwan Ahmad
Director of Human Resources
Director of Legal
annual report 2013
Azrani Rustam
Juliana Mohd Yahaya
Director of Corporate Affairs and Communications
Director of Portfolio
Khoo Bee Leng
Tan Chor Peng
Director of Development and Planning
Director of C&TM Operations
35
Management Team
David McShee
British, aged 40, BA (Economics)
Director of Human Resources, Mr. David McShee has been
with the Company since July 2008. He is responsible for
managing all human resources activities across all of JTI’s
entities in Malaysia. He joined JT International S.A. as Corporate
Pensions and Benefits Manager in 2003 and has held various
positions of increasing responsibility in corporate HR in Geneva.
Mr. McShee was appointed Human Resources Director for
Geneva Headquarters in 2006 and then Global Pensions and
Benefits, and HR Controls Director in 2007 before moving to
Malaysia.
Gary Tullidge
Zimbabwean, aged 60
Director of Leaf, Gary Tullidge has been with the Company since
1995. He is primarily responsible for the development of leaf
agronomy and all leaf operations in Asia for the Company. He
is highly regarded for his knowledge and expertise in this field,
in particular, the Asian environment as he has lived and worked
in the region since 1975. Prior to joining JTI, Mr. Tullidge was
attached to Universal Tobacco Company in Thailand.
Rohizwan Ahmad
Malaysian, aged 36, Advocate & Solicitor, High Court of Malaya
LL.B (Hons)
Director of Legal, Mr. Rohizwan Ahmad joined the Company
in July 2013. He is responsible for managing and coordinating
all legal matters of the Company. Immediately before joining
JT International Berhad, Mr. Rohizwan was the Head of Legal
& Compliance Department in Mercedes-Benz Malaysia Sdn
Bhd and prior to that he was a legal practitioner, doing mostly
litigation and commercial matters and has held legal counsel
positions with regional counsel experience.
36
annual report 2013
Azrani Rustam
Malaysian, aged 39, LL.B (Hons.)
Director of Corporate Affairs and Communications, Mr. Azrani
Rustam joined the company in 2012. He is responsible for
the development and management of regulatory strategy
and programmes that would assist in shaping the operating
environment for the company. In addition, he is responsible for
management of corporate communications for the company’s
internal and external stakeholders. Prior to joining JTI, Mr. Azrani
was attached to another multinational tobacco company. His
previous working experience includes stints at the Securities
Commission of Malaysia and the New Straits Times.
Khoo Bee Leng
Malaysian, aged 46, BA (Business Administration)
Director of Development and Planning, Ms. Khoo Bee Leng has
been with the Company since 1993. She is primarily responsible
for all consumer and trade marketing activities for the Company.
She joined the Company in 1993 and has served in various
positions in Market Research and Marketing before assuming
her current position in October 1, 2006. Ms. Khoo brings with
her a wealth of experience from her various positions both
locally and abroad when she was posted to Hong Kong and
Geneva. Prior to joining JT International Berhad, Ms. Khoo was
attached to A.C. Nielsen.
Juliana Mohd Yahaya
Malaysian, aged 40
Director of Portfolio, Brand and Trade Strategy, Ms. Juliana
Mohd Yahaya has been with the company since 2000. She
is responsible for consumer and trade strategy, brand equity
and market intelligence. She has served in various positions
of increasing responsibilities in Operations and Marketing
before she was posted to Geneva as Global Brand Manager for
Winston. She was appointed as the Director of Portfolio, Brand
and Trade Strategy in October 1, 2013. She brings with her a
wealth of experience from her various cross-functional positions
both locally and globally.
Tan Chor Peng
Malaysian, aged 46
Director of C&TM Operations, Mr. Tan Chor Peng has been with
the Company since 1989, starting-off as a sales representative
in Malaysia. He is primarily responsible for the overall function
of C&TM Operations for the Company. Mr. Tan comes with a
vast experience in the sales and distribution field having taken
on a managerial role in Malaysia and Philippines. He was the
Country Manager of the JTI representative office in Cambodia
before taking on his current position in Malaysia in 2011.
37
Financial
Highlights
Turnover
(RM Million)
Profit Before Taxation
2013
1,273.3
2012
(RM Million)
Profit Attributable to Shareholders
1,234.3
2011
1,197.8
2013
164.3
2012
300
600
900
1,200
(RM Million)
141.5
2011
164.3
40
80
120
2013
121.6
2012
160
101.3
2011
122.8
Net Tangible Assets
(RM Million)
30
60
90
120
Gross Earnings Per Share
(Sen)
2013
352.7
2012
345.6
2011
2013
446.8
100
200
300
400
62.8
2012
Net Earnings Per Share
(Sen)
54.1
2011
62.8
16
32
48
2013
46.5
2012
64
38.7
2011
Gross Dividend Per Share
47.0
12
(Sen)
24
36
48
Net Tangible Assets Per Share
(RM)
2013
43.0
2012
84.0
2011
30.0
20
40
60
80
Net Return On Shareholders’ Funds
2013
1.3
2012
1.3
(%)
2011
1.7
0.4
0.8
1.2
1.6
2013
34.0
2012
29.0
2011
27.2
9
38
18
27
36
annual report 2013
Turnover
(RM Million)
Five-Year Selected
Financial Profile
2013
1,273.3
2012
1,234.3
2011
1,197.8
2010
1,205.1
2009
1,158.2
300
Profit Before Taxation
Gross Earnings Per Share
(RM Million)
2013
2012
141.5
2011
164.3
2010
178.9
2009
143.6
40
80
120
160
62.8
2011
62.8
2010
68.4
54.9
16
32
48
2013
43.0
2012
54.1
2009
1,200
(Sen)
2013
2012
900
Net Dividend Per Share
(Sen)
164.3
600
64
78.0
2011
22.5
2010
22.5
2009
22.5
20
40
60
80
RM MILLION RM MILLION RM MILLION RM MILLION RM MILLION % Change
2013
2012
2011
2010
20092013/2012
INCOME STATEMENT Turnover 1,273.3 1,234.3 1,197.8 1,205.1 1,158.2 3.2%
Profit before taxation 164.3 141.5 164.3 178.9 143.6 16.1%
Profit attributable to shareholders 121.6 101.3 122.8 133.8 108.3 20.0%
BALANCE SHEET Issued capital 65.4 65.4 65.4 65.4 65.4 0.0%
Shareholders’ funds 357.6 349.4 451.0 390.6 315.6 2.3%
Non-current assets 173.5 121.7 115.3 123.0 125.7 42.6%
Current assets 322.7 333.1 424.6 357.2 286.1 -3.1%
Total assets 496.2 454.8 539.9 480.2 411.8 9.1%
Net tangible assets 352.7 345.6 446.8 387.4 310.7 2.1%
PERFORMANCE DATA Earnings per share (gross) - sen 62.8 54.1 62.8 68.4 54.9 16.1%
Earnings per share (net) - sen 46.5 38.7 47.0 51.2 41.4 20.2%
Return on Shareholders’ fund (net) - % 34.0 29.0 27.2 34.3 34.3 17.2%
Net tangible assets per share (RM) 1.3 1.3 1.7 1.5 1.2 0.0%
Current assets ratio 3.0 4.3 7.2 5.5 3.8 -30.2%
Gross dividend per share (sen) 43.0 84.0 30.0 30.0 30.0 -48.8%
Net dividend per share (sen) 43.0 78.0 22.5 22.5 22.5 -44.9%
Dividend cover (net) - times 1.1 0.5 2.1 2.3 1.8 120.0%
39
Corporate
Philanthropy
40
annual report 2013
41
Corporate Philanthropy
We are Passionate about Contributing to Our
Communities
JTI Malaysia’s priority, as a responsible corporate citizen in
Malaysia, is to give back in a meaningful way. As a key player in
the tobacco industry, JTI Malaysia is committed towards ensuring
our philanthropic efforts impact positively upon our shareholders,
partners, employees, customers, and most importantly, the
communities and the environment that we operate in.
We contribute to our communities in accordance to our global
principles. JTI Malaysia’s Corporate Philanthropy and Corporate
Social Responsibility programmes have enabled the voluntary
commitment of resources – both financial and human – to
causes that are of real benefit to the needs of our communities.
Initiatives are aimed at improving people’s lives, alleviating
suffering/ poverty, complementing the efforts of local systems
providing services to the underprivileged and supporting the
development of arts and culture. These contributions are
integral to the way the Company operates in order to make a
significant difference to the quality of life of our communities.
In 2013, JTI Malaysia continued implementing various
meaningful and sustainable programmes aimed at enriching the
communities and environment.
Contributing to the Sustainable Development of
Society
Mr Rob Stanworth and Dr. Ngau Boon Keat, MyKasih Foundation Chairman, at the
staging of Rashomon, marking the strong collaboration between JTI and MyKasih
Foundation
42
Since October 2012, JTI Malaysia has been providing support
to the food aid programme ‘Love My Neighbourhood’ for
1,000 needy and underprivileged families in collaboration with
the MyKasih Foundation. This support programme utilizes
technology to disburse essential items periodically to the
recipients, ensuring transparency and integrity in the support
delivery process.
About 21% of the working population represents Malaysian
households which earn less than RM1,500 per month. As such,
the target beneficiaries of the MyKasih ‘Love My Neighbourhood’
programme are mainly urban and sub-urban low-income
households earning a monthly combined household income of
RM1,500 and below; with significant dependents who include
the elderly and/or school-going children. This segment of society
is commonly categorised as ‘vulnerable poor’.
annual report 2013
Such partnerships demonstrate our
commitment in providing a more
enabling environment for the lessprivileged communities to step out of
poverty. JTI Malaysia is hopeful that
such philanthropic efforts will make
a significant difference to their lives.
As such, JTI Malaysia is committed to
the continuing provision of practical
assistance to underprivileged families in
the country.
Construction of the ‘Balai
Adat’ in the Jah Hut village of
Kampung Pian in Kuala Krau,
Pahang.
In June 2013, JTI Malaysia assisted in
the construction of the Balai Adat, a
community hall in the Orang Asli village
of Kampung Pian in Kuala Krau, Pahang.
The Balai Adat is a much-needed amenity
for any community to conduct cultural
ceremonies, programmes and activities,
as well as meetings.
The Balai Adat was constructed by the
villagers themselves and was completed
in September 2013.
The Jah Hut community at their ‘Balai Adat’
Disaster Relief Efforts:
Humanitarian Initiative &
Financial Support
NURTURING ARTS AND
CULTURE TO ENRICH THE
COMMUNITY
In response to the devastation
brought about by Typhoon Haiyan on
the Philippines at the end of 2013,
JTI Malaysia employees joined hands
and embarked on a donation drive, of
which the amount was matched by the
company. Donations were channeled to
two relief organisations, Mercy Malaysia
and the Malaysian Red Crescent.
If the arts enhance and enrich lives of our
communities, then JTI Malaysia’s active
role in supporting the development of art
and culture is no stage act. We partnered
with two local cultural and artistic
organisations – Kuala Lumpur Performing
Arts Centre (klpac) and The Actors
Studio (TAS) – in providing financial
assistance in support of the performing
arts movement. This includes nurturing
homegrown talent and pursuing creative
excellence to propel the domestic art
scene to greater heights.
Apart from that, in December 2013, JTI
Malaysia came forward and contributed
financial support to the victims of the
flooding that affected large areas of the
east coast of Peninsular Malaysia, via
Mercy Malaysia.
Volunteers from JTI Malaysia spared their
time and joined in on a clean-up efforts in
Kemaman, Terengganu. In that particular
humanitarian mission, JTI Malaysia also
contributed to the mobilization of 10 units
of 4WD vehicles carrying essential items
such as food and hygiene packs, as well
as cleaning utensils.
JTI Malaysia’s commitment and financial
support has enabled both organisations
to develop and showcase more
productions and talents that fulfilled
the needs of the growing theatre-loving
community in Malaysia. In 2013, klpac
and TAS showcased 171 productions,
which include the staging of the highly
popular “Philadelphia, Here I Come!”,
“Broken Bridges”, “Postcards from Rosa”
and “Short & Sweet 2013”.
Developing local talents through support for culture and arts
43
Corporate Philanthropy
JTI Malaysia also collaborated with klpac in staging
Rashomon, a well known classic Japanese masterpiece
made famous by legendary director Akira Kurosawa in the
1950s. Such concerted initiative has not only promoted
the Japanese arts and culture, but also and more
importantly, provided a platform to strengthen ties and
build cultural understanding between the Malaysian and
Japanese communities in Malaysia. On July 12, 2013, JTI
Malaysia held a special staging of Rashomon in the Kuala
Lumpur Performing Arts Centre in aid of the MyKasih
Foundation. This marked the first time JTI Malaysia had
brought together two Corporate Philanthropy partners
for a good cause. RM23,000 raised through the sales
of tickets are used to purchase Nokero solar light bulbs,
which were subsequently distributed to Orang Asli homes
throughout the country that are without electricity.
A total of 100 new works premiered at and produced by
klpac and TAS in 2013. At the root of this commitment
and support is the fundamental belief that JTI Malaysia
has made it possible for klpac and TAS to keep nurturing
Malaysian talents and showcasing local and foreign works,
as well as bringing arts and culture to the masses.
The Kuala Lumpur Rat Race
As a responsible corporate citizen, JTI Malaysia has
always been supportive of philanthropic initiatives that
would create a positive impact to the community. Ten
employees represented JTI Malaysia and ran the streets
of Kuala Lumpur in the annual “The Edge – Bursa Malaysia
Kuala Lumpur Rat Race 2013”, which garnered the support
from various local and foreign companies.
klpac showcasing local talents in one of its productions in 2013
44
Over RM1.8 million was raised and distributed to 28
charitable organisations. This was one of the unique
ways that JTI Malaysia encourages its employees’ direct
participation to give back to the less fortunate.
Moving Forward
JTI Malaysia will continue to reach out to elevate the
well being of the communities in which we operate
in, as part of our commitment to enriching lives. The
Company will continue building upon existing initiatives
and implement new, more structured ones that will create
sustainable value and tangible impact. We look forward
to jointly implementing a variety of meaningful community
initiatives in the immediate future.
JTI Malaysia employees at the Kuala Lumpur Rat Race 2013
annual report 2013
Kedermawanan Korporat
Kami begitu bersemangat untuk Menyumbang
kepada Komuniti Setempat
Sebagai warga korporat yang bertanggungjawab, keutamaan JTI
Malaysia adalah untuk membantu dengan cara yang bermakna
dan berkesan. Sebagai penggerak utama dalam industri
tembakau, JTI Malaysia beriltizam untuk memastikan usaha
kedermawanan kami memberi impak yang positif terhadap para
pemegang saham, rakan niaga, kakitangan, pelanggan, dan
yang paling penting, komuniti serta persekitaran di mana kami
beroperasi.
Sumbangan kami kepada masyarakat adalah sejajar dengan prinsip
global kami. Program Kedermawanan Korporat serta Tanggungjawab
Sosial Korporat JTI Malaysia telah mewujudkan komitmen secara
sukarela dari segi sumber – yakni kewangan dan tenaga manusia –
untuk perkara yang benar-benar memberi manfaat dan memenuhi
keperluan komuniti kami.
Inisiatif-inisiatif disasarkan ke arah menambah baik kehidupan insan,
mengurangkan penderitaan/kemiskinan, melengkapkan usaha yang
digerakkan oleh sistem setempat dalam memberi perkhidmatan
kepada golongan kurang bernasib baik dan juga menyokong
pembangunan seni dan budaya. Sumbangan ini adalah penting kepada
cara Syarikat beroperasi agar dapat mencorakkan perbezaan yang
membawa nilai kepada kualiti kehidupan komuniti kami.
Pada tahun 2013, JTI Malaysia terus melaksanakan pelbagai program yang
bermakna dengan matlamat memperkayakan komuniti serta alam sekitar.
Menyumbang kepada Pembangunan Masyarakat
Lestari
Sejak Oktober 2012, JTI Malaysia telah memberi sokongan kepada
program ‘Love My Neighbourhood’ dengan menyediakan bantuan
kepada 1,000 keluarga miskin dan kurang bernasib baik menerusi
kerjasama dengan Yayasan MyKasih. Program sokongan ini
menggunakan teknologi untuk mengagihkan barangan keperluan
secara berkala kepada penerima, dengan menitikberatkan ketelusan
dan integriti dalam proses penghantaran sokongan.
Lampu Nokero Solar yang telah diagihkan kepada rumah orang asli yang
tidak mempunyai bekalan elektrik
Kira-kira 21 peratus daripada populasi penduduk Malaysia yang bekerja
memperolehi pendapatan seisi rumah kurang dari RM1,500 sebulan.
Justeru itu, sebahagian besar penerima yang menjadi sasaran program
‘Love My Neighbourhood’ adalah keluarga dari kawasan bandar dan pinggir
kota yang memperolehi pendapatan seisi rumah tergabung bulanan
sebanyak RM1,500 atau kurang; dengan sebahagian besarnya memiliki
tanggungan warga tua dan/atau anak-anak yang bersekolah. Segmen
masyarakat ini biasanya dikategorikan sebagai golongan ‘miskin rentan’.
45
Kedermawanan Korporat
Perkongsian sebegini memperlihatkan komitmen kami
dalam menyediakan persekitaran yang mampu memberi
peluang kepada komuniti kurang bernasib baik agar dapat
keluar dari kancah kemiskinan. JTI Malaysia menaruh
harapan semoga usaha kedermawanan ini akan membawa
perbezaan yang ketara dalam kehidupan mereka. Justeru
itu, JTI Malaysia beriltizam untuk terus menyediakan
bantuan praktikal kepada keluarga yang kurang bernasib
baik di dalam negara.
Pembinaan Balai Adat suku kaum Jah Hut
di Kampung Pian, Kuala Krau, Pahang
Pada Jun 2013, JTI Malaysia telah membantu membina
Balai Adat: sebuah balai raya untuk perkampungan orang
asli yang terletak di Kampung Pian, Kuala Krau, Pahang.
Balai Adat ini merupakan suatu kemudahan yang amat
diperlukan oleh mana-mana komuniti untuk mengadakan
majlis, program serta aktiviti kebudayaan, serta mesyuarat.
Balai Adat ini telah dibina sendiri oleh penduduk kampung
dan siap sepenuhnya pada bulan September 2013.
Sukarelawan dari JTI Malaysia telah meluangkan
masa untuk turut menyertai usaha-usaha pembersihan
yang diadakan di Kemaman, Terengganu. Dalam misi
kemanusiaan tersebut, JTI Malaysia turut memberi
sumbangan dengan menggerakkan 10 unit kenderaan
pacuan empat roda (4WD) yang membawa barang-barang
keperluan seperti makanan dan pek pembersih diri serta
peralatan mencuci.
MEMUPUK SENI DAN BUDAYA UNTUK
MEMPERKAYAKAN KOMUNITI
Andainya seni dapat memperhebat dan memperkayakan
kehidupan komuniti, maka peranan aktif yang dimainkan
oleh JTI Malaysia dalam menyokong pembangunan seni
dan budaya bukanlah suatu sandiwara. JTI Malaysia telah
menjalinkan kerjasama dengan dua buah pertubuhan
kebudayaan dan kesenian tempatan – Kuala Lumpur
Performing Arts Centre (klpac) serta The Actors Studio
(TAS) – dengan memberi bantuan kewangan sebagai
usaha menyokong pergerakan seni persembahan. Usaha
ini termasuk memupuk bakat yang dicungkil dari kalangan
warga tempatan dan mengejar kecemerlangan dalam
aspek kreativiti bagi melonjakkan lagi dunia seni tempatan
ke tahap yang lebih hebat dan menyerlah.
Iltizam dan bantuan kewangan JTI Malaysia telah
membolehkan kedua-dua organisasi ini menghasil dan
mempersembahkan lebih banyak penerbitan serta
mengetengahkan bakat yang menepati keperluan
masyarakat yang semakin ramai mencintai dunia
teater di Malaysia. Pada 2013, klpac dan TAS telah
mempersembahkan sebanyak 171 buah penerbitan,
termasuk pementasan yang digemari ramai seperti
“Philadelphia, Here I Come!”, “Broken Bridges”,
“Postcards from Rosa” dan “Short & Sweet 2013”.
Balai Adat di Kampung Pian, Pahang
Usaha Bantuan Bencana: Inisiatif
Kemanusiaan & Sokongan Kewangan
Sebagai reaksi kepada kemusnahan yang dibawa Taufan
Haiyan di Filipina pada penghujung tahun 2013, kakitangan
JTI Malaysia telah berganding bahu mengadakan satu
kutipan derma, di mana syarikat memberi jumlah derma
yang sama dengan sumbangan yang berjaya dikutip.
Sumbangan tersebut telah disalurkan kepada dua buah
organisasi bantuan, iaitu Mercy Malaysia dan Persatuan
Bulan Sabit Merah Malaysia.
Selain dari itu, pada Disember 2013, JTI Malaysia
telah tampil ke hadapan untuk menghulurkan bantuan
kewangan melalui Mercy Malaysia kepada mangsa banjir
di mana bencana tersebut telah menjejas kawasan yang
luas di pantai timur Semenanjung Malaysia.
46
Sokongan berterusan untuk mempertingkatkan industri seni
annual report 2013
Pementasan Rashomon yang membawa 2 rakan Kedermawanan Korporat bersama JTI Malaysia
untuk tujuan kebajikan
JTI Malaysia telah bekerjasama dengan klpac dalam mementaskan Rashomon, sebuah adikarya klasik
tersohor dari Jepun yang menempa kemahsyuran di tangan pengarah legenda, Akira Kurosawa pada
tahun 1950an. Usaha bersepadu ini bukan sahaja mempromosi seni dan budaya Jepun, malah, dan paling
penting sekali, ia menyediakan landasan bagi mengeratkan hubungan dan membina kefahaman budaya
di antara komuniti Malaysia dan warga Jepun yang berada di Malaysia. Pada 12 Julai, 2013, JTI Malaysia
telah mempersembahkan pementasan istimewa Rashomon di Kuala Lumpur Performing Arts Centre bagi
menyokong salah satu program Yayasan MyKasih. Buat kali pertamanya JTI Malaysia telah berjaya membawa
dua rakan Kedermawanan Korporat untuk tujuan kebajikan. Sebanyak RM23,000 yang berjaya dikumpul
melalui jualan tiket telah digunakan untuk membeli menthol lampu Nokero Solar, yang mana ia kemudiannya
telah diagihkan kepada rumah orang asli di seluruh negara yang tidak mempunyai bekalan elektrik.
Sejumlah 100 hasil kerja baharu telah dipertonton dan diterbitkan oleh klpac dan TAS. Hakikatnya, sokongan
ini adalah bertunjangkan keyakinan asas bahawa JTI Malaysia telah memberi peluang kepada klpac serta
TAS untuk terus-menerus memupuk bakat warga Malaysia dan mengetengahkan hasil kerja tempatan serta
dari luar, di samping membawa seni dan budaya kepada khalayak ramai.
KUALA LUMPUR RAT RACE
Sebagai warga korporat yang bertanggungjawab, JTI Malaysia sentiasa menyokong inisiatif kedermawanan
strategik yang dapat memberi impak positif kepada komuniti. Sepuluh kakitangan telah mewakili JTI
Malaysia dan terlibat dalam larian jalanan di Kuala Lumpur yang merupakan acara tahunan “The Edge
– Bursa Kuala Lumpur Rat Race 2013”, di mana ia berjaya meraih sokongan dari pelbagai syarikat asing
dan tempatan. Lebih RM1.8 juta telah berjaya dikumpul dan diagihkan kepada 28 pertubuhan amal. Ini
merupakan salah satu cara unik JTI Malaysia menggalakkan kakitangannya terlibat secara langsung untuk
menyumbang kepada mereka yang kurang bernasib baik.
MELANGKAH KE HADAPAN
JTI Malaysia akan terus mendekati dan meningkatkan kesejahteraan komuniti di mana kami beroperasi
sebagai sebahagian daripada iltizam kami untuk memperkayakan kehidupan. Syarikat akan terus
memantapkan inisiatif sedia ada dan melaksanakan usaha baharu yang lebih berstruktur dan dapat
menghasilkan nilai lestari serta impak yang lebih ketara. Kami menantikan masanya untuk bersama-sama
melaksanakan pelbagai inisiatif komuniti yang bermakna tidak lama lagi.
47
Financial
Calendar
2013
March 28, 2013
Special Dividend Paid (21 sen per share, tax exempt
under the single-tier system)
May 21, 2013
2013 First Quarter Results
August 23, 2013
2013 Second Quarter Results
October 25, 2013
Interim Dividend Paid (11 sen per share, tax exempt
November 21, 2013
2013 Third Quarter Results
December 20, 2013
Interim Dividend Paid (11 sen per share, tax exempt
48
annual report 2013
2014
February 25, 2014
2013 Fourth Quarter and Financial Year ended
December 31, 2013 Results
April 2, 2014
2013 Annual Report posted
April 24, 2014
Forty-First Annual General Meeting (Financial Year
ended December 31, 2013)
49
Statement of
Corporate Governance
The Board of Directors is committed to high standards
of corporate governance and ensures that it is practised
throughout the Group as a fundamental part of discharging
its responsibilities to protect and enhance shareholder
value and the financial performance of JT International
Berhad (JTI Malaysia). In this process, the Board and
management are supported by the initiatives of the Japan
Tobacco Inc. Group (“JTI Group”).
The statement below sets out how the Group has applied
the principles and the extent of its compliance with the
recommendations of good governance as set out in the
Malaysian Code on Corporate Governance 2012 (“the
Code”).
JTI Code of Conduct
The JTI Group of companies, its management and its
employees are fully committed to achieving business
results which are driven and supported by the highest
level of integrity and in full compliance with the laws and
regulations of all jurisdictions where it does business.
As part of the JTI Group, JTI Malaysia places the highest
priority in ensuring its business conduct is in complete
adherence and compliance to the Code of Conduct. The
Code of Conduct is available online at www.jti.com.
BOARD OF DIRECTORS
The Board
The Board has overall responsibility for the Company’s
strategic plan, overseeing the conduct of the Company’s
business, risks management practices and internal
controls, succession planning and a shareholder
communications policy. As the Company is a member
of the JTI Group, it practices a world-wide management
programme covering succession planning, including
appointing, training, fixing the compensation of and where
appropriate, replacing senior management.
50
Board Composition and Independence
The Board had nine members, comprising two NonExecutive Directors, three Executive Directors and four
Independent Non-Executive Directors who fulfill the
criteria of independence as defined in the Bursa Malaysia
Securities Berhad Main Market Listing Requirements
(“Listing Requirements”). The Independent Non-Executive
Directors are free of any business or other relationship
with the Company which could reasonably be perceived
to materially interfere with their exercise of independent
judgement. In staying clear of any potential conflict of
interest situation, the Independent Directors remain in
a position to fulfill their responsibility to provide a check
and balance to the Board. Essentially, these Independent
Directors provide independent and constructive views and
ensure that the strategies and policies proposed by the
management are fully deliberated upon, and take account
of the long term interests, not only of the shareholders,
but also of the employees, customers, suppliers, and
the many communities in which the Group conducts
business. Datuk Henry Chin Poy-Wu is the designated
Senior Independent Non-Executive Director to whom
concerns relating to the Group may be conveyed by the
shareholders and other stakeholders.
Recommendation of the Code states that the tenure of
an independent director should not exceed a cumulative
term of nine (9) years. The Company does not have term
limits for Independent Directors as the Board of Directors
does not believe that a term of more than 9 years would
impair independence. The Company firmly believes that
individuals chosen and appointed to the Board of Directors
are individuals of high calibre and integrity and can be
tasked to discharge their duties and responsibilities
independently and effectively.
The Nominating Committee and Board had, upon their
annual assessment, concluded that the four Independent
Directors, who have served on the Board for more than
9 years, remain objective and independent. Further,
all Independent Directors have provided an annual
confirmation of their independence to the Board that they
continue to fall within the definition of independence as
set out in the Listing Requirements.
annual report 2013
The composition of the Board comprises highly qualified
and experienced individuals. Together, they bring a wide
range of business and financial experience, skills and
expertise that are vital for the successful performance of
the Board. A brief description of the background of each
current Director is presented on pages 30 to 33.
There is a clear division of roles and responsibility between
the Chairman and the Managing Director to ensure that
there is a balance of power and authority.
Pursuant to the Code, the Company has formalized in
its Board Charter roles and responsibilities of the Board
and Board Committees, the Board and Management, the
Chairman and Managing Director and the processes and
procedures for convening meetings. It serves as a source
of reference and primary induction literature, providing
insights to prospective and existing Board members
and Management. The Board will periodically review the
Charter in accordance with the needs of the Company to
ensure it remains consistent with the Board’s objectives,
current law and practices.
Board Meetings and Supply of Information
The Board meets at least four times a year, with additional meetings convened as necessary. During the year ended
December 31, 2013, four meetings were held. The details of attendance of the Board members are as follows:
Members of the Board
Number of Board Meetings attended
4 out of 4 meetings
3 out of 4 meetings
Shigeyuki Nakano (Resigned on February 28, 2013)
1 out of 1 meeting
Robert John Stanworth (Appointed on March 1, 2013)
3 out of 3 meetings
Thean Nam Hooi
4 out of 4 meetings
Hirakazu Otomo (Resigned on May 21, 2013)
1 out of 1 meeting
Igor Kosinskiy (Appointed on May 21, 2013)
1 out of 2 meetings
Nobuaki Hayashi (Resigned on May 21, 2013)
1 out of 1 meeting
Brian Conor Hannon (Appointed on May 21, 2013)
2 out of 2 meetings
2 out of 4 meetings
Keong Choon Keat
4 out of 4 meetings
Leong Wai Hoong
4 out of 4 meetings
The agenda and Board reports for each meeting are
circulated at least one week prior to the meeting to enable
Directors to obtain further explanations, where necessary,
before the meeting to allow them to effectively discharge
their responsibilities.
The Board reports include, among others, the following:
•
minutes of meeting of the Board;
•
quarterly performance reports of the Group;
•
brands, segments and industry performance;
•
update on manufacturing activities;
•
enterprise risk assessment and management;
•
review of related party transactions; and
•
major operational and financial matters.
In addition, there is a schedule of matters reserved
specifically for the Board’s decision, including strategic
business plan, annual plan, major capital expenditure and
acquisitions and emerging business issues. All decisions
and conclusions of the Board are duly recorded in the Board
minutes.
The Board has delegated specific responsibilities to
three committees (Audit, Nominating and Remuneration
Committees), the details of which are set out below. These
Committees have the authority to examine particular issues
and report back to the Board with their recommendations.
The ultimate responsibility for the final decision on all
matters, however, lies with the entire Board.
51
Statement of Corporate Governance
The Board has also approved a procedure for Directors,
whether as a full Board or in their individual capacity,
to take independent advice, where necessary, in the
furtherance of their duties at the Group’s expense.
All Directors have access to all information within the
Group and to the advice and services of the Company
Secretary.
Nominating Committee
Leong Wai Hoong (Chairman)
Keong Choon Keat
The terms of reference of the Nominating Committee
provides that it shall comprise exclusively of not less
than three (3) Non-Executive Directors, a majority of
whom must be independent. The functions and duties
of the Nominating Committee are set out in its terms
of reference as approved by the Board. The Nominating
Committee shall meet at least once a year. Additional
meetings can be scheduled if considered necessary by
the Chairman of the Committee. The Company Secretary
is the Secretary to the Nominating Committee.
The Nominating Committee has the following duties:•
•
•
•
•
Making recommendations to the Board on new
candidates for appointment and re-appointment/reelection of Directors to the Board.
Reviewing the required mix of skills, experience and
other qualities of the Board annually.
Reviewing and recommending to the Board the
appointment of members of Board Committees.
Establishing the mechanisms and reviewing criteria
for annual assessment of Directors.
Conducting an annual assessment of the Board,
Board Committees and individual directors and his
independence where applicable.
The Nominating Committee carries out the Board
assessment exercise annually. In 2013, the Nominating
Committee assessed the Board, Board Committees
and individual directors. The Board assessment is
conducted via formal questionnaires covering both
Executive Directors and Non-Executive Directors. The
Nominating Committee reviews the feedback from the
Board assessment and identifies areas for continuous
improvement. The Board’s effectiveness is assessed in the
areas of the Board structure, administration, conduct and
contribution of the Chairman and Board members.
52
The process also examines the ability of each Director and
Committee member to give material input at meetings
and to demonstrate a high level of professionalism
and integrity in the decision-making process. The
Board’s composition is reviewed with a focus on skills,
knowledge, core-competencies and independence in
meeting the Company’s needs.
The Company does not have a policy on boardroom
diversity, including gender diversity. In its selection for
Board representation, the Company believes in, and
provides equal opportunity to candidates with merit.
Nevertheless, the Board will give consideration to the
gender diversity objectives.
In 2013, the NC had also recommended the appointment
of Messrs Robert John Stanworth, Brian Conor Hannon
and Igor Kosinskiy for appointment as Directors. The
NC’s review of the criteria for the appointment process
focussed largely on the skills, knowledge, expertise,
competencies, experience and qualifications of the
candidates to meet the needs of the Company.
In accordance with the Company’s Articles of Association,
all Directors who are appointed by the Board are subject
to election by shareholders at the first Annual General
Meeting (“AGM”) after their appointment. In addition,
one-third of the Directors are required by rotation to
submit themselves for re-election by shareholders at
every AGM of the Company. The Articles further provide
that all the Directors shall retire from office once at least
in every three years but shall be eligible for re-election.
Directors over seventy (70) years of age are required
to submit themselves for re-appointment annually in
accordance with Section 129 of the Companies Act, 1965.
In 2013, the Board approved the recommendation of the
Nominating Committee to support four (4) directors to be
elected, re-elected or re-appointed at the 40th AGM.
The Nominating Committee was satisfied that the four
Independent Directors are demonstrably independent, and
that their length of service on the Board of more than nine
(9) years do not in any way interfere with their exercise
of objective judgment or their ability to act in the best
interest of the Company.
Two meetings of the Nominating Committee were held
during the financial year. All members of this Committee
are Independent Non-Executive Directors.
annual report 2013
Directors’ Training
DIRECTORS’ REMUNERATION
The Company recognises the importance of continuing
education for its Directors to ensure they are equipped
with the necessary skills and knowledge to meet the
challenges of the Board. The Board acknowledges that
Directors’ training is an ongoing process and is mindful
of the need for continuous training to keep abreast of
industry developments and trends. The Directors are
encouraged to attend training sessions and seminars in
accordance with their respective needs in discharging their
duties as Directors. Each Director determines the areas of
training that he may require for personal development as a
Director or as a member of a Board Committee.
The objective of the Company’s policy on Directors’
remuneration is to attract and retain Directors of the
calibre required to run the Group successfully. The
component parts of remuneration are structured so as to
link rewards to corporate and individual performance in
the case of Executive Directors. Performance is measured
against profits and key performance indicator targets set
out in the Group’s annual business plan. In the case of
Non-Executive Directors, the level of remuneration reflects
the experience and level of responsibilities undertaken by
the particular Non-Executive concerned.
During the financial year ended December 31, 2013, the
Directors had attended training programmes or briefings
covering areas such as business management, legal
and regulatory compliance, risk management, corporate
governance and corporate disclosure. In addition, Directors
continuously receive briefings and updates on the Group’s
businesses and operations, new developments in the
business environment, risk management activities,
corporate governance and new regulatory requirements.
Messrs. Robert John Stanworth, Brian Conor Hannon and
Igor Kosinskiy who were appointed as Directors during the
financial year have completed the Mandatory Accreditation
Programme prescribed by Bursa Malaysia Securities
Berhad. The Board will continue to assess the training
needs of its Directors.
Remuneration Committee
Leong Wai Hoong (Chairman)
Keong Choon Keat
This Committee held one meeting during the financial year
ended December 31, 2013. All members of this Committee
are Independent Non-Executive Directors.
The Remuneration Committee reviews the policy and
framework for Directors’ remuneration drawing advice
from external consultants as necessary. Remuneration
of Executive Directors is according to JTI Group Global
Remuneration Policies which links rewards to corporate and
individual performance. Directors’ fees payable to NonExecutive Directors is proposed by the Board and is subject
to shareholders’ approval at the annual general meeting.
The Committee shall meet at least once a year. Additional meetings can be scheduled if considered necessary by the
Chairman of the Committee. The Company Secretary is the Secretary to the Remuneration Committee. The details of the
aggregate remuneration of the Directors as at December 31, 2013 are as follows:
Fee
Executive Directors
Non-Executive Directors
Total
RM
RMRM
-
405,000405,000
Salary
2,536,456
-2,536,456
Bonus
1,994,043
-1,994,043
Allowances
EPF
Post Employment Benefit
Benefits-in-kind
Total
800,008
-800,008
91,536
-91,536
10,021
-
586,522
6,018,586
10,021
-586,522
405,0006,423,586
53
Statement of Corporate Governance
The number of directors whose remuneration falls within the following bands are:
Executive Directors
Non-Executive Directors
Total
RM
RMRM
50,001 – 100,000
-
3
3
100,001 – 150,000
-
1
1
850,001 – 900,000
1
-
1
950,001 – 1,000,000
1
-
1
1,050,001 – 1,100,000
1
-
1
3,050,001 – 3,100,000
1
-
1
Total
4
FINANCIAL REPORTING
It is the Board’s commitment to provide a balanced, clear,
and meaningful assessment of the financial position and
prospects of the Group in all the reports to shareholders,
investors, and regulatory authorities.
The Directors are responsible for ensuring that the
Company and the Group keep accounting records which
disclose, with reasonable accuracy, the financial position
of the Company and the Group and enable the Directors
to ensure that the financial statements are in compliance
with the Act and in accordance with MFRS and IFRS.
Early release of the announcements of the quarterly
financial statements and press release reflect the Board’s
commitment to provide timely and transparent disclosures
of the performance of the Company and the Group.
The Directors have general responsibility to take such
steps that are reasonably open to them to safeguard the
assets of the Company and the Group and to prevent and
detect fraud and other irregularities.
STATEMENT OF DIRECTORS’
RESPONSIBILITY FOR PREPARING THE
FINANCIAL STATEMENTS
ASSESSMENT OF EXTERNAL AUDITORS
Pursuant to the Companies Act, 1965 (“the Act”), the
Directors are required to prepare financial statements for
each financial year which give a true and fair view of the
state of affairs of the Company and the Group at the end
of the financial year and the results and cash flows of the
Company and the Group for the financial year.
The Directors are of the view that the financial statements
for the year ended December 31, 2013 of the Company
and the Group have been prepared in accordance with
the Malaysia Financial Reporting Standards (“MFRS”),
International Financial Reporting Standards (“IFRS”) and
the requirements of the Act. The Directors consider that
in preparing the financial statements of the Company and
the Group for the year ended December 31, 2013, the
Group has used appropriate accounting policies that are
consistently applied and supported by reasonable as well
as prudent judgments and estimates.
54
48
The Audit Committee undertakes an annual assessment
of the external auditors. Having satisfied itself with their
performance and fulfilment of criteria of independence,
the AC will recommend their re-appointment to the Board,
upon which the shareholders’ approval will be sought at the
AGM. The external auditor attended two Audit Committee
Meetings in year 2013 to discuss the nature and scope of
the audit and problems and reservations (if any) arising from
the final audit. During the financial year ended December
31, 2013, the Group paid non-audit fees of RM90,745 to the
statutory auditors and its affiliated companies.
RISK MANAGEMENT AND INTERNAL
CONTROL
The Board maintains a sound risk management framework
and system of internal controls to safeguard shareholders’
investments and the Group’s assets. An overview of
the state of risk management and internal controls
of the Company is set out in the Statement on Risk
Management and Internal Control on pages 56 to 57 of
this Annual Report.
annual report 2013
INTERNAL CORPORATE DISCLOSURE
POLICY
Along with good corporate governance practices, the
Company is committed to provide to investors and
the public with comprehensive, accurate and material
information on a timely basis.
In line with this commitment and in order to enhance
transparency and accountability, the Board has established
an internal Corporate Disclosure Policy, to facilitate the
handling and disclosure of material information in a timely
and accurate manner. The internal Corporate Disclosure
Policy aims to ensure the Company’s compliance with
the disclosure requirements as set out in the Listing
Requirements and other applicable laws.
SHAREHOLDERS
Dialogue between the Company and
Investors
The Group values dialogue with investors. As per the
Investor Relations Policy, it organises quarterly briefings
and discussions for analysts and fund managers the day
after each quarter’s announcement of results to Bursa
Malaysia Securities Berhad. Presentations are made, as
appropriate, to explain the Group’s strategy, performance
and major developments. However, any information that
may be regarded as competitive information will not be
given.
Annual General Meeting
The Board acknowledges the need to communicate with
shareholders on all material business matters affecting the
Company. A copy of the Annual Report is sent to all our
shareholders and is available upon request.
At each Annual General Meeting, the Board presents
the progress and performance of the business and
encourages shareholders to participate in the question
and answer session, which provides an opportunity for
shareholders to clarify any issues and to have a better
understanding of the business. Executive Directors and,
where appropriate, the Chairman of the Audit, Nominating
and Remuneration Committees are available to respond
to shareholders’ questions during the meeting. Where
appropriate, the Chairman of the Board will undertake
to provide the questioner with a written answer to any
significant question that cannot be readily answered
during the Annual General Meeting.
Each item of special business included in the notice of the
meeting will be accompanied by a full explanation of the
effects of a proposed resolution. Separate resolutions are
proposed for substantially separate issues at the meeting.
The Chairman announces proxy votes for all proxies
lodged with the Company.
The collective approved by the Board on this Statement
was obtained on February 25, 2014.
Chairman
55
Statement on
Risk Management and
Internal Control
Introduction
Enterprise Risk Management Framework
The Malaysian Code on Corporate Governance 2012
stated that the board should establish a sound risk
management framework and internal controls system
to safeguard shareholders’ investment and the Group’s
assets. The Bursa Malaysia Securities Berhad (BMSB)
Main Market Listing Requirements require Directors of
listed companies to include a statement in the annual
reports on the state of their risk management and internal
controls. The Statement on Risk Management and
Internal Control: Guidelines for Directors of Listed Issuers
(“Guidelines”) issued by the Taskforce on Internal Control
with the support and endorsement of BMSB provides
guidance for compliance with these requirements.
Set out below is the Board’s Risk Management and
Internal Control Statement, which has been prepared in
accordance with the Guidelines.
The Board has established an organisation structure
with clearly defined lines of accountability and delegated
authority. The risk management framework was
formalised in 2001 to be in compliance with the BMSB
Listing Requirements with emphasis on compliance with
the Code of Corporate Governance and Statement on Risk
Management and Internal Control. It also had, in 2001,
extended the responsibilities of the Audit Committee to
include the work of monitoring all internal controls, on its
behalf. Since 2002, a Risk Advisory Committee has been
in place, with representatives from middle management
and chaired by the Managing Director, which will meet
on a quarterly basis to consider the changes to risk
management and control processes required.
Responsibility
Having identified the risks to achieving the Group’s
strategic objectives, each functional area is required
to document the management and mitigating actions
for each significant risk. New areas are introduced for
assessment as the business risk profile changes and are
reviewed by the management team.
The Board of Directors recognises the importance of
sound internal controls and risk management practices to
good corporate governance. The Board affirms its overall
responsibility for the Group’s systems of internal controls
and risk management, and for reviewing the adequacy and
integrity of those systems. It should be noted, however,
that such systems are designed to manage rather than
eliminate the risk of failure to achieve business objectives.
In addition, it should be noted that any system can provide
only reasonable and not absolute assurance against
material misstatement or loss.
The Group has in place an on-going process that
systematically identifies key business risks and assesses
their impact and likelihood of occurrence and further
identifies measures and controls to mitigate and manage
the risks affecting the achievement of its business
objectives throughout the period. The process is regularly
reviewed by the Board, which dedicates separate time for
discussion of this subject.
56
Control Self-Assessment
Each quarter, the Internal Audit Department will prepare
a risk profile which summarises the risks, the controls
and processes for managing them and the means for
assuring management that the processes are effective.
This information will be updated in a timely manner and
reviewed by the management team. The Internal Audit
Department then reports to the Board significant changes
in the business and the external environment that affect
key risks.
Moving forward, the Company will further enhance
its risks and controls identification and monitoring
methodology. In addition, the Internal Audit Department
undertakes to broaden the development and refinement
of its risk-based techniques, enhance the level of staff
expertise and benchmark itself against global best
practices in risk management.
annual report 2013
Other Key Elements of Internal Control
Raising Concerns Mechanism
The other key elements of the Group’s internal control
systems are described below:
In line with the Group’s commitment to integrity and
ethics, the Raising Concerns Mechanism, an additional
tool for employees to report concerns on potentially
unethical behavior such as alleged violations of the Group’s
Code of Conduct was launched in 2008 and continuously
emphasized through communication and awareness
programmes.
•
•
•
•
•
•
Clearly defined delegation of responsibilities to
committees of the Board and to management
of Head Office and operating units, including
authorisation levels for all aspects of the business;
Clearly documented internal policies and procedures
set out in a series of Standard Practice Manuals.
These manuals are subject to regular review and
improvement;
Regular and comprehensive information provided to
management, covering financial performance and key
business indicators;
A detailed budgeting process where operating units
prepare budgets for the coming year which are
approved at the operating unit level;
Quarterly monitoring of results against budget, with
major variances being followed up and management
action taken, where necessary; and
Regular visits to operating units by the management
team and where deemed appropriate by the Board.
A number of internal control weaknesses were identified
during the period, all of which have been, or are being,
addressed. None of the weaknesses have resulted in any
material losses, contingencies or uncertainties that would
require disclosure in the Group’s annual report.
Related Party Transactions
Recurrent related party transactions of the Group during
the year are disclosed in the Notes to the Financial
Statements. The general mandate for these transactions
was obtained at the Thirty-Ninth Annual General Meeting
held on April 26, 2012 and further renewed at the Fortieth
Annual General Meeting held on April 25, 2013.
During the year, save for those recurrent related party
transactions of a revenue or trading nature that are
disclosed in Notes to the Financial Statements, there were
no material contracts of the Group involving Directors’ and
major shareholders’ interests.
57
Audit Committee
Report
Objective
d.
the assistance given by the employees of the
Company to the external auditor;
The Audit Committee assists the Board in fulfilling its
responsibility and ensuring the quality and integrity of the
accounting, auditing, internal control and financial practices
of the Company.
e.
the adequacy of the scope, functions,
competency and resources of the internal audit
functions and that it has the necessary authority
to carry out its work;
f.
the internal audit programme, processes,
the results of the internal audit programme,
processes or investigations undertaken and
whether or not appropriate action is taken on
the recommendations of the internal audit
function;
g.
the quarterly results and year end financial
statements prior to the approval by the Board of
Directors, focusing particularly on:
•
changes in the implementation of major
accounting policy;
Membership
The Audit Committee, whose composition is listed on page
6, comprises three Independent Non-Executive Directors of
the Board, with Datuk Henry Chin Poy-Wu as the Chairman.
Authority
The Committee is authorised by the Board:
i.
To investigate any activity within its terms of
reference;
•
significant and unusual events;
ii.
To have the resources required to perform its duties;
•
iii.
To have full and unrestricted access to any
information pertaining to the Company and the Group;
compliance with accounting standards
and other legal requirements;
•
the going concern assumption;
iv.
To have direct communication channels with the
internal and external auditors;
•
compliance with Bursa Malaysia Securities
Berhad (BMSB) requirements;
v.
To obtain external legal or other independent advice
as necessary; and
h.
vi.
To convene meetings with the external auditors, the
internal auditors or both, excluding the attendance of
other directors and employees, whenever deemed
necessary.
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 integrity;
i.
any letter of resignation from the external
auditors of the Company;
j.
whether there is any reason (supported by
grounds) to believe that the external auditor is
not suitable for reappointment;
k.
external auditors’ management letter and
management’s response;
l.
whether they are satisfied that the Corporate
Risk Management procedure used within the
Company and the Group provides reasonable
assurance that all known risks are identified,
evaluated and effectively managed;
ii.
To prepare the Audit Committee Report for the JT
International Berhad Annual Report as established by
Section 15.15 of the BMSB Listing Requirements;
Functions and Duties
The function and duties of the Committee shall be:
58
i.
To review the following and report the same to the
Board of Directors:
a.
with the external auditor, the audit plan;
b.
with the external auditor, his evaluation of the
system of internal controls;
c.
with the external auditor, his report;
annual report 2013
iii.
Where the Audit Committee is of the view that any
matter reported by it to the Board of Directors of the
Company which has not been satisfactorily resolved
resulting in a breach of BMSB Listing Requirements,
the Audit Committee must report such matter to the
BMSB;
iv.
To recommend the nomination of a person or persons
as external auditors;
v.
To review any appraisal or assessment of the
performance of the members of the internal audit
function;
vi.
To approve any appointment or termination of senior
staff members of the internal audit function;
vii.
To inform itself of resignations of the internal audit
staff members and provide the resigning staff
member an opportunity to submit his reasons for
resigning;
viii. To discuss problems and reservations arising from
the interim and final audits, their evaluation of the
system of internal controls and any matters the
external auditor may wish to discuss (in the absence
of management where necessary); and
ix.
To carry out any other function that may be mutually
agreed upon by the Committee and the Board.
Summary of Activities
During the year under review, the Audit Committee carried
out the activities as set out in its functions and duties.
Meetings
The Committee held four meetings during the financial
year ended December 31, 2013. At the invitation of the
Committee, the Managing Director, the Chief Financial
Officer and the Group Internal Audit Manager attended all
meetings.
The Group’s external auditors attended two meetings during
this period, where they were invited to discuss matters
related to the statutory audit for the year ended December
31, 2012 and their statutory audit-planning memorandum
for the year ended December 31, 2013. They were also
given the opportunity to raise areas of concern without the
presence of the Executive Directors of the Group.
NAME OF
AUDIT COMMITTEE MEMBER TOTAL MEETINGS
ATTENDED
1. Datuk Henry Chin Poy-Wu
3/4
2. Mr. Keong Choon Keat
4/4
3. Mr. Leong Wai Hoong 4/4
Internal Audit Function
The Group has a well-established Internal Audit Department
(established in 1991), which reports directly to the Audit
Committee of the Board and assists the Board of Directors
in monitoring and managing risks, related party transactions
and internal controls, based on the internal audit plan. The
Audit Committee approves the following year’s internal
audit plan during the last Audit Committee meeting of
the prior year and reviews its status at Audit Committee
meetings in the current year. The scope of Internal Audit
covers the audit of all units and operations, including
enterprise wide risk assessment, review of related
party transactions, the adequacy of operational controls,
compliance with law and regulations and the management
of assets. In addition, Internal Audit performs quarterly
follow-ups on outstanding issues from prior audits.
The Group adopts a risk-based approach to the
implementation and monitoring of controls. The approach is
being continuously refined. This systematic and disciplined
approach is designed to evaluate and continually enhance
enterprise risk management, controls and corporate
governance processes in the context of the Group’s overall
objectives.
During the year, the Audit Committee reviewed a total of
six reports prepared by the Internal Audit Department,
which included Leaf and Stemmery Operations,
Reviews on Factory Operations, Investigation on Gratis
Misappropriation, Merchandising and Point of Sale
Materials and Consumer and Trade Marketing Field
Operations. In addition to the audit reports, the Audit
Committee performed reviews on recurrent related party
transactions updates. Management has duly acted upon
the recommendations made.
The total cost incurred for the internal audit function of
the Company and the Group for the financial year was
RM438,000.
59
Promoting
Sustainability
JTI Malaysia recognizes the importance of sustainability and its increasing impact to the business and is
committed to the goal of developing a sustainable future. At JTI Malaysia, we are always prepared to rise
above the challenges in our quest for consistent growth and sustainability.
Globally, the JTI Group is committed to providing a safe workplace for its employees and conducting its
business in a way that is environmentally sound. JTI Malaysia aims to eliminate all occupational injuries
and illnesses, prevent pollution at its source and optimize the use of natural resources. A clearly defined
Environment, Health and Safety (EHS) management structure and framework for managing EHS issues.
60
annual report 2013
Various energy conservation and recycling initiatives were developed to reduce energy consumption and
emissions into the environment. JTI Malaysia places utmost priority in maintaining the highest level of
corporate governance and compliance with laws and regulations. The Company’s dedication to supporting
the local communities within which it operates will remain steadfast and consistent. Through its corporate
philanthropy programmes, JTI Malaysia has and will continue to implement initiatives designed to give back
to the local community.
Always prepared to rise above the challenges in our quest for consistent growth and sustainability
61
Financial
Statements
Directors’ Report 64
Statements of Cash Flows 75
Independent Auditors’ Report 68
Notes to the Financial Statements 77
Statements of Profit or Loss and Other
Comprehensive Income
70
Statements of Financial Position 71
Statements of Changes in Equity 73
Statement by Directors 112
Declaration by the Director 112
Statement of Value Added
113
Directors’ Report
The Directors of JT INTERNATIONAL BERHAD have pleasure in submitting their report and the audited financial statements of the
Group and of the Company for the financial year ended December 31, 2013.
Principal Activities
The Company is principally an investment holding company.
The principal activities of its subsidiary companies are disclosed in Note 14 to the financial statements.
There have been no significant changes in the nature of the activities of the Company and its subsidiary companies during the
financial year.
Results of Operations
The results of operations of the Group and of the Company for the financial year are as follows:
The The
GroupCompany
RM’000RM’000
Profit before tax
Tax expense
164,340
(42,711)
112,865
(31)
Profit for the year 121,629
112,834
In the opinion of the Directors, the results of operations of the Group and of the Company during the financial year have not been
substantially affected by any item, transaction or event of a material and unusual nature.
Dividends
Since the end of the previous financial year, the dividends paid by the Company in respect of the current financial year were as
follows:
(i)
A single tier special cash dividend of 21 sen amounting to RM54,922,225; and
(ii) Two single tier interim dividends of 11 sen each totalling RM57,537,569.
The Directors do not recommend the payment of any final dividend in respect of the current financial year.
Reserves and Provisions
There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial
statements.
64
annual report 2013
Issue of Shares and Debentures
The Company has not issued any new shares or debentures during the financial year.
Share Options
No options have been granted by the Company to any parties during the financial year to take up unissued shares of the Company.
No shares have been issued during the financial year by virtue of the exercise of any option to take up unissued shares in the
Company. As of the end of the financial year, there were no unissued shares of the Company under options.
Other Statutory Information
Before the statements of profit or loss and other comprehensive income and the statements of financial position of the Group and
of the Company were made out, the Directors took reasonable steps:
(a) to ascertain that proper action had been taken in relation to the writing off of bad receivables and the making of allowance
for doubtful receivables, and had satisfied themselves that all known bad receivables had been written off and that adequate
allowance had been made for doubtful receivables; and
(b) to ensure that any current assets which were unlikely to realise their book values in the ordinary course of business had been
written down to their estimated realisable values.
At the date of this report, the Directors are not aware of any circumstances:
(a) which would render the amount written off for bad receivables or the amount of allowance for doubtful receivables in the
financial statements of the Group and of the Company inadequate to any substantial extent; or
(b) which would render the values attributed to current assets in the financial statements of the Group and of the Company
misleading; or
(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the
Company misleading or inappropriate; or
(d) not otherwise dealt with in this report or financial statements which would render any amount stated in the financial statements
of the Group and of the Company misleading.
At the date of this report, there does not exist:
(a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which secures
the liability of any other person; or
(b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.
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, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the
Company to meet their obligations as and when they fall due.
In the opinion of the Directors, 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 operations of the Group and of
the Company for the succeeding financial year.
65
Directors’ Report
Directors
The following Directors served on the Board of the Company since the date of the last report:
Dato’ Sri Mohd Nadzmi bin Mohd Salleh
Leong Wai Hoong
Keong Choon Keat
Thean Nam Hooi
Robert John Stanworth (appointed on 01.03.2013)
Igor Kosinskiy (appointed on 21.05.2013)
Brian Conor Hannon (appointed on 21.05.2013)
Shigeyuki Nakano (resigned on 28.02.2013)
Nobuaki Hayashi (resigned on 21.05.2013)
Hirakazu Otomo (resigned on 21.05.2013)
In accordance with Article 99 of the Company’s Articles of Association, Messrs. Dato’ Sri Mohd Nadzmi bin Mohd Salleh and Pierre
Henri Emeric Binetter retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for reelection.
Messrs. Igor Kosinskiy and Brian Conor Hannon, who were appointed to the Board after the date of the last Annual General Meeting,
retire under Article 106 of the Company’s Articles of Association and, being eligible, offer themselves for re-election.
Datuk Henry Chin Poy-Wu, being over the age of seventy years, retires pursuant to Section 129(2) of the Companies Act, 1965 and
seeks re-appointment as Director under the provision of Section 129(6) of the said Act to hold office until the next Annual General
Meeting.
Directors’ Interests
None of the Directors in office as of the end of the financial year held shares or had beneficial interest in the shares of the Company
during the financial year. Under the Company’s Articles of Association, the Directors are not required to hold shares in the Company.
The interests in shareholdings in other related companies of those who were Directors at the end of the financial year, as recorded
in the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act, 1965, are as follows:
Number of ordinary shares of PHP 1 each
Balance at
1.1.2013/
Date of Balance at
appointment
Bought
Sold 31.12.2013
Registered in the name of the Director
Shares in JT International (Philippines) Inc.
Brian Conor Hannon
1
-
-
1
-
-
66
1
1
annual report 2013
Directors’ Interests (cont’d.)
Number of ordinary shares of PHP 100 each
Balance at
1.1.2013/
Date of Balance at
appointment
Bought
Sold 31.12.2013
Registered in the name of the Director
Shares in JTI Company (Philippines) Inc.
Brian Conor Hannon
1
-
-
1
1
-
-
1
None of the other Directors in office at the end of the financial year held shares or had beneficial interest in the shares of the related
companies during or at the beginning and at the end of the financial year.
Directors’ Benefits
Since the end of the previous financial year, none of the Directors of the Company has received or become entitled to receive any
benefit (other than those disclosed as directors’ remuneration in the financial statements) by reason of a contract made by the
Company or a related corporation with the Director or with a firm of which he is a member, or with a company in which he has a
substantial financial interest.
During and at the end of the financial year, no arrangement subsisted to which the Company was a party whereby the Directors
of the Company might acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body
corporate.
Holding Companies
The Company is a subsidiary company of JT International Holding B.V., a company incorporated in the Netherlands. The Directors
regard Japan Tobacco Inc., a company incorporated in Japan as the ultimate holding company.
Auditors
The auditors, Messrs. Deloitte & Touche, have indicated their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the Directors,
ROBERT JOHN STANWORTH
THEAN NAM HOOI
Kuala Lumpur,
February 25, 2014
67
Independent Auditors’ Report
to the Members of jt international Berhad (Incorporated in Malaysia)
Report on the Financial Statements
We have audited the financial statements of JT INTERNATIONAL BERHAD, which comprise the statements of financial position
of the Group and of the Company as of December 31, 2013, and the statements of profit or loss and other comprehensive income,
statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a
summary of significant accounting policies and other explanatory information, as set out on pages 70 to 110.
Directors’ Responsibility for the Financial Statements
The Directors of the Company are responsible for the preparation of these financial statements so as to give a true and fair view in
accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the
Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
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 auditors’ judgement, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the
entity’s preparation of financial statements that give a true and fair view 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 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 that we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of
December 31, 2013 and of their financial performance and cash flows for the year then ended in accordance with Malaysian Financial
Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report that:
(a) in our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and by its
subsidiary companies have been properly kept in accordance with the provisions of the Act;
(b) we are satisfied that the accounts of the subsidiary companies 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 financial statements of the
Group and we have received satisfactory information and explanations as required by us for those purposes; and
(c) our auditors’ reports on the accounts of the subsidiary companies were not subject to any qualification or any adverse comment
made under Section 174(3) of the Act.
68
annual report 2013
Other Reporting Responsibilities
The supplementary information set out on page 111 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is
not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance
with Guidance on Special Matter No. 1 “Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure
Pursuant to Bursa Malaysia Securities Berhad Listing Requirements” as issued by the Malaysian Institute of Accountants (“MIA
Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all
material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.
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 towards any other person for the contents of this report.
DELOITTE & TOUCHE
AF 0834
Chartered Accountants
YEE YOON CHONG
Partner - 1829/07/15 (J)
Chartered Accountant
Kuala Lumpur
February 25, 2014
69
Statements of Profit or Loss and Other
Comprehensive Income
for the year ended December 31, 2013
The Group
The Company
2013201220132012
Note RM’000RM’000RM’000RM’000
(restated)
Revenue5
1,273,2731,234,330 113,850181,170
Investment revenue
6
3,5765,677 119585
Other income
7
2,1193,079
-Change in inventories of finished goods
2,747(5,657)
-Raw materials and consumables used (145,942)
(146,765)
-Directors’ remuneration
8
(5,837)(5,709) (405)(367)
Staff costs
7(76,332)(65,348)
-Depreciation and amortisation of property,
plant and equipment
12
(19,742)(17,356)
-Amortisation of prepaid lease payments
13
(6)(6) -Other expenses
7
(869,516)(860,703)
(699)(464)
Profit before tax
164,340141,542112,865180,924
Tax expense
9
(42,711)(40,230)
(31)(145)
Profit for the year
121,629101,312112,834180,779
Other comprehensive income,
net of income tax:
Items that will not be reclassified subsequently
to profit or loss:
Remeasurement of defined benefit obligation
(959)1,095
-
Total comprehensive income for the year
120,670102,407112,834180,779
Earnings per ordinary share
Basic and diluted
10
RM0.47RM0.39
The accompanying Notes form an integral part of the Financial Statements.
70
annual report 2013
71
Statements of Financial Position
as of December 31, 2013
The Group
31.12.201331.12.2012 1.1.2012
NoteRM’000RM’000RM’000
(restated)(restated)
ASSETS
Non-current Assets
Property, plant and equipment
12
168,436117,733110,875
Prepaid lease payments 13
192198204
Deferred tax assets
15
4,9073,7384,204
Total Non-current Assets
173,535121,669115,283
Current Assets
Inventories16
72,39488,67882,716
Trade receivables
17
83,75273,93957,978
Other receivables, deposits and prepaid expenses
18
33,62919,64914,480
Tax recoverable
1,606
-1,609
Amount owing by ultimate holding company
19
- -66
Amount owing by other related companies
19
16,700 8977,856
Cash and cash equivalents
20
114,605149,930259,903
Total Current Assets
322,686333,093424,608
Total Assets
496,221454,762539,891
EQUITY AND LIABILITIES
Capital and Reserves Issued capital
2165,38465,38465,384
Share premium
22
4,5364,5364,536
Retained earnings
23287,660279,450381,040
Total Equity
357,580349,370450,960
Non-current and Deferred Liabilities
Deferred tax liabilities
15
13,79012,58813,342
Provision for retirement benefits
2416,63115,05917,010
Total Non-current and Deferred Liabilities
30,42127,64730,352
Current Liabilities
Trade payables
25
35,638 8,18810,778
Other payables and accrued expenses
25
61,35955,14737,118
Amount owing to immediate holding company
19
4,0003,724 371
Amount owing to ultimate holding company
19
116153 Amount owing to other related companies
19
7,1079,9393,216
Tax liabilities
- 5947,096
Total Current Liabilities
108,22077,74558,579
Total Liabilities
138,641105,39288,931
Total Equity and Liabilities
496,221454,762539,891
Statements of Financial Position
as of December 31, 2013
The Company
20132012
NoteRM’000RM’000
ASSETS
Non-current Asset
Investment in subsidiary companies
14
250,990250,990
Total Non-current Asset
250,990250,990
Current Assets
Other receivables, deposits and prepaid expenses
18
2511
Tax recoverable
100Cash and cash equivalents
20
4,6654,299
Total Current Assets
4,7904,310
Total Assets
255,780255,300
EQUITY AND LIABILITIES
Capital and Reserves Issued capital
21
65,38465,384
Share premium
22
4,5364,536
Retained earnings
23
185,551185,177
Total Equity
255,471255,097
Current Liabilities
25
309187
Tax liabilities
-16
Total Current Liabilities
309203
Total Liabilities
309203
Total Equity and Liabilities
255,780255,300
72
annual report 2013
73
Statements of Changes in Equity
Non
distributable Distributable
Reserve -
Reserve -
Issued ShareRetained
Capital
Premium
Earnings
Total
The Group
Balance as of January 1, 2012
As previously reported
65,384
4,536
384,602
454,522
Effect of adoption of MFRS 119
2
-
-
(3,562)
(3,562)
As restated
65,384
4,536
381,040
450,960
Profit for the year
-
-
101,312
101,312
Other comprehensive income for
the year, net of income tax:
-
-
-
2
-
-
1,095
1,095
As restated
-
-
1,095
1,095
Total comprehensive income for
the year - restated
-
-
102,407
102,407
Dividends
11
-
-
(203,997)
(203,997)
Balance as of December 31, 2012 65,384 4,536279,450349,370
65,384 4,536281,917351,837
2
-
- (2,467)(2,467)
As restated
65,384 4,536279,450349,370
Profit for the year
-
-121,629121,629
Other comprehensive income for
the year, net of income tax
-
- (959)(959)
Total comprehensive income for
the year -
-120,670120,670
Dividends
11
-
- (112,460)(112,460)
Balance as of December 31, 2013
65,384 4,536287,660357,580
Statements of Changes in Equity
Non
distributable Distributable
Reserve -
Reserve -
Issued ShareRetained
Capital
Premium
Earnings
Total
The Company
Balance as of January 1, 2012 65,384 4,536208,395278,315
Profit for the year
-
-
180,779
180,779
Other comprehensive income for the year,
net of income tax
-
-
-
-
-
180,779
180,779
Dividends
11
-
-
(203,997)
(203,997)
Balance as of December 31, 2012 65,384 4,536185,177255,097
65,384
Profit for the year
Other comprehensive income for the year,
net of income tax
-
Dividends
11 Balance as of December 31, 2013
-
-
-112,834112,834
----
65,384
74
4,536185,177255,097
-112,834112,834
- (112,460)(112,460)
4,536185,551255,471
annual report 2013
75
Statements of Cash Flows
The Group
The Company
2013201220132012
RM’000RM’000RM’000RM’000
CASH FLOWS FROM/ (USED IN)
OPERATING ACTIVITIES
Profit for the year
121,629101,312112,834180,779
Adjustments for:
Tax expense recognised in profit or loss
42,71140,230
31145
Depreciation and amortisation of property,
plant and equipment
19,74217,356
-Inventories written down
3,4771,956
-Provision for employee termination compensation
2,738--Property, plant and equipment written off
2,0441,536
-Provision for retirement benefits
1,6601,858
-Allowance for doubtful receivables
156--Inventories written off
17--Amortisation of prepaid lease payments
66 -Interest income
(3,576)(5,677) (119)(585)
Gain on disposal of property, plant and
equipment
(1,146)(2,654)
-Unrealised gain on foreign exchange
(905)(28) -Reversal of impairment of property, plant
and equipment
(303)- -Gain on transfer of property, plant and
equipment to other related companies
(4)- -Allowance for doubtful receivables no longer required
-
(17)- Bad receivables written off
-53 -
Impairment of property, plant and equipment
-3,806
-Dividend income
--
(113,850)(181,170)
Provision for restructuring costs
-1,576
-
188,246161,313 (1,104)(831)
Movements in working capital:
Decrease/(Increase) in:
Inventories
12,790(7,918)
-Trade receivables
(9,969)(16,040)
-Other receivables, deposits and prepaid expenses
(2,396)845 (14)(1)
Amount owing by ultimate holding company
-66 -Amount owing by other related companies
(15,815)6,935
-Increase/(Decrease) in:
Trade payables
27,358(2,549)
-Other payables and accrued expenses
3,45816,437 12228
Amount owing to ultimate holding company (37)153
-Amount owing to immediate holding company
2763,353
-Amount owing to other related companies
(2,940)6,736
-
Cash Generated From/(Used In) Operations
200,971169,331
(996)(804)
Tax refunded
210740 24251
Tax paid
(45,088)(46,151) (171)(156)
Retirement benefits paid
(1,047)(2,714)
-
Net Cash From/(Used In) Operating Activities
155,046121,206 (1,143)(709)
The Group
The Company
2013201220132012
RM’000RM’000RM’000RM’000
CASH FLOWS (USED IN)/FROM
INVESTING ACTIVITIES
Interest received
3,6295,648119597
Proceeds from disposal of property, plant
and equipment
1,5962,749
-Proceeds from transfer of property, plant
and equipment to other related companies
1,194--Transfer of property, plant and equipment from
other related companies
(3,732)(6,631)
-Downpayments for capital expenditure
(19,546)(9,042)
-Purchase of property, plant and equipment
(61,052)(19,906)
-Dividends received from subsidiary companies
--
113,850181,170
Net Cash (Used In)/From Investing Activities
(77,911)(27,182)113,969181,767
CASH FLOWS USED IN
FINANCING ACTIVITY
Dividends paid
(112,460)
(203,997)
(112,460)(203,997)
Net Cash Used In Financing Activity
(112,460)
(203,997)
(112,460)(203,997)
NET (DECREASE)/INCREASE IN
CASH AND CASH EQUIVALENTS
(35,325)
(109,973)
366(22,939)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 149,930
259,903
4,29927,238
CASH AND CASH EQUIVALENTS AT
END OF YEAR (Note 20)
114,605149,930
4,6654,299
76
annual report 2013
Notes to the Financial Statements
1. General Information
The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed on the Main Market of
Bursa Malaysia Securities Berhad.
The Company is principally an investment holding company.
The principal activities of its subsidiary companies are disclosed in Note 14.
There have been no significant changes in the nature of the activities of the Company and its subsidiary companies during the
financial year.
The registered office and principal place of business of the Company is located at 6th Floor Menara Manulife, No. 6 Jalan
Gelenggang, Damansara Heights, 50490 Kuala Lumpur, Malaysia.
The financial statements of the Group and the Company have been authorised by the Board of Directors for issuance in
accordance with a resolution of the Directors dated February 25, 2014.
2. Basis of Preparation of the Financial Statements
The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting
Standards (“MFRSs”), International Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia.
Adoption of New and Revised Financial Reporting Standards
In the current financial year, the Group and the Company adopted all the new and revised MFRSs and Issues Committee
Interpretations (“IC Interpretations”) and amendments to MFRSs and IC Interpretations issued by the Malaysian Accounting
Standards Board that are relevant to their operations and effective for annual financial periods beginning on or after January 1,
2013.
MFRS 7 Financial Instruments: Disclosures (Amendment relating to Disclosures – Offsetting Financial Assets and Liabilities)
MFRS 10 Consolidated Financial Statements
MFRS 12 Disclosure of Interests in Other Entities
MFRS 13 Fair Value Measurement
MFRS 101 Presentation of Financial Statements (Amendments relating to Presentation of Items of Other Comprehensive Income)
MFRS 119 Employee Benefits (IAS 19 as amended by IASB in June 2011)
Annual Improvements to MFRSs 2009 – 2011 Cycle (issued in July 2012)
The adoption of these new and revised MFRSs and IC Interpretations did not result in significant changes in the accounting
policies of the Group and of the Company and has no significant effect on the financial performance or position of the Group
and of the Company except as discussed below.
Amendments to MFRS 7 Disclosures – Offsetting Financial Assets and Financial Liabilities
The Group and the Company have applied the amendments to MFRS 7 Disclosures – Offsetting Financial Assets and Financial
Liabilities for the first time in the current financial year. The amendments to MFRS 7 require entities to disclose information
about rights of offset and related arrangements (such as collateral posting requirements) for financial instruments under an
enforceable master netting agreement or similar arrangement.
The amendments have been applied retrospectively. As the Group and the Company do not have any offsetting arrangements
in place, the application of the amendments has no material impact on the disclosures or on the amounts recognised in these
financial statements.
77
2. Basis of Preparation of the Financial Statements (Cont’d.)
MFRS 13 Fair Value Measurement
The Group and the Company has applied MFRS 13 for the first time in the current year. MFRS 13 establishes a single source
of guidance for fair value measurements and disclosures about fair value measurements. The scope of MFRS 13 is broad; the
fair value measurement requirements of MFRS 13 apply to both financial instrument items and non-financial instrument items
for which other MFRSs require or permit fair value measurements and disclosures about fair value measurements, except for
share-based payment transactions that are within the scope of MFRS 2 Share-based Payment, leasing transactions that are
within the scope of MFRS 117 Leases, and measurements that have some similarities to fair value but are not fair value (e.g.
net realisable value for the purposes of measuring inventories or value in use for impairment assessment purposes).
MFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction in the principal (or most advantageous) market at the measurement date under current market conditions. Fair value
under MFRS 13 is an exit price regardless of whether that price is directly observable or estimated using another valuation
technique. Also, MFRS 13 includes extensive disclosure requirements.
MFRS 13 requires prospective application from January 1, 2013. In addition, specific transitional provisions were given to
entities such that they need not apply the disclosure set out in the Standard in comparative information provided for periods
before the initial application of the Standard. In accordance with these transitional provisions, the Group and the Company have
not made any new disclosures required by MFRS 13 for the 2012 comparative period. Other than the additional disclosures, the
application of MFRS 13 has not had any material impact on the amounts recognised in these financial statements.
Amendments to MFRS 101: Presentation of Items of Other Comprehensive Income
The Group and the Company have applied the amendments to MFRS 101 Presentation of Items of Other Comprehensive
Income for the first time in the current financial year. The amendments introduce new terminology, whose use is not mandatory,
for the statement of comprehensive income and income statement. Under the amendments to MFRS 101, the “statement of
comprehensive income” is renamed as the “statement of profit or loss and other comprehensive income” and the “income
statement” is renamed as the “statement of profit or loss”. The amendments to MFRS 101 retain the option to present profit
or loss and other comprehensive income in either a single statement or in two separate but consecutive statements. However,
the amendments to MFRS 101 require items of other comprehensive income to be grouped into two categories in the other
comprehensive income section: (a) items that will not be reclassified subsequently to profit or loss and (b) items that may
be reclassified subsequently to profit or loss when specific conditions are met. Income tax on items of other comprehensive
income is required to be allocated on the same basis – the amendments do not change the option to present items of other
comprehensive income either before tax or net of tax.
The amendments have been applied retrospectively, and hence the presentation of items of other comprehensive income has
been modified to reflect the changes. Other than the aforementioned presentation changes, the application of the amendments
to MFRS 101 does not result in any impact on profit or loss and total comprehensive income.
Amendments to MFRS 119: Employee benefits as amended by IASB in June 2011
In the current financial year, the Group has applied MFRS 119 Employee Benefits (IAS 19 as amended by IASB in June 2011)
and the related consequential amendments for the first time.
MFRS 119 (IAS 19 as amended by IASB in June 2011) changes the accounting for defined benefit plans and termination
benefits. The most significant changes relates to the accounting for changes in defined benefit obligations and plan assets.
The amendments require the recognition of changes in defined benefit obligations and in the fair value of plan assets when
they occur, and hence eliminate the ‘corridor approach’ permitted under the previous version of MFRS 119 and accelerate the
recognition of past service costs.
All actuarial gains and losses are recognised immediately through other comprehensive income in order for the net pension asset
or liability recognised in the consolidated statement of financial position to reflect the full value of the plan deficit or surplus.
Furthermore, the interest cost and expected return on plan assets used in the previous version of MFRS 119 are replaced with a
‘net interest’ amount under MFRS 119 (IAS 19 as amended by IASB in June 2011), which is calculated by applying the discount
rate to the net defined benefit liability or asset. These changes have had an impact on the amounts recognised in profit or loss and
other comprehensive income in prior years (see the tables below for details). In addition, MFRS 119 (IAS 19 as amended by IASB
in June 2011) introduces certain changes in the presentation of the defined benefit cost including more extensive disclosures.
78
annual report 2013
79
Amendments to MFRS 119: Employee benefits as amended by IASB in June 2011 (cont’d.)
Specific transitional provisions are applicable to first-time application of MFRS 119 (IAS 19 as amended by IASB in June 2011).
The Group has applied the relevant transitional provisions and restated the comparative amounts on a retrospective basis.
As
Effect of
previouslyamendments
reported
to MFRS 119
As restated
RM’000
RM’000
RM’000
The Group
Statement of Financial Position as of January 1, 2012
13,448
3,562
17,010
Retained earnings
384,602
(3,562)
381,040
Statement of Profit or Loss and Other Comprehensive Income
for the year ended December 31, 2012 Other comprehensive income, net of income tax - Items that
will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit obligation
-
1,095
1,095
Statement of Financial Position as of December 31, 2012
12,592
2,467
15,059
Retained earnings
281,917
(2,467)
279,450
Standards and IC Interpretations in issue but not yet effective
At the date of authorisation for issue of these financial statements, the new and revised Standards and IC Interpretations which
were in issue but not yet effective and not early adopted by the Group and the Company are as listed below.
MFRS 7
Financial Instruments : Disclosures (Amendments relating to Mandatory Effective Date of MFRS 9 (IFRS 9
issued by IASB in November 2009 and October 2010 respectively) and Transition Disclosures)2
MFRS 9
Financial Instruments (IFRS 9 issued by IASB in November 2009)2
MFRS 9
Financial Instruments (IFRS 9 issued by IASB in October 2010)2
MFRS 10
Consolidated Financial Statements (Amendments relating to Investment Entities)1
MFRS 12
Disclosure of Interests in Other Entities (Amendments relating to Investment Entities)1
MFRS 127Separate Financial Statements (Amendments relating to Investment Entities)1
MFRS 132Financial Instruments: Presentation (Amendments relating to Offsetting Financial Assets and Financial
Liabilities)1
MFRS 136Impairment of Assets (Amendments relating to Recoverable Amounts Disclosures for Non-Financial Assets)1
MFRS 139Financial Instruments: Recognition and Measurement (Amendments relating to Novation of Derivatives and
Continuation of Hedge Accounting)1
IC Interpretation 21 Levies2
Annual Improvements to MFRSs 2010 - 2012 cycle (issued in December 2013)3
Annual Improvements to MFRSs 2011 - 2013 cycle (issued in December 2013)3
1
2
3
Effective for annual periods beginning on or after January 1, 2015 instead of January 1, 2013 immediately upon the
issuance of Amendments to MFRS 9 (IFRS 9 issued by IASB in November 2009 and October 2010 respectively) and MFRS
7 relating to “Mandatory Effective Date of MFRS 9 and Transition Disclosures” on March 1, 2012
Effective for annual periods beginning on or after January 1, 2014
Effective for annual periods beginning on or after July 1, 2014
Standards and IC Interpretations in issue but not yet effective (cont’d.)
The Directors anticipate that the adoption of these Standards and IC Interpretations when they become effective, will have no
material impact on the financial statements of the Group and of the Company in the period of initial application.
3. Significant Accounting Policies
Basis of Accounting
The financial statements of the Group and of the Company have been prepared under the historical cost convention unless
otherwise indicated in the accounting policies below. Historical cost is generally based on the fair value of the consideration
given in exchange for assets.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date, regardless of whether that price is directly observable or estimated using another
valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of
the asset or liability if market participants would take those characteristic into account when pricing the asset or liability at
the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statements
is determined on such as basis, except for share-based payment transactions that are within the scope of MFRS 2, leasing
transactions that are within the scope of MFRS 117, and measurements that have some similarities to fair value but are not fair
value, such as realisable value in MFRS 102 or value in use in MFRS 136.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to
which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement
in its entirety, which are described as follows:
•
•
•
Level 1 inputs are quoted prices (unadjusted) inactive markets for identical assets or liabilities that the entity can access at
the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability,
either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
Subsidiaries and Basis of Consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the
Company. Control is achieved when the Company:
•
•
•
has power over the investee;
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to
one or more of the three elements of control listed above.
When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting
rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company
considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights in an investee are
sufficient to give it power, including:
80
•
•
•
the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
potential voting rights held by the Company, other vote holders or other parties;
rights arising from other contractual arrangements; and any additional facts and circumstances that indicate that the
Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be
made, including voting patterns at previous shareholders’ meetings.
annual report 2013
3. Significant Accounting Policies (Cont’d.)
Subsidiaries and Basis of Consolidation (cont’d.)
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company
loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are
included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains
control until the date when the Company ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the
non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the
non-controlling interests even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line
with the Group’s accounting policies.
All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the
Group are eliminated in full on consolidation.
Changes in the Group’s ownership interests in existing subsidiaries
Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control are accounted for as
equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the
changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests
are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of
the Company.
When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated as the difference
between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the
previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests.
All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the
Group had directly disposed of the relevant assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred
to another category of equity as specified/permitted by applicable MFRSs). The fair value of any investment retained in the
former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting
under MFRS 139 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an
investment in an associate or joint venture.
Subsidiaries
Investment in subsidiaries which are eliminated on consolidation, are stated at cost less impairment losses, if any, in the
Company’s separate financial statements.
Business Combinations
The acquisition of subsidiary companies is accounted for using the purchase method. The cost of the acquisition is measured at
the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments
issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination.
The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under MFRS 3
Business Combinations, are recognised at their fair values at the acquisition date, except for non-current assets (or disposal
groups) that are classified as held for sale in accordance with MFRS 5 Non-current Assets Held for Sale and Discontinued
Operations, which are recognised and measured at fair value less costs to sell.
81
Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the Company and
the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable. Revenue
is reduced for estimated customer returns, rebates and other similar allowances.
The following specific recognition criteria must also be met before revenue is recognised:
(i)
(ii) Tobacco processing and related service fees - upon rendering of services;
(iii) Dividend income - when the shareholder’s right to receive payment is established; and
(iv) Interest income - recognised in profit or loss as it accrues, taking into account the effective yield on asset.
Foreign Currencies
(i)
Sale of goods - upon delivery of products and customer acceptance and when the significant risks and rewards of ownership
have passed to the buyer;
Functional and Presentation Currency
The individual financial statements of each entity in the Group are presented in Ringgit Malaysia, the currency of the
primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated
financial statements, the results and financial position of each entity are expressed in Ringgit Malaysia which is the
functional currency of the Company and the presentation currency for the consolidated financial statements.
(ii) Foreign Currency Transactions
In preparing the financial statements of the Group and of the Company, transactions in currencies other than the Group’s
and the Company’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of
the transactions. At the end of the reporting period, monetary items denominated in foreign currencies are retranslated at
the rates prevailing at the end of the reporting period. Exchange differences arising on the settlement of monetary items,
and on the retranslation of monetary items, are included in profit or loss.
Employees’ Benefits
(a) Short-term Employee Benefits
Salaries, wages, paid annual leave, bonuses and non-monetary benefits are accrued in the period in which the associated
services are rendered by the employees of the Group and of the Company. 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.
(b) Defined Contribution Plan
As required by law, the Group and the Company are required to make monthly contributions to the Employees Provident
Fund (“EPF”), a statutory defined contribution plan for all its eligible employees based on certain prescribed rates of the
employees’ salaries. The Group’s and the Company’s contributions to EPF are recognised as an expense in profit or
loss as incurred and disclosed separately and the employees’ contributions to EPF are included in staff costs. Once the
contributions have been paid, the Group and the Company have no further payment obligations.
82
annual report 2013
Employees’ Benefits (cont’d.)
(c) Defined Benefit Plan
The Group operates an unfunded non-contributory defined benefit scheme for its eligible employees. Provision for
retirement benefits is made based on an actuarial valuation carried out at the end of each reporting period by a qualified
actuary using the “Projected Unit Credit” method. The latest actuarial valuation was undertaken on December 31, 2013.
Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and
the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge
or credit recognised in other comprehensive income in the period in which they occur.
Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and will not be
reclassified to profit or loss. Past service cost is recognised in profit or loss in the period of a plan amendment. Net interest
is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined
benefit costs are categorised as follows:
(i) Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
(ii) Net interest expense or income; and
(iii)
Remeasurement.
The Group presents the first two components of defined benefit costs in profit or loss in staff costs.
The retirement benefit obligation recognised in the statement of financial position represents the actual deficit or surplus
in the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any
economic benefits available in the form of refunds and reductions in future contributions to the plan.
A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the
termination benefit and when the entity recognises any related restructuring costs.
(d) Termination Benefits
Termination benefits are payable when employment is terminated before the normal retirement date or whenever an
employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits as a
liability and as an expense when it is demonstrably committed to either terminate the employment of current employees
according to a detailed plan without possibility of withdrawal or providing termination benefits as a result of an offer made
to encourage voluntary redundancy. In the case of an offer made to encourage voluntary redundancy, the measurement
of termination benefits is based on the number of employees expected to accept the offer. Benefits falling due more than
twelve months after end of the reporting period are discounted to present value.
Income Tax
Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected amount of income
taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted or
substantively enacted by the end of the reporting period.
Deferred tax is accounted for using the liability method in respect of temporary differences arising from differences between the
carrying amounts of assets and liabilities in the financial statements and their corresponding tax bases used in the computation
of taxable profit.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are generally
recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable
that future taxable profits 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 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 the
accounting profit nor taxable profit.
83
Income Tax (cont’d.)
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset
is realised, based on the tax rates that have been enacted or substantively enacted by the end of the reporting period. The
measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which
the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items that are
recognised outside profit or loss (whether in other comprehensive income or directly in equity), in which case the tax is also
recognised outside profit or loss, or where they arise from the initial accounting for a business combination. In the case of a
business combination, the tax effect is included in the accounting for the business combination.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current
tax liabilities and when they relate to income taxes by the same taxation authority and the Group intends to settle its current
tax assets and liabilities on a net basis.
Impairment of Assets
At the end of each reporting period, the Group and the Company review the carrying amounts of its non-current assets to
determine whether there is any indication that those assets have suffered any impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is
not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the
cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and 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 assessment of the
time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately
in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a
revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount
that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years.
A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued
amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Property,
plant and equipment in the course of construction for production, administrative purposes, or for purposes not yet determined,
are carried at cost, less any recognised impairment loss.
Construction-in-progress is not depreciated. Depreciation of these assets commences when the assets are ready for their
intended use, on the same basis as other property, plant and equipment. Depreciation and amortisation of other property, plant
and equipment is provided on a straight-line basis to write off the cost of the assets to their residual values over their estimated
useful lives.
The principal annual rates used are as follows:
Building Leasehold improvements (under 50 years) Plant, machinery and equipment Motor vehicles 84
2%
Over the lease period
5% - 33.3%
20%
annual report 2013
Property, Plant and Equipment (cont’d.)
Gain or loss arising from the disposal of an asset is determined as the difference between the estimated net disposal proceeds
and the carrying amount of the asset, and is recognised in profit or loss.
The estimated useful lives and depreciation method are reviewed at the end of each reporting period, with the effect of any
changes in estimates accounted for prospectively.
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classified as operating leases.
Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease.
Benefits received and receivable as an incentive to enter into an operating lease are also spread evenly over the lease term.
Prepaid Lease Payments
The up-front payments made for the leasehold land represents prepaid lease payments and are amortised on a straight-line
basis over the remaining terms of the relevant lease.
The leasehold interests in land are accounted for as operating leases and are classified as prepaid lease payments.
Prepaid lease payments are amortised on a straight line basis over the lease terms of 60 years.
Inventories
Inventories are stated at the lower of cost (determined principally on the weighted-average basis) and net realisable value.
The costs of raw materials and factory supplies comprise cost of purchase plus the incidental costs incurred in bringing the
inventories to their present locations and conditions. The costs of finished goods comprise costs of raw materials, direct labour,
other direct costs and an appropriate proportion of production overheads based on normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business less estimated costs to completion and
estimated costs necessary to make the sale.
Provisions
Provisions are made when the Group and the Company have a present legal or constructive obligation as a result of past events,
when it is probable that an outflow of resources will be recognised to settle the obligation, and when a reliable estimate of the
amount can be made. Provisions are measured at the Directors’ best estimate of the amount required to settle the obligation at
the end of reporting period, and are discounted to present value where the effect is material.
At the end of each reporting period, the provisions are reviewed by the Directors and adjusted to reflect the current best
estimate. The provisions are reversed if it is no longer probable that the Group and the Company will be required to settle the
obligations.
The Group and the Company adopt the indirect method in the preparation of the statements of cash flows.
Cash equivalents are short-term, highly liquid investments with maturities of three months or less from the date of acquisition
and are readily convertible to cash with insignificant risks of changes in value.
85
Financial Instruments
Financial assets and financial liabilities are recognised in the statements of financial position when, and only when, the Group
and the Company become a party to the contractual provisions of the financial instruments.
(i)
Financial Assets
Financial assets are classified into the following specified categories: financial asset ‘at fair value through profit or loss’
(“FVTPL”), ‘held-to-maturity’ investments, ‘available-for-sale’ (“AFS”) financial assets and ‘loans and receivables’. The
classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
Loans and receivables, comprising trade and other receivables, refundable deposits, cash and cash equivalents and
amount owing by related companies, are measured at initial recognition at fair value, and are subsequently measured at
amortised cost using the effective interest method less impairment losses, if any.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest
income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash
receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction
costs and other premiums or discounts) through the expected life of the financial asset, or (where appropriate) a shorter
period, to the net carrying amount on initial recognition.
Receivables are assessed for indicators of impairment at the end of each reporting period. Receivables are impaired
where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the
receivable, the estimated future cash flows of the receivable has been impacted.
For receivables, objective evidence of impairment could include:
•
•
•
Significant financial difficulty of the customers; or
Default or delinquency in interest or principal payments; or
It becoming probable that the customers will enter bankruptcy or financial re-organisation.
Receivables that are assessed not to be impaired individually are subsequently assessed for impairment on a collective
basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’s past
experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average
credit period of 30 days, as well as observable changes in national or local economic conditions that correlate with default
on receivables.
The carrying amount of a receivable is reduced by the impairment loss through the use of an allowance account. When a
receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts
previously written off are credited against the allowance account. Changes in the carrying amount of the allowance
account are recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised when the contractual right to receive cash flows from the asset has expired. On
derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the
consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is
recognised in profit or loss.
(ii)
Financial liabilities and equity instruments
Classification as debt or equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements
entered into and the definitions of a financial liability and an equity instrument.
86
annual report 2013
Financial Instruments (cont’d.)
(ii)
Financial liabilities and equity instruments (cont’d.)
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its
liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs. Ordinary shares are equity
instruments.
Ordinary shares are recorded at the proceeds received, net of directly attributable transactions costs. Ordinary shares are
classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.
Financial liabilities
Financial liabilities are classified as either financial liabilities ‘at FVTPL’ or ‘other financial liabilities’.
Other financial liabilities, comprising trade and other payables, accrued expenses and amount owing to holding and other
related companies, are initially measured at fair value. These financial liabilities are subsequently measured at amortised cost.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they
expire.
4. Critical Accounting Judgements and Key Sources of Estimation Uncertainty
(i)
Critical judgements made in applying accounting policies
In the process of applying the Group’s and Company’s accounting policies, which are described in Note 3, management is
of the opinion that there are no instances of application of judgement which are expected to have a significant effect on the
amounts recognised in the financial statements other than as follows:
Allowance for doubtful debts
The Group makes allowance for doubtful debts based on an assessment of the recoverability of trade and other receivables.
Allowances are applied to trade and other receivables where events or changes in circumstances indicate that the balances
may not be collectible. The identification of doubtful debts requires use of judgement and estimates. Where the expectation
is different from the original estimate, such difference will impact the carrying value of the trade and other receivables and
doubtful debts expense in the period in which such estimate has been changed.
Allowance for slow-moving inventories
The Group makes allowance for its slow-moving inventories based on an assessment of their estimated net realisable
value. Inventories are written down when events or changes in circumstances indicate that the carrying amounts may not
be recoverable. Where expectations differ from the original estimates, the differences will impact the carrying amount of
inventories.
(ii)
Key sources of estimation uncertainty
Management believes that there are no key assumptions made concerning the future, and other key sources of estimation
uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year.
87
5.Revenue
Sales of tobacco products
Tobacco processing and related
service fees
Dividend income from
subsidiary company
The Group
The Company
2013201220132012
RM’000RM’000RM’000RM’000
1,219,4531,193,866
53,820
40,464
---
--
113,850181,170
1,273,2731,234,330 113,850181,170
6. Investment Revenue
Interest income on short-term
deposits with licensed banks
88
The Group
The Company
2013201220132012
RM’000RM’000RM’000RM’000
3,5765,677 119585
annual report 2013
89
7. Other (Income)/Expenses and Staff Costs
Included in other (income)/expenses are the following:
The Group
The Company
2013201220132012
RM’000RM’000RM’000RM’000
Rental of buildings
11,41110,530
-Inventories written down
3,4771,956
-Loss/(Gain) on foreign exchange:
Realised
3,0703,493
-Unrealised
(905)(28) -Provision for employee termination compensation
2,738--Property, plant and equipment written off
2,0441,536
-Provision for retirement benefits
1,6601,858
-Auditors’ remuneration
3032888068
Rental of equipment
159206 -Allowance for doubtful receivables
156--Rental of motor vehicles
4836 -Inventories written off
17--Impairment of property, plant and equipment
-480 -Gain on disposal of property, plant and equipment (1,146)(2,654)
-Reversal of impairment of property, plant and equipment(303)- -Gain on transfer of property,plant and equipment to
other related companies (4)- -Restructuring expenses*:
Employee Separation Scheme payouts
-4,250
-Impairment of property, plant and equipment
-
3,326-Exit payments to farmers
-3,069
-Dismantling costs
-973 -Others
-603 -
Allowance for doubtful receivables no longer required
Bad receivables written off
*
-12,221
--(17) - -53 --
JTI Malaysia implemented a restructuring exercise in relation to the leaf and stemmery operations in Kota Bharu, Kelantan
during financial year ended December 31, 2012. The Group ceased the purchase of local leaf from farmers on November
30, 2012 and provided the farmers with exit package payments. Consequently, the Group closed down the operations with
effect from January 1, 2013. As a result, voluntary separation schemes were offered to affected employees; property, plant
and equipment in Kota Bharu were impaired and all other associated costs had been provided for as part of restructuring
costs.
7. Other (Income)/Expenses and Staff Costs (Cont’d.)
Included in staff costs for the current financial year are the following:
(a) Total contributions made to EPF by the Group of RM4,750,000 (2012: RM4,840,000).
(b) Key management personnel compensation:
The remuneration of members of key management, other than the Directors of the Company as disclosed in Note 8, is as
follows:
The Group
The Company
2013201220132012
RM’000RM’000RM’000RM’000
Short-term employee benefits:
Salaries, bonuses, allowances and
contributions to EPF
6,3725,614
-Post-employment benefits *
3440 -
6,4065,654
-
*
Post-employment benefits represent provision for retirement benefits for the financial year.
The estimated monetary value of non-cash benefits-in-kind received and receivable by the key management from the
Group amounted to RM456,000 (2012: RM693,000).
8. Directors’ Remuneration
The Group
The Company
2013201220132012
RM’000RM’000RM’000RM’000
Directors of the Company
Executive directors:
Salaries, bonuses, allowances and
contributions to EPF 5,4225,326
-Post-employment benefits *
1016 -Non-executive directors:
Fees
405367405367
5,8375,709 405367
*
Post-employment benefits represent provision for retirement benefits for the financial year.
The estimated monetary value of non-cash benefits-in-kind received and receivable by the Directors from the Group amounted
to RM587,000 (2012: RM418,000).
90
annual report 2013
91
9. Tax Expense
The Group
The Company
2013201220132012
RM’000RM’000RM’000RM’000
Current year:
Estimated tax payable
43,52440,326
31145
Deferred taxation (Note 15)
(334)(1,856)
-
43,19038,470
31145
(Over)/Under provision in prior years:
Estimated tax payable
(846)192
-Deferred taxation (Note 15)
3671,568
-
42,71140,230
31145
A reconciliation of tax expense applicable to profit before tax at the statutory income tax rate to tax expense at the effective tax
rate of the Group and of the Company is as follows:
Profit before tax
The Group
The Company
2013201220132012
RM’000RM’000RM’000RM’000
164,340141,542112,865180,924
Tax at the applicable tax rate of 25% 41,08535,38628,21645,231
Tax effects of:
Expenses not deductible for tax purposes
2,5103,657 276207
Income not subject to tax
(405)(573)(28,461)(45,293)
Tax expense for the year
43,19038,470
31145
Under Schedule 7A of the Income Tax Act, 1967, a subsidiary of the Company is allowed to claim reinvestment allowances.
As of December 31, 2013, the said subsidiary company has reinvestment allowances claimed and utilised to-date amounting
to approximately RM96,355,000 (2012: RM96,355,000). Subject to the availability of distributable reserve, these reinvestment
allowances claimed, when approved by the tax authorities, will enable the said subsidiary company to distribute tax exempt
dividends to its shareholders.
As of December 31, 2013, the Group and the Company have tax exempt income amounting to approximately RM12,066,000
(2012: RM12,066,000) and RM3,391,000 (2012: RM3,391,000) respectively arising from chargeable income waived in 1999 in
accordance with the Income Tax (Amendment) Act, 1999 which has been approved by the Inland Revenue Board. Dividends
declared out of such profits will be exempted from income tax in the hands of the shareholders.
10. Earnings Per Ordinary Share
Earnings per ordinary share has been computed based on the Group’s profit after tax of RM121,629,000 (2012: RM101,312,000)
divided by the number of ordinary shares in issue of 261,534,406 (2012: 261,534,406) during the financial year.
The basic and diluted earnings per ordinary share are equal as the Group has no dilutive potential ordinary shares.
11. Dividends
The Group and
The Company
20132012
RM’000RM’000
Special dividend paid per share - 21 sen, single tier
(2012: 24 sen, less 25% tax and 38 sen, tax exempt)
54,922146,459
First interim single tier dividend paid per share – 11 sen
(2012: 11 sen)
28,76928,769
Second interim single tier dividend paid per share – 11 sen
(2012: 11 sen)
28,76928,769
112,460203,997
Gross dividends per share during the financial year is 43 sen (2012: 84 sen).
12. Property, Plant and Equipment
Building and
Plant,
leasehold machinery and
Motor Construction-
improvements
equipment
vehicles
in-progress
Total
The Group
RM’000 RM’000RM’000RM’000RM’000
Cost
At January 1, 2012
50,660
273,395
21,561
600
346,216
Additions
119 2,288 6,47014,14323,020
Disposals
- (185)(7,033)
- (7,218)
Write offs
(550)
(8,397)
-
(27)
(8,974)
Transfer from other related companies
-
3,043
-
3,588
6,631
Reclassifications
2,806 9,551
-(12,357)
At December 31, 2012
53,035
279,695
20,998
5,947
359,675
Additions
5 1,448 5,20563,43670,094
Disposals
- (780)(3,030)
- (3,810)
Write offs
(256)
(26,999)
-
-
(27,255)
Transfer from other related companies
-
1,514
-
2,218
3,732
Transfer to other related companies
-
(2,862)
-
-
(2,862)
Reclassifications
1,925 40,157
-(42,082)
54,709
292,173
23,173
29,519
399,574
92
annual report 2013
93
12. Property, Plant and Equipment (Cont’d.)
The Group
Accumulated depreciation and
impairment
At January 1, 2012
Charge for the year
Impairment during the year (Note 7)
Disposals
Write offs
Charge for the year
Reversal of impairment during the year (Note 7)
Disposals
Write offs
Transfer to other related companies
Group
Net book value
As of December 31, 2013
Building and
Plant,
Motor
improvements
equipment
vehicles
Total
RM’000RM’000RM’000RM’000
18,587
204,311
12,443
235,341
1,865
11,683
3,808
17,356
111
3,478
217
3,806
- (183)(6,940)(7,123)
(479)
(6,959)
-
(7,438)
20,084
212,330
9,528
241,942
1,470
14,346
3,926
19,742
(66)
(237)
-
(303)
- (780)(2,580)(3,360)
(185)
(25,026)
-
(25,211)
-
(1,672)
-
(1,672)
21,303
198,961
10,874
231,138
Building and
Plant,
Motor Construction-
improvements
equipment
vehicles
in-progress
Total
RM’000 RM’000RM’000RM’000RM’000
33,406
93,212
12,299
29,519
168,436
32,951
67,365
11,470
5,947
117,733
Included in property, plant and equipment of the Group are fully depreciated assets which are still in use, with costs totaling
RM131,318,000 (2012: RM133,111,000).
Analysis of additions to property, plant and equipment is as follows:
20132012
The GroupRM’000RM’000
By cash
61,05219,906
By cash downpayment in prior year
9,0423,114
70,09423,020
13. Prepaid Lease Payments
The Group
20132012
RM’000RM’000
Cost:
At beginning and end of year
383383
Cumulative amortisation:
At beginning of year
185179
Current amortisation
66
At end of year
191185
Net:
At end of year
192198
Prepaid lease payments relate to lease of land on which the Group’s factory building is located and the lease will expire in year
2069.
14. Investment in Subsidiary Companies
The Company
20132012
RM’000RM’000
Unquoted shares - at cost
250,990250,990
The subsidiary companies, both incorporated in Malaysia, are as follow:
Effective
Name of Company
Equity Interest
Principal Activities
20132012
%%
Direct
JT International Tobacco Sdn. Bhd. 100
100
Manufacture of tobacco products.
JT International Trading Sdn. Bhd.99
99
Marketing and sale of tobacco products.
Indirect
JT International Trading Sdn. Bhd.
1
1
Marketing and sale of tobacco products.
94
annual report 2013
95
15. Deferred Tax Assets/(Liabilities)
The Group
Deferred tax assets
20132012
RM’000RM’000
3,7384,204
Recognised in profit or loss (Note 9)
1,169(466)
At end of year
4,9073,738
The Group
Deferred tax liabilities
20132012
RM’000RM’000
(12,588)(13,342)
Recognised in profit or loss (Note 9)
(1,202)754
At end of year
(13,790)(12,588)
The components and movements of deferred tax assets and liabilities during the financial year are as follows:
OtherProvision
Property,
payables
for
plant and Trade and accrued retirement
equipmentreceivables expenses
benefits
Others
Total
The Group
RM’000RM’000RM’000RM’000RM’000RM’000
Deferred Tax Assets
As of January 1, 2012
640
157
1,677
1,730
-
4,204
Recognised in profit or loss
168
(4)
(713)
83
-
(466)
808
153
964
1,813
-
3,738
808
153
964
1,813
-
3,738
579 8(200)782
-
1,169
1,387
161
764
2,595
-
4,907
Deferred Tax Liabilities
(15,622)
-
-
1,632
648
(13,342)
1,263
-
-
(298)
(211)
754
(14,359)
-
-
1,334
437
(12,588)
(14,359)
-
-
1,334
437
(12,588)
(2,254) - 5914133
(1,202)
(16,613)
-
5
2,248
570
(13,790)
16. Inventories
The Group
20132012
RM’000RM’000
At cost:
Raw materials
41,92865,497
Factory supplies
14,36210,234
Finished goods 11,7839,036
Spare parts
4,321
3,911
72,39488,678
The cost of inventories recognised as an expense of the Group includes RM3,477,000 (2012: RM1,956,000) in respect of writedowns of inventory to net realisable value.
17. Trade Receivables
The Group
20132012
RM’000RM’000
Trade receivables
84,39874,550
Less: Allowance for doubtful receivables
(646)(611)
Net
83,75273,939
Trade receivables comprise amounts receivable for sales of goods and tobacco related service fee. These are denominated in
Ringgit Malaysia, non-interest bearing and recognised at their original invoice amounts which represent their fair values on initial
recognition. The credit period granted by the Group to customers ranges from 7 to 60 days (2012: 10 to 60 days).
The Group’s historical experience in collection of trade receivables and other receivables (as disclosed in Note 18) falls within
the recorded allowances and management believes that no additional credit risk beyond amount provided for collection losses
is inherent in the Group’s trade and other receivables.
Trade receivables disclosed above include amounts (see below for aged analysis) that are past due at the end of the reporting
period but against which the Group has not recognised an allowance for doubtful receivables because there has not been a
significant change in credit quality and the amounts are still considered recoverable.
At the end of the reporting period, the Group holds bank guarantees totalling RM25,576,000 (2012: RM25,684,000) and titles
over certain properties with estimated fair values totalling RM3,670,000 (2012: RM3,670,000) over its receivables.
96
annual report 2013
97
17. Trade Receivables (Cont’d.)
The table below is an analysis of trade receivables as of year-end:
The Group
20132012
RM’000RM’000
Neither past due nor impaired
64,86161,175
Past due but not impaired:
1 - 30 days
15,31610,694
31 - 60 days
-123
61 - 90 days
8711
> 90 days
852
15,48810,830
Past due and impaired
Less: Allowance for doubtful receivables
4,0492,545
(646)(611)
3,4031,934
Total
83,75273,939
Movement in the allowance for doubtful receivables
The Group
20132012
RM’000RM’000
611628
Impairment losses recognised/(reversed)
156(17)
Amount written off
(121)
At end of year
646611
In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable
from the date credit was initially granted up to the end of the reporting period. The Group has significant concentration of credit
risk as one major customer accounts for 28% (2012: 27%) of the total amount outstanding.
18. Other Receivables, Deposits and Prepaid Expenses
20132012
RM’000RM’000
The Group
Other receivables
4,4524,745
Downpayments for capital expenditure
19,5469,042
Refundable deposits
3,3582,337
Prepaid expenses
6,2733,525
33,62919,649
The Company
Other receivables
66
Refundable deposits
55
Prepaid expenses
14
2511
Analysis of currency exposure profile of other receivables is as follows:
20132012
RM’000RM’000
The Group
Ringgit Malaysia
140543
United States Dollar
4,3124,202
4,4524,745
The Company
Ringgit Malaysia 66
19. Holding Companies and Intercompany Transactions
The Company is a subsidiary company of JT International Holding B.V., a company incorporated in the Netherlands. The
Directors regard Japan Tobacco Inc., a company incorporated in Japan as the ultimate holding company.
The amount owing (to)/by ultimate holding company arose mainly from intercompany purchases and expenses paid on behalf.
This amount is unsecured, interest-free and repayable on demand.
he amount owing to immediate holding company arose mainly from service charges relating to overall business strategy
T
provided. This amount is unsecured, interest-free and repayable on demand.
The amounts owing by/(to) other related companies arose mainly from intercompany sales and purchases, tobacco processing fee,
purchases on behalf, royalty and expenses paid on behalf. These amounts are unsecured, interest-free and repayable on demand.
98
annual report 2013
99
19. Holding Companies and Intercompany Transactions (Cont’d.)
Other than as disclosed elsewhere in the financial statements, the other related companies, with whom the Group has
transactions with during the financial year, and their relationship with the Company are as follows:
Name of related companies
JT International SA JT International Germany GmbH
JTI Services Switzerland SA
JTI Business Services (Asia) Sdn. Bhd.
JT International Luxembourg S.A.
Gallaher Limited
Austria Tabak GmbH
JTI Polska Sp.z o.o.
JT International AG Dagmersellen
JTI Tütün Ürünleri Sanayi A.S.
JT International Manufacturing S.A
Relationship
Subsidiary company of Japan Tobacco Inc.
Analysis of currency exposure profile of intercompany balances is as follows:
20132012
The GroupRM’000RM’000
Amount owing to immediate holding company:
(4,000)(3,724)
Amount owing (to)/by ultimate holding company:
Japanese Yen
203(153)
313Ringgit Malaysia
(632)
(116)(153)
Amount owing by other related companies:
14,486642
Ringgit Malaysia
2,214255
16,700897
Amount owing to other related companies:
United States Dollar (5,122)(9,939)
Euro (69)Polish Zloty
(66)Ringgit Malaysia
(1,685)Zar
(165)
(7,107)(9,939)
During the financial year, significant intercompany transactions which are determined on a basis as negotiated between the said
parties are as follows:
The Group
20132012
RM’000RM’000
Ultimate holding company
Purchase of raw materials and factory supplies
9991,138
Regional support fee receivable
(1,347)(1,704)
Net transfer in of property, plant and equipment
-3,587
Immediate holding company
Service charges paid/payable
15,60715,682
Global insurance charges
321342
Other related companies
Purchase of raw materials:
JT International SA 4,2494,250
JTI Polska Sp.z o.o.
325236
4,5744,486
Royalty paid/payable:
JT International SA
29,08027,102
Sale of tobacco leaf and non-tobacco materials:
JT International SA
(30,212)(24,208)
Services charges paid/payable:
JT International SA 9,9209,312
4,6984,333
14,61813,645
Regional support fee paid/payable/(received/receivable): JT International Luxembourg S.A.
-(1,000)
JT International SA
(13,450)(11,976)
402549
(13,048)(12,427)
100
annual report 2013
101
The Group
20132012
RM’000RM’000
Other related companies
Transfer in of property, plant and equipment - net:
JTI Tütün Ürünleri Sanayi A.S.
43JT International Germany GmbH
987JT International Manufacturing S.A.
1,512JTI Business Services (Asia) Sdn. Bhd.
-1
Austria Tabak GmbH
-1,824
JT International AG Dagmersellen
-1,050
JT International Ukraine
-168
2,5423,043
Tobacco processing fee received/receivable:
JT International SA (53,820)(36,152)
Administrative and operational service fee received/receivable:
JT International SA (8,144)(4,731)
Management charges paid/payable:
JTI Services Switzerland SA
8,6268,381
Gallaher Limited
1,835503
10,4618,884
Human resource cost allocation received/receivable:
(1,116)(954)
The financial statements of the Company also reflect the following significant intercompany transactions:
The Company
20132012
RM’000RM’000
Gross dividend income from subsidiary company
113,850181,170
20. Cash and Cash Equivalents
20132012
RM’000RM’000
The Group
Short-term deposits with licensed banks
43,89083,677
Cash and bank balances
70,71566,253
114,605149,930
The Company
3,6083,022
Cash and bank balances
1,057
1,277
4,6654,299
The range of interest rates is as follows:
The Group
The Company
2013201220132012
%
%
%
%
per annum
per annum
per annum
per annum
2.802.802.802.80
Short-term deposits of the Group and of the Company have an average maturity period of 31 days (2012: 31 days).
21. Share Capital
The Group and
The Company
20132012
RM’000RM’000
Authorised:
1,400,000,000 ordinary shares of RM0.25 each 350,000350,000
Issued and fully paid:
261,534,406 ordinary shares of RM0.25 each 65,38465,384
102
annual report 2013
103
22. Share Premium - Non-Distributable
Share premium arose from the following issue of shares:
20132012
RM’000RM’000
The Group
3,779,406 ordinary shares issued at a premium of RM1.30 per share in
1990, net of share issue expenses of RM377,647
4,536 4,536
The Company
3,779,406 ordinary shares issued at a premium of RM1.30 per share in
1990, net of share issue expenses of RM377,647
4,536 4,536
23. Retained Earnings
31.12.201331.12.2012 1.1.2012
RM’000RM’000RM’000
The Group
Distributable:
Retained earnings
287,660279,450381,040
20132012
RM’000RM’000
The Company
Distributable:
Retained earnings
185,551185,177
Distributable reserves are those available for distribution as cash dividends.
The retained earnings of the Company is available for appropriation as dividends to the shareholders of the Company under the
single tier tax system.
24. Provision for Retirement Benefits
The Group operates an unfunded non-contributory defined benefit scheme for its eligible employees. Provision for retirement
benefits is made based on actuarial valuation carried out periodically using “Projected Unit Credit” method. The latest actuarial
valuation was undertaken on December 31, 2013.
The amount recognised in the statement of financial position is determined as follows:
The Group
31.12.201331.12.2012 1.1.2012
RM’000RM’000RM’000
Present value of unfunded defined benefit obligation
16,63115,05917,010
The amount recognised in the statement of profit or loss and other comprehensive income in respect of these defined benefit
plans are as follows:
The Group
20132012
RM’000RM’000
(restated)
Service cost:
Current service cost
1,0721,199
Net interest expense
588659
Components of defined benefit costs recognised in profit or loss
1,6601,858
Movements in the present value of the defined benefit obligation in the current period are as follows:
The Group
20132012
RM’000RM’000
(restated)
Opening defined benefit obligation
15,05917,010
Current service cost
1,0721,199
Interest cost
588659
Benefits paid
(1,047)(2,714)
Remeasurement (gains)/losses:
Actuarial gains and losses arising from changes in financial assumptions
(115)(1,502)
Actuarial gains and losses arising from experiences adjustments
1,074407
Closing defined benefit obligation
16,63115,059
104
annual report 2013
105
24. Provision for Retirement Benefits (Cont’d.)
The principal actuarial assumptions at the end of the reporting period are as follows:
The Group
20132012
%%
Discount rate
3.753.75
Expected future salary increases
4.004.00
Expected future pension increases
2.002.00
Proportion of employees retiring at age of 55 years
100.00100.00
Significant actuarial assumptions for the determination of the defined obligation are discount rate and expected salary increase.
The sensitivity analysis below has been determined based on reasonably possible changes of the respective assumptions
occurring at the end of the reporting period, while holding all other assumptions constant.
1.If the discount rate is 50 basis points higher, the defined benefit obligation would decrease by RM324,500.
2.If the expected salary growth increases by 50 basis points, the defined benefit obligation would increase by RM317,000.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is
unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated
using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the
defined obligation liability recognised in the statement of financial position.
There were no changes in the methods and assumptions used in preparing the sensitivity analysis from prior years.
25. Trade Payables, Other Payables and Accrued Expenses
Trade and other payables comprise amounts outstanding for trade purchases and ongoing costs. These payables are noninterest bearing and the average credit period granted to the Group for trade purchases is 15 to 30 days (2012: 14 to 30 days).
Analysis of currency profile of trade payables is as follows:
The Group
20132012
RM’000RM’000
Ringgit Malaysia
26,9355,774
6,8311,123
Japanese Yen
1,573865
Euro
293346
Others
680
35,6388,188
25. Trade Payables, Other Payables and Accrued Expenses (Cont’d.)
Other payables and accrued expenses consist of the following:
20132012
RM’000RM’000
The Group
Other payables 27,82124,042
Accrued expenses
30,800
29,529
Provision for employee termination compensation 2,738Provision for restructuring costs
-1,576
61,35955,147
The Company
Accrued expenses
309187
Movement in provision for restructuring costs
The Group
20132012
RM’000RM’000
1,576Current year provision
-1,576
Provision utilised during the year
(1,576)
At end of year
-1,576
Other payables and accrued expenses arose mainly from sales tax payable, amount payable for the acquisition of property, plant
and equipment and general administrative and freight expenses payable. These amounts are unsecured, interest-free and are
repayable within 30 days (2012: 30 days) from the transaction dates.
Analysis of currency profile of other payables is as follows:
The Group
20132012
RM’000RM’000
Ringgit Malaysia
25,70921,615
Euro 1,1861,424
669907
Others
25796
27,82124,042
106
annual report 2013
107
26. Banking Facilities
A subsidiary company has a bank guarantee facility totalling RM59,400,000 (2012: RM20,000,000) obtained from licensed banks.
As of December 31, 2013, the amount of bank guarantee utilised by the said subsidiary company amounted to RM51,639,000
(2012: RM19,647,000). The bank guarantee bears interest at 0.35% (2012: 0.35%) per annum and is covered by corporate
guarantee from the ultimate holding company.
27. Financial Instruments, Financial Risks and Capital Risk Management
Categories of financial instruments
20132012
RM’000RM’000
The Group
Financial assets
114,605149,930
Trade receivables
83,75273,939
Other receivables and refundable deposits
7,8107,082
Amount owing by other related companies
16,700897
Loans and receivables, at amortised cost
108,26281,918
Trade payables
35,6388,188
61,35955,147
Amount owing to immediate holding company
4,0003,724
Amount owing to ultimate holding company
116153
Amount owing to other related companies
7,1079,939
Other financial liabilities, at amortised cost
108,22077,151
20132012
RM’000RM’000
The Company
Financial assets
4,6654,299
Other receivables and refundable deposits
1111
Loans and receivables, at amortised cost
1111
309187
Other financial liabilities, at amortised cost
309187
27. Financial Instruments, Financial Risks and Capital Risk Management (Cont’d.)
Financial Risk Management Objectives and Policies
The operations of the Group and of the Company are subject to a variety of financial risks, including foreign currency risk,
interest rate risk, credit risk and liquidity risk. The Group and the Company have formulated a financial risk management
framework whose principal objective is to minimise the Group’s and the Company’s exposure to risks and/or costs associated
with the financing, investing and operating activities.
Various risk management policies are formulated and approved by the Board of Directors for observation in the day-to-day
operations for controlling and managing the risks associated with financial instruments.
Foreign Currency Risk Management
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in foreign exchange rates.
The carrying amounts of the Group’s and the Company’s foreign currency denominated monetary assets and liabilities are
disclosed in Notes 18, 19 and 25.
No sensitivity analysis is prepared as the Group and the Company do not expect any material effect on the Group’s and the
Company’s profit net of tax and equity arising from the effect of reasonably possible changes to exchange rates on the foreign
currency denominated monetary assets and monetary liabilities at the end of the reporting period.
The Group did not engage in any transactions involving financial derivative instruments during the financial year.
Interest Rate Risk Management
Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will
fluctuate because of changes in market interest rates.
The Group’s and the Company’s interest bearing financial asset is mainly their short-term deposits with licensed banks. The
deposit placements as at the end of the reporting period, which bear interest as disclosed in Note 20, are short-term and
therefore their exposure to the effects of future changes in prevailing level of interest rates are limited.
No sensitivity analysis is prepared as the Group and the Company do not expect any material effect on the Group’s and the
Company’s profit net of tax and equity arising from the effect of reasonably possible changes to interest rates on interest
bearing financial instruments at the end of the reporting period.
Credit Risk Management
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations.
The Group is exposed to credit risk mainly from trade receivables, other receivables and intercompany indebtedness.
The Group extends credit to its customers based upon careful evaluation of the customers’ financial condition and credit history.
The Group also ensures a large number of customers so as to limit high credit concentration in a customer or customers from
a particular market.
The Group’s exposure to credit risk in relation to its trade receivables, other receivables and intercompany indebtedness should
all these debtors fail to perform their obligations as of December 31, 2013, is the carrying amount of these receivables as
disclosed in statement of financial position.
The Group places its short-term deposits with credit worthy institutions. The carrying amount of financial assets in the financial
statements, net of any provision for losses, represents the Group’s maximum exposure to credit risk without taking into account
the value of any collateral or other security obtained.
Apart from the concentration risk of the major customer as disclosed in Note 17, the Group and the Company do not have any
significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The
Group defines counterparties as having similar characteristics if they are related entities.
108
annual report 2013
109
27. Financial Instruments, Financial Risks and Capital Risk Management (Cont’d.)
Liquidity Risk Management
Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage
of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of
financial assets and liabilities.
The Group and the Company practise prudent liquidity risk management by maintaining adequate reserves, by continuously
monitoring forecast and actual cash flows. The Group’s and the Company’s operations are financed mainly through capital and
retained earnings.
All financial liabilities in 2013 and 2012 are repayable on demand or due within one year of the reporting date.
Fair Values
The carrying amounts of the financial assets and financial liabilities as reported in the statements of financial position as of
December 31, 2013 and December 31, 2012 approximate their fair values due to the immediate or short maturity terms of these
financial instruments.
Capital Risk Management Policies and Procedures
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital
ratios in order to support its business and maximise shareholder value. The capital structure of the Group and the Company
comprises issued capital and retained earnings.
The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or
adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue
new shares. No changes were made in the objectives, policies or processes during the years ended December 31, 2013 and
December 31, 2012.
The Group is not subject to any externally imposed capital requirements.
28. Capital Commitments
As of December 31, 2013, the Group has the following capital commitments in respect of acquisition of property, plant and
equipment:
The Group
20132012
RM’000RM’000
Approved and contracted for
67,04432,474
Approved but not contracted for
19,8813,025
86,92535,499
29. Lease Commitments
As of December 31, 2013, the Group has non-cancellable lease commitments pertaining to rental of premises and office
equipment as follows:
The Group
Future Minimum Lease Payments
20132012
RM’000RM’000
Financial years ending December 31,
2013
-7,157
2014 7,0651,348
2015
1,299871
2016
12719
2017 and thereafter
104
8,5959,395
30. Segment Reporting
The Group operates predominantly in the tobacco industry involving various types of activities as mentioned in Note 14
and principally in Malaysia. The other operating segments are not significant and accordingly, the financial information by
geographical and industry segments of the Group’s operations are not presented.
Included in revenues arising from sales of tobacco products are revenue of approximately RM119,395,866 (2012: RM112,192,437)
which arose from sales to the Group’s largest customer.
110
annual report 2013
Supplementary Information - Disclosure on realised and unrealised profits/losses
On March 25, 2010, Bursa Malaysia Securities Berhad (“Bursa Malaysia”) issued a directive to all listed issuers pursuant to
Paragraphs 2.06 and 2.23 of the Bursa Securities Main Market Listing Requirements which requires all listed issuers to disclose
the breakdown of the retained earnings or accumulated losses as of the end of the reporting period, into realised and unrealised
profits or losses.
On December 20, 2010, Bursa Malaysia further issued guidance on the disclosure and the prescribed format of disclosure.
The breakdown of the retained earnings of the Group and of the Company into realised and unrealised profits or losses, pursuant
to the directive, is as follows:
The Group
The Company
2013201220132012
RM’000RM’000RM’000RM’000
(restated)
Total retained earnings of the Company and its
subsidiary companies
Realised
295,638289,848185,551185,177
Unrealised
(7,978)(10,398)
-
Total retained earnings as per statements of
financial position
287,660279,450185,551185,177
The determination of realised and unrealised profits or losses is based on Guidance of Special Matter No. 1 “Determination of
Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Securities Listing Requirements” as
issued by the Malaysian Institute of Accountants on December 20, 2010. A charge or credit to the profit or loss of a legal entity is
deemed realised when it resulted from the consumption of resource of all types and form, regardless of whether it is consumed
in the ordinary course of business or otherwise. A resource may be consumed through sale or use. Where a credit or a charge to
the profit or loss upon initial recognition or subsequent measurement of an asset or a liability is not attributed to consumption of
resource, such credit or charge should not be deemed as realised until the consumption of resource could be demonstrated.
This supplementary information have been made solely for complying with the disclosure requirements as stipulated in the directive
of Bursa Malaysia Securities Berhad and is not made for any other purposes.
111
Statement by Directors
The Directors of JT INTERNATIONAL BERHAD state that, in their opinion, the accompanying financial statements are drawn up
in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the provisions of 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 of
December 31, 2013 and of the financial performance and the cash flows of the Group and of the Company for the year ended on
that date.
The supplementary information set out on page 111 which is not part of the financial statements, is prepared in all material respects,
in accordance with Guidance on Special Matter No. 1 “Determination of Realised and Unrealised Profits and Losses in the Context of
Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements” as issued by the Malaysian Institute of Accountants
and the directive of Bursa Malaysia Securities Berhad.
Signed in accordance with a resolution of the Directors,
ROBERT JOHN STANWORTH
THEAN NAM HOOI
Kuala Lumpur,
February 25, 2014
Declaration by the Director
Primarily Responsible for the Financial Management of the Company
I, THEAN NAM HOOI, the Director primarily responsible for the financial management of JT INTERNATIONAL BERHAD, do
solemnly and sincerely declare that the accompanying financial statements 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.
THEAN NAM HOOI
Subscribed and solemnly declared by the
abovenamed THEAN NAM HOOI at
KUALA LUMPUR, this 25th day of
February, 2014.
Before me,
SHAFIE BIN DAUD (W350)
COMMISSIONER FOR OATHS
112
annual report 2013
113
Statement of Value Added
20132012
Value Added
RM’000
RM’000
(restated)
Turnover 1,273,273 1,234,330
Less: Cost of materials and services 313,646 303,596
Value added from operations 959,627 930,734
Investment and other income 3,576 5,677
Total Value Added 963,203 936,411
20132012
Distribution of Value Added
RM’000
%
RM’000
%
To the government Duties, income and other taxes 740,616 76.9 745,585 79.6
To providers of capital Dividend to shareholders of the company 112,460 11.7 203,997 21.8
To employees Salaries and other benefits 82,169 8.5 71,057 7.6
Retained for maintenance and future growth – Depreciation 19,748 2.0
17,362 1.8
– Retained earning (Restated)
8,210 0.9 (101,590)
(10.8)
963,203 100 936,411 100
Analysis of Shareholdings
as at March, 7 2014
Share Capital
Authorised Share Capital
: RM350,000,000 comprising 1,400,000,000 ordinary shares of RM0.25 each
Issued and Paid-up Capital : RM65,383,601.50 comprising 261,534,406 ordinary shares of RM0.25 each
Class of Shares
: Ordinary shares of RM0.25 each
Voting Rights
: One (1) vote per ordinary share
Distribution of Shareholdings
Size of Holdings
Less than 100 shares
100 – 1,000 shares
1,001 – 10,000 shares
10,001 – 100,000 shares
100,001 to less than 5% of issued shares
5% and above of issued shares
No. of
Holders
Total
Holdings
%
64
2,143
2,624
441
46
3
1,227
1,888,899
10,267,700
12,038,950
41,804,755
195,532,875
0.00
0.72
3.93
4.60
15.99
74.76
5,321
261,534,406
100.00
Substantial Shareholders as per Register of Substantial Shareholders
Name
1. JT International Holding B.V.
2. JT International Group Holding B.V.
(formerly known as JT Europe Holding B.V.)
3. Japan Tobacco Inc.
4. Employees Provident Fund Board
5. Kumpulan Wang Persaraan (Diperbadankan)
* Indirect interest through JT International Holding B.V.
114
Direct Interest
No. of
% of
Shares
Shares
Indirect Interest
No. of
% of
Shares
Shares
157,885,275
60.37
-
-
21,265,800
17,881,800
8.13
6.84
157,885,275*
157,885,275*
-
60.37*
60.37*
-
annual report 2013
Directors’ Shareholdings as per Register of Directors’ Shareholdings
Name
Dato’ Sri Mohd Nadzmi bin Mohd Salleh
Leong Wai Hoong
Keong Choon Keat
Thean Nam Hooi
Brian Conor Hannon
Igor Kosinskiy
Name
Ordinary Shares of RM0.25 each
held in the Company
Direct Interest
Indirect Interest
No. of
% of
No. of
% of
Shares
Shares
Shares
Shares
-
-
-
-
Shares held in related corporations
Direct Interest
Indirect Interest
No. of
% of
No. of
% of
Shares
Shares
Shares
Shares
Common Shares of PHP1 each in
JT International (Philippines) Inc.
Brian Conor Hannon
1
1
-(a)
-(a)
-
-
Shares of PHP100 each in
JTI Company (Philippines) Inc.
Brian Conor Hannon
1
1
-(a)
-(a)
-
-
Note:
(a) Negligible
115
Analysis of Shareholdings
as at March, 7 2014
30 Largest Securities Account Holders
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
116
JT International Holding B.V.
Citigroup Nominees (Tempatan) Sdn Bhd
[Beneficiary: Employees Provident Fund Board]
Kumpulan Wang Persaraan (Diperbadankan)
Malaysia Nominees (Tempatan) Sendirian Berhad
[Beneficiary: Great Eastern Life Assurance (Malaysia) Berhad (Par 1)]
Amanahraya Trustees Berhad
[Beneficiary: Amanah Saham Malaysia]
Kam Loong Mining Sdn Bhd
[Beneficiary: AS 1Malaysia]
[Beneficiary: Amanah Saham Wawasan 2020]
Yap Ah Fatt
Hong Leong Assurance Berhad
[Beneficiary: As Beneficiary Owner (Life Par)]
[Beneficiary: Public Smallcap Fund]
Employees Provident Fund Board
[Beneficiary: Exempt An For AIA Berhad]
[Beneficiary: Great Eastern Life Assurance (Malaysia) Berhad (Non Par 1)]
Yeoh Saik Khoo Sendirian Berhad
Citigroup Nominees (Asing) Sdn Bhd
[Beneficiary: CBNY For DFA Emerging Markets Small Cap Series]
Foo Khen Ling
Meng Lee Motors Sdn Berhad
Kam Loong Credit Sdn Bhd
[Beneficiary: Great Eastern Life Assurance (Malaysia) Berhad (LGF)]
[Beneficiary: As Beneficial Owner (S’holders NPAR)]
Yong Siew Lee
DB (Malaysia) Nominee (Tempatan) Sendirian Berhad
[Beneficiary: Deutsche Trustees Malaysia Berhad for
Hong Leong Consumer Products Sector Fund]
DB (Malaysia) Nominee (Tempatan) Sendirian Berhad
[Beneficiary: Deutsche Trustees Malaysia Berhad for Hong Leong Penny Stock Fund]
Malacca Equity Nominees (Tempatan) Sdn Bhd
[Beneficiary: Exempt An for Phillip Capital Management Sdn Bhd]
[Beneficiary: American International Assurance Company Limited For
Malaysian Agents Provident Fund]
[Beneficiary: As Beneficial Owner (Life Ann Par)]
[Beneficiary: As Beneficial Owner (Life Non Par)]
No. of Shares
% of Shares
157,885,275
19,765,800
60.37
7.56
17,881,800
9,058,470
6.84
3.46
5,000,000
1.91
4,380,000
3,613,400
1.67
1.38
1,870,185
0.72
1,868,000
1,697,600
0.71
0.65
1,531,000
0.59
1,500,000
1,308,300
0.57
0.50
1,137,800
0.44
754,200
0.29
745,000
554,100
0.28
0.21
522,000
514,800
0.20
0.20
468,000
451,000
417,700
0.18
0.17
0.16
300,000
0.11
260,000
253,800
0.10
0.10
251,300
0.10
247,700
0.09
201,000
0.08
200,000
0.08
200,000
0.08
234,838,230
89.79
annual report 2013
Particulars of Properties The property held by the Group and Company as at December 31,2013 are as follows: Leasehold Approx. Age
Date Of
Of Building
Term Of
Land Area
Address Acquisition Usage Year Lease Sq.Metres Persiara Raja Muda December Factory 16 99 years lease 20,717 Seksyen 16 1997
Land & expiring on Shah Alam Industrial Estate Building 15.3.2069 Selangor Darul Ehsan Net Book
Value
RM’000
27,963
117
Notice of
Annual General Meeting
NOTICE IS HEREBY GIVEN that the Forty-First Annual General Meeting of JT International Berhad
(“the Company”) will be held at Ballroom 1, 1st Floor, Sime Darby Convention Centre, 1A Jalan Bukit Kiara 1,
60000 Kuala Lumpur on Thursday, April 24, 2014 at 10.00 a.m. to transact the following businesses:
AGENDA
As Ordinary Business
1.
To receive the Audited Financial Statements for the financial year ended December 31, 2013 and the Reports of
Directors and Auditors thereon.
(Please refer to Explanatory Note A)
RESOLUTON 1
2.
To approve the payment of Directors’ Fees of RM405,000 for the financial year ended December 31, 2013, an
increase of RM38,000 compared to RM367,000 as approved for the financial year ended December 31, 2012.
3.
To re-elect the following Directors, who retire in accordance with Article 99 of the Company’s Articles of Association:
i. Dato’ Sri Mohd Nadzmi bin Mohd Salleh
ii. Mr. Pierre Henri Emeric Binetter
4.
To elect the following Directors, who retire in accordance with Article 106 of the Company’s Articles of
Association:
i.
ii.
5.
To consider and if thought fit, pass the following resolution in accordance with Section 129(6) of the Companies
Act, 1965:
“THAT Datuk Henry Chin Poy-Wu who is over the age of seventy years and retires in accordance with Section
129(2) of the Companies Act, 1965 be and is hereby re-appointed a Director of the Company and to hold office
until the next Annual General Meeting.”
RESOLUTON 6
To re-appoint Messrs Deloitte & Touche as the Auditors of the Company and to authorise the Directors to
determine their remuneration.
RESOLUTON 7
6.
Mr. Brian Conor Hannon
Mr. Igor Kosinskiy
RESOLUTON 2
RESOLUTON 3
RESOLUTON 4
RESOLUTON 5
As Special Business
To consider and if thought fit, pass with or without modifications, the following resolution:
7.
ORDINARY RESOLUTION
118
Proposed Renewal of Shareholders’ Mandate for JT International Berhad and its subsidiaries to enter into
Recurrent Related Party Transactions of a Revenue or Trading Nature with Related Parties
“THAT subject always to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, approval be
and is hereby given for the renewal of shareholders’ mandate for the Company and its subsidiaries (“JTI Malaysia
Group”) to enter into recurrent transactions of a revenue or trading nature which are necessary for JTI Malaysia
Group’s day-to-day operations, as set out in Section 2.5 of the Circular to shareholders dated April 2, 2014, with
the related parties mentioned therein provided that the transactions are in the ordinary course of business and on
normal commercial terms that are not more favourable to the related parties than those generally available to the
public and are not to the detriment of the minority shareholders of the Company,
RESOLUTON 8
annual report 2013
AND THAT the authority conferred by this resolution shall commence immediately upon the passing of this resolution and shall
continue to be in force until:
i.
ii.
iii.
whichever is earlier,
AND THAT the Directors of the Company be authorised to complete and do all such acts and things (including executing all such
documents as may be required) as they may consider expedient or necessary to give effect to the mandate and transactions
contemplated and authorised by this resolution.”
the conclusion of the next Annual General Meeting of the Company (“AGM”), at which time the mandate will lapse, unless by
a resolution passed at the next AGM the mandate is again renewed;
the expiration of the period within which the next AGM is required to be held pursuant to Section 143(1) of the Companies
Act, 1965 (but shall not extend to such extensions as may be allowed pursuant to Section 143(2) of the Companies Act, 1965);
or
revoked or varied by a resolution passed by the shareholders of the Company in a general meeting,
8. To transact any other business of which due notice shall have been given.
By Order of the Board
YONG LAI CHIN (LS 0009679)
WONG KWAI YIN (MAICSA 7008652)
Company Secretaries
Kuala Lumpur
April 2, 2014
Explanatory Note A
This agenda item is meant for discussion only as the provision of Section 169(1) of the
Companies Act, 1965 does not require a formal approval of the shareholders for the
audited financial statements. As such, this item is not put forward for voting.
Notes:
1.
2.
3.
4.
A member entitled to attend and vote at the meeting is entitled to appoint a
proxy to attend and vote instead of him, and that a proxy need not also be a
member. A member may appoint any person to be his proxy and the provisions
of Section 149(1)(b) of the Companies Act, 1965 shall not apply.
Where a member is an authorised nominee as defined under the Securities
Industry (Central Depositories) Act, 1991, it may appoint at least one (1) but not
more than two (2) proxies in respect of each securities account it holds with
ordinary shares of the Company standing to the credit of the said securities
account.
Where a member is an exempt authorised nominee which holds ordinary
shares in the Company for multiple beneficial owners in one securities account
(“omnibus account”), there is no limit to the number of proxies which the
exempt authorised nominee may appoint in respect of each omnibus account it
holds.
Where a member or the authorised nominee appoints more than one (1)
proxy (subject always to a maximum of two (2) proxies), or where an exempt
authorised nominee appoints two (2) or more proxies, the proportions of
shareholdings to be represented by each proxy must be specified in order for the
appointments to be valid.
5.
6.
7.
The instrument appointing a proxy shall be in writing under the hand of the
appointor or of his attorney duly authorised in writing or, if the appointor is a
corporation, either under the corporation’s common seal or under the hand of an
officer or attorney duly authorised.
The instrument appointing a proxy, with the power of attorney or other authority
(if any) under which it is signed or a notarially certified or office copy of such
power or authority, must be deposited at the Registered Office of the Company
at 6th Floor, Menara Manulife, No. 6 Jalan Gelenggang, Damansara Heights,
50490 Kuala Lumpur not less than forty-eight (48) hours before the time
appointed for holding the meeting or adjourned meeting, as the case may be.
Only members whose name appear in the Record of Depositors as at April 17,
2014 shall be eligible to attend the meeting or appoint a proxy to attend and vote
on his/her behalf.
Explanatory Notes on Special Business:
Ordinary Resolution 8 - Proposed Renewal of Shareholders’ Mandate for
Existing Recurrent Related Party Transactions
This resolution if passed, will enable the Company and its subsidiary companies to
enter into recurrent transactions involving the interests of related parties, which are
of revenue or trading nature and necessary for the JTI Malaysia Group’s day-to-day
operations, subject to the transactions being carried out in the ordinary course of
business and on terms not to the detriment of the minority shareholders of the
Company.
Please refer to the Circular to shareholders dated April 2, 2014 for further information.
119
Statement Accompanying Notice of
Forty-First Annual General Meeting
Details of individuals who are standing for election as Directors
Mr. Brian Conor Hannon
120
Age
:48
Nationality
:Irish
Qualification
:
FCA (Ireland)
Position in the Company
:
Working experience and occupation
: Mr. Brian Conor Hannon was appointed as Non-Executive Director of JT
International Berhad on May 21, 2013. He has 12 years of working experience
with JT International (JTI) Group of Companies, having joined JTI Russia as the
Chief Financial Officer for Global Supply Chain, CIS & Baltics in 2001. He brings
with him a wealth of global market experience having served in the regions
of Middle East, Near East, North & West Africa and Russia as Chief Financial
Officer and thereafter as Regional CFO for Southern, Western Europe & Baltics
markets as well as for the enlarged Western Europe region. Mr. Hannon is
currently the Chief Financial Officer and Vice President of JT International Asia
Pacific, based in Hong Kong. Prior to joining JTI, Mr. Hannon served in various
corporations including Pepsi-Cola International, Masterpork Group and Price
Waterhouse.
Other directorships of public companies
:
None
Details of any interest in the securities of the
Company and its subsidiaries
:
None
Family relationship with any director and/or
major shareholder of the Company
:
None
Conflict of interests that he has with the
Company
:None
List of conviction for offences within the
past 10 years other than traffic offences
:
None
annual report 2013
Details of individuals who are standing for election as Directors
Mr. Igor Kosinskiy
Age
:44
Nationality
:Russian
Qualification
:
BSc (Mechanical Engineering)
Position in the Company
:
Executive Director
Working experience and occupation
: Mr. Igor Kosinskiy was appointed as Executive Director of JT International
Berhad on May 21, 2013. He has 16 years of extensive work experience with
JT International (JTI) Group of Companies. He joined JTI in 1997 as Financial
Analyst and has since held various positions of increasing responsibilities
including holding the post of Making & Packing Director at JTI Petro, St.
Petersburg, Russia and subsequently as Global Manufacturing Director at JTI
SA, Geneva, Switzerland. Mr. Kosinskiy undertook the role of General Director
at JTI Ukraine in 2006 and he was thereafter appointed as General Director
Vice President at JTI Liggett-Ducat, Moscow in 2007. Prior to assuming his role
in JT International Berhad, he was the Manufacturing Vice President responsible
for the coordination and supervision of all manufacturing activities within the
region of Middle East, Near East, Africa and Turkey, based in Izmir, Turkey.
Other directorships of public companies
:
None
Details of any interest in the securities of the
Company and its subsidiaries
:
None
Family relationship with any director and/or
major shareholder of the Company
:
None
Conflict of interests that he has with the
Company
:None
List of conviction for offences within the
past 10 years other than traffic offences
:
None
121
This page is intentionally left blank
Form Of Proxy
Jt International Berhad
Single color (spot)
PANTONE ® 3405C
Four-color process
C:88 M:0 Y:60 K:0
(9244-D)
(Incorporated in Malaysia)
I/We …………………………………………………….........................................................………………………………………………………………………………
(Full
Logo Green
Single color (spot)
PANTONE ® 3405C
name in capital letters)
Four-color process
C:88 M:0 Y:60 K:0
RGB
R:0 G:170 B:96
100-027
I.C. or Company No. ………………………………………..................................... CDS Account No: …………........……………………………..............................
Web safe (HEX)
00AA60
Vinyl
Emerald Green
of…………………………………………………………….........................................................…………………………………………………………………………..
(Full address)
being a member of JT INTERNATIONAL BERHAD, hereby appoint ………...........................................................…………………………………………….……
(Full name in capital letters)
I.C. No: …………….......….....………… of ……………..…………………………………………………………..................................................…………………….
(Full address)
or failing him/her, …………………………………………………........................................................................…………… I.C. No:…………….......….....…………
(Full name in capital letters)
of…………………………………………………………….........................................................…………………………………………………………………………..
(Full address)
or failing him/her, the Chairman of the meeting as my/our proxy to attend and vote for me/us and on my/our behalf at the Forty-First Annual General
Meeting of the Company to be held at Ballroom 1, 1st Floor, Sime Darby Convention Centre, 1A Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Thursday, April
24, 2014 at 10.00 a.m., or at any adjournment thereof, and to vote as indicated below:
No.RESOLUTION
For
1.
Approval of Directors’ Fees
2.
Re-election of Dato’ Sri Mohd. Nadzmi bin Mohd. Salleh as Director
3.
Re-election of Mr. Pierre Henri Emeric Binetter as Director
4.
Election of Mr. Brian Conor Hannon as Director
5.
Election of Mr. Igor Kosinskiy as Director
6.
Re-appointment of Datuk Henry Chin Poy-Wu as Director
7.
Re-appointment of Messrs Deloitte & Touche as Auditors 8.
Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions
of a Revenue or Trading Nature.
Against
Please indicate with a “X” in the appropriate space how you wish your votes to be cast. If you do not indicate how you wish your proxy to vote on any
Resolution, the proxy will vote or abstain from voting at his or her discretion.
Signed this _____________ day of ____________________ 2014
No. of Shares Held
_____________________________________
Signature of Shareholder or Common Seal
Notes:
i. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote instead of him, and that a proxy need not also be a member. A member may appoint
any person to be his proxy and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply.
ii. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint at least one (1) but not more than two (2) proxies in
respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.
iii. Where a member is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no
limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.
iv. Where a member or the authorised nominee appoints more than one (1) proxy (subject always to a maximum of two (2) proxies), or where an exempt authorised nominee appoints two
(2) or more proxies, the proportions of shareholdings to be represented by each proxy must be specified in order for the appointments to be valid.
v. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under the
corporation’s common seal or under the hand of an officer or attorney duly authorised.
vi. The instrument appointing a proxy, with the power of attorney or other authority (if any) under which it is signed or a notarially certified or office copy of such power or authority, must be
deposited at the Registered Office of the Company at 6th Floor, Menara Manulife, No. 6 Jalan Gelenggang, Damansara Heights, 50490 Kuala Lumpur not less than forty-eight (48) hours
before the time appointed for holding the meeting or adjourned meeting, as the case may be.
vii. Only members whose name appear in the Record of Depositors as at April 17, 2014 shall be eligible to attend the meeting or appoint a proxy to attend and vote on his/her behalf.
(fold here)
STAMP
The Company Secretary
No. 6, Jalan Gelanggang
Damansara Heights
50490 Kuala Lumpur
Malaysia
(fold here)

Annual Report 2013

Transcription

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