Annual Report 2011 - Bonia

Transcription

Annual Report 2011
Contents
014
015
016
021
026
029
031
033
034
038
042
046
049
050
055
153
155
158
160
Corporate Information
Corporate Structure
Profile Of Directors
Statement On Corporate Governance
Audit Committee Report
Additional Compliance Information
Statement On Internal Control
Directors’ Responsibility Statement
Chairman’s Statement
Penyata Pengerusi
ᇽ༣ཋՔ
Corporate Social Responsibility
Five-Year Group Financial Highlights
Event Highlights
Financial Statements
Analysis Of Shareholdings
List Of Properties
Notice Of Annual General Meeting
Statement Accompanying The Notice Of
Annual General Meeting
161 Proxy Form
Corporate Information
BOARD OF DIRECTORS
Chiang Sang Sem
(Group Executive Chairman cum
Chief Executive Officer)
Chiang Fong Yee
(Alternate Director to Mr Chiang
Sang Sem)
Chiang Heng Kieng
(Group Managing Director)
Chiang Sang Bon
(Group Executive Director)
Chong Chin Look
(Group Finance Director)
Chiang Fong Tat
Datuk Ng Peng Hong @ Ng Peng Hay
(Independent Non-Executive
Director)
Dato’ Shahbudin Bin Imam Mohamad
(Non-Independent Non-Executive
Director)
Lim Fong Boon
Director)
Chong Sai Sin
Director)
14
l Annual Report 2011
AUDIT COMMITTEE
(Chairman)
Chong Sai Sin
(Member)
Lim Fong Boon
(Member)
NOMINATION COMMITTEE
(Chairman)
Lim Fong Boon
(Member)
Chong Sai Sin
(Member)
REMUNERATION COMMITTEE
(Chairman)
(Member)
Lim Fong Boon
(Member)
COMPANY SECRETARIES
Ting Oi Ling
Chok Kwee Wah
Tan Kean Wai
AUDITORS
BDO
Chartered Accountants
REGISTERED OFFICE
Lot 10, The Highway Centre
Jalan 51/205
46050 Petaling Jaya
Selangor Darul Ehsan
Tel : (6)03 7784 3922
Fax : (6)03 7784 1988
SHARE REGISTRAR
Bina Management (M) Sdn Bhd
Lot 10, The Highway Centre
Jalan 51/205
46050 Petaling Jaya
Selangor Darul Ehsan
Tel : (6)03 7784 3922
Fax : (6)03 7784 1988
STOCK EXCHANGE LISTING
Main Market of Bursa Malaysia
Securities Berhad
WEBSITE
www.bonia.com
Corporate Structure
RETAILING
100% Armani Context Sdn Bhd
Interior design, advertising and promotion
100% Alpha Footwear Sdn Bhd
Marketing, retailing and distribution of men’s and
ladies’ footwear
100% Banyan Sutera Sdn Bhd
Marketing and distribution of fashionable goods
100% PT Banyan Cemerlang
Wholesaling of fashionable goods and
accessories
100% CB Marketing Sdn Bhd
Designing, promoting and marketing of fashionable
leather goods
100% CB Franchising Sdn Bhd
Franchising of leather goods and apparels
100% CRG Incorporated Sdn Bhd
Investment holdings
100% CR Boutique Sdn Bhd
100% CRF Marketing Sdn Bhd
Designing, promoting and marketing of
fashionable ladies’ footwear
100% CRL Marketing Sdn Bhd
Marketing and distribution of fashionable
accessories
100% CRV Sdn Bhd
goods and accessories
100% Daily Frontier Sdn Bhd
Marketing, distribution and export of fashionable
100% De Marts Marketing Sdn Bhd
ladies’ footwear
100% Dominion Directions Sdn Bhd
Marketing and distribution of men’s apparels and
accessories
100% Galaxy Hallmark Sdn Bhd
Marketing and distribution of men’s apparels
and accessories
100% SB Directions Sdn Bhd
accessories
75%
New Series Sdn Bhd
75%
VR Directions Sdn Bhd
and accessories, and ladies’ apparels
100% Eclat World Sdn Bhd
100% Kin Sheng Group Limited
men’s footwear
Investment holdings
100% Guangzhou Jia Li Bao Leather
Fashion Co Ltd
100% FR Gallery Sdn Bhd
Retailing, marketing and distribution of fashionable
Retailing, marketing, promoting, designing,
import and export of fashionable leather
goods, apparels and accessories
100% Future Classic Sdn Bhd
leather goods.
40% Guangzhou Yong Yi Leather
Fashion Co Ltd
100% Mcolours & Design Sdn Bhd
Marketing, distribution, import
and export of fashionable ladies’
leatherwear and accessories
Product design, research and development
100% Paris RCG Sdn Bhd
100% Guangzhou Bonia Fashions Co
Limited
Managing food and beverage business
100% SB Boutique Sdn Bhd
Manufacturing, marketing, retailing of
fashionable leather goods, apparels and
accessories
100% SBL Marketing Sdn Bhd
leather goods
100% Kin Sheng International Trading Co Ltd
General trading and marketing of
fashionable goods
100% SBFW Marketing Sdn Bhd
Wholesaling, retailing and marketing of fashionable
ladies’ footwear
70%
Jeco (Pte) Limited
Intellectual property management
100% Scarpa Marketing Sdn Bhd
100% Lianbee-Jeco Pte Ltd
footwear
Retailing, import and export of leather
goods and general merchandise
100% Vista Assets Sdn Bhd
100% Lianbee-Jeco (M) Sdn Bhd
Marketing and distribution of fashionable goods and
accessories
100% Active World Pte Ltd
Wholesaling and retailing of fashionable leather
goods and apparels
100% Jetbest Enterprise Pte Ltd
Wholesaling, retailing, importing and
exporting of leather goods and accessories
Trading in leather goods and
footwear
60%
Mcore Sdn Bhd
Marketing and distribution of fashionable leather
goods
MANUFACTURING
100% Long Bow Manufacturing Sdn Bhd
Manufacturing and marketing of leather goods
100% SBLS Pte Ltd
Wholesaling, retailing and marketing
of fashionable footwear, carrywear and
accessories
PROPERTY DEVELOPMENT
100% BCB Properties Sdn Bhd
100% SCRL Pte Ltd
Property development
Wholesaling, retailing and marketing
of fashionable footwear, carrywear and
accessories
100% Active Franchise Pte Ltd
General wholesale trade including general
importers and exporters
100% Active Footwear Pte Ltd
Marketing, retailing and distribution of
fashionable footwear
60%
Apex Marble Sdn Bhd
goods
40%
Makabumi Sdn Bhd
Dormant
PROPERTY INVESTMENT
100% CB Holdings (Malaysia) Sdn Bhd
Property investment and management services
100% PT Active World
100% Luxury Parade Sdn Bhd
Investment holdings
Property investment
100% Ataly Industries Sdn Bhd
Property investment
Annual Report 2011 l
15
Profile Of Directors
MR CHIANG SANG SEM
aged 58, Malaysian
MR CHIANG FONG YEE
aged 34, Malaysian
MR CHIANG HENG KIENG
aged 49, Malaysian
He is the founder of BONIA. He was appointed
to the Board on 16 June 1994 as Executive
Chairman of the Company and holds the post
of Executive Chairman in several subsidiaries
and related companies of the Company. He is
now the Group Executive Chairman cum Chief
Executive Officer of the Group. His involvement
in the leather industry spans a period of over 30
years. He possesses in-depth knowledge, skills
and expertise in all aspects of the leatherwear
trade. He is responsible for the overall business
development and formulating the Group’s
strategic plans and policies. To ensure that the
Group is very much in line with the trend of
the fashion and technological changes in the
leatherwear and fashion accessories industry,
he travels extensively to Italy, France, Germany,
Japan, Hong Kong, Taiwan, China, Bangkok,
Vietnam and Indonesia. He does not have any
other directorships of public companies.
He was appointed to the Board on 18 February
2004 as Alternate Director to Mr Chiang Sang
Sem.
He was appointed to the Board on 16 June
1994 and is the Group Managing Director of the
Company and of its several other subsidiaries
and related companies. He is extensively and
directly involved in the day-to-day management,
decision-making and operations of the Group.
He is responsible for the development and
implementation of the marketing strategy and
product distribution functions of the Group.
He is the Honorary President of the Malaysian
Retailer-Chains Association. He does not have
any other directorships of public companies.
His brothers, Chiang Sang Bon and Chiang
Heng Kieng, and his sons, Chiang Fong Yee
and Chiang Fong Tat, are also members of
the Board.
16
He obtained his Bachelor Degree in Marketing
and Statistic from Middlesex University in the
United Kingdom in 1999. He joined the Group
in February 2000 as Marketing Executive and
subsequently he was promoted to the position
of Assistant Business Development Manager of
the leatherwear division in October 2002. He is
responsible for product sourcing, research and
development, planning, implementation of the
marketing strategy and product distribution
functions of the leatherwear division. He
currently holds directorships in several
subsidiaries of the Company. He does not have
His father, Chiang Sang Sem, his uncles, Chiang
Sang Bon and Chiang Heng Kieng, and his
brother, Chiang Fong Tat, are also members of
the Board.
His brothers, Chiang Sang Sem and Chiang
Sang Bon, and his nephews, Chiang Fong Yee
and Chiang Fong Tat, are also members of
the Board.
Profile Of Directors (cont’d)
MR CHIANG SANG BON
aged 56, Malaysian
MR CHONG CHIN LOOK
aged 48, Malaysian
MR CHIANG FONG TAT
aged 33, Malaysian
1994 and is the Group Executive Director
of the Company. He started his career with
a leather manufacturer in Singapore in
1974. To date, he has gained over 35 years’
vast experience of technical skills in the
manufacturing of leatherwear. In his current
capacity, he is responsible for the overall
factory and production operations. He is also
in charge of product quality control. He also
holds directorships in several subsidiaries of
the Company. He does not have any other
directorships of public companies.
1994. He is the Group Finance Director
of the Company and holds the position of
Financial Controller of the Group since 1992.
He is responsible for the overall financial and
corporate functions of the Group. He graduated
with a Bachelor of Economics Degree with
a major in Business Administration from the
University of Malaya in 1987. He is also a
member of The Malaysian Institute of Certified
Public Accountants (MICPA) and a Chartered
Accountant with the Malaysian Institute of
Accountants (MIA). Prior to his current position,
he was attached to KPMG Peat Marwick, an
international firm of Chartered Accountants,
where he gained four and a half years’
experience in auditing, accounting, taxation
and management consultancy. He currently
holds directorships in several subsidiaries of
the Company. He does not have any other
directorships of public companies.
He was appointed to the Board on 30 August
2004. He is the Group Executive Director of the
Company. He graduated with a Bachelor (Hons)
Degree in Marketing and Management from
Middlesex University in the United Kingdom
in 2000 and thereafter joined the Group in
July 2000 as Marketing Executive. He was
subsequently promoted to the position of Brand
Manager in menswear and accessories division
in October 2002. He is now responsible for the
development of product sourcing, research and
development, planning and implementation of
the marketing strategy and product distribution
functions of the leatherwear and footwear
divisions.
His brothers, Chiang Sang Sem and Chiang
Heng Kieng, and his nephews, Chiang Fong
Yee and Chiang Fong Tat, are also members of
the Board.
He currently holds directorships in several
subsidiaries of the Company. He does not have
His father, Chiang Sang Sem, his uncles, Chiang
Sang Bon and Chiang Heng Kieng, and his
brother, Chiang Fong Yee, are also members of
the Board.
17
DATUK NG PENG HONG @ NG PENG HAY
D.M.S.M., D.S.M., P.J.K.
aged 59, Malaysian
1994. He is an Independent Non-Executive
Director, the Chairman of the Audit Committee,
Nomination Committee and a member of the
Remuneration Committee of the Company.
He was the State Assemblyman for Tengkera
Constituency of Barisan Nasional between 1982
and 1986. He then served as a Senator in the
Malaysian Parliament from 1987 to 1993. His
first involvement in social activities was upon
completing his secondary education. He has
been appointed as the Investment Coordinator
by the Malacca State Development Corporation
to handle direct investments in the State of
Melaka since 1988. Together with his teams of
officials and his excellent public relations, he
has helped in attracting numerous Taiwanese,
Singaporean and Chinese investors into the
State of Melaka. In recognition of his efforts and
dedication, he was conferred the Darjah Mulia
Seri Melaka by his Excellency, the Governor of
Melaka in 1992. On 17 July 1999, the Taiwanese
Government awarded him the Economics
Medal. He is the Chairman of MCA, 7th Branch
Melaka since 1982. He was appointed as the
Chairman of the Malacca State Malaysia Crime
Prevention Foundation (MCPF), Board Member
of Malaysia Industrial Development Authority
(MIDA), Board Member of Invest Melaka Berhad
and Chairman of Koperasi Jayadiri Malaysia
Berhad.
He also holds directorships in Farm’s Best
Berhad, Komarkcorp Berhad, Ta Win Holdings
Berhad, iCapital.Biz Berhad and is the Chairman
of Wellcall Holdings Berhad.
18
DATO’ SHAHBUDIN BIN IMAM MOHAMAD
D.S.A.P., D.I.M.P., S.A.P., J.S.M., P.J.K.
MR LIM FONG BOON
aged 62, Malaysian
MR CHONG SAI SIN
aged 44, Malaysian
He was appointed to the Board on 20 June 1994.
He is an Independent Non-Executive Director
and a member of the Audit Committee,
Nomination Committee and Remuneration
Committee of the Company. He was a district
councilor of Tanjung Malim since 1987, the
Managing Partner of Hin Lee Goldsmith since
1978 and also the Managing Director of Tanma
Holdings Sdn Bhd, a property investment
holding company since 1980. He does not have
He was appointed to the Board on 30 January
2009. He is an Independent Non-Executive
Director and a member of the Audit Committee
and Nomination Committee of the Company.
aged 69, Malaysian
He was appointed to the Board on 1 March
1998. He is a Non-Independent NonExecutive Director and the Chairman of the
Remuneration Committee of the Company. He
is the representative of Permodalan Nasional
Berhad (PNB) on the Board of Directors of the
Company. He has served in the government
service in various capacities for some 31 years.
His last post with the Government was from
1996 to 1997 as the Deputy Secretary General
(Operation), Ministry of Finance prior to his
retirement in 1997. He also serves as Director in
MWE Holdings Berhad.
He is a Chartered Accountant, an Approved
Company Auditor, an Approved Tax Agent and a
Partner in LLTC, a firm of Chartered Accountants.
He is also a member of the Malaysian Institute of
Certified Public Accountants (MICPA), Institute
of Internal Auditors Malaysia (IIAM), Chartered
Tax Institute of Malaysia (CTIM) and Financial
Planning Association of Malaysia (FPAM).
He signed up as an article student in MICPA
and started audit experience in Kassim Chan
& Co. since 1987. He joined BDO Binder in
199
1993 after he completed the articleship. He
accu
accumulated more than 7 years’ experience
in 2 established audit firms before joining
com
commercial organisations as an Accountant,
Cor
Corporate Finance Manager and Financial
Con
Controller from 1995 to 2002. He joined
LLTC as an audit principal and was admitted
as a Partner in 2005. He has more than 20
yea
years’ experience in commercial organisations
and accounting practice and gained good
exp
exposure in Corporate Finance, Due Diligence
Rev
Review, Listing Exercise, Auditing, Taxation
and Accounting. He does not have any other
dire
directorships of public listed companies.
19
Notes:
1.
Save as disclosed above, none of the directors have:
(a) any family relationship with any Directors and/or substantial shareholders of the Company,
(b) any conflict of interest with the Company,
(c) any conviction for offences (other than traffic offences) within the past ten (10) years.
2.
The respective Directors’ interests in the Company are detailed in pages 57 and 153 of the
Annual Report.
3.
There were four (4) Board Meetings held during the financial year ended 30 June 2011. The
details of attendance of the Directors are as follows:
Name
Chiang Sang Sem
Chiang Fong Yee (Alternate Director to Mr Chiang Sang Sem)
Chiang Heng Kieng
Chiang Sang Bon
Chong Chin Look
Chiang Fong Tat
Lim Fong Boon
Chong Sai Sin
4.
3 out of 4
4 out of 4
4 out of 4
3 out of 4
4 out of 4
3 out of 4
4 out of 4
4 out of 4
4 out of 4
4 out of 4
The Date, Time and Place of the Board Meetings held:
Date
(i)
(ii)
(iii)
(iv)
25 August 2010, Wednesday
24 November 2010, Wednesday
23 February 2011, Wednesday
25 May 2011, Wednesday
Place
The Boardroom
Bonia Headquarters
4th Floor, No. 62, Jalan Kilang Midah
Taman Midah, Cheras
56000 Kuala Lumpur
20
Attendance
Time
10.30 a.m.
3.00 p.m.
10.30 a.m.
10.30 a.m.
Statement On Corporate Governance
The Board of Bonia Corporation Berhad, in recognising the importance of corporate governance, is
committed to ensure that the Company’s business and operations are in line with the principles and best
practice advocated by the Malaysia Code on Corporate Governance.
The following paragraphs set out the Company’s application of the
principles and best practices of the Malaysian Code on Corporate
Governance (Revised 2007) (“the Code”).
THE BOARD OF DIRECTORS
The Group acknowledges the pivotal role played by the Board of Directors
to lead and control the Company with the ultimate objective of realising
long-term shareholder value. To fulfill this role, the Board has established
various processes and committees to assist the Board in discharging
these responsibilities. Among others, the setting of Company’s strategies
and directions, shareholders and investors’ relationship, annual budget,
significant financial matters, and the internal control including risk
assessment are within the responsibilities of the Board of Directors.
The Board meets at least four (4) times a year, with additional meetings
convened as and when necessary. There were four (4) Board Meetings held
during the financial year ended 30 June 2011. The details of attendance
of the Directors at the Board Meetings are set out on page 20.
The Company is led by an experienced Board under a Chairman who is
a Group Executive Director cum Chief Executive Officer. The roles of the
Group Executive Chairman cum Chief Executive Officer and the Group
Managing Director are separated and each has a clearly accepted division
of responsibilities to ensure balance of power and authority. The Board
has within it, professionals drawn from varied backgrounds, bringing
in-depth and diversity in experience, expertise and perspectives to the
Group’s business operations. The Board is ensured of a balance and
independent view at all Board deliberations largely due to the presence of
its Independent Non-Executive Directors whom are independent from the
Management and major shareholders of the Company. The Independent
Non-Executive Directors are also free from any business dealing and
other relationships that could materially interfere with the exercise of their
independent judgement. Together with the Executive Directors who have
intimate knowledge of the Group‘s businesses, the Board is constituted of
individuals who are committed to business integrity and professionalism
in all their activities.
Board Balance
The Board of Directors consists of nine (9) directors and one (1) alternate
director; comprising five (5) Executive Directors, three (3) Independent
Non-Executive Directors and one (1) Non-Independent Non-Executive
Director. The Board therefore complies with Paragraphs 1.01 and 15.02
of the Bursa Securities’s Main Market Listing Requirements which requires
that at least two (2) directors or one-third (1/3) of the Board members
whichever is the higher, are Independent Directors.
A brief profile of each Director is presented on pages 16 to 20.
21
Statement On Corporate Governance (cont’d)
Supply of Information
The Directors are provided with relevant agenda and timely information, such as quarterly financial results, progress report of the Group’s businesses,
corporate developments, regulatory and audit reports to enable them to discharge their duties and responsibilities effectively.
All Directors have full access to the advice and services of the Company Secretaries, the internal and external auditors and other independent
professionals in carrying out their duties.
Board Committees
To assist the Board in discharging its duties, various Board Committees were established. The functions and terms of reference of the Board Committees
are clearly defined and where applicable, comply with the recommendations of the Code.
(i)
Audit Committee
The objective of the Audit Committee is to assist the Board to review the adequacy and integrity of internal control system and management
information system of the Group and the Company. The composition terms of reference and summary of activities of the Audit Committee are set
out on pages 26 to 28 .
(ii) Nomination Committee
The Nomination Committee currently comprises the following members:
Name of members
Designation
Attendance
Independent Non-Executive Director (Chairman)
1 out of 1
Lim Fong Boon
Independent Non-Executive Director
1 out of 1
Chong Sai Sin
1 out of 1
The responsibilities of the Nomination Committee are to identify skill and expertise that are relevant to the effective functioning of the Board,
to review the Board structure, size and composition, to select and propose suitable candidates for appointment to the Board. The Nomination
Committee also assesses the contribution and performance of each individual Director and recommends to the Board to fill the seat in the
respective Committees. Besides, the Nomination Committee also annually review its required mix of skills and experience and other qualities,
including core competencies which Non-Executive Directors should bring to the Board.
(iii) Remuneration Committee
The Remuneration Committee currently comprises the following members:
Name of members
Designation
Attendance
Non-Independent Non-Executive Director (Chairman)
1 out of 1
1 out of 1
Lim Fong Boon
1 out of 1
The Remuneration Committee is responsible for considering and recommending the following matters to the Board for its approval:
•
•
•
22
Revision of fees payable to the Board of Directors;
Reimbursement of expenses incurred in attending the Board and its Committees’ Meeting;
Develop a remuneration policy based on performance to attract and retain high caliber and experience directors to successfully manage the
business of the Group and of the Company.
Appointment to the Board
The Nomination Committee is responsible for making recommendation
for appointment to the Board. Upon appointment, the Director will
undergo an orientation and familiarisation programme, including visits
to the Group’s businesses and meetings with senior management as
appropriate, to facilitate their understanding of the Group’s businesses.
Training sessions have been held for Directors of the Group to keep them
abreast of current and regulatory issues.
Re-election of Directors
Any Director appointed during the year is required under the Company’s
Articles of Association, to retire and seek re-election by the shareholders
at the next Annual General Meeting (AGM) to be held following their
appointments. The Articles also require that one-third (1/3) of the
Directors including the Managing Director, if any, to retire by rotation and
seek re-election at each AGM and that each Director shall submit himself
for re-election at least once in every three (3) years.
Directors over seventy (70) years of age are required to submit themselves
for re-appointment by the shareholders annually in accordance with
Section 129(6) of the Companies Act, 1965.
Directors’ Training
All members of the Board have attended the Mandatory Accreditation
Training Programme (MAP) prescribed by Bursa Malaysia Training Sdn
Bhd, the training and education arm of Bursa Malaysia. In order to ensure
that the Directors are competent in carrying out their expected roles
and responsibilities, Directors are encouraged and required to attend
continuous education programmes and seminars to keep abreast with
developments in the market place.
All executive directors and other members in the senior management
attended a three-day “Management Camp” entitled “Systematic Process
for Strategic Alignment and Teambuilding”” conducted by Quest
Learning, an expert specialized in organizational development and
customized training program in July 2011.
All non-executive directors have attended seminar with topic related to
Corporate Governance during the period under review.
There is a familiarisation programme for all Board members including,
where appropriate, visits to the Group’s business and meetings with senior
management to facilitate their understanding of the Group’s businesses
and operations.
23
Directors’ Remuneration
The Code states that Directors’ remuneration should be of a sufficient level to attract and retain high calibre Directors to successfully run the Group. For
Non-Executive Directors, their remuneration should reflect their respective levels of experience, expertise and responsibilities.
Non-Executive Directors are paid attendance allowance for each Board and/or Audit Committee Meeting they attended. Directors’ fees are paid to
Executive and Non-Executive Directors upon approval granted by the shareholders at the Annual General Meeting. Executive Directors are not paid
attendance allowance.
The aggregate remuneration of the Directors is categorised into appropriate components:
Category
Executive Directors *
Non-Executive Directors
Fees
RM’000
Salaries
RM’000
Bonuses
RM’000
Other
Emoluments
RM’000
Total
RM’000
427*
160
1,863*
–
4,346*
–
790*
–
7,426*
160
* inclusive of remuneration paid by the subsidiary companies.
The number of Directors whose total remuneration falls within the following bands:
Range of Remuneration
Below RM50,000
RM500,001 to RM550,000
RM650,001 to RM700,000
RM700,001 to RM750,000
RM950,001 to RM1,000,000
RM4,500,001 to RM4,550,000
Executive Director
Non-Executive Director
–
1
1
1
1
1
4
–
–
–
–
–
RELATIONSHIP WITH SHAREHOLDERS
Dialogue between the Company and Investors
The Company recognises the importance of keeping shareholders and investors informed of the Group’s business and corporate developments. Such
information is disseminated through press releases, press conferences, the Company’s annual reports, circulars to shareholders, quarterly financial
results and various announcements made from time to time.
The Group has established a website at www.bonia.com which shareholders and members of the public can access for pertinent and updated
information of the Group. Alternatively the Group’s latest announcement can be obtained through the Bursa Malaysia Securities Berhad’s website at
www.bursamalaysia.com.
The Annual General Meeting (AGM) remains the principal forum for dialogue with shareholders. It is a crucial mechanism in shareholders communication
for the Company. At the Company’s AGM, the shareholders have direct access to the Board and are given the opportunity to ask questions during the
open question and answer session prior to the motion moving for the Company’s and the Group’s Audited Financial Statements and Directors’ Report
for the financial year. The shareholders are encouraged to ask questions both about the resolutions being proposed or about the Group’s operations
in general.
24
ACCOUNTABILITY AND AUDIT
Internal Control
Financial Reporting
The Board acknowledges their responsibilities for the Group’s system of
internal controls covering not only financial controls but also operational
and compliance controls as well as risk management. A Statement on
Internal Control of the Group is set out on page 31 to 32.
The Board aims to provide and present a balanced and meaningful
assessment of the Group’s financial performance and prospects, primarily
through the financial statements and the Chairman’s Statement in the
Annual Report and quarterly financial statements.
The Group’s quarterly, half yearly and annual financial results
announcements which are released to the shareholders within the
stipulated time frame reinforce the Board’s commitment to ensure accurate
and timely dissemination of financial and corporate announcements for
greater accountability and transparency.
The Directors consider that in preparing the financial statements, the
Group has used appropriate accounting policies, consistently applied
and supported by reasonable and prudent judgements and estimates.
All accounting standards which the Board considers to be applicable
have been followed, subject to any explanations and material departures
disclosed in the notes to the financial statements.
Relationship with the Auditors
The Board, via the Audit Committee, has established a transparent and
appropriate relationship with the Group’s auditors. In the course of audit of
the Group’s operations, the auditors highlighted to the Audit Committee
and the Board, matters that need the Board’s attention.
The appointment of the external auditors is subject to the approval of the
shareholders at the Annual General Meeting.
A summary of the activities of the Audit Committee during the year as
well as the role of the Audit Committee in relation to the external auditors
and internal auditors are set out in the Audit Committee Report on pages
26 to 28.
The Directors’ Responsibility Statement made pursuant to Paragraph
15.26(a) of the Main Market Listing Requirements of Bursa Malaysia
Securities Berhad is set out on page 33.
25
Audit Committee Report
The Board of Directors of Bonia Corporation Berhad is pleased to present the Report of the Audit Committee for the financial year ended 30 June 2011.
MEMBERS AND MEETINGS
The composition of the Audit Committee is as listed below.
There were four (4) Audit Committee Meetings held during the financial year ended 30 June 2011. The details of attendance of the Audit Committee
members are as follows:
Name
Status of directorship
Independent
Attendance
Independent Non-Executive Director (Chairman)
Yes
1 out of 1
Lim Fong Boon
Yes
1 out of 1
Chong Sai Sin
(A member of the Malaysian Institute of Accountants)
Yes
1 out of 1
The Date and Time and Place of the Audit Committee Meetings held:
Date
Time
25 August 2010, Wednesday
24 November 2010, Wednesday
23 February 2011, Wednesday
25 May 2011, Wednesday
10.00 a.m.
2.30 p.m.
10.00 a.m.
10.00 a.m.
Place
The Boardroom
Bonia Headquarters
4th Floor, No. 62, Jalan Kilang Midah
Taman Midah, Cheras
56000 Kuala Lumpur
The Group Executive Chairman cum Chief Executive Officer, the Group Managing Director, the Group Finance Director, the Group Executive Directors,
any other Board members, managers or any other senior executives may attend the meetings upon invitation by the Committee. The Committee shall
at least meet with the external auditors twice a year in the absence of the Executive Directors and the Management.
TERMS OF REFERENCE
Membership
The Audit Committee shall be appointed by the Board from amongst the Directors and shall consist of not less than three (3) members, all of whom
shall be Non-Executive Directors, with a majority being Independent Directors and at least one (1) member of the Committee must be a member of the
Malaysian Institute of Accountants or possess such other qualifications and/or experience as approved by Bursa Malaysia Securities Berhad.
Review of membership is undertaken once every three (3) years. This review pertains to the term of office and performance of the members.
26
Audit Committee Report (cont’d)
Quorum
The quorum shall be two (2) and the all must be Independent Directors.
Reporting Procedures
The Chairman of the Committee shall be an Independent Director appointed by the Board. He shall
report on each meeting of the Committee to the Board.
The Company Secretary shall be responsible for drawing up the agenda and circulating it, supported
by explanatory documentation to the Committee members prior to each meeting. The Secretaries
shall also be responsible for keeping minutes of meetings of the Committee and circulating them to
the Committee members and to the other members of the Board.
Frequency of Meetings
Meetings shall be held not less than four (4) times a year. The presence of external auditors will be
requested if required and the external auditors may also request a meeting if they consider it is
necessary.
Authority
The Committee is authorised by the Board to investigate any activity within its terms of reference
and shall have full and unrestricted access to both the internal and external auditors and to all
employees of the Group. The Committee is also authorised to obtain external legal advice or other
independent professional advice as necessary.
Functions
The functions of the Committee shall be:
a)
to review with the external auditors:
•
the audit plan;
•
the evaluation of the system of internal accounting controls;
•
the scope and results of audit procedures;
•
the audit report;
•
the assistance given by the Group’s and the Company’s officers to the auditors;
•
the annual financial statements of the Group and the Company and thereafter to submit
them to the Board of Directors of the Company;
•
any problems and reservations arising from the interim and final audits, and any
matters the external auditor may wish to discuss in the adsence of the
Management, where necessary;
•
any related party transactions that may arise within the Company or the Group;
b)
to consider and recommend to the Board the nomination of external auditors;
c)
to review the internal audit plan, consider significant finding and
management’s response and report to the Board together with such other
functions as may be agreed to by the Committee and the Board;
27
Audit Committee Report (cont’d)
d)
Assess the performance of the internal auditors and determine and approve the fees and annual increment of the internal auditors;
e)
to review the quarterly, half yearly and annual financial statements of the Group and the Company before submission to the Board, focusing
particularly on:
•
public announcement of results and dividend payment;
•
any changes in accounting policies and practices;
•
significant adjustments resulting from audit;
•
the going concern assumptions;
•
compliance with applicable approved accounting standards and regulatory requirements;
f)
to carry out such other responsibilities, functions or assignments as may be defined jointly by the Committee and the Board of Directors from time
to time;
g)
in compliance with Paragraph 15.16 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements’), where
the Committee is of the view that a matter reported by it to the Board has not been satisfactory resolved resulting in a breach of the Listing
Requirements, the Committee must promptly report such matter to the Bursa Malaysia Securities Berhad.
INTERNAL AUDIT FUNCTION
The Group outsources its internal audit function to an independent professional firm, which has adequate resources and appropriate standing to
undertake its activities independently objectively to provide reasonable assurance to the Audit Committee regarding the adequacy and effectiveness
of risk management, internal control and governance systems. The internal auditors report directly to the Audit Committee.
ACTIVITIES OF THE COMMITTEE
During the financial year, the Audit Committee has:
a)
reviewed the unaudited quarterly and year-end financial statements before recommending to the Board for consideration and approval, and
release to Bursa Malaysia Securities Berhad;
b)
reviewed the audit plan, audit strategy and scope of work presented by the external auditors prior to commencement of annual audit;
c)
reviewed with the external auditors the results of audit, their audit report and management letter and management’s response;
d)
reviewed and approved the Audit Committee Report for the financial year ended 30 June 2011 to be presented in the Annual Report by the Board;
e)
reviewed the internal audit reports presented and considered the major findings of internal audit in the Group’s operating subsidiaries and
associated companies through the review of internal audit report tabled and management responses thereto and ensuring significant findings are
adequately addressed by the management;
f)
reported to the Board on its activities and significant findings and results.
g)
To review any related party transactions and conflict of interest situation that may arise within the Group including any transaction,
procedure or course of conduct that raises questions of Management integrity.
28
Pursuant to Paragraph 9.25 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad
UTILISATION OF PROCEEDS
VARIATION IN RESULTS
There were no fund raising exercises implemented during the financial
year.
During the financial year, there were no variance of results which differ
by 10% or more from any profit estimate/forecast/projection/unaudited
results announced.
SHARE BUYBACKS
PROFIT GUARANTEES
During the financial year, there were no share buybacks by the Company.
OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES
There were no other exercise of options, warrants or convertible securities
during the financial year ended 30 June 2011.
AMERICAN DEPOSITORY RECEIPT (ADR) OR GLOBAL DEPOSITORY
RECEIPT (GDR) PROGRAMME
During the financial year, there were no profit guarantees given by the
Company.
MATERIAL CONTRACTS
During the financial year, there were no material contracts on the Company
and its subsidiaries involving Directors’ and major shareholders’ interests.
CONTRACT RELATING TO LOANS
During the financial year, the Company did not sponsor any ADR or GDR
programme.
There were no contracts relating to loans by the Company.
IMPOSITION OF SANCTIONS/PENALTIES
REVALUATION OF LANDED PROPERTIES
There were no sanctions and/or penalties imposed on the Company
and its subsidiaries, Directors or management by the relevant regulatory
bodies.
The Company does not have a revaluation policy on landed properties.
However, fair value accounting is applied for certain properties classified
under the Group’s Investment Properties.
NON-AUDIT FEES
RECURRENT RELATED PARTIES TRANSACTIONS (RRPT) OF REVENUE
OR TRADING NATURE
During the financial year, there were non-audit fees of RM22,625.00 paid
to the external auditors in relation to review of the Company’s disclosure
on realised and unrealised profits, statement of internal control and
subsidiary’s gross sales statements to landlords.
The aggregate value of the recurrent related party transactions conducted
between the Company’s subsidiaries with the related parties during the
financial year is as follows:
Interested parties
and nature of
relationship
Amount
transacted
RM’000
No.
Transacting parties
Companies within the Group
Nature of transactions
1.
Cassardi International
Co Ltd
Dominion Directions Sdn Bhd
New Series Sdn Bhd
VR Directions Sdn Bhd
Alpha Footwear Sdn Bhd
• Purchase of men’s apparels
• Payment of Valentino Rudy
trademark royalty
Note 1
2,150
2.
BIH Franchising Ltd
Daily Frontier Sdn Bhd
CB Marketing Sdn Bhd
Mcore Sdn Bhd
Apex Marble Sdn Bhd
Banyan Sutera Sdn Bhd
SBL Marketing Sdn Bhd
SB Directions Sdn Bhd
Kin Sheng International Trading Co Ltd
Active World Pte Ltd
Payment of Bonia, Carlo Rino
and Sembonia trademarks
royalties
Note 2
1,403
3.
Long Bow Manufacturing
(S) Pte Ltd
Active World Pte Ltd
Jetbest Enterprise Pte Ltd
Payment of office rental
Note 3
436
29
Pursuant to Paragraph 9.25 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (cont’d)
Notes:
1.
Mr Boonnam Boonnamsap is a director of Cassardi International
Co Ltd (“Cassardi”) and a major shareholder of VR Directions Sdn
Bhd and New Series Sdn Bhd holding 15% equity interest. Sirinee
Chantranakarach and Petcharat Boonnamsap, being the sister in-law
and daughter of Mr Boonnam Boonnamsap, are major shareholders
of Cassardi, holding 17% and 15% equity interest respectively.
Suchart Chantranakarach, Patcharawan Boonnamsap, Petcharat
Boonnamsap, Yaowanuch Boonnamsap and Yaowaluck Boonnamsap,
being the brother in-law and daughters of Mr Boonnam Boonnamsap,
are directors of Cassardi.
2.
Mr Chiang Sang Sem is the major shareholder of BIH Franchising
Ltd., holding 100% equity interest. He is also the major shareholder
and director of the Company.
3.
Mr Chiang Sang Sem is a director and major shareholder of Long
Bow Manufacturing (S) Pte. Ltd. holding 83.92% equity interest. His
brother, Mr Chiang Boon Tian is also a director and shareholder of
Long Bow Manufacturing (S) Pte. Ltd. holding 13.58% equity interest.
Mr Chiang Sang Sem is also the major shareholder and director of the
Company.
The above recurrent related parties transactions of revenue or trading
nature do not require the mandate of shareholders by virtue of:
a)
b)
The transacted parties for Item 1 fall within the interpretation of
Paragraph 10.08(9);
the amount transacted for Item 2 and 3 are within the interpretation
of Paragraph 10.09 (1)(a) of the Main Market Listing Requirements of
Bursa Malaysia Securities Berhad.
Save as disclosed above, there were no recurrent related party transactions
of revenue or trading nature during the financial year under review
SHARE OPTION OFFERED TO AND EXERCISED BY NON-EXECUTIVE
DIRECTORS
There were no share options offered to and exercised by Non-Executive
Directors under the Company Executives’ Share Option Scheme (ESOS)
during the financial year under review.
30
Statement On Internal Control
INTRODUCTION
Paragraph 15.26(b) of the Bursa Malaysia Securities Berhad Main Market Listing Requirements
requires the Board to include in its Company Annual Report a statement about the state of its
internal control. The Malaysian Code on Corporate Governance (Revised 2007) requires all listed
companies to maintain a sound system of internal control to safeguard shareholders’ investment
and the Group’s assets.
Accordingly, the Board is therefore pleased to provide the Statement on Internal Control
(“Statement”) that was prepared in accordance with the “Guidance for Directors of Public Listed
Company” issued by Bursa Malaysia Securities Berhad which outlines the processes the Board have
adopted in reviewing the adequacy and integrity of the system of internal control of the Group.
RESPONSIBILITY
The Board of Directors acknowledges its overall responsibility for maintaining a sound system of
internal controls for the Group and for reviewing its effectiveness and adequacy. Whilst the role of
the management is to implement the Board’s policies on risk and control. The system of internal
control is designed to manage rather than eliminate the risk of failure to achieve business objectives
and can only provide reasonable and not absolute assurance against material misstatement or loss.
The Board confirms that there is a continuous process in place to identify, evaluate and manage the
significant risks that may affect the achievement of business objectives. The process
rocess which has been
instituted throughout the Group is updated and reviewed from time to time to suit the changes in
the business environment and this on-going process has been in place for the
he whole financial year
under review and up to the date of adoption of this Annual Report.
Annuall Report 2011 l
A
31
Statement On Internal Control (cont’d)
INTERNAL CONTROL
FRAMEWORK
PROCESSES
AND
RISK
MANAGEMENT
The key elements of the Group’s internal control processes and risk
management framework are described below:
•
There is an organisation structure with clearly defined lines of
responsibility, limits of authority and accountability aligned to business
and operations requirements which support the maintenance of a
strong control environment. It has extended the responsibilities of
the Audit Committee to include the assessment of internal controls,
through the Internal Audit function.
•
There is a clearly defined delegation of responsibilities to the Audit
Committee and the management of operating units who ensure that
appropriate risk management and control procedures are in place.
The Group’s management operates a risk management framework
that identifies the key risks by line of business and key functional
activities.
•
There is a clearly defined framework for investment appraisal
covering the acquisition or disposal of any business, application of
capital expenditure and approval on borrowing. Post implementation
reviews are conducted and reported to the Board.
•
The annual plans and budgets are submitted to the Board for
approval. The actual performances would be reviewed against the
targeted results on a quarterly basis allowing timely response and
corrective action to be taken to mitigate risks.
•
Comprehensive management accounts and reports are prepared
monthly for effective monitoring and decision-making.
•
Regular scheduled management meetings are held and attended by
all Executive Directors and management to discuss and report on
operational performance, business strategy, key operating statistics,
legal and regulatory matters of each business unit where plans and
targets are established for business planning and budgeting process.
•
The Critical Success Factors (CSF) Committee is established as part of
the stewardship team to conduct study on various business processes
and functions to identify key elements that are vital to achieve
company’s mission and goals.
•
Periodical internal audit has been carried out by an independent
professional firm to oversee compliance with operating procedures
and corporate governances, to review of the business process and
effectiveness of group’s internal control; and to highlight significant
risks and non-compliances impacting the group.
•
32
The Audit Committee reviews and holds meetings on internal audit
issues identified by the internal auditors, and devises action plan to
rectify the weaknesses.
THE INTERNAL AUDIT FUNCTION
Regular internal audits are carried out by an independent professional
firm to review the adequacy and integrity of the internal control systems
of the business units (operational and non-operational) within the Group.
The internal audit function reports directly to the Audit Committee on
improvement measures pertaining to internal controls, including a followup on the status of Management’s implementation of recommendation
by the Internal Audit function. Internal audit reports are submitted to
the Audit Committee, who reviews the findings with Management at its
quarterly meetings. In addition, the External Auditors’ management letters
and management’s responsiveness to the control recommendations on
deficiencies noted during financial audits provide added assurance that
control procedures on matters of finance are in place, and are being
followed. In assessing the adequacy and effectiveness of the system of
internal controls and accounting control procedures of the Group, the
Audit Committee reports to the Board its activities, significant results,
findings and the necessary recommendations or changes.
During the financial year, an audit fee of RM45,000 was paid to the
internal auditors to undertake the audit and risk assessment of the
Group’s operating units; reviewing the units’ compliance to internal
control procedures; highlighting weaknesses and making appropriate
recommendations for improvement to ensure a sound system of internal
controls.
REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS
The external auditors have reviewed this Statement on Internal Control
for the inclusion in the annual report for the financial year ended 30 June
2011. The external auditors conducted the review in accordance with the
“Recommended Practice Guide 5: Guidance for Auditors on the Review
of Directors’ Statement on Internal Control” (“RPG 5”) issued by the
Malaysian Institute of Accountants. The review has been conducted to
assess whether the Statement on Internal Control is both supported by the
documentation prepared by or for the Directors and appropriately reflects
the processes the Directors had adopted in reviewing the adequacy and
integrity of the system of internal controls for the Group. RPG 5 does not
require the external auditors to consider whether the Directors’ Statement
on Internal Control covers all risks and controls, or to form an opinion on
the effectiveness of the Group’s risk and control procedures. RPG 5 also
does not require the external auditors to consider whether the processes
described to deal with material internal control aspects of any significant
matters disclosed in the annual report will, in fact, mitigate the risks
identified or remedy the potential problems.
Based on their review, the external auditors have reported to the Board
that nothing had come to their attention that caused them to believe that
the Statement on Internal Control is inconsistent with their understanding
of the process the Board has adopted in the review of the adequacy and
integrity of internal control of the Group.
Directors’ Responsibility Statement
The Directors are required by the Companies
Act, 1965 (“the Act”) to prepare financial
statements for each financial year which give a
true and fair view of the state of affairs of the
Group and of the Company and their results
and cash flows for the financial year. As required
by the Act and the Listing Requirements of
Bursa Malaysia Securities Berhad, the financial
statements have been prepared in accordance
with the applicable approved accounting
standards in Malaysia and the provisions of the
Act.
In preparing the financial statements for the
financial year ended 30 June 2011, the Directors
have:
•
•
•
•
selected suitable accounting policies and
then applied them consistently;
made judgements and estimates that are
reasonable and prudent;
ensured that applicable accounting
standard have been followed, subject to
any material departures disclosed and
explained in the financial statements;
prepare the financial statements on a
going-concern basis.
The Directors are responsible for ensuring
that the Group and the Company keep
proper accounting records which disclose with
reasonable accuracy at any time the financial
position of the Group and of the Company
and to enable them to ensure that the financial
statements comply with the Act.
The Directors have a general responsibility for
taking such steps that are reasonably available
to them to safeguard the assets of the Group
and of the Company and to prevent and detect
fraud and other irregularities.
33
Chairman’s Statement
On behalf of the Board of Directors, I am
pleased to present the Annual Report
and Audited Financial Statement of Bonia
Corporation Berhad and its Group of
Companies for the financial year ended
30 June 2011.
34
Chairman’s Statement (cont’d)
FINANCIAL PERFORMANCE
OPERATIONAL REVIEW
The Group’s revenue grew by 28% or RM101.3 million to reach RM461.4
million in the financial year 2011. The growth was mainly attributed to
the contribution of revenue of RM54.8 million from Jeco (Pte) Limited,
of which the Group completed its acquisition on 20 December 2010, as
well as consignment sales in Malaysia which registered a higher revenue
growth of RM24.0 million.
Retailing
For the financial year 2011, the Group recorded a profit before tax of
RM56.5 million, an increase of 24%, as compared to RM45.5 million from
the preceding year. During the financial year under review, the Group has
provided for losses of RM5.4 million arising from its joint venture business
in Vietnam. Excluding the losses, the Group would have recorded a profit
before tax of RM61.9 million, of which Jeco (Pte) Limited has contributed
a profit before tax of RM14.8 million.
ECONOMIC REVIEW
The Malaysian economy showed a moderate growth of 4.0% in the
second quarter following a weaker external environment. In the first half of
2011, its GDP expanded by 4.4%. The overall weakness in the advanced
economies and the disruptions in the global manufacturing supply chain
stemming from the disaster in Japan were reflected in the slowdown in
the manufacturing sector. Nevertheless, overall growth continued to be
underpinned by the sustained expansion of private domestic demand.
This was further supported by the strong exports of commodities and
resource-based products given the favourable regional demand and high
commodity prices.
Growth in the wholesale and retail trade sub-sector remained resilient
and was higher at 7.3% in the second quarter. Private consumption grew
by 6.4% in the second quarter, supported by strong consumer spending
amid favourable labour market conditions and sustained disposal
income. Continued high commodity prices also provided further impetus
to spending in the rural areas. Major consumption indicators such as
manufacturing sales of food and beverages, credit card spending and
imports of consumption goods registered improvements during the
quarter. However, real private consumption was affected by higher food
and fuel prices, with headline inflation averaging 3.3% in the second
quarter. Higher inflation also affected consumer sentiments, as reflected
by a slight drop in the MIER Consumer Sentiments Index to 107.9 points
in the second quarter. These factors resulted in more cautious spending
on discretionary items during the quarter and rest of the year.
With the successful acquisition of 70% equity in Jeco (Pte) Limited, the
Group has added other well known international brands, namely Braun
Buffel, Pierre Cardin, Renoma and Bruno Magli to its portfolio of brands.
The acquisition has also helped the Group to widen its range of product
offerings to cater to the constant changes and demands of the consumers
in the fashion retail industry. The acquisition has contributed positively to
the Group’s earnings since the completion of the acquisition in December
2010.
As one of the leaders in the fashion industry, the Group is constantly
upgrading itself in all aspects, from merchandising to store image. This
is an important corporate exercise to maintain the Group’s brand image
as the market leader in the retail industry. One of the exercises was the
refurbishment of the BONIA Natural Suria KLCC boutique. Its design
features mainly natural concepts, including the use of natural materials
for the interior and other environmentally-friendly aspects such as LED
energy-saving lights.
During the year under review, the Group has added one (1) BONIA
boutique, two (2) Sembonia boutiques, four (4) Carlo Rino boutiques,
two (2) Valentino Rudy boutiques and two (2) Braun Buffel boutiques. The
Group also opened its first standalone boutique for The Savile Row Co
in the Sunway Pyramid shopping mall in May 2011, which features high
quality apparels for both men and women, as well as men’s shoes, bags
and accessories. At present, the Group has a total of seventy-seven (77)
standalone boutiques in Malaysia.
Reflecting the ongoing success of BONIA in the global market, the Group
recently opened its first BONIA boutique in Jakarta, Indonesia. The
882-square foot boutique is conveniently located in the Grand Indonesia
Shopping Town - West Mall in the heart of Jakarta. The boutique
showcases and markets a range of ladies’ handbags and shoes, men’s
shoes as well as accessories.
As part of the diversification and natural progression of our product range,
the Group has successfully launched its first ever range of ‘BONIA Parfums’
for men and women during the financial year under review. Inspired by the
luxurious and glamorous vibe that the brand exudes, the fragrances, aptly
named ‘BONIA pour FEMME’ and ‘BONIA pour HOMME’, are distributed
exclusively via BONIA boutiques across Malaysia. The perfume range will
help the Group to leverage on its ever growing popularity as a luxury
brand and further strengthen its BONIA brand as a leading player in the
Malaysian fashion industry.
35
CORPORATE DEVELOPMENTS
Gallery Sdn Bhd are retailing, marketing and distribution of fashionable
goods and accessories.
On 9 September 2010, the Company entered into a conditional share sale
agreement for the proposed acquisition of 70% equity interest in Jeco
(Pte) Limited for an aggregate total cash consideration of SGD28.0 million
from Liao Tien Fook, Liao Tian Sze, Tan Ah Kiat, Liao Wang Leng and Liao
Huanting Joan. The acquisition was completed on 20 December 2010.
Bonia (Shanghai) Commerce Limited, the wholly owned sub-subsidiary
of the Company had on 3 September 2011 completed its voluntary
deregistration procedures. Bonia (Shanghai) Commerce Limited was
incorporated in the People’s Republic of China on 23 May 2008 and its
principal activities were that of retailing, marketing, promoting, designing,
import and export of fashionable goods, apparels and accessories. Bonia
(Shanghai) Commerce Limited had ceased operations since June 2010.
Active World Pte Ltd, a wholly-owned subsidiary of Bonia Corporation
Berhad, had on 22 November 2010 incorporated a wholly-owned
subsidiary in Singapore, known as Active Footwear Pte Ltd. Its current
issued and paid-up share capital is SGD1.00 comprising one (1) ordinary
share of SGD1.00 each. Its intended principal activities are marketing,
retailing and distribution of fashionable footwear.
Active World Pte Ltd, a wholly-owned subsidiary of Bonia, had on 24 June
2011 incorporated a wholly-owned subsidiary known as PT Active World
in the Republic of Indonesia. The authorised share capital of PT Active
World is Rp13,660,800,000 or equivalent to USD1,600,000, divided into
1,600 shares of Rp8,538,000 each or equivalent to USD1,000 each, of
which Rp4,781,280,000 or equivalent to USD560,000, have been fully
paid-up. The principal activity of PT Active World is that of investment
holding.
On 25 August 2011, the Company acquired the entire equity interest
in Vista Assets Sdn Bhd comprising two (2) ordinary shares of RM1.00
each for a total cash consideration of RM2.00 only from Mr Yap Kian Mun
and Ms Lim Boon Huay who were also the directors of Vista Assets Sdn
Bhd. Vista Assets Sdn Bhd is a dormant company and its authorised share
capital is RM100,000, comprising 100,000 ordinary shares of RM1.00
each, of which RM2.00 have been issued and fully paid-up. The intended
principal activities of Vista Assets Sdn Bhd are marketing and distribution
of fashionable goods and accessories.
On 26 August 2011, the wholly-owned subsidiary of the Company, CRG
Incorporated Sdn Bhd incorporated a wholly-owned subsidiary in Malaysia
known as CRV Sdn Bhd. The current authorised share capital of CRV Sdn
Bhd is RM100,000 comprising 100,000 ordinary shares of RM1.00 each, of
which RM2.00 have been issued and fully paid-up. The intended principal
activities of CRV Sdn Bhd are marketing and distribution of fashionable
goods and accessories.
On 27 September 2011, a wholly-owned subsidiary of the Company,
Banyan Sutera Sdn Bhd, had on 18 August 2011 incorporated a whollyowned subsidiary company known as PT Banyan Cemerlang in the Republic
of Indonesia. The authorised share capital of PT Banyan Cemerlang is
Rp8,487,000,000 or equivalent to USD1,000,000, divided into 1,000
shares of Rp8,487,000 each or equivalent to USD1,000 each, of which
Rp2,121,750,000 or equivalent to USD250,000 have been fully paid-up.
The principal activity of PT Banyan Cemerlang is that of wholesaling of
fashionable goods and accessories.
FUTURE PROSPECTS
In the first half of 2011, the Malaysian economy grew by 4.4% due to healthy
domestic demand and strong exports of commodity and resource-based
products amidst slower global economic growth. The global economic
outlook was further dampened by the renewed debt crisis in Europe and
poor economic data in the USA. However, the Malaysian economy is
expected to continue to grow in view of the implementation of the 10th
Malaysia Plan and Economic Transformation Programme initiatives.
The Group has been eyeing new business opportunities all this while.
An opportunity arose recently when the Group, through its Singapore
subsidiary, was successfully appointed as the master Franchisee for
“Renoma Café Gallery” from Licensor, Renoma S.T.A.R. for the territories
of Malaysia, Singapore and Indonesia. A first concept “Renoma Café
Gallery” will be launched in the first half of 2012.
On 12 September 2011, the Company incorporated a wholly-owned
subsidiary in Malaysia known as Paris RCG Sdn Bhd. The current authorised
share capital of Paris RCG Sdn Bhd is RM100,000, comprising 100,000
ordinary shares of RM1.00 each, of which two (2) ordinary shares have
been issued and fully paid-up. The intended principal activity of Paris RCG
Sdn Bhd is management of the food and beverage business.
On the overseas front, we have to rebuild our retail base in Vietnam after
the fallout with our previous partner for the Vietnam businesses. With
the continuing support of Vietnam’s departmental store operators and
complex management, we foresee this setback to be temporary and we
will emerge even stronger after this. We plan to expand our base further
in Indonesia after the successful launch of our first exclusive BONIA
boutique at the Grand Indonesia Shopping Town in Jakarta. Plans are
under way to build up our support and marketing team to explore further
opportunities in the boutique retail operations.
On 19 September 2011, the Company incorporated a wholly-owned
subsidiary in Malaysia known as FR Gallery Sdn Bhd. The current
authorised share capital of FR Gallery Sdn Bhd is RM100,000, comprising
100,000 ordinary shares of RM1.00 each, of which two (2) ordinary shares
have been issued and fully paid-up. The intended principal activities of FR
Given the Group’s business expansion plans locally and abroad, and with
tourist expenditure envisaged to increase further, barring any unforeseen
circumstances, the Board of Directors is of the view that the Group’s
performance for the financial year ending 30 June 2012 will remain
prudent and will continue to grow, albeit at a slower pace.
36
DIVIDEND
The Board of Directors has recommended a final dividend of 5% or 2.5
sen per ordinary share of 50.0 sen each, less tax of 25%, amounting to
RM3,779,472 in respect of the financial year ended 30 June 2011. Coupled
with the interim dividend of 5% or 2.5 sen per ordinary share of 50.0 sen
each, less tax of 25%, amounting to RM3,779,472 paid on 23 June 2011,
this financial year’s total payout shall be 10% or 5.0 sen per share.
The final dividend will be proposed for shareholders’ approval in the
forthcoming Annual General Meeting. The entitlement date and payment
date for the proposed final dividend will be determined and announced
at a later date.
ACKNOWLEDGEMENTS
On behalf of the Board, I would like to express my utmost and sincere
appreciation and gratitude to the management and staff for their
conscientious efforts, commitment and dedication to delivering results.
The successes we achieved in the financial year 2011 could not have been
possible without their efforts.
We are also grateful to our valued customers, partners, shareholders,
business associates, government authorities and financiers for their
continued support and confidence in the Group.
CHIANG SANG SEM
Group Executive Chairman
24 October
ober 2011
37
Penyata Pengerusi
Bagi pihak Lembaga Pengarah, saya
dengan sukacita mempersembahkan
Laporan Tahunan dan Penyata Kewangan
Beraudit Bonia Corporation Berhad serta
Kumpulan Syarikat-syarikat bagi tahun
kewangan berakhir 30 Jun 2011.
PRESTASI KEWANGAN
Pendapatan Kumpulan bertambah sebanyak 28% atau RM101.3 juta dan
telah mencapai RM461.4 juta pada tahun kewangan 2011. Pertumbuhan
ini tercapai melalui pendapatan sebanyak RM54.8 juta daripada Jeco (Pte)
Limited, yang telah menjadi milik penuh Kumpulan pada 20 Disember
2010, serta jualan konsainmen di Malaysia yang telah merekodkan
pertumbuhan pendapatan yang lebih tinggi iaitu sebanyak RM24.0 juta.
Bagi tahun kewangan 2011, Kumpulan telah mencatatkan keuntungan
sebelum cukai sebanyak RM56.5 juta, iaitu pertambahan sebanyak
24%, berbanding dengan RM45.5 juta pada tahun sebelumnya. Pada
tahun kewangan yang ditinjau, Kumpulan telah memperuntukkan jumlah
kerugian sebanyak RM5.4 juta yang berpunca daripada perniagaan
usahasama di Vietnam. Seandainya kerugian tersebut tidak diambil
kira, Kumpulan akan mencatatkan keuntungan sebelum cukai sebanyak
RM61.9 juta, yang mana Jeco (Pte) Limited menyumbangkan keuntungan
sebelum cukai sebanyak RM14.8 juta.
TINJAUAN EKONOMI
Ekonomi Malaysia telah menunjukkan pertumbuhan sederhana
sebanyak 4.0% pada suku kedua berikutan persekitaran luaran yang
lebih lemah. Pada setengah pertama tahun 2011, KDNK Malaysia telah
berkembang sebanyak 4.4%. Kelembapan dalam sektor pengeluaran
adalah disebabkan oleh kelemahan keseluruhan ekonomi maju serta
gangguan dalam rantaian tawaran dan pengeluaran secara global akibat
dari malapetaka di negara Jepun. Walau bagaimanapun, pertumbuhan
keseluruhan dapat diperkukuhkan dengan adanya permintaan domestik
peribadi yang berkembang pesat. Ini turut disokong oleh pengukuhan
dalam pengeksportan komoditi dan produk berasaskan sumber,
memandangkan permintaan serantau dan harga komoditi yang tinggi dan
menggalakkan.
38
Penyata Pengerusi (samb)
Pertumbuhan dalam sub-sektor borong dan peruncitan, kekal berdaya
saing dan mencatatkan peratusan yang lebih tinggi, iaitu 7.3% pada suku
kedua. Pada suku kedua juga, penggunaan peribadi telah bertambah
sebanyak 6.4%, disebabkan oleh perbelanjaan pengguna yang kukuh
akibat dari keadaan pasaran buruh dan pendapatan yang siap dibelanjakan
yang menggalakkan. Harga komoditi yang tinggi turut mendorong
perbelanjaan di kawasan luar bandar. Indeks penggunaan utama seperti
jualan dari pengeluaran hasil makanan & minuman, perbelanjaan melalui
kad kredit dan pengimportan barangan pengguna telah mencatatkan
penambahbaikan pada suku tersebut. Namun demikian, harga makanan
dan petrol yang lebih tinggi telah membawa impak kepada penggunaan
peribadi yang sebenar, dengan purata inflasi menyeluruh sebanyak
3.3% pada suku kedua. Inflasi yang tinggi turut membawa kesan kepada
sentimen pengguna dan dilihat dengan penurunan yang sedikit dalam
Indeks Sentimen Pengguna MIER ke 107.9 poin pada suku kedua. Faktorfaktor ini telah mengakibatkan perbelanjaan yang lebih cermat atas
barangan budi bicara semasa suku tersebut dan keseluruhan tahun.
TINJAUAN OPERASI
Peruncitan
Dengan kejayaan perolehan 70% ekuiti dalam Jeco (Pte) Limited,
Kumpulan telah menambahkan beberapa jenama antarabangsa, seperti
Braun Buffel, Pierre Cardin, Renoma dan Bruno Magli, ke dalam portfolio
jenama sedia ada. Perolehan tersebut juga telah membantu Kumpulan
meluaskan jumlah produk yang ditawar bagi memenuhi permintaan
pengguna dan memenuhi desakan perubahan dalam industri peruncitan
fesyen. Perolehan ini telah menyumbang secara positif kepada pendapatan
Kumpulan sejak ianya dilengkapkan pada Disember 2010.
Sebagai salah satu peneraju utama dalam industri fesyen, Kumpulan
sering melakukan penambahbaikan dalam semua aspek, daripada
penjualan sehinggalah kepada imej kedai. Ini merupakan sebuah latihan
korporat yang penting bagi mengekalkan imej jenama Kumpulan sebagai
pemimpin pasaran dalam industri perniagaan. Salah satu dari latihan
tersebut merupakan pengubahsuaian butik BONIA Natural di Suria
KLCC. Rekabentuk butik tersebut bertemakan konsep semulajadi dan
merangkumi penggunaan bahan-bahan semulajadi untuk hiasan dalaman
serta aspek mesra alam yang antara lain termasuk penggunaan lampu
LED yang menjimatkan tenaga.
Pada tahun yang ditinjau, Kumpulan telah menambah satu (1) butik
BONIA, dua (2) butik Sembonia, empat (4) butik Carlo Rino, dua (2) butik
Valentino Rudy dan dua (2) butik Braun Buffel. Kumpulan juga telah
membuka butik tersendiri untuk The Savile Row Co di pusat membeli
belah Sunway Pyramid pada Mei 2011, yang memaparkan pakaian
berkualiti tinggi untuk lelaki dan wanita, serta kasut, beg dan aksesori
lelaki. Pada masa kini, Kumpulan mempunyai sejumlah tujuh puluh tujuh
(77) butik tersendiri di Malaysia.
Sebagai susulan kepada kejayaan berterusan BONIA di pasaran
antarabangsa pihak Kumpulan telah membuka butik BONIA yang
pertama di Jakarta, Indonesia. Butik seluas 882 kaki persegi terletak di
Grand Indonesia Shopping Town – West Mall di pusat bandar Jakarta.
Butik tersebut menampil dan memasarkan kasut dan beg tangan wanita,
kasut lelaki serta pelbagai aksesori.
Sebagai sebahagian daripada diversifikasi dan perkembangan produk
kami, Kumpulan telah berjaya melancarkan jenama minyak wangi
pertama ‘BONIA Parfums’ untuk lelaki dan wanita pada tahun kewangan
yang ditinjau. Minyak wangi tersebut yang telah dinamakan ‘BONIA
pour FEMME’ dan ‘BONIA pour HOMME’, mencerminkan kemewahan
tidak terhingga, dan diedarkan secara eksklusif di butik-butik BONIA
di sekitar Malaysia. Minyak wangi ini akan membantu Kumpulan
untuk memperkukuhkan lagi populariti sebagai jenama mewah serta
memperkuhkan jenama BONIA sebagai peneraju utama dalam industri
fesyen di Malaysia.
39
PERKEMBANGAN KORPORAT
Pada 9 September 2010, Syarikat telah menandatangani perjanjian
bersyarat dalam penjualan saham untuk memperoleh sebanyak 70%
kepentingan dalam Jeco (Pte) Limited untuk jumlah keseluruhan sebanyak
SGD28.0 juta daripada Liao Tien Fook, Liao Tian Sze, Tan Ah Kiat, Liao
Wang Leng dan Liao Huanting Joan. Perolehan tersebut telah lengkap
pada 20 Disember 2010.
Pada 26 Ogos 2011, CRG Incorporated Sdn Bhd yang merupakan
subsidiari milik penuh Syarikat, telah memperbadankan di Malaysia,
subsidiari milik penuh yang dikenali sebagai CRV Sdn Bhd. Modal
saham semasa yang dibenarkan untuk CRV Sdn Bhd adalah RM100,000
dan terdiri dari 100,000 saham biasa sebanyak RM1.00 setiap satu, dan
RM2.00 telah diterbitkan dan dibayar sepenuhnya. Aktiviti utama CRV
Sdn Bhd yang dirancang adalah pemasaran dan pengedaran barangan
dan aksesori fesyen.
Pada 22 November 2010, Active World Pte Ltd, yang merupakan
subsidiari milik penuh Bonia Corporation Berhad, telah menubuhkan
sebuah subsidiari milik penuh di Singapura, dikenali sebagai Active
Footwear Pte. Ltd. Modal saham terkini yang diterbitkan dan dibayar
sepenuhnya adalah SGD1.00, dan terdiri daripada satu (1) saham biasa
bernilai SGD1.00. Aktiviti utama yang dirancang adalah pemasaran,
peruncitan dan pengedaran kasut berfesyen.
Pada 12 September 2011, Syarikat telah memperbadankan di Malaysia
sebuah subsidiari milik penuh yang dikenali sebagai Paris RCG Sdn Bhd.
Modal saham semasa yang dibenarkan bagi Paris RCG Sdn Bhd adalah
RM100,000 yang terdiri dari 100,000 saham biasa bernilai RM1.00
setiap satu, di mana dua (2) saham biasa telah diterbitkan dan dibayar
sepenuhnya. Aktiviti utama Paris RCG Sdn Bhd yang dirancang adalah
pengurusan perniagaan makanan dan minuman.
Active World Pte Ltd, subsidiari milik penuh Bonia, telah pada 24 Jun 2011
memperbadankan subsidiari milik penuh dikenali sebagai PT Active World
di Republik Indonesia. Modal saham yang dibenarkan bagi PT Active World
adalah Rp13,660,800,000 atau bersamaan dengan USD1,600,000 yang
terbahagi kepada 1,600 saham sebanyak Rp8,538,000 atau bersamaan
dengan USD1,000 setiap satu, dan Rp4,781,280,000 atau bersamaan
dengan USD560,000 yang telah dibayar sepenuhnya. Aktiviti utama PT
Active World adalah sebagai pemegang pelaburan.
Pada 19 September 2011, Kumpulan telah memperbadankan di Malaysia
sebuah subsidiari milik penuh yang dikenali sebagai FR Gallery Sdn
Bhd. Modal saham semasa yang dibenarkan untuk FR Gallery Sdn Bhd
adalah RM100,000, yang terdiri daripada 100,000 saham biasa bernilai
RM1.00 setiap satu, dan dua (2) saham biasa telah diterbitkan dan dibayar
sepenuhnya. Akitiviti utama FR Gallery Sdn Bhd yang dirancang adalah
penjualan, pemasaran dan pengedaran barangan and aksesori fesyen.
Pada 25 Ogos 2011, Kumpulan telah memperolehi keseluruhan
kepentingan ekuiti dalam Vista Assets Sdn Bhd yang terdiri daripada dua
(2) saham biasa sebanyak RM1.00 setiap satu untuk pertimbangan wang
berjumlah RM2.00 sahaja daripada En Yap Kian Mun dan Cik Lim Boon
Huay yang juga merupakan pengarah Vista Assets Sdn Bhd. Vista Assets
Sdn Bhd merupakan syarikat dorman dan mempunyai modal saham yang
dibenarkan sebanyak RM100,000 yang terdiri daripada 100,000 saham
biasa untuk RM1.00 setiap satu, dan RM2.00 telah diterbitkan dan dibayar
sepenuh. Aktiviti-aktiviti utama yang dirancang bagi Vista Assets Sdn Bhd
adalah pemasaran dan pengedaran barangan dan aksesori fesyen.
40
Pada 3 September 2010, Bonia (Shanghai) Commerce Limited, subsubsidiari milik penuh Syarikat telah menyiapkan tatacara penyahdaftaran
secara sukarela. Bonia (Shanghai) Commerce Limited telah diperbadankan
di Negara China pada 23 Mei 2008 dan aktiviti-aktiviti utamanya
merangkumi penjualan, promosi, rekaan, import dan eksport barangan,
pakaian dan aksesori fesyen. Bonia (Shanghai) Commerce Limited telah
menamatkan operasi semenjak Jun 2010.
Pada 27 September 2011, Banyan Sutera Sdn Bhd yang merupakan
subsidiari milik penuh Syarikat, telah pada 18 Ogos 2011,
memperbadankan subsidiari milik penuh yang dikenali sebagai PT
Banyan Cemerlang di Republik Indonesia. Modal saham yang dibenarkan
bagi PT Banyan
Ban
Cemerlang adalah Rp8,487,000,000 atau bersamaan
dengan USD
USD1,000,000, dibahagi kepada 1,000 saham sebanyak
Rp8,487,000 setiap satu atau bersamaan dengan USD1,000 setiap satu,
dan Rp2,121,750,000
Rp2,121
atau bersamaan USD250,000 yang telah dibayar
sepenuhnya. Aktiviti utama PT Banyan Cemerlang adalah pemborongan
barangan dan aksesori fesyen.
PROSPEK MASA DEPAN
Pada setengah pertama tahun 2011, ekonomi Malaysia telah tumbuh
sebanyak 4.4% disebabkan oleh permintaan domestik yang sihat serta
eksport komoditi dan produk berasaskan sumber yang kuat walaupun
dikekang oleh pertumbuhan ekonomi antarabangsa yang lembap.
Keadaan ekonomi antarabangsa turut dilembapkan akibat krisis hutang
di Eropah dan keadaan ekonomi yang kurang memuaskan di Amerika
Syarikat. Namun demikian, ekonomi Malaysia dijangka akan terus
berkembang dengan inisiatif Rancangan Malaysia Ke-10 dan Program
Transformasi Ekonomi.
Kumpulan sering giat mencari peluang perniagaan baru. Satu peluang
telah timbul baru-baru ini, dan Kumpulan, menerusi subsidiari di
Singapura, telah berjaya dilantik sebagai Francaisi utama bagi “Renoma
Café Gallery” oleh pemegang lesen, Renoma S.T.A.R. untuk wilayah
Malaysia, Singapura dan Indonesia. “Renoma Café Gallery” berkonsep
yang pertama akan dilancarkan pada setengah pertama tahun 2012.
Di persada antarabangsa, kami perlu membina semula teras jualan
di Vietnam akibat perselisihan dengan bekas rakan kongsi dalam
mengendalikan perniagaan di sana. Dengan sokongan berterusan oleh
pengendali kedai dan pengurusan kompleks di Vietnam, kami meramalkan
bahawa ini merupakan halangan sementara, malah kami akan menjadi
lebih kukuh selepas ini. Kami merancang untuk memperluaskan lagi
kedudukan kami di Indonesia berikutan kejayaan pelancaran butik BONIA
eksklusif yang pertama di Grand Indonesia Shopping Town di Jakarta.
Seterusnya, kami berhasrat untuk memperkukuhkan pasukan sokongan
dan pemasaran untuk menerokai peluang-peluang selanjutnya dalam
operasi peruncitan butik.
Dividen akhir akan dicadangkan untuk persetujuan pemegang saham
pada Mesyuarat Agung Tahunan akan datang. Tarikh kelayakan dan tarikh
bayaran untuk dividen akhir yang dicadangkan akan ditentukan dan
diumumkan pada tarikh akan datang.
PENGHARGAAN
Bagi pihak Lembaga, saya ingin melafazkan penghargaan kepada pihak
pengurusan dan kakitangan atas segala usaha, komitmen dan dedikasi
mereka ke arah mencapai hasil yang memberangsangkan. Kejayaankejayaan yang telah kami capai dalam tahun kewangan 2011 tidak
mungkin direalisasikan tanpa kegigihan mereka.
Kami juga amat menghargai dan berterima kasih kepada para pelanggan,
rakan kongsi, pemegang saham, rakan perniagaan, pihak berkuasa dan
pembiaya atas sokongan dan keyakinan berterusan mereka terhadap
Kumpulan.
CHIANG SANG SEM
Pengerusi Eksekutif Kumpulan
24 Oktober 2011
Berlandaskan pelan peluasan perniagaan Kumpulan di persada tempatan
dan antarabangsa, serta ramalan peningkatan dalam perbelanjaan
golongan para pelancong, dan sekiranya tiada sebarang sekatan yang
tidak dijangka, Lembaga Pengarah berpendapat bahawa prestasi
Kumpulan bagi tahun kewangan berakhir 30 Jun 2012 akan kekal
memberangsangkan dan terus berkembang, walau pada kadar yang lebih
perlahan.
DIVIDEN
Lembaga Pengarah telah mengesyorkan dividen akhir sebanyak 5%
atau 2.5 sen setiap saham biasa untuk 50.0 sen setiap satu, kurang cukai
sebanyak 25%, berjumlah RM3,779,472 untuk tahun kewangan berkahir
30 Jun 2011. Dengan mengambil kira dividen interim sebanyak 5% atau
2.5 sen setiap saham biasa untuk 50.0 sen setiap satu, kurang cukai
pendapatan sebanyak 25%, sebanyak RM3,779,472 yang dibayar pada
23 Jun 2011, bayaran keseluruhan bagi tahun kewangan ini berjumlah
10% atau 5.0 sen setiap saham.
41
42
43
44
45
Corporate Social Responsibility
The Group is committed to managing our business in a socially responsible manner which is aligned
with our business strategy.
Our position as one of the leaders in designing, manufacturing, marketing and distribution of
fashionable leather goods, apparel and accessories brings with it many responsibilities. We
recognise that it is equally important to measure the impact of our activities on our customers,
employees, shareholders, communities and the environment.
In particular, we are committed to ensuring that BONIA engages with and makes a positive
contribution to the local communities.
We believe that a firm commitment to Corporate Social Responsibility (CSR) activities forms the
basis of good corporate citizenship and promotes good corporate governance. As part of our
commitment to CSR, the Group has been involved in various activities during the financial year.
THE WORKPLACE
We believe that our people are our most important asset in helping us to attain our objectives.
With a constantly growing workforce, it is imperative that we continue to invest in our staff to meet
the demands of our rapid progress. Training programmes and specialised courses are conducted
regularly to upgrade the skills and improve competency levels of our employees. Apart from inhouse training activities, our employees are also encouraged to attend external courses sponsored
by the Group. The Group also promotes staff appreciation and recognition effort such as long
service awards, appreciation dinners, birthday celebrations, festive gatherings, as well as family and
sport events.
In July 2011, the Group held a three-day management camp on “Systematic Process for Strategic
Alignment and Teambuilding”. During the camp, the Group’s Mission and Vision 2015 were set out.
Under the 3R Mission, the Group will focus on three main areas:
•
•
•
Recognition - to be recognized as an international luxury brand with excellent customer
satisfaction
Resources - to build, recognize and reward our valued human capital
Responsibilities - to provide sound return to stakeholders and fulfil community social
responsibilities
The Group also outlined its Vision 2015, of which one of the objectives is to be recognised in the
region as the preferred employer and create a workforce of passion and accountability.
46
Corporate Social Responsibility (cont’d)
THE COMMUNITY
During the year under review, the Group contributed a total of RM195,400 in monetary assistance to
various community projects, charitable organizations and local communities. The main beneficiaries
of the Group’s contributions are the following organizations:
•
•
•
•
•
•
•
•
•
•
Malaysian Aeon Foundation (Contributions to Japan Tsunami Victims) ;
Malam Sentuhan Kasih Nur Ramandhan (Charity Dinner);
Persatuan SLE Malaysia (Help People To Live With Systemic Lupus Erythematosus);
Malaysia Red Crescent Society (“Hope Of Japan” Charity Fundraiser);
Olympic Council Malaysia (Donation For Funding Of The Malaysian Volleyball Association
Programmes 2011);
Persatuan Insan Istimewa Cheras Selangor (Medical & Welfare Fund);
MRCA (18th Anniversary Celebration Charity Dinner);
Sam Wei Keong Temple Fund, Melaka;
The Federation of Ka Yin Chu Association of Malaysia;
Persatuan Tarian Naga & Singa Long Yee Tangkak Ledang, Johor Bahru; and Parent-Teacher
Associations of several schools.
The Group continues to place a special emphasis on the education sector in line with our belief
that education plays a key role in realising our Government’s vision to create a knowledge-based
society. As such, it has continued to make contributions to schools and other education-related
activities. Contributions were also made to various health organizations and charities. Our BONIA
Club members also contributed to the Malaysian Aeon Foundation via the ‘Waoh’ Coin Box charity.
THE MARKETPLACE
The Group has built a good reputation as a manufacturer and distributor of quality products and
provider of excellent customer service. In view of our commitment to providing only the best for our
customers, quality remains the main emphasis of all our production and management systems, and
stringent controls are carried out right from the initial raw material stage to the final stage before
finished goods are delivered.
THE ENVIRONMENT
The Group believes it has a part to play in contributing towards a greener environment. Through
various efforts and initiatives, we have continued to implement key energy saving measures, such
as maintaining air-conditioning on a need-to-use basis, switching off non-essential lighting and
equipment during non-operating hours, creating awareness among our staff on the recycling of
waste materials, and continuous improvements in our manufacturing process. As part of our efforts
to promote more eco-lifestyle products, we have introduced a range of eco-friendly handbags
made from genuine leather tanned with vegetable dyes using traditional Italian techniques. Unlike
chemical dyes, which pollute the earth, vegetable dyes are easily disposed of and recycled into
fertilizers.
The Group recognizes that healthy lifestyles and safeguarding a healthy planet are closely related.
During the year, health talks by the Taiwan Buddhist Tzu Chi Foundation to promote “Save The
Environment & Planet” campaign were held in April and June 2011. In addition, once-a-week
vegetarian lunches and sharing sessions were also organized by our Group Finance Director to
promote a healthier lifestyle.
47
48
Five-Year Group Financial Highlights
Revenue
Profit before Tax
Profit after Tax and Non-controlling interests
60,000
500,000
50,000
400,000
40,000
45,000
35,000
40,000
35,000
30,000
250,000
30,000
25,000
200,000
150,000
RM’000
300,000
RM’000
RM’000
350,000
25,000
20,000
20,000
15,000
15,000
100,000
10,000
10,000
50,000
5,000
–
–
2007
2008
2009
2010
2011
5,000
–
2007
Total Shareholders’ Equity
2008
2009
2010
2011
2007
Net Basic EPS
2008
2009
2010
2011
Gross Dividend
20.0
18.0
250,000
12.0
16.0
200,000
10.0
14.0
8.0
10.0
%
Sen
RM’000
12.0
150,000
8.0
100,000
6.0
6.0
4.0
4.0
50,000
2.0
2.0
–
–
2007
2008
2009
2010
2011
–
2007
2008
2009
2010
2011
2007
2008
2009
2010
2011
30 June 2007
30 June 2008
30 June 2009
30 June 2010
30 June 2011
246,346
300,189
314,891
360,099
461,381
Profit before Tax (RM’000)
37,112
38,334
29,515
45,455
56,546
Profit after Tax and Non-controlling interests (RM’000)
28,203
27,948
20,607
33,547
39,152
136,734
164,095
177,477
203,804
232,062
16.0
14.1
10.2
16.6
19.4
6.0
10.0
8.0
10.0
10.0
Revenue (RM’000)
Total Shareholders’ Equity (RM’000)
Net Basic EPS (sen) *
Gross Dividend (%)
* Comparitive EPS has been restated to take into account the effect of the bonus issue and subdivision of ordinary share of RM1.00 each into RM0.50 each on 23 April 2007.
49
Event Highlights
BONIA UNVEILS BONIA NERO
In November 2010, BONIA unveiled its
premium label for men, boasting high quality
shirts with sartorial details aptly named ‘Nero’meaning black in Italian. This collection is a
significant leap from the essential Red and Silver
Labels, extending from casual to formal evening
wear with its elegant, body-skimming cuts.
Nero was chosen because black symbolizes
prestige which is reflective of the quality,
craftsmanship and target audience the shirts
are tailored for. In conjunction with the launch, BONIA invited renowned local fashion consultant,
Peter Lum to comment on the collection and provide advice on how to “Dress for Success”.
VALENTINO RUDY SPONSORS MISS TOURISM INTERNATIONAL 2010/2011
With 55 delegates from countries around the world vying for the coveted crown of Miss Tourism
International, this event marked the biggest number of participants in an international pageant
held in Malaysia.
Held in Sunway Resort Hotel on 31 December 2010, the pageant finale saw Ms Nathalie Den Dekker
of the Netherlands winning the most prestigious award of Miss Tourism International 2010/2011 as
well as Ms Elegance Valentino Rudy.
CARLO RINO AS THE MAIN SPONSOR FOR JAY CHOU THE ERA WORLD TOUR 2011,
INDOOR STADIUM BUKIT JALIL, 4 & 5 MARCH 2011
Sweet and unforgettable moments with Carlo Rino and Jay Chou continue to linger in the
minds of millions of Jay Chou fans and Carlo Rino customers. Carlo Rino was the main
sponsor of this hugely successful event in Malaysia.
By prioritizing its customers, Carlo Rino had opened great opportunities to Carlo Rino Boutique
shoppers with an exclusive contest for 20 lucky winners to win 2 Jay Chou concert tickets each to
witness the exciting event at the Indoor Stadium Bukit Jalil on the 4 March 2011. In total, 10 lucky
shoppers won 2 concert tickets each, and another 10 lucky shoppers won 2 concert tickets each
plus a chance to attend the after-concert celebration party with Jay Chou as well as take a much
treasured group photograph with the pop star.
BONIA PARFUMS WORKSHOP
In conjunction with the launch of its first ever range of scents for men and women, BONIA held a
fragrance workshop titled “The Art and Science of Perfumery” especially for members of the media
on 5 April 2011. The fragrances are aptly named ‘BONIA pour FEMME’ and ‘BONIA pour HOMME’
and are distributed exclusively via BONIA boutiques across Malaysia.
The scents were conceptualized together with one of the world’s thoroughbreds of perfumery,
‘Atelier des Parfums’, based at the French Riviera, near Grasse, also known as the world’s perfume
capital. ‘Le Nez’ (‘the Nose’) and creator of BONIA’s inaugural perfumes, Olivier Funel is a state-certified
‘Master Parfumeur’ and the fourth generation and current owner of Atelier des Parfums, France.
50
Event Highlights (cont’d)
MALAYSIA INTERNATIONAL SHOE
FESTIVAL 2011
Carlo Rino participated in the Malaysia
International Shoe Festival from the 7 - 10
April 2011 held in PWTC, that is believed to
have attracted over 100,000 visitors over the
three days. Occupying a promotional booth at
the premier area, it was the talk of the town,
covered by both local and international media
and attracting shoes lovers from all walks of life.
As no selling was allowed on the promotional
floor, Carlo Rino distributed some 5,000
postcards with a drawback of 20% discount
applicable for shoes at Carlo Rino boutiques.
SBPRC CENTENNIAL CELEBRATION
The Santa Barbara Polo & Racquet Club (SBPRC),
licensed under the Bonia Group, celebrated its
100-year anniversary at West Boulevard Oasis
in the Sunway Pyramid shopping mall on 16
April this year. To mark the occasion, SBPRC
held a carnival with various outdoor games and
activities along with a special band and dance
performances to entertain the crowd. More than
5,000 people attended our Centennial Carnival.
Profits from the carnival were donated to SPCA.
During the event, lucky draw winners were
selected from a year-long promotion held at
every SBPRC counter and boutique starting
from June 2010 for customers who had spent
a minimum of RM100. RM100,000 worth of
prizes were given away. The grand prize was
a fully paid vacation to the United States of
America and a visit to the Santa Barbara Polo &
Racquet Club in Santa Barbara, California – the
birthplace of the brand.
INNOVATIVE LEADERSHIP IN GLOBALIZATION AWARD
BONIA bagged an award on 4 May 2011 from the Malaysian Institute of Directors for “Innovative
Leadership in Globalization”. The award was presented by the Prime Minister Dato’ Sri Najib Tun
Razak during the Corporate Leaders’ Banquet 2011 organized by Limkokwing University of Creative
Technology. Receiving the award on behalf of BONIA was the Group Managing Director Mr Albert
Chiang. The Malaysian Institute of Directors is the only professional institute of company directors
in the country.
The award represents another proud corporate milestone for BONIA. By winning such an acclaimed
award BONIA is encouraged to reach new heights of success for its future endeavors.
51
SEMBONIA GREEN QUEEN
The Sembonia Goes Green Queen roadshow was held on 9 - 15 May 2011
at the Mid Valley Concourse. The event saw the introduction of stylish
reusable Sembonia Ecobags, reflecting the trend towards being more ecogreen and natural in premium lifestyle products.
The roadshow was aimed at not only showing the new Sembonia Spring/
Summer collection but also helping to promote a more eco-friendly
lifestyle.
BONIA LAUNCHES FACEBOOK
BONIA officially launched its Facebook on 1 June 2011 at http://www.facebook.com/BoniaFashion.
In conjunction with the launch, a ‘BONIA Fashionista Pose Photo Contest’ was held from June 15
June to 31 July.
SAVILE ROW LAUNCHES 1ST STAND ALONE
BOUTIQUE
For the contest, participants had to submit a photo posing with any BONIA product together with
a brief caption/theme for the photo. The Grand prize was an Ipad2 plus RM1000 BONIA cash
vouchers. Cash vouchers worth a total of RM5100 were given to the winners.
The Savile Row Co, a London based apparel
house launched its first standalone boutique
at the Sunway Pyramid shopping mall in May
2011. Strategically located on the Ground Floor
at Lot 1.41, the boutique features high quality
apparels for both men and women, along with
men’s shoes, bags and accessories.
BONIA launched the BONIA Natural boutique in Suria KLCC on 16 June 2011. This new concept
boutique has been designed to give our customers a natural and fresh shopping experience. In
conjunction with the launch, the company took the opportunity to introduce the latest collection
from its Brianna eco handbags range.
Mr PS Lee of VR Directions Sdn Bhd (a
subsidiary under Bonia Group) & Mr Jeffrey
Doltis of The Savile Row London also signed a
license agreement for Savile Row London for all
products in Malaysia, Singapore and Indonesia.
Driven by a passion for leather and with almost four decades of experience in the selection, design
and production of leather wear, BONIA continues to research and develop new processes, methods
and means of producing the finest quality leather. Since the early days, the company has practiced
eco-friendly processes by using vegetable dye in place of chemical based ones in some of our
products.
52
BONIA LAUNCHES BRIANNA ECO HANDBAGS
BONIA SPONSORS PRIZES FOR “DAD,
YOU’RE THE GREATEST” CONTEST
BONIA participated in “Dad, You’re the
Greatest“, a message writing contest organized
by the New Straits Times in conjunction with
Fathers’ Day on 19 June 2011. The contest
invited NST readers to write a special message
to their fathers.
The Grand Prize winner received a BONIA
Lusso Premio luggage while the Second and
Third Prize winners received a BONIA black
full-grain leather briefcase and a BONIA dark
brown jacquard-trimmed leather messenger
bag respectively. 10 Consolation Prize winners
were given a BONIA leather wallet each.
SBPRC AT FIP POLO WORLD CUP 2011
On 25 June 2011, Santa Barbara Polo &
Racquet Club (SBPRC) was the main sponsor for
the committee and staff uniforms of the Royal
Malaysian Polo Association (RMPA) during
the Asian-Australasian-African Championships
Zone D Playoffs in the FIP (Federation of
International Polo) Polo World Cup 2011. The
company also outfitted the Malaysian Polo
team and sponsored RM100,000 in retail value
of merchandise to RMPA.
His Majesty, the Sultan of Pahang and his son,
HRH Tengku Mahkota Pahang (tournament
chairman) who are avid polo players, were
present at the event as well as the Prime
Minister, Dato’ Sri Najib Tun Razak, who was the
official guest.
BONIA EXTENDS ITS STORES WORLDWIDE
Another BONIA boutique recently opened in Jakarta, Indonesia further marking the ongoing success
of BONIA in the global market. Opened in July 2011, the 882 square foot store is conveniently
located in Grand Indonesia Shopping Town - West Mall, in the heart of Jakarta. The boutique
showcases ladies handbags and shoes, men’s shoes and accessories.
CARLO RINO 1ST BOWLING COMPETITION
The Carlo Rino First Bowling Competition was held on 5 August 2011 at Cosmic Bowl Mid Valley allowing all staff under the Carlo Rino Group of Companies to take part and have a fun day out
together as one big family.
The objective of organizing this event was mainly to benefit staff by providing them a fun and
leisurely environment after working hours, bringing them closer to each another.
53
FINANCIAL
STATEMENTS
056
060
060
061
063
065
066
068
070
Directors’ Report
Statement By Directors
Statutory Declaration
Independent Auditors’ Report
Statements Of Financial Position
Statements Of Comprehensive Income
Statements Of Changes In Equity
Statements Of Cash Flows
Notes To The Financial Statements
Directors’ Report
The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year
ended 30 June 2011.
PRINCIPAL ACTIVITIES
The Company is principally an investment holding and management company. The principal activities of the subsidiaries are set out in Note 10 to the
financial statements.
There have been no significant changes in the nature of these activities during the financial year.
RESULTS
Profit for the financial year attributable to:
Owners of the parent
Non-controlling interests
Group
RM’000
Company
RM’000
39,152
3,452
17,531
–
42,604
17,531
DIVIDENDS
Dividends paid, declared or proposed since the end of the previous financial year were as follows:
RM’000
In respect of financial year ended 30 June 2010:
An interim tax exempt dividend of 5% or 2.5 sen per ordinary share, paid on 18 August 2010
A final tax exempt dividend of 1% or 0.5 sen per ordinary share, paid on 23 December 2010
A final dividend of 4% or 2.0 sen per ordinary share, less tax of 25%, paid on 23 December 2010
5,039
1,008
3,024
9,071
In respect of financial year ended 30 June 2011:
An interim dividend of 5% or 2.5 sen per ordinary share, less tax of 25%, paid on 23 June 2011
3,779
The Directors have proposed a final dividend of 5% or 2.5 sen per ordinary share, less tax of 25%, amounting to RM3,779,472 in respect of the financial
year ended 30 June 2011, subject to the approval of members at the forthcoming Annual General Meeting.
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.
OPTIONS GRANTED OVER UNISSUED SHARES
No options were granted to any person to take up unissued shares of the Company during the financial year.
ISSUE OF SHARES AND DEBENTURES
The Company has not issued any new shares or debentures during the financial year.
56
Directors’ Report (cont’d)
DIRECTORS
The Directors who have held for office since the date of the last report are:
Chiang Sang Sem
Chiang Fong Yee
Chiang Heng Kieng
Chiang Sang Bon
Chiang Fong Tat
Chong Chin Look
Lim Fong Boon
Chong Sai Sin
(Group Executive Chairman cum Chief Executive Officer)
(Alternate Director to Mr. Chiang Sang Sem)
(Group Managing Director)
(Group Finance Director)
(Independent Non-Executive Director)
(Non-Independent Non-Executive Director)
DIRECTORS’ INTERESTS
The Directors holding office at the end of the financial year and their beneficial interests in the ordinary shares of the Company and of its related
corporations during the financial year ended 30 June 2011, as recorded in the Register of Directors’ Shareholdings kept by the Company under Section
134 of the Companies Act, 1965, were as follows:
Number of ordinary shares of RM0.50 each
Balance
as at
1.7.2010
Bought
Sold
Balance
as at
30.6.2011
2,367,000
856,300
305,000
599,000
500,000
–
–
–
–
–
–
–
–
–
–
2,367,000
856,300
305,000
599,000
500,000
62,109,226
10,000
69,000
59,000
25,000
–
–
–
–
–
–
–
–
–
–
62,109,226
10,000
69,000
59,000
25,000
Shares in the Company
Direct interests
Chiang Sang Sem
Chiang Fong Yee
Chiang Sang Bon
Chiang Fong Tat
Chong Chin Look
Indirect interests
Chiang Sang Sem
Chiang Fong Yee
Chiang Heng Kieng
Chiang Sang Bon
Chiang Fong Tat
By virtue of his interest in the ordinary shares of the Company, Chiang Sang Sem is also deemed to be interested in the ordinary shares of all the
subsidiaries to the extent the Company has an interest.
None of the other Directors holding office at the end of the financial year held any interest in ordinary shares of the Company or of its related
corporations during the financial year.
57
DIRECTORS’ BENEFITS
Since the end of the previous financial year, none of the Directors have received or become entitled to receive any benefit (other than a benefit included
in the aggregate amount of emoluments received or due and receivable by the Directors as shown 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 the Director is a member, or with a company in which the
Director has a substantial financial interest except for any benefit which may be deemed to have derived by virtue of the remuneration received and
receivable by certain Directors from the related corporations in their capacity as Directors of those related corporations.
There were no arrangements during and at the end of the financial year, to which the Company is a party, which had the object of enabling Directors to
acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.
OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY
(I)
AS AT THE END OF THE FINANCIAL YEAR
(a) Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the
Directors took reasonable steps:
(i)
to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts
and have satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful
debts; and
(ii)
to ensure that any current assets other than debts, which were unlikely to realise their book values in the ordinary course of business had
been written down to their estimated realisable values.
(b) In the opinion of the Directors, the results of the 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.
(II) FROM THE END OF THE FINANCIAL YEAR TO THE DATE OF THIS REPORT
(c) The Directors are not aware of any circumstances:
(i)
which would render the amounts written off for bad debts or the amount of the provision for doubtful debts in the financial statements of
the Group and of the Company inadequate to any material extent; and
(ii)
which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; and
(iii) which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the
Company misleading or inappropriate.
(d) In the opinion of the Directors:
58
(i)
there has not arisen any item, transaction or event of a material and unusual nature likely to affect substantially the results of the
operations of the Group and of the Company for the financial year in which this report is made; and
(ii)
no contingent or other liability has become enforceable, or is likely to become enforceable, within the period of twelve (12) months after
the end of the financial year, which will or may affect the ability of the Group or of the Company to meet their obligations as and when
they fall due.
OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY (cont’d)
(III) AS AT THE DATE OF THIS REPORT
(e) There are no charges on the assets of the Group and of the Company which have arisen since the end of the financial year to secure the
liabilities of any other person.
(f)
There are no contingent liabilities of the Group and of the Company which have arisen since the end of the financial year.
(g) The Directors are not aware of any circumstances not otherwise dealt with in the report or financial statements which would render any amount
stated in the financial statements of the Group and of the Company misleading.
SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
Significant events during the financial year are disclosed in Note 38 to the financial statements.
SIGNIFICANT EVENTS SUBSEQUENT TO THE REPORTING DATE
Significant events subsequent to the reporting date are disclosed in Note 39 to the financial statements.
AUDITORS
The auditors, BDO, have expressed their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the Directors.
…................................................
Chiang Sang Sem
cum Chief Executive Officer
…................................................
Chiang Heng Kieng
Group Managing Director
Kuala Lumpur
24 October 2011
59
Statement By Directors
In the opinion of the Directors, the financial statements set out on pages 63 to 152 have been drawn up in accordance with applicable approved
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 at 30 June 2011 and of the financial performance and cash flows of the Group and of the Company for the financial
year then ended.
On behalf of the Board,
.....................................................
Chiang Sang Sem
cum Chief Executive Officer
.....................................................
Chiang Heng Kieng
Group Managing Director
Kuala Lumpur
24 October 2011
Statutory Declaration
I, Chong Chin Look, being the Group Finance Director primarily responsible for the financial management of Bonia Corporation Berhad, do solemnly
and sincerely declare that the financial statements set out on pages 63 to 152 are, to the best of my knowledge and belief, correct and I make this
solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by )
the abovenamed at Kuala Lumpur this )
24 October 2011
)
Chong Chin Look
Before me:
S.IDERAJU (No.W451)
Commissioner for Oaths
Kuala Lumpur
60
to the members of Bonia Corporation Berhad
REPORT ON THE FINANCIAL STATEMENTS
We have audited the financial statements of Bonia Corporation Berhad, which comprise the statements of financial position as at 30 June 2011 of the
Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group
and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out
on pages 63 to 152.
DIRECTORS’ RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with Financial
Reporting Standards and the Companies Act, 1965 in Malaysia, and for such internal control as the Directors determine are 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 about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures
selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, we consider internal control relevant to the entity’s preparation 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 we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
OPINION
In our opinion, the financial statements have been properly drawn up in accordance with applicable approved 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
30 June 2011 and of the financial performance and cash flows of the Group and of the Company for the financial year then ended.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we
have acted as auditors have been properly kept in accordance with the provisions of the Act.
(b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are
indicated in Note 10 to the financial statements.
(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statements 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 required by us for those purposes.
(d) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section
174(3) of the Act.
61
to the members of Bonia Corporation Berhad (cont’d)
OTHER REPORTING RESPONSIBILITIES
The supplementary information set out in Note 41 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 to any other person for the content of this report.
BDO
AF: 0206
Chartered Accountants
Hiew Kim Loong
2858/08/12 (J)
Chartered Accountant
Kuala Lumpur
24 October 2011
62
as at 30 June 2011
Group
Company
Note
2011
RM’000
2010
(Restated)
RM’000
7
8
9
10
11
12
13
71,130
12,753
68,848
–
426
950
735
62,544
12,127
4,876
–
112
575
808
16,403
–
–
143,870
–
–
–
17,274
–
–
81,531
–
–
–
154,842
81,042
160,273
98,805
81,464
76,680
4,227
56,037
57,869
54,709
2,943
70,017
–
24,693
3,418
491
–
24,562
2,376
10,244
218,408
185,538
28,602
37,182
373,250
266,580
188,875
135,987
2011
RM’000
2010
RM’000
ASSETS
Non-current assets
Property, plant and equipment
Investment properties
Intangible assets
Investments in subsidiaries
Investments in associates
Other investments
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Current tax assets
Cash and cash equivalents
TOTAL ASSETS
14
15
16
63
as at 30 June 2011 (cont’d)
Group
Company
Note
2011
RM’000
2010
(Restated)
RM’000
17
18
100,786
131,276
100,786
103,018
100,786
31,721
100,786
27,040
232,062
14,925
203,804
2,349
132,507
–
127,826
–
TOTAL EQUITY
246,987
206,153
132,507
127,826
32,926
7,411
6,151
18,936
244
–
18,431
36
6,151
4,240
57
–
46,488
19,180
24,618
4,297
53,138
18,317
8,320
26,679
10,399
4,169
29,765
1,985
–
3,689
175
–
79,775
41,247
31,750
3,864
TOTAL LIABILITIES
126,263
60,427
56,368
8,161
TOTAL EQUITY AND LIABILITIES
373,250
266,580
188,875
135,987
2011
RM’000
2010
RM’000
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital
Reserves
LIABILITIES
Non-current liabilities
Borrowings
Deferred tax liabilities
Trade and other payables
19
13
22
Current liabilities
Borrowings
Current tax liabilities
22
19
The accompanying notes form an integral part of the financial statements.
64
Statements Of Comprehensive Income
for the financial year ended 30 June 2011
Group
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
461,381
(194,232)
360,099
(154,639)
39,167
–
23,632
–
267,149
4,472
(122,860)
(87,439)
(4,649)
(127)
205,460
8,860
(103,039)
(62,830)
(2,993)
(3)
39,167
918
–
(16,746)
(1,403)
–
23,632
22,268
–
(19,704)
(222)
–
56,546
(13,942)
45,455
(12,252)
21,936
(4,405)
25,974
(3,766)
Profit for the financial year
Other comprehensive income:
Foreign currency translations
42,604
33,203
17,531
22,208
–
–
Total comprehensive income
44,927
32,030
17,531
22,208
Profit attributable to:
39,152
3,452
33,547
(344)
17,531
–
22,208
–
42,604
33,203
17,531
22,208
41,108
3,819
32,374
(344)
17,531
–
22,208
–
44,927
32,030
17,531
22,208
19.42
16.64
Note
Revenue
Cost of sales
Gross profit
Other operating income
Selling and distribution expenses
General and administrative expenses
Finance costs
Share of loss of associates
Profit before tax
Tax expense
25
26
27
28
29
2,323
Total comprehensive income attributable to:
Earnings per ordinary share
attributable to equity holders of the Company (sen)
30
(1,173)
65
Share
capital
RM’000
Share
premium
RM’000
Exchange
translation
reserve
RM’000
Retained
earnings
RM’000
Total
attributable
to owners
of the
parent
RM’000
100,786
476
2,562
73,653
177,477
Profit/(Loss) for the financial year
–
–
–
–
–
(1,173)
33,547
–
33,547
(1,173)
(344)
–
33,203
(1,173)
–
–
(1,173)
33,547
32,374
(344)
32,030
–
–
–
–
–
–
–
–
–
–
–
–
Balance as at 30 June 2010
100,786
476
1,389
101,153
203,804
2,349
206,153
–
–
–
–
–
1,956
39,152
–
39,152
1,956
3,452
367
42,604
2,323
–
–
1,956
39,152
41,108
3,819
44,927
33(a)
–
–
–
–
–
12,276
12,276
31
–
–
–
–
–
–
–
–
–
–
–
–
100,786
476
3,345
GROUP
Note
Noncontrolling
interests
RM’000
Total
equity
RM’000
3,072
180,549
Transactions with owners:
Additional acquisition of shares
from a minority shareholder
Dividends paid
Dividend paid to non-controlling
interests of a subsidiary
31
Total transactions with owners:
–
(6,047)
–
(6,047)
–
(6,047)
–
(6,047)
(356)
–
(356)
(6,047)
(23)
(23)
(379)
(6,426)
Transactions with owners
Acquisition of subsidiaries
Disposal of share to noncontrolling interests of a
subsidiary
Dividends paid
Dividend paid to non-controlling
interests of subsidiaries
Total transactions with owners
66
–
(12,850)
–
(12,850)
127,455
–
(12,850)
–
(12,850)
232,062
89
–
89
(12,850)
(3,608)
(3,608)
8,757
(4,093)
14,925
246,987
for the financial year ended 30 June 2011 (cont’d)
Share
premium
RM’000
Retained
earnings
RM’000
Total
equity
RM’000
100,786
476
10,403
111,665
–
–
22,208
22,208
–
–
22,208
22,208
–
–
(6,047)
(6,047)
–
–
(6,047)
(6,047)
100,786
476
26,564
127,826
–
–
17,531
17,531
–
–
17,531
17,531
–
–
(12,850)
(12,850)
–
–
(12,850)
(12,850)
100,786
476
Note
Share
capital
RM’000
COMPANY
Dividends paid
31
Dividends paid
31
31,245
132,507
67
Group
Company
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
56,546
45,455
21,936
25,974
8
646
712
14,475
–
(626)
3
359
13,468
–
–
–
–
926
(37,216)
–
–
–
1,118
(21,725)
–
11
9
(115)
(36)
–
232
(89)
(10)
(53)
–
–
(500)
–
–
–
(17,835)
110
–
–
3,219
1
212
–
2,413
678
(421)
2,362
(312)
225
127
(52)
–
–
3,877
–
–
(3,836)
1,512
–
(221)
75
(467)
863
3
108
–
524
3,248
1
–
–
703
678
(300)
–
(83)
–
–
(29)
–
1,715
4,174
–
–
(4,182)
167
–
(86)
–
(164)
–
–
118
2,700
(10,112)
(7,916)
Note
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments for:
Amortisation of trademarks
Bad debts written off
Depreciation of property, plant and equipment
Dividend income
Fair value adjustments on investment properties
(Gain)/Loss on disposal of:
- property, plant and equipment, net
- subsidiaries
- an associate
Goodwill written off
Impairment losses on:
- investment in subsidiaries
- trade and other receivables
- an associate
- property, plant and equipment
Impairment losses on other receivables no longer required
Interest expense
Accretion of non current other payable
Interest income
Inventories written off
Profit received from trust fund accounts
Property, plant and equipment written off
Share of loss of associates
Unrealised (gain)/loss on foreign currency translations, net
Waiver of debts owing from a subsidiary
9
7
7
14
7
80,286
Operating profit/(loss) before changes in working capital
Changes in working capital:
Inventories
(10,072)
(9,824)
10,928
2,180
(7,076)
4,012
–
–
1,078
–
–
2,430
Cash generated from/(used in) operations
Tax paid
Tax refunded
71,318
(18,687)
1,587
60,163
(10,631)
687
(9,034)
–
1,142
(5,486)
–
499
Net cash from/(used in) operating activities
54,218
50,219
(7,892)
(4,987)
68
61,047
for the financial year ended 30 June 2011 (cont’d)
Group
Note
2011
RM’000
Company
2010
RM’000
2011
RM’000
2010
RM’000
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received
Dividend received
(Increase)/Decrease in fixed deposits pledged to licensed banks
Acquisition of additional shares in subsidiaries
Additional acquisition of share from a minority shareholder
Acquisition of an associate
Other investment
Proceed from disposal of:
- a subsidiary
- an associate
Purchase of property, plant and equipment
Purchase of trademarks
(Advances to)/Repayments from subsidiaries
Repayments to/(Advances from) subsidiaries
Advances to an associate
33(c)
11
10(ii)
11
7(a)
9
Net cash (used in)/from investing activities
421
–
(801)
–
(50,845)
–
(441)
(350)
221
–
13
–
–
(356)
(115)
–
300
30,606
–
(500)
(55,154)
–
–
–
86
16,294
–
(1,265)
–
–
–
–
125
–
373
312
(19,949)
(7)
–
–
(1)
100
126
462
467
(7,776)
(1)
–
–
(2)
500
–
–
83
(55)
–
(3,354)
23,265
–
100
126
–
164
(82)
–
2,549
(240)
(2)
(71,163)
(6,861)
(4,309)
(2,413)
(12,850)
(3,608)
20,325
(986)
(5,174)
39
12,521
(7,218)
(1,512)
(6,047)
(23)
4,601
(718)
(576)
(874)
899
(11,185)
(703)
(12,850)
–
16,000
(158)
–
–
–
–
(167)
(6,047)
–
4,000
(298)
–
–
–
–
(15,435)
2,289
(2,512)
(16,309)
1,035
67,205
27,923
(59)
39,341
(9,912)
–
10,227
10,231
–
(4)
51,931
67,205
17,730
CASH FLOWS FROM FINANCING ACTIVITIES
Interest paid
Dividends paid to shareholders
Dividends paid to minority shareholders
Drawdowns of term loans
Repayments of hire-purchase and lease creditors
Repayments of term loans
Net financing/(repayment) of trust receipts
Drawdowns of bankers’ acceptances
Repayments of bankers’ acceptances
636
Net cash from/(used in) financing activities
Net (decrease)/increase in cash and cash equivalents
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at beginning of the financial year
Cash and cash equivalents at end of the financial year
16(e)
315
10,227
69
30 June 2011
1.
CORPORATE INFORMATION
The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia
Securities Berhad.
The registered office of the Company is located at Lot 10, The Highway Centre, Jalan 51/205, 46050, Petaling Jaya, Selangor Darul Ehsan.
The principal place of business of the Company is located at No. 62, Jalan Kilang Midah, Taman Midah, Cheras, 56000 Kuala Lumpur.
The financial statements are presented in Ringgit Malaysia (‘RM’), which is also the Company’s functional currency. All financial information presented
in RM has been rounded to the nearest thousand, unless otherwise stated.
The financial statements were authorised for issue in accordance with a resolution by the Board of Directors on 24 October 2011.
2.
PRINCIPAL ACTIVITIES
The Company is principally an investment holding and management company. The principal activities of the subsidiaries are set out in Note 10 to
the financial statements.
There have been no significant changes in the nature of these activities during the financial year.
3.
BASIS OF PREPARATION
The financial statements of the Group and of the Company have been prepared in accordance with applicable approved Financial Reporting
Standards (‘FRSs’) and the provisions of the Companies Act, 1965 in Malaysia.
4.
SIGNIFICANT ACCOUNTING POLICIES
4.1 Basis of accounting
The financial statements of the Group and of the Company have been prepared under the historical cost convention except as otherwise
stated in the financial statements.
The preparation of financial statements requires the Directors to make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue and expenses and disclosure of contingent assets and liabilities. In addition, the Directors are also required to exercise their
judgement in the process of applying the Group’s accounting policies. The areas involving such judgements, estimates and assumptions are
disclosed in Note 6 to the financial statements. Although these estimates and assumptions are based on the Directors’ best knowledge of
events and actions, actual results could differ from those estimates.
4.2 Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and all its subsidiaries. Subsidiaries are entities
(including special purposes entities) over which the Company has the power to govern the financial operating policies, generally accompanied
by a shareholding giving rise to the majority of the voting rights, as to obtain benefits from their activities.
Subsidiaries are consolidated from the date on which control is transferred to the Group up to the effective date on which control ceases, as
appropriate.
Intragroup balances, transactions, income and expenses are eliminated on consolidation. Unrealised gains arising from transactions with
associates and joint ventures are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are
eliminated in the same way as unrealised gains, but only to the extent that there is no impairment.
70
30 June 2011 (cont’d)
4.
SIGNIFICANT ACCOUNTING POLICIES (cont’d)
4.2 Basis of consolidation (cont’d)
The financial statements of the subsidiaries are prepared for the same reporting period as that of the Company, using consistent accounting
policies. Where necessary, accounting policies of subsidiaries are changed to ensure consistency with the policies adopted by the other entities
in the Group.
Non-controlling interests represents the equity in subsidiaries that are not attributable, directly or indirectly, to owners of the Company, and
is presented separately in the consolidated statement of comprehensive income and within equity in the consolidated statement of financial
position, separately from equity attributable to owners of the Company. Profit or loss and each component of other comprehensive income
are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to non-controlling
interests even if this results in the non-controlling interests having a deficit balance.
Non-controlling interests in the acquiree may be initially measured either at fair value or at the non-controlling interests’ proportionate share
of the fair value of the acquiree’s identifiable net assets. The choice of measurement basis is made on an combination-by-combination basis.
Subsequent to initial recognition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the
non-controlling interests’ share of subsequent changes in equity.
The Group has applied the revised FRS 3 Business Combinations in accounting for business combinations from 1 July 2010 onwards. The
change in accounting policy has been applied prospectively in accordance with the transitional provisions provided by the Standard.
Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity
transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in
their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value
of consideration paid or received is recognised directly in equity and attributed to owners of the parent.
When the Group losses control of a subsidiary, the profit or loss on disposal 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.
Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted for (i.e. reclassified to profit or
loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed
of. The fair value of any investments 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 FRS 139 Financial Instruments: Recognition and Measurement or, where applicable, the cost on
initial recognition of an investment in associate or jointly controlled entity.
4.3 Business combinations
Business combinations from 1 July 2010 onwards
Business combinations are accounted for by applying the acquisition method of accounting.
Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured at their fair value at the
acquisition date, except that:
(a) deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured in
accordance with FRS 112 Income Taxes and FRS 119 Employee Benefits respectively;
(b) liabilities or equity instruments related to the replacements by the Group of an acquiree’s share-based payment awards are measured in
accordance with FRS 2 Share-based Payment; and
(c) assets (or disposal groups) that are classified as held for sale in accordance with FRS 5 Non-current Assets Held for Sale and Discontinued
Operations are measured in accordance with that Standard.
71
4.
4.3 Business combinations (cont’d)
Business combinations from 1 July 2010 onwards (cont’d)
Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the serviced are received.
In a business combination achieved in stages, previously held equity interests in the acquiree are re-measured to fair value at the acquisition
date and any corresponding gain or loss is recognised in profits or loss.
The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) is recognised on the
acquisition date at fair value, or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.
Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interest
in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the
acquiree’s identifiable assets and liabilities is recorded as goodwill in the statement of financial position. The accounting policy for goodwill is
set out in Note 4.8(a). In instances where the latter amount exceeds the former, the excess is recognised as a gain on bargain purchase in profit
or loss on the acquisition date.
Business combinations before 1 July 2010
Under the purchase method of accounting, the cost of business combination is measured at the aggregate of fair values at the date of
exchange, of assets given, liabilities incurred or assumed, and equity instruments issued plus any costs directly attributable to the business
combination.
At the acquisition date, the cost of business combination is allocated to identifiable assets acquired, liabilities assumed and contingent
liabilities in the business combination which are measured initially at their fair values at the acquisition date. The excess of the cost of business
combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities is recognised as
goodwill (see Note 4.8(a) to the financial statements on goodwill). If the cost of business combination is less than the interest in the net fair
value of the identifiable assets, liabilities and contingent liabilities, the Group will:
(a) reassess the identification and measurement of the acquiree’s identifiable assets, liabilities and contingent liabilities and the measurement
of the cost of the business combination; and
(b) recognise immediately in profit or loss any excess remaining after that reassessment.
When a business combination includes more than one exchange transaction, any adjustment to the fair values of the subsidiary’s identifiable
assets, liabilities and contingent liabilities relating to previously held interests of the Group is accounted for as a revaluation.
4.4 Property, plant and equipment and depreciation
All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that is directly attributable to the acquisition
of the asset.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred
and it is probable that the future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured
reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment
are recognised in profit or loss as incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the
site on which it is located for which the Group is obligated to incur when the asset is acquired, if applicable.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the asset and which has
different useful life, is depreciated separately.
After initial recognition, property, plant and equipment, except for freehold land and properties under construction, are stated at cost less any
accumulated depreciation and any accumulated impairment losses.
72
4.
4.4 Property, plant and equipment and depreciation (cont’d)
Freehold land has unlimited useful life and is not depreciated. Properties under construction are not depreciated until such time when the asset
is available for use. Leasehold land is depreciated over the leasehold period of ninety-six (96) years.
Depreciation is calculated to write off the cost of the assets to their estimated residual value on a straight line basis over their estimated useful
lives. The principal depreciation rates are as follows:
Buildings
Plant and machinery
Furniture, fittings and counter fixtures
Office equipment
Renovation
Electrical installations
Motor vehicles
2%
15% - 20%
10% - 33ѿ%
10% - 50%
10% - 33ѿ%
10% - 15%
20%
At the end of each reporting period, the carrying amount of an item of property, plant and equipment is assessed for impairment when events
or changes in circumstances indicate that its carrying amount may not be recoverable. A write down is made if the carrying amount exceeds
the recoverable amount (see Note 4.9 to the financial statements on impairment of non-financial assets).
The residual values, useful lives and depreciation method are reviewed at the end of each reporting period to ensure that the amount, method
and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits
embodied in the items of property, plant and equipment. If expectations differ from previous estimates, the changes are accounted for as a
change in an accounting estimate.
The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no future economic benefits
are expected from its use or disposal. The difference between the net disposal proceeds, if any, and the carrying amount is included in profit
or loss.
4.5 Leases and hire purchase
(a) Finance leases and hire purchase
Assets acquired under finance leases and hire purchase which transfer substantially all the risks and rewards of ownership to the Group are
recognised initially at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments,
each determined at the inception of the lease. The discount rate used in calculating the present value of the minimum lease payments is
the interest rate implicit in the leases, if this is practicable to determine; if not, the Group’s incremental borrowing rate is used. Any initial
direct costs incurred by the Group are added to the amount recognised as an asset. The assets are capitalised as property, plant and
equipment and the corresponding obligations are treated as liabilities. The property, plant and equipment capitalised are depreciated on
the same basis as owned assets.
The minimum lease payments are apportioned between the finance charges and the reduction of the outstanding liability. The finance
charges are recognised in the income statements over the period of the lease term so as to produce a constant periodic rate of interest
on the remaining lease and hire-purchase liabilities.
(b) Operating leases
A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.
Lease payments under operating leases are recognised as an expense on a straight-line basis over the lease term.
73
4.
4.5 Leases and hire purchase (cont’d)
(c) Leases of land and buildings
For leases of land and buildings, the land and buildings elements are considered separately for the purpose of lease classification and
these leases are classified as operating or finance leases in the same way as leases of other assets.
The minimum lease payments including any lump-sum upfront payments made to acquire the interest in the land and buildings are
allocated between the land and the buildings elements in proportion to the relative fair values of the leasehold interests in the land
element and the buildings element of the lease at the inception of the lease.
For a lease of land and buildings in which the amount that would initially be recognised for the land element is immaterial, the land and
buildings are treated as a single unit for the purpose of lease classification and is accordingly classified as a finance or operating lease. In
such a case, the economic life of the buildings is regarded as the economic life of the entire leased asset.
Following the adoption of Amendment to FRS 117 Leases contained in the Improvements to FRSs (2009), the Group reassessed the
classification of land elements of unexpired leases on the basis of information existing at the inception of those leases. Consequently, the
Group retrospectively reclassified certain prepaid lease payments for land as disclosed in Notes 7 and 40 to the financial statements.
4.6 Investment properties
Investment properties are properties which are held to earn rentals yields or for capital appreciation or for both and are not occupied by
the Group. Investment properties also include properties that are being constructed or developed for future use as investment properties.
Investment properties are initially measured at cost, which includes transaction costs. After initial recognition, investment properties are stated
at fair value.
If the Group determines that the fair value of an investment property under construction is not reliably determinable but expects the fair
value of the property to be reliably determinable when construction is complete, the Group shall measure that investment property under
construction at cost until either its fair value becomes reliably determinable or construction is completed (whichever is earlier). Once the Group
is able to measure reliably the fair value of an investment property under construction that has previously been measured at cost, the Group
shall measure that property at its fair value.
The fair values of investment properties are the prices at which the properties could be exchanged between knowledgeable, willing parties in
an arm’s length transaction. The fair values of investment properties reflect market conditions at the end of the reporting period, without any
deduction for transaction costs that may be incurred on sale or other disposal.
Fair values of investment properties are arrived at by reference to market evidence of transaction prices for similar properties. It is performed
by registered independent valuers with appropriate recognised professional qualification and has recent experience in the location and
category of the investment properties being valued.
A gain or loss arising from a change in the fair value of investment properties is recognised in profit or loss for the period in which it arises.
Investment properties are derecognised when either they have been disposed of or when they are permanently withdrawn from use and no
future economic benefit is expected from their disposal. The gains or losses arising from the retirement or disposal of investment property is
determined as the difference between the net disposal proceeds, if any, and the carrying amount of the asset and is recognised in profit or loss
in the period of the retirement or disposal.
4.7 Investments
(a) Subsidiaries
A subsidiary is an entity in which the Group and the Company have power to control the financial and operating policies so as to obtain
benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered
when assessing whether the Group and the Company have such power over another entity.
74
4.
4.7 Investments (cont’d)
(a) Subsidiaries (cont’d)
An investment in subsidiary, which is eliminated on consolidation, is stated in the Company’s separate financial statements at cost less
impairment losses, if any. Investments accounted for at cost shall be accounted for in accordance with FRS 5 Non Current Assets Held for
Sale and Discounted Operations when they are classified as held for sale in accordance with FRS 5.
When control of a subsidiary is lost as a result of a transaction, event or other circumstance, the Group would derecognise all assets,
liabilities and non-controlling interests at their carrying amount and to recognise the fair value of the consideration received. Any retained
interest in the former subsidiary is recognised at its fair value at the date control is lost. The resulting difference is recognised as a gain or
loss in profit or loss.
(b) Associates
An associate is an entity over which the Group and the Company have significant influence and that is neither a subsidiary nor an interest
in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not
control or joint control over those policies.
In the Company’s separate financial statements, an investment in associate is stated at cost less impairment losses, if any.
An investment in associate is accounted for in the consolidated financial statements using the equity method of accounting. The investment
in associate in the consolidated statement of financial position is initially recognised at cost and adjusted thereafter for the post acquisition
change in the Group’s share of net assets of the investments.
The interest in the associate is the carrying amount of the investment in the associate under the equity method together with any long
term interest that, in substance, form part of the Group’s net interest in the associate.
The Group’s share of the profit or loss of the associate during the financial year is included in the consolidated financial statements, after
adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date
that significant influence ceases. Distributions received from the associate reduce the carrying amount of the investment. Adjustments to
the carrying amount may also be necessary for changes in the Group’s proportionate interest in the associate arising from changes in the
associate’s equity that have not been recognised in the associate’s profit or loss. Such changes include those arising from the revaluation
of property, plant and equipment and from foreign exchange translation differences. The Group’s share of those changes is recognised
directly in equity of the Group.
Unrealised gains and losses on transactions between the Group and the associate are eliminated to the extent of the Group’s interest in
the associate.
When the Group’s share of losses in the associate equal to or exceeds its interest in the associate, the carrying amount of that interest is
reduced to nil and the Group does not recognise further losses unless it has incurred legal or constructive obligations or made payments
on its behalf.
The most recent available financial statements of the associates are used by the Group in applying the equity method. Where the end of
the reporting periods of the financial statements are not coterminous, the share of results is arrived at using the latest audited financial
statements for which the difference in the end of the reporting periods is no more than three (3) months. Adjustments are made for the
effects of any significant transactions or events that occur between the intervening period.
Upon disposal of such investment, the difference between the net disposal proceeds and its carrying amount is included in profit or loss.
75
4.
4.8
Intangible assets
(a) Goodwill
Goodwill recognised in a business combination is an asset at the acquisition date and is initially measured at cost being the excess of
the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer’s
previously held equity interest (if any) in the entity over net of the acquisition-date amounts of the identifiable assets acquired and the
liabilities assumed. If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum
of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer’s previously
held equity interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.
After initial recognition, goodwill is measured at cost less accumulated impairment losses, if any. Goodwill is not amortised but instead
tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount may be
impaired. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill arising on acquisition of an associate is the excess of cost of investment over the Group’s share of the net fair value of net assets
of the associates’ identifiable assets, liabilities and contingent liabilities at the date of acquisition.
Goodwill relating to the associate is included in the carrying amount of the investment and is not amortised. The excess of the Group’s
share of the net fair value of the associate’s identifiable assets and liabilities over the cost of investment is included as income in the
determination of the Group’s share of the associate’s profit or loss in the period in which the investment is acquired.
(b) Other intangible assets
Other intangible assets are recognised only when the identifiability, control and future economic benefit probability criteria are met.
The Group recognises at the acquisition date separately from goodwill, an intangible asset of the acquire, irrespective of whether the
asset had been recognised by the acquiree before the business combination.
Intangible assets are initially measured at cost. The cost of intangible assets recognised in a business combination is their fair values as
at the date of acquisition.
After initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment
losses. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite useful lives are
amortised on a straight line basis over the estimated economic useful lives and are assessed for any indication that the asset may be
impaired. If any such indication exists, the entity shall estimate the recoverable amount of the asset. The amortisation period and the
amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year end. The amortisation
expense on intangible assets with finite useful lives is recognised in profit or loss and is included within the general and administrative
expenses line item.
An intangible asset has an indefinite useful life when based on the analysis of all the relevant factors; there is no foreseeable limit to the
period over which the asset is expected to generate net cash inflows to the Group. Intangible assets with indefinite useful lives are tested
for impairment annually and wherever there is an indication that the carrying amount may be impaired. Such intangible assets are not
amortised. Their useful lives are reviewed each period to determine whether events and circumstances continue to support the indefinite
useful life assessment for the asset. If they do not, the change in the useful life assessment from indefinite to finite is accounted for as a
change in accounting estimate in accordance with FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors.
Expenditure on an intangible item that are initially recognised as an expense is not recognised as part of the cost of an intangible asset
at a later date.
An intangible asset is derecognised on disposal or when no future economic benefits are expected from its use. The gain or loss arising
from the derecognition determined as the difference between the net disposal proceeds, if any, and the carrying amount of the asset is
recognised in profit or loss when the asset is derecognised.
76
4.
4.8
Intangible assets (cont’d)
(c) Trademarks
Trademarks acquired have finite useful lives and are carried at cost less any accumulated amortisation and any accumulated impairment
losses. Amortisation is calculated using the straight-line method to allocate the cost of trademarks over their estimated useful lives of
seven (7) to twenty six (26) years. Cost of renewing trademarks is recognised in profit or loss as incurred.
4.9
Impairment of non-financial assets
The carrying amounts of assets, except for financial assets (excluding investments in subsidiaries and associates), inventories, deferred tax
assets and investment properties measured at fair value, are reviewed at the end of each reporting period to determine whether there is any
indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.
Goodwill and intangible assets that have an indefinite useful life are tested annually for impairment or more frequently if events or changes
in circumstances indicate that the goodwill or intangible asset might be impaired.
The recoverable amount of an asset is estimated for an individual asset. Where it is not possible to estimate the recoverable amount of the
individual asset, the impairment test is carried out on the cash generating unit (‘CGU’) to which the asset belongs. Goodwill acquired in a
business combination is from the acquisition date, allocated to each of the Group’s CGU or groups of CGU that are expected to benefit from
the synergies of the combination giving rise to the goodwill irrespective of whether other assets or liabilities of the acquiree are assigned to
those units or groups of units.
Goodwill acquired in a business combination shall be tested for impairment as part of the impairment testing of CGU to which it relates.
The CGU to which goodwill is allocated shall represent the lowest level within the Group at which the goodwill is monitored for internal
management purposes and not larger than an operating segment determined in accordance with FRS 8.
The recoverable amount of an asset or CGU is the higher of its fair value less cost to sell and its value in use.
In estimating the value in use, the estimated future cash inflows and outflows to be derived from continuing use of the asset and from its
ultimate disposal are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset for which the future cash flow estimates have not been adjusted. An impairment loss is recognised
in profit or loss when the carrying amount of the asset or the CGU, including the goodwill or intangible asset, exceeds the recoverable
amount of the asset or the CGU. The total impairment loss is allocated, first, to reduce the carrying amount of any goodwill allocated to the
CGU and then to the other assets of the CGU on a pro-rata basis of the carrying amount of each asset in the CGU. The impairment loss is
recognised in profit or loss immediately.
An impairment loss on goodwill is not reversed in subsequent periods. An impairment loss for other assets is reversed if, and only if, there
has been a change in the estimates used to determine the assets’ recoverable amount since the last impairment loss was recognised.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have
been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Such reversals are recognised as income
immediately in profit or loss.
4.10 Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost is determined using the weighted average method. The cost of consumables and raw materials comprises all costs of purchase plus
the cost of bringing the inventories to their present location and condition. The cost of work-in-progress and finished goods includes the
cost of raw materials, direct labour, other direct cost and a proportion of production overheads based on normal operating capacity of the
production facilities.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated
costs necessary to make the sale.
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4.
4.11 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one enterprise and a financial liability or equity instrument of
another enterprise.
A financial asset is any asset that is cash, an equity instrument of another enterprise, a contractual right to receive cash or another financial
asset from another enterprise, or a contractual right to exchange financial assets or financial liabilities with another enterprise under conditions
that are potentially favourable to the Group.
A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another enterprise, or a contractual
obligation to exchange financial assets or financial liabilities with another enterprise under conditions that are potentially unfavourable to the
Group.
Financial instruments are recognised on the statement of financial position when the Group has become a party to the contractual provisions
of the instrument. At initial recognition, a financial instrument is recognised at fair value plus, in the case of a financial instrument not at fair
value through profit or loss, transaction costs that are directly attributable to the acquisition or issuance of the financial instrument.
An embedded derivative is separated from the host contract and accounted for as a derivative if, and only if the economic characteristics and
risks of the embedded derivative is not closely related to the economic characteristics and risks of the host contract, a separate instrument
with the same terms as the embedded derivative meets the definition of a derivative, and the hybrid instrument is not measured at fair value
through profit or loss.
(a) Financial assets
A financial asset is classified into the following four categories after initial recognition for the purpose of subsequent measurement:
(i)
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss comprise financial assets that are held for trading (i.e. financial assets acquired
principally for the purpose of resale in the near term), derivatives (both, freestanding and embedded) and financial assets that were
specifically designated into this classification upon initial recognition.
Subsequent to initial recognition, financial assets classified as at fair value through profit or loss are measured at fair value. Any gains
or losses arising from changes in the fair value of financial assets classified as at fair value through profit or loss are recognised in
profit or loss. Net gains or losses on financial assets classified as at fair value through profit or loss exclude foreign exchange gains
and losses, interest and dividend income. Such income is recognised separately in profit or loss as components of other income or
other operating losses.
However, derivatives that is linked to and must be settled by delivery of unquoted equity instruments that do not have a quoted
market price in an active market are recognised at cost.
(ii)
Held-to-maturity investments
Financial assets classified as held-to-maturity comprise non-derivative financial assets with fixed or determinable payments and
fixed maturity that the Group has the positive intention and ability to hold to maturity.
Subsequent to initial recognition, financial assets classified as held-to-maturity are measured at amortised cost using the effective
interest method. Gains or losses on financial assets classified as held-to-maturity are recognised in profit or loss when the financial
assets are derecognised or impaired, and through the amortisation process.
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4.
4.11 Financial instruments (cont’d)
(a) Financial assets (cont’d)
(iii) Loans and receivables
Financial assets classified as loans and receivables comprise non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market
Subsequent to initial recognition, financial assets classified as loans and receivables are measured at amortised cost using the
effective interest method. Gains or losses on financial assets classified as loans and receivables are recognised in profit or loss when
the financial assets are derecognised or impaired, and through the amortisation process.
(iv) Available-for-sale financial assets
Financial assets classified as available-for-sale comprise non-derivative financial assets that are designated as available for sale or
are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss.
Subsequent to initial recognition, financial assets classified as available-for-sale are measured at fair value. Any gains or losses
arising from changes in the fair value of financial assets classified as available-for-sale are recognised directly in other comprehensive
income, except for impairment losses and foreign exchange gains and losses, until the financial asset is derecognised, at which
time the cumulative gains or losses previously recognised in other comprehensive income are recognised in profit or loss. However,
interest calculated using the effective interest method is recognised in profit or loss whilst dividends on available-for-sale equity
instruments are recognised in profit or loss when the Group’s right to receive payment is established.
Cash and cash equivalents include cash and bank balances, bank overdrafts, deposits and other short term, highly liquid investments
with original maturities of three (3) months or less, which are readily convertible to cash and are subject to insignificant risk of changes
in value.
A financial asset is derecognised when the contractual right to receive cash flows from the financial asset has expired. On derecognition
of a financial asset in its entirety, the difference between the carrying amount and the sum of consideration received (including any new
asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised directly in other comprehensive
income shall be recognised in profit or loss.
A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within
the time frame established generally by regulation or marketplace convention.
(b) Financial liabilities
Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. A financial
liability is classified into the following two categories after initial recognition for the purpose of subsequent measurement:
(i)
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss comprise financial liabilities that are held for trading, derivatives (both,
freestanding and embedded) and financial liabilities that were specifically designated into this classification upon initial recognition.
Subsequent to initial recognition, financial liabilities classified as at fair value through profit or loss are measured at fair value.
Any gains or losses arising from changes in the fair value of financial liabilities classified as at fair value through profit or loss are
recognised in profit or loss. Net gains or losses on financial liabilities classified as at fair value through profit or loss exclude foreign
exchange gains and losses, interest and dividend income. Such income is recognised separately in profit or loss as components of
other income or other operating losses.
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4.
SIGNIFICANT ACCOUNTING POLICIES (cont’d
4.11 Financial instruments (cont’d)
(b) Financial liabilities (cont’d)
(ii)
Other financial liabilities
Financial liabilities classified as other financial liabilities comprise non-derivative financial liabilities that are neither held for trading
nor initially designated as at fair value through profit or loss.
Subsequent to initial recognition, other financial liabilities are measured at amortised cost using the effective interest method. Gains
or losses on other financial liabilities are recognised in profit or loss when the financial liabilities are derecognised and through the
amortisation process.
A financial liability is derecognised when, and only when, it is extinguished, i.e. when the obligation specified in the contract is discharged
or cancelled or expired. An exchange between an existing borrower and lender of debt instruments with substantially different terms are
accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial
modification of the terms of an existing financial liability is accounted for as an extinguishment of the original financial liability and the
recognition of a new financial liability.
The difference between the carrying amount of a financial liability extinguished or transferred to another party and the consideration
paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs
because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.
The Group designates corporate guarantees given to banks for credit facilities granted to subsidiaries as insurance contracts as defined
in FRS 4 Insurance Contracts. The Group recognises these insurance liabilities when there is a present obligation, legal or constructive,
as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
(c) Equity
An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of
its liabilities. Ordinary shares are classified as equity instruments.
Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value of shares issued, if any, are accounted
for as share premium. Both ordinary shares and share premium are classified as equity. Transaction costs of an equity transaction are
accounted for as a deduction from equity, net of any related income tax benefit. Otherwise, they are charged to profit or loss.
Dividends to shareholders are recognised in equity in the period in which they are declared.
The Group measures a liability to distribute non-cash assets as a dividend to the owners of the Company at the fair value of the assets to
be distributed. The carrying amount of the dividend is remeasured at each reporting date and at the settlement date, with any changes
recognised directly in equity as adjustments to the amount of the distribution. On settlement of the transaction, the Group recognises
the difference, if any, between the carrying amount of the assets distributed and the carrying amount of the liability in profit or loss.
If the Company reacquires its own equity instruments, the consideration paid, including any attributable transaction costs is deducted
from equity as treasury shares until they are cancelled. No gain or loss is recognised in profit or loss on the purchase, sale, issue
or cancellation of the Company’s own equity instruments. Where such shares are issued by resale, the difference between the sales
consideration and the carrying amount is shown as a movement in equity.
Following the adoption of FRS 139 during the financial year, the Group reassessed the classification and measurement of financial assets and
financial liabilities as at 1 January 2010. Consequently, the Group reclassified and remeasured the financial assets and financial liabilities as
disclosed in Note 5.1(c) and Note 12 to the financial statements.
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4.
4.12 Impairment of financial assets
The Group assesses whether there is any objective evidence that a financial asset is impaired at the end of each reporting period.
(a) Loans and receivables
The Group collectively considers factors such as the probability of bankruptcy or significant financial difficulties of the receivable,
and default or significant delay in payments to determine whether there is objective evidence that an impairment loss on loans and
receivables has occurred. Other objective evidence of impairment include historical collection rates determined on an individual basis
and observable changes in national or local economic conditions that are directly correlated with the historical default rates of receivables.
If any such objective evidence exists, the amount of impairment loss is measured as the difference between the financial asset’s carrying
amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The
impairment loss is recognised in profit or loss.
The carrying amount of loans and receivables are reduced through the use of an allowance account.
If in a subsequent period, the amount of the impairment loss decreases and it objectively relates to an event occurring after the
impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset
does not exceed its amortised cost at the reversal date. The amount of impairment reversed is recognised in profit or loss.
(b) Available-for-sale financial assets
The Group collectively considers factors such as significant or prolonged decline in fair value below cost, significant financial difficulties
of the issuer or obligor, and the disappearance of an active trading market as objective evidence that available-for-sale financial assets
are impaired.
If any such objective evidence exists, an amount comprising the difference between the financial asset’s cost (net of any principal
payment and amortisation) and current fair value, less any impairment loss previously recognised in profit or loss, is transferred from
equity to profit to loss.
Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the subsequent periods. Instead, any
increase in the fair value subsequent to the impairment loss is recognised in other comprehensive income.
Impairment losses on available-for-sale debt investments are subsequently reversed in profit or loss if the increase in the fair value of the
investment can be objectively related to an event occurring after the recognition of the impairment loss in profit or loss.
4.13 Borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualified asset is capitalised as part of the
cost of the asset until when substantially all the activities necessary to prepare the asset for its intended use or sale are complete, after which
such expense is charged to profit or loss. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its
intended use or sale. Capitalisation of borrowing cost is suspended during extended periods in which active development is interrupted.
The amount of borrowing costs eligible for capitalisation is the actual borrowing costs incurred on the borrowing during the period less any
investment income on the temporary investment of the borrowing.
All other borrowing cost is recognised in profit or loss in the period in which they are incurred.
4.14 Income taxes
Income taxes include all domestic and foreign taxes on taxable profit. Income taxes also include other taxes such as withholding taxes which
are payable by foreign subsidiaries and associates on distributions to the Group and Company and real property gains taxes payable on
disposal of properties.
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4.
4.14 Income taxes (cont’d)
Taxes in the income statement comprise current tax and deferred tax.
(a) Current tax
Current tax is the amount of income taxes payable or receivable in respect of the taxable profit or loss for a period.
Current taxes for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that have been enacted or substantively enacted by the
end of the reporting period.
(b) Deferred tax
Deferred tax is recognised in full using the liability method on temporary differences arising between the carrying amount of an asset or
liability in the statements of financial position and its tax base.
Deferred tax is recognised for all temporary differences, unless the deferred tax arises from goodwill or the initial recognition of an asset
or liability in a transaction which is not a business combination and at the time of transaction, affects neither accounting profit nor taxable
profit.
A deferred tax asset is recognised only to the extent that it is probable that taxable profits will be available against which the deductible
temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amount of a deferred tax asset is reviewed
at the end of each reporting period. If it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or
all of that deferred tax asset to be utilised, the carrying amount of the deferred tax asset will be reduced accordingly. When it becomes
probable that sufficient taxable profit will be available, such reductions will be reversed to the extent of the taxable profits.
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 the deferred income taxes relate to the same taxation authority on either:
(i)
the same taxable entity; or
(ii)
different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle
the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to
be settled or recovered.
Deferred tax will be recognised as income or expense and included in profit or loss for the period unless the tax relates to items that
are credited or charged, in the same or a different period, directly to equity, in which case the deferred tax will be charged or credited
directly to equity.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the
liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the reporting period.
4.15 Contingent liabilities and contingent assets
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or nonoccurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognised because it
is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases
where there is a liability that cannot be recognised because it cannot be measured reliably. The Group does not recognise a contingent
liability but discloses its existence in the financial statements.
A contingent asset is a possible asset that arises from past events whose existence will be confirmed by the occurrence or non-occurrence
of one or more uncertain future events beyond the control of the Group. The Group does not recognise contingent assets but discloses its
existence where inflows of economic benefits are probable, but not virtually certain.
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4.
4.15 Contingent liabilities and contingent assets (cont’d)
In the acquisition of subsidiaries by the Group under business combinations, contingent liabilities assumed are measured initially at their fair
value at the acquisition date, irrespective of the extent of any non-controlling interest.
4.16 Employee benefits
(a) Short term employee benefits
Wages, salaries, social security contributions, paid annual leave, paid sick leave, bonuses and non-monetary benefits are recognised as
an expense in the financial year when employees have rendered their services to the Group.
Short term accumulating compensated absences such as paid annual leave are recognised as an expense when employees render
services that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as
sick leave are recognised when the absences occur.
Bonuses are recognised as an expense when there is a present, legal or constructive obligation to make such payments, as a result of
past events and when a reliable estimate can be made of the amount of the obligation.
(b) Defined contribution plans
The Company and its subsidiaries incorporated in Malaysia make contributions to a statutory provident fund and foreign subsidiaries
make contributions to their respective countries’ statutory pension schemes. The contributions are recognised as a liability after deducting
any contribution already paid and as an expense in the period in which the employees render their services.
4.17 Foreign currencies
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Ringgit
Malaysia, which is the Company’s functional and presentation currency.
(b) Foreign currency transactions and balances
Transactions in foreign currencies are converted into Ringgit Malaysia at rates of exchange ruling at the transaction dates. Monetary
assets and liabilities in foreign currencies at the end of the reporting period are translated into Ringgit Malaysia at rates of exchange
ruling at that date. All exchange differences arising from the settlement of foreign currency transactions and from the translation of
foreign currency monetary assets and liabilities are included in profit or loss in the period in which they arise. Non-monetary items
initially denominated in foreign currencies, which are carried at historical cost are translated using the historical rate as of the date of
acquisition, and non-monetary items which are carried at fair value are translated using the exchange rate that existed when the values
were determined for presentation currency purposes.
(c) Foreign operations
Financial statements of foreign operations are translated at financial year end exchange rates with respect to the assets and liabilities,
and at exchange rates at the dates of the transactions with respect to profit or loss. All resulting translation differences are recognised
as a separate component of equity.
In the consolidated financial statements, exchange differences arising from the translation of net investment in foreign operations
are taken to equity. When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are
recognised in profit or loss as part of the gain or loss on disposal.
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4.
4.17 Foreign currencies (cont’d)
(c) Foreign operations (cont’d)
Exchange differences arising on a monetary item that forms part of the net investment of the Company in a foreign operation shall
be recognised in profit or loss in the separate financial statements of the Company or the foreign operation, as appropriate. In the
consolidated financial statements, such exchange differences shall be recognised initially as a separate component of equity and
recognised in profit or loss upon disposal of the net investment.
Goodwill and fair value adjustments to the assets and liabilities arising from the acquisition of a foreign operation are treated as assets
and liabilities of the acquired entity and translated at the exchange rate ruling at the end of the reporting date.
4.18 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable net of discounts and rebates.
Revenue is recognised to the extent that it is probable that the economic benefits associated with the transaction will flow to the Group, and
the amount of revenue and the cost incurred or to be incurred in respect of the transaction can be reliably measured and specific recognition
criteria have been met for each of the Group’s activities as follows:
(a) Sales of goods
Revenue from sale of goods is recognised when significant risk and rewards of ownership of the goods has been transferred to the
customer and where the Group retains neither continuing managerial involvement over the goods, which coincides with the delivery of
goods and acceptance by customers.
(b) Dividend income
Dividend income is recognised when the rights to receive payment is established.
(c) Interest income
Interest income is recognised as it accrues, using the effective interest method unless collectibility is in doubt.
(d) Rental income
Rental income is recognised on an accrual basis unless collectibility is in doubt.
(e) Royalty income
Royalty income is recognised on an accrual basis in accordance with the substance of the trademark license agreement.
4.19 Provisions
Provisions are recognised when there is a present obligation, legal or constructive, as a result of a past event, when it is probable that an
outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation. Where the Group or the Company expects a provision to be reimbursed (for example, under an insurance contract),
the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain.
Where the effect of the time value of money is material, the amount of a provision will be discounted to its present value at a pre-tax rate that
reflects current market assessments of the time value of money and the risks specific to the liability.
Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that
an outflow of resources embodying economic benefits will be required to settle the obligation, the provision will be reversed.
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4.
4.19 Provisions (cont’d)
Provisions are not recognised for future operating losses. If the Group has a contract that is onerous, the present obligation under the
contract shall be recognised and measured as a provision.
4.20 Operating segments
Operating segments are defined as components of the Group that:
(a) engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to
transactions with other components of the Group); and
(b) whose operating results are regularly reviewed by the Group’s chief operating decision maker (i.e. the Group’s Chief Executive Officer)
in making decisions about resources to be allocated to the segment and assessing its performance; and
(c) for which discrete financial information is available.
An operating segment may engage in business activities for which it has yet to earn revenues.
The Group reports separately information about each operating segment that meets any of the following quantitative thresholds:
(a) Its reported revenue, including both sales to external customers and intersegment sales or transfers, is ten (10) per cent or more of the
combined revenue, internal and external, of all operating segments.
(b) The absolute amount of its reported profit or loss is ten (10) per cent or more of the greater, in absolute amount of:
(i)
the combined reported profit of all operating segments that did not report a loss; and
(ii)
the combined reported loss of all operating segments that reported a loss.
(c) Its assets are ten (10) per cent or more of the combined assets of all operating segments.
Operating segments that do not meet any of the quantitative thresholds may be considered reportable, and separately disclosed, if the
management believes that information about the segment would be useful to users of the financial statements.
Total external revenue reported by operating segments shall constitute at least seventy five (75) percent of the Group’s revenue. Operating
segments identified as reportable segments in the current financial year in accordance with the quantitative threshold would result in a
restatement of prior period segment data for comparative purposes.
4.21 Earnings per share
(a) Basic
Basic earnings per ordinary share for the financial year is calculated by dividing the profit for the financial year attributable to equity
holders of the parent by the weighted average number of ordinary shares outstanding during the financial year.
(b) Diluted
Diluted earnings per ordinary share for the financial year is calculated by dividing the profit for the financial year attributable to equity
holders of the parent by the weighted average number of ordinary shares outstanding during the financial year adjusted for the effects
of dilutive potential ordinary shares.
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5.
ADOPTION OF NEW FRSs AND AMENDMENT TO FRSs
5.1 New FRS adopted during the current financial year
(a) FRS 7 Financial Instruments: Disclosures and the consequential amendments resulting from FRS 7 are mandatory for annual financial
periods beginning on or after 1 January 2010. FRS 7 replaces the disclosure requirements of the existing FRS 132 Financial Instruments:
Disclosure and Presentation.
This Standard applies to all risks arising from a wide array of financial instruments and requires the disclosure of the significance of financial
instruments for the Group’s financial position and performance.
(b) FRS 123 Borrowing Costs and the consequential amendments resulting from FRS 123 are mandatory for annual periods beginning on or
after 1 January 2010.
This Standard removes the option of immediately recognising as an expense borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset. However, capitalisation of borrowing costs is not required for assets measured at fair
value, and inventories that are manufactured or produced in large quantities on a repetitive basis, even if they take a substantial period of
time to get ready for use or sale.
There is no impact upon adoption of this Standard during the financial year.
(c) FRS 139 Financial Instruments: Recognition and Measurement and the consequential amendments resulting from FRS 139 are mandatory
for annual financial periods beginning on or after 1 January 2010.
This Standard establishes the principles for the recognition and measurement of financial assets and financial liabilities including
circumstances under which hedge accounting is permitted.
Following the adoption of FRS 139 during the financial year, the Group reassessed the classification and measurement of financial assets
and financial liabilities as at 1 July 2010.
There is no impact upon adoption of this Standard during the financial year other than those disclosed in Note 12(a) to the financial
statements.
(d) Amendments to FRS 2 Share-based Payment: Vesting Conditions and Cancellations are mandatory for annual financial periods beginning
on or after 1 January 2010.
These amendments clarify that vesting conditions comprise service conditions and performance conditions only. Cancellations by parties
other than the Group are accounted for in the same manner as cancellations by the Group itself and features of a share-based payment
that are non-vesting conditions are included in the grant date fair value of the share-based payment.
There is no impact upon adoption of these amendments during the financial year.
(e) Amendments to FRS 1 First-time Adoption of Financial Reporting Standards and FRS 127 Consolidated and Separate Financial Statements:
Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate is mandatory for annual periods beginning on or after 1
January 2010.
These amendments allow first-time adopters to use a deemed cost of either fair value or the carrying amount under previous accounting
practice to measure the initial cost of investments in subsidiaries, jointly controlled entities and associates in the separate financial
statements. The cost method of accounting for an investment has also been removed pursuant to these amendments.
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5.
ADOPTION OF NEW FRSs AND AMENDMENT TO FRSs (cont’d)
5.1 New FRS adopted during the current financial year (cont’d)
(f)
IC Interpretation 9 Reassessment of Embedded Derivatives is mandatory for annual financial periods beginning on or after 1 January 2010.
This Interpretation prohibits the subsequent reassessment of embedded derivatives unless there is a change in the terms of the host
contract that significantly modifies the cash flows that would otherwise be required by the host contract.
There is no impact upon adoption of this Interpretation during the financial year.
(g) IC Interpretation 10 Interim Financial Reporting and Impairment is mandatory for annual financial periods beginning on or after 1 January
2010.
This Interpretation prohibits the reversal of an impairment loss recognised in a previous interim period in respect of goodwill or an
investment in either an equity instrument or a financial asset carried at cost.
(h) IC Interpretation 11 FRS 2 – Group and Treasury Share Transactions is mandatory for annual periods beginning on or after 1 January 2010.
This Interpretation requires share-based payment transactions in which the Company receives services from employees as consideration for
its own equity instruments to be accounted for as equity-settled, regardless of the manner of satisfying the obligations to the employees.
If the Company grants rights to its equity instruments to the employees of its subsidiaries, this Interpretation requires the Company to
recognise the equity reserve for the obligation to deliver the equity instruments when needed whilst the subsidiaries shall recognise the
remuneration expense for the services received from employees.
If the subsidiaries grant rights to equity instruments of the Company to its employees, this Interpretation requires the Company to account
for the transaction as cash-settled, regardless of the manner the subsidiaries obtain the equity instruments to satisfy its obligations.
There is no impact upon adoption of this Interpretation during the financial year. The Group would like to draw attention to the withdrawal
of this Interpretation for annual periods beginning on or after 1 January 2011 as disclosed in Note 5.2(d) to the financial statements.
(i)
IC Interpretation 13 Customer Loyalty Programmes is mandatory for annual periods beginning on or after 1 January 2010.
This Interpretation requires the separation of award credits as a separately identifiable component of sales transactions involving the
award of free or discounted goods or services in the future. The fair value of the consideration received or receivable from the initial sale
shall be allocated between the award credits and the other components of the sale.
If the Group supplies the awards itself, the consideration allocated to the award credits shall only be recognised as revenue when the
award credits are redeemed. If a third party supplies the awards, the Group shall assess whether it is acting as a principal or agent in the
transaction.
If the Group is acting as the principal in the transaction, it shall measure its revenue as the gross consideration allocated to the award
credits. If the Group is acting as an agent, it shall measure its revenue as the net amount retained on its own account, and recognise
the net amount as revenue when the third party becomes obliged to supply the awards and entitled to receive the consideration for
doing so.
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5.
(j)
IC Interpretation 14 FRS 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction is mandatory
for annual periods beginning on or after 1 January 2010.
This Interpretation applies to all post-employment defined benefits and other long-term employee defined benefits. This Interpretation
clarifies that an economic benefit is available if the Group can realise it at some point during the life of the plan or when the plan liabilities
are settled, and that it does not depend on how the Group intends to use the surplus.
A right to refund is available to the Group in stipulated circumstances and the economic benefit available shall be measured as the amount
of the surplus at the end of the reporting period less any associated costs. If there are no minimum funding requirements, the economic
benefit available shall be determined as a reduction in future contributions as the lower of the surplus in the plan and the present value of
the future service cost to the Group. If there is a minimum funding requirement for contributions relating to the future accrual of benefits,
the economic benefit available shall be determined as a reduction in future contributions at the present value of the estimated future
service cost less the estimated minimum funding required in each financial year.
(k) FRS 101 Presentation of Financial Statements is mandatory for annual periods beginning on or after 1 January 2010.
FRS 101 sets out the overall requirements for the presentation of financial statements, guidelines for their structure and minimum
requirements for their content.
This Standard introduces the titles ‘statement of financial position’ and ‘statement of cash flows’ to replace the current titles ‘balance
sheet’ and ‘cash flow statement’ respectively. A new statement known as the ‘statement of comprehensive income’ is also introduced in
this Standard whereby all non-owner changes in equity are required to be presented in either one statement of comprehensive income or
in two statements (i.e. a separate income statement and a statement of comprehensive income).
This Standard also introduces a new requirement to present a statement of financial position as at the beginning of the earliest comparative
period if there are applications of retrospective restatements that are defined in FRS 108, or when there are reclassifications of items in the
financial statements.
Additionally, FRS 101 requires the disclosure of reclassification adjustments and income tax relating to each component of other
comprehensive income, and the presentation of dividends recognised as distributions to owners together with the related amounts per
share in the statement of changes in equity or in the notes to the financial statements.
This Standard introduces a new requirement to disclose information on the objectives, policies and processes for managing capital based
on information provided internally to key management personnel as defined in FRS 124 Related Party Disclosures. Additional disclosures
are also required for puttable financial instruments classified as equity instruments.
Following the adoption of this Standard, the Group has reflected the new format of presentation and additional disclosures warranted in
the primary financial statements and relevant notes to the financial statements.
(l)
Amendments to FRS 139, FRS 7 and IC Interpretation 9 are mandatory for annual periods beginning on or after 1 January 2010.
These amendments permit reclassifications of non-derivative financial assets (other than those designated at fair value through profit or
loss upon initial recognition) out of the fair value through profit or loss category in rare circumstances. Reclassifications from the availablefor-sale category to the loans and receivables category are also permitted provided there is intention and ability to hold that financial asset
for the foreseeable future. All of these reclassifications shall be subjected to subsequent reassessments of embedded derivatives.
These amendments also clarify the designation of one-sided risk in eligible hedged items and streamline the terms used throughout the
Standards in accordance with the changes resulting from FRS 101.
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5.
5.1
New FRS adopted during the current financial year (cont’d)
(m) Amendments to FRS 132 Financial Instruments: Presentation is mandatory for annual periods beginning on or after 1 January 2010.
These amendments require certain puttable financial instruments, and financial instruments that impose an obligation to deliver to
counterparties a pro rata share of the net assets of the entity only on liquidation to be classified as equity.
Puttable financial instruments are defined as financial instruments that give the holder the right to put the instrument back to the issuer
for cash, or another financial asset, or are automatically put back to the issuer upon occurrence of an uncertain future event or the death
or retirement of the instrument holder.
(n) Improvements to FRSs (2009) that are mandatory for annual periods beginning on or after 1 January 2010.
Amendment to FRS 5 Non-current Assets Held for Sale and Discontinued Operations clarifies that the disclosure requirements of this
Standard specifically apply to non-current assets (or disposal groups) classified as held for sale or discontinued operations. There is no
impact upon adoption of this amendment during the financial year.
Amendment to FRS 8 clarifies the consistency of disclosure requirement for information about profit or loss, assets and liabilities. There is
no impact upon adoption of this amendment during the financial year.
Amendment to FRS 107 Statement of Cash Flows clarifies the classification of cash flows arising from operating activities and investing
activities. Cash payments to manufacture or acquire assets held for rental to others and subsequently held for sale, and the related cash
receipts, shall be classified as cash flows from operating activities. Expenditures that result in a recognised asset in the statement of
financial position are eligible for classification as cash flows from investing activities. There is no impact upon adoption of this amendment
during the financial year.
Amendment to FRS 108 clarifies that only Implementation Guidance issued by the MASB that are integral parts of FRSs is mandatory.
There is no impact upon adoption of this amendment during the financial year.
Amendment to FRS 110 Events after the Reporting Period clarifies the rationale for not recognising dividends declared after the reporting
period but before the financial statements are authorised for issue. There is no impact upon adoption of this amendment during the
financial year.
Amendment to FRS 116 Property, Plant and Equipment removes the definition pertaining the applicability of this Standard to property
that is being constructed or developed for future use as investment property but do not yet satisfy the definition of ‘investment property’
in FRS 140 Investment Property. This amendment also replaces the term ‘net selling price’ with ‘fair value less costs to sell’, and clarifies
that proceeds arising from routine sale of items of property, plant and equipment shall be recognised as revenue in accordance with FRS
118 Revenue rather than FRS 5. There is no impact upon adoption of this amendment during the financial year.
Amendment to FRS 117 Leases removes the classification of leases of land and of buildings, and instead, requires assessment of
classification based on the risks and rewards of the lease itself. The reassessment of land elements of unexpired leases shall be made
retrospectively in accordance with FRS 108. As at 1 July 2010, the Group has carrying amount of prepaid lease payments for land of
RM216,000 (see Note 40 to the financial statements) that has been reclassified as land held in accordance with FRS 116 upon adoption of
this amendment.
Amendment to FRS 118 clarifies reference made on the term ‘transaction costs’ to the definition in FRS 139. There is no impact upon
adoption of this amendment during the financial year.
Amendment to FRS 119 Employee Benefits clarifies the definitions in this Standard by consistently applying settlement dates within twelve
(12) months in the distinction between short-term employee benefits and other long-term employee benefits. This amendment also
provides additional explanations on negative past service cost and curtailments. There is no impact upon adoption of this amendment
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5.
(n) Improvements to FRSs (2009) that are mandatory for annual periods beginning on or after 1 January 2010. (cont’d)
Amendment to FRS 120 Accounting for Government Grants and Disclosure of Government Assistance streamlines the terms used in this
Standard in accordance with the new terms used in FRS 101. There is no impact upon adoption of this amendment during the financial year.
Amendment to FRS 123 clarifies that interest expense calculated using the effective interest rate method described in FRS 139 qualifies
for recognition as borrowing costs. There is no impact upon adoption of this amendment during the financial year.
Amendment to FRS 127 Consolidated and Separate Financial Statements clarifies that investments measured at cost shall be accounted
for in accordance with FRS 5 when they are held for sale in accordance with FRS 5. There is no impact upon adoption of this amendment
Amendment to FRS 128 Investments in Associates clarifies that investments in associates held by venture capital organisations, or mutual
funds, unit trusts and similar entities shall make disclosures on the nature and extent of any significant restrictions on the ability of
associates to transfer funds to the investor in the form of cash dividends, or repayment of loans or advances. This amendment also clarifies
that impairment loss recognised in accordance with FRS 136 Impairment of Assets shall not be allocated to any asset, including goodwill,
that forms the carrying amount of the investment. Accordingly, any reversal of that impairment loss shall be recognised in accordance with
FRS 136. There is no impact upon adoption of this amendment during the financial year.
Amendment to FRS 129 Financial Reporting in Hyperinflationary Economies streamlines the terms used in this Standard in accordance with
the new terms used in FRS 101. This amendment also clarifies that assets and liabilities that are measured at fair value are exempted from the
requirement to apply historical cost basis of accounting. There is no impact upon adoption of this amendment during the financial year.
Amendment to FRS 131 Interests in Joint Ventures clarifies that venturers’ interests in jointly controlled entities held by venture capital
organisations, or mutual funds, unit trusts and similar entities shall make disclosures on related capital commitments. This amendment
also clarifies that a listing and description of interests in significant joint ventures and the proportion of ownership interest held in jointly
controlled entities shall be made. There is no impact upon adoption of this amendment during the financial year.
Amendment to FRS 136 clarifies the determination of allocation of goodwill to each cash-generating unit whereby each unit shall not be
larger than an operating segment as defined in FRS 8 before aggregation. This amendment also requires additional disclosures if the fair
value less costs to sell is determined using discounted cash flow projections. There is no impact upon adoption of this amendment during
the financial year.
Amendment to FRS 138 Intangible Assets clarifies the examples provided in this Standard in measuring the fair value of an intangible asset
acquired in a business combination. This amendment also removes the statement on the rarity of situations whereby the application of
the amortisation method for intangible assets results in a lower amount of accumulated amortisation than under the straight line method.
There is no impact upon adoption of this amendment during the financial year.
Amendment to FRS 140 clarifies that properties that are being constructed or developed for future use as investment property are
within the definition of ‘investment property’. This amendment further clarifies that if the fair value of such properties cannot be reliably
determinable but it is expected that the fair value would be readily determinable when construction is complete, the properties shall be
measured at cost until either its fair value becomes reliably determinable or construction is completed, whichever is earlier. There is no
impact upon adoption of this amendment during the financial year.
(o) Amendments to FRS 132 is mandatory for annual periods beginning on or after 1 January 2010 and 1 March 2010 in respect of the
transitional provisions in accounting for compound financial instruments and classification of rights issues respectively.
These amendments remove the transitional provisions in respect of accounting for compound financial instruments issued before 1
January 2003 pursuant to FRS 1322004 Financial Instruments: Disclosure and Presentation. Such compound financial instruments shall be
classified into its liability and equity components when FRS 139 first applies.
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5.
(o) Amendments to FRS 132 is mandatory for annual periods beginning on or after 1 January 2010 and 1 March 2010 in respect of the
transitional provisions in accounting for compound financial instruments and classification of rights issues respectively. (cont’d)
The amendments also clarifies that rights, options or warrants to acquire a fixed number of the Group’s own equity instruments for a fixed
amount of any currency shall be classified as equity instruments rather than financial liabilities if the Group offers the rights, options or
warrants pro rata to all of its own existing owners of the same class of its own non-derivative equity instruments.
(p) Amendments to FRS 139 is mandatory for annual periods beginning on or after 1 January 2010.
These amendments remove the scope exemption on contracts for contingent consideration in a business combination. Accordingly, such
contracts shall be recognised and measured in accordance with the requirements of FRS 139.
(q) IC Interpretation 12 Service Concession Arrangements is mandatory for annual periods beginning on or after 1 July 2010.
This Interpretation applies to operators for public-to-private service concession arrangements, whereby infrastructure within the scope of
this Interpretation shall not be recognised as property, plant and equipment of the operator. The operator shall recognise and measure
revenue in accordance with FRS 111 Construction Contracts and FRS 118 for the services performed. The operator shall also account for
revenue and costs relating to construction or upgrade services in accordance with FRS 111.
Consideration received or receivable by the operator for the provision of construction or upgrade services shall be recognised at its fair
value. If the consideration consists of an unconditional contractual right to receive cash or another financial asset from the grantor, it
shall be classified as a financial asset. Conversely, if the consideration consists of a right to charge users of the public service, it shall be
classified as an intangible asset.
(r)
FRS 1 First-time Adoption of Financial Reporting Standards is mandatory for annual periods beginning on or after 1 July 2010.
This Standard supersedes the existing FRS 1 and shall be applied when the Group adopts FRSs for the first time via the explicit and
unreserved statement of compliance with FRSs. An opening FRS statement of financial position shall be prepared and presented at the
date of transition to FRS, whereby:
(i)
(ii)
(iii)
(iv)
All assets and liabilities shall be recognised in accordance with FRSs;
Items of assets and liabilities shall not be recognised if FRSs do not permit such recognition;
Items recognised in accordance with previous GAAP shall be reclassified in accordance with FRSs; and
All recognised assets and liabilities shall be measured in accordance with FRSs.
All resulting adjustments shall therefore be recognised directly in retained earnings at the date of transition to FRSs.
There is no impact upon adoption of this Standard during the financial year.
(s)
FRS 3 Business Combinations is mandatory for annual periods beginning on or after 1 July 2010.
This Standard supersedes the existing FRS 3 and now includes business combinations involving mutual entities and those achieved
by way of contract alone. Any non-controlling interest in an acquiree shall be measured at fair value or as the non-controlling interest’s
proportionate share of the acquiree’s net identifiable assets.
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5.
(s)
FRS 3 Business Combinations is mandatory for annual periods beginning on or after 1 July 2010. (cont’d)
The time limit on the adjustment to goodwill due to the arrival of new information on the crystallisation of deferred tax benefits shall be
restricted to the measurement period resulting from the arrival of the new information. Contingent liabilities acquired arising from present
obligations shall be recognised, regardless of the probability of outflow of economic resources.
Acquisition-related costs shall be accounted for as expenses in the periods in which the costs are incurred and the services are received.
Consideration transferred in a business combination, including contingent consideration, shall be measured and recognised at fair value
at acquisition date. Any changes in the amount of consideration to be paid will no longer be adjusted against goodwill but recognised in
profit or loss.
In business combinations achieved in stages, the acquirer shall remeasure its previously held equity interest at its acquisition date fair value
and recognise the resulting gain or loss in profit or loss.
The revised FRS 3 has been applied prospectively in accordance with its transitional provisions. Assets and liabilities that arose from
business combinations whose acquisition dates were before 1 July 2010 are not adjusted.
During the financial year, the newly acquired subsidiary was accounted for in accordance with this new Standard as disclosed in Note 33
to the financial statements.
(t)
FRS 127 Consolidated and Separate Financial Statements is mandatory for annual periods beginning on or after 1 July 2010.
This Standard supersedes the existing FRS 127 and replaces the current term ‘minority interest’ with the new term ‘non-controlling interest’
which is defined as the equity in a subsidiary that is not attributable, directly or indirectly, to a parent. Accordingly, total comprehensive
income shall be attributed to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling
interests having a deficit balance.
Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.
If the Group loses control of a subsidiary, any gains or losses are recognised in profit or loss and any investment retained in the former
subsidiary shall be remeasured at its fair value at the date when control is lost.
According to its transitional provisions, the revised FRS 127 has been applied prospectively, and does not impact the Group’s consolidated
financial statements in respect of transactions with non-controlling interest, attribution of losses to non-controlling interest, and disposal
of subsidiaries before 1 July 2010. These changes would only affect future transactions with non-controlling interest.
As at the end of the reporting period, the Group has reclassified RM14,925,000 as non-controlling interests and remeasured the
non-controlling interests prospectively in accordance with the transitional provisions of FRS 127.
(u) Amendments to FRSs that are mandatory for annual periods beginning on or after 1 July 2010.
Amendments to FRS 2 Share-based Payments clarify that transactions in which the Group acquired goods as part of the net assets
acquired in a business combination or contribution of a business on the formation of a joint venture are excluded from the scope of this
Standard. There is no impact upon adoption of these amendments during the financial year.
Amendments to FRS 5 clarify that non-current asset classified as held for distribution to owners acting in their capacity as owners are
within the scope of this Standard. The amendment also clarifies that in determining whether a sale is highly probable, the probability of
shareholders’ approval, if required in the jurisdiction, shall be considered. In a sale plan involving loss of control of a subsidiary, all assets
and liabilities of that subsidiary shall be classified as held for sale, regardless of whether the Group retains a non-controlling interest in
its former subsidiary after the sale. Discontinued operations information shall also be presented. Non-current asset classified as held for
distribution to owners shall be measured at the lower of its carrying amount and fair value less costs to distribute. There is no impact upon
adoption of these amendments during the financial year.
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5.
(u) Amendments to FRSs that are mandatory for annual periods beginning on or after 1 July 2010. (cont’d)
Amendments to FRS 138 clarify that the intention of separating an intangible asset is irrelevant in determining the identifiability of the
intangible asset. In a separate acquisition and acquisition as part of a business combination, the price paid by the Group reflects the
expectations of the Group of an inflow of economic benefits, even if there is uncertainty about the timing or the amount of the inflow.
Accordingly, the probability criterion is always considered to be satisfied for separately acquired intangible assets. The useful life of a
reacquired right recognised as an intangible asset in a business combination shall be the remaining contractual period of the contract in
which the right was granted, and do not include renewal periods. In the case of a reacquired right in a business combination, if the right
is subsequently reissued to a third party, the related carrying amount shall be used in determining the gain or loss on reissue. There is no
impact upon adoption of these amendments during the financial year.
Amendments to IC Interpretation 9 clarify that embedded derivatives in contracts acquired in a business combination, combination of
entities or business under common controls, or the formation of a joint venture are excluded from this Interpretation. There is no impact
upon adoption of these amendments during the financial year.
(v) IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation is mandatory for annual periods beginning on or after 1 July 2010.
This Interpretation applies to hedges undertaken on foreign currency risk arising from net investments in foreign operations and the Group
wishes to qualify for hedge accounting in accordance with FRS 139.
Hedge accounting is applicable only to the foreign exchange differences arising between the functional currency of the foreign operation
and the functional currency of any parent (immediate, intermediate or ultimate parent) of that foreign operation. An exposure to foreign
currency risk arising from a net investment in a foreign operation may qualify for hedge accounting only once in the consolidated financial
statements.
Hedging instruments designated in the hedge of a net investment in a foreign operation may be held by any companies within the Group,
as long as the designation, documentation and effectiveness requirements of FRS 139 are met. There is no impact upon adoption of this
Interpretation during the financial year.
(w) IC Interpretation 17 Distributions of Non-cash Assets to Owners is mandatory for annual periods beginning on or after 1 July 2010.
This Interpretation applies to non-reciprocal distributions of non-cash assets by the Group to its owners in their capacity as owners, as
well as distributions that give owners a choice of receiving either non-cash assets or a cash alternative. This Interpretation also applies to
distributions in which all owners of the same class of equity instruments are treated equally.
The liability to pay a dividend shall be recognised when the dividend is appropriately authorised and is no longer at the discretion of the
Group. The liability shall be measured at the fair value of the assets to be distributed. If the Group gives its owners a choice of receiving
either a non-cash asset or a cash alternative, the dividend payable shall be estimated by considering the fair value of both alternatives and
the associated probability of the owners’ selection.
At the end of each reporting period, the carrying amount of the dividend payable shall be remeasured and any changes shall be recognised
in equity. At the settlement date, any difference between the carrying amounts of the assets distributed and the carrying amount of the
dividend payable shall be recognised in profit or loss. The new accounting policy (see Note 4.11(c)) has been applied prospectively. There
is no impact upon adoption of this Interpretation during the financial year.
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5.
5.2 New FRSs that have been issued, but not yet effective and not yet adopted
(a) Amendment to FRS 1 Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters is mandatory for annual periods
beginning on or after 1 January 2011.
This amendment permits a first-time adopter of FRSs to apply the exemption of not restating comparatives for the disclosures required in
Amendments to FRS 7.
The Group does not expect any impact on the financial statements arising from the adoption of this amendment.
(b) Amendments to FRS 1 Additional Exemptions for First-time Adopters are mandatory for annual periods beginning on or after 1 January
2011.
These amendments permit a first-time adopter of FRSs to apply the exemption of not restating the carrying amounts of oil and gas assets
determined under previous GAAP.
The Group does not expect any impact on the financial statements arising from the adoption of these amendments.
(c) Amendments to FRS 7 Improving Disclosures about Financial Instruments are mandatory for annual periods beginning on or after 1
January 2011.
These amendments require enhanced disclosures of fair value of financial instruments based on the fair value hierarchy, including the
disclosure of significant transfers between Level 1 and Level 2 of the fair value hierarchy as well as reconciliations for fair value measurements
in Level 3 of the fair value hierarchy.
By virtue of the exemption provided under paragraph 44G of FRS 7, the impact of applying these amendments on the financial statements
upon first adoption of FRS 7 as required by paragraph 30(b) of FRS 108 are not disclosed.
(d) Amendments to FRS 2 Group Cash-settled Share-based Payment Transactions are mandatory for annual periods beginning on or after 1
January 2011.
These amendments clarify the scope and the accounting for group cash-settled share-based payment transactions in the separate financial
statements of the entity receiving the goods or services when that entity has no obligation to settle the share-based payment transaction.
Consequently, IC Interpretation 8 Scope of FRS 2 and IC Interpretation 11 have been superseded and withdrawn.
The Group does not expect any impact on the financial statements arising from the adoption of these amendments. The effects of
adopting IC Interpretation 11 have been disclosed in Note 5.1(h) to the financial statements.
(e) IC Interpretation 4 Determining whether an Arrangement contains a Lease is mandatory for annual periods beginning on or after
1 January 2011.
This Interpretation requires the determination of whether an arrangement is, or contains, a lease based on an assessment of whether
the fulfilment of the arrangement is dependent on the use of a specific asset and whether the arrangement conveys a right to use the
asset. This assessment shall be made at the inception of the arrangement and subsequently reassessed if certain condition(s) in the
Interpretation is met.
The Group does not expect any impact on the financial statements arising from the adoption of this Interpretation because there are no
arrangements dependent on the use of specific assets in the Group.
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5.
5.2 New FRSs that have been issued, but not yet effective and not yet adopted (cont’d)
(f)
IC Interpretation 18 Transfers of Assets from Customers is mandatory for annual periods beginning on or after 1 January 2011.
This Interpretation applies to agreements in which an entity receives from a customer an item of property, plant and equipment that must
be used to either connect the customer to a network or to provide the customer with ongoing access to a supply of goods or services.
The entity receiving the transferred item is required to assess whether the transferred item meets the definition of an asset set out in the
Framework. The credit entry would be accounted for as revenue in accordance with FRS 118.
The Group does not expect any impact on the financial statements arising from the adoption of this Interpretation because there are no
such arrangements in the Group.
(g) Improvements to FRSs (2010) that are mandatory for annual periods beginning on or after 1 January 2011.
Amendments to FRS 1 clarify that FRS 108 does not apply to changes in accounting policies made upon adoption of FRSs until after the
first FRS financial statements have been presented. If changes in accounting policies or exemptions in this FRS are used, an explanation of
such changes together with updated reconciliations shall be made in each interim financial report. Entities whose operations are subject
to rate regulation are permitted the use of previously revalued amounts as deemed cost. The Group does not expect any impact on the
financial statements arising from the adoption of these amendments.
Amendments to FRS 3 clarify that for each business combination, the acquirer shall measure at the acquisition date non-controlling
interests that consists of the present ownership interests and entitle holders to a proportionate share of the entity’s net assets in the
event of liquidation. Un-replaced and voluntarily replaced share-based payment transactions shall be measured using the market-based
measurement method in accordance with FRS 2 at the acquisition date. The Group does not expect any impact on the consolidated
financial statements arising from the adoption of these amendments.
Amendments to FRS 7 clarify that quantitative disclosures of risk concentrations are required if the disclosures made in other parts of the
financial statements are not readily apparent. The disclosure on maximum exposure to credit risk is not required for financial instruments
whose carrying amount best represents the maximum exposure to credit risk. The Group expects to improve the disclosures on maximum
exposure to credit risk upon adoption of these amendments.
Amendments to FRS 101 clarify that a statement of changes in equity shall be presented as part of a complete set of financial statements.
Amendments to FRS 121 The Effects of Changes in Foreign Exchange Rates clarify that the accounting treatment for cumulative
foreign exchange differences in other comprehensive income for the disposal or partial disposal of a foreign operation shall be applied
prospectively. The Group does not expect any impact on the financial statements arising from the adoption of these amendments.
Amendments to FRS 128 clarify that the accounting treatment for the cessation of significant influence over an associate shall be applied
prospectively. The Group does not expect any impact on the consolidated financial statements arising from the adoption of these
amendments.
Amendments to FRS 131 clarify that the accounting treatment for the cessation of joint control over an entity shall be applied prospectively.
The Group does not expect any impact on the consolidated financial statements arising from the adoption of these amendments.
Amendments to FRS 132 clarify that contingent consideration from a business combination that occurred before the effective date of
the revised FRS 3 of 1 July 2010 shall be accounted for prospectively. The Group does not expect any impact on the financial statements
arising from the adoption of these amendments.
Amendments to FRS 134 clarify that updated information on significant events and transactions since the end of the last annual reporting
period shall be included in the Group’s interim financial report. Although the Group does not expect any impact on the financial statements
arising from the adoption of these amendments, it is expected that additional disclosures would be made in the quarterly interim financial
statements of the Group.
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5.
(g) Improvements to FRSs (2010) that are mandatory for annual periods beginning on or after 1 January 2011. (cont’d)
Amendments to FRS 139 clarify that contingent consideration from a business combination that occurred before the effective date of
the revised FRS 3 of 1 July 2010 shall be accounted for prospectively. The Group does not expect any impact on the financial statements
arising from the adoption of these amendments.
Amendments to IC Interpretation 13 clarify that the fair value of award credits takes into account, amongst others, the amount of the
discounts or incentives that would otherwise be offered to customers who have not earned award credits from an initial sale. The Group
does not expect any impact on the financial statements arising from the adoption of these amendments.
(h) Amendments to IC Interpretation 14 FRS 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
are mandatory for annual periods beginning on or after 1 July 2011.
These amendments clarify that if there is a minimum funding requirement for contributions relating to future service, the economic benefit
available as a reduction in future contributions shall include any amount that reduces future minimum funding requirement contributions
for future service because of the prepayment made.
(i)
IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments is mandatory for annual periods beginning on or after
1 July 2011.
This Interpretation applies to situations whereby equity instruments are issued to a creditor to extinguish all or part of a recognised
financial liability. Such equity instruments shall be measured at fair value, and the difference between the carrying amount of the financial
liability extinguished and the consideration paid shall be recognised in profit or loss.
The Group does not expect any impact on the financial statements arising from the adoption of this Interpretation.
(j)
FRS 124 Related Party Disclosures and the consequential amendments to FRS 124 are mandatory for annual periods beginning on or after
1 January 2012.
This revised Standard simplifies the definition of a related party and eliminates certain inconsistencies within the superseded version. In
addition to this, transactions and balances with government-related entities are broadly exempted from the disclosure requirements of
the Standard.
The Group expects to reduce related party disclosures in respect of transactions and balances with government-related entities upon
adoption of this Standard.
(k) IC Interpretation 15 Agreements for the Construction of Real Estate is mandatory for annual periods beginning on or after 1 January 2012.
This Interpretation applies to the accounting for revenue and associated expenses by entities undertaking construction or real estate directly
or via subcontractors. Within a single agreement, the Group may contract to deliver goods or services in addition to the construction of
real estate. Such an agreement shall therefore, be split into separately identifiable components.
An agreement for the construction of real estate shall be accounted for in accordance with FRS 111 if the buyer is able to specify the major
structural elements of the design of the real estate before construction begins and/or specify major structural changes once construction
is in progress. Accordingly, revenue shall be recognised by reference to the stage of completion of the contract.
An agreement for the construction of real estate in which buyers only have limited ability to influence the design of the real estate or to
specify only minor variations to the basic designs is an agreement for the sale of goods in accordance with FRS 118. Accordingly, revenue
shall be recognised by reference to the criteria in paragraph 14 of FRS 118 (e.g. transfer of significant risks and rewards, no continuing
managerial involvement nor effective control, reliable measurement, etc.).
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5.
(k) IC Interpretation 15 Agreements for the Construction of Real Estate is mandatory for annual periods beginning on or after 1 January 2012.
(cont’d)
The Group does not expect any impact on the financial statements arising from the adoption of this Interpretation.
6.
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application
of the Group’s and the Company’s accounting policies, reported amounts of assets, liabilities, income and expenses, and disclosures made. They
are assessed on an ongoing basis and are based on experience and relevant factors, including expectations of future events that are believed to
be reasonable under the circumstances.
6.1 Critical judgements made in applying accounting policies
The followings are judgements made by management in the process of applying the Group’s accounting policies that have the most significant
effect on the amounts recognised in the financial statements.
(a) Classification between investment properties and property, plant and equipment
The Group has developed certain criteria based on FRS 140 Investment Property in making judgement whether a property qualifies as an
investment property. Investment property is a property held to earn rentals or for capital appreciation or both.
Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in
the production or supply of goods or services or for administrative purposes. If these portions could be sold separately (or leased out
separately under a finance lease), the Group would account for the portions separately. If the portions could not be sold separately, the
property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for
administrative purposes. Judgement is made on an individual property basis to determine whether ancillary services are so significant that
a property does not qualify as investment property.
(b) Contingent liabilities
The determination of treatment of contingent liabilities is based on management’s view of the expected outcome of the contingencies for
matters in the ordinary course of business.
6.2 Key sources of estimation uncertainty
The following are key assumptions 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:
(a) Impairment of goodwill on consolidation
The Group determines whether goodwill on consolidation is impaired at least on an annual basis. This requires an estimation of the valuein-use of the subsidiaries to which goodwill is allocated. Estimating a value-in-use amount requires management to make an estimate of
the expected future cash flows from the subsidiaries and also to choose a suitable discount rate in order to calculate the present value of
those cash flows. Further details are disclosed in Note 9(a) to the financial statements.
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6.
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (cont’d)
6.2 Key sources of estimation uncertainty (cont’d)
(b) Taxation
(i)
Deferred tax assets
Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent that it is probable that
taxable profit will be available against which the tax losses and capital allowances can be utilised. Significant management judgement
is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future
taxable profits together with future tax planning strategies.
(ii)
Income taxes
Significant judgement is required in determining the capital allowances, deductibility of certain expenses and taxability of certain
income during the estimation of the provision for income taxes. There are many transactions and calculations for which the ultimate
tax determination is uncertain during the ordinary course of business. The Group and the Company recognise tax liabilities based
on estimates of whether additional taxes will be due. Where the final tax outcome is different from the amounts that were initially
recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.
(c) Depreciation of property, plant and equipment
The cost of property, plant and equipment is depreciated on a straight-line basis over the assets’ estimated useful lives. Management
estimates the useful lives of these property, plant and equipment as disclosed in Note 4.4 to the financial statements. These are
common life expectancies applied in the industry which the Group operates. Changes in the expected level of usage and technological
developments could impact the economic useful lives and the residual values of these assets, and therefore future depreciation charges
could be revised.
(d) Impairment of receivables
The Group makes impairment of receivables based on an assessment of the recoverability of receivables. Impairment is applied to
receivables where events or changes in circumstances indicate that the carrying amounts may not be recoverable. The management
specifically analyses historical bad debt, customer concentration, customer creditworthiness, current economic trends and changes in
customer payment terms when making a judgement to evaluate the adequacy of impairment of receivables. Where expectations differ
from the original estimates, the differences will impact the carrying amount of receivables.
(e) Write down for obsolete or slow moving inventories
The Group writes down its obsolete or slow moving inventories based on an assessment of their estimated net selling price. Inventories
are written down when events or changes in circumstances indicate that the carrying amounts may not be recoverable. The management
specifically analyses fashion pattern, current economic trends and changes in customer preference when making a judgement to evaluate
the adequacy of the write down for obsolete or slow moving inventories. Where expectations differ from the original estimates, the
differences will impact the carrying amount of inventories.
(f)
Fair values of borrowings
The fair values of borrowings are estimated by discounting future contractual cash flows at the current market interest rates available to the
Group for similar financial instruments. It is assumed that the effective interest rates approximate the current market interest rates available
to the Group based on its size and its business risk.
(g) Impairment of trademarks
The Group determines whether trademarks are impaired at least on an annual basis. This requires an estimation of the value-in-use of
the trademarks. Estimating a value-in-use amount requires management to make an estimate of the expected future cash flows from
royalty income and also to choose a suitable discount rate in order to calculate the present value of those cash flows. Further details are
disclosed in Note 9(b) to the financial statements.
98
7.
PROPERTY, PLANT AND EQUIPMENT
Group
Balance
as at Acquisition
of
1.7.2010
(restated) subsidiaries Additions
RM’000
RM’000
RM’000
Written
Disposals
off Impairment
RM’000 RM’000
RM’000
Depreciation
charge for
the year
RM’000
Balance
as at
Reclassi- Translation
fication adjustments 30.6.2011
RM’000
RM’000
RM’000
Carrying amount
Freehold land
Leasehold land
Buildings on freehold land
Buildings on long term
leasehold land
Plant and machinery
Plant and machinery under
hire-purchase and lease
Furniture, fittings and
counter fixtures
Office equipment
Renovation
Motor vehicles
Motor vehicles under hirepurchase and lease
Properties under
construction
3,002
216
31,759
–
–
–
–
–
–
–
–
–
–
–
–
4,752
610
–
–
173
1,881
–
–
–
–
25
–
–
–
–
9,786
2,762
1,873
731
1,787
659
224
303
–
–
10,885
2,573
2,547
223
447
1,156
803
1,668
–
4,085
–
985
–
62,544
1,989
21,382
Group
Freehold land
Leasehold land
Buildings on long term leasehold land
Plant and machinery
Plant and machinery under hire-purchase and lease
Office equipment
Renovation
Motor vehicles
Motor vehicles under hire-purchase and lease
Properties under construction
(107)
(29)
(45)
(14)
(63)
(258)
–
–
–
(212)
–
–
–
–
(3)
(761)
–
–
–
–
–
195
3,002
213
31,193
(124)
(236)
4,085
–
–
(5)
8,674
2,250
(25)
–
–
117
8
34
(3)
(2)
12,920
3,946
2,887
731
1,830
41
2,499
–
985
385
71,130
–
–
–
–
–
(8,211)
(1,576)
(1,825)
(206)
(339)
–
–
–
–
–
–
–
–
–
(1,169)
–
–
–
(209)
(16)
–
–
–
(225)
(212)
–
(4,085)
(14,475)
–
At 30.6.2011
Accumulated Accumulated
impairment
Cost depreciation
RM’000
RM’000
RM’000
Carrying
amount
RM’000
3,002
277
37,651
12,846
4,472
123
49,426
14,093
9,879
1,501
3,585
7,702
985
–
(64)
(6,182)
(1,716)
(2,222)
(123)
(36,506)
(10,147)
(6,992)
(770)
(1,755)
(5,203)
–
–
–
(276)
(2,456)
–
–
–
–
–
–
–
–
–
3,002
213
31,193
8,674
2,250
–
12,920
3,946
2,887
731
1,830
2,499
985
145,542
(71,680)
(2,732)
71,130
99
7.
PROPERTY, PLANT AND EQUIPMENT (cont’d)
Group
Amortisation/
Depreciation
Translation
charge for
the year adjustments
Written off
RM’000
RM’000
RM’000
Balance
as at
30.6.2010
(restated)
RM’000
Balance
as at
1.7.2009
(restated)
RM’000
Additions
RM’000
3,002
219
32,719
4,875
553
–
–
24
–
330
–
–
(73)
–
(38)
–
–
–
–
–
–
(3)
(764)
(123)
(227)
–
–
(147)
–
(8)
3,002
216
31,759
4,752
610
49
13,510
2,959
2,978
665
2,434
–
5,041
1,154
625
257
162
–
(28)
(92)
(3)
–
(139)
–
(523)
(32)
(308)
–
–
(24)
(8,144)
(1,196)
(1,350)
(177)
(647)
–
(70)
(31)
(69)
(14)
(23)
25
9,786
2,762
1,873
731
1,787
1,612
3,953
368
132
–
–
(813)
–
(11)
–
1,156
4,085
69,528
8,093
(13,468)
(373)
62,544
Disposals
RM’000
Carrying amount
Freehold land
Leasehold land
Plant and machinery
Plant and machinery under hirepurchase and lease
Office equipment
Renovation
Motor vehicles
Motor vehicles under hire-purchase
and lease
(373)
(863)
At 30.6.2010
Accumulated
amortisation/ Accumulated
impairment
Cost depreciation
RM’000
RM’000
RM’000
Group
Freehold land
Leasehold land
Plant and machinery
Plant and machinery under hire-purchase and lease
Office equipment
Renovation
Motor vehicles
Motor vehicles under hire-purchase and lease
100
–
–
Carrying
amount
RM’000
3,002
277
37,447
8,309
2,597
123
36,742
10,522
6,447
1,312
3,847
4,352
4,364
–
(61)
(5,412)
(1,592)
(1,987)
(98)
(26,956)
(7,760)
(4,574)
(581)
(2,060)
(3,196)
–
–
–
(276)
(1,965)
–
–
–
–
–
–
–
–
(279)
3,002
216
31,759
4,752
610
25
9,786
2,762
1,873
731
1,787
1,156
4,085
119,341
(54,277)
(2,520)
62,544
7.
Company
Depreciation
charge for
the year
RM’000
Balance
as at
30.6.2011
RM’000
Balance
as at
1.7.2010
RM’000
Additions
RM’000
2,530
13,183
52
135
155
23
747
449
–
–
–
55
–
–
–
–
–
(341)
(36)
(50)
(78)
(12)
(230)
(179)
2,530
12,842
16
140
77
11
517
270
17,274
55
(926)
16,403
Carrying amount
Freehold land
Furniture, fixtures and fittings
Office equipment
Renovation
Motor vehicles
At 30.6.2011
Accumulated
Cost depreciation
RM’000
RM’000
Freehold land
Office equipment
Renovation
Motor vehicles
Company
Carrying
amount
RM’000
2,530
17,080
351
351
780
75
2,053
856
–
(4,238)
(335)
(211)
(703)
(64)
(1,536)
(586)
2,530
12,842
16
140
77
11
517
270
24,076
(7,673)
16,403
Depreciation
charge for
the year
RM’000
Balance
as at
30.6.2010
RM’000
Balance
as at
1.7.2009
RM’000
Additions
RM’000
2,530
13,524
88
95
261
34
977
801
–
–
–
82
–
–
–
–
–
(341)
(36)
(42)
(106)
(11)
(230)
(352)
2,530
13,183
52
135
155
23
747
449
18,310
82
(1,118)
17,274
Carrying amount
Freehold land
Office equipment
Renovation
Motor vehicles
101
7.
Cost
RM’000
Freehold land
Office equipment
Renovation
Motor vehicles
At 30.6.2010
Accumulated
depreciation
RM’000
Carrying
amount
RM’000
2,530
17,080
351
296
780
75
1,151
1,758
–
(3,897)
(299)
(161)
(625)
(52)
(404)
(1,309)
2,530
13,183
52
135
155
23
747
449
24,021
(6,747)
17,274
(a) During the financial year, the Group and the Company made the following cash payments to purchase property, plant and equipment:
Group
2011
RM’000
2010
RM’000
Company
2011
2010
RM’000
RM’000
Purchase of property, plant and equipment
Financed by hire-purchase and lease arrangements
Financed by term loans
21,382
(1,260)
(173)
8,093
(185)
(132)
55
–
–
82
–
–
Cash payments on purchase of property, plant and equipment
19,949
7,776
55
82
(b) As at end of reporting period, the carrying amount of property, plant and equipment under hire-purchase and lease arrangements of the
Group and of the Company are as follows:
Group
Plant and machinery
Motor vehicles
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
–
2,499
25
1,156
–
270
–
449
2,499
1,181
270
449
Details of the terms and conditions of the hire-purchase and lease arrangements are disclosed in Notes 20 and 37 to the financial statements.
102
7.
(c) Net book value of property, plant and equipment pledged as securities for banking facilities granted to the Group and to the Company are as
follows:
Group
Freehold land
Leasehold land
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
3,002
213
31,125
2,916
3,002
216
31,689
3,074
2,530
–
12,842
–
2,530
–
13,183
–
37,256
37,981
15,372
15,713
(d) An impairment loss of RM212,000 (2010: Nil) was recognised in the financial statements of the Group during the financial year due to the
management is in view that the recoverable amount is lower than its carrying amount. The recoverable amount is based on indicative market
value carried out by an independent professional valuer on an open market basis.
(e) During the financial year, the Group reassessed its long term leases of land in accordance with the Amendment to FRS 117 to the finance
leases. The classification of prepaid lease payments for land as property, plant and equipment has been accounted for retrospectively.
8.
INVESTMENT PROPERTIES
Group
Fair value
Freehold land, shoplots and clubhouse
Long term leasehold land and shoplots
Group
Fair value
Freehold land, shoplots and clubhouse
Long term leasehold land and shoplots
Additions
RM’000
Fair value
adjustment
RM’000
Balance
as at
30.6.2011
RM’000
6,377
5,750
–
–
208
418
6,585
6,168
12,127
–
626
12,753
Balance
as at
1.7.2010
RM’000
Additions
RM’000
Fair value
adjustment
RM’000
Balance
as at
30.6.2010
RM’000
6,377
5,750
–
–
–
–
6,377
5,750
12,127
–
–
12,127
Balance
as at
1.7.2009
RM’000
The fair value of the investment properties of the Group was recommended by the Directors as at end of reporting period based on an indicative
market value carried out by an independent professional valuer on an open market value basis.
Rental income of the Group derived from the investment properties amounted to RM495,000 (2010: RM389,000).
103
8.
INVESTMENT PROPERTIES (cont’d)
Direct operating expenses arising from investment properties generating rental income during the financial year are as follows:
Group
Repairs and maintenance
Quit rent and assessment
9.
2011
RM’000
2010
RM’000
6
35
7
34
INTANGIBLE ASSETS
Group
Amortisation
charge for
the year
RM’000
Balance
as at
1.7.2010
RM’000
Acquisition
of
subsidiaries
RM’000
Additions
RM’000
4,871
5
33,720
30,912
–
7
–
(646)
4,876
64,632
7
(646)
Translation
adjustment
RM’000
Balance
as at
30.6.2011
RM’000
(232)
–
–
211
38,359
30,489
(232)
211
68,848
Written
off during
the year
RM’000
Carrying amount
Goodwill
Trademarks
Cost
RM’000
Goodwill
Trademarks
Group
At 30.6.2011
impairment
amortisation
RM’000
RM’000
Carrying
amount
RM’000
44,100
35,510
–
(5,021)
(5,741)
–
38,359
30,489
79,610
(5,021)
(5,741)
68,848
Amortisation
charge for
the year
RM’000
Balance
as at
30.6.2010
RM’000
Balance
as at
1.7.2009
RM’000
Additions
RM’000
4,871
7
–
1
–
(3)
4,871
5
4,878
1
(3)
4,876
Carrying amount
Goodwill
Trademarks
104
9.
INTANGIBLE ASSETS (cont’d)
Cost
RM’000
Goodwill
Trademarks
At 30.6.2010
impairment
amortisation
RM’000
RM’000
Carrying
amount
RM’000
10,612
1,021
–
(1,016)
(5,741)
–
4,871
5
11,633
(1,016)
(5,741)
4,876
(a) Goodwill
Goodwill is tested for impairment on an annual basis by comparing the carrying amount with the recoverable amount. As the Directors are of
the opinion that all the cash generating units (“CGU”) are held on a long-term basis, the value-in-use would best reflect its recoverable amount.
The value-in-use is determined by discounting future cash flows over a three-year period. The future cash flows are based on management’s
business plan, which is the best estimate of future performance. The ability to achieve the business plan targets is a key assumption in
determining the recoverable amount for each CGU.
There remains a risk that the ability to achieve management’s business plan will be adversely affected due to unforeseen changes in the
respective economies in which the CGUs operate and/or global economic conditions. Hence, in computing the value-in-use for each CGU,
the management has applied a discount rate of 12.73% per annum and growth rates of 5% to 10% per annum depending on the products,
markets and business plan of the subsidiaries.
The following describes each key assumption on which the management has based its cash flow projections for the purposes of the impairment
test for goodwill:
(i)
The discount rate was estimated based on the Group’s weighted average cost of capital.
(ii)
Growth rate used has been based on historical trend of each segment taking into account industry outlook for that segment.
(iii) The profit margin applied to the projections are based on the historical profit margin trend for the individual CGU.
With regard to the assessment of value-in-use of the goodwill, the management believes that no reasonably possible change in any of the
above key assumption would cause the carrying values of the CGU to materially exceed their recoverable amounts.
Goodwill of RM232,000 relating to the acquisitions of two (2) subsidiaries have been written off during the financial year due to declining
business operations of these subsidiaries.
(b) Trademarks
Trademarks of RM30,912,000 relating to the acquisition of subsidiaries during the year represent the rights of using “Braun Buffel” trademark
in various countries.
The Management has prepared a 25-year cash flow forecast and projections to support the carrying amounts of trademark. The said cash-flow
forecast and projections is based on 25 years projected royalty income from year 2010 to year 2034 due to the Group owns the rights for use
of the “Braun Buffel” trademark until 30 June 2034. Trademark of “Braun Buffel” is also amortised over 25 years until 30 June 2034.
The following describes each key assumption on which the management has based on its cash flows projections for the purpose of impairment
test for “Braun Buffel” trademark.
(i)
The discount rate was estimated based on the Group’s weighted average cost of capital.
(ii)
Growth rate used has been based on historical trend of royalty income received.
105
9.
INTANGIBLE ASSETS (cont’d)
(b) Trademarks (cont’d)
As at 30 June 2011, the management assessed that the recoverable amounts of trademark, based on value in use calculations, exceeded their
carrying amounts and thus, no impairment is required.
Other trademarks represent the registration cost of Bonia, Sembonia and Carlo Rino brands.
10. INVESTMENTS IN SUBSIDIARIES
Company
2011
2010
RM’000
RM’000
Unquoted shares - at cost
Less: Impairment losses
144,394
(524)
89,446
(7,915)
143,870
81,531
An impairment loss on investments in subsidiaries amounting RM524,000 (2010: RM1,715,000) have been recognised during the financial year due
to declining business operations and the net tangible assets of these subsidiaries were lower than the cost of investments.
The impairment losses is net of investment written off of RM7,415,000 (2010: Nil) during the financial year.
The details of the subsidiaries are as follows:
Name of company
Interest in equity
held
Country of
2011
2010
incorporation
%
%
Principal activities
Subsidiaries of Bonia Corporation Berhad
CB Marketing Sdn. Bhd.
Malaysia
100
100
leather goods
CB Holdings (Malaysia) Sdn. Bhd.
Malaysia
100
100
Property investment and management services
Ataly Industries Sdn. Bhd.
Malaysia
100
100
Property investment
Luxury Parade Sdn. Bhd.
Malaysia
100
100
Property investment
Eclat World Sdn. Bhd.
Malaysia
100
100
men’s footwear
CB Franchising Sdn. Bhd.
Malaysia
100
100
BCB Properties Sdn. Bhd.
Malaysia
100
100
Property development
Long Bow Manufacturing Sdn. Bhd.
Malaysia
100
100
Manufacturing and marketing of leather goods
106
10. INVESTMENTS IN SUBSIDIARIES (cont’d)
Name of company
Interest in equity
held
Country of
2011
2010
incorporation
%
%
Subsidiaries of Bonia Corporation Berhad (cont’d)
De Marts Marketing Sdn. Bhd.
Malaysia
100
100
ladies’ footwear
Mcore Sdn. Bhd.
Malaysia
60
60
Marketing and distribution of fashionable leather goods
Future Classic Sdn. Bhd.
Malaysia
100
100
leather goods
Daily Frontier Sdn. Bhd.
Malaysia
100
100
Marketing, distribution and export of fashionable goods
and accessories
Armani Context Sdn. Bhd.
Malaysia
100
100
Interior design, advertising and promotion
Banyan Sutera Sdn. Bhd.
Malaysia
100
100
* Active World Pte. Ltd.
Singapore
100
100
Wholesaling and retailing of fashionable leather goods
and apparels
*# Kin Sheng Group Limited
Hong Kong
100
100
Investment holding
Dominion Directions Sdn. Bhd.
Malaysia
100
100
Marketing and distribution of men’s apparel and
accessories
SBFW Marketing Sdn. Bhd.
Malaysia
100
100
ladies’ footwear
SBL Marketing Sdn. Bhd.
Malaysia
100
100
leather goods
CRG Incorporated Sdn. Bhd.
Malaysia
100
100
Investment holdings
SB Boutique Sdn. Bhd.
Malaysia
100
100
New Series Sdn. Bhd.
Malaysia
–
100
Mcolours & Design Sdn. Bhd.
Malaysia
100
100
Product design, research and development
Scarpa Marketing Sdn. Bhd.
Malaysia
100
100
footwear
Alpha Footwear Sdn. Bhd.
Malaysia
100
100
Marketing, retailing and distribution of men’s and ladies’
footwear
Singapore
70
–
* Jeco (Pte) Limited
Intellectual property management
107
Interest in equity
held
Country of
2011
2010
incorporation
%
%
Name of company
Subsidiaries of Dominion Directions Sdn. Bhd.
VR Directions Sdn. Bhd.
Malaysia
75
75
Marketing and distribution of men’s apparel and
accessories, and ladies’ apparel
SB Directions Sdn. Bhd.
Malaysia
100
100
Marketing and distribution of fashionable accessories
Galaxy Hallmark Sdn. Bhd.
Malaysia
100
100
Marketing and distribution of men’s apparels and
accessories
New Series Sdn. Bhd.
Malaysia
75
–
CR Boutique Sdn. Bhd.
Malaysia
100
100
CRF Marketing Sdn. Bhd.
Malaysia
100
100
ladies’ footwear
CRL Marketing Sdn. Bhd.
Malaysia
100
100
leather goods
Apex Marble Sdn. Bhd.
Malaysia
–
60
Malaysia
60
–
* Jetbest Enterprise Pte. Ltd.
Singapore
100
100
Wholesaling, retailing, importing and exporting of leather
* SCRL Pte. Ltd.
Singapore
100
100
footwear, carrywear and accessories
* SBLS Pte. Ltd.
Singapore
100
100
footwear, carrywear and accessories
* Active Franchise Pte. Ltd.
Singapore
100
100
General wholesale trade including general importers and
exporters
Subsidiaries of CRG Incorporated Sdn. Bhd.
Subsidiary of BCB Properties Sdn. Bhd.
Apex Marble Sdn. Bhd.
Subsidiaries of Active World Pte. Ltd.
108
Name of company
Interest in equity
held
Country of
2011
2010
incorporation
%
%
Subsidiaries of Active World Pte. Ltd. (cont’d)
* Active Footwear Pte. Ltd.
Singapore
100
–
Marketing, retailing and distribution of fashionable
footwear
** PT Active World
Indonesia
100
–
Investment holding
^ Bonia (Shanghai) Commerce Limited
China
100
100
Retailing, marketing, promoting, designing, importing
and exporting of leather goods, apparels and
accessories
* Guangzhou Jia Li Bao Leather Fashion Co. Ltd.
China
100
100
Wholesaling, retailing, importing and exporting of leather
* Guangzhou Bonia Fashions China Co. Ltd.
China
100
100
Manufacturing, marketing, retailing of fashionable leather
goods, apparels and accessories
Hong Kong
100
100
General trading and marketing of fashionable goods
Singapore
100
–
Retailing, importing and exporting leather goods and
general merchandise
Malaysia
100
–
Trading in leather goods and footwear
Subsidiaries of Kin Sheng Group Limited
*# Kin Sheng International Trading Co. Limited
Subsidiary of Jeco (Pte) Limited
* Lianbee-Jeco Pte. Ltd.
Subsidiary of Lianbee-Jeco Pte. Ltd.
* Lianbee-Jeco (M) Sdn. Bhd.
*
#
^
**
Subsidiaries not audited by BDO.
Subsidiaries audited by BDO Member Firms.
No auditors’ report on the financial statement of this subsidiary due to the subsidiary was dormant during the financial year and had completed
the application for voluntary deregistration procedures on 3 September 2011.
No auditors’ report on the financial statements of this subsidiary was issued as it was newly incorporated during the financial year.
109
During the financial year:
(i)
a wholly owned subsidiary of the Company, CRG Incorporated Sdn. Bhd. had disposed off 300,000 ordinary shares of RM1.00 each representing
60% equity interest in Apex Marble Sdn. Bhd. to another wholly owned subsidiary of the Company, BCB Properties Sdn. Bhd. for a cash
consideration of RM2,500. The disposal does not have any impact to the Group’s financial statements.
(ii)
the Company had disposed off 125,000 ordinary shares of RM1.00 each representing 25% equity interest in New Series Sdn. Bhd. (“NSSB”),
a wholly owned subsidiary of the Company, to an existing shareholder and a director of VR Directions Sdn. Bhd.(“VRDSB”) and Dominion
Directions Sdn. Bhd. (“DDSB”), for a total cash consideration of RM125,000. The remaining 75% equity interest in NSSB has been transferred
to DDSB. The consideration for the transfer is at par value of the shares amounted RM375,000. The cost of investment of RM500,000 in
NSSB had been fully impaired in previous years. The gain arising from the said disposal to the Group and the Company are RM36,000 and
RM500,000 respectively.
(iii) the Company had acquired 350,000 ordinary shares of SGD1.00 each, representing 70% equity interest in Jeco (Pte) Limited, for a total cash
consideration of SGD28,000,000 (approximately RM62,363,000). As a result of the acquisition, the Company had indirectly owned 70% equity
interest in Lianbee-Jeco Pte. Ltd. and Lianbee-Jeco (M) Sdn. Bhd. respectively.
(iv) Active World Pte. Ltd., a wholly owned subsidiary of the Company had incorporated a wholly owned subsidiary, Active Footwear Pte. Ltd. in
Singapore, with an authorised share capital of SGD1 comprising 1 ordinary share of SGD1.00 each, of which 1 share has been issued and fully
paid up.
(v) Active World Pte. Ltd., a wholly owned subsidiary of the Company had incorporated a wholly owned subsidiary, PT Active World in Indonesia,
with an authorised share capital of Rp13,660,800,000 comprising 1,600 ordinary shares of Rp8,538,000 each, of which 560 shares have been
issued and fully paid up.
(vi) the Company further subscribed 499,998 newly issued shares of RM1.00 each at par in Alpha Footwear Sdn. Bhd..
In the previous financial year:
(i)
Mcore Sdn. Bhd. (“Mcore”), a 60% owned subsidiary of the Company, had acquired 50,000 ordinary shares of RM1.00 each representing 10%
equity interest in Apex Mable Sdn. Bhd. (“AMSB”) from a minority shareholder, for a total cash consideration of RM1. Subsequent to this
acquisition, AMSB became a wholly owned subsidiary of Mcore.
(ii)
the Company had disposed off its entire equity interest in Pasti Anggun Sdn. Bhd. for a total cash consideration of RM100,000. The gain arising
from the said disposal to the Group and the Company are RM10,000 and RM100,000 respectively.
(iii) Active World Pte. Ltd., a wholly owned subsidiary of the Company, had incorporated a wholly owned subsidiary, Active Franchise Pte. Ltd. in
Singapore, with an authorised share capital of SGD1 comprising 1 ordinary share of SGD1.00 each, of which 1 share has been issued and fully
paid up.
(iv) DDSB, a wholly owned subsidiary of the Company, had acquired 50,000 ordinary shares of RM1.00 each representing 5% equity interest in
VRDSB from a minority shareholder, for a total cash consideration of RM370,367. Subsequent to the acquisition, DDSB is now holding 75%
equity interest in VRDSB.
(v) the Company had incorporated a wholly owned subsidiary, Alpha Footwear Sdn. Bhd. in Malaysia, with an authorised share capital of
RM100,000 comprising 100,000 ordinary shares of RM1.00 each, of which 2 shares have been issued and fully paid up. The incorporation of
the subsidiary does not have any material impact to the Group’s financial statements.
(vi) the Company further subscribed 500,000 newly issued shares of RM1.00 each at par in CR Boutique Sdn. Bhd. (“CRBSB”).
(vii) the Company had incorporated a wholly owned subsidiary, CRG Incorporated Sdn. Bhd. (“CRG”) in Malaysia, with an authorised share capital
of RM100,000 comprising 100,000 ordinary shares of RM1.00 each, of which 2 shares have been issued and fully paid up. The incorporation
of the subsidiary does not have any material impact to the Group’s financial statements.
110
In the previous financial year: (cont’d)
(viii) As a result of internal group reorganisation:
(a) CRG had acquired 300,000 ordinary shares of RM1.00 each representing 60% equity interest in AMSB from Mcore, for a total cash
consideration of RM2,525. The remaining 200,000 ordinary shares of RM1.00 each representing 40% equity interest in AMSB was disposed
off to an existing director of Mcore, for a total cash consideration of RM1,648. Subsequent to this disposal, the Group’s equity interest in
AMSB was diluted from 100% to 60%.
(b) CRG had acquired 500,000 ordinary shares of RM1.00 each representing 100% equity interest in CRL Marketing Sdn. Bhd. (“CRLMSB”)
from the Company, for a total consideration of RM10,337,488 by way of issuance of 10,337,488 new ordinary shares of RM1.00 each at
RM1.00 per share of CRG.
(c) CRG had acquired 500,000 ordinary shares of RM1.00 each representing 100% equity interest in CRF Marketing Sdn. Bhd. (“CRFMSB”)
from the Company, for a total consideration of RM4,995,385 by way of issuance of 4,995,385 new ordinary shares of RM1.00 each at
RM1.00 per share of CRG.
(d) CRG had acquired 1,000,000 ordinary shares of RM1.00 each representing 100% equity interest in CRBSB from the Company, for a total
consideration of RM4,402,598 by way of issuance of 4,402,598 new ordinary shares of RM1.00 each at RM1.00 per share of CRG.
The total gains arising from the above disposals for (b) to (d) to the Company is RM17,735,000.
(ix) the Company further subscribed 500,000 newly issued shares of RM1.00 each at par in SB Boutique Sdn. Bhd..
(x) the Company further subscribed 264,527 newly issued shares of RM1.00 each at par in CRG.
11. INVESTMENTS IN ASSOCIATES
Group
Unquoted equity shares, at cost
Share of post acquisition reserves, net of dividends received
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
556
(130)
115
(3)
–
–
–
–
426
112
–
–
The details of the associates are as follows:
Name of Company
Makabumi Sdn. Bhd.
Guangzhou Yong Yi Leather Fashions Co. Ltd.
Interest in equity
held by the Group
2011
2010
Country of
%
%
incorporation
Malaysia
40
40
Dormant
China
40
40
Marketing and distribution of fashionable leather goods
111
11. INVESTMENTS IN ASSOCIATES (cont’d)
In the previous financial year:
(i)
the Company had disposed off its entire equity interest in BBA International Co. Ltd. (“BBA”) to the existing shareholders and directors of BBA,
for a total cash consideration of THB1,236,139 (equivalent to RM126,162). The gain and loss arising from the said disposal to the Group and
the Company are RM53,000 and RM110,000 respectively.
(ii)
Guangzhou Jia Li Bao Leather Fashion Co. Ltd. (‘JLB’), a wholly owned subsidiary of the Company, has entered into an agreement with a third
party, for a tenure of five (5) years with an option to renew for another five (5) years to expand its business in The People’s Republic of China.
The said agreement has been carried out through a formation of an associate in The People’s Republic of China, Guangzhou Yong Yi Leather
Fashion Co. Ltd. (‘Guangzhou Yong Yi’).
According to the agreement, JLB is required to contribute RMB1,200,000 representing 40% of the registered share capital of Guangzhou Yong
Yi. JLB has contributed RMB240,000 (approximately RM115,000) during the financial year ended 30 June 2010. The balance of RMB960,000
(approximately RM441,000) was contributed during the financial year ended 30 June 2011.
The summarised financial information of the associates are as follows:
2011
RM’000
2010
RM’000
928
201
278
5
1,129
283
Current liabilities
248
204
Total liabilities
248
204
Assets and liabilities
Current assets
Non-current assets
Total assets
Liabilities
Results
1,168
(318)
Revenue
Loss for the year
112
–
(8)
12. OTHER INVESTMENTS
Group
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
950
–
–
575
–
–
–
–
Subordinated bonds
–
3,000
–
3,000
Less: Impairment loss
–
(3,000)
–
(3,000)
At cost
Unquoted
Non-current assets
Available-for-sale financial assets - Club memberships
Other investments - Club memberships
Current assets
–
–
–
–
950
575
–
–
(a) The other investments have been classified into available-for-sale financial assets upon adoption of FRS 139 on 1 July 2010.
Addition of club memberships during the financial year amounted to RM350,000.
(b) The comparative figures have not been presented based on the new categorisation of financial assets resulting from the adoption of FRS 139
by virtue of the exemption given in FRS 7.44AA.
(c) The investments in unquoted subordinate bonds is in relation to the unsecured term loan amounting to RM30,000,000 previously obtained
from a financial institution where a condition is imposed on the Company to subscribe for the subordinated bonds issued pursuant to the
Primary Collateralised Loan Obligations Transactions and shall be limited to 10% of the principal term loan amount. The subordinated bonds
are unquoted and are held until the maturity of the term loan on 3 June 2009. In 2009, the said term loan was fully settled and an impairment
loss on unquoted subordinated bonds of RM3,000,000 had been recognised due to the default by obligors in the Primary Collateralised Loan
Obligations Transactions. The said subordinated bonds were written off during the financial year.
13. DEFERRED TAX
(a) The deferred tax assets and liabilities are made up of the following:
Group
2011
RM’000
Balance as at 1 July 2010/2009
Recognised in profit or loss (Note 29)
(564)
6,748
492
Balance as at 30 June 2011/2010
6,676
2010
RM’000
(1,126)
–
562
(564)
Company
2011
2010
RM’000
RM’000
57
–
(21)
24
–
33
36
57
113
13. DEFERRED TAX (cont’d)
(a) The deferred tax assets and liabilities are made up of the following: (cont’d)
Presented after appropriate offsetting as follows:
Group
2011
RM’000
Deferred tax assets, net
Deferred tax liabilities, net
2010
RM’000
Company
2011
2010
RM’000
RM’000
(735)
7,411
(808)
244
–
36
–
57
6,676
(564)
36
57
(b) The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows:
Deferred tax liabilities of the Group
At 1 July 2010
Recognised in profit or loss
At 30 June 2011
Property,
plant and
equipment
RM’000
Other
temporary
differences
RM’000
306
769
396
–
5,979
–
(62)
–
23
244
6,748
419
1,471
5,979
(39)
7,411
Offsetting
RM’000
Total
RM’000
At 1 July 2009
362
(56)
–
–
(127)
65
235
9
At 30 June 2010
306
–
(62)
244
Deferred tax assets of the Group
Unused tax
losses and
unabsorbed
capital
allowances
RM’000
114
Other
deductible
temporary
differences
RM’000
Offsetting
RM’000
Total
RM’000
At 1 July 2010
353
(103)
517
7
(62)
23
808
(73)
At 30 June 2011
250
524
(39)
735
At 1 July 2009
233
120
1,255
(738)
(127)
65
1,361
(553)
At 30 June 2010
353
517
(62)
808
13. DEFERRED TAX (cont’d)
(b) The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows: (cont’d)
Deferred tax liabilities of the Company
Property,
plant and
equipment
RM’000
Offsetting
RM’000
Total
RM’000
At 1 July 2010
59
(22)
(2)
1
57
(21)
At 30 June 2011
37
(1)
36
At 1 July 2009
24
35
–
(2)
24
33
At 30 June 2010
59
(2)
57
Deferred tax assets of the Company
Unabsorbed
capital
allowances
RM’000
Offsetting
RM’000
Total
RM’000
At 1 July 2010
2
(1)
(2)
1
–
–
At 30 June 2011
1
(1)
–
At 1 July 2009
–
2
–
(2)
–
–
At 30 June 2010
2
(2)
–
(c) The amount of temporary differences for which no deferred tax assets have been recognised in the statements of financial position are as
follows:
Group
Unused tax losses
Unabsorbed capital allowances
Other deductible temporary differences
2011
RM’000
2010
RM’000
8,324
1,112
778
5,040
849
959
10,214
6,848
Deferred tax assets of certain subsidiaries have not been recognised in respect of these items as it is not probable that taxable profit of the
subsidiaries will be available against which the deductible temporary differences can be utilised.
115
14. INVENTORIES
Group
2011
RM’000
2010
RM’000
5,349
693
75,291
131
4,412
954
52,350
153
81,464
57,869
At cost
Raw materials
Work-in-progress
Finished goods
Consumables
The inventories of the Group is net of inventories written off of RM2,362,000 (2010: RM75,000).
15. TRADE AND OTHER RECEIVABLES
Group
2011
RM’000
2010
RM’000
Company
2011
2010
RM’000
RM’000
Trade receivables
Third parties
60,579
(3,238)
38,789
(108)
–
–
–
–
57,341
38,681
–
–
–
195
5,239
10,034
7,852
–
194
4,744
8,448
6,622
35,326
195
3,678
9
–
31,946
194
3,678
10
–
23,320
20,008
39,208
35,828
Other receivables, deposits and prepayments
Amounts owing by subsidiaries
Amount owing by an associate
Other receivables
Deposits
Prepayments
- subsidiaries
- associate
- other receivables
–
(195)
(3,786)
–
(194)
(3,786)
(10,642)
(195)
(3,678)
(7,394)
(194)
(3,678)
19,339
16,028
24,693
24,562
76,680
54,709
24,693
24,562
(a) Trade receivables are non-interest bearing and the normal trade credit terms granted by the Group and by the Company range from 30 to 120
days. They are recognised at their original invoice amounts which represent their fair values on initial recognition.
(b) The impairment losses for trade receivables of the Group is net of bad debts written off of RM89,000 (2010: RM217,000).
(c) Amounts owing by subsidiaries are unsecured, interest-free and payable on demand in cash and cash equivalents.
116
15. TRADE AND OTHER RECEIVABLES (cont’d)
(d) Amount owing by an associate is unsecured, interest-free and payable on demand in cash and cash equivalents.
(e) Information on the financial risk of trade and other receivables is disclosed in Note 37 to the financial statements.
(f)
The currency exposure profile of trade and other receivables are as follows:
Group
Ringgit Malaysia
Brunei Dollar
Chinese Renminbi
Euro
Hong Kong Dollar
Singapore Dollar
U.S. Dollar
Japanese Yen
2011
RM’000
2010
RM’000
2011
RM’000
Company
2010
RM’000
48,401
57
1,257
369
3,666
21,990
910
30
40,221
48
889
496
417
9,908
2,692
38
21,596
–
–
–
–
3,097
–
–
20,747
–
–
–
3,815
–
–
–
76,680
54,709
24,693
24,562
(g) The ageing analysis of trade receivable of the Group are as follows:
Group
2011
RM’000
2010
RM’000
53,416
38,195
Past due, not impaired
121 to 150 days
151 to 180 days
181 to 210 days
More than 211 days
1,535
1,065
573
752
19
12
33
422
Past due and impaired
3,925
3,238
486
108
60,579
38,789
Neither past due nor impaired
Receivables that are neither past due nor impaired
Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group.
None of the trade receivables of the Group that are neither past due nor impaired have been renegotiated during the financial year.
Receivables that are past due but not impaired
Trade receivables that are past due but not impaired mainly arose from customers where the Group has healthy business relationship with,
whereby the management is of the opinion that the amount are recoverable based on past payments history.
The trade receivables of the Group that are past due but not impaired are unsecured in nature.
117
15. TRADE AND OTHER RECEIVABLES (cont’d)
(g) The ageing analysis of trade receivable of the Group are as follows: (cont’d)
Receivables that are past due and impaired
Trade receivables of the Group that are past due and impaired at the end of the reporting period are as follows:
Individually impaired
2011
2010
RM’000
RM’000
3,238
(3,238)
Trade receivables, gross
Less: Impairment loss
108
(108)
–
–
The reconciliation of movement in the impairment loss are as follows:
Group
2011
RM’000
2010
RM’000
At 1 July 2010/2009
Reclassification
Charge for the financial year (Note 28)
Write off
108
–
3,219
(89)
211
25
89
(217)
At 30 June 2011/2010
3,238
108
Trade receivables that are individually determined to be impaired at the end of the reporting period relate to those debtors that exhibit
significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.
16. CASH AND CASH EQUIVALENTS
Group
Cash in hand and at banks
Fixed deposits with licensed banks
Short term placements with licensed banks
Placements with licensed banks
118
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
35,955
7,778
8,400
3,904
24,966
7,709
5,200
32,142
41
–
450
–
96
–
–
10,148
56,037
70,017
491
10,244
16. CASH AND CASH EQUIVALENTS (cont’d)
(a) Included in the fixed deposits with licensed banks of the Group is an amount of RM1,991,000 (2010: RM1,190,000) pledged to licensed banks
as securities for banking facilities granted to certain subsidiaries.
(b) Placements with licensed banks represent monies deposit into the fixed income fund, which are not restricted to fixed maturity date.
(c) Information on financial risks of cash and cash equivalents is disclosed in Note 37 to the financial statements.
(d) The currency exposure profile of cash and cash equivalents are as follows:
Group
Ringgit Malaysia
Chinese Renminbi
Hong Kong Dollar
Singapore Dollar
U.S. Dollar
Others
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
31,135
964
1,843
21,673
284
138
52,330
1,126
1,381
14,751
300
129
491
–
–
–
–
–
10,244
–
–
–
–
–
56,037
70,017
491
10,244
(e) For the purpose of statements of cash flows, cash and cash equivalents comprise the following as at the end of reporting period:
Group
2011
RM’000
Cash and bank balances
Fixed deposits with licensed banks
Short term placements with licensed banks
Less: Bank overdrafts included in bank borrowings (Note 19)
Less: Fixed deposits pledged to licensed banks
2010
RM’000
2011
RM’000
Company
2010
RM’000
35,955
7,778
8,400
3,904
(2,115)
24,966
7,709
5,200
32,142
(1,622)
41
–
450
–
(176)
96
–
–
10,148
(17)
53,922
68,395
315
10,227
–
–
315
10,227
(1,991)
51,931
(1,190)
67,205
119
17. SHARE CAPITAL
Group and Company
2011
2010
RM’000
Number
of shares
’000
RM’000
500,000
250,000
500,000
250,000
201,571
100,786
201,571
100,786
Number
of shares
’000
Ordinary shares of RM0.50 each:
Authorised
Issued and fully paid
Balance as at beginning and end of financial year
The holders of the ordinary shares are entitled to receive dividends as and when declared by the Company and are entitled to one vote per share
at meetings of the Company. All ordinary shares rank pari passu with regard to the Company’s residual assets.
18. RESERVES
Group
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
476
3,345
476
1,389
476
–
476
–
3,821
1,865
476
476
127,455
101,153
31,245
26,564
131,276
103,018
31,721
27,040
Non-distributable
Share premium
Exchange translation reserve
Distributable
Retained earnings
(a) Exchange translation reserve
The exchange translation reserve is used to record foreign currency exchange differences arising from the translation of the financial statements
of foreign operations whose functional currencies are different from that of the Group’s presentation currency. It is also used to record the
exchange differences arising from monetary items which form part of the Group’s net investment in foreign operations, where the monetary
item is denominated in either the functional currency of the reporting entity or the foreign operation.
120
18. RESERVES (cont’d)
(b) Retained earnings
Effective 1 January 2008, the Company is given the option to make an irrevocable election to move to a single tier system or continue to use
its tax credit under Section 108 of the Income Tax Act 1967 for the purpose of dividend distribution until the tax credit is fully utilised or latest
by 31 December 2013.
The Company has decided not to make this election and has sufficient tax credit under Section 108 of the Income Tax Act, 1967 and balance
in the tax exempt account to frank the payment of dividends amounting to RM15,253,000 (2010: RM23,374,000) out of its retained profits
as at 30 June 2011 without incurring additional tax liabilities. Retained earnings not covered by tax credit amounted to RM15,992,000
(2010: RM3,190,000). The Company has tax exempt accounts amounting to approximately RM11,132,000 (2010: RM6,403,000) available
for distribution of tax exempt dividends. Certain subsidiaries have tax exempt accounts amounting to approximately RM4,202,000 (2010:
RM3,932,000) available for distribution of tax exempt dividends out of their respective retained profits.
19. BORROWINGS
Group
Company
2011
2010
RM’000
RM’000
Note
2011
RM’000
2010
RM’000
20
21
575
1,120
781
2,861
172
400
606
953
–
–
142
1,667
–
–
158
–
5,337
2,131
1,809
158
1,540
11,401
39
1,450
6,818
–
176
–
–
17
–
–
12,980
8,268
176
17
18,317
10,399
1,985
175
1,312
31,614
831
18,105
98
18,333
240
4,000
32,926
18,936
18,431
4,240
Current liabilities
Secured
Bank overdrafts
Bankers’ acceptances
Hire-purchase and lease creditors
Term loans
Unsecured
Bank overdrafts
Trust receipts
Total
Secured
Term loans
Total
20
21
121
19. BORROWINGS (cont’d)
Group
Note
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
2,115
12,521
2,093
34,475
39
1,622
7,218
1,437
19,058
–
176
–
240
20,000
–
17
–
398
4,000
–
51,243
29,335
20,416
4,415
Total borrowings
Bank overdrafts
Term loans
Trust receipts
16
20
21
(a) Certain bank overdrafts and bankers’ acceptances of the Group and of the Company are secured by first fixed charges over certain freehold
and long term leasehold land and buildings of the Company and its subsidiaries as disclosed in Note 7 to the financial statements.
(b) The currency exposure profile of borrowings are as follows:
Group
Ringgit Malaysia
Singapore Dollar
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
49,241
2,002
27,215
2,120
20,416
–
4,415
–
51,243
29,335
20,416
4,415
(c) Information on financial risks of borrowings is disclosed in Note 37 to the financial statements.
20. HIRE-PURCHASE AND LEASE CREDITORS
Group
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
Minimum hire-purchase and lease payments:
- not later than one year
- later than one year and not later than five years
882
1,422
672
880
149
99
171
248
Less: Future interest charges
2,304
(211)
1,552
(115)
248
(8)
419
(21)
Present value of hire-purchase and lease payments
2,093
1,437
240
398
122
20. HIRE-PURCHASE AND LEASE CREDITORS (cont’d)
Group
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
781
606
142
158
1,312
831
98
240
2,093
1,437
240
398
Repayable as follows:
Current liabilities
- not later than one year
- later than one year and not later than five years
21. TERM LOANS
Group
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
Term loan I is repayable as follows:
- 12 equal monthly instalments of RM48,652 each commencing January 2006
3,466
3,873
–
–
Term loan II is repayable by 300 equal monthly instalments of SGD3,286 (RM7,885)
each commencing January 2006
1,535
1,497
–
–
Term loan III is repayable by 180 equal monthly instalments of RM26,307 each
commencing October 2009
3,223
3,188
–
–
Term loan IV is repayable as follows:
- 24 equal monthly instalments of RM70,000 each commencing November 2010
6,251
6,500
–
–
Term loan V is repayable by 95 equal monthly instalments of RM208,334 each and a
final instalment of RM208,270 commencing November 2011
20,000
4,000
20,000
4,000
34,475
19,058
20,000
4,000
Secured
123
21. TERM LOANS (cont’d)
Group
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
2,861
953
1,667
–
16,342
15,272
7,273
10,832
10,000
8,333
1,875
2,125
31,614
18,105
18,333
4,000
34,475
19,058
20,000
4,000
Repayable as follows:
Current liabilities
- within one year
- more than one year and less than five years
- more than five years
Term loans I, II, III and IV are secured by means of legal charge over freehold land, leasehold land and buildings of subsidiaries (Note 7) and
guaranteed by the Company.
Term loan V is secured by means of legal charge over the freehold land and buildings of the Company.
There are no fixed repricing periods for these loans.
22. TRADE AND OTHER PAYABLES
Group
Non-current:
Other payable
Current:
Trade payables
Third parties
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
6,151
–
6,151
–
16,262
10,774
–
–
–
8,387
1,177
27,312
–
3,772
1,011
11,122
23,299
1,807
–
4,659
37
38
–
3,614
36,876
15,905
29,765
3,689
Other payables, deposits and accruals
Amounts owing to subsidiaries
Other payables
Deposits
Accruals
53,138
124
26,679
29,765
3,689
22. TRADE AND OTHER PAYABLES (cont’d)
(a) Non-current other payable of the Group and the Company represents deferred consideration for the acquisition of a subsidiary, Jeco (Pte)
Limited during the financial year (Note 33). The amount is unsecured and interest-free. This amount is initially recognised at fair value based
on method and assumptions disclosed in Note 36(d)(iv) to the financial statements.
(b) Trade payables are non-interest bearing and the normal credit terms granted to the Group range from 30 to 90 days.
(c) Amount owing to subsidiaries are unsecured, interest-free and payable on demand in cash and cash equivalents.
(d) Information on the financial risks of trade and other payables is disclosed in Note 37 to the financial statements.
(e) The currency exposure profile of trade and other payables are as follows:
Group
Ringgit Malaysia
Chinese Renminbi
Hong Kong Dollar
Singapore Dollar
U.S. Dollar
Others
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
26,347
4,423
1,114
27,075
293
37
17,841
638
691
7,317
192
–
27,898
–
–
8,018
–
–
3,689
–
–
–
–
–
59,289
26,679
35,916
3,689
23. COMMITMENTS
(a) Operating lease commitments
The Group had entered into non-cancellable lease arrangements for boutiques, offices and staff housing, resulting in future rental commitments.
The Group has aggregate future minimum lease commitments as at the end of the reporting period as follows:
Group
Not later than one (1) year
Later than one (1) year and not later than five (5) years
2011
RM’000
2010
RM’000
19,421
16,473
11,375
10,923
35,894
22,298
Certain lease rentals are subject to contingent rental which are determined based on a percentage of sales generated from boutiques.
125
23. COMMITMENTS (cont’d)
(b) Capital commitments
Group
2011
2010
RM’000
RM’000
Approved and contracted for:
Investment in an associate (Note 11)
Property, plant and equipment:
- leasehold land
- building on freehold land
- properties under construction
- others
–
458
642
2,847
8,870
–
–
–
1,153
1,849
12,359
3,460
24. CONTINGENT LIABILITIES
Company - Unsecured
As at 30 June 2011, the Company has given corporate guarantees amounting to RM119,480,000 (2010: RM119,620,000) to financial institutions
for banking facilities granted to and utilised by certain subsidiaries.
The amount of banking facilities utilised by the subsidiaries as at the financial year end:
- secured borrowings
- unsecured borrowings
2011
RM’000
2010
RM’000
17,643
15,106
16,591
9,549
32,749
26,140
The Directors are of the view that the chances of the financial institutions to call upon the corporate guarantees are remote. Accordingly, the
Directors are of the view that the fair values of the above corporate guarantees for banking facilities of subsidiaries are negligible.
126
25. REVENUE
Group
Sale of goods
Rental income
Royalties income
Dividend income from unquoted investments in subsidiaries (gross)
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
457,253
495
3,633
–
359,710
389
–
–
–
1,951
–
37,216
–
1,907
–
21,725
461,381
360,099
39,167
23,632
26. COST OF SALES
Group
Inventories sold
2011
RM’000
2010
RM’000
194,232
154,639
27. FINANCE COSTS
Group
Accretion of non current other payable
Bank charges
Credit card charges
Genting World Card charges
Interest expense on:
- bank guarantee
- bank overdrafts
- bankers’ acceptances
- hire-purchase and lease
- term loans
- trust receipts
- others
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
678
783
757
18
–
820
645
16
678
22
–
–
–
55
–
–
30
126
583
111
1,489
67
7
18
62
440
93
881
17
1
1
–
–
13
689
–
–
1
–
–
24
142
–
–
4,649
2,993
1,403
222
127
28. PROFIT BEFORE TAX
Group
Note
2011
RM’000
2010
RM’000
Company
2011
2010
RM’000
RM’000
Profit before tax is arrived at after charging:
Amortisation of trademarks
Auditors’ remuneration:
- Statutory
- Auditors of the ultimate holding company:
- current year
- over provision in prior years
- Other auditors:
- current year
- under provision in prior years
- Non statutory
- current year
- under provision in prior year
Bad debts written off
9
Directors’ remuneration:
- Fees
- payable by the Company
- payable by subsidiaries
- Emoluments other than fees
- payable by the Company
- payable by subsidiaries
Impairment loss on:
- investments in subsidiaries
- trade receivables
- non-trade receivables
- an associate
Inventories written off
Lease of office equipment
Loss on disposal of:
- an associate
Property, plant and equipment written off
Realised loss on foreign currency transactions
Rental of premises
Unrealised loss on foreign currency translations
Waiver of debts owing from a subsidiary
7
128
9
10
15(g)
7
14
11
7
646
3
–
–
256
(2)
230
(1)
35
(1)
214
1
203
13
–
–
–
–
23
10
712
5
–
359
10
–
–
5
–
–
14,475
13,468
926
1,118
340
247
306
260
340
–
306
–
6,879
120
232
5,154
92
–
6,879
–
–
5,154
–
–
–
3,219
–
1
212
2,362
43
–
89
3,788
–
–
75
41
524
–
3,248
1
–
–
–
1,715
–
4,174
–
–
–
–
–
6
225
570
31,670
6
–
–
47
863
776
23,744
111
–
–
–
–
–
–
–
–
110
–
–
–
–
118
2,700
28
–
28. PROFIT BEFORE TAX (cont’d)
Group
Company
2011
2010
RM’000
RM’000
Note
2011
RM’000
2010
RM’000
25
8
–
626
–
–
37,216
–
21,725
–
10
11
121
36
–
136
10
53
–
500
–
–
17,835
–
–
–
3,836
–
–
–
–
4,182
52
187
182
312
536
13
58
31
111
79
467
348
3
3
–
122
178
83
6
1,952
29
–
10
76
164
1
1,907
–
Profit before tax is arrived at after charging: (cont’d)
And after crediting:
Dividend income from unquoted investments in subsidiaries (gross)
Fair value adjustment on investment properties
Gain on disposal of:
- subsidiaries
- an associate
Impairment losses no longer required
- other receivable
- a subsidiary
Interest income from:
- fixed deposits with licensed banks
- short term placements with licensed banks
- others
Realised gain on foreign currency transactions
Rental income
Unrealised gain on foreign currency translations
29. TAX EXPENSE
Group
Current tax expense based on profit for the financial year:
Malaysian income tax
Foreign income tax
(Over)/Under provision in prior years:
Malaysian income tax
Foreign income tax
2010
RM’000
10,842
3,373
10,989
638
5,056
–
3,800
–
14,215
11,627
5,056
3,800
(780)
15
13,450
Deferred tax (Note 13)
Relating to origination and reversal of temporary differences
(Over)/Under provision in prior years
Total tax expense
Company
2011
2010
RM’000
RM’000
2011
RM’000
(22)
85
11,690
(630)
–
4,426
(67)
–
3,733
636
(144)
456
106
(5)
(16)
27
6
492
562
(21)
33
13,942
12,252
4,405
3,766
129
29. TAX EXPENSE (cont’d)
The Malaysian income tax is calculated at the statutory tax rate of 25% (2010: 25%) of the estimated taxable profits for the fiscal year.
Tax expense for other taxation authorities are calculated at the rates prevailing in those respective jurisdictions.
The numerical reconciliation between the tax expense and the product of accounting profit multiplied by the applicable tax rates of the Group and
of the Company are as follows:
Group
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
Profit before tax
56,546
45,455
21,936
25,974
Tax at Malaysian statutory tax rate of 25% (2010: 25%)
14,137
11,364
5,484
6,494
2,235
196
–
–
(2,864)
–
2,609
269
–
–
(5,545)
–
5,051
3,827
Tax effect in respect of:
Non-allowable expenses
Depreciation on non-qualifying property, plant and equipment
Lower tax rates in foreign jurisdiction
Movements in deferred tax assets not recognised
Non-taxable incomes
Tax incentive and allowances
1,808
651
(1,194)
841
(290)
(1,102)
14,851
(Over)/Under provision of tax expense in prior years
(Over)/Under provision of deferred tax in prior years
(765)
(144)
13,942
2,138
736
(14)
(149)
(1,369)
(623)
12,083
63
106
12,252
(630)
(16)
4,405
(67)
6
3,766
Tax savings of the Group are as follows:
Group
Arising from utilisation of previously unrecognised tax losses
130
2011
RM’000
2010
RM’000
53
197
30. EARNINGS PER SHARE
Basic earnings per ordinary share for the financial year is calculated by dividing the profit for the financial year attributable to ordinary equity
holders of the parent by the weighted average number of ordinary shares outstanding during the financial year.
2011
2010
Profit attributable to equity holders of the parent (RM’000)
39,152
33,547
Weighted average number of ordinary shares in issue (’000)
201,571
201,571
19.42
16.64
Basic earnings per ordinary share for profit for the financial year (sen)
Diluted earnings per ordinary share is not presented as there is no dilutive potential ordinary shares outstanding during the financial year.
31. DIVIDENDS
Gross
dividend
per share
Sen
Group and Company
2011
2010
Amount of
Gross
Amount of
dividend
dividend
dividend
net of tax
per share
net of tax
RM’000
Sen
RM’000
Dividends paid:
Interim dividend paid in respect of the financial year ended 30 June 2011
2.5
3,779
–
–
Interim tax exempt dividend paid in respect of the financial year ended 30 June 2010
2.5
5,039
–
–
Final tax exempt dividend paid in respect of the financial year ended 30 June 2010
0.5
1,008
–
–
Final dividend paid in respect of the financial year ended 30 June 2010
2.0
3,024
–
–
First and final dividend paid in respect of the financial year ended 30 June 2009
–
–
2.5
3,779
Special dividend paid in respect of the financial year ended 30 June 2009
–
–
1.5
2,268
7.5
12,850
4.0
6,047
A final dividend in respect of the financial year ended 30 June 2011 of 5% or 2.5 sen per ordinary share, less tax of 25%, amounting to RM3,779,472
has been proposed by the Directors after the reporting period for shareholders’ approval at the forthcoming Annual General Meeting. The financial
statements for the current financial year do not reflect this proposed dividends. This dividend, if approved by shareholders, will be accounted for
as an appropriation of retained earnings in the financial year ending 30 June 2012.
131
32. EMPLOYEE BENEFITS
Group
Wages, salaries and bonuses
Contributions to defined contribution plan
Social security contributions
Other benefits
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
62,600
7,472
497
8,602
45,333
5,251
476
6,931
7,027
785
6
68
5,843
697
6
92
79,171
57,991
7,886
6,638
33. ACQUISITION OF SUBSIDIARIES
On 20 December 2010 (the ‘acquisition date’), the Company acquired 70% issued and paid-up ordinary share capital of Jeco (Pte) Limited (“Jeco”),
a company incorporated in Singapore which is engaged in the management and exploitation of intellectual property relating to bags, leather
goods, accessories, and related products in Singapore and the Asia Pacific region for a cash consideration of SGD28,000,000.
Jeco has a wholly owned subsidiary namely, Lianbee-Jeco Pte. Ltd. (“LJ”), which in turn wholly owned Lianbee-Jeco (M) Sdn. Bhd. (“LBM”). LJ is
principally engaged in the business of retailing, importing and exporting leather goods and general merchandise while LBM is principally engaged
in trading in leather goods and footwear. (“Jeco Group”)
The Group acquired Jeco Group in order to complement and increase Bonia’ range of products offerings to provide a wider assortment to cater for
the constant change and demands of the consumers in the fashion retail industry. Control was obtained by virtue of owning majority of the voting
rights of Jeco Group.
(a) The fair value of the identifiable assets and liabilities of Jeco Group as at the date of acquisition are as follows:
RM’000
Trademark
Inventories
Cash and bank balances
1,989
30,912
14,997
15,089
4,309
Total identifiable assets
67,296
Borrowings
Current tax payable
12,994
344
6,291
6,748
Total identifiable liabilities
26,377
Total identifiable net assets
Non-controlling interest
Goodwill arising from acquisition (Note 9)
40,919
(12,276)
33,720
62,363
132
33. ACQUISITION OF SUBSIDIARIES (cont’d)
(a) The fair value of the identifiable assets and liabilities of Jeco Group as at the date of acquisition are as follows: (cont’d)
(i)
The fair value of trade and other receivables of RM15,089,000 includes trade receivables of RM12,463,000.
(ii)
Goodwill of RM33,720,000 comprises the value of the strengthening of the Group’s market position in the industry, and cost reduction
synergies expected to arise from the acquisition.
(b) The consideration transferred for the acquisition of Jeco Group are as follows:
RM’000
Cash paid
Deferred consideration recognised at fair value as at acquisition date
55,154
7,209
Total consideration transferred
Fair value of equity interest in Jeco Group held by the Group immediately before the acquisition
62,363
–
62,363
(i)
A deferred consideration of SGD5 million was agreed upon as part of the Share Sale Agreement, which is approximately RM11,934,000
in relation to the acquisition of Jeco Group. The Group was allowed to spread out the balance of payment of SGD5 million for a further
period of seven (7) years to facilitate the cash management purposes of the Group.
The fair value of the deferred consideration was estimated at RM7,209,000 at the date of acquisition.
(ii)
Transaction costs related to the acquisition of RM1,108,000 have been recognised in profit or loss as general and administrative expenses.
(c) The effects of acquisition of Jeco Group on cash flows are as follows:
RM’000
Total consideration for 70% equity interest acquired
Less: Deferred consideration
62,363
(7,209)
Consideration settled in cash upon acquisition
Less: Cash and cash equivalents of subsidiary acquired
55,154
(4,309)
Net cash outflow of the Group on acquisition
50,845
Jeco Group has contributed RM54,829,000 of revenue and RM12,005,000 to the Group’s profit for the financial year from the acquisition date.
Had the business combination taken place at the beginning of the financial year, the Group’s revenue would have been RM516,210,000 and
the profit for the financial year would have been RM54,609,000.
133
34. RELATED PARTY DISCLOSURES
(a) Identities of related parties
Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant
influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common
control or common significant influence. Related parties may be individuals or other entities.
The Company has controlling related party relationship with its direct and indirect subsidiaries.
Related parties other than those disclosed elsewhere in the financial statements and their relationship with the Group are as follows:
Related party
Relationship
Cassardi International Co. Ltd.
A company in which a major shareholder of VR Directions Sdn. Bhd., a subsidiary, Boonnam
Boonnamsap has substantial financial interests.
Long Bow Manufacturing (S) Pte. Ltd.
A company in which a Director, who is also a major shareholder of the Company has
substantial financial interests.
Bonia International Holdings Pte. Ltd.
BIH Franchising Limited
(b) In addition to the transactions and balances detailed elsewhere in the financial statements, the Group and the Company had the following
transactions with related parties during the financial year:
Group
Rental income received/receivable from subsidiaries
Gross dividends received from subsidiaries
Management fees paid/payable to subsidiaries
Purchases from Cassardi International Co. Ltd.
Royalty paid/payable to:
- Cassardi International Co. Ltd.
- Bonia International Holdings Pte. Ltd.
- BIH Franchising Limited
Rental expense paid/payable to Long Bow Manufacturing (S) Pte. Ltd.
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
–
–
–
1,540
–
–
–
1,264
1,952
37,216
794
–
1,907
21,725
740
–
610
–
1,403
436
581
1,375
–
200
–
–
–
–
–
–
–
–
The related party transactions described above were carried out in the normal course of business and have been established under negotiated
and mutually agreed terms.
(c) Compensation of key management personnel
Key management personnel are those persons having the authority and responsibility for planning, directing and controlling the activities of
the entity, directly and indirectly, including any director (whether executive or otherwise) of the Group.
134
34. RELATED PARTY DISCLOSURES (cont’d)
(c) Compensation of key management personnel (cont’d)
The remuneration of Directors and other key management personnel during the financial year was as follows:
Group
Short term employee benefits
Contributions to defined contribution plans
Company
2011
2010
RM’000
RM’000
2011
RM’000
2010
RM’000
11,755
1,324
10,143
1,104
6,526
715
5,354
625
13,079
11,247
7,241
5,979
35. OPERATING SEGMENTS
Bonia Corporation Berhad and its subsidiaries are principally engaged in designing, manufacturing, marketing, retailing, wholesaling and franchising
of fashionable leather goods, accessories and apparel for the local and overseas markets, property development and investment holding.
The Group has arrived at three (3) reportable operating segments that are organised and managed separately according to the nature of products
and services and specific expertise, which requires different business and marketing strategies. The reportable segments are summarised as
follows:
Retailing
Designing, promoting and marketing of fashionable apparels, footwear, accessories and leather goods.
Manufacturing
Manufacturing and marketing of fashionable leather goods.
Investment and property
development
Investment holding and rental and development of commercial properties.
The accounting policies of operating segments are the same as those described in the summary of significant accounting policies.
The Group evaluates performance on the basis of profit or loss from operations before tax not including non-recurring losses, such as goodwill
written off.
Inter-segment revenue is priced along the similar lines as sales to external customers and is eliminated in the consolidated financial statements.
These policies have been applied consistently throughout the current and previous financial years.
Segment assets exclude tax assets and assets used primarily for corporate purposes.
Segment liabilities exclude tax liabilities. Even though loans and borrowings arise from financing activities rather than operating activities, they are
allocated to the segments based on relevant factors (e.g. funding requirement). Details are provided in the reconciliations from segment assets and
liabilities to the position of the Group.
135
35. OPERATING SEGMENTS (cont’d)
2011
Retailing
RM’000
Manufacturing
RM’000
Revenue
Total revenue
Inter-segment revenue
456,864
–
22,479
(18,457)
Revenue from external customers
456,864
4,022
Investment
and property
development
RM’000
50,956
(50,461)
495
Total
RM’000
530,299
(68,918)
461,381
Interest income
Finance costs
109
(2,343)
–
(501)
312
(1,805)
421
(4,649)
Net finance expense
(2,234)
(501)
(1,493)
(4,228)
Depreciation
(11,758)
(900)
(1,817)
(14,475)
Amortisation
(646)
Segment profit/(loss) before income tax
66,902
(127)
Share of losses of associates
Income tax expenses
Other material non-cash items:
- impairment losses on trade and other receivables
- bad debts written off
- inventories written off
Investment in associates
Additions to non-current assets other than financial instruments and
deferred tax assets
Segment assets
Segment liabilities
136
–
616
–
–
(10,740)
(646)
56,778
–
(127)
(15,799)
(60)
1,917
(13,942)
(3,219)
(712)
(2,193)
–
–
(169)
–
–
–
(3,219)
(712)
(2,362)
426
–
–
426
84,539
351
3,120
88,010
270,434
23,156
74,272
367,862
58,282
9,529
42,721
110,532
2010
Retailing
RM’000
Manufacturing
RM’000
Revenue
Total revenue
Inter-segment revenue
357,541
–
17,880
(15,711)
357,541
2,169
Investment
and property
development
RM’000
32,180
(31,791)
389
Total
RM’000
407,601
(47,502)
360,099
Interest income
Finance costs
121
(1,975)
1
(532)
99
(486)
221
(2,993)
Net finance expense
(1,854)
(531)
(387)
(2,772)
Depreciation
(10,724)
(873)
(1,871)
(13,468)
Amortisation
(3)
Segment profit/(loss) before income tax
Share of losses of associates
Income tax expenses
53,526
(3)
(13,688)
–
(272)
–
–
(7,799)
(3)
45,455
–
(3)
(4)
1,440
(12,252)
(3,788)
–
–
3,836
(3,877)
(359)
(75)
3,836
Other material non-cash items:
- impairment losses on trade and other receivables
- bad debts written off
- inventories written off
- impairment losses on other receivable no longer required
(89)
(359)
(75)
–
–
–
–
–
Investment in associates
112
–
–
112
7,193
309
591
8,093
179,631
23,026
60,060
262,717
28,623
10,954
16,437
56,014
Additions to non-current assets other than financial instruments and deferred
tax assets
Segment assets
Segment liabilities
137
Reconciliations of reportable segment revenues, profit or loss, assets and liabilities to the Group’s corresponding amounts are as follows:
2011
RM’000
2010
RM’000
Total revenue for reportable segments
Elimination of inter-segment revenues
530,299
(68,918)
407,601
(47,502)
Group’s revenue per consolidated statement of comprehensive income
461,381
360,099
Revenue
Total profit or loss for reportable segments
56,778
(232)
45,455
–
Profit before tax
Income tax expenses
56,546
(13,942)
45,455
(12,252)
42,604
33,203
367,862
426
4,962
262,717
112
3,751
373,250
266,580
110,532
15,731
56,014
4,413
126,263
60,427
Assets
Total assets for reportable segments
Investments in associates
Tax assets
Liabilities
Total liabilities for reportable segments
Tax liabilities
Geographical information
The Group operates mainly in Malaysia and Singapore.
In presenting information on the basis of geographical areas, segment revenue is based on the geographical location from which the sale
transactions originated.
138
Geographical information (cont’d)
The composition of each geographical segment is as follows:
(i)
Malaysia
:
Manufacturing, designing, promoting and marketing of fashionable apparel, footwear, accessories and leather goods, and
development of commercial properties.
(ii)
Singapore
:
Designing, promoting and marketing of fashionable apparels, footwear, accessories and leather goods.
Segment assets are based on geographical location of the Group’s assets. The non-current assets do not include financial instruments and deferred
tax assets.
2011
RM’000
2010
RM’000
Malaysia
Singapore
Others
304,995
124,316
32,070
268,938
62,711
28,450
461,381
360,099
Non-current assets
2011
RM’000
2010
RM’000
Malaysia
Singapore
Others
114,824
38,321
536
75,394
3,634
1,094
153,681
80,122
36. FINANCIAL INSTRUMENTS
(a) Capital management
The primary objective of the Group’s capital management is to ensure that entities of the Group would be able to continue as going concerns
while maximising the return to shareholders through the optimisation of the debt and equity balance. The overall strategy of the Group
remains unchanged from that in financial year ended 30 June 2010.
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 financial years ended 30 June 2011 and 30 June 2010.
The Group is not subject to any externally imposed capital requirements.
139
36. FINANCIAL INSTRUMENTS (cont’d)
(a) Capital management (cont’d)
The Group monitors capital using gearing ratios, i.e. gearing ratio and net gearing ratio. Gearing ratio represents borrowing divided by total
capital whereas net gearing ratio represents borrowing less cash and cash equivalent divided by the total capital. Capital represents equity
attributable to the owners of the parent.
Group
2011
RM’000
Borrowings
Less: Cash and cash equivalents
Total capital
Gearing ratio*
Net gearing ratio#
2010
RM’000
Company
2011
2010
RM’000
RM’000
51,243
(56,037)
29,335
(70,017)
20,416
(491)
4,415
(10,244)
(4,794)
(40,682)
19,925
(5,829)
232,062
203,804
132,507
127,826
22%
14%
15%
3%
–
–
15%
–
* without taking cash and cash equivalents into consideration
# taking cash and cash equivalents into consideration
The Group will continue to be guided by prudent financial policies of which gearing is an important aspect.
(b) Financial instruments
Certain comparative figures have not been presented for 30 June 2010 by virtue of the exemption given in paragraph 44AA of FRS 7.
(i)
Categories of financial instruments
Group
2011
Financial assets
Other investments
140
Loans and
receivables
RM’000
Fair value
through
profit or loss
RM’000
Available
for sale
RM’000
Held to
maturity
RM’000
Total
RM’000
–
76,680
56,037
–
–
–
950
–
–
–
–
–
950
76,680
56,037
132,717
–
950
–
133,667
(b) Financial instruments (cont’d)
(i)
Categories of financial instruments (cont’d)
Financial liabilities
Borrowings
Company
2011
Financial assets
Other receivables
Other
Financial
liabilities
RM’000
Fair value
through
profit or loss
RM’000
Total
RM’000
51,243
59,289
–
–
51,243
59,289
110,532
–
110,532
Loans and
receivables
RM’000
Fair value
through
profit or loss
RM’000
Available
for sale
RM’000
Held to
maturity
RM’000
Total
RM’000
24,693
491
–
–
–
–
–
–
24,693
491
25,184
–
–
–
25,184
Other
Financial
liabilities
RM’000
Fair value
through
profit or loss
RM’000
Total
RM’000
20,416
35,916
–
–
20,416
35,916
56,332
–
56,332
Financial liabilities
Borrowings
Other payables
141
(c) Fair values of financial instruments
The fair values of financial instruments that are not carried at fair value and whose carrying amounts do not approximate its fair values are as
follows:
Group
Company
Fair
Carrying
value
amount
RM’000
RM’000
Note
Carrying
amount
RM’000
Fair
value
RM’000
20
2,093
2,064
240
234
20
1,437
1,386
398
377
2011
Recognised
Financial liabilities:
Hire purchase and lease creditors
2010
Recognised
(d) Methods and assumptions used to estimate fair value
The fair values of financial assets and financial liabilities are determined as follows:
i.
Financial instruments that are not carried at fair value and whose carrying amounts are a reasonable approximation of fair value
The carrying amounts of financial assets and liabilities, such as trade and other receivables, trade and other payables and borrowings, are
reasonable approximation of fair value, either due to their short-term nature or that they are floating rate instruments that are re-priced to
market interest rates on or near the end of the reporting period.
ii.
The fair values of these borrowings are estimated based on the future contractual cash flows discounted at current market interest rates
available for similar financial instrument and of the same remaining maturities.
iii.
Other investment
The fair value of club membership is determined by reference to comparable market value of similar investment, which is a Level 2 fair
value measurement.
iv.
Non current other payable
The fair value of non current other payable is estimated by discounting expected future cash flows at discount rate of 12.73% per annum.
The discount rate has been estimated based on the weighted average cost of capital of the Group.
142
37. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s financial risk management objective is to optimise value creation for shareholders whilst minimising the potential adverse impact
arising from fluctuations in foreign currency exchange and interest rates and the unpredictability of the financial markets.
The Group operates within an established risk management framework and clearly defined guidelines that are regularly reviewed by the Board
of Directors. Financial risk management is carried out through risk review programmes, internal control systems, insurance programmes and
adherence to the Group financial risk management policies. The Group is exposed mainly to foreign currency risk, liquidity risk, interest rate risk
and credit risk. Information on the management of the related exposures is detailed below.
(i)
Credit risk
Cash deposits and trade receivables may give rise to credit risk which requires the loss to be recognised if a counter party fails to perform as
contracted. The counter parties are major international institutions and reputable multinational organisations. It is the Group’s policy to monitor
the financial standing of these counter parties on an ongoing basis to ensure that the Group is exposed to minimal credit risk.
The Group’s primary exposure to credit risk arises through its trade receivables. The Group’s trading terms with its customers are mainly
on credit, except for boutique sales, where the transactions are done in cash term. The credit period is generally for a period of 60 days,
extending up to 120 days for major customers. Each customer has a maximum credit limit and the Group seeks to maintain strict control over
its outstanding receivables to minimise credit risk. Overdue balances are reviewed regularly by senior management.
Exposure to credit risk
At the end of the reporting period, the Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amount of
each class of financial assets recognised in the statements of financial position.
Information regarding credit exposure for trade and other receivables is disclosed in Note 15 to the financial statements.
Credit risk concentration profile
The Group determines concentration of credit risk by monitoring the country and industry sector profiles of its trade receivables on an ongoing
basis. The credit risk concentration profile of the Group’s trade receivables at the end of the reporting period are as follows:
Group
2011
By country:
Malaysia
Singapore
Others
By industry sectors:
Retailing
Manufacturing
Investment and property Development
2010
RM’000
% of
Total
RM’000
% of
total
31,845
23,170
2,326
56
40
4
27,673
6,711
4,297
72
17
11
57,341
100
38,681
100
56,676
653
12
99
1
#
38,430
228
23
99
1
#
57,341
100
38,681
100
# Amount is less than 1%
143
37. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)
(i)
Credit risk (cont’d)
Financial assets that are neither past due nor impaired
Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 15 to the financial statements.
Deposits with banks and other financial institutions that are neither past due nor impaired are placed with or entered into with reputable
financial institutions or companies with high credit ratings and no history of default.
Financial assets that are either past due or impaired
Information regarding financial assets that are either past due or impaired is disclosed in Note 15 to the financial statements.
(ii) Liquidity and cash flow risk
Liquidity risk is the risk that the Group is unable to service its cash obligations in the future. To mitigate this risk, the management measures
and forecasts its cash commitments, monitors and maintain a level of cash and cash equivalents deemed adequate to finance the Group’s
operations and developments activities.
Analysis of financial instruments by remaining contractual maturities
The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the end of the reporting period based on
contractual undiscounted repayment obligations.
On demand
or within
one year
RM’000
One to
five years
RM’000
Over
five years
RM’000
Total
RM’000
Group
Borrowings
53,272
20,263
6,444
24,270
4,296
17,012
64,012
61,545
Total undiscounted financial liabilities
73,535
30,714
21,308
125,557
Company
Other payables
Borrowings
29,900
3,092
6,444
14,723
4,296
9,558
40,640
27,373
Total undiscounted financial liabilities
32,992
21,167
13,854
68,013
As at 30 June 2011
As at 30 June 2011
144
(iii) Interest rate risk
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 exposure to interest rate risk relates primarily to their interest-bearing borrowings on floating rates. The Group
does not use derivative financial instruments to hedge this risk.
Sensitivity analysis for interest rate risk
As at 30 June 2011, if interest rates at the date had been 50 basis points lower with all other variables held constant, post-tax profit for the
year would have been RM138,000 higher and vice versa, arising mainly as a result of lower or higher interest expense on variable borrowings.
The following table set out the carrying amounts, the weighted average effective interest rate as at the end of the reporting period and the
remaining maturities of the Group’s and the Company’s financial instruments that are exposed to interest rate risk:
Weighted
average
effective
interest rate
%
Note
Within
1 year
RM’000
1-2
years
RM’000
2-3
years
RM’000
3-4
years
RM’000
4-5
years
RM’000
More
than
5 years
RM’000
Total
RM’000
7,778
–
–
–
–
–
7,778
–
(2,093)
Group
At 30 June 2011
Fixed rate
Fixed deposits with licensed
banks
Hire-purchase and lease
creditors
16
0.79
20
5.06
(781)
(574)
(337)
(298)
(103)
16
16
19
19
19
21
2.54
3.18
6.70
4.34
6.75
5.38
8,400
3,904
(2,115)
(12,521)
(39)
(2,861)
–
–
–
–
–
(3,807)
–
–
–
–
–
(3,923)
–
–
–
–
–
(4,007)
–
–
–
–
–
(4,353)
Floating rate
Short term placements with
licensed banks
Bank overdrafts
Trust receipt
Term loans
–
–
–
–
–
(15,524)
8,400
3,904
(2,115)
(12,521)
(39)
(34,475)
145
(iii) Interest rate risk (cont’d)
Weighted
average
effective
interest rate
%
Note
Within
1 year
RM’000
1-2
years
RM’000
2-3
years
RM’000
3-4
years
RM’000
4-5
years
RM’000
More
than
5 years
RM’000
Total
RM’000
7,709
–
–
–
–
–
7,709
–
–
(1,437)
Group
At 30 June 2010
Fixed rate
Fixed deposits with licensed
banks
creditors
16
0.47
20
5.67
(606)
(493)
(290)
(48)
16
16
19
19
21
2.17
2.33
7.50
3.41
5.49
5,200
32,142
(1,622)
(7,218)
(953)
–
–
–
–
(1,532)
–
–
–
–
(1,807)
–
–
–
–
(1,924)
Floating rate
licensed banks
Bank overdrafts
Term loans
Weighted
average
effective
interest rate
%
Note
Within
1 year
RM’000
1-2
years
RM’000
–
–
–
–
(2,010)
–
–
–
–
(10,832)
2-3
years
RM’000
3-4
years
RM’000
4-5
years
RM’000
More
than
5 years
RM’000
–
–
–
–
5,200
32,142
(1,622)
(7,218)
(19,058)
Total
RM’000
Company
At 30 June 2011
Fixed rate
creditors
20
4.24
(142)
(98)
16
19
21
2.60
8.35
4.85
450
(176)
(1,667)
–
–
(2,500)
(240)
Floating rate
licensed banks
Bank overdrafts
Term loan
146
–
–
(2,500)
–
–
(2,500)
–
–
(2,500)
–
–
(8,333)
450
(176)
(20,000)
(iii) Interest rate risk (cont’d)
Weighted
average
effective
interest rate
%
Note
Within
1 year
RM’000
1-2
years
RM’000
2-3
years
RM’000
3-4
years
RM’000
4-5
years
RM’000
More
than
5 years
RM’000
–
–
–
Total
RM’000
At 30 June 2010
Fixed rate
creditors
20
4.25
(158)
(142)
(98)
16
19
21
3.49
7.55
4.27
10,148
(17)
–
–
–
(375)
–
–
(500)
(398)
Floating rate
Bank overdrafts
Term loan
–
–
(500)
–
–
(500)
–
–
(2,125)
10,148
(17)
(4,000)
(iv) Foreign currency risk
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.
Subsidiaries operating in Singapore, Hong Kong and China have assets and liabilities together with expected cash flows from anticipated
transactions denominated in foreign currencies that give rise to foreign exchange exposures.
The Group maintains a natural hedge, where possible, by borrowing in the currency of the country in which the investment is located or by
borrowing in currencies that match the future revenue stream to be generated from its investments.
The Group did not enter into any material forward foreign exchange contract in the current financial year.
The currency exposure profile is as follows:
Group
2011
RM’000
Ringgit Malaysia
Singapore Dollar (SGD)
Hong Kong Dollar (HKD)
Chinese Renminbi (RMB)
Others
Company
2011
RM’000
3,948
14,586
4,395
(2,202)
1,458
(26,227)
(4,920)
–
–
–
22,185
(31,147)
147
(iv) Foreign currency risk (cont’d)
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible change in the SGD, HKD and RMB
exchange rates against the respective functional currencies of the Group entities, with all other variables held constant.
Group
2011
RM’000
Profit net
of tax
Company
2011
RM’000
Profit net
of tax
SGD/RM
- strengthen by 3%
- weaken by 3%
+438
-438
-148
+148
HKD/RM
- strengthen by 3%
- weaken by 3%
+132
-132
–
–
RMB/RM
- strengthen by 3%
- weaken by 3%
-66
+66
–
–
38. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
Investments in subsidiaries
Investments in subsidiaries during the financial year are disclosed in Note 10 to the financial statements.
Material litigation
The Company’s 60% owned subsidiaries, Apex Sdn. Bhd. (“Apex”) and Mcore Sdn. Bhd. (“Mcore”) had filed a civil suit on 3 August 2011 against
Leong Tat Yan. Apex and Mcore claimed against Leong Tat Yan for a sum of RM946,000 and RM2,250,000 respectively, being the proceeds of sale
from the joint venture business owed by Leong Tat Yan.
Leong Tat Yan owns 40% of Apex and he is also a controlling shareholder of 388 Venture Corporation Sdn. Bhd. which owns 40% of Mcore.
There are losses of RM5,389,000 arising from the dispute of which management had made the necessary impairment. The losses includes
impairment loss of trade receivables amounted to RM3,196,000 and inventories written off of RM2,193,000 (before non-controlling interest’s share
of loss).
The said litigation is fixed for case management on 3 November 2011.
148
39. SIGNIFICANT EVENTS SUBSEQUENT TO END OF REPORTING PERIOD
(a)
On 18 August 2011, the Company’s wholly owned subsidiary, Banyan Sutera Sdn. Bhd. incorporated a wholly owned subsidiary, PT Banyan
Cemerlang in Indonesia, with an authorised share capital of Rp8,487,000,000 or equivalent to USD1,000,000 divided into 1,000 shares of
Rp8,487,000 each or equivalent to USD1,000.00 each, of which Rp2,121,750,000 or equivalent to USD250,000.00 have been fully paid-up.
The incorporation of this subsidiary does not have any material impact to the Group’s financial statements.
(b)
On 25 August 2011, the Company acquired 2 ordinary shares of RM1.00 each, representing 100% equity interest in Vista Assets Sdn. Bhd.,
from third parties, with a total cash consideration of RM2.00. The acquisition does not have any material impact to the Group’s financial
statements.
(c)
On 26 August 2011, the Company’s wholly owned subsidiary, CRG incorporated a wholly owned subsidiary, CRV Sdn. Bhd. in Malaysia, with
an authorised share capital of RM100,000 comprising 100,000 ordinary shares of RM1.00 each, of which all have been issued and fully paid-up.
The incorporation of this subsidiary does not have any material impact to the Group’s financial statements.
(d)
On 3 September 2011, the Company’s wholly owned sub-subsidiary, Bonia (Shanghai) Commerce Limited had completed the application for
voluntary deregistration procedures. The deregistration does not have any material impact to the Group’s financial statements.
(e)
On 12 September 2011, the Company incorporated a wholly owned subsidiary, Paris RCG Sdn. Bhd. in Malaysia, with an authorised share
capital of RM100,000 comprising 100,000 ordinary shares of RM1.00 each, of which 2 ordinary shares have been issued and fully paid-up. The
incorporation of this subsidiary does not have any material impact to the Group’s financial statements.
(f)
On 19 September 2011, the Company incorporated a wholly owned subsidiary, FR Gallery Sdn. Bhd. in Malaysia, with an authorised share
capital of RM100,000 comprising 100,000 ordinary shares of RM1.00 each, of which 2 ordinary shares have been issued and fully paid-up. The
incorporation of this subsidiary does not have any material impact to the Group’s financial statements.
(g)
On 19 October 2011, the Company’s wholly owned subsidiary, Luxury Parade Sdn. Bhd. had entered into fifteen (15) sale and purchase
agreements with Platinum Starhill Sdn. Bhd. for the acquisitions of freehold properties for a total consideration of RM44,287,000.
149
40. COMPARATIVES
Certain comparative figures have been restated due to the effects arising from the adoption of Amendment to FRS 117 Leases, which have
resulted in retrospective adjustments. Leasehold land held by the Group for own use were reclassified from prepaid lease payments for land as
previously reported, to property, plant and equipment - leasehold land.
Group
As
previously
reported
RM’000
As at 1 July 2009
Effects on
adoption of
Amendment
to FRS 117
As restated
RM’000
RM’000
As
previously
reported
RM’000
As at 30 June 2010
Effects on
adoption of
Amendment
to FRS 117
As restated
RM’000
RM’000
Statement of financial position
Assets
Non-current assets
Investment properties
Prepaid lease payments for land
Intangible assets
Investment in an associate
Other investments
Deferred tax assets
69,309
12,127
219
4,878
73
596
1,361
219
–
(219)
–
–
–
–
69,528
12,127
–
4,878
73
596
1,361
62,328
12,127
216
4,876
112
575
808
216
–
(216)
–
–
–
–
62,544
12,127
–
4,876
112
575
808
88,563
–
88,563
81,042
–
81,042
60,685
48,821
2,555
44,138
–
–
–
–
60,685
48,821
2,555
44,138
57,869
54,709
2,943
70,017
–
–
–
–
57,869
54,709
2,943
70,017
156,199
–
156,199
185,538
–
185,538
244,762
–
244,762
266,580
–
266,580
Current assets
Inventories
Current tax assets
TOTAL ASSETS
150
40. COMPARATIVES (cont’d)
Certain comparative figures have been restated due to the effects arising from the adoption of Amendment to FRS 117 Leases, which have resulted
in retrospective adjustments. Leasehold land held by the Group for own use were reclassified from prepaid lease payments for land as previously
reported, to property, plant and equipment - leasehold land. (cont’d)
Group
As
previously
reported
RM’000
As at 1 July 2009
Effects on
adoption of
Amendment
to FRS 117
As restated
RM’000
RM’000
As
previously
reported
RM’000
As at 30 June 2010
Effects on
adoption of
Amendment
to FRS 117
As restated
RM’000
RM’000
Statement of financial position
Equity attributable to owners of the parent
Share capital
Reserves
100,786
76,691
–
–
100,786
76,691
100,786
103,018
–
–
100,786
103,018
177,477
3,072
–
–
177,477
3,072
203,804
2,349
–
–
203,804
2,349
180,549
–
180,549
206,153
–
206,153
15,576
235
–
–
15,576
235
18,936
244
–
–
18,936
244
15,811
–
15,811
19,180
–
19,180
22,964
23,375
2,063
–
–
–
22,964
23,375
2,063
26,679
10,399
4,169
–
–
–
26,679
10,399
4,169
48,402
–
48,402
41,247
–
41,247
64,213
–
64,213
60,427
–
60,427
244,762
–
244,762
266,580
–
266,580
LIABILITIES
Bank borrowings
Current liabilities
Bank borrowings
Current tax liabilities
Total liabilities
Total equity and liabilities
151
40. COMPARATIVES (cont’d)
Certain comparative figures have been restated due to the effects arising from the adoption of Amendment to FRS 117 Leases, which have resulted
in retrospective adjustments. Leasehold land held by the Group for own use were reclassified from prepaid lease payments for land as previously
reported, to property, plant and equipment - leasehold land. (cont’d)
As
previously
reported
RM’000
Group
Effects on
adoption of
Amendment
to FRS 117
RM’000
As
restated
RM’000
For the financial year ended 30 June 2010
Statements of comprehensive income (Note 28)
Amortisation of prepaid lease payments for land
13,465
3
3
(3)
13,468
–
13,465
3
3
(3)
13,468
–
Statements of cash flows
Amortisation of prepaid lease payments for land
41. SUPPLEMENTARY INFORMATION ON REALISED AND UNREALISED PROFITS OR LOSSES
The retained earnings as at the end of the reporting period may be analysed as follows:
Group
RM’000
Total retained profits of Bonia Corporation Berhad and its subsidiaries:
- Realised
- Unrealised
Total share of retained profits from associated companies:
- Realised
2011
Company
RM’000
176,868
(581)
31,252
(7)
(130)
–
Less: Consolidation adjustments
176,157
(48,702)
31,245
–
Total group/company retained profits as per financial statements
127,455
31,245
The supplementary information on realised and unreaslised profits or losses has been prepared 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.
152
as at 19 October 2011
ANALYSIS OF SHAREHOLDINGS
Authorised Share Capital:
Issued Share Capital:
Paid-up Share Capital:
Class of Shares:
Voting Right:
RM500,000,000
201,571,850 Ordinary Shares
RM100,785,925
Ordinary Shares of RM0.50 each
1 Vote per Ordinary Share
Size of Shareholdings
No. of
Shareholders
%
No. of Shares
%
43
204
836
195
50
3
3.23
15.33
62.81
14.65
3.76
0.22
1,810
152,404
3,862,674
5,897,044
75,171,828
116,486,090
*
0.08
1.92
2.92
37.29
57.79
1,331
100.00
201,571,850
100.00
No. of Shares
%
66,489,098
49,996,992
32.98
24.80
Less than 100
100 to 1,000
1,001 to 10,000
10,001 to 100,000
100,001 to less than 5% of issued shares
5% of issued shares and above
Total
* Negligible
SUBSTANTIAL SHAREHOLDERS
as per the Register of Substantial Shareholder (Section 69L of the Companies Act 1965)
Name
Permodalan Nasional Berhad
Bonia Holdings Sdn Bhd
DIRECTORS’ SHAREHOLDINGS
Name
Chiang Sang Sem
Chiang Fong Yee (Alternate Director to Mr Chiang Sang Sem)
Chiang Heng Kieng
Chiang Sang Bon
Chong Chin Look
Chiang Fong Tat
Lim Fong Boon
Chong Sai Sin
Direct
2,367,000
856,300
–
305,000
500,000
599,000
–
–
–
–
Shareholdings
%
Indirect
1.17
0.42
–
0.15
0.25
0.30
–
–
–
–
62,109,226^^^
10,000^
69,000^
59,000^^
–
25,000^
–
–
–
–
%
30.81
*
0.03
0.03
–
0.01
–
–
–
–
^^^ Deemed interested through his substantial shareholdings in Bonia Holdings Sdn Bhd, Kontrak Kosmomaz Sdn Bhd, SGP Investment Pte Ltd,
Golden Shine Finance Limited and through his spouse and children.
^^ Deemed interested through his spouse and child.
^ Deemed interested through his spouse.
*
Negligible
153
as at 19 October 2011 (cont’d)
THIRTY LARGEST SHAREHOLDERS
as per the Record of Depositors
No.
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.
Name
PERMODALAN NASIONAL BERHAD
BONIA HOLDINGS SDN BHD
AMSEC NOMINEES (TEMPATAN) SDN BHD
[Beneficiary: AmBank (M) Berhad for Bonia Holdings Sdn Bhd]
HSBC NOMINEES (ASING) SDN BHD
[Beneficiary: Exempt An for HSBC Private Bank (Suisse) S.A. (Spore TST Accl)]
CIMSEC NOMINEES (ASING) SDN BHD
[Beneficiary: Exempt An for CIMB Securities (Singapore) Pte Ltd (Retail Clients)]
KONTRAK KOSMOMAZ SDN BHD
CITIGROUP NOMINEES (ASING) SDN BHD
[Beneficiary: GSCO for Truffle Hound Global Value LLC]
SUDISAMA SDN BHD
LEE ENG CHENG
LIM KWEE LIAN
AVON MORE ALPS SDN BHD
MAYBAN NOMINEES (ASING) SDN BHD
[Beneficiary: DBS Bank for Albizia Asean Opportunities Fund]
HLB NOMINEES (ASING) SDN BHD
[Beneficiary: Pledged Securities Account for SGP Investment Pte Ltd]
AMANAHRAYA TRUSTEES BERHAD
[Beneficiary: Public Dividend Select Fund]
CHIANG SANG SEM
NIK HATMAH BINTI NIK HASSAN
DENVER CORPORATION SDN BHD
HLB NOMINEES (ASING) SDN BHD
[Beneficiary: Pledged Securities Account for Golden Shine Finance Limited]
OSK NOMINEES (ASING) SDN BERHAD
[Beneficiary: Kim Eng Securities Pte Ltd for Exquisite Holdings Limited]
CHIANG FONG YEE
CHONG SEE MOI
BHLB TRUSTEE BERHAD
[Beneficiary: Exempt An For EPF Investment for Member Savings Scheme]
CHIANG HENG PANG
ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD
[Beneficiary: Pledged Securities Account for Wong Yee Hui]
CHIANG FONG TAT
CHIANG BOON TIAN
CHONG CHIN LOOK
YONG TIAN LAI
KWAN YOONG YU
MILAN QUEST SDN BHD
Total
154
No. of Shares
%
66,489,098
31,351,992
18,645,000
32.98
15.55
9.25
9,897,600
4.91
8,200,400
4.07
5,583,434
5,000,000
2.77
2.48
4,702,600
4,635,000
4,326,200
4,044,200
3,754,400
2.33
2.30
2.15
2.01
1.86
3,096,000
1.54
2,772,700
1.38
2,367,000
2,344,400
1,446,800
1,200,000
1.17
1.16
0.72
0.60
1,111,000
0.55
856,300
777,500
660,700
0.42
0.38
0.33
630,000
615,300
0.31
0.31
599,000
588,000
500,000
474,000
413,898
400,000
0.30
0.29
0.25
0.24
0.20
0.20
187,482,522
93.01
List Of Properties
held by the Group as at 30 June 2011
Age of
Building
(Year)
Land
Area
(Sq Ft)
Net Book
Value
RM’000
Date
of
Acquisition
Description
Tenure
Existing
Use
2-storey
Terrace House
Freehold
Hostel
29
1,540
98
21/05/1992
6-storey Office
cum
Warehouse
Freehold
Office cum
Warehouse
13
24,374
15,371
01/12/1998
QT No. 85228 Lot No. 2794
UG-51, Upper Ground Floor
Plaza Phoenix
Batu 6, Jalan Cheras
56000 Kuala Lumpur
Shopping
Complex Lot
Freehold
Vacant
17
432
–
17/05/1993
PN No. 1339 Lot No. 385
Unit 2B, 3.04 & 3.05
KOMTAR Shopping Complex
10000 Pulau Pinang
Shopping
Complex Lot
Leasehold
(Expiring
in 2084)
Office
25
1,806
1,475
29/08/1994
PN No. 1339 Lot No. 385
Unit C2, 4.03B
KOMTAR Shopping Complex
10000 Pulau Pinang
Office Lot
Leasehold
(Expiring
in 2092)
Store
25
1,134
252
31/12/1994
Lot No. PT 428 HS (M) 387
Lot 18, Merlimau Industrial Estate
Phase ll 77300 Merlimau
Melaka
Industrial Land Leasehold
and Building (Expiring in
2085)
Office cum
Factory
25
135,100
2,902
07/02/1989
Lot No. PT 683 HS (D) 1499
No. 1483, Jalan Jasin
Taman Bunga Muhibbah
77300 Merlimau, Melaka
Single-Storey
Semi-detached
House
Freehold
Hostel
19
3,199
69
12/06/1992
Location of Property
ATALY INDUSTRIES SDN BHD
HS(D) No. 85704 Lot No. 20501
No. 29, Jalan Budiman
Taman Midah, Cheras
56000 Kuala Lumpur
BONIA CORPORATION BERHAD
GRN 50053 Lot No. 50644
No. 62, Jalan Kilang Midah
Taman Midah, Cheras
56000 Kuala Lumpur
CB HOLDINGS (MALAYSIA) SDN BHD
LONG BOW MANUFACTURING SDN BHD
155
List Of Properties
held by the Group as at 30 June 2011 (cont’d)
Existing
Use
Age of
Building
(Year)
Land
Area
(Sq Ft)
Net Book
Value
RM’000
Date
of
Acquisition
Description
Tenure
6-storey
Industrial
Buidling
Freehold
R&D Centre
cum
Warehouse
3
13,713
10,322
31/01/2008
HS(D) No. 72947 PT No. 3865
No. 3, Jalan 8/146, The Metro Centre
Bandar Tasik Selatan
57000 Sungai Besi
Kuala Lumpur
6-storey
Shop-lot
Leasehold
(Expiring
in 2087)
Rented Out
(Partially)
13
1,920
1,500
10/01/1995
HS(D) No. 72948 PT No. 3866
No. 5, Jalan 8/146, The Metro Centre
Bandar Tasik Selatan
57000 Sungai Besi
Kuala Lumpur
6-storey
Shop-lot
Leasehold
(Expiring
in 2087)
Rented Out
(Partially)
13
1,920
1,500
10/01/1995
Strata Geran 43528/M1/1/142
PT 12201-12202
Unit No. G61 The Summit
Persiaran Kewajipan
USJ 1, UEP-Subang Jaya
46700 Subang Jaya
Selangor Darul Eshan
Shopping
Complex Lot
Freehold
Rented Out
13
1,020
1,428
16/01/1995
HS(D) No. 182 PT SEK 4
Unit No. G0.07, Plaza Bukit Mertajam
566, Jalan Arumugam Pillai
14000 Bukit Mertajam
Shopping
Complex Lot
Freehold
Rented Out
13
1,038
778
19/03/1995
HS(D) No. 55098 PT 4
Unit No. 1.48, Level 3
Plaza Uncang Emas
No. 85, Jalan Loke Yew
55200 Kuala Lumpur
Shopping
Complex Lot
Leasehold
(Expiring
in 2086)
Rented Out
14
1,098
988
26/05/1995
Club House
Freehold
Rented Out
(Partially)
5
7,599
3,000
03/02/2005
GRN No. 57103 Lot No. 21085
No. 60, Jalan Kilang Midah
Taman Midah, Cheras
56000 Kuala Lumpur
LUXURY PARADE SDN BHD
Strata Geran 61152/M1/B1/1
The Club House
Angkasa Condominium
No. 5, Jalan Puncak Gading
Taman Connaught, Cheras
56000 Kuala Lumpur
156
List Of Properties
held by the Group as at 30 June 2011 (cont’d)
Existing
Use
Age of
Building
(Year)
Land
Area
(Sq Ft)
Net Book
Value
RM’000
Date
of
Acquisition
Description
Tenure
Condominium
Covered &
Uncovered
Car Parks
Freehold
Rented Out
(Partially)
N.A
–
1,379
20/06/2008
Office Lot
Freehold
Office
6
28,540
6,250
06/01/2005
Shopping
Complex Lot
Leasehold
(Expiring
in 2081)
Under
Construction
N.A.
524
–
23/05/1996
PN(WP) 10228, Lot No. 31627
Jln Orkid Desa
Desa Tun Razak, Cheras
56000 Kuala Lumpur.
3-storey
Detached
Factory
Leasehold
(Expiring
in 2085)
Warehouse
1
13,595
4,258
15/01/2008
Strata Geran 61148/M2/1/235, 236, 237, 238
Strata Geran 61148/M1/1/2, 3, 4, 5
A-0-1, A-0-2, A-0-7, A-0-8,
B-0-5, B-0-6, B-0-7, B-0-8
Puncak Banyan Condo
Jalan 3/118B, Taman Sri Cendekia
56000 Kuala Lumpur
8 unit
Shop Lots
Freehold
Rented Out
(Partially)
4
6,566
2,180
13/03/2009
17 unit
Office Suites
Freehold
Under
Construction
N.A.
18,747
985
11/05/2011
Condominium
Freehold
Hostel
7
1,463
2,085
05/09/2005
154 Units of Parking Bay
Angkasa Condominium
Mukim of Petaling
District of Wilayah Persekutuan
Wilayah Persekutuan
HS(D) No. 102556 PT8200
3rd, 4th, 5th & 6th Floor, Asmah Tower
Mukim of Petaling
District of Wilayah Persekutuan
Wilayah Persekutuan
HS(D) No 76874-76878 PT 92-96
Unit No L1-046 Plaza Rakyat
Pudu, Kuala Lumpur
Geran 61154 Lot 39891
Parcel No. L7-01, L7-02, L7-03, L7-03A,
L7-05, L7-06, L7-07, L7-08, L7-09, L7-10,
L7-11, L7-12, L7-13, L7-13A, L7-15, L7-16,
L7-17, Ikon Connaught
Mukim of Petaling
Daerah Kuala Lumpur
Negeri Wilayah Persekutuan
ACTIVE WORLD PTE LTD
Mukim 25 Lot No.U18781L
158, Haig Road
#16-01, Haig Court
Singapore 438794
157
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN THAT the Twentieth Annual General Meeting of the Company will be held at Perdana Ballroom,
Bukit Jalil Golf & Country Resort, Jalan 3/155B, Bukit Jalil, 57000 Kuala Lumpur on Thursday, 8 December 2011 at 11.30 a.m. for
the transaction of the following businesses:
To refer to Explanatory
Note 1
1.
To lay and discuss on the Directors’ Report and the Audited Financial Statements for the financial year ended
30 June 2011 together with the Auditors’ Report thereon.
2.
To declare a Final Dividend of 5% less 25% Income Tax for the financial year ended 30 June 2011.
Ordinary Resolution 1
3.
To approve the payment of Directors’ fees for the financial year ended 30 June 2011.
4.
To re-elect the following Directors who retire pursuant to Article 96 of the Articles of Association of the
Company:
5.
(i) Mr Chiang Sang Sem
(ii) Mr Chong Chin Look
(iii) Datuk Ng Peng Hong @ Ng Peng Hay
To re-appoint Messrs BDO as Auditors of the Company and to authorise the Directors to fix their remuneration.
To consider and if thought fit, to pass the following resolution with or without amendments or modifications:
6.
Authority to Issue Shares pursuant to Section 132D of the Companies Act, 1965
“THAT pursuant to Section 132D of the Companies Act, 1965, and subject to the approvals of the relevant
governmental and/or regulatory authorities, the Directors be and are hereby empowered to issue shares in the
Company at any time and upon such terms and conditions, for such purposes as the Directors may, in their
absolute discretion deem fit, provided that the aggregate number of shares issued in any one financial year
of the Company does not exceed ten per centum (10%) of the issued share capital of the Company for the
time being and that the Directors be and are hereby also empowered to obtain approval for the listing of and
quotation for the additional shares so issued on Bursa Malaysia Securities Berhad and that such authority shall
continue in force until the conclusion of the next Annual General Meeting of the Company”.
7.
To transact any other ordinary business of the Company for which due notice shall have been given.
NOTICE OF DIVIDEND PAYMENT
NOTICE IS HEREBY GIVEN THAT, subject to the approval of the shareholders of the Company at the Twentieth Annual General Meeting, a Final
Dividend of 5% less 25% Income Tax for the financial year ended 30 June 2011 will be paid on 29 December 2011 to the Depositors whose names
appear in the Record of Depositors at the close of business on 19 December 2011.
158
Notice of Annual General Meeting (cont’d)
NOTICE OF DIVIDEND PAYMENT (cont’d)
A Depositor shall qualify for entitlement to the dividend only in respect of:
(a) shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 19 December 2011 in respect of ordinary transfers; and
(b) shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the Bursa Malaysia Securities Berhad.
By Order of the Board
TING OI LING
CHOK KWEE WAH
TAN KEAN WAI
Company Secretaries
Petaling Jaya
16 November 2011
Notes:
1.
A member is entitled to appoint a proxy (or in the case of corporation, to appoint a representative) to attend and vote on his place. A proxy need
not be a member of the Company.
2.
The Proxy Form must be signed by the appointer or his attorney duly authorised in writing or in the case of a corporation, executed under its
common seal or attorney duly authorised in that behalf.
3.
All the Proxy Forms must be deposited at the Company’s Registered Office situated at Lot 10, The Highway Centre, Jalan 51/205, 46050 Petaling
Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time for holding the Meeting or at any adjournment thereof.
Explanatory Notes:
Item 1 of the Agenda
To lay and discuss on the Directors’ Report and the Audited Financial Statements for the financial year ended 30 June 2011 together with the
Auditors’ Report thereon
Pursuant to Section 169 (1) of the Companies Act, 1965, this item is meant for discussion only. It does not require shareholders’ approval and henceforth,
this item is not put forward for voting.
Item 6 of the Agenda
Authority to Issue Shares pursuant to Section 132D of the Companies Act, 1965
The proposed Ordinary Resolution 7 is for the purpose of granting a general mandate for renewal (“General Mandate”) and empowering the Directors
of the Company, pursuant to Section 132D of the Companies Act, 1965 to issue new shares in the Company from time to time provided that aggregate
number of shares issued pursuant to the General Mandate does not exceed ten per centum (10%) of the issued share capital of the Company for such
purposes as the Directors consider would be in the interest of the Company. This would avoid any delay and cost involved in convening a general
meeting to approve such an issue of shares. This authority will, unless revoked or varied by the Company at a general meeting, expire at the conclusion
of the next annual general meeting or the expiration of the period within which the next annual general meeting is required by law to be held, whichever
is the earlier.
As at the date of this Notice, no new shares in the Company were issued pursuant to the mandate granted to the Directors at the last annual general
meeting held on 3 December 2010 and which will lapse at the conclusion of the forthcoming annual general meeting.
The General Mandate will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares,
for the purpose of funding future investment project(s), working capital and/or acquisitions.
159
Statement Accompanying The Notice Of Annual General Meeting
Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad
1.
The Directors who are standing for re-election at the Twentieth Annual General Meeting
The Directors standing for re-election pursuant to Article 96 of the Articles of Association of the Company are:
(i) Mr Chiang Sang Sem
(ii) Mr Chong Chin Look
(iii) Datuk Ng Peng Hong @ Ng Peng Hay
The profiles of the above Directors are set out in the section entitled “Profile of Directors” on pages 16 to 18. Their respective shareholdings in the
Company and its subsidiaries are set out in the section entitled “Analysis of Shareholdings” on page 153.
2.
The Details of Attendance of the Directors at the Board Meetings
The details of attendance of each Director at the Board Meetings are set out on page 20 .
3.
The Date, Time and Place of the Annual General Meeting
The Twentieth Annual General Meeting of the Company will be held as follows:
Date
Time
Place
8 December 2011
Thursday
11.30 a.m.
Perdana Ballroom
Bukit Jalil Golf & Country Resort
Jalan 3/155B, Bukit Jalil
57000 Kuala Lumpur
160
Proxy Form
I/We __________________________________________________________________________________________________ (FULL NAME IN BLOCK LETTERS)
of ___________________________________________________________________________________________________________________________________
being a member/members of BONIA CORPORATION BERHAD hereby appoint _____________________________________________________________
_____________________________________________________________________________________(I/C No.: _____________________________________ ) of
____________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________ (ADDRESS)
or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf, at the Twentieth Annual General Meeting of the
Company to be held at Perdana Ballroom, Bukit Jalil Golf & Country Resort, Jalan 3/155B, Bukit Jalil, 57000 Kuala Lumpur on Thursday, 8 December
2011 at 11.30 a.m. or at any adjournment thereof, as indicated below:
No.
Resolutions
1.
Declaration of Final Dividend
2.
Approval for the payment of Directors’ fees
3.
Re-election of Mr Chiang Sang Sem as Director
4.
Re-election of Mr Chong Chin Look as Director
5.
Re-election of Datuk Ng Peng Hong @ Ng Peng Hay as Director
6.
Re-appointment of Auditors, Messrs BDO
7.
Authority to Issue Shares
For
Against
Please indicate with a ( 3 ) in the appropriate box against the resolution how you wish your vote to be cast. If no specific direction as to voting is given,
the proxy will vote or abstain at his discretion.
No. of Shares
Signature/Seal of the Shareholder: _________________________________________
CDS Account No.
Date: ___________________________________
Notes:
1.
A member is entitled to appoint a proxy (or in the case of a corporation, to appoint a representative) to attend and vote in his place. A proxy need
not be a member of the Company.
2.
The Proxy Form must be signed by the appointor or his attorney duly authorised in writing or in the case of a corporation, executed under its
common seal or attorney duly authorised in that behalf.
3.
All the Proxy Forms must be deposited at the Company’s Registered Office situated at Lot 10, The Highway Centre, Jalan 51/205, 46050 Petaling
Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time for holding the Meeting or at any adjournment thereof.
161
Fold this flap for sealing
Fold here
AFFIX STAMP
THE COMPANY SECRETARY
BONIA CORPORATION BERHAD (223934-T)
LOT 10, THE HIGHWAY CENTRE
JALAN 51/205
46050 PETALING JAYA
SELANGOR DARUL EHSAN
Fold here
www.bonia.com

Annual Report 2011 - Bonia

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