Annual Report 2011

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Annual Report 2011
JT International Berhad
Annual Report 2011
JT International Berhad (9244-D)
jti.com/Malaysia
Annual Report 2011
JT International Berhad (9244-D)
6th Floor, Menara Manulife
No. 6, Jalan Gelenggang
Damansara Heights
50490 Kuala Lumpur
Malaysia
Financial performance highlights
Profit Before
Taxation
Turnover
-0.6%
(RM million)
1,205.1
1,197.8
2010
2011
Profit Attributable
To Shareholders
-8.2%
(RM million)
-8.2%
178.9
(RM million)
2010
164.3
2011
Net Earnings
Per Share
133.8
2010
-8.2%
51.2
(sen)
2010
122.8
2011
47.0
2011
2011
2010
Difference
1,197.8
1,205.1
-0.6%
Profit before taxation (RM million)
164.3
178.9
-8.2%
Profit attributable to shareholders (RM million)
122.8
133.8
-8.2%
Earnings per share (net) – sen
47.0
51.2
-8.2%
Net tangible assets per share (RM)
1.70
1.50
+13.3%
Net dividend per share (sen)
22.5
22.5
0.0%
Dividend cover (net) – times
2.1
2.3
-8.7%
Income Statement
Turnover (RM million)
Performance Data
JT International Berhad
(JTI Malaysia) is a member of Japan Tobacco
International (JTI). Its headquarter is located at Menara Manulife, Damansara Heights,
Kuala Lumpur. JTI Malaysia has nine Sales Offices throughout the country with its
Manufacturing facility located in Selangor, while its Leaf and Stemmery operations are
located in Kelantan. JTI Malaysia markets the following cigarette brands – Winston, Mild
Seven, Camel and Salem. For the fiscal year ended December 31, 2011, the Company’s
revenue amounted to RM1,197.8 million and profit before tax was RM164.3 million.
JTI is a member of Japan Tobacco Group of Companies Inc., a leading international
tobacco products manufacturer. It markets world-renowned brands such as Winston,
Mild Seven and Camel. Other global brands include Silk Cut, Sobranie, Glamour and LD.
With its headquarters in Geneva, Switzerland, and net sales of USD11.2 billion in the fiscal
year ended December 31, 2011, JTI has operations in more than 120 countries and about
25,000 employees. For more information, visit www.jti.com.
Our goal is clear:
To be the most successful and respected tobacco company in the world.
Our values
Enterprising
We have the courage to do things differently.
We work together to achieve our long-term goal.
This leads to new ideas resulting in fresh perspectives and innovation.
This is fuelled by our creative energy and agile minds.
Open
We believe in openness and transparency in everything we do.
Diverse cultures inspire us, knowledge informs us and integrity guides us.
This means making the right decisions, earning us the reputation as
the trusted voice of authority within our industry.
Challenging
We strive for continuous improvement. This means embedding quality into
everything we do and never accepting second best.
We set the standards which become benchmarks for the entire industry.
This enables us to challenge the status quo and be ahead of the market
– a leader not a follower.
Contents
Notice of Thirty-Ninth
Annual General Meeting of
JT International Berhad
DATE: April 26, 2012 (Thursday)
TIME: 10.00 a.m.
VENUE: Hibiscus Auditorium, Lower Ground 1,
Sime Darby Convention Centre,
1A Jalan Bukit Kiara 1,
60000 Kuala Lumpur
Financial Calendar
2
Corporate Information
2
Board of Directors & Audit Committee
3
Chairman’s Statement
4
Penyata Pengerusi
9
Our Brands
12
Managing Director’s Review
14
Ulasan Pengarah Urusan
22
Group Financial Highlights
28
Five-Year Selected Financial Profile
29
Profile of Directors
30
Management Team
33
Corporate Social Responsibility
36
Tanggungjawab Sosial Korporat
38
Statement of Corporate Governance
40
Statement on Internal Control
44
Audit Committee Report
45
Directors’ Report
47
Independent Auditors’ Report
51
Statements of Comprehensive Income
53
Statements of Financial Position
54
Statements of Changes in Equity
55
Statements of Cash Flows
56
Notes to the Financial Statements
58
Statement by Directors
86
Declaration by the Director
86
Statement of Value Added
87
Analysis of Shareholdings
88
Particulars of Properties
91
Notice of Annual General Meeting
92
Statement Accompanying Notice
94
Form of Proxy
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
1
Financial calendar
May 12, 2011
June 10, 2011
August 16, 2011
September 20, 2011
2011 First Quarter
Results
First Interim
Dividend Paid
(15 sen per share
less 25% tax)
2011 Second Quarter
Results
Second Interim
Dividend Paid
(15 sen per share
less 25% tax)
Corporate information
Country Of Incorporation
Share Registrar
Malaysia
Insurban Corporate Services Sdn Bhd
149, Jalan Aminuddin Baki
Taman Tun Dr Ismail
60000 Kuala Lumpur
Telephone: (03) 7729 5529
Facsimile: (03) 7728 5948
Registered Office
6th Floor, Menara Manulife
No. 6, Jalan Gelenggang
Damansara Heights
50490 Kuala Lumpur
Telephone: (03) 2094 9011
Facsimile: (03) 2095 0230
Company Secretaries
Tan Teoh Hooi
(MIA No. 10234)
Wong Kwai Yin
(MAICSA No. 7008652)
Auditors
Deloitte & Touche
Chartered Accountants
Solicitors
Raja, Darryl & Loh
Principal Banker
Deutsche Bank (Malaysia) Berhad
Stock Exchange Listing
Main Market of
Bursa Malaysia Securities Berhad
2
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
November 21, 2011
February 27, 2012
April 4, 2012
April 26, 2012
2011 Third Quarter
Results
2011 Fourth Quarter
and Financial Year Ended
December 31, 2011
Results
2011 Annual Report
Posted
Thirty-Ninth
Annual General Meeting
(Financial Year Ended
December 31, 2011)
Board of directors & audit committee
Dato’ Sri Mohd. Nadzmi
Bin Mohd. Salleh
Independent
Non-Executive Chairman
Shigeyuki Nakano
Managing Director
Thean Nam Hooi
Executive Director
Hirakazu Otomo
Executive Director
(Appointed on March 1, 2012)
Nobuaki Hayashi
Non-Executive
Non-Independent Director
Datuk Henry Chin Poy-Wu
Independent Non-Executive Director
& Chairman of Audit Committee
Keong Choon Keat
Independent Non-Executive Director
& Member of Audit Committee
Leong Wai Hoong
Independent Non-Executive Director
& Member of Audit Committee
Pierre Henri Emeric Binetter
Non-Executive
Non-Independent Director
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
3
Chairman’s statement
4
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
“JT International Berhad (JTI Malaysia) faced
an extremely challenging year in 2011
and this resulted in a marginal decline of
consolidated revenues of RM1,197.8 million
from RM1,205.1 million achieved in 2010.”
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
5
Chairman’s statement
To all our shareholders,
I am pleased to present you
our Company’s performance
for the financial year ended
December 31, 2011.
Financial Performance Review
JT International Berhad (JTI Malaysia) faced an extremely
challenging year in 2011 and this resulted in a marginal
decline of consolidated revenues of RM1,197.8 million from
RM1,205.1 million achieved in 2010. Profit before tax was
lower at RM164.3 million compared with RM178.9 million in the
previous year. The decrease in revenue was mainly attributed
to lower sales volume of Winston, offset partially by higher
cigarette prices. Winston’s volume was severely impacted
by several sub-value brands selling below the Governmentmandated Minimum Cigarette Price of RM7.00 for a pack of
cigarettes. Another contributing factor was the prevalent high
incidence of illegal cigarettes trade which continued to affect
the volumes of the legal tobacco industry. Profit before tax
declined due to lower sales volume offset partially by higher
net margins and lower marketing expenditures.
Despite the above challenges, JTI Malaysia managed to
maintain its market share at 19.8% (Nielsen Retail Audit
Report), same as in the prior year. Whilst Winston, the leader
in the Value segment, saw a decline in market share to
10.0% from 10.6% in 2010; Mild Seven registered a strong
performance, growing market share to 4.1% in 2011 from
3.5% previously. JTI Malaysia’s continued commitment
to invest behind the Company’s Global Flagship Brands
– Winston, Mild Seven and Camel – has resulted in a
commendable performance for the year.
Dividends
For the current financial year, the Company maintained
its total dividend payout of 30 sen gross per share less
25% tax.
Turnover
(RM million)
1,205.1
1,197.8
1,158.2
2009
6
2010
2011
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
Anti-Illegal Cigarettes Trade awareness programme for the public by Royal Malaysian Customs.
JTI Malaysia’s products at a retail outlet.
External Operating Environment – 2011
2011 represented a year in which the Government
acknowledged the severity of the illegal cigarettes trade in
the country. For the first time in nine years, the Government
did not increase excise tax for cigarettes in the 2012
Federal Budget. JTI Malaysia and the industry are extremely
encouraged by the Government’s prudent and pragmatic
approach to combat the issue of illegal cigarettes that
continue to pose a major challenge to the legitimate cigarette
industry. Excessive taxation is one of the critical factors which
fuels the trade of illegal cigarettes that places downward
pressure on legitimate industry’s volumes.
The Government has also acknowledged that the illegal
cigarettes trade results in an approximately RM2 billion loss
in Government revenue – funds which otherwise could be
utilised for the betterment of the country’s infrastructure
and public facilities. In cognisance of this serious threat,
JTI Malaysia fully acknowledges and appreciates the
increased and persistent enforcement initiatives taken by
the Government’s Law Enforcement Agencies (LEAs) in
2011, which saw many successful raids and seizures of
illegal cigarettes, including apprehension and conviction of
Hand-held scanning device to identify the authenticity of security ink marking
on cigarette packs.
suspected illegal traders. JTI Malaysia, together with other
industry players, has and will continue to cooperate with the
Government, particularly the relevant LEAs to combat this
issue.
Following the Government’s mandate in 2011, JTI Malaysia
began replacing the security ink marking on domestic
cigarette packs with a new and upgraded security ink
marking to enhance its efforts in combating the illegal
cigarettes trade.
Looking Forward
JTI Malaysia expects continued challenges in the tobacco
industry’s operating environment in 2012, particularly in the
regulatory landscape which is expected to be even more
restrictive.
Illegal cigarettes will continue to be a significant threat to
JTI Malaysia and the industry. JTI Malaysia believes that
the Government’s two-pronged approach of a prudent
excise policy and enhanced enforcement will be an effective
strategy in the medium to longer term to combat the huge
illegal cigarettes trade in Malaysia.
Employees bonding during a ‘gotong-royong’ session.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
7
Chairman’s statement
With all these anticipated challenges, JTI Malaysia is
committed to strengthening its position within the retail trade
and will continue to invest resources and build equity behind
its Global Flagship Brands – Winston, Mild Seven and Camel.
Cost optimisation and where appropriate, cost reduction will
continue to be a focal point in driving increased operational
efficiencies. The Company will continue to place high
priority in managing the existing talent pool and maintaining
continuous investment in human capital, as employees are
as important as the Company’s brands.
JTI Malaysia remains confident that with comprehensive and
innovative business strategies, a highly motivated workforce
and strong focus on execution and delivery, the Company
is well-positioned to meet its overall objectives and deliver
another credible performance in 2012.
Corporate Responsibility
Corporate governance and compliance with laws and
regulations are amongst the most valuable principles held by
JTI Malaysia. They form the basis of the JTI Code of Conduct,
which represents the Company’s commitment to uphold the
principles of integrity and transparency in the way it conducts
its business.
JTI Malaysia is passionate about giving back to the
communities in a meaningful and sustainable manner
through its various Corporate Philanthropy and Corporate
Social Responsibility initiatives. The Company’s continuous
efforts and its employees’ active participation in programmes
to alleviate the suffering of the elderly in Malaysia remain
heartening. In addition, JTI Malaysia continued to provide
financial support in nurturing the culture and arts industry,
which has benefited many local budding talents while providing
the Malaysian community the opportunity to experience
international theatre performances from various countries.
The dedication and commitment shown by employees
in supporting these causes is highly commendable. JTI
Malaysia is committed to continuously implement initiatives
designed to give back to the local community.
JTI Malaysia’s booth at a career fair.
8
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
Board Of Directors
On behalf of the Board, I am pleased to welcome Mr. Hirakazu
Otomo who was appointed as Executive Director on March
1, 2012. He will take on the role of Director of Operations for
the Company’s factory in Shah Alam. He replaces Mr. Jarl
Hakan Kulp who retired on February 29, 2012. Mr. Kulp is a
long serving team member, having joined the JT International
(JTI) Group of Companies in 1978. He was appointed as
Executive Director of JT International Berhad on December
8, 1998.
My heartfelt thanks to Mr. Jarl Hakan Kulp for his invaluable
contribution to the Company and I wish him the very best in
his retirement.
A Word Of Appreciation
2011 represented a year where the tobacco industry
continued to evolve in a highly competitive and regulated
environment, bringing with it significant challenges and
opportunities. Against this landscape, JTI Malaysia rose to
the challenges and delivered a commendable performance.
As such, I would like to take this opportunity to thank the
Board of Directors, management and employees for their
invaluable contribution and cooperation. Their unwavering
support has allowed the Company to build on its position as
a significant player in the industry.
Finally, I would like to thank our shareholders, customers,
distributors, business partners and Government stakeholders
for their continued support and kind cooperation.
Dato’ Sri Mohd. Nadzmi Bin Mohd. Salleh
Chairman
JTI Malaysia’s continuous support to the growth of culture and arts.
Penyata pengerusi
Para pemegang saham yang dihormati, saya dengan sukacitanya
berkongsi bersama anda prestasi Syarikat kita bagi tahun
kewangan berakhir pada 31 Disember 2011.
Tinjauan Prestasi Kewangan
sebelum ini. Manakala Winston,
Perolehan
iaitu peneraju dalam segmen
Pendapatan
Nilai, memperlihatkan sedikit
(RM juta)
kemerosotan dalam pegangan
1,205.1
pasaran iaitu sebanyak 10.0%
1,197.8
dari 10.6% yang dikecapi pada
1,158.2
tahun 2010; Mild Seven pula
mencatatkan prestasi kukuh
iaitu meningkat pegangan
pasarannya ke 4.1% pada
tahun 2011 dari 3.5% pada
tahun sebelum ini. Komitmen
berterusan JTI Malaysia untuk
membuat pelaburan ke atas
Global Flagship Brand milik
Syarikat – Winston, Mild Seven
2009 2010 2011
dan Camel – telah menghasilkan
suatu prestasi yang cemerlang untuk tahun ini.
JT International Berhad (JTI Malaysia) berhadapan dengan
tahun yang amat mencabar sepanjang tahun 2011 dan
ini telah mengakibatkan suatu kemerosotan marginal bagi
perolehan pendapatan terkumpul berjumlah RM1,197.8
juta dari RM1,205.1 juta yang dikecapi pada tahun 2010.
Keuntungan sebelum cukai bernilai RM164.3 juta, lebih
rendah berbanding RM178.9 juta pada tahun sebelum ini.
Kemerosotan perolehan pendapatan disebabkan volum
jualan Winston lebih rendah, diimbangi sebahagiannya oleh
harga rokok yang lebih tinggi. Volum Winston amat terjejas
kerana kewujudan beberapa jenama rokok kategori sub-nilai
yang dijual di bawah paras Harga Minimum Rokok RM7.00
bagi satu pek rokok sepertimana ditetapkan oleh pihak
Kerajaan. Satu lagi faktor penyumbang ialah kewujudan
banyak penjualan rokok-rokok tidak sah yang terus
memberi kesan kepada volum industri tembakau yang sah.
Keuntungan sebelum cukai merosot kerana volum jualan
yang rendah, diimbangi sebahagiannya oleh margin bersih
yang tinggi dan perbelanjaan pemasaran yang rendah.
Dividen-Dividen
Di sebalik semua cabaran-cabaran di atas, JTI Malaysia
berjaya mengekalkan pegangan pasarannya pada 19.8%
(Laporan Audit Runcit Nielsen) sama seperti pada tahun
Bagi tahun kewangan ini, pihak Syarikat telah mengekalkan
bayaran jumlah dividen sebanyak 30 sen sesaham sesudah
ditolak cukai 25%.
Pelupusan rokok-rokok tidah sah yang telah dirampas oleh pihak Kastam DiRaja Malaysia.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
9
Penyata pengerusi
Para pelawat di Karnival Kerjaya JobStreet 2011 mengunjungi pameran
JTI Malaysia.
Amalan pertanian yang baik oleh penanam tembakau.
Persekitaran Operasi Luaran – 2011
Tinjauan Masa Hadapan
Tahun 2011 mewakili tahun di mana pihak Kerajaan
memperakui keruncingan masalah dagangan rokok tidak
sah di dalam negara. Buat pertama kali sejak sembilan
tahun, pihak Kerajaan tidak menaikkan cukai eksais rokok
di dalam Belanjawan Persekutuan 2012. JTI Malaysia dan
pihak industri amat teruja dengan langkah berhemat dan
pragmatik pihak Kerajaan memerangi isu rokok-rokok tidak
sah yang terus menjadi suatu ancaman besar kepada
industri rokok sah. Pencukaian yang melampau merupakan
salah satu faktor kritikal yang menyemarakkan dagangan
rokok-rokok tidak sah lantas menyekat volum-volum pihak
industri yang sah.
JTI Malaysia menjangkakan pelbagai cabaran berterusan di
dalam persekitaran operasi industri tembakau pada tahun
2012, terutama sekali di dalam landskap perundangan yang
dijangka akan menjadi lebih mengekang.
Pihak Kerajaan turut memperakui bahawa dagangan
rokok-rokok tidak sah telah mengakibatkan pihak
Kerajaan kerugian pendapatan hampir RM2 bilion – suatu
jumlah dana yang boleh digunakan untuk memperbaiki
infrastruktur negara serta kemudahan-kemudahan awam.
Sejajar dengan perakuan tentang ancaman serius ini,
JTI Malaysia turut memperakui dan menghargai inisiatifinisiatif penguatkuasaan yang semakin diperhebatkan
dan berterusan oleh pihak-pihak Agensi Penguatkuasaan
Perundangan Kerajaan (APPK) pada tahun 2011 yang
menyaksikan banyak kejayaan serbuan dan rampasan
rokok-rokok tidak sah termasuk tangkapan dan pendakwaan
pedagang-pedagang tidak sah yang disyaki. JTI Malaysia
bersama pemain-pemain industri yang lain telah dan akan
terus bekerjasama dengan pihak Kerajaan terutama sekali
dengan pihak APPK memerangi isu ini.
Berpandukan mandat pihak Kerajaan dalam tahun
2011, JTI Malaysia mula menggantikan tanda dakwat
keselamatan pada pek-pek rokok tempatan dengan tanda
dakwat keselamatan baru yang dipertingkatkan demi
memperhebatkan usaha-usaha memerangi dagangan
rokok-rokok tidak sah.
10
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
Dagangan rokok-rokok tidak sah terus membawa ancaman
hebat kepada JTI Malaysia dan pihak industri. JTI Malaysia
yakin bahawa pendekatan dua serampang pihak Kerajaan
di mana polisi eksais yang berhemat berserta usaha
penguatkuasaan yang dipertingkatkan akan menjadi strategi
berkesan buat jangkamasa sederhana dan panjang dalam
memerangi dagangan rokok-rokok tidak sah yang semakin
berkembang di Malaysia.
Di sebalik cabaran-cabaran yang dijangkakan ini,
JTI Malaysia komited untuk memperkukuhkan lagi
kedudukannya di pasaran selain terus melaburkan sumbersumber dan membangunkan ekuiti Global Flagship
Brands miliknya – Winston, Mild Seven dan Camel. Usaha
mengoptimakan kos dan pengurangan kos bila perlu akan
terus menjadi tumpuan utama bagi memacu peningkatan
kecekapan-kecekapan operasi. Pihak Syarikat akan terus
memberikan keutamaan tinggi dalam menguruskan bakatbakat yang sedia ada selain membuat pelaburan modal
insani kerana para kakitangan adalah sama penting dengan
jenama-jenama milik Syarikat.
JTI Malaysia kekal yakin bahawa dengan adanya strategistrategi bisnes yang komprehensif dan inovatif berserta
sumber gunatenaga yang bermotivasi tinggi di samping
tumpuan yang jitu ke atas aspek perlaksanaan dan
penghasilan, maka pihak Syarikat kini berada dalam
kedudukan yang terbaik untuk mengecapi objektifobjektif keseluruhan bagi tahun 2012 dan bakal berupaya
menghasilkan satu lagi prestasi yang cemerlang.
Sesi orientasi para kakitangan baru untuk menperkenalkan operasi JTI Malaysia.
Persembahan kesenian semakin berkembang untuk memenuhi citarasa
peminat-peminat seni.
Tanggungjawab Korporat
menyertai Perkumpulan Syarikat JT International (JTI) pada
1978. Beliau telah dilantik sebagai Pengarah Eksekutif bagi JT
International Berhad pada 8 Disember 1998.
Kawalselia korporat dan kepatuhan terhadap undang-undang
dan peraturan-peraturan adalah di antara prinsip-prinsip
amat bernilai yang dipegang oleh JTI Malaysia. Kesemua ini
membentuk asas bagi Kod Tatasusila JTI yang mencerminkan
komitmen Syarikat dalam mendokong prinsip-prinsip integriti
dan ketelusan dalam cara kita mengendalikan bisnes.
JTI Malaysia amat yakin dengan usaha berbakti kepada
masyarakat secara bermakna dan mampan menerusi
pelbagai inisiatif Kebajikan Korporat dan Tanggungjawab
Sosial Korporat miliknya. Usaha-usaha berterusan pihak
Syarikat serta penglibatan aktif para kakitangannya di
dalam program-program yang bertujuan mengurangkan
kesengsaraan golongan warga emas di Malaysia terus
menjadi kebanggaan bersama. Di samping itu, JTI Malaysia
terus menyalurkan bantuan kewangan bagi membangunkan
industri kesenian dan kebudayaan di mana ramai bakatbakat baru tempatan telah menikmati manfaatnya selain
menyediakan peluang kepada masyarakat Malaysia untuk
menikmati pengalaman persembahan-persembahan teater
antarabangsa dari pelbagai negara. Dedikasi dan komitmen
yang diperlihatkan oleh para kakitangan dalam menyokong
usaha-usaha bakti ini harus dipuji. JTI Malaysia komited
untuk terus melaksanakan inisiatif-inisiatif yang dibentuk
demi berbakti kepada masyarakat tempatan.
Lembaga Pengarah
Bagi pihak Lembaga, saya mengalu-alukan kedatangan
Encik Hirakazu Otomo yang telah dilantik sebagai Pengarah
Eksekutif pada 1 Mac 2012. Beliau akan mengalas jawatan
selaku Pengarah Operasi bagi kilang Syarikat di Shah Alam.
Beliau menggantikan Encik Jarl Hakan Kulp yang telah bersara
pada 29 Februari 2012. Encik Kulp merupakan salah seorang
ahli pasukan yang telah lama berkhidmat sejak beliau mula
Saya ingin merakamkan penghargaan kepada Encik
Jarl Hakan Kulp di atas segala sumbangan berharganya
kepada Syarikat dan berharap beliau terus berjaya selepas
persaraannya.
Sekalung Penghargaan
Tahun 2011 mewakili tahun di mana industri tembakau
terus berkembang dalam suasana persekitaran yang
amat kompetitif dan dikawalselia serta membawa
bersamanya pelbagai cabaran dan peluang-peluang.
Berlatarbelakangkan lanskap sebegini, JTI Malaysia gagah
bangkit mengharungi cabaran-cabaran dan menghasilkan
prestasi yang membanggakan. Oleh itu, saya ingin
mengambil kesempatan ini merakamkan jutaan terima
kasih kepada pihak Lembaga Pengarah, pengurusan
dan para kakitangan di atas sumbangan dan kerjasama
mereka yang amat bermakna. Sokongan padu mereka
telah membolehkan pihak Syarikat membangunkan
kedudukannya selaku ahli penting di dalam industri.
Akhir kata, sekalung penghargaan kepada semua para
pemegang saham, pelanggan, pengedar, rakan-rakan
bisnes dan para pemegang amanah Kerajaan di atas
sokongan dan kerjasama berterusan mereka.
Dato’ Sri Mohd. Nadzmi Bin Mohd. Salleh
Pengerusi
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
11
Our brands
12
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
13
Managing director’s review
14
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
“I am pleased to report that the Company
saw key improvements in various
key functional areas of the business.”
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
15
Managing director’s review
To all our shareholders, I am pleased to report that in 2011, JT
International Berhad (JTI Malaysia) delivered a commendable
performance, despite a succession of challenges faced in the
operating environment.
JTI’s products in the market.
Strengthening JTI Malaysia’s
Share Of Market
In 2011, JTI Malaysia remained focused on reinforcing its
position as the second largest tobacco manufacturer in
Malaysia. Despite numerous external challenges, core
strategies and initiatives continued to be implemented and
effectively leveraged to further strengthen the Company’s
business base in positioning itself for future growth.
I am pleased to report that the Company saw key
improvements in various key functional areas of the business.
While the Company’s revenue and profit saw a marginal
decline in 2011 compared to 2010, JTI Malaysia was able to
maintain its share of market compared to the previous year.
A serious breach of the Government-mandated Minimum
Cigarette Price of RM7.00 for a pack of cigarettes by several
sub-value brands and the prevailing high-incidence of illegal
cigarettes trade resulted in the Company not being able to
meet the same performance in 2010.
GFBs Share
Of Market*
(%)
13.3
2009
16
14.6
2010
14.7
2011
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
Growing Our Business
Base
Brand Portfolio Optimisation
JTI Malaysia continued to invest
and focus resources to drive
growth and further build the
Company’s Global Flagship
Brands (GFBs) – Winston, Mild
Seven and Camel.
In 2011, the Company made significant efforts to increase
brand equity and awareness across the Company’s portfolio.
Continuous improvements in distribution to increase the
availability of JTI Malaysia’s brands in the retail universe
enabled the Company to maintain share in an exceptionally
challenging market where illegal cigarettes trade gained
significant momentum, hence impacting legal market
volumes.
•
Winston – Malaysia’s Leading Low Tar And Value
Brand*
Winston maintained its position in 2011 as the second
largest brand in Malaysia despite challenges from illegal
cigarettes trade and the open breach of the Governmentmandated Minimum Cigarette Price of RM7.00 for a pack
of cigarettes in the first quarter of 2011. Winston was
also the leading brand in both the low tar/nicotine and
Value segments. Winston evolved further through the
successful introduction of the global packaging upgrade
in June, and the continuous focus on equity building
programmes that further enhanced the brand’s promise
of quality and strong international reputation.
•
Mild Seven – The World’s Leading Charcoal Filter
Brand**
In 2011, Mild Seven further strengthened its position
within the Premium segment, accelerating overall market
share momentum. This led Mild Seven to maintain its
position as Malaysia’s fastest growing Premium brand.
The success of the brand was achieved through equity
building programmes that focused on its innovative and
JTI Malaysia’s products at a retail outlet.
JTI’s products in the market.
modern image. This further reinforced Mild Seven’s
position as the World’s No. 1 Charcoal Filter brand in
parallel with increased nationwide distribution. The launch
of innovative Limited Edition Packs and the expansion into
the Menthol segment with two new variants, Mild Seven
Menthol and Mild Seven Icene, further enhanced Mild
Seven’s reputation as one of the world’s leading tobacco
brands.
•
•
Camel – The Originator Of American Blend
Cigarettes
JTI Malaysia introduced the new modern and dynamic
Camel Black and Camel White in April 2011 which
delivered incremental and overall volume growth to
the Camel range. Activities were centered on building
focused distribution and driving price awareness of the
brand’s unique position in the Sub-Premium segment in
Malaysia.
Salem – Malaysia’s Leading Menthol Brand*
Malaysia’s leading Menthol brand, Salem, further
enhanced its position as the Menthol expert in 2011 by
delivering innovative and unique propositions through
Salem Nova and Salem Seasons. Salem Nova White
delivered an impressive year on year volume growth
and pioneered the new 99mm sticks configuration
domestically, being the first to market this format in
Malaysia.
Delivering Best-Of-Class Manufacturing
Capabilities
JTI Malaysia’s Shah Alam factory continues to deliver quality
products and services of international standards to meet
the needs of the JTI Asian markets. In 2011, the production
volume of cigarettes declined due to lower demand from
export markets. Nevertheless, production of processed
tobacco and cut filler for exports grew 9% compared to 4%
in 2010.
The factory continued to enhance four areas namely – Safety,
Quality, Service and Cost.
•
Safety
JTI Malaysia’s successful work safety programmes
continued to be rolled-out and practised in 2011 with
excellent results. The factory, by December 2011, had
operated 1,500 days without Lost Time Injuries. This
remarkable achievement was attributed to the hard work
Source – global market research agencies
* Nielsen Retail Audit – 2011
** Euromonitor International – 2010
Emergency Response Team training for factory employees.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
17
Managing director’s review
and commitment of all employees. Awareness activities
such as daily safety dialogues where messages on safety
were clearly communicated to the factory employees
contributed to the success. In addition, employees
adopted the basic factory work principle; “Work shall only
be done once it is safe to do it”.
•
Quality
Maintaining and improving the quality of products and
services with an approach for continuous improvement
is a key objective in the factory. Quality covers an entire
manufacturing operation, from selection of raw materials
to manufacturing processes and outbound logistics.
A committed and skilled work force is vital in ensuring
high quality is practised and implemented throughout
the factory. To facilitate this, the factory offers various
training programmes and small group activities to further
enhance the employees’ awareness and knowledge on
quality and incorporating it in their daily work.
•
Service
Every year the factory has maintained its excellent
service delivery to the markets. Good planning systems
and frequent discussions with the markets are essential
in matching factory production output to meet the needs
of the markets. The Company has in place a world class
planning system and trained the relevant personnel
to fully utilise the tools in meeting the high standard of
customer service.
•
Cost
The company continuously works on projects to
optimise manufacturing costs without sacrificing quality.
In 2011, the Company continued sending employees to
training programmes to enhance their knowledge and
understanding of optimising machine efficiencies and
improving volume output. Material yield improvement
programmes were also successfully implemented,
resulting in a reduction of waste, hence bringing about
positive environmental impact.
“Model Farm” project produces higher volume and quality leaves.
Sustaining Leaf Operations
Post implementation of the Asean Free Trade Area agreement
(AFTA) saw changes in the local tobacco industry, requiring
local farmers to enhance the quality of local tobacco leaves
to remain competitive. As a result, JTI Malaysia found the
need to kick-off good farming practices that have been
successful in other countries. The “Model Farm” project was
implemented on a pilot basis in Bachok, one of the major
tobacco planting areas in Kelantan. Aimed at achieving
higher production yield and better quality tobacco leaves, the
project generated much interest amongst the farmers.
As a result, farmers who practised the correct and
recommended growing methodology successfully produced
more than 1,600 kg of cured leaf per hectare compared
to other farmers nearby who only harvested 1,100 kg per
hectare. In addition, there was also improvement in the
quality of the tobacco leaves. Following the success of this
pilot, it will be further expanded to more farms in 2012.
Extraordinary heavy rainfall in March 2011 caused severe
flooding in Kelantan and Terengganu, the two major tobacco
growing areas in Malaysia. Most of the tobacco plants due
to be harvested were destroyed, potentially depriving the
growers of their income.
JTI Malaysia immediately provided agricultural assistance
to help the farmers replant their tobacco for the late crop.
This subsequently enabled the farmers, who lost their entire
crop due to the floods, to generate income and sustain their
livelihood.
Despite the reduction in the overall volume, JTI Malaysia
managed to purchase a satisfactory target volume from the
local farmers in 2011.
Cigarette packing process.
18
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
Continuous training for employee development.
Improving Environment, Health And
Safety Practises
JTI Malaysia is committed to the continuous improvement
of Environment, Health and Safety (EHS) throughout the
organisation.
Various safety measures, programmes, activities and
communications are continuously implemented or
disseminated to further enhance a safe working environment.
Employees receive training from internal and external experts
to acquire new knowledge on fire safety, first aid and Cardio
Pulmonary Resuscitation (CPR). They are also exposed
to the correct ergonomic positions when carrying out their
daily tasks particularly those in the manufacturing facility. In
addition, safety signs are prominently displayed to further
enhance workers’ awareness on safe working practices.
In the area of agronomy, JTI Malaysia continued to create
awareness on EHS amongst famers by organising regular
technical group sessions. EHS specialists were invited to
impart information on the importance of optimum and correct
usage of agrochemicals. This is in line with the Integrated
Pest Management (IPM) concept which includes minimising
the use of chemicals in the field to ensure minimal impact to
the natural environment. The farmers were also briefed on
practising safe working conditions when handling and using
agrochemicals.
Improvements were also seen in areas of productivity, cost
efficiencies and product integrity. JTI Malaysia continued
to implement projects on efficiency of energy consumption
and conservation at various sections of the factory. Focus on
reduction of waste saw the Company increasing the recycling
rate of waste to 98%, which is equivalent to a world class
performance.
Continuing To Leverage Human Capital
In 2011, JTI Malaysia continued its investment in developing
the Company’s most important asset – its employees.
Strong emphasis is continuously placed to groom the
current workforce to succeed in their current roles and take
on new challenges to grow as well as develop to be future
leaders of JTI Malaysia and JT Group of companies. The
Company constantly reviews and updates its approach
to training and development programmes to ensure these
programmes remain relevant for the current environment.
Talent Management is a programme where JTI Malaysia
recognises high potential employees and focuses on providing
opportunities for them to practise and hone their leadership
skills through a mix of classroom training and real world case
studies. This comprehensive approach allows the Company to
assess and leverage employees’ strengths and address their
development gaps, which enhances their career opportunities
while driving the Company’s business performance.
Following the results of the Employee Engagement Survey
that was implemented across the global JTI organisation in
May 2010 – the Management identified three areas where
further improvement would benefit the entire organisation.
There are initiatives underway to:
•
Ensure Management effectively communicates the
Company’s strategic plans and objectives and is
understood by the entire workforce,
•
Leverage expertise from all areas of the entire business
to reinforce the notion that we are all striving towards a
common goal,
•
Develop a feedback based culture where individuals
are encouraged to ask questions and challenge the
status-quo.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
19
Managing director’s review
Code of Conduct 2011 booklet.
The Company in its strategy to attract and retain talent
offers a Compensations and Benefits programme. Efforts
are ongoing to ensure that the Compensation and Benefits
platform remains competitive, attractive, and most of all,
valued by the employees. This is achieved by constantly
looking for the optimum balance of competitive base and
incentive pay, benefits and perquisites.
•
JTI Malaysia is constantly striving to create a workplace that
combines a passion for professional excellence, as well as
an environment that encourages personal development and
growth.
Complying With Corporate And Legal
Compliance
JTI Malaysia is fully committed to conduct its business
and daily operations with the highest level of integrity
and achieving the standards of Corporate Governance.
The Company ensures it fully complies with the laws and
regulations implemented by the Government and other
global good practises. In 2011, JTI Malaysia implemented the
following initiatives:
•
•
20
Know Your Supplier
JTI Malaysia implemented the Supplier Certification
Programme, “Know Your Supplier” (KYS), in November
2011 to ensure all contractors engaged by JTI comply
to the standards set by JTI in the areas of labour, human
rights, environment, health, safety and legitimate business
practices. This programme is in line with JTI’s obligation
in the European Union Agreement to certify contractors
engaged by JTI to provide distribution and storage
services for JTI Cigarettes (global and local).
Gifts, Hospitality And Entertainment
JTI actively supports international efforts to fight bribery
and corruption. Following this, JTI reviewed the Gifts,
Hospitality and Entertainment policy and procedures to
comply with best international practices such as the UK
Bribery Act. The updated policy and procedures were
introduced at JTI Malaysia in July 2011.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
New Code Of Conduct 2011
JTI issued its updated version of the JTI Code of
Conduct in 2011 for employees worldwide as a result
of an in-depth review to ensure that JTI’s policies are
in line with current international best practices, recent
regulatory developments on business ethics (such as
the UK Bribery Act) and changes in the JTI’s business
environment.
On September 15, JTI Malaysia distributed the JTI
Code of Conduct booklet to employees to ensure they
fully comply with the policies and procedures in their
daily operations.
•
Sanctioned Party Lists
National legislation and international law enforcement
organisations require companies to exclude suspected
terrorists, money launderers, drug traffickers and
other criminals detailed on their “Sanction Lists” from
commercial relationships. To meet this requirement, JTI
developed a new procedure, “Sanction Party Lists” or
“SPL” which was implemented in October 2011. It aims
to enhance the existing set of controls to ensure that JTI
complies with all national legislation. JTI Malaysia piloted
the new procedure with other five JTI locations worldwide
in September 2011.
As the legal and regulatory environment becomes more
complex, JTI Malaysia’s Legal Department consistently
ensures that the Company’s commercial activities remain
compliant with local laws and regulations. The Legal
Department provided legal training within the Company to
maintain its responsibilities as a good corporate citizen.
Combating Illegal Cigarettes Trade
In 2011, cigarette volume of the overall tobacco industry,
as measured by the Confederation of Malaysian Tobacco
Manufacturers (CMTM), saw a further decline of 2.3%
compared to 2010. Whilst the decline was moderate
compared to previous years, the incidence of illegal
cigarettes continued to be of great concern. Results of the
Awareness on illegal cigarettes in the media.
Illicit Cigarettes Study, commissioned by CMTM, saw the
incidence of illegal cigarettes remaining high for the full year
at 36.1%. This is a major concern for the industry and the
Government as this number represents an estimated 9 billion
smuggled cigarettes in the country.
In October 2011, the Government tabled the 2012 Federal
Budget and for the first time in nine years it did not increase
cigarette excise, acknowledging that there is an urgent need
to combat the illegal cigarettes incidence. Following this move,
the Illicit Cigarette Study for the period between October–
December 2011 fell by 1.5% points from the previous period
of the study between June–August 2011.
The Government’s Law Enforcement Agencies (LEAs), such
as Royal Malaysian Customs (RMC), Malaysian Maritime
Enforcement Agency (MMEA), Marine Operations Force
(MOF) and Royal Malaysian Police acknowledged the severity
of the illegal cigarettes incidence and doubled the number
of raids and seizures at various retail outlets nationwide.
RMC, in particular, actively conducted various awareness
programmes such as “Ops Pacak” at several states and took
action against errant retailers trading in illegal cigarettes in
identified hotspot areas. The number of seizures and arrests
made by RMC increased significantly in 2011, with the agency
successfully prosecuting several retailers in court. In parallel,
MMEA and MOF also increased their enforcement initiatives
while taking stern action against detained smugglers
through court prosecution. To raise retailers and smugglers
awareness on the penalties involved for dealing in illegal
cigarettes, LEAs highlighted the raids and court prosecutions
through the media.
JTI Malaysia is encouraged by the Government’s pragmatic
approach to cigarettes taxation as well as intensified and
persistent enforcement by the LEAs. The Company remains
committed in providing full cooperation to the various
Government LEAs, key policymakers and retailers in this
ongoing fight against the illegal cigarettes trade.
Looking Ahead
JTI Malaysia expects 2012 to be another challenging year for
the tobacco industry. Notwithstanding this, the Company is
confident that by staying focused behind its core business
strategies, it will deliver another satisfactory performance
and further strengthen its position within Malaysia’s tobacco
industry.
Shigeyuki Nakano
Managing Director
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
21
Ulasan pengarah urusan
Para pemegang saham, saya dengan sukacitanya melaporkan
bahawa pada tahun 2011, JT International Berhad (JTI Malaysia)
telah menghasilkan satu prestasi yang cemerlang di sebalik
pelbagai cabaran yang dihadapi dalam persekitaran operasi.
Produk-produk JTI di pasaran.
Memperkukuhkan Pegangan Pasaran
JTI Malaysia
Pada tahun 2011, JTI Malaysia terus mengekalkan tumpuan
untuk memperkukuhkan kedudukannya selaku pengeluar
tembakau kedua terunggul di Malaysia. Di sebalik pelbagai
cabaran luaran, strategi-strategi dan inisiatif-inisiatif utama
terus dilaksana dan dimanfaatkan secara efektif untuk
memperteguhkan lagi asas bisnes pihak Syarikat agar
dapat menyusun kedudukannya demi pertumbuhan masa
hadapan.
Saya gembira melaporkan bahawa pihak Syarikat terus
mencatatkan kemajuan dalam pelbagai fungsi-fungsi utama
bisnes. Walaupun perolehan pendapatan dan keuntungan
Syarikat mencatatkan penurunan yang marginal dalam tahun
2011 berbanding 2010, JTI Malaysia dapat mempertahankan
pegangan pasarannya berbanding tahun lalu. Tindakan
beberapa jenama rokok sub-nilai yang melanggar Harga
Minimum Rokok RM7.00 bagi
satu pek rokok sepertimana
Pegangan
ditetapkan oleh pihak Kerajaan
Pasaran GFBs*
dan kewujudan dagangan rokok
(%)
tidak sah yang masih berleluasa
telah mengakibatkan pihak
14.7
14.6
Syarikat tidak dapat mengecapi
13.3
prestasi yang sama seperti dalam
tahun 2010.
2009
22
2010
2011
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
Membangunkan Asas Bisnes Kita
Pengoptimum Portfolio Jenama
JTI Malaysia terus melabur dan menumpukan sumbersumbernya demi memacu pertumbuhan dan membangunkan
lagi Global Flagship Brand (GFB) milik pihak Syarikat –
Winston, Mild Seven dan Camel.
Pada tahun 2011, pihak Syarikat telah berusaha dengan gigih
meningkatkan ekuiti dan kesedaran jenama untuk seluruh
portfolio pihak Syarikat. Kemajuan berterusan dalam aspek
pengedaran agar dapat meningkatkan kehadiran jenamajenama milik JTI Malaysia di kedai-kedai seluruh negara telah
membolehkan pihak Syarikat mengekalkan pegangan di
dalam pasaran yang sungguh mencabar di mana dagangan
rokok-rokok tidak sah memperolehi momentum yang ketara
lantas memberi impak kepada volum-volum pasaran sah.
•
Winston – Jenama Bertar Rendah Dan Bernilai
Terunggul Malaysia*
Winston mengekalkan kedudukannya dalam tahun 2011
selaku jenama kedua terunggul di Malaysia di sebalik
cabaran-cabaran dari dagangan rokok tidak sah dan
pelanggaran secara terbuka terhadap Harga Minimum
Rokok RM7.00 bagi satu pek rokok yang ditetapkan oleh
pihak Kerajaan pada suku tahun pertama 2011. Winston
juga merupakan jenama terunggul di dalam segmensegmen tar/nikotina rendah dan Bernilai. Winston
terus berkembang menerusi kejayaan pengenalan
pembungkusan global yang telah dipertingkatkan pada
Jun dan ianya terus tertumpu kepada program-program
pembangunan ekuiti yang terus mempertingkatkan janji
mutu jenama dan reputasi unggul antarabangsanya.
Penggunaan peralatan Kecemerlangan Pemasaran Dagangan untuk mempertingkatkan keupayaan pengedaran.
Produk-produk JTI di pasaran.
•
•
•
Mild Seven – Jenama Penapis Arang Terunggul Di
Dunia**
Pada tahun 2011, Mild Seven terus memperkukuhkan
kedudukannya di dalam segmen Premium,
mempertingkatkan momentum keseluruhan pegangan
pasaran. Ini telah mendorong Mild Seven mengekalkan
kedudukannya sebagai jenama Premium yang
terpantas membangun di Malaysia. Kejayaan jenama ini
diperolehi menerusi program-program pembangunan
ekuiti yang tertumpu kepada imejnya yang inovatif dan
moden. Ini terus memperkukuhkan lagi kedudukannya
sebagai jenama Penapis Arang No. 1 Di Dunia sejajar
dengan peningkatan pengedaran di seluruh negara.
Pelancaran Pek-Pek Edisi Terhad yang berinovasi dan
pengembangan ke segmen Mentol menerusi dua varian
baru iaitu, Mild Seven Menthol dan Mild Seven Icene,
terus meningkatkan reputasi Mild Seven selaku salah
satu jenama rokok terunggul di dunia.
Camel – Perintis Rokok-Rokok Adunan Amerika
JTI Malaysia telah memperkenalkan pembungkusan
baru lagi dinamik Camel Black dan Camel White pada
April 2011 yang telah menghasilkan peningkatan dan
pertumbuhan volum secara keseluruhannya kepada
rangkaian Camel. Aktiviti-aktiviti tertumpu kepada usaha
membangunkan pengedaran yang khusus dan menjana
kesedaran harga ke atas kedudukan unik jenama ini di
dalam segmen Separa Premium di Malaysia.
Salem – Jenama Mentol Terunggul Malaysia*
Salem selaku jenama terunggul Mentol Malaysia terus
memperkukuhkan kedudukannya sebagai pakar Mentol
pada tahun 2011 menerusi proposisi-proposisi berinovasi
dan unik menerusi Salem Nova dan Salem Seasons.
Salem Nova White telah menghasilkan pertumbuhan
volum setahun demi setahun yang membanggakan
dan menjadi perintis konfigurasi 99mm baru di pasaran
tempatan, lantas menjadikannya yang pertama
dipasarkan dalam bentuk sebegini di Malaysia.
Sumber – agensi-agensi penyelidikan pasaran global
* Audit Runcit Nielsen – 2011
** Euromonitor International – 2010
Menghasilkan Keupayaan Pembuatan
Yang Terbaik Dunia
Kilang JTI Malaysia di Shah Alam terus menghasilkan produkproduk dan perkhidmatan-perkhidmatan berkualiti yang
memiliki piawaian-piawaian antarabangsa bagi memenuhi
permintaan-permintaan pasaran-pasaran JTI Asia. Pada
tahun 2011, volum pengeluaran rokok merosot disebabkan
permintaan yang rendah dari pasaran-pasaran eksport.
Walau bagaimanapun, pengeluaran tembakau terproses dan
bahan cut filler untuk eksport pula meningkat 9% berbanding
4% yang dicatatkan pada tahun 2010.
Pihak kilang terus berusaha mempertingkatkan empat
bidang – Keselamatan, Kualiti, Perkhidmatan dan Kos.
•
Keselamatan
Kejayaan program-program keselamatan kerja JTI
Malaysia terus dilaksana dan diamalkan dalam tahun
2011 yang membuahkan hasil-hasil yang cemerlang.
Pada Disember 2011, pihak kilang telah beroperasi
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
23
Ulasan pengarah urusan
Proses mengeringkan daun tembakau.
selama 1,500 hari tanpa sebarang kecederaan atau
‘Lost Time Injuries’. Kejayaan cemerlang ini telah dikecapi
hasil dari usaha gigih dan komitmen semua kakitangan.
Aktiviti-aktiviti kesedaran seperti sesi dialog keselamatan
harian di mana mesej-mesej tentang keselamatan
disalurkan dengan jelas kepada para kakitangan kilang
turut menyumbang kepada kejayaan ini. Para kakitangan
juga telah menyesuaikan diri kepada prinsip asas kerja
kilang; “Kerja hanya akan terlaksana jika ianya selamat
dilakukan”.
•
•
24
Kualiti
Mengekal dan memperbaiki kualiti produk-produk dan
perkhidmatan-perkhidmatan menerusi pendekatan
pembaikan secara berterusan adalah satu objektif
utama di kilang. Kualiti merangkumi keseluruhan
operasi pembuatan, dari pemilihan bahan-bahan
mentah ke proses-proses pembuatan dan logistiklogistik luaran. Satu tenaga kerja yang komited dan
berkemahiran adalah penting untuk memastikan
kualiti yang tinggi diamal dan dilaksanakan di seluruh
kilang. Bagi membolehkan ini dilakukan, pihak kilang
menawarkan pelbagai program latihan dan aktivitiaktiviti kumpulan kecil untuk terus mempertingkatkan
kesedaran dan pengetahuan para kakitangan tentang
kualiti dan mengamalkannya ke dalam kerja harian
mereka.
Perkhidmatan
Setiap tahun pihak kilang telah mengekalkan
perkhidmatan yang cemerlang kepada pihak pasaran.
Sistem-sistem perancangan yang baik dan perbincangan
yang kerap bersama pihak pasaran adalah penting
bagi memadankan hasil pengeluaran kilang dengan
keperluan-keperluan pihak pasaran. Pihak Syarikat
telah menyediakan suatu sistem perancangan bertaraf
dunia dan melatih para kakitangan yang terlibat agar
dapat memanfaatkan sepenuhnya peralatan-peralatan
dalam usaha memastikan wujudnya taraf perkhidmatan
pelanggan yang tinggi.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
•
Kos
Pihak syarikat terus mengusahakan projek-projek yang
berupaya mengoptimumkan kos pengilangan tanpa
mengorbankan kualiti. Pada tahun 2011, pihak Syarikat
terus menghantar para kakitangan menghadiri programprogram latihan untuk mempertingkatkan pengetahuan
dan pemahaman mereka tentang pengoptimuman
kecekapan mesin selain memperbaiki hasil pengeluaran
volum. Program-program pembaikan kadar hasil bahanbahan turut berjaya dilaksanakan dan menghasilkan
pengurangan bahan sisa lantas mewujudkan impak
positif persekitaran.
Operasi Daun Yang Mampan
Selepas perlaksanaan perjanjian Kawasan Perdagangan
Bebas Asean (AFTA), terdapat perubahan-perubahan di
dalam industri tembakau tempatan yang memerlukan para
penanam tempatan mempertingkatkan kualiti daun-daun
tembakau tempatan agar dapat kekal bersaing. Hasilnya
ialah JTI Malaysia mendapati perlunya dilaksanakan amalanamalan penanaman yang baik sepertimana diamalkan
dengan cemerlang di negara-negara lain. Projek Ladang
Model atau “Model Farm” telah diusahakan secara rintis di
Bachok iaitu sebuah kawasan tanaman tembakau utama
di Kelantan. Projek ini, yang bertujuan menghasilkan jumlah
pengeluaran daun tembakau yang lebih banyak dan bermutu
tinggi, telah menarik minat ramai penanam.
Hasilnya ialah para penanam yang mengamalkan metodologi
yang betul dan dicadangkan ini telah berjaya menghasilkan
lebih dari 1,600 kg daun tembakau terawet setiap hektar
berbanding para penanam berdekatan lain yang hanya
mampu menghasilkan sejumlah 1,100 kg setiap hektar sahaja.
Selain itu, terdapat juga kemajuan dari segi kualiti daun
tembakau. Berdasarkan kejayaan projek rintis ini, ianya akan
dikembangkan lagi ke ladang-ladang lain pada tahun 2012.
Hujan luar biasa yang turun dengan lebatnya pada Mac 2011
turut menyebabkan banjir besar di Kelantan dan Terengganu,
iaitu dua kawasan tanaman tembakau utama di Malaysia.
Pengiktirafan kebersihan kafeteria kilang Shah Alam oleh Jabatan Kesihatan.
Latihan pertolongan cemas di pejabat Kota Bahru.
Kebanyakan tanaman tembakau yang sedang menanti untuk
dituai telah musnah lantas meragut sumber pendapatan para
penanam.
yang optimum dan betul. Usaha ini adalah sejajar dengan
konsep Pengurusan Perosak Bersepadu (IPM) yang
merangkumi usaha meminimakan penggunaan bahanbahan kimia di ladang bagi memastikan impak yang minima
terhadap alam semulajadi. Para penanam turut diberi taklimat
tentang amalan suasana tempat kerja yang selamat ketika
mengendali dan menggunakan bahan-bahan agrokimia.
JTI Malaysia dengan segera membekalkan bantuan pertanian
untuk menolong para penanam menanam semula tembakau
sebagai tanaman lewat. Usaha ini seterusnya membolehkan
para penanam yang kehilangan tanaman akibat banjir
menjana pendapatan dan menampung kehidupan mereka.
Walaupun terdapat pengurangan volum keseluruhan, JTI
Malaysia berjaya membeli volum yang disasarkan dari para
penanam tempatan pada tahun 2011.
Memperbaiki Amalan-Amalan
Persekitaran, Kesihatan Dan
Keselamatan
JTI Malaysia komited untuk memperbaiki secara berterusan
Persekitaran, Kesihatan dan Keselamatan (EHS) di seluruh
organisasi.
Pelbagai langkah-langkah keselamatan, program-program,
aktiviti-aktiviti dan komunikasi berterusan telah dilaksanakan
atau disalurkan demi mempertingkatkan persekitaran
tempat kerja yang selamat. Para kakitangan telah menjalani
latihan-latihan dari pakar-pakar dalaman dan luaran untuk
menimba ilmu pengetahuan baru tentang keselamatan
kebakaran, pertolongan cemas dan Resusitasi Pulmonari
Cardio (CPR). Mereka turut didedahkan kepada kedudukan
ergonomi yang betul apabila melaksanakan tugasan harian
mereka khususnya mereka yang berada di dalam kawasan
pembuatan. Tambahan pula, tanda-tanda keselamatan
dipaparkan secara jelas bagi meningkatkan lagi kesedaran
para kakitangan terhadap amalan-amalan kerja yang
selamat.
Dari segi agronomi pula, JTI Malaysia terus mewujudkan
kesedaran tentang EHS di kalangan para penanam dengan
menganjurkan sesi-sesi kumpulan teknikal secara kerap.
Para pakar EHS diundang untuk berkongsi maklumat
tentang pentingnya penggunaan bahan-bahan agrokimia
Kemajuan turut dinikmati di aspek produktiviti, kecekapan kos
dan integriti produk. JTI Malaysia akan terus melaksanakan
projek-projek penggunaan dan pemuliharaan sumber tenaga
secara cekap di pelbagai bahagian kilang. Tumpuan ke
atas pengurangan bahan sisa memperlihatkan usaha pihak
Syarikat meningkatkan kadar kitaran bahan-bahan tersebut
ke paras 98% iaitu sama dengan prestasi tahap dunia.
Usaha Berterusan Memanfaatkan
Modal Insani
Pada tahun 2011, JTI Malaysia meneruskan pelaburannya
dalam pembangunan aset pihak Syarikat yang paling
penting – para kakitangannya. Penekanan yang gigih terus
dilakukan untuk membangunkan tenaga kerja yang ada
untuk berjaya di dalam tugasan masa kini mereka dan
mengharungi cabaran-cabaran baru agar dapat berkembang
serta membentuk menjadi pemimpin JTI Malaysia dan
syarikat-syarikat Perkumpulan JT pada masa hadapan.
Pihak Syarikat kerap menilai semula dan mengemaskini
pendekatan-pendekatannya terhadap program-program
latihan dan pembangunan bagi memastikan programprogram tersebut kekal relevan untuk persekitaran masa kini.
Pengurusan Bakat merupakan sebuah program di mana JTI
Malaysia mengenalpasti para kakitangan yang berpotensi
tinggi dan memberi tumpuan menyediakan peluang-peluang
untuk mereka terus mengamal dan mengasah bakat-bakat
kepimpinan mereka menerusi berbagai latihan berbentuk
bilik darjah dan kajian-kajian kes dunia yang sebenarnya.
Pendekatan komprehensif ini membolehkan pihak Syarikat
menilai dan memanfaatkan kekuatan para kakitangan serta
menyelesaikan jurang-jurang pembangunan mereka di
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
25
Ulasan pengarah urusan
•
Kenali Pembekal Anda
JTI Malaysia telah melaksanakan program Pensijilan
Pembekal iaitu “Kenali Pembekal Anda” (KYS) pada
November 2011 bagi memastikan kesemua pembekal
yang dilantik oleh JTI mematuhi piawaian-piawaian yang
ditetapkan oleh JTI di dalam aspek guna tenaga, hak
asasi manusia, persekitaran, kesihatan, keselamatan
dan amalan-amalan bisnes yang sah. Program ini
sejajar dengan tanggungjawab JTI di dalam Perjanjian
Kesatuan Eropah yang mengesahkan para pembekal
yang dilantik oleh JTI untuk membekalkan perkhidmatanperkhidmatan pengedaran dan penyimpanan untuk
Rokok-Rokok JTI (global dan tempatan).
•
Hadiah, Hospitaliti Dan Hiburan
JTI menyokong secara aktif usaha-usaha antarabangsa
memerangi sogokan dan rasuah. Oleh itu, JTI telah
menyemak semula polisi dan prosedur-prosedur Hadiah,
Hospitaliti dan Hiburan agar mematuhi amalan-amalan
terbaik antarabangsa seperti Akta Rasuah UK. Polisi dan
prosedur-prosedur yang dikemaskini telah diperkenalkan
di JTI Malaysia pada Julai 2011.
•
Kod Tatasusila 2011 Baru
JTI telah menerbitkan versi Kod Tatasusila JTI yang
dikemas kini pada 2011 kepada para kakitangan di
seluruh dunia sesudah dilakukan kajian semula secara
terperinci bagi memastikan polisi-polisi JTI adalah sejajar
dengan amalan-amalan terbaik antarabangsa yang
terkini, perkembangan perundangan etika bisnes (seperti
Akta Rasuah UK) dan perubahan-perubahan di dalam
persekitaran bisnes JTI. Pada 15 September yang lalu,
JTI Malaysia telah mengedarkan buku Kod Tatasusila
Memupuk budaya kerjasama di kalangan para pekerja.
mana usaha-usaha ini mampu mempertingkatkan peluangpeluang kerjaya mereka sambil memacu prestasi bisnes
pihak Syarikat.
Berdasarkan hasil keputusan Kajian Penglibatan Para
Kakitangan yang dilaksanakan di seluruh organisasi JTI di
peringkat global pada Mei 2010 lalu – pihak Pengurusan
telah mengenal pasti tiga aspek untuk terus diperbaiki demi
manfaat seluruh organisasi. Terdapat inisiatif-inisiatif yang
sedang dilakukan untuk:
•
Memastikan pihak Pengurusan berkomunikasi secara
berkesan rancangan-rancangan dan matlamat-matlamat
strategik Syarikat dan difahami oleh keseluruhan tenaga
kerja,
•
Memanfaatkan kepakaran dari semua bahagian di
keseluruhan bisnes untuk memperteguhkan gagasan
bahawa kita sedang berusaha gigih mencapai satu
matlamat yang sama,
•
Membangunkan suatu budaya berdasarkan
maklumbalas di mana individu-individu digalakkan
menyoal dan mencabar status-quo.
Sebagai strategi menarik dan mengekalkan bakat-bakat,
pihak Syarikat menawarkan program Pampasan dan
Faedah-Faedah. Usaha-usaha sedang diikhtiarkan agar
platform-platform Pampasan dan Faedah-Faedah kekal
kompetitif, menarik dan paling penting sekali ialah dihargai
oleh para kakitangan. Ini dicapai menerusi usaha berterusan
mencari keseimbangan optimum di antara asas kompetitif
dan bayaran insentif, faedah-faedah dan prasyarat-prasyarat.
JTI Malaysia sentiasa berusaha mewujudkan sebuah tempat
kerja yang menggabungkan minat untuk kecemerlangan
profesional dan persekitaran yang menggalakkan
pembangunan dan pertumbuhan peribadi.
Mematuhi Kepatuhan Korporat Dan
Perundangan
JTI Malaysia komited sepenuhnya dalam menjalankan bisnes
dan operasi-operasi hariannya pada tahap integriti yang tinggi
serta menepati piawaian Kawalselia Korporat. Pihak Syarikat
memastikan ia mematuhi sepenuhnya undang-undang dan
peraturan-peraturan yang dilaksanakan oleh pihak Kerajaan
Malaysia serta amalan-amalan global lain yang baik. Pada
tahun 2011, JTI Malaysia telah melaksanakan inisiatif-inisiatif
berikut:
26
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
Kod Tatasusila 2011.
JTI kepada para kakitangan bagi memastikan mereka
mematuhi sepenuhnya polisi-polisi dan prosedurprosedur di dalam operasi harian mereka.
•
Senarai Pihak Yang Disekat
Pihak organisasi perundangan kebangsaan dan
penguatkuasaan undang-undang antarabangsa
mengkehendaki syarikat-syarikat mengecualikan
pihak pengganas, pedagang wang haram, pengedar
dadah dan penjenayah-penjenayah lain yang disyaki
sepertimana tersenarai di dalam “Senarai Sekatan”
mereka dari memiliki sebarang perhubungan komersial.
Demi mematuhi keperluan ini, JTI telah membangunkan
satu prosedur baru iaitu “Senarai Pihak Yang Disekat”
atau ringkasnya “SPL” yang telah dilaksanakan pada
Oktober 2011. Ianya bertujuan mempertingkatkan set
kawalan-kawalan yang wujud bagi memastikan JTI
mematuhi semua peraturan-peraturan kebangsaan.
JTI Malaysia telah menjadi perintis kepada prosedur
baru bersama lima lagi lokasi JTI di seluruh dunia pada
September 2011 yang lalu.
Tatkala persekitaran perundangan menjadi semakin kompleks,
Jabatan Perundangan JTI Malaysia telah memastikan segala
aktiviti komersial pihak Syarikat secara konsisten mematuhi
undang-undang dan peraturan-peraturan tempatan. Jabatan
Perundangan turut menyediakan latihan perundangan di
dalam Syarikat bagi mengekalkan tanggungjawabnya selaku
warga korporat yang baik.
Memerangi Dagangan Rokok-Rokok
Tidak Sah
Pada tahun 2011, volum rokok bagi keseluruhan industri
tembakau sebagaimana disukat oleh pihak Gabungan
Pengilang Tembakau Malaysia (GPTM) memperlihatkan
penurunan yang berterusan sebanyak 2.3% berbanding
tahun 2010. Sungguhpun penurunan ini dianggap sederhana
berbanding tahun-tahun sebelum ini, namun insiden rokokrokok tidak sah terus menjadi kebimbangan yang besar. Hasil
dari Kajian Rokok-Rokok Tidak Sah yang ditauliahkan oleh
pihak GPTM menunjukkan bahawa insiden rokok-rokok tidak
sah kekal tinggi sebanyak 36.1% untuk tahun sepenuhnya.
Ini merupakan suatu kebimbangan yang besar bagi pihak
industri dan pihak Kerajaan di mana perangkaan ini mewakili
anggaran sebanyak 9 bilion batang rokok seludup di dalam
negara.
Pada Oktober 2011, pihak Kerajaan telah membentangkan
Belanjawan Persekutuan 2012 dan buat pertama kalinya sejak
sembilan tahun eksais rokok tidak dinaikkan, menandakan
penerimaan bahawa wujudnya keperluan segera memerangi
insiden rokok-rokok tidak sah. Setelah langkah ini dilakukan,
Kajian Rokok-Rokok Tidak Sah bagi jangkamasa di antara
Oktober–Disember 2011 memperlihatkan penurunan
sebanyak 1.5% poin dari jangkamasa sebelumnya iaitu Jun–
Ogos 2011.
Pihak Agensi Penguatkuasaan Perundangan Kerajaan
(APPK) seperti Kastam Diraja Malaysia (KDRM), Agensi
Penguatkuasaan Maritim Malaysia (APMM), Pasukan
Gerakan Marin (PGM) dan Polis Diraja Malaysia memperakui
keruncingan insiden rokok-rokok tidak sah dan melipat
gandakan jumlah serbuan dan rampasan di pelbagai
kedai di seluruh negara. Pihak KDRM khususnya aktif
mengendalikan pelbagai program kesedaran seperti Ops
Pacak di beberapa buah negeri dan mengenakan tindakan
tegas terhadap pekedai-pekedai yang didapati bersalah
menjual rokok-rokok tidak sah di kawasan-kawasan panas
yang dikenalpasti. Bilangan rampasan dan tangkapan oleh
pihak KDRM telah mencatatkan peningkatan yang amat
ketara pada tahun 2011, di mana mereka berjaya mendakwa
beberapa pekedai di mahkamah. Sejajar dengan itu, pihak
APMM dan PGM turut mempertingkatkan inisiatif-inisiatif
penguatkuasaan mereka di samping mengenakan tindakan
tegas terhadap para penyeludup menerusi pendakwaan
di mahkamah. Sebagai langkah meningkatkan kesedaran
para pekedai dan penyeludup tentang penalti-penalti apabila
terlibat dalam dagangan rokok-rokok tidak sah, pihak APPK
mengenengahkan kejayaan serbuan dan dakwaan di
mahkamah menerusi media.
JTI Malaysia gembira dengan pendekatan pragmatik pihak
Kerajaan terhadap pencukaian rokok selain peningkatan
inisiatif-inisiatif penguatkuasaan oleh pelbagai pihak APPK.
Pihak Syarikat kekal komited untuk bekerjasama sepenuhnya
dengan pelbagai pihak APPK, pengubal-pengubal polisi
utama dan para peruncit dalam usaha berterusan memerangi
dagangan rokok-rokok tidak sah.
Memandang Ke Hadapan
JTI Malaysia menjangkakan tahun 2012 akan menjadi satu
lagi tahun yang mencabar bagi industri tembakau. Namun
begitu, pihak Syarikat yakin bahawa jika tumpuan terus
diberikan kepada strategi-strategi utama bisnes, ia pasti akan
menghasilkan satu lagi prestasi yang memberangsangkan di
samping terus memperkukuhkan kedudukan Syarikat dalam
industri tembakau Malaysia.
Shigeyuki Nakano
Pengarah Urusan
Pameran rokok-rokok tidak sah sempena “Ops Pacak”.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
27
Group financial highlights
Profit Before
Taxation
Turnover
(RM million)
(RM million)
1,205.1
(RM million)
178.9
1,197.8
1,158.2
2009
Profit Attributable
To Shareholders
164.3
2011
Net Tangible
Assets
(RM million)
450.3
2009
2011
2010
2009
Gross Earnings
Per Share
Net Earnings
Per Share
(sen)
(sen)
387.4
68.4
122.8
108.3
143.6
2010
133.8
2011
51.2
62.8
54.9
2010
47.0
41.4
310.7
2009
2010
2011
Gross Dividend
Per Share
(sen)
30.0
30.0
2009
2010
2011
Net Tangible Assets
Per Share
30.0
(RM)
2009
2010
Net Return On
Shareholders’ Fund
1.70
1.50
(%)
34.3
34.3
27.0
1.19
2009
28
2010
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
2011
2009
2011
2010
2011
2009
2010
2011
Five-year selected financial profile
2011
2010
1,197.8
1,205.1
Profit before taxation
164.3
Profit attributable to shareholders
(RM million)
2009
2008
2007
1,158.2
1,038.5
862.0
178.9
143.6
134.1
114.1
122.8
133.8
108.3
98.2
81.1
65.4
65.4
65.4
261.5
261.5
Shareholders’ funds
454.5
390.6
315.6
462.3
495.5
Non-current assets
115.3
123.0
125.7
107.0
103.8
Current assets
424.6
357.2
286.1
437.7
459.7
Total assets
539.9
480.2
411.8
544.7
563.5
Net tangible assets
450.3
387.4
310.7
457.5
495.5
Earnings per share (gross) – sen
62.8
68.4
54.9
51.3
43.6
Earnings per share (net) – sen
47.0
51.2
41.4
37.5
31.0
Return on Shareholders’ fund (net) – %
27.0
34.3
34.3
21.2
16.4
Net tangible assets per share (RM)
1.70
1.50
1.19
1.75
1.89
7.2
5.5
3.8
6.7
9.3
Gross dividend per share (sen)
30.0
30.0
30.0
58.0*
45.0*
Net dividend per share (sen)
22.5
22.5
22.5
50.2*
36.9*
Dividend cover (net) – times
2.1
2.3
1.8
0.7
0.8
Income Statement
Turnover
Balance Sheet
Issued capital
Performance Data
Current assets ratio
Turnover
1,205.1
(RM million)
1,197.8
1,158.2
Profit Before
Taxation
1,038.5
164.3
134.1
862.0
2007
178.9
(RM million)
143.6
114.1
2008
2009
Gross Earnings
Per Share
(sen)
51.3
2010
68.4
2011
62.8
54.9
2007
Net Dividend
Per Share
2008
2009
2010
2011
22.5
22.5
22.5
2009
2010
2011
50.2*
(sen)
36.9*
43.6
2007
2008
2009
2010
2011
2007
2008
*Includes special dividend
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
29
Profile of directors
Dato’ Sri Mohd. Nadzmi Bin Mohd. Salleh jsm, pmk, dimp
Malaysian, aged 57, MA (Econs & Statistics), BA (Econs), BSc (Chemistry & Mathematics)
Dato’ Sri Mohd. Nadzmi Mohd. Salleh was appointed as Independent Non-Executive
Chairman on December 1, 1996. Dato’ Sri Mohd. Nadzmi has more than 20 years working
experience, of which, 12 years was spent with Edaran Otomobil Nasional Berhad and
Perusahaan Otomobil Nasional Berhad. He is a much sought after leader who is also
currently a Chairman of Proton Holdings Berhad, Chairman and Managing Director of
Konsortium Transnasional Berhad and Transocean Holdings Berhad, as well as Director of
VS Industry Berhad, Syarikat Kenderaan Melayu Kelantan Berhad, Kumpulan Kenderaan
Malaysia Berhad and Park May Berhad. An upstanding citizen, he has won several awards
namely, “Entrepreneur of the Year 2009” by the Enterprise Asia, “Malaysia’s Ernst & Young
Entrepreneur of the Year 2003” and “Ernst & Young Master Entrepreneur of the Year”.
“Achiever of the Year 2003” by The Chartered Institute of Logistics & Transport in Malaysia,
“Tokoh Usahawan Melayu Anak Kelantan 1996”, “Global Leaders for Tomorrow” by the
World Economic Forum, the “Outstanding Young Malaysian” in 1993 by the Junior Chamber
of Commerce and “Man of the Year” by the Malaysian Business Magazine in 1986. Dato’ Sri
Mohd. Nadzmi is presently the President of the Badminton Association of Malaysia.
Shigeyuki Nakano
Japanese, aged 55, BA (Economics)
Mr. Shigeyuki Nakano was appointed as Executive Director and Managing Director
of JT International Berhad on March 1, 2010. He has 30 years of extensive working
experience with both Japan Tobacco Inc. and JT International (JTI) Group of
Companies, having joined the Group immediately upon his graduation from Aoyama
Gakuin University, Japan in 1981. During his time with the JTI Group, Mr. Nakano has
held various positions and served in various divisions such as Sales, Consumer and
Trade Marketing, Human Resources and brand management of Mild Seven and Salem.
He brings with him a wealth of global market experience having served in London,
Brussels, Singapore, Geneva and Hong Kong. Prior to this appointment, Mr. Nakano
was the Vice President of Consumer & Trade Marketing for the Asia Pacific Region
since 2007.
Thean Nam Hooi
Malaysian, aged 51, MBA (Finance), BSc (Industrial Engineering)
Mr. Thean Nam Hooi was appointed as Executive Director on May 14, 2001.
Mr. Thean is currently the Chief Financial Officer for JT International Berhad. He joined
the company in January 1991 starting out as a Financial Analyst and has since moved
on to serve the company in various financial capacities including Manager, Financial
Planning and Analysis, Senior Manager and Director of Financial Control. Prior to joining
JT International Berhad, Mr. Thean was attached to Texas Instruments.
30
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
Hirakazu Otomo
Japanese, aged 50, BSc (Mechanical Engineering)
Mr. Hirakazu Otomo was appointed as Executive Director on March 1, 2012.
He is also the Director of Operations for the Company’s factory in Shah Alam.
Mr. Otomo joined Japan Tobacco Inc. in 1984 as a technical staff at the Tokai factory in
Japan. He then moved on to various other positions in several countries including as a
manager at the JT London Office and Director of the JT New York representative office.
Mr. Otomo joined JT International based in Geneva as Director of Global Manufacturing
in 2003. Prior to his appointment in Malaysia, he was the General Director of JT
International Ukraine (Kremenchuk factory).
Nobuaki Hayashi
Japanese, aged 46, BA (Economics)
Mr. Nobuaki Hayashi was appointed as Non-Executive Director of JT International
Berhad on May 18, 2010. He has 22 years of working experience with both Japan
Tobacco Inc. (JT) and the JT International (JTI) Group of Companies. Mr. Hayashi
graduated from Japan’s Osaka Prefecture University with a Bachelor’s Degree in
Economics. He joined JT’s Domestic Sales Division in 1988 as an Area Manager
before assuming a position in JTI Tokyo and JT United Kingdom in 1992. Thereafter, he
was responsible for the Company’s key divisions in Logistics, Planning and Treasury,
based in Tokyo and Hong Kong. Mr. Hayashi undertook a role in Internal Audit prior to
being appointed as Chief Financial Officer of JTI Taiwan in 2001. Four years later, he
assumed the role of General Manager of JT’s Tobacco Business Planning. Mr. Hayashi
is currently the Vice President and Chief Financial Officer of JT International Asia Pacific,
based in Hong Kong.
Pierre Henri Emeric Binetter
Belgian, aged 40, Master of Laws
Mr. Pierre Binetter was appointed as Non-Executive Director of JT International
Berhad on August 13, 2010. He graduated from the University of Kent at Canterbury
with a Bachelor of Laws and subsequently pursued his Master of Laws at King’s
College, London. Mr. Binetter joined the JT International (JTI) Group of Companies
in 2006 as Regional General Counsel and was based in Cyprus and subsequently
in Geneva before assuming his current role as Regional General Counsel Asia
Pacific, leading the regional legal function for the JTI Group, based in Hong Kong.
Mr. Binetter has held various legal positions and served in various corporations in
London prior to joining JTI.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
31
Profile of directors
Datuk Henry Chin Poy-Wu psd, pgdk
Malaysian, aged 74
Datuk Henry Chin Poy-Wu was appointed as Independent Non-Executive Director
on November 1, 1993 and was subsequently appointed as Chairman of the
Audit Committee on February 16, 1994 and as a member of the Nominating and
Remuneration Committees on December 11, 2001. He had served the Government
of Malaysia for almost 39 years before retiring in 1993 as the Commissioner of Police,
Kuala Lumpur. Datuk Henry currently also serves on the Board of Eastern & Oriental
Berhad, Glenealy Plantations (Malaya) Berhad and Hap Seng Consolidated Berhad.
Datuk Henry contributes to society by serving as the Honorary Life President of the Asia
Karate Federation, Chairman of the Datuk Seah Tee Sui Foundation, Kota Kinabalu,
Sabah, Deputy Chairman of the Kinabalu Foundation, Sabah, Vice Chairman of the
Malaysian Crime Prevention Foundation, Board Member of the Universiti Malaysia
Sabah.
Keong Choon Keat
Malaysian, aged 67, FCA (England & Wales), CPA (M), CA (M)
Mr. Keong Choon Keat was appointed as an Independent Non-Executive Director
and member of the Audit Committee on August 2, 2000 and as a member of the
Nominating and Remuneration Committees on December 11, 2001. A Chartered
Accountant by profession, Mr. Keong brings with him more than 30 years of business
and professional acumen to the Board. Mr. Keong currently also serves on the Board
of Chin Teck Plantations Berhad, Negri Sembilan Oil Palms Berhad and Crest Builder
Holdings Berhad.
Leong Wai Hoong
Malaysian, aged 66, BA (Hons.)
Mr. Leong Wai Hoong was appointed as Independent Non-Executive Director on
November 12, 2003 and as a member of the Audit Committee on January 10, 2000.
Mr. Leong is currently the Chairman of the Nominating and Remuneration Committees.
He was previously appointed as Executive Director on June 3, 1996 and following his
resignation as Executive Director, he became a Non-Executive Director on January 10,
2000. Prior to this appointment, he had served as JTI’s Regional Vice President (South
East Asia) and Managing Director of JT International Berhad up till his retirement on
January 10, 2000.
Individual members of the Board of Directors do not have any family relationship with any other Director and/or
major shareholder of the Company, nor do they have any conflict of interest with the Company.
32
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
Management team
1. Shigeyuki Nakano
Managing Director
2. Thean Nam Hooi
Chief Financial Officer
3. Hirakazu Otomo
Director of Operations
4. Gary Tullidge
Director of Leaf
5. David McShee
Director of Human Resources
6. Jennie Tan
Legal Manager
7. Jacob Botta
Director of Portfolio, Brand and Trade Strategy
8. Khoo Bee Leng
Director of Development & Planning
9. Tan Chor Peng
Director of C&TM Operations
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
33
Management team
Gary Tullidge
Zimbabwean, aged 58
Director of Leaf, Mr. Gary Tullidge has been with the Company since 1995. He is
primarily responsible for the development of leaf agronomy and all tobacco purchases
for the Company. He is highly regarded for his knowledge and experience in this field,
in particular, the Asian environment as he has lived and worked in the region since
1975. Prior to joining JTI, Mr. Tullidge was attached to Universal Tobacco Company in
Thailand.
David McShee
British, aged 39, BA (Economics)
Director of Human Resources, Mr. David McShee has been with the Company since
July 2008. He is responsible for managing all human resources activities across all of
JTI’s entities in Malaysia. He joined JT International S.A. as Corporate Pensions and
Benefits Manager in 2003 and has held various positions of increasing responsibility
in corporate HR in Geneva. Mr. McShee was appointed Human Resources Director
for Geneva Headquarters in 2006 and then Global Pensions and Benefits, and HR
Controls Director in 2007 before moving to Malaysia.
Jennie Tan
Malaysian, aged 38, Solicitor, England & Wales,
Advocate & Solicitor, High Court of Malaya,
ICSA Grad, BA (Hons) (Law & Business)
Legal Manager, Ms. Jennie Tan joined the Company in April 2010. She is responsible
for managing and coordinating all legal matters of the Company. Prior to joining JT
International Berhad, she practised as a legal associate with Messrs Skrine and Messrs
Shooklin & Bok. She subsequently joined the Malaysian Stock Exchange and an IT
multinational as Legal Counsel.
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JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
Jacob Botta
American, aged 39, BSc (Marketing Management)
Director of Portfolio, Brand and Trade Strategy, Mr. Jacob Botta has been with the
company since 1996. He is responsible for consumer and trade strategy, brand equity
and market insights. Mr. Botta began his career with JT International SA Geneva
headquarters as a marketing analyst. He has extensive experience in the marketing
of various JTI brands having served as Camel Brand Manager in 2001 before moving
on as Winston Brand Manager for JTI Switzerland in 2004. In 2007 he returned to
headquarters and was appointed as the Director of Portfolio Strategy prior to his
appointment to Malaysia in 2012.
Khoo Bee Leng
Malaysian, aged 45, BA (Business Administration)
Director of Development and Planning, Ms. Khoo Bee Leng has been with the Company
since 1993. She is primarily responsible for all consumer and trade marketing activities
for the Company. She joined the Company in 1993 and has served in various positions
in Market Research and Marketing before assuming her current position in October 1,
2006. Ms. Khoo brings with her a wealth of experience from her various positions both
locally and abroad when she was posted to Hong Kong and Geneva. Prior to joining JT
International Berhad, Ms. Khoo was attached to A.C. Nielsen.
Tan Chor Peng
Malaysian, aged 45
Director of C&TM Operations, Mr. Tan Chor Peng has been with the Company since
1989, starting-off as a sales representative in Malaysia. He is primarily responsible
for the overall function of C&TM Operations for the Company. Mr. Tan comes with a
vast experience in the sales and distribution field having taken on a managerial role in
Malaysia and Philippines. He was the Country Manager of the JTI representative office
in Cambodia before taking on his current position in Malaysia in 2011.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
35
Corporate social responsibility
Contributing to our communities
At JTI, we are passionate about contributing to the communities in which we operate.
In line with global principles, JTI Malaysia’s Corporate Philanthropy and Corporate
Social Responsibility programmes have enabled the voluntary commitment of resources
JTI Malaysia’s collection for the
Japan Disaster Relief Fund.
Celebrating Chinese New Year with the elderly.
In 2011, JTI Malaysia continued implementing various
meaningful and sustainable programmes aimed at enriching
the communities and environment.
JTI Japan Disaster Relief Fund
News of the Great East Japan earthquake and tsunami
shocked the whole world on March 11, 2011. Many
employees and their families from JT Group were also
personally affected by this disaster. During this period, JTI
employees from around the globe showed a spontaneous
desire to help.
JTI headquarters in Geneva was quick to respond by
organising a fundraiser for the victims of the disaster. Within a
few weeks, donations started pouring in and a total of US$5.8
million (approximately RM18.6 million) was collected for the
fund. Donations by employees (including from Malaysia) were
matched by the Company.
Today, the funds are administered by the JTI Foundation, an
independent charitable foundation specialising in projects
related to nature and man-made disasters across the world.
The funds were set aside for short-term projects focusing
on emergency relief and long-term projects that focus on
rebuilding communities.
Support To The Elderly
JTI Malaysia’s “Support to the Elderly” programme, which
36
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
Support for culture and arts.
began since December 2008, is a long term sustainable
initiative to improve the quality of life for the elderly by
providing resources and support to meet their various needs.
The Company consistently identifies underprivileged elderlycare homes that are in need of resources for the upkeep of
the homes and residents. The programme also provides an
excellent platform for JTI Malaysia employees to volunteer
their time. Since 2009, JTI Malaysia has touched the lives
of the elderly community through 17 charitable homes in six
states across Malaysia.
In 2011, JTI Malaysia continued to collaborate with local
authorities in Tumpat and Pasir Putih to provide new homes
for the elderly communities within these two districts in
Kelantan. JTI Malaysia is happy to report that the construction
of the elderly home in Tumpat has been completed in
September 2011. Meanwhile, one of the two blocks of the
elderly home in Pasir Putih is ready for occupancy, whilst the
construction of the other block is scheduled to be completed
by mid-2012.
JTI Malaysia, together with the Taman Cuepacs Residents
Association, helped to rebuild a community centre in
Cheras, Kuala Lumpur. The centre was fully reconstructed
in June 2011 and provides the residents and surrounding
communities a platform to forge greater interaction, social
cohesion and integration, especially with the elderly. JTI
Malaysia continued to bring cheer and joy to the elderly at
the Selangor King George V Silver Jubilee Fund Home by
celebrating Chinese New Year with them.
– both financial and human – to causes that are of real benefit to the needs of the
communities. These contributions are integral to the way the Company operates in
order to make a significant difference to the quality of life of our communities.
JTI Malaysia contributes computers
to the Cheras Community Centre.
“Shamisen” traditional Japanese
instrument performance.
Nurturing Arts And Culture To Enrich
The Community
The development of arts and culture remained as another
focus area for JTI Malaysia to actively support in 2011. The
Company strengthened its successful partnership with “The
Kuala Lumpur Performing Arts Centre” and “The Actors
Studio – Teater Rakyat” in enhancing and enriching the
industry whilst creating opportunities for more local talents
to stage their production. JTI Malaysia’s financial support
enabled the organisations to develop and showcase more
productions and talents in 2011 that fulfilled the needs of the
growing theatre-loving community in Malaysia. JTI Malaysia is
pleased to share that in 2011, “The Kuala Lumpur Performing
Arts Centre” showcased 32 productions which included the
staging of the highly popular “Malaysian Girls” and “I’m Not
My Pimples” productions. Meanwhile “The Actors Studio –
Teater Rakyat” staged 16 productions, including notable plays
such as “Together as One” and “Farewell My Concubine”.
In 2011, JTI Malaysia also partnered with “The Kuala Lumpur
Performing Arts Centre”, “The Actors Studio” and “Nyoba
Kan Dance Troupe” to showcase Japanese arts and culture.
This initiative will not only promote the Japanese arts and
culture but most importantly provide a platform to strengthen
ties and build cultural understanding between the Malaysian
and Japanese communities in Malaysia. The Company will
continue to support these initiatives in 2012.
JTI Malaysia’s participants at KL Rat Race 2011.
Preventing Access To Youth
JTI’s global corporate position is clear – Smoking is an
adult choice and minors should not smoke. JTI Malaysia is
committed to play its part in raising awareness to retailers
that tobacco products must not be sold to those below 18
years of age. In 2011, JTI Malaysia, together with the industry,
continued to embark on a nationwide initiative to replenish
the Government-mandated “No Sale to Under-18” signage
to retailers. Moving forward, JTI Malaysia will continue to
support the Youth Access Prevention campaign, aimed at
creating awareness amongst retailers in preventing the underaged from having access to tobacco products.
Kuala Lumpur Rat Race 2011
As a responsible corporate citizen, JTI Malaysia continues
to support and leverage sustainable philanthropic activities
of other organisations. Once again, 11 employees, led by
Managing Director, Shigeyuki Nakano, represented JTI
Malaysia in “The Edge-Bursa Malaysia Kuala Lumpur Rat
Race 2011”. Held on September 20, this annual charity event
garnered the support from 88 local and foreign companies
who sent a total of 150 teams of five runners each. The
highlight of the event was the fund-raised which reached
a record of over RM1.93 million that were distributed to 20
charitable organisations. JTI Malaysia is proud to be part of
this unique initiative to give back to the less fortunate in a
meaningful way.
For 2012, JTI Malaysia will continue to contribute back to the
society and strengthen partnerships with organisations of
high quality and integrity.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
37
headline
Tanggungjawab
sosial korporat
Berbakti kepada masyarakat kita
Di JTI, kita bertekad berbakti kepada masyarakat di sekitar tempat kita beroperasi. Sejajar
dengan prinsip-prinsip global, maka program-program Kebajikan Korporat dan Tanggungjawab
Sosial Korporat milik JTI Malaysia telah membolehkan terbentuknya komitmen sumber-sumber
Bangunan warga emas yang
dinaik-taraf.
Menderma komputer untuk kegunaan pusat komuniti di Cheras.
Pada tahun 2011, JTI Malaysia terus melaksanakan pelbagai
program-program yang bermakna serta mampan demi
memantapkan masyarakat dan alam sekitar.
Dana Bantuan Bencana Alam Jepun JTI
Berita tentang malapetaka gempa bumi dan tsunami
Jepun Timur pada 11 Mac 2011 telah mengejutkan seluruh
dunia. Kebanyakan para kakitangan dari Perkumpulan JT
serta anggota keluarga mereka turut menerima kesan dari
malapetaka ini. Sepanjang tempoh masa ini, para kakitangan
JTI dari seluruh dunia telah memperlihatkan keinginan secara
spontan untuk menghulurkan bantuan.
Ibu pejabat JTI di Geneva bertindak cepat dengan
menganjurkan kutipan dana untuk mangsa-mangsa bencana
alam tersebut. Di dalam beberapa minggu sahaja sumbangansumbangan mula mencurah masuk di mana sejumlah US$5.8
juta (lebih kurang RM18.6 juta) telah berjaya dikumpul untuk
dana tersebut. Semua sumbangan oleh para kakitangan
(termasuk dari Malaysia) telah digandakan oleh pihak Syarikat.
Pada hari ini, dana-dana telah ditadbir oleh Yayasan JTI
iaitu sebuah yayasan kebajikan bebas yang mengkhusus
dalam pengendalian projek-projek berkaitan bencana alam
dan bencana akibat tindakan manusia sendiri di seluruh
dunia. Dana-dana turut dikhususkan untuk projek-projek
jangkamasa pendek yang tertumpu kepada bantuan
kecemasan dan projek-projek jangkamasa panjang yang
tertumpu kepada pembangunan semula masyarakat.
Sokongan Terhadap Warga Emas
Program “Sokongan terhadap Warga Emas” milik JTI
Malaysia yang bermula pada Disember 2008 merupakan
38
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
Persembahan seni dari Jepun.
suatu inisiatif mampan jangkamasa panjang yang
bermatlamat memperbaiki kualiti kehidupan warga emas
menerusi pembekalan sumber-sumber dan bantuan untuk
memenuhi pelbagai keperluan mereka. Pihak Syarikat secara
konsisten berusaha mengenalpasti pusat-pusat jagaan
warga emas kurang berkemampuan yang memerlukan
bantuan sumber-sumber untuk penyelenggaraan pusat
jagaan dan para penghuninya. Program ini turut menjadi
sebuah platform terbaik buat para kakitangan JTI Malaysia
menjadi sukarelawan. Semenjak tahun 2009, JTI Malaysia
telah menyentuh hidup masyarakat warga emas di 17 buah
rumah kebajikan di enam buah negeri di seluruh Malaysia.
Pada tahun 2011, JTI Malaysia terus bekerjasama dengan
pihak berkuasa tempatan di Tumpat dan Pasir Putih untuk
membekalkan rumah-rumah baru buat golongan warga emas
di kedua-dua daerah ini di Kelantan. JTI Malaysia dengan
sukacitanya melaporkan bahawa kerja-kerja pembinaan
rumah warga emas di Tumpat telah siap sepenuhnya pada
September 2011. Sementara itu, satu dari dua buah blok
rumah warga emas di Pasir Putih telah siap untuk dihuni
manakala kerja-kerja pembinaan satu blok lagi dijadual akan
siap sepenuhnya pada pertengahan 2012.
JTI Malaysia telah membantu Persatuan Penduduk Taman
Cuepacs membina semula sebuah pusat komuniti di
Cheras, Kuala Lumpur. Pusat ini yang telah siap dibina
sepenuhnya pada Jun 2011 lalu akan menjadi sebuah
platform untuk para penduduk dan masyarakat sekelilingnya
mempereratkan interaksi, perpaduan dan integrasi sosial
terutamanya dengan golongan warga emas. JTI Malaysia
terus membawa kemeriahan dan keceriaan kepada
golongan warga emas di Rumah Selangor King George V
Silver Jubilee Fund dengan meraikan perayaan Tahun Baru
Cina bersama mereka.
secara sukarela – kewangan dan tenaga kerja – ke atas usaha-usaha yang membawa manfaat
sebenar buat masyarakat. Sumbangan-sumbangan ini penting terhadap cara Syarikat beroperasi
demi menghasilkan suatu perubahan ketara pada kualiti kehidupan masyarakat kita.
Meraikan Tahun Baru Cina bersama warga emas.
Sokongan padu kepada Kuala Lumpur Rat Race 2011.
Memupuk Kesenian Dan Kebudayaan
Untuk Memperkaya Masyarakat
Mencegah Remaja Merokok
Pembangunan bidang kesenian dan kebudayaan kekal
menjadi salah satu tumpuan bagi JTI Malaysia memberikan
sokongan aktif pada tahun 2011. Pihak Syarikat telah
mempertingkatkan kerjasama dengan pihak “The Kuala
Lumpur Performing Arts Centre” dan “The Actors Studio
– Teater Rakyat” untuk membangun dan memperkayakan
industri selain membuka peluang-peluang kepada lebih
ramai lagi bakat-bakat tempatan untuk mengenengahkan
produksi mereka. Bantuan kewangan JTI Malaysia telah
memungkinkan organisasi-organisasi memupuk dan
menghasilkan lebih banyak produksi dan bakat-bakat dalam
tahun 2011 yang mengisi keperluan-keperluan komuniti
penggemar seni teater di Malaysia.
Sukacitanya JTI Malaysia memaklumkan bahawa pada
tahun 2011, pihak “The Kuala Lumpur Performing Arts
Centre” telah mengenengahkan 32 buah produksi, termasuk
mempersembahkan teater paling popular iaitu “Malaysian
Girls” dan “I’m Not My Pimples”. Sementara itu, pihak “The
Actors Studio – Teate Rakyat” pula telah menghasilkan 16
buah produksi termasuk “Together as One” dan “Farewell My
Concubine”.
Pada tahun 2011, JTI Malaysia turut bekerjasama dengan
pihak “The Kuala Lumpur Performing Arts Centre”, “The
Actors Studio” dan “Nyoba Kan Dance Troupe” untuk
mengenegahkan seni dan budaya Jepun. Inisiatif ini bukan
hanya mempromosi seni dan budaya Jepun tetapi apa yang
penting ialah ianya menjadi platform untuk memperteguhkan
hubungan dan membangunkan persefahaman budaya di
antara komuniti-komuniti Malaysia dan Jepun yang berada di
Malaysia. Pihak Syarikat akan terus memberikan sokongan
padu kepada inisiatif-inisiatif sebegini pada tahun 2012.
Pendirian global korporat JTI adalah jelas – Merokok ialah
pilihan orang dewasa dan remaja tidak seharusnya merokok.
JTI Malaysia komited memainkan peranannya dalam
meningkatkan kesedaran di kalangan peruncit bahawa produkproduk tembakau tidak harus dijual kepada golongan di bawah
umur 18 tahun. Pada tahun 2011, JTI Malaysia bersama pihak
industri telah melaksanakan sebuah inisiatif di seluruh negara
untuk membekalkan semula tanda “Dilarang Jual Kepada
Bawah 18 Tahun” yang diwartakan pihak Kerajaan kepada
para peruncit. JTI Malaysia akan terus menyokong kempen
Mencegah Remaja Merokok yang bertujuan membentuk
kesedaran di kalangan peruncit agar menghalang golongan
remaja dari memperolehi produk-produk tembakau.
Kuala Lumpur Rat Race 2011
Sebagai warga korporat yang bertanggungjawab, JTI Malaysia
terus menghulurkan sokongan kepada aktiviti-aktiviti kebajikan
yang mampan anjuran organisasi-organisasi lain. Sekali lagi
11 orang kakitangan yang diketuai oleh Pengarah Urusan iaitu
Shigeyuki Nakano telah mewakili JTI Malaysia bagi acara “The
Edge-Bursa Malaysia Kuala Lumpur Rat Race 2011”. Acara
tahunan yang berlangsung pada 20 September lalu ini telah
berjaya menarik sokongan 88 buah syarikat tempatan dan
antarabangsa, mewakili 150 buah pasukan yang terdiri dari
lima orang pelari setiap pasukan. Acara kemuncak merupakan
usaha mengumpul dana yang berjaya mencecah lebih dari
RM1.93 juta untuk disalurkan kepada 20 buah organisasi
kebajikan. JTI Malaysia turut merasa bangga melibatkan diri
dalam inisiatif unik ini bagi menghulurkan sumbangan kepada
golongan kurang berupaya.
Untuk tahun 2012, JTI Malaysia akan terus menyumbang
kepada masyarakat dan memperteguhkan kerjasama dengan
organisasi-organisasi yang berkualiti dan berintegriti tinggi.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
39
Statement of corporate governance
The Board of Directors is committed to high standards
of corporate governance and ensures that it is practised
throughout the Group as a fundamental part of discharging
its responsibilities to protect and enhance shareholder value
and the financial performance of JT International Berhad.
To this end, the Board fully subscribes to and supports the
recommendations of the Malaysian Code on Corporate
Governance.
Board Balance
The Board had nine members, comprising four Independent
Non-Executive Directors, two Non-Executive Directors and
three Executive Directors. Together, the Directors bring a wide
range of business and financial experience, skills and expertise
that are vital for the successful performance of the Board. A
brief description of the background of each current Director is
presented on pages 30 to 32.
Set out below is a statement of how the Group has applied
the various principles and complied with the best practices in
the Code throughout the financial year ended December 31,
2011.
There is a clear division of responsibility between the Chairman
and the Group Managing Director to ensure that there is a
balance of power and authority.
Board Of Directors
The Board
The Group is led and controlled by an effective Board that has
the overall responsibility for corporate governance, strategic
direction and overseeing the investments and operations
of the Group. The Board meets at least four times a year,
with additional meetings convened as necessary. All Board
members bring an independent judgment to bear on the
issues of strategy, performance and resources including key
appointments and standards of conduct.
During the year ended December 31, 2011, four meetings
were held. The details of attendance of the Board members
are as follows:
MEMBERS OF THE BOARD
NUMBER OF BOARD
MEETINGS ATTENDED
Dato’ Sri Mohd. Nadzmi
Bin Mohd. Salleh
2 out of 4 meetings
Datuk Henry Chin Poy-Wu
4 out of 4 meetings
Shigeyuki Nakano
3 out of 4 meetings
Thean Nam Hooi
4 out of 4 meetings
Jarl Hakan Kulp
3 out of 4 meetings
Nobuaki Hayashi
2 out of 4 meetings
Pierre Henri Emeric Binetter
2 out of 4 meetings
Keong Choon Keat
4 out of 4 meetings
Leong Wai Hoong
4 out of 4 meetings
The Board has delegated specific responsibilities to
three committees (Audit, Nominating and Remuneration
Committees), the details of which are set out below. These
Committees have the authority to examine particular issues
and report back to the Board with their recommendations.
The ultimate responsibility for the final decision on all matters,
however, lies with the entire Board.
40
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
There is also balance in the Board because of the presence of
Independent Non-Executive Directors of the calibre necessary
to carry sufficient weight in Board decisions. Although all
the Directors have an equal responsibility for the Group’s
operations, the role of these Independent Non-Executive
Directors is particularly important in ensuring that the strategies
proposed by the executive management are fully deliberated
upon, and take account of the long term interests, not only
of the shareholders, but also of the employees, customers,
suppliers, and the many communities in which the Group
conducts business.
Datuk Henry Chin Poy-Wu is the Senior Independent NonExecutive Director. Any issues concerning the Group may be
conveyed to him.
More than one third of the Board consists of independent
directors and the investment of minority shareholders is fairly
reflected through Board representation.
Supply Of Information
The agenda and Board reports for each meeting are
circulated at least one week prior to the meeting to enable
Directors to obtain further explanations, where necessary,
before the meeting to allow them to effectively discharge their
responsibilities.
The Board reports include, among others, the following:
• minutes of meeting of the Board;
• quarterly performance reports of the Group;
• brands, segments and industry performance;
• update on manufacturing and related leaf activities;
• enterprise risk assessment and management;
• review of related party transactions; and
• major operational and financial issues.
In addition, there is a schedule of matters reserved specifically
for the Board’s decision, including the approval of the annual
business plan, strategic plan, changes to management and
control structure of the Group plus key policies and procedures.
All decisions and conclusions of the Board are duly recorded in
the Board minutes.
The Board has also approved a procedure for Directors,
whether as a full Board or in their individual capacity, to take
independent advice, where necessary, in the furtherance of
their duties at the Group’s expense.
All Directors have access to all information within the Group
and to the advice and services of the Company Secretary.
Appointments To The Board
A formal procedure is in place for appointments to the Board.
The Nominating Committee is delegated the responsibility of
recommending candidates to the Board for directorships as
required.
Nominating Committee
Leong Wai Hoong (Chairman)
Datuk Henry Chin Poy-Wu
Keong Choon Keat
This Committee held one meeting during the financial year
ended December 31, 2011. All members of this Committee
are Independent Non-Executive Directors.
The Nominating Committee recommends to the Board:
• candidates for all directorships;
• candidates for directorships proposed by the Managing
Director and, within the bounds of practicability, by any
other senior executive or any Director or shareholder; and
• directors to fill the seats on Board committees.
The actual decision as to who shall be nominated is
the responsibility of the full Board after considering its
recommendations.
In addition, this Committee assesses:
• the effectiveness of the Board as a whole and the
Committees of the Board; and
• the contribution of Directors.
This is undertaken through a formal annual assessment
covering both Executive Directors and Non-Executive
Directors.
The Board, through the Nominating Committee, reviews
annually its required mix of skills and experience and other
qualities, including core competencies, which Directors should
bring to the Board.
The Committee shall meet at least once a year. Additional
meetings can be scheduled if considered necessary by the
Chairman of the Committee. The Company Secretary is the
Secretary to the Nominating Committee.
Directors’ Training
As an integral element in the appointment of new Directors,
the Nominating Committee ensures that there is an orientation
and education programme for new Board members. This is
to keep them abreast of new relevant laws and regulations,
changing commercial risks and provide them with a briefing on
the plans and operations of the Group. In line with the Listing
Requirements, the Board of Directors has assumed the onus
of evaluating and determining the training needs of its directors
on a continuous basis from 2005 onwards. During the financial
year ended December 31 2011, the respective Directors
attended various seminars, conferences, technical updates
and briefings in areas of leadership, corporate integrity, risk
management, finance, corporate governance, management,
environment health and safety.
The Directors are mindful that they should continue to
attend relevant seminars and conferences to stay abreast
with the various issues arising from the ever-changing
business environment, regulatory and corporate governance
developments to enhance their professionalism and knowledge
to effectively discharge their duties and obligations.
Re-Election And Re-Appointment Of Directors
In accordance with the Company’s Articles of Association,
all Directors who are appointed by the Board are subject to
election by shareholders at the first Annual General Meeting
after their appointment. In addition, one-third of the Directors
are required by rotation to submit themselves for re-election
by shareholders at every Annual General Meeting of the
Company. The Articles further provide that all the Directors shall
retire from office once at least in every three years but shall be
eligible for re-election. Directors over seventy (70) years of age
are required to submit themselves for re-appointment annually
in accordance with Section 129 of the Companies Act, 1965.
Directors’ Remuneration
The objective of the Company’s policy on Directors’
remuneration is to attract and retain Directors of the calibre
required to run the Group successfully. The component parts of
remuneration are structured so as to link rewards to corporate
and individual performance, in the case of Executive Directors.
Performance is measured against profits and key performance
indicator targets set in the Group’s annual plan. In the case
of Non-Executive Directors, the level of remuneration reflects
the experience and level of responsibilities undertaken by the
particular Non-Executive concerned.
Remuneration Committee
Leong Wai Hoong (Chairman)
Datuk Henry Chin Poy-Wu
Keong Choon Keat
This Committee held one meeting during the financial year
ended December 31, 2011, which was attended by all the
members. All members of this Committee are Independent
Non-Executive Directors.
The Remuneration Committee reviews the policy and
framework for Directors’ remuneration drawing advice from
external consultants as necessary. Remuneration of Executive
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
41
Statement of corporate governance
Directors is according to JT International Global Remuneration
Policies which links rewards to corporate and individual
performance. It is the responsibility of the Board to approve
the remuneration package of the Directors. Directors do not
participate in decisions regarding their own remuneration and
directors’ fees are approved by the shareholders at the Annual
General Meeting.
The Committee shall meet at least once a year. Additional
meetings can be scheduled if considered necessary by the
Chairman of the Committee. The Company Secretary is the
Secretary to the Remuneration Committee. The details of the
aggregate remuneration of the Directors as at December 31,
2011 are as follows:
EXECUTIVE
DIRECTORS
RM
NON-EXECUTIVE
DIRECTORS
RM
TOTAL
RM
–
329,000
329,000
Salary
1,968,322
–
1,968,322
Bonus
1,428,592
–
1,428,592
Allowances
1,026,231
–
1,026,231
EPF
56,580
–
56,580
Post Employment
Benefit
17,096
–
17,096
420,873
–
420,873
4,917,694
329,000
5,246,694
Fee
Benefits-in-kind
Total
The number of directors whose remuneration falls within the
following bands are:
RM
EXECUTIVE
DIRECTORS
NON-EXECUTIVE
DIRECTORS
TOTAL
50,001 – 100,000
–
3
3
100,001 – 150,000
–
1
1
750,001 – 800,000
1
–
1
1,600,001 – 1,650,000
1
–
1
2,500,001 – 2,550,000
1
–
1
Total
3
4
7
Note:
For privacy and security reasons, the details of Directors’
remuneration are not shown with reference to Directors
individually. The Board is of the view that the transparency
and accountability aspect of the corporate governance on
Directors’ remuneration are appropriately served by the band
disclosure made.
42
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
Shareholders
Dialogue Between The Company And Investors
The Group values dialogue with investors. As per the
Investor Relations Policy, it organises quarterly briefings and
discussions for analysts and fund managers the day after
each quarter’s announcement of results to Bursa Malaysia
Securities Berhad (BMSB). Presentations are made, as
appropriate, to explain the Group’s strategy, performance
and major developments. However, any information that may
be regarded as competitive information will not be given.
Annual General Meeting
The Board acknowledges the need to communicate with
shareholders on all material business matters affecting the
Company. A copy of the Annual Report is sent to all our
shareholders and is available upon request.
At each Annual General Meeting, the Board presents the
progress and performance of the business and encourages
shareholders to participate in the question and answer session,
which provides an opportunity for shareholders to clarify any
issues and to have a better understanding of the business.
Executive Directors and, where appropriate, the Chairman
of the Audit, Nominating and Remuneration Committees are
available to respond to shareholders’ questions during the
meeting. Where appropriate, the Chairman of the Board will
undertake to provide the questioner with a written answer to
any significant question that cannot be readily answered during
the Annual General Meeting.
Each item of special business included in the notice of the
meeting will be accompanied by a full explanation of the
effects of a proposed resolution. Separate resolutions are
proposed for substantially separate issues at the meeting. The
Chairman announces proxy votes for all proxies lodged with
the Company.
Accountability And Audit
Financial Reporting
It is the Board’s commitment to provide a balanced, clear, and
meaningful assessment of the financial position and prospects
of the Group in all the reports to shareholders, investors, and
regulatory authorities.
Early release of the announcements of the quarterly financial
statements and press release reflect the Board’s commitment to
provide timely and transparent disclosures of the performance
of the Company and the Group.
Statement Of Directors’ Responsibility For Preparing
The Financial Statements
The Directors are required by the Companies Act 1965 to
prepare financial statements for each financial year which
have been made out in accordance with applicable approved
accounting standards and give a true and fair view of the
state of affairs of the Group and Company at the end of the
financial year and of the results and cash flows of the Group
and Company for the financial year.
In preparing the financial statements, the Directors have:
• selected suitable accounting policies and applied them
consistently;
• made judgments and estimates that are reasonable and
prudent;
• ensured that all applicable accounting standards have
been followed; and
• prepared financial statements on the going concern basis
as the Directors have a reasonable expectation, having
made enquiries, that the Group and Company have
adequate resources to continue in operational existence
for the foreseeable future.
The Directors have the responsibility for ensuring that the
Company keeps accounting records which disclose with
reasonable accuracy the financial position of the Group and
Company and which enable them to ensure the financial
statements comply with the Companies Act 1965.
The Directors have overall responsibilities for taking such steps
as are reasonably open to them to safeguard the assets of the
Group and to prevent and detect fraud and other irregularities.
Internal Control
The Board acknowledges its overall responsibility for
maintaining a sound system of internal control to safeguard
shareholders’ investments, the Company’s assets, and the
need to review the adequacy and integrity of those systems
regularly.
In establishing and reviewing the system of internal control, the
Directors recognise that the system of internal control can only
provide reasonable but not absolute assurance against the risk
of material misstatement or loss.
The Internal Audit department was established in late 1991
whilst the Audit Committee was formed in 1994. At that time
the emphasis was mainly on financials, compliance audit
and operational audit. In 1997, the Risk Assessment Asset
Protection (RAAP) Matrix, a tool that systematically identifies
key business risks and assesses their impact and likelihood
of occurrence and further identifies measures and controls
to mitigate and manage the risks, was implemented. In year
2001, the Company adopted the Enterprise Risk Management
approach that examines risks in relation to the achievement of
the Company’s objectives on a quarterly basis.
The Audit Committee met four times in year 2011 to consider,
discuss and review all the matters specified in its terms of
reference.
Relationship With Auditors
Through the Audit Committee of the Board, the Company has
established a transparent and appropriate relationship with the
Company’s auditors, both internal and external. The external
auditor attended two Audit Committee Meetings during the
year to discuss the nature and scope of the audit and problems
and reservations arising from the final audit. During the financial
year, the Group paid non-audit fees of RM154,597 to the
statutory auditors and its affiliated companies.
The collective approval by the Board on this Statement was
obtained on February 27, 2012.
Dato’ Sri Mohd. Nadzmi Bin Mohd. Salleh
Chairman
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
43
Statement on internal control
Introduction
The Malaysian Code on Corporate Governance requires listed
companies to maintain a sound system of internal control to
safeguard shareholders’ investment and the Group’s assets.
The revamped Bursa Malaysia Securities Berhad (BMSB)
Listing Requirements require Directors of listed companies to
include a statement in the annual reports on the state of their
internal controls. The BMSB’s Statement on Internal Control:
Guidance for Directors of Public Listed Companies (“Guidance”)
provides guidance for compliance with these requirements. Set
out below is the Board’s Internal Control Statement, which has
been prepared in accordance with the Guidance.
Responsibility
The Board of Directors recognises the importance of
sound internal controls and risk management practices to
good corporate governance. The Board affirms its overall
responsibility for the Group’s systems of internal controls and
risk management, and for reviewing the adequacy and integrity
of those systems. It should be noted, however, that such
systems are designed to manage rather than eliminate the risk
of failure to achieve business objectives. In addition, it should
be noted that any system can provide only reasonable, and
not absolute assurance against material misstatement or loss.
The Group has in place an on-going process for identifying,
evaluating, monitoring and managing the significant risks
affecting the achievement of its business objectives throughout
the period. The process is regularly reviewed by the Board,
which dedicates separate time for discussion of this subject.
Enterprise Risk Management Framework
The Board has established an organisation structure with
clearly defined lines of accountability and delegated authority.
The risk management framework was formalised in the 4th
quarter of 2001 to be in compliance with the BMSB Listing
Requirements with emphasis on compliance with the Code of
Corporate Governance and Statement on Internal Control. It
also had, in the 4th quarter 2001, extended the responsibilities
of the Audit Committee to include the work of monitoring all
internal controls, on its behalf.
In the 4th quarter of 2002 a Risk Advisory Committee, with
representatives from middle management and chaired by the
Managing Director, was created to meet on a quarterly basis
to consider the changes to risk management and control
processes required. This approach has been fully implemented
in the 1st quarter of 2003 and practised throughout the year.
44
Each quarter, the Internal Audit Department will prepare a risk
profile which summarises the risks, the controls and processes
for managing them and the means for assuring management
that the processes are effective. This information will be
updated in a timely manner and reviewed by the management
team. The Internal Audit Department then reports to the
Board significant changes in the business and the external
environment that affect key risks.
Moving forward, the Company will further enhance its risks
and controls identification and monitoring methodology. In
addition, the Internal Audit Department undertakes to broaden
the development and refinement of its risk-based techniques,
enhance the level of staff expertise and benchmark itself
against global best practices in risk management.
Other Key Elements Of Internal Control
The other key elements of the Group’s internal control systems
are described below:
• Clearly defined delegation of responsibilities to committees
of the Board and to management of Head Office and
operating units, including authorisation levels for all
aspects of the business;
• Clearly documented internal policies and procedures
set out in a series of Standard Practice Manuals. These
manuals are subject to regular review and improvement;
• Regular and comprehensive information provided to
management, covering financial performance and key
business indicators;
• A detailed budgeting process where operating units
prepare budgets for the coming year which are approved
both at the operating unit level and by the board;
• Quarterly monitoring of results against budget, with major
variances being followed up and management action
taken, where necessary; and
• Regular visits to operating units by the management team
and where deemed appropriate by the Board.
A number of internal control weaknesses were identified during
the period, all of which have been, or are being, addressed.
None of the weaknesses have resulted in any material losses,
contingencies or uncertainties that would require disclosure in
the Group’s annual report.
Related Party Transactions
Control Self-Assessment
Recurrent related party transactions of the Group during the
year are disclosed in Note 20 to the financial statements.
The general mandate for these transactions was obtained at
the Thirty-Seventh Annual General Meeting held on April 23,
2010 and further renewed at the Thirty-Eighth Annual General
Meeting held on April 21, 2011.
Having identified the risks to achieving the Group’s strategic
objectives, each functional area is required to document the
management and mitigating actions for each significant risk.
New areas are introduced for assessment as the business risk
profile changes and is reviewed by the management team.
During the year, save for those recurrent related party
transactions of a revenue or trading nature that are disclosed
in Note 20 to the financial statements, there were no material
contracts of the Group involving Directors’ and major
shareholders’ interests.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
Audit committee report
Objective
g. the quarterly results and yearend financial statements
prior to the approval by the Board of Directors,
focusing particularly on:
• changes in the implementation of major
accounting policy;
• significant and unusual events;
• compliance with accounting standards and other
legal requirements;
• the going concern assumption;
• compliance with Bursa Malaysia Securities
Berhad (BMSB) requirements;
The Audit Committee assists the Board in fulfilling its
responsibility and ensuring the quality and integrity of the
accounting, auditing, internal control and financial practices
ofthe Company.
Membership
The Audit Committee, whose composition is listed on
page 3, comprises three Independent Non-executive
Directors of the Board, with Datuk Henry Chin Poy-Wu as
the Chairman.
h. any related party transaction and conflict of interest
situation that may arise within the Company or Group
including any transaction, procedure or course of
conduct that raises questions of management integrity;
Authority
The Committee is authorised by the Board:
i.
To investigate any activity within its terms of reference;
ii.
To have the resources required to perform its duties;
i.
any letter of resignation from the external auditors of
the Company;
j.
whether there is any reason (supported by grounds)
to believe that the external auditor is not suitable for
reappointment;
iii. To have full and unrestricted access to any information
pertaining to the Company and the Group;
k. external auditors’ management
management’s response;
iv. To have direct communication channels with the internal
and external auditors;
l.
v. To obtain external legal or other independent advice as
necessary; and
vi. To convene meetings with the external auditors, the
internal auditors or both, excluding the attendance of other
directors and employees, whenever deemed necessary.
Functions And Duties
and
whether they are satisfied that the Corporate Risk
Management procedure used within the Company
and the Group provides reasonable assurance that
all known risks are identified, evaluated and effectively
managed;
To prepare the Audit Committee Report for the JT
International Berhad Annual Report as established by
Section 15.15 of the BMSB Listing Requirements;
a. with the external auditor, the audit plan;
iii. Where the Audit Committee is of the view that any matter
reported by it to the Board of Directors of the Company
which has not been satisfactorily resolved resulting in
a breach of BMSB Listing Requirements, the Audit
Committee must report such matter to the BMSB;
b. with the external auditor, his evaluation of the system
of internal controls;
iv. To recommend the nomination of a person or persons as
external auditors;
c. with the external auditor, his report;
v. To review any appraisal or assessment of the performance
of the members of the internal audit function;
The function and duties of the Committee shall be:
i.
ii.
letter
To review the following and report the same to the Board
of Directors:
d. the assistance given by the employees of the
Company to the external auditor;
e. the adequacy of the scope, functions, competency
and resources of the internal audit functions and
that it has the necessary authority to carry out its
work;
f.
the internal audit programme, processes, the
results of the internal audit programme, processes
or investigations undertaken and whether or not
appropriate action is taken on the recommendations
of the internal audit function;
vi. To approve any appointment or termination of senior staff
members of the internal audit function;
vii. To inform itself of resignations of the internal audit staff
members and provide the resigning staff member an
opportunity to submit his reasons for resigning;
viii. To discuss problems and reservations arising from the
interim and final audits, their evaluation of the system of
internal controls and any matters the external auditor may
wish to discuss (in the absence of management where
necessary); and
ix. To carry out any other function that may be mutually
agreed upon by the Committee and the Board.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
45
Audit committee report
Summary Of Activities
During the year under review, the Audit Committee carried out
the activities as set out in its functions and duties.
Meetings
The Committee held four meetings during the financial year
ended December 31, 2011. At the invitation of the Committee,
the Group’s Managing Director, Chief Financial Officer and the
Group Internal Audit Manager attended all meetings.
The Group’s external auditors attended two meetings during
this period, where they were invited to discuss matters related
to the statutory audit for the year ended December 31, 2010
and their statutory audit-planning memorandum for the
year ended December 31, 2011. They were also given the
opportunity to raise areas of concern without the presence of
the Executive Directors of the Group.
NAME OF AUDIT COMMITTEE MEMBER
TOTAL MEETINGS ATTENDED
1. Datuk Henry Chin Poy-Wu
4/4
2. Mr. Keong Choon Keat
4/4
3. Mr. Leong Wai Hoong
4/4
Internal Audit Function
The Group has a well-established Internal Audit Department
(established in 1991), which reports directly to the Audit
Committeeof the Board and assists the Board of Directors in
monitoring and managing risks, related party transactions and
internal controls, based on the internal audit plan. The Audit
Committee approves the following year’s internal audit plan
during the last Audit Committee meeting of the prior year and
46
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
reviews its status at Audit Committee meetings in the current
year. The scope of Internal Audit covers the audit of all units
and operations, including enterprise wide risk assessment,
review of related party transactions, the adequacy of
operational controls, compliance with law and regulations and
the management of assets. In addition, Internal Audit performs
quarterly follow-ups on outstanding issues from prior audits.
The Group introduced a risk-based approach to the
implementation and monitoring of controls in October 2001.
The approach is being continuously refined. This systematic
and disciplined approachis designed to evaluate and continually
enhance enterprise risk management, controls and corporate
governance processes in the context of the Group’s overall
objectives.
During the year, the Audit Committee reviewed a total of six
reports prepared by the Internal Audit Department, which
included Leaf and Stemmery Operations, Investigation on
Sabah Leaf Operations, Reviews on Factory Operations,
Corporate Affairs and Communications and Human
Resources functions. In addition to the audit reports, the
Audit Committee performed reviews on recurrent related party
transactions updates. Management has duly acted upon the
recommendations made.
The total cost incurred by the internal audit function of the
Company and the Group in fulfilling its obligations for the
financial year was RM400,000.
Statement By The Audit Committee
There were no share options offered to the eligible employees
or the non-executive directors during the financial year ended
December 31, 2011.
Directors’ report
The Directors of JT INTERNATIONAL BERHAD have pleasure in submitting their report and the audited financial statements of the
Group and of the Company for the financial year ended December 31, 2011.
Principal Activities
The Company is principally an investment holding company.
The principal activities of its subsidiary companies are disclosed in Note 14 to the financial statements.
There have been no significant changes in the nature of the activities of the Company and its subsidiary companies during the
financial year.
Results Of Operations
The results of operations of the Group and of the Company for the financial year are as follows:
The
Group
The
Company
RM’000
RM’000
Profit before tax
Tax expense
164,285
(41,474)
59,315
(173)
Profit for the year
122,811
59,142
In the opinion of the Directors, the results of operations of the Group and of the Company during the financial year have not been
substantially affected by any item, transaction or event of a material and unusual nature.
Dividends
Two interim dividends of 15 sen each, less 25% tax per share, totalling RM58,845,241 were paid in respect of the current financial
year.
The Directors do not recommend the payment of any final dividend in respect of the current financial year.
Reserves And Provisions
There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the
financial statements.
Issue Of Shares And Debentures
The Company has not issued any new shares or debentures during the financial year.
Share Options
No options have been granted by the Company to any parties during the financial year to take up unissued shares of the
Company.
No shares have been issued during the financial year by virtue of the exercise of any option to take up unissued shares in the
Company. As of the end of the financial year, there were no unissued shares of the Company under options.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
47
Directors’ report
Other Statutory Information
Before the statements of comprehensive income and the statements of financial position of the Group and of the Company were
made out, the Directors took reasonable steps:
(a) to ascertain that proper action had been taken in relation to the writing off of bad receivables and the making of allowance
for doubtful receivables, and had satisfied themselves that all known bad receivables had been written off and that adequate
allowance had been made for doubtful receivables; and
(b) to ensure that any current assets which were unlikely to realise their book values in the ordinary course of business had been
written down to their estimated realisable values.
At the date of this report, the Directors are not aware of any circumstances:
(a) which would render the amount written off for bad receivables or the amount of allowance for doubtful receivables in the
financial statements of the Group and of the Company inadequate to any substantial extent; or
(b) which would render the values attributed to current assets in the financial statements of the Group and of the Company
misleading; or
(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the
Company misleading or inappropriate; or
(d) not otherwise dealt with in this report or financial statements which would render any amount stated in the financial statements
of the Group and of the Company misleading.
At the date of this report, there does not exist:
(a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which
secures the liability of any other person; or
(b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.
No contingent or other liability has become enforceable, or is likely to become enforceable within the period of twelve months after
the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the
Company to meet their obligations as and when they fall due.
In the opinion of the Directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the
end of the financial year and the date of this report which is likely to affect substantially the results of operations of the Group and
of the Company for the succeeding financial year.
Directors
The following Directors served on the Board of the Company since the date of the last report:
Dato’ Sri Mohd Nadzmi Bin Mohd Salleh
Datuk Henry Chin Poy-Wu
Leong Wai Hoong
Jarl Hakan Kulp
Keong Choon Keat
Thean Nam Hooi
Shigeyuki Nakano
Nobuaki Hayashi
Pierre Henri Emeric Binetter
In accordance with Article 99 of the Company’s Articles of Association, Messrs. Leong Wai Hoong, Keong Choon Keat and
Shigeyuki Nakano retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.
Datuk Henry Chin Poy-Wu, being over the age of seventy years, retires pursuant to Section 129(2) of the Companies Act, 1965
and seeks re-appointment as Director under the provision of Section 129(6) of the said Act to hold office until the next Annual
General Meeting.
48
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
Directors’ Interests
None of the Directors in office as of the end of the financial year held shares or have beneficial interest in the shares of the
Company during the financial year. Under the Company’s Articles of Association, the Directors are not required to hold shares in
the Company.
The interests in shareholdings in other related companies of those who were Directors at the end of the financial year, as recorded
in the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act, 1965, are as follows:
Number Of Ordinary Shares Of Yen 10,000 Each
Balance At 1.1.2011
Bought
Sold
Balance At
31.12.2011
58.139536
6.307848
63.910681
7.315888
Shares in ultimate holding company,
Japan Tobacco Inc.
Direct Interest
Shigeyuki Nakano
Nobuaki Hayashi
5.771145
1.008040
–
–
Number Of Ordinary Shares Of HKD 100 Each
Balance At 1.1.2011
Bought
Sold
Balance At
31.12.2011
Registered in the name of the Director
Shares in Japan Tobacco International (HK) Ltd.
Nobuaki Hayashi
1
–
1
–
Number Of Ordinary Shares Of PHP 1 Each
Balance At
1.1.2011
Bought
Sold
Balance At
31.12.2011
Registered in the name of the Director
Shares in JT International (Philippines) Inc.
Nobuaki Hayashi
Pierre Henri Emeric Binetter
1
1
–
–
1
1
–
–
Number Of Ordinary Shares Of PHP 100 Each
Balance At
1.1.2011
Bought
Sold
Balance At
31.12.2011
Registered in the name of the Director
Shares in JTI Company (Philippines) Inc.
Nobuaki Hayashi
Pierre Henri Emeric Binetter
1
1
–
–
–
–
1
1
None of the other Directors in office at the end of the financial year held shares or had beneficial interest in the shares of the related
companies during or at the beginning and at the end of the financial year.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
49
Directors’ report
Directors’ Benefits
Since the end of the previous financial year, none of the Directors of the Company has received or become entitled to receive any
benefit (other than those disclosed as Directors’ remuneration in the financial statements) by reason of a contract made by the
Company or a related corporation with the Director or with a firm of which he is a member, or with a company in which he has a
substantial financial interest.
During and at the end of the financial year, no arrangement subsisted to which the Company was a party whereby the Directors of
the Company might acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body
corporate.
Holding Companies
The Company is a subsidiary company of JT International Holding B.V., a company incorporated in the Netherlands. The Directors
regard Japan Tobacco Inc., a company incorporated in Japan as the ultimate holding company.
Auditors
The auditors, Messrs. Deloitte & Touche, have indicated their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the Directors,
SHIGEYUKI NAKANO
THEAN NAM HOOI
Kuala Lumpur,
February 27, 2012
50
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
Independent auditors’ report
TO THE MEMBERS OF JT INTERNATIONAL BERHAD
Report On The Financial Statements
We have audited the financial statements of JT INTERNATIONAL BERHAD, which comprise the statements of financial position of
the Group and of the Company as of December 31, 2011, 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 year then ended, and a summary of significant
accounting policies and other explanatory information, as set out on pages 53 to 84.
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 is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance
with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on auditors’ judgement, including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control
relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence that we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the
Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of
December 31, 2011 and of their financial performance and cash flows for the year then ended.
Report On Other Legal And Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report that:
(a) in our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its
subsidiary companies have been properly kept in accordance with the provisions of the Act;
(b) we are satisfied that the accounts of the subsidiary companies that have been consolidated with the financial statements of
the Company are in form and content appropriate and proper for the purposes of the preparation of the financial statements
of the Group and we have received satisfactory information and explanations as required by us for those purposes; and
(c) our auditors’ reports on the accounts of the subsidiary companies were not subject to any qualification and did not include
any adverse comment made under Section 174(3) of the Act.
Other Reporting Responsibilities
The supplementary information set out in Note 32 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.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
51
Independent auditors’ report
TO THE MEMBERS OF JT INTERNATIONAL BERHAD
Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act,
1965 in Malaysia and for no other purpose. We do not assume responsibility towards any other person for the contents of this
report.
DELOITTE & TOUCHE
AF 0834
Chartered Accountants
KEK AH FONG
Partner – 1880/4/12 (J)
Chartered Accountant
February 27, 2012
52
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
Statements of comprehensive income
FOR THE Y EAR ENDED DECEMBER 31, 2011
The Group
Note
2011
RM’000
The Company
2010
RM’000
2011
RM’000
2010
RM’000
Revenue
5
Investment revenue
6
Other income
7
Change in inventories of finished goods
Raw materials and consumables used
Directors’ remuneration
8
Staff costs
7
Depreciation and amortisation
of property, plant and equipment
12
Amortisation of prepaid lease payments
13
Other expenses
7
1,197,810
5,682
2,557
5,946
(141,402)
(4,826)
(57,079)
1,205,121
3,250
8,637
1,241
(158,732)
(4,289)
(58,067)
59,400
696
–
–
–
(329)
–
118,800
345
7,213
–
–
(336)
–
(17,707)
(5)
(826,691)
(17,230)
(6)
(801,006)
–
–
(452)
–
–
(1,252)
Profit before tax
Tax (expense)/income
9
164,285
(41,474)
178,919
(45,106)
59,315
(173)
124,770
3
Profit for the year
122,811
133,813
59,142
124,773
Other comprehensive income
–
–
–
–
Total comprehensive income for the year
122,811
133,813
59,142
124,773
Earnings per ordinary share
Basic and diluted
RM0.47
RM0.51
10
The accompanying Notes form an integral part of the Financial Statements.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
53
Statements of financial position
AS OF DECEMBER 31, 2011
The Group
Note
ASSETS
Non-current Assets
Property, plant and equipment
Prepaid lease payments
Investment in subsidiary companies
Deferred tax assets
12
13
14
15
Total Non-current Assets
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
110,875
204
–
4,204
119,646
209
–
3,168
–
–
250,990
–
–
–
250,990
–
115,283
123,023
250,990
250,990
Current Assets
Inventories
16
Trade receivables
17
Other receivables, deposits and
prepaid expenses
18
Tax recoverable
Amount owing by ultimate holding company
20
Amount owing by other related companies
20
Cash and cash equivalents
21
82,716
57,978
77,333
59,776
–
–
–
–
14,480
1,609
66
7,856
259,903
8,258
13,392
1,629
7,560
189,230
22
224
–
–
27,238
26
452
–
–
26,708
Total Current Assets
424,608
357,178
27,484
27,186
Total Assets
539,891
480,201
278,474
278,176
EQUITY AND LIABILITIES
Capital and Reserves
Issued capital
Share premium
Retained earnings
65,384
4,536
384,602
65,384
4,536
320,636
65,384
4,536
208,395
65,384
4,536
208,098
454,522
390,556
278,315
278,018
13,342
13,448
12,442
12,321
–
–
–
–
Total Non-current and Deferred Liabilities
26,790
24,763
–
–
Current Liabilities
Trade payables
26
Other payables and accrued expenses
26
Amount owing to immediate holding company
20
Amount owing to a subsidiary company
20
Amount owing to other related companies
20
Tax liabilities
10,778
37,118
371
–
3,216
7,096
8,748
46,087
–
–
3,609
6,438
–
159
–
–
–
–
–
157
–
1
–
–
Total Current Liabilities
58,579
64,882
159
158
Total Liabilities
85,369
89,645
159
158
Total Equity and Liabilities
539,891
480,201
278,474
278,176
22
23
24
Total Equity
Non-current and Deferred Liabilities
Deferred tax liabilities
Provision for retirement benefits
15
25
The accompanying Notes form an integral part of the Financial Statements.
54
The Company
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
Statements of changes in equity
FOR THE Y EAR ENDED DECEMBER 31, 2011
NonDistri-
butable Reserve
Distributable
Reserve
The Group
Note
Issued
Capital
RM’000
Share
Premium
RM’000
Retained
Earnings
RM’000
Total
RM’000
Balance as of January 1, 2010
Total comprehensive income for the year
Dividends 11
65,384
–
–
4,536
–
–
245,668
133,813
(58,845)
315,588
133,813
(58,845)
Balance as of December 31, 2010
65,384
4,536
320,636
390,556
Balance as of January 1, 2011
Total comprehensive income for the year
Dividends
11
65,384
–
–
4,536
–
–
320,636
122,811
(58,845)
390,556
122,811
(58,845)
Balance as of December 31, 2011
65,384
4,536
384,602
454,522
NonDistri-
butable Reserve
Distributable
Reserve
The Company
Note
Issued
Capital
RM’000
Share
Premium
RM’000
Retained
Earnings
RM’000
Total
RM’000
Balance as of January 1, 2010
Total comprehensive income for the year
Dividends
11
65,384
–
–
4,536
–
–
142,170
124,773
(58,845)
212,090
124,773
(58,845)
Balance as of December 31, 2010
65,384
4,536
208,098
278,018
Balance as of January 1, 2011
Total comprehensive income for the year
Dividends
11
65,384
–
–
4,536
–
–
208,098
59,142
(58,845)
278,018
59,142
(58,845)
Balance as of December 31, 2011
65,384
4,536
208,395
278,315
The accompanying Notes form an integral part of the Financial Statements.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
55
Statements of cash flows
FOR THE Y EAR ENDED DECEMBER 31, 2011
The Group
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
122,811
133,813
59,142
124,773
41,474
45,106
173
(3)
17,707
1,928
736
321
112
5
756
–
(5,682)
(2,847)
(1,316)
(180)
(162)
–
–
17,230
2,633
445
–
726
6
680
–
(3,250)
(528)
–
(1,017)
(29)
–
(7,214)
–
–
–
–
–
–
–
–
(696)
–
–
–
–
(59,400)
–
–
–
–
–
–
–
–
877
(345)
–
–
–
–
(118,800)
(7,214)
175,663
188,601
(781)
(712)
Movements in working capital:
(Increase)/Decrease in:
Inventories
Trade receivables
Other receivables, deposits and prepaid expenses
Amount owing by ultimate holding company
Amount owing by other related companies
(6,119)
4,780
(3,561)
807
(194)
(2,206)
(7,412)
(2,646)
(508)
(536)
–
–
4
–
–
–
–
(11)
–
–
Increase/(Decrease) in:
Trade payables
Other payables and accrued expenses
Amount owing to immediate holding company
Amount owing to other related companies
1,996
(7,637)
371
(421)
311
(820)
(4,952)
(3,443)
–
2
(1)
–
–
3
(61,155)
–
Cash Generated From/(Used In) Operations
Tax refunded
Tax paid
Retirement benefits paid
165,685
13,255
(42,424)
(801)
166,389
1,087
(44,312)
(2,128)
(776)
315
(260)
–
(61,875)
1,086
(367)
–
Net Cash From/(Used In) Operating Activities
135,715
121,036
(721)
(61,156)
CASH FLOWS FROM/(USED IN)
OPERATING ACTIVITIES
Profit for the year
Adjustments for:
Tax expense/(income) recognised in income statements
Depreciation and amortisation of
property, plant and equipment
Provision for retirement benefits
Inventories written down
Bad receivables written off
Property, plant and equipment written off
Amortisation of prepaid lease payments
Allowance for doubtful receivables
Interest expense on loan payable to a subsidiary company
Interest income
Allowance for doubtful receivables no longer required
Allowance for litigation claims no longer required
Gain on disposal of property, plant and equipment
Unrealised gain on foreign exchange
Dividend income
Residual value received from Trustee
56
The Company
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
The Group
The Company
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
CASH FLOWS (USED IN)/FROM
INVESTING ACTIVITIES
Interest received
Proceeds from disposal of property, plant and equipment
Transfer of property, plant and equipment
(from)/to other related companies – net
Downpayments for capital expenditure
Purchase of property, plant and equipment
Dividends received from subsidiary companies
Repayment from Trustee
5,682
529
3,250
1,277
696
–
345
–
(1)
(3,114)
(9,293)
–
–
218
(103)
(17,159)
–
14,500
–
–
–
59,400
–
–
–
–
118,800
14,500
Net Cash (Used In)/From Investing Activities
(6,197)
1,983
60,096
133,645
CASH FLOWS USED IN FINANCING ACTIVITY
Dividends paid
(58,845)
(58,845)
(58,845)
(58,845)
Net Cash Used In Financing Activity
(58,845)
(58,845)
(58,845)
(58,845)
NET INCREASE IN CASH AND
CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR
70,673
64,174
530
13,644
189,230
125,056
26,708
13,064
CASH AND CASH EQUIVALENTS
AT END OF YEAR (Note 21)
259,903
189,230
27,238
26,708
The accompanying Notes form an integral part of the Financial Statements.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
57
Notes to the financial statements
1.
General Information
The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed on the Main Market
of Bursa Malaysia Securities Berhad.
The Company is principally an investment holding company.
The principal activities of its subsidiary companies are disclosed in Note 14.
There have been no significant changes in the nature of the activities of the Company and its subsidiary companies
during the financial year.
The registered office and principal place of business of the Company is located at 6th Floor Menara Manulife, No. 6 Jalan
Gelenggang, Damansara Heights, 50490 Kuala Lumpur, Malaysia.
The financial statements of the Group and the Company have been authorised by the Board of Directors for issuance on
February 27, 2012.
2.
Basis Of Preparation Of The Financial Statements
The financial statements of the Group and the Company have been prepared in accordance with Financial Reporting
Standards (“FRS”) and the provisions of the Companies Act, 1965 in Malaysia.
Adoption of New and Revised Financial Reporting Standards
On January 1, 2011, the Group and the Company adopted the following new and revised FRSs and IC Interpretations
mandatory for annual financial period beginning on or after January 1, 2011 as follows:
FRS 1
First-time Adoption of Financial Reporting Standards (revised)
FRS 1
First-time Adoption of Financial Reporting Standards (Amendments relating to limited exemption from
Comparative FRS 7 Disclosures for First-time Adopters)
FRS 1
First-time Adoption of Financial Reporting Standards (Amendments relating to additional exemptions for
first-time adopters)
FRS 2 Share-based Payment (Amendments relating to group-cash settled share-based payment transactions)
FRS 2
Share-based Payment (Amendments relating to scope of FRS 2 and revised FRS 3)
FRS 3
Business Combinations (revised)
FRS 5
Non-current Assets held for Sale and Discontinued Operations (Amendments relating to plan to sell
controlling interest in a subsidiary)
FRS 7
Financial Instruments: Disclosures (Amendments relating to improving disclosures about financial
instruments)
FRS 127
Consolidated and Separate Financial Statements (Revised)
FRS 132
Financial Instruments: Disclosures (Amendments relating to classification of rights issue)
FRS 138
Intangible Assets (Amendments relating to additional consequential amendments arising from revised FRS 3)
Improvements to FRSs issued in 2010
IC Int. 4
Determining Whether an Arrangement Contains a Lease
IC Int. 9
Reassessment of Embedded Derivatives (Amendments relating to additional consequential amendments
arising from revised FRS 3)
IC Int. 12
Service Concession Arrangements
IC Int. 16
Hedges of a Net Investment in a Foreign Operation
IC Int. 17
Distributions of Non-cash Assets to Owners
IC Int. 18
Transfers of Assets from Customers
The adoption of these new and revised FRSs and IC Interpretations did not result in significant changes in the accounting
policies of the Group and of the Company and have no significant effect on the financial performance or position of the
Group and of the Company.
58
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
2.
Basis Of Preparation Of The Financial Statements (continued)
FRS and IC Interpretations (“IC Ints.”) Issued but Not Effective
At the date of authorisation for issue of these financial statements, the FRSs, IC Ints. and amendments to FRSs and IC
Ints. which were issued but not yet effective are as listed below:
FRS 1
First-time Adoption of Financial Reporting Standards (Amendments relating to Severe Hyperinflation and
Removal of Fixed Dates for First-time Adopters)2
FRS 7
Financial Instruments: Disclosures (Amendments relating to Disclosures – Transfers of Financial Assets)1
FRS 9
Financial Instruments (IFRS 9 issued by IASB in November 2009)2
FRS 9
Financial Instruments (IFRS 9 issued by IASB in October 2010)2
FRS 10
Consolidated Financial Statements2
FRS 11
Joint Arrangements2
FRS 12
Disclosures of Interests in Other Entities2
FRS 13
Fair Value Measurement2
FRS 101
Presentation of Financial Statements (Amendments relating to Presentation of Items of Other Comprehensive
Income)3
FRS 112
Income Taxes (Amendments relating to Deferred Tax – Recovery of Underlying Assets)1
FRS 119
Employee Benefits (2011)2
FRS 124
Related Party Disclosures (revised)1
FRS 127
Separate Financial Statements (2011)2
FRS 128
Investments in Associates and Joint Ventures (2011)2
Improvements to FRSs issued in 20112
IC Int. 14
FRS 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and Their Interaction
(Amendments relating to prepayments of a minimum funding requirement)4
IC Int. 15
Agreements for the Construction of Real Estate5
IC Int. 19
Extinguishing Financial Liabilities with Equity Instruments4
IC Int. 20
Stripping Costs in the Production Phase of a Surface Mine2
Effective for annual periods beginning on or after January 1, 2012
Effective for annual periods beginning on or after January 1, 2013
3
Effective for annual periods beginning on or after July 1, 2012
4
Effective for annual periods beginning on or after July 1, 2011
5
Original effective date of July 1, 2010 deferred to January 1, 2012 via amendment issued by MASB on August 30, 2010
1
2
The Directors expect that the adoption of the standards and interpretations above will have no material impact on the
financial statements in the period of initial application.
On November 19, 2011, the MASB issued a new MASB approved accounting framework, the Malaysian Financial
Reporting Standards Framework (MFRS Framework) in conjunction with its planned convergence of FRSs with
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board on January
1, 2012.
The MFRS Framework is a fully IFRS-compliant framework, equivalent to IFRSs which is mandatory for adoption by
all Entities Other than Private Entities for annual periods beginning on or after January 1, 2012, with the exception for
Transitioning Entities. Transitioning Entities, being entities which are subject to the application of MFRS 141 Agriculture
and/or IC Interpretation 15 Agreements for the Construction of Real Estate are given an option to defer adoption of the
MFRS Framework for an additional one year. Transitioning Entities also includes those entities that consolidates equity
accounts or proportionately consolidates an entity that has chosen to continue to apply the FRS Framework for annual
periods beginning on or after January 1, 2012.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
59
Notes to the financial statements
2.
Basis Of Preparation Of The Financial Statements (continued)
Accordingly, the Group and the Company which are not Transitioning Entities will be required to apply MFRS 1 First-time
Adoption of Malaysian Financial Reporting Standards (MFRS 1) in their financial statements for the financial year ending
December 31, 2012, being the first set of financial statements prepared in accordance with the new MFRS Framework.
Further, an explicit and unreserved statement of compliance with IFRSs will be made in these financial statements.
The Group and the Company are currently assessing the impact of adoption of MFRS 1, including identification of the
differences in existing accounting policies as compared to the new MFRSs. As at the date of authorisation of issue of the
financial statements, accounting policy decisions or elections have not been finalised. Thus, the impact of adopting the
new MFRS Framework on the Group and the Company’s first set of financial statements prepared in accordance with the
MFRS Framework cannot be determined and estimated reliably until the process is complete.
3.
Significant Accounting Policies
Basis of Accounting
The financial statements of the Group and of the Company have been prepared under the historical cost convention
unless otherwise indicated in the accounting policies below.
Basis of Consolidation
Subsidiary companies are those enterprises controlled by the Company. Control exists when the Company has the
power to govern the financial and operational policies of an enterprise so as to obtain benefits from its activities. Control is
presumed to exist when the Group owns, directly or indirectly through subsidiary companies, more than half of the voting
power of the entity.
The consolidated financial statements include the financial statements of the Company and its subsidiary companies
as mentioned in Note 14 made up to December 31, 2011. The financial statements of the subsidiary companies are
prepared for the same reporting date as the Company.
All subsidiary companies are consolidated using the acquisition method of accounting. On acquisition, the assets,
liabilities and contingent liabilities of the relevant subsidiary companies are measured at their fair values at the date of
acquisition. The results of the subsidiary companies acquired or disposed during the year are included in the statements
of comprehensive income from the date of their acquisitions or up to the effective date of their disposals.
All significant intercompany balances and transactions are eliminated on consolidation. Uniform accounting policies are
adopted in the consolidated financial statements for like transactions and events in similar circumstances.
Business Combinations
The acquisition of subsidiary companies is accounted for using the purchase method. The cost of the acquisition is
measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and
equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the
business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for
recognition under FRS 3, Business Combinations, are recognised at their fair values at the acquisition date, except for
non-current assets (or disposal groups) that are classified as held for sale in accordance with FRS 5, Non-current Assets
Held for Sale and Discontinued Operations, which are recognised and measured at fair value less costs to sell.
Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the Company
and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable.
Revenue is reduced for estimated customer returns, rebates and other similar allowances.
The following specific recognition criteria must also be met before revenue is recognised:
(i)
Sale of goods – upon delivery of products and customer acceptance and when the significant risks and rewards of
ownership have passed to the buyer;
(ii) Tobacco processing and related service fees – upon rendering of services;
(iii) Dividend income – when the shareholder’s right to receive payment is established; and
(iv) Interest income – accrued on a timely basis.
60
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
3.
Significant Accounting Policies (continued)
Foreign Currencies
(i) Functional and Presentation Currency
The individual financial statements of each entity in the Group are presented in Ringgit Malaysia, the currency of
the primary economic environment in which the entity operates (its functional currency). For the purpose of the
consolidated financial statements, the results and financial position of each entity are expressed in Ringgit Malaysia
which is the functional currency of the Company and the presentation currency for the consolidated financial
statements.
(ii) Foreign Currency Transactions
In preparing the financial statements of the Group and the Company, transactions in currencies other than the Group’s
and the Company’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the
dates of the transactions. At the end of the reporting period, monetary items denominated in foreign currencies are
retranslated at the rates prevailing at the end of the reporting period. Exchange differences arising on the settlement
of monetary items, and on the retranslation of monetary items, are included in the profit or loss.
Employees’ Benefits
(a) Short-term Employee Benefits
Salaries, wages, paid annual leave, bonuses and non-monetary benefits are accrued in the period in which the
associated services are rendered by the employees of the Group and of the Company. Short-term accumulating
compensated absences such as paid annual leave are recognised when services are rendered by employees that
increase their entitlement to future compensated absences.
(b) Defined Contribution Plan
As required by law, the Group and the Company are required to make monthly contributions to the Employees
Provident Fund (“EPF”), a statutory defined contribution plan for all its eligible employees based on certain prescribed
rate of the employees’ salaries. The Group’s and the Company’s contributions to EPF are included in the statements
of comprehensive income and disclosed separately and the employees’ contributions to EPF are included in staff
costs. Once the contributions have been paid, the Group and the Company have no further payment obligations.
(c) Defined Benefit Plan
The Group operates an unfunded non-contributory defined benefit scheme for its eligible employees. Provision
for retirement benefits is made based on an actuarial valuation carried out at the end of each reporting period
by a qualified actuary using the “Projected Unit Credit” method. The latest actuarial valuation was undertaken on
December 31, 2011.
Actuarial gain and loss which exceed 10 percent of the greater of the present value of the Group’s defined benefit
obligation and the fair value of plan assets, if any, are amortised over the expected average remaining working lives
of the participating employees. Past service cost is recognised immediately to the extent that the benefits are already
vested, and otherwise is amortised on a straight-line basis over the average period until the amended benefits
become vested.
The retirement benefit obligation recognised in the statements of financial position represents the present value
of the defined benefit obligation as adjusted for unrecognised actuarial gains and losses and unrecognised past
services cost, and reduced by the fair value of plan assets, if any. Any asset resulting from this calculation is limited
to unrecognised actuarial losses and past service cost, plus the present value of available refunds and reductions in
future contributions to the plan.
(d) Termination Benefits
Termination benefits are payable when employment are terminated before the normal retirement date or whenever
an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination
benefits as a liability and as an expense when it is demonstrably committed to either terminate the employment of
current employees according to a detailed plan without possibility of withdrawal or providing termination benefits as
a result of an offer made to encourage voluntary redundancy. In the case of an offer made to encourage voluntary
redundancy, the measurement of termination benefits is based on the number of employees expected to accept the
offer. Benefits falling due more than twelve months after end of the reporting period are discounted to present value.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
61
Notes to the financial statements
3.
Significant Accounting Policies (continued)
Income Tax
Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected amount of
income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been
enacted or substantively enacted at the end of the reporting period.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from
differences between the carrying amounts of assets and liabilities in the financial statements and their corresponding tax
bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are generally
recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is
probable that future taxable profit will be available against which the deductible temporary differences, unused tax losses
and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from the initial
recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction,
affects neither the accounting profit nor taxable profit.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset
is realised, based on the tax rates that have been enacted or substantially enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner
in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and
liabilities.
Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items that
are recognised outside profit or loss (whether in other comprehensive income or directly in equity), in which case the tax
is also recognised outside profit or loss, or where they arise from the initial accounting for a business combination. In the
case of a business combination, the tax effect is included in the accounting for the business combination.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes by the same taxation authority and the Group intends to settle
its current tax assets and liabilities on a net basis.
Impairment of Assets
At the end of each reporting period, the Group and the Company review the carrying amounts of its non-current assets
to determine whether there is any indication that those assets have suffered any impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessment of the time value of money and the risks specific to the asset for which the estimates of future cash flows
have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is
recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the
impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased
to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating
unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is
carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
62
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
3.
Significant Accounting Policies (continued)
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.
Property, plant and equipment in the course of construction for production, administrative purposes, or for purposes not
yet determined, are carried at cost, less any recognised impairment loss.
Construction-in-progress is not depreciated. Depreciation of these assets commences when the assets are ready for
their intended use, on the same basis as other property, plant and equipment. Depreciation and amortisation of other
property, plant and equipment is provided on a straight-line basis to write off the cost of the assets to their residual values
over their estimated useful lives.
The principal annual rates used are as follows:
Building
2%
Leasehold improvements (under 50 years) Over the lease period
Plant, machinery and equipment 5% – 33.3%
Motor vehicles 20%
Gain or loss arising from the disposal of an asset is determined as the difference between the estimated net disposal
proceeds and the carrying amount of the asset, and is recognised in profit or loss.
The estimated useful lives and depreciation method are reviewed at the end of each reporting period, with the effect of
any changes in estimates accounted for prospectively.
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classified as operating leases.
Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant
lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread evenly over the
lease term.
Prepaid Lease Payments
The up-front payments made for the leasehold land represents prepaid lease payments and are amortised on a straightline basis over the remaining terms of the relevant lease.
The leasehold interests in land are accounted for as operating leases and are classified as prepaid lease payments.
Prepaid lease payments are amortised on a straight line basis over the lease terms of 60 years.
Investment in Subsidiary Companies
In the Company’s financial statements, investment in subsidiary companies is carried at cost less any impairment in net
recoverable value that has been recognised in profit or loss.
Inventories
Inventories are stated at the lower of cost (determined principally on the weighted-average basis) and net realisable
value.
The costs of raw materials and factory supplies comprise cost of purchase plus the incidental costs incurred in bringing
the inventories to their present locations and conditions. The costs of finished goods comprise costs of raw materials,
direct labour, other direct costs and an appropriate proportion of production overheads based on normal operating
capacity.
Net realisable value is the estimated selling price in the ordinary course of business less estimated costs to completion
and estimated costs necessary to make the sale.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
63
Notes to the financial statements
3.
Significant Accounting Policies (continued)
Provisions
Provisions are made when the Group and the Company have a present legal or constructive obligation as a result of past
events, when it is probable that an outflow of resources will be recognised to settle the obligation, and when a reliable
estimate of the amount can be made. Provisions are measured at the Directors’ best estimate of the amount required to
settle the obligation at the end of reporting period, and are discounted to present value where the effect is material.
At the end of each reporting period, the provisions are reviewed by the Directors and adjusted to reflect the current best
estimate. The provisions are reversed if it is no longer probable that the Group and the Company will be required to settle
the obligations.
Statements of Cash Flows
The Group and the Company adopt the indirect method in the preparation of the statements of cash flows.
Cash equivalents are short-term, highly liquid investments with maturities of three months or less from the date of
acquisition and are readily convertible to cash with insignificant risks of changes in value.
Financial Instruments
Financial assets and financial liabilities are recognised in the statements of financial position when, and only when, the
Group and the Company become a party to the contractual provisions of the financial instruments.
(i) Financial Assets
Financial assets are classified into the following specified categories: financial asset ‘at fair value through profit or loss’
(“FVTPL”), ‘held-to-maturity’ investments, ‘available-for-sale’ (“AFS”) financial assets and ‘loans and receivables’.
The classification depends on the nature and purpose of the financial assets and is determined at the time of initial
recognition.
Loans and receivables, comprising trade and other receivables, refundable deposits, cash and cash equivalents and
amount owing by related companies, are measured at initial recognition at fair value, and are subsequently measured
at amortised cost less impairment losses, if any.
Receivables are assessed for indicators of impairment at the end of each reporting period. Receivables are impaired
where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of
the receivable, the estimated future cash flows of the receivable has been impacted.
For receivables, objective evidence of impairment could include:
•
Significant financial difficulty of the customers; or
•
Default or delinquency in interest or principal payments; or
•
It becoming probable that the customers will enter bankruptcy or financial re-organisation.
Receivables that are assessed not to be impaired individually are subsequently assessed for impairment on a
collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s and the
Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio
past the average credit period of 30 days, as well as observable changes in national or local economic conditions
that correlate with default on receivables.
The carrying amount of the receivable is reduced by the impairment loss through the use of an allowance account.
When a receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries
of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the
allowance account are recognised in the profit or loss.
Derecognition of Financial Assets
Financial assets are derecognised when the contractual right to receive cash flows from the asset has expired.
On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the
consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is
recognised in profit or loss.
64
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
3.
Significant Accounting Policies (continued)
Financial Instruments (continued)
(ii) Financial Liabilities and Equity Instruments
Classification as Debt or Equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements
entered into and the definitions of a financial liability and an equity instrument.
Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of
its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs. Ordinary shares are
equity instruments.
Ordinary shares are recorded at the proceeds received, net of direct attributable transactions costs. Ordinary
shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are
declared.
Financial Liabilities
Financial liabilities are classified as either financial liabilities ‘at FVTPL’ or ‘other financial liabilities’.
Other financial liabilities, comprising trade and other payables, accrued expenses and amount owing to related
companies, are initially measured at fair value. These financial liabilities are subsequently measured at amortised
cost.
Derecognition of Financial Liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled
or they expire.
4.
Critical Accounting Judgements And Key Sources Of Estimation Uncertainty
(i) Critical Judgements Made in Applying Accounting Policies
In the process of applying the Group’s and Company’s accounting policies, which are described in Note 3,
management is of the opinion that there are no instances of application of judgement which are expected to have a
significant effect on the amounts recognised in the financial statements other than as follows:
Allowance for Doubtful Debts
The Group and the Company make allowance for doubtful debts based on an assessment of the recoverability
of trade and other receivables. Allowances are applied to trade and other receivables where events or changes
in circumstances indicate that the balances may not be collectible. The identification of doubtful debts requires
use of judgement and estimates. Where the expectation is different from the original estimate, such difference will
impact the carrying value of the trade and other receivables and doubtful debts expense in the period in which such
estimate has been changed.
Allowance for Slow-Moving Inventories
The Group makes allowance for its slow moving inventories based on an assessment of their estimated net realisable
value. Inventories are written down when events or changes in circumstances indicate that the carrying amounts
may not be recoverable. Where expectations differ from the original estimates, the differences will impact the carrying
amount of inventories.
(ii) Key Sources of Estimation Uncertainty
Management believes that there are no key assumptions made concerning the future, and other key sources of
estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the next financial year.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
65
Notes to the financial statements
5.
Revenue
6.
The Group
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
Sales of tobacco products
Tobacco processing and related
service fees
Dividend income from subsidiary
companies
1,168,894
1,173,227
–
–
28,916
31,894
–
–
–
–
59,400
118,800
1,197,810
1,205,121
59,400
118,800
Investment Revenue
66
The Company
The Group
The Company
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
Interest income on short-term deposits
with licensed banks
5,682
3,250
696
345
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
7.
Other (Income)/Expenses And Staff Costs
Included in other (income)/expenses are the following:
The Group
Rental of buildings
Provision for retirement benefits
Loss/(Gain) on foreign exchange
Realised
Unrealised
Allowance for doubtful receivables
Inventories written down
Bad receivables written off
Auditors’ remuneration
Rental of equipment
Property, plant and equipment written off
Rental of motor vehicles
Interest expense on loan payable to a subsidiary
company (Note 20)
Residual amount received from Trustee (Note 19)
Gain on disposal of property, plant and equipment
Allowance for litigation claims no longer required
Allowance for doubtful receivables no longer required
The Company
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
8,537
1,928
8,038
2,633
–
–
–
–
1,898
(162)
756
736
321
251
215
112
16
1,707
(29)
680
445
–
236
231
726
25
–
–
–
–
–
70
–
–
–
–
–
–
–
–
65
–
–
–
–
–
(180)
(1,316)
(2,847)
–
(7,214)
(1,017)
–
(528)
–
–
–
–
–
877
(7,214)
–
–
–
Included in staff costs for the current financial year are the following:
(a) Total contributions made to EPF by the Group of RM3,910,000 (2010: RM4,300,000).
(b) Key management personnel compensation:
The remuneration of members of key management, other than the Directors of the Company as disclosed in Note
8, are as follows:
The Group
The Company
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
Short-term employee benefits:
Salaries, bonuses, allowances and
contributions to EPF
Post-employment benefits*
4,895
114
4,761
79
–
–
–
–
5,009
4,840
–
–
* Post-employment benefits represent provision for retirement benefits for the financial year.
The estimated monetary value of non-cash benefits-in-kind received and receivable by the key management from
the Group amounted to RM576,000 (2010: RM592,000).
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
67
Notes to the financial statements
8.
Directors’ Remuneration
The Group
Directors of the Company
Executive directors:
Salaries, bonuses, allowances and
contributions to EPF
Post-employment benefits*
Non-executive directors:
Fees
The Company
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
4,480
17
3,922
31
–
–
–
–
329
336
329
336
4,826
4,289
329
336
* Post-employment benefits represent provision for retirement benefits for the financial year.
The estimated monetary value of non-cash benefits-in-kind received and receivable by the Directors from the Group
amounted to RM421,000 (2010: RM340,000).
9.
Tax Expense/(Income)
The Group
The Company
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
Current year:
Estimated tax payable
Deferred taxation (Note 15)
42,047
239
39,096
5,643
173
–
86
–
Under/(Over) provision in prior years:
Estimated tax payable
Deferred taxation (Note 15)
42,286
44,739
173
86
(437)
(375)
1,472
(1,105)
–
–
(89)
–
41,474 45,106
173
(3)
A reconciliation of tax expense applicable to profit before tax at the statutory income tax rate to tax expense at the
effective tax rate of the Group and of the Company is as follows:
68
The Group
The Company
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
Profit before tax
164,285
178,919
59,315
124,770
Tax at the applicable rate of 25%
Tax effects of:
Expenses not deductible for tax purposes
Income not subject to tax
41,071
44,731
14,829
31,193
1,259
(44)
1,811
(1,803)
194
(14,850)
396
(31,503)
Tax expense for the year
42,286
44,739
173
86
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
9.
Tax Expense/(Income) (continued)
Under Schedule 7A of the Income Tax Act, 1967, a subsidiary company of the Company is allowed to claim reinvestment
allowances. As of December 31, 2011, the said subsidiary company has reinvestment allowances claimed and utilised
to-date amounting to approximately RM96,355,000 (2010: RM96,355,000). Subject to the availability of distributable
reserve, these reinvestment allowances claimed, when approved by the tax authorities, will enable the said subsidiary
company to distribute tax exempt dividends to the shareholders of the said subsidiary company.
As of December 31, 2011, the Group and the Company have tax exempt income arising from chargeable income waived
in 1999 in accordance with the Income Tax (Amendment) Act, 1999 which has been approved by the Inland Revenue
Board amounting to approximately RM12,066,000 (2010: RM12,066,000) and RM3,391,000 (2010: RM3,391,000)
respectively. Dividends declared out of such profits will be exempted from income tax in the hands of the shareholders.
10.
Earnings Per Ordinary Share
Earnings per ordinary share has been computed based on the Group’s profit after tax of RM122,811,000 (2010:
RM133,813,000) divided by the number of ordinary shares in issue of 261,534,406 (2010: 261,534,406) during the
financial year.
The basic and diluted earnings per ordinary share are equal as the Group has no dilutive potential ordinary shares.
11.
Dividends
The Group And
The Company
2011
RM’000
2010
RM’000
First interim dividend paid per share – 15 sen, less 25% tax
(2010: 15 sen, less 25% tax)
Second interim dividend paid per share – 15 sen, less 25% tax
(2010: 15 sen, less 25% tax)
29,423
29,423
29,422
29,422
58,845
58,845
Gross dividends per share during the financial year is 30 sen (2010: 30 sen).
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
69
Notes to the financial statements
12.
Property, Plant And Equipment
The Group
Building
And Leasehold
Improve-
ments
RM’000
Plant,
Machinery
And
Motor
Equipment
Vehicles
RM’000
RM’000
ConstructionIn-Progress
RM’000
Total
RM’000
Cost
At January 1, 2010
Additions
Disposals
Write offs
Transfer to other related companies
Transfer from other related companies
Reclassifications
46,773
10
–
(4)
–
–
2,692
284,734
2,182
(8,781)
(10,753)
(4,819)
25
7,406
18,094
3,459
(3,035)
–
(120)
120
1,097
2,627
11,809
–
(3)
(222)
–
(11,195)
352,228
17,460
(11,816)
(10,760)
(5,161)
145
–
At December 31, 2010
Additions
Disposals
Write offs
Transfer from other related companies
Reclassifications
49,471
30
–
–
–
1,159
269,994
1,553
(204)
(3,880)
8
5,924
19,615
3,079
(1,133)
–
–
–
3,016
4,734
–
(67)
–
(7,083)
342,096
9,396
(1,337)
(3,947)
8
–
At December 31, 2011
50,660
273,395
21,561
600
346,216
Accumulated Depreciation
and Impairment
At January 1, 2010
Charge for the year
Disposals
Write offs
Transfer to other related companies
Transfer from other related companies
14,846
1,655
–
(4)
–
–
208,174
11,902
(8,751)
(10,030)
(4,819)
21
8,588
3,673
(2,805)
–
(56)
56
–
–
–
–
–
–
231,608
17,230
(11,556)
(10,034)
(4,875)
77
At December 31, 2010
Charge for the year
Disposals
Write offs
Transfer from other related companies
16,497
2,090
–
–
–
196,497
11,795
(153)
(3,835)
7
9,456
3,822
(835)
–
–
–
–
–
–
–
222,450
17,707
(988)
(3,835)
7
At December 31, 2011
18,587
204,311
12,443
–
235,341
Net Book Value
As of December 31, 2011
32,073
69,084
9,118
600
110,875
As of December 31, 2010
32,974
73,497
10,159
3,016
119,646
Included in property, plant and equipment of the Group are fully depreciated assets which are still in use, with costs
totalling RM131,802,000 (2010: RM125,808,000).
70
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
13.
Prepaid Lease Payments
The Group
2011
RM’000
2010
RM’000
Cost:
At beginning and end of year
383
383
Cumulative Amortisation:
At beginning of year
Current amortisation
174
5
168
6
At end of year
179
174
Net:
At end of year
204
209
Prepaid lease payments relate to lease of land on which the Group’s factory building is located and the lease will expire
in year 2069.
14.
Investment In Subsidiary Companies
The Company
2011
RM’000
2010
RM’000
Unquoted shares – at cost
250,990
250,990
The subsidiary companies, both incorporated in Malaysia, are as follows:
Name Of Company
Effective
Equity Interest
2011
2010
%
%
Principal Activities
Direct
JT International Tobacco Sdn. Bhd.
JT International Trading Sdn. Bhd.
100
99
100
99
Manufacture of tobacco products.
Marketing and sale of tobacco products.
Indirect
JT International Trading Sdn. Bhd.
1
1
Marketing and sale of tobacco products.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
71
Notes to the financial statements
15.
Deferred Tax Assets/(Liabilities)
The Group
Deferred
Tax Assets
2011
2010
RM’000
RM’000
Deferred
Tax Liabilities
2011
2010
RM’000
RM’000
At beginning of year
Recognised in profit or loss (Note 9)
3,168
1,036
4,855
(1,687)
(12,442)
(900)
(9,591)
(2,851)
At end of year
4,204
3,168
(13,342)
(12,442)
The components and movements of deferred tax assets and liabilities during the financial year are as follows:
Property,
Plant And Trade
Equipment Receivables
Group
RM’000
RM’000
Deferred Tax Assets
As of January 1, 2010
Recognised in profit or loss
16.
Other
Payables
And
Accrued
Expenses
RM’000
Provision
For
Retirement
Benefits
RM’000
Unabsorbed
Capital
Allowances
RM’000
Others
RM’000
Total
RM’000
2,162
(1,693)
1,085
(156)
325
(75)
1,283
237
–
–
–
–
4,855
(1,687)
As of December 31, 2010
469
929
250
1,520
–
–
3,168
As of January 1, 2011
Recognised in profit or loss
469
171
929
(772)
250
1,427
1,520
210
–
–
–
–
3,168
1,036
As of December 31, 2011
640
157
1,677
1,730
–
–
4,204
Deferred Tax Liabilities
As of January 1, 2010
Recognised in profit or loss
(12,068)
(2,638)
–
–
571
(478)
1,671
(111)
175
(175)
60
551
(9,591)
(2,851)
As of December 31, 2010
(14,706)
–
93
1,560
–
611
(12,442)
As of January 1, 2011
Recognised in profit or loss
(14,706)
(916)
–
–
93
(93)
1,560
72
–
–
611
37
(12,442)
(900)
As of December 31, 2011
(15,622)
–
–
1,632
–
648
(13,342)
Inventories
The Group
2011
RM’000
2010
RM’000
At cost:
Raw materials
Factory supplies
Finished goods
Spare parts
55,381
9,578
14,693
3,064
57,876
7,536
8,747
2,777
At net realisable value:
Spare parts
82,716
76,936
–
397
82,716
77,333
The cost of inventories recognised as an expense of the Group includes RM736,000 (2010: RM445,000) in respect of
write-downs of inventory to net realisable value.
72
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
17.
Trade Receivables
The Group
2011
RM’000
2010
RM’000
Trade receivables
Less: Allowance for doubtful receivables
58,606
(628)
63,490
(3,714)
Net
57,978
59,776
Trade receivables comprise amounts receivable for sales of goods and tobacco related service fee. These are denominated
in Ringgit Malaysia, non-interest bearing and recognised at their original invoice amounts which represent their fair values on
initial recognition. The credit period granted by the Group to customers ranges from 10 to 60 days (2010: 10 to 60 days).
The Group’s historical experience in collection of trade receivables and other receivables (as disclosed in Note 18) falls
within the recorded allowances and management believes that no additional credit risk beyond amount provided for
collection losses is inherent in the Group’s trade and other receivables.
Trade receivables disclosed above include amounts (see below for aged analysis) that are past due at the end of the
reporting period but against which the Group has not recognised an allowance for doubtful receivables because there
has not been a significant change in credit quality and the amounts are still considered recoverable.
At the end of the reporting period, the Group holds bank guarantees totalling RM26,378,000 (2010: RM26,138,000) and
titles over certain properties with estimated fair values totalling RM2,947,000 (2010: RM2,535,000) over its receivables.
The table below is an analysis of trade receivables as of year-end:
The Group
2011
RM’000
2010
RM’000
Neither past due nor impaired
Past due but not impaired:
1 – 30 days
31 – 60 days
61 – 90 days
> 90 days
45,891
50,583
10,158
2
–
17
2,658
63
15
105
10,177
2,841
Past due and impaired
Less: Allowance for doubtful receivables
2,538
(628)
10,066
(3,714)
1,910
6,352
Total
57,978
59,776
Movement in the Allowance for Doubtful Receivables
The Group
2011
RM’000
2010
RM’000
At beginning of year
Amount written off
Impairment losses reversed
3,714
(239)
(2,847)
4,342
(100)
(528)
At end of year
628
3,714
In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade
receivable from the date credit was initially granted up to the end of the reporting period. The Group has significant
concentration of credit risk as one major customer accounts for 33% (2010: 24%) of the total amount outstanding.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
73
Notes to the financial statements
18. Other Receivables, Deposits And Prepaid Expenses
The Group
The Company
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
Other receivables
Less: Allowance for doubtful receivables
3,778
–
3,498
(920)
17
–
21
–
3,778
2,578
17
21
Downpayments for capital expenditure
3,114
Refundable deposits
1,860
Prepaid expenses
5,728
14,480
103
1,815
3,762
–
5
–
–
5
–
8,258
22
26
2010
RM’000
2011
RM’000
2010
RM’000
Movement in the Allowance for Doubtful Receivables
The Group
2011
RM’000
The Company
At beginning of year
Impairment loss recognised on receivables
Amount written off
920
–
(920)
240
680
–
–
–
–
–
–
–
At end of year
–
920
–
–
Allowance for doubtful receivables represent amounts due from tobacco farmers which have been identified on an
individual basis. The Group provides fertilizers and chemicals to tobacco farmers on credit crop by crop basis. Amounts
due from farmers who are inactive for two consecutive years are considered not recoverable and hence impaired. The
Group does not hold any collateral over these balances.
The currency exposure profile of other receivables is as follows:
The Group
Ringgit Malaysia
United States Dollar
The Company
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
843
2,935
1,475
2,023
17
–
21
–
3,778
3,498
17
21
19. Receivable From Trustee
Receivable from Trustee in prior years represents loans given to the Trustee of the Employees’ Share Option Scheme
(“ESOS”) established by the Company in 1996 and extended to 2006.
The ESOS expired on April 3, 2006 and management did not extend the ESOS. In accordance with the Trust Deed of the
ESOS, all shares held by the Trustee upon expiry of the ESOS will be disposed off and after providing for expenses of the
Trust, the residual proceeds will be returned to the Company.
All shares held by the Trustee, pursuant to the ESOS had been disposed off during the previous financial year. Total
proceeds of RM14,500,000 had been received from the Trustee during the previous financial year. The residual value
received from the Trustee (after deducting the loan receivable) amounting to RM7,214,000 had been taken up in the
statement of comprehensive income (Note 7) in the previous financial year.
74
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
20. Holding Companies And Intercompany Transactions
The Company is a subsidiary company of JT International Holding B.V., a company incorporated in the Netherlands. The
Directors regard Japan Tobacco Inc., a company incorporated in Japan as the ultimate holding company.
The Group
2011
RM’000
2010
RM’000
Amount owing by ultimate holding company
Less: Allowance for doubtful receivables
822
(756)
1,629
–
Net
66
1,629
The amount owing by ultimate holding company arose mainly from intercompany purchases and expenses paid on
behalf. This amount is unsecured, interest-free and repayable on demand.
The amount owing to immediate holding company in 2011 arose mainly from service charges relating to overall business
strategy provided. This amount is unsecured, interest-free and repayable on demand.
The amounts owing by/(to) other related companies arose mainly from intercompany sales and purchases, purchases on
behalf, royalty and expenses paid on behalf. These amounts are unsecured, interest-free and repayable on demand.
Other than as disclosed elsewhere in the financial statements, the other related companies, with whom the Group has
transactions with during the financial year, and their relationship with the Company are as follows:
Name of Related Companies
JT International SA
Limited Liability Company “Petro”
JT International Germany GmbH
JTI Services Switzerland SA
JT International (India) Private Limited
JTI Business Services (Asia) Sdn. Bhd.
JT International Luxembourg S.A.
JT International (Asia Pacific) Limited
Gallaher Limited
Gallaher Singapore Pte Limited
Austria Tabak GmbH
JT International Korea Inc.
JTI Company (Philippines) Inc.
JT Tobacco International Taiwan Corp.
JT International Tobacco Services (Singapore) Pte. Ltd.
JTI (RMS) Ltd
Relationship
Subsidiary company of Japan Tobacco Inc.
Subsidiary company of Japan Tobacco Inc.
Subsidiary company of Japan Tobacco Inc.
Subsidiary company of Japan Tobacco Inc.
Subsidiary company of Japan Tobacco Inc.
Subsidiary company of Japan Tobacco Inc.
Subsidiary company of Japan Tobacco Inc.
Subsidiary company of Japan Tobacco Inc.
Subsidiary company of Japan Tobacco Inc.
Subsidiary company of Japan Tobacco Inc.
Subsidiary company of Japan Tobacco Inc.
Subsidiary company of Japan Tobacco Inc.
Subsidiary company of Japan Tobacco Inc.
Subsidiary company of Japan Tobacco Inc.
Subsidiary company of Japan Tobacco Inc.
Subsidiary company of Japan Tobacco Inc.
The currency exposure profile of intercompany balances is as follows:
The Group
The Company
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
Amount owing by ultimate holding company:
United States Dollar
Japanese Yen
Ringgit Malaysia
19
47
–
1,179
327
123
–
–
–
–
–
–
66
1,629
–
–
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
75
Notes to the financial statements
20.
Holding Companies And Intercompany Transactions (continued)
The Group
The Company
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
Amount owing by other related companies:
United States Dollar
Ringgit Malaysia
7,578
278
7,406
154
–
–
–
–
7,856
7,560
–
–
(371)
–
–
–
Amount owing to a subsidiary company
Ringgit Malaysia
–
–
–
(1)
Amount owing to other related companies:
United States Dollar
Euro
(3,216)
–
(3,568)
(41)
–
–
–
–
(3,216)
(3,609)
–
–
Amount owing to immediate holding company:
United States Dollar
During the financial year, significant intercompany transactions which are determined on a basis as negotiated between
the said parties are as follows:
76
The Group
2011
RM’000
2010
RM’000
Ultimate Holding Company
Purchase of raw materials and factory supplies
Regional support fee receivable
1,082
(1,314)
1,086
(1,495)
Immediate Holding Company
Service charges paid/payable
Global insurance charges
14,260
371
14,828
277
Other Related Companies
Purchase of raw materials:
JT International SA
Austria Tabak GmbH
JT International (India) Private Limited
4,874
270
–
4,724
129
1
5,144
4,854
Royalty paid/payable:
JT International SA
26,607
28,243
Sale of tobacco leaf and non-tobacco materials:
JT International SA
(13,181)
(18,711)
Services charges paid/payable:
JT International SA
JTI Business Services (Asia) Sdn. Bhd.
5,758
4,278
5,647
4,753
10,036
10,400
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
20.
Holding Companies And Intercompany Transactions (continued)
The Group
2011
RM’000
2010
RM’000
Other Related Companies
Regional support fee paid/payable/(received/receivable):
JT International Luxembourg S.A.
JTI Business Services (Asia) Sdn. Bhd.
(12,576)
85
(11,928)
437
(12,491)
(11,491)
Transfer in/(out) of property, plant and equipment – net:
JTI Business Services (Asia) Sdn. Bhd.
JT International SA
1
–
4
(222)
1
(218)
Proceeds from disposal of property, plant and equipment:
JT International Korea Inc.
–
(82)
Tobacco processing fee received/receivable:
JT International SA
(24,022)
(27,631)
Administrative and operational service fee received/receivable:
JT International SA
(3,364)
(2,676)
Management charges paid/payable:
JTI Services Switzerland SA
Gallaher Limited
5,761
330
6,806
383
6,091
7,189
Human resource cost allocation received/receivable:
JTI Business Services (Asia) Sdn. Bhd.
(971)
(802)
The financial statements of the Company also reflect the following significant intercompany transactions:
The Group
2011
RM’000
2010
RM’000
Gross dividend income from subsidiary company
Interest on loan payable
59,400
–
118,800
877
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
77
Notes to the financial statements
21.
Cash And Cash Equivalents
The Group
The Company
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
Short-term deposits with licensed banks
Cash and bank balances
189,124
70,779
123,150
66,080
26,739
499
26,693
15
259,903
189,230
27,238
26,708
The range of interest rates is as follows:
The Group
The Company
2011
% per annum
2010
% per annum
2011
% per annum
2010
% per annum
Short-term deposits with licensed banks
2.55 – 2.65
1.65 – 2.40
2.55 – 2.65
1.65 – 2.40
Short-term deposits of the Group and of the Company have an average maturity period of 32 days (2010: 1 to 30 days)
respectively.
22.
Share Capital
23.
The Group And
The Company
2011
RM’000
2010
RM’000
Authorised:
1,400,000 ordinary shares of RM0.25 each
350,000
350,000
Issued and fully paid:
261,534,406 ordinary shares of RM0.25 each
65,384
65,384
Share Premium – Non-Distributable
Share premium arose from the following issue of shares:
The Group
3,779,406 ordinary shares issued at a premium of
RM1.30 per share in 1990, net of share issue
expenses of RM377,647
78
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
The Company
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
4,536
4,536
4,536
4,536
24.
Retained Earnings
The Group
The Company
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
Distributable:
Retained earnings
384,602
320,636
208,395
208,098
Distributable reserves are those available for distribution as cash dividends.
In accordance with the Finance Act 2007, the single tier tax system became effective from the year of assessment 2008.
Under this system, tax on a company’s profit is a final tax, and dividends paid are exempted from tax in the hand of the
shareholder. Unlike the previous imputation system, the recipient of the dividend would no longer be able to claim any tax
credit.
Companies without Section 108 tax credit balance will automatically move to the single tier tax system on January 1,
2008. However, companies with such tax credits are given an irrevocable option to elect for the single tier tax system and
disregard the tax credit or to continue to use the tax credits under Section 108 account to frank the payment of cash
dividends on ordinary shares for a period of 6 years ending December 31, 2013 or until the tax credits are fully utilised,
whichever comes first. During the transitional period, any tax paid will not be added to the Section 108 account and any
tax credits utilised will reduce the tax credit balance. All companies will be in the new system on January 1, 2014.
As at the end of the reporting period, the Company has not elected for the irrevocable option to disregard the Section
108 tax credits. Taking into consideration the tax exempt account balance, the estimated tax credits and the prevailing
tax rate applicable to dividends, the Company is able to distribute up to RM50,830,000 out of its retained earnings as of
December 31, 2011 as dividends without additional tax liability being incurred. The Company may distribute the balance
of the retained earnings as dividends under the single tier system.
25.
Provision For Retirement Benefits
The Group operates an unfunded non-contributory defined benefit scheme for their eligible employees. Provision for
retirement benefits is made based on actuarial valuation carried out periodically using “Projected Unit Credit” method. The
latest actuarial valuation was undertaken on December 31, 2011.
The amount recognised in the statement of financial position is determined as follows:
The Group
2011
RM’000
2010
RM’000
Present value of unfunded obligation
Unrecognised actuarial losses
17,036
(3,588)
15,400
(3,079)
13,448
12,321
The amount recognised in profit or loss is as follows:
The Group
2011
RM’000
2010
RM’000
Current service cost
Interest on obligation
Net actuarial losses recognised
1,144
643
141
1,426
786
421
1,928
2,633
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
79
Notes to the financial statements
25.
Provision For Retirement Benefits (continued)
Movements in the net liability recognised in the statement of financial position are as follows:
The Group
2011
RM’000
2010
RM’000
At beginning of year
Current year provision
Utilised during the year
12,321
1,928
(801)
11,816
2,633
(2,128)
At end of year
13,448
12,321
Movements in the present value of the defined benefit obligation in the current period are as follows:
The Group
2011
RM’000
2010
RM’000
Opening defined benefit obligation
Current service cost
Interest cost
Actuarial (gains)/losses
Benefits paid
15,400
1,144
643
650
(801)
17,499
1,426
786
(2,183)
(2,128)
Closing defined benefit obligation
17,036
15,400
The principal actuarial assumptions at the end of the reporting period date are as follows:
26.
The Group
2011
%
2010
%
Discount rate
Expected future salary increases
Expected future pension increases
Proportion of employees retiring at age of 55 years
3.75
5.00
3.00
100.00
4.00
5.00
3.00
100.00
Trade Payables, Other Payables And Accrued Expenses
Trade and other payables comprise amounts outstanding for trade purchases and ongoing costs. These payables are
non-interest bearing and the average credit period granted to the Group for trade purchases is 7 to 30 days (2010: 7 to
30 days).
The currency exposure profile of trade payables is as follows:
80
The Group
2011
RM’000
2010
RM’000
Ringgit Malaysia
Japanese Yen
United States Dollar
Euro
Swiss Franc
7,563
1,549
1,370
296
–
6,568
1,120
784
266
10
10,778
8,748
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
26.
Trade Payables, Other Payables And Accrued Expenses (continued)
Other payables and accrued expenses consist of the following:
The Group
The Company
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
Other payables
Accrued expenses
15,736
21,382
17,217
28,870
–
159
–
157
37,118
46,087
159
157
Other payables and accrued expenses arose mainly from sales tax payable, amount payable for the acquisition of
property, plant and equipment and general administrative and freight expenses payable. These amounts are unsecured,
interest-free and are repayable within 30 days (2010: 30 days) from the transaction dates.
The currency exposure profile of other payables is as follows:
27.
The Group
The Company
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
Ringgit Malaysia
United States Dollar
Euro
Others
14,620
454
300
362
15,891
1,316
28
(18)
–
–
–
–
–
–
–
–
15,736
17,217
–
–
Banking Facilities
A subsidiary company has bank guarantee facility totalling RM20,000,000 (2010: RM20,000,000) obtained from licensed
banks.
As of December 31, 2011, the amount of bank guarantees utilised by the said subsidiary company amounted to
RM16,292,000 (2010: RM9,425,000). The bank guarantee bears interest at 0.35% (2010: 0.35%) per annum and is
covered by corporate guarantee from the ultimate holding company.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
81
Notes to the financial statements
28.
Financial Instruments, Financial Risks And Capital Risk Management
Categories of Financial Instruments
The Group
The Company
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
Financial Assets
Cash and cash equivalents
259,903
189,230
27,238
26,708
Trade receivables
Other receivables and refundable deposits
Amount owing by ultimate holding company
Amount owing by other related companies
57,978
5,638
66
7,856
59,776
4,393
1,629
7,560
–
22
–
–
–
26
–
–
Loans and receivables, at amortised cost
71,538
73,358
22
26
Financial Liabilities
Trade payables
Other payables and accrued expenses
Amount owing to immediate holding company
Amount owing to a subsidiary company
Amount owing to other related companies
10,778
37,118
371
–
3,216
8,748
46,087
–
–
3,609
–
159
–
–
–
–
157
–
1
–
Other financial liabilities, at amortised cost
51,483
58,444
159
158
Financial Risk Management Objectives and Policies
The operations of the Group and of the Company are subject to a variety of financial risks, including foreign currency risk,
interest rate risk, credit risk and liquidity risk. The Group and the Company have formulated a financial risk management
framework whose principal objective is to minimise the Group’s and the Company’s exposure to risks and/or costs
associated with the financing, investing and operating activities.
Various risk management policies are formulated and approved by the Board of Directors for observation in the day-today operations for controlling and managing the risks associated with financial instruments.
Foreign Currency Risk Management
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates.
The carrying amounts of the Group’s and the Company’s foreign currency denominated monetary assets and liabilities
are disclosed in Notes 18, 20 and 26.
No sensitivity analysis is prepared as the Group and the Company do not expect any material effect on the Group’s and
the Company’s profit net of tax and equity arising from the effect of reasonably possible changes to exchange rates on
the foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period.
The Group did not engage in any transactions involving financial derivative instruments during the financial year.
Interest Rate Risk Management
Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments
will fluctuate because of changes in market interest rates.
The Group’s and the Company’s interest bearing financial asset is mainly its short-term deposits with licensed banks. The
deposits placements as at the end of the reporting period, which bear interest as disclosed in Note 21, are short-term
and therefore their exposure to the effects of future changes in prevailing level of interest rates are limited.
No sensitivity analysis is prepared as the Group and the Company do not expect any material effect on the Group’s and
the Company’s profit net of tax and equity arising from the effect of reasonably possible changes to interest rates on
interest bearing financial instruments at the end of the reporting period.
82
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
28.
Financial Instruments, Financial Risks And Capital Risk Management (continued)
Credit Risk Management
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its
obligations. The Group is exposed to credit risk mainly from trade receivables, other receivables and intercompany
indebtedness.
The Group extends credit to its customers based upon careful evaluation of the customers’ financial condition and credit
history. The Group also ensures a large number of customers so as to limit high credit concentration in a customer or
customers from a particular market.
The Group’s exposure to credit risk in relation to its trade receivables, other receivables and intercompany indebtedness
should all these debtors fail to perform their obligations as of December 31, 2011, is the carrying amount of these
receivables as disclosed in statement of financial position.
The Group places its short-term deposits with credit worthy institutions. The carrying amount of financial assets in the
financial statements, net of any provision of losses, represents the Group’s maximum exposure to credit risk without
taking into account the value of any collateral or other security obtained.
Apart from the concentration risk of the major customer as disclosed in Note 17, the Group and the Company do
not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar
characteristics. The Group defines counterparties having similar characteristics if they are related entities.
Liquidity Risk Management
Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to
shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the
maturities of financial assets and liabilities.
The Group and the Company practice prudent liquidity risk management by maintaining adequate reserves, by
continuously monitoring forecast and actual cash flows. The Group’s and the Company’s operations are financed mainly
through equity and retained earnings.
All financial liabilities in 2010 and 2011 are repayable on demand or due within one year from the reporting date.
Fair Values
The carrying amounts of the financial assets and financial liabilities as reported in the statements of financial position as
of December 31, 2011 approximate their fair values because of the immediate or short maturity terms of these financial
instruments.
Capital Risk Management Policies and Procedures
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy
capital ratios in order to support its business and maximise shareholder value. The capital structure of the Group and the
Company comprises issued capital and retained earnings.
The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions. To
maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to
shareholders or issue new shares. No changes were made in the objectives, policies or processes during the year ended
December 31, 2011 and December 31, 2010.
The Group is not subject to any externally imposed capital requirements.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
83
Notes to the financial statements
29.
Capital Commitments
As of December 31, 2011, the Group has the following capital commitments in respect of acquisition of property, plant
and equipment:
30.
The Group
2011
RM’000
2010
RM’000
Approved and contracted for
Approved but not contracted for
21,072
7,705
3,420
8,737
28,777
12,157
Lease Commitments
As of December 31, 2011, the Group has non-cancellable lease commitments pertaining to rental of premises and office
equipment as follows:
31.
The Group
Future Minimum
Lease Payments
2011
RM’000
2010
RM’000
Financial years ending December 31,
2011
2012
2013
2014
2015 and thereafter
–
6,788
393
43
1
7,528
1,395
148
20
–
7,225
9,091
Segment Reporting
The Group operates predominantly in the tobacco industry involving various types of activities as mentioned in Note 14
and principally in Malaysia. The other operating segments are not significant and accordingly, the financial information by
geographical and industry segments of the Group’s operations are not presented.
84
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
32.
Supplementary Information – Disclosure On Realised And Unrealised Profits/Losses
On March 25, 2010, Bursa Malaysia Securities Berhad (“Bursa Malaysia”) issued a directive to all listed issuers pursuant
to Paragraphs 2.06 and 2.23 of the Bursa Securities Main Market Listing Requirements which requires all listed issuers
to disclose the breakdown of the unappropriated profits or accumulated losses as of the end of the reporting period, into
realised and unrealised profits or losses.
On December 20, 2010, Bursa Malaysia further issued guidance on the disclosure and the prescribed format of
disclosure.
The breakdown of the retained earnings of the Group and of the Company as of December 31, 2011 and December 31,
2010 into realised and unrealised profits or losses, pursuant to the directive, is as follows:
The Group
The Company
2011
RM’000
2010
RM’000
2011
RM’000
2010
RM’000
Total Retained Earnings of the Company
and its Subsidiary Companies
Realised
Unrealised
393,578
(8,976)
329,881
(9,245)
208,395
–
208,098
–
Total Retained Earnings as per Statements
of Financial Position
384,602
320,636
208,395
208,098
The determination of realised and unrealised profits or losses is based on Guidance of Special Matter No. 1
“Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Securities
Listing Requirements” as issued by the Malaysian Institute of Accountants on December 20, 2010. A charge or credit
to the profit or loss of a legal entity is deemed realised when it resulted from the consumption of resource of all types
and form, regardless of whether it is consumed in the ordinary course of business or otherwise. A resource may be
consumed through sale or use. Where a credit or a charge to the profit or loss upon initial recognition or subsequent
measurement of an asset or a liability is not attributed to consumption of resource, such credit or charge should not be
deemed as realised until the consumption of resource could be demonstrated.
This supplementary information have been made solely for complying with the disclosure requirements as stipulated in
the directive of Bursa Malaysia Securities Berhad and is not made for any other purposes.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
85
Statement by directors
The Directors of JT INTERNATIONAL BERHAD state that, in their opinion, the accompanying financial statements are drawn up
in accordance with Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true
and fair view of the financial position of the Group and of the Company as of December 31, 2011 and of the financial performance
and the cash flows of the Group and of the Company for the year ended on that date.
Signed in accordance with a resolution of the Directors,
SHIGEYUKI NAKANO
THEAN NAM HOOI
Kuala Lumpur,
February 27, 2012
Declaration by the director
PRIMARILY RESPONSIBLE FOR THE FINANCIAL MANAGEMENT OF THE COMPANY
I, THEAN NAM HOOI, the Director primarily responsible for the financial management of JT INTERNATIONAL BERHAD, do
solemnly and sincerely declare that the accompanying financial statements are, in my opinion, correct and I make this solemn
declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.
THEAN NAM HOOI
Subscribed and solemnly declared by
the abovenamed THEAN NAM HOOI
at KUALA LUMPUR, this 27th day
of February, 2012.
Before me,
SHAFIE BIN DAUD (W350)
Commissioner for Oaths
86
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
Statement of value added
Value Added
2011
RM’000
2010
RM’000
Turnover
Less: Cost of materials and services
1,197,810
264,300
1,205,121
271,071
Value added from operations
Investment and other income
935,942
5,682
934,050
3,250
Total Value Added
939,192
937,300
Distribution Of Value Added
RM’000
n To the government
Duties, income and other taxes
2011
2010
%
RM’000
%
736,764
78.4
723,895
77.2
n To providers of capital
Dividends to shareholders of the company
58,845
6.3
58,845
6.3
n To employees
Salaries and other benefits
61,905
6.6
62,356
6.7
n Retained for maintenance and future growth
81,678
8.7
92,204
9.8
939,192
100.0
937,300
100.0
78.4%
6.3%
6.6%
8.7%
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
87
Analysis of shareholdings
AS AT MARCH 5, 2012
Share Capital
Authorised Share Capital
: RM350,000,000 comprising 1,400,000,000 ordinary shares of RM0.25 each
Issued and Paid-up Capital : RM65,383,601.50 comprising 261,534,406 ordinary shares of RM0.25 each
Class of Shares
: Ordinary shares of RM0.25 each
Voting Rights
: One (1) vote per ordinary share
Distribution Of Shareholdings
Size Of Holdings
No. Of
Holders
Total
Holdings
%
Less than 100 shares
100 – 1,000 shares
1,001 – 10,000 shares
10,001 – 100,000 shares
100,001 to less than 5% of issued shares
5% and above of issued shares
58
2,031
2,432
408
59
3
1,317
1,819,250
9,603,100
11,359,709
47,805,455
190,945,575
0.00
0.70
3.67
4.34
18.28
73.01
4,991
261,534,406
100.00
Substantial Shareholders As Per Register Of Substantial Shareholders
Name
1. JT International Holding B.V.
2. JT Europe Holding B.V.
3. Japan Tobacco Inc.
4. Employees Provident Fund Board
5. Kumpulan Wang Persaraan (Diperbadankan)
* Indirect interest through JT International Holding B.V.
88
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
Direct Interest
No. Of
% Of
Shares
Shares
157,885,275
–
–
20,038,800
14,521,500
60.37
–
–
7.66
5.55
Indirect Interest
No. Of
% Of
Shares
Shares
–
157,885,275*
157,885,275*
–
–
–
60.37*
60.37*
–
–
Directors’ Shareholdings As Per Register Of Directors’ Shareholdings
Ordinary Shares Of RM0.25 Each
Held In The Company
Name
Dato’ Sri Mohd. Nadzmi Bin Mohd. Salleh
Datuk Henry Chin Poy-Wu
Leong Wai Hoong
Keong Choon Keat
Shigeyuki Nakano
Thean Nam Hooi
Nobuaki Hayashi
Pierre Henri Emeric Binetter
Hirakazu Otomo
Direct Interest
No. Of
% Of
Shares
Shares
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Indirect Interest
No. Of
% Of
Shares
Shares
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Shares Held In Related Corporations
Name
Direct Interest
No. Of
% Of
Shares
Shares
Indirect Interest
No. Of
% Of
Shares
Shares
Shares of Yen 10,000 Each in Japan Tobacco Inc.
Shigeyuki Nakano
Nobuaki Hayashi
Hirakazu Otomo
64.724356
7.567888
28.146184
– (a)
– (a)
– (a)
–
–
–
–
–
–
Shares of HKD100 Each in
Japan Tobacco International (HK) Ltd.
Nobuaki Hayashi
1
– (a)
–
–
Common Shares of PHP1 Each in
JT International (Philippines) Inc.
Nobuaki Hayashi
Pierre Henri Emeric Binetter
1
1
– (a)
– (a)
–
–
–
–
Shares of PHP100 Each in
JTI Company (Philippines) Inc.
Nobuaki Hayashi
Pierre Henri Emeric Binetter
1
1
– (a)
– (a)
–
–
–
–
Note:
Negligible
(a)
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
89
Analysis of shareholdings
AS AT MARCH 5, 2012
30 Largest Securities Account Holders
Name No. Of
Shares
% Of
Shares
1. JT International Holding B.V. 157,885,275
2. Citigroup Nominees (Tempatan) Sdn Bhd
18,538,800
[Beneficiary: Employees Provident Fund Board]
3. Kumpulan Wang Persaraan (Diperbadankan)
14,521,500
4. Malaysia Nominees (Tempatan) Sendirian Berhad
9,058,470
[Beneficiary: Great Eastern Life Assurance (Malaysia) Berhad (Par 1)]
5. Valuecap Sdn Bhd
6,757,900
6. Amanahraya Trustees Berhad
4,750,000
[Beneficiary: Amanah Saham Malaysia]
7. Kam Loong Mining Sdn Bhd
4,301,000
8. Amanahraya Trustees Berhad
1,931,785
[Beneficiary: Amanah Saham Wawasan 2020]
9. Yap Ah Fatt
1,860,000
10. Employees Provident Fund Board
1,500,000
11. Malaysia Nominees (Tempatan) Sendirian Berhad
1,308,300
[Beneficiary: Great Eastern Life Assurance (Malaysia) Berhad (Par 2)]
12. Public Nominees (Tempatan) Sdn Bhd
1,289,200
[Beneficiary: Pledged Securities Account for Ang Beng Poh (E-BMM)]
13. Citigroup Nominees (Tempatan) Sdn Bhd
1,255,300
[Beneficiary: Exempt An For American International Assurance Berhad]
14. Malaysia Nominees (Tempatan) Sendirian Berhad
1,195,100
[Beneficiary: Great Eastern Life Assurance (Malaysia) Berhad (Non Par 1)]
15. Hong Leong Assurance Berhad
1,027,100
[Beneficiary: As Beneficiary Owner (Life Par)]
16. Ang Beng Poh
729,700
17. Yeoh Saik Khoo Sendirian Berhad
569,000
18. Citigroup Nominees (Asing) Sdn Bhd
550,600
[Beneficiary: CBNY for DFA Emerging Markets Small Cap Series]
19. Foo Khen Ling
522,000
20. Malaysia Nominees (Tempatan) Sendirian Berhad
514,800
[Beneficiary: Great Eastern Life Assurance (Malaysia) Berhad (Par 3)]
21. Citigroup Nominees (Tempatan) Sdn Bhd
513,500
[Beneficiary: ING Insurance Berhad (INV-IL Non Par)]
22. Public Nominees (Tempatan) Sdn Bhd
500,000
[Beneficiary: Pledged Securities Account for Koyata Sdn Bhd (E-BMM)]
23. Meng Lee Motors Sdn Berhad
452,000
24. Malaysia Nominees (Tempatan) Sendirian Berhad
417,700
[Beneficiary: Great Eastern Life Assurance (Malaysia) Berhad (LGF)]
25. Kam Loong Credit Sdn Bhd
390,000
26. Citigroup Nominees (Tempatan) Sdn Bhd
356,300
[Beneficiary: Exempt An For Eastspring Investments Berhad]
27. Public Nominees (Tempatan) Sdn Bhd
313,000
[Beneficiary: Pledged Securities Account for Lo Hung Hock (E-BMM)]
28. Citigroup Nominees (Tempatan) Sdn Bhd
311,000
[Beneficiary: American International Assurance Company Limited for Malaysian Agents Provident Fund]
29. Mohd Rosdi bin Man
290,800
30. HSBC Nominees (Asing) Sdn Bhd
270,700
[Beneficiary: Exempt An for JPMorgan Chase Bank, National Association (U.S.A.)]
60.37
7.09
90
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
233,880,830
5.55
3.46
2.58
1.82
1.64
0.74
0.71
0.57
0.50
0.49
0.48
0.46
0.39
0.28
0.22
0.21
0.20
0.20
0.20
0.19
0.17
0.16
0.15
0.14
0.12
0.12
0.11
0.10
89.43
Particulars of properties
The property held by the Group and Company as at December 31, 2011 are as follows:
Leasehold
Address
Persiaran Raja Muda
Seksyen 16
Shah Alam Industrial Estate
Selangor Darul Ehsan
Date Of
Acquisition
December 1997
Usage
Factory Land
& Building
Approx.
Age Of
Building
Year
14
Term Of
Lease
99 years
lease expiring
on 15.3.2069
Land
Area
Square
Metres
Net
Book
Value
RM’000
20,717
30,015
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
91
Notice of annual general meeting
NOTICE IS HEREBY GIVEN that the Thirty-Ninth Annual General Meeting of
JT International Berhad (“the Company”) will be held at the Hibiscus Auditorium,
Lower Ground 1, Sime Darby Convention Centre, 1A Jalan Bukit Kiara 1, 60000
Kuala Lumpur on Thursday, April 26, 2012 at 10.00 a.m. to transact the following
businesses:
Agenda
As Ordinary Business
1. To receive the Audited Financial Statements for the financial year ended December 31, 2011 and
the Reports of Directors and Auditors thereon.
(Please refer to Explanatory Note A)
2. To approve the payment of Directors’ Fees of RM329,000 for the financial year ended December
31, 2011.
RESOLUTION 1
3. To re-elect the following Directors, who retire in accordance with Article 99 of the Company’s
Articles of Association:
i.
Mr. Shigeyuki Nakano
RESOLUTION 2
ii. Mr. Keong Choon Keat
RESOLUTION 3
iii. Mr. Leong Wai Hoong
RESOLUTION 4
4. To elect Hirakazu Otomo as a Director who retires in accordance with Article 106 of the Company’s
Articles of Association.
RESOLUTION 5
5. To consider and if thought fit, pass the following resolution in accordance with Section 129(6) of
the Companies Act, 1965:
“THAT Datuk Henry Chin Poy-Wu who is over the age of seventy years and retires in accordance
with Section 129(2) of the Companies Act, 1965 be and is hereby re-appointed a Director of the
Company and to hold office until the next Annual General Meeting.”
RESOLUTION 6
6. To re-appoint Messrs Deloitte & Touche as the Auditors of the Company and to authorise the
Directors to determine their remuneration.
RESOLUTION 7
As Special Business
To consider and if thought fit, pass with or without modifications, the following resolutions:
7. Ordinary Resolution
Proposed Renewal of Shareholders’ Mandate for JT International Berhad and its
subsidiaries to enter into Recurrent Related Party Transactions of a Revenue or Trading
Nature with Related Parties
“THAT, subject always to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad,
approval be and is hereby given for the renewal of shareholders’ mandate for the Company and its
subsidiaries (“JTI Group”) to enter into recurrent transactions of a revenue or trading nature which are
necessary for JTI Group’s day-to-day operations, as set out in Section 2.5 of the Circular to shareholders
dated April 4, 2012, with the related parties mentioned therein provided that the transactions are in the
ordinary course of business and on normal commercial terms that are not more favourable to the related
parties than those generally available to the public and are not to the detriment of the minority shareholders
of the Company,
92
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
RESOLUTION 8
AND THAT the authority conferred by this resolution shall commence immediately upon the
passing of this resolution and shall continue to be in force until:
i.
the conclusion of the next Annual General Meeting of the Company (“AGM”), at which time
the mandate will lapse, unless by a resolution passed at the next AGM the mandate is again
renewed;
ii. the expiration of the period within which the next AGM is required to be held pursuant to
Section 143(1) of the Companies Act, 1965 (but shall not extend to such extensions as may
be allowed pursuant to Section 143(2) of the Companies Act, 1965); or
iii. revoked or varied by a resolution passed by the shareholders of the Company in a general
meeting,
whichever is earlier,
AND THAT the Directors of the Company be authorised to complete and do all such acts and
things (including executing all such documents as may be required) as they may consider
expedient or necessary to give effect to the mandate and transactions contemplated and
authorised by this resolution.”
8. To transact any other business of which due notice shall have been given.
By Order of the Board
TAN TEOH HOOI (MIA 10234)
WONG KWAI YIN (MAICSA 7008652)
Company Secretaries
Kuala Lumpur
April 4, 2012
Explanatory Note A
This agenda item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not require
a formal approval of the shareholders for the audited financial statements. As such, this item is not put forward for voting.
Notes:
1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote instead of
him, and that a proxy need not also be a member. A member may appoint any person to be his proxy and the provisions of
Section 149(1)(b) of the Companies Act, 1965 shall not apply.
2. Where a member appoints more than one (1) proxy, the proportions of shareholdings to be represented by each proxy must
be specified in order for the appointments to be valid.
3. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in
writing or, if the appointor is a corporation, either under the corporation’s common seal or under the hand of an officer or
attorney duly authorised.
4. The instrument appointing a proxy, with the power of attorney or other authority (if any) under which it is signed or a notarially
certified or office copy of such power or authority, must be deposited at the Registered Office of the Company at 6th Floor,
Menara Manulife, No. 6 Jalan Gelenggang, Damansara Heights, 50490 Kuala Lumpur not less than forty-eight (48) hours
before the time appointed for holding the meeting or adjourned meeting, as the case may be.
5. Only members whose names appear in the Record of Depositors as at 19 April 2012 shall be eligible to attend the meeting
or appoint a proxy to attend and vote on his/her behalf.
Explanatory Notes on Special Business:
Ordinary Resolution 8 – Proposed Renewal of Shareholders’ Mandate for Existing Recurrent Related Party
Transactions
This resolution if passed, will enable the Company and its subsidiary companies to enter into recurrent transactions involving the
interests of related parties, which are of revenue or trading nature and necessary for the JTI Group’s day-to-day operations,
subject to the transactions being carried out in the ordinary course of business and on terms not to the detriment of the minority
shareholders of the Company.
Please refer to the Circular to Shareholders dated April 4, 2012 for further information.
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
93
Statement accompanying notice
Of Thirty-ninth Annual General Meeting
Details of individuals who is standing for election as Directors
i)
94
Mr. Hirakazu Otomo
Age:
50
Nationality:
Japanese
Qualification:
BSc (Mechanical Engineering)
Position in the company:
Executive Director
Working Experience & Occupation:
Mr. Hirakazu Otomo was appointed as Executive Director on March 1,
2012. He is also the Director of Operations for the Company’s factory in
Shah Alam. Mr. Otomo joined Japan Tobacco Inc. in 1984 as a technical
staff at the Tokai factory in Japan. He then moved on to various other
positions in several countries including as a manager at the JT London
Office and Director of the JT New York representative office. Mr. Otomo
joined JT International based in Geneva as Director of Global Manufacturing
in 2003. Prior to his appointment in Malaysia, he was the General Director
of JT International Ukraine (Kremenchuk factory).
Other directorships of public companies:
None
Details of any interest in the securities
of the company and its subsidiaries:
None
Family relationship with any director
and/or major shareholder of the company:
None
Conflict of interest that he has
with the company:
None
List of conviction for offences within the
past 10 years other than traffic offences:
None
JT INTERNATIONAL BERHAD
2011 ANNUAL REPORT
Form of proxy
JT International Berhad (9244-D)
(Incorporated in Malaysia)
I/We
(Full name in block letters)
of
(Address)
being a member of JT INTERNATIONAL BERHAD, hereby appoint
of
(Full name in block letters)
(Address)
(Address)
or failing him/her
(Full name in block letters)
of
(Address)
or failing him/her, the Chairman of the meeting as my/our proxy to attend and vote for me/us and on my/our behalf at the
Thirty-Ninth Annual General Meeting of the Company to be held at the Hibiscus Auditorium, Lower Ground 1, Sime Darby
Convention Centre, 1A Jalan Bukit Kiara 1, 60000 Kuala Lumpur on Thursday, April 26, 2012 at 10.00 a.m. or at any
adjournment thereof, and to vote as indicated below:
No.
Resolution
For
1.
Approval of Directors’ Fees
2.
Re-election of Mr. Shigeyuki Nakano as Director
3.
Re-election of Mr. Keong Choon Keat as Director
4.
Re-election of Mr. Leong Wai Hoong as Director
5.
Election of Mr. Hirakazu Otomo as Director
6.
Re-appointment of Datuk Henry Chin Poy-Wu as Director
7.
Re-appointment of Messrs Deloitte & Touche as Auditors
8.
Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party
Transactions of a Revenue or Trading Nature.
Against
Please indicate with a “X” in the appropriate space how you wish your votes to be cast. If you do not indicate how you wish
your proxy to vote on any Resolution, the proxy will vote or abstain from voting at his or her discretion.
Signed this
day of
2012
No. of Shares Held
Signature of Shareholder or Common Seal
Proxy:
1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote instead of him, and that a proxy need not
also be a member. A member may appoint any person to be his proxy and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply.
2. Where a member appoints more than one (1) proxy, the proportions of shareholdings to be represented by each proxy must be specified in order for the
appointments to be valid.
3. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a
corporation, either under the corporation’s common seal or under the hand of an officer or attorney duly authorised.
4. The instrument appointing a proxy, with the power of attorney or other authority (if any) under which it is signed or a notarially certified or office copy of such
power or authority, must be deposited at the Registered Office of the Company at 6th Floor, Menara Manulife, No. 6 Jalan Gelenggang, Damansara Heights,
50490 Kuala Lumpur not less than forty-eight (48) hours before the time appointed for holding the meeting or adjourned meeting, as the case may be.
5. Only members whose names appear in the Record of Depositors as at 19 April 2012 shall be eligible to attend the meeting or appoint a proxy to attend and
vote on his/her behalf.
Fold along this line (1)
The Company Secretary
JT International Berhad (9244-D)
6th Floor, Menara Manulife
No. 6, Jalan Gelenggang
Damansara Heights
50490 Kuala Lumpur
Malaysia
Fold along this line (2)
Affix
postage
stamp

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