Annual Report 2014 - Wing Tai Malaysia Berhad

Transcription

Annual Report 2014
WING TAI MALAYSIA BERHAD
(6716-D)
Contents
03
Chairman’s Statement
32
Additional Compliance Information
06
5-Year Group Financial Highlights
33
Directors’ Responsibility Statement
08
Corporate Data
34
Financial Statements
09
Corporate Structure
156
Group Material Properties
10Directors
158
Analysis of Shareholdings
16
Corporate Governance Statement
161
Notice of Annual General Meeting
24
Audit Committee Report
165
Notice of Book Closure
29
Statement on Risk Management and
Internal Control
167
Proxy Form
Tucked away on a quiet corner of Bukit Ceylon,
Verticas Residensi is well-complemented by the charming
Lanson Place Bukit Ceylon Serviced Residences.
02
Chairman’s Statement
Dear Shareholders
On behalf of the Board of Directors of Wing Tai Malaysia Berhad, I am pleased
to present this Annual Report and Audited Financial Statements of the Group
and of the Company for the financial year ended 30 June 2014.
Financial Performance
The Group recorded a revenue of RM434.6 million and a
profit before tax of RM91.3 million for the current financial
year as compared to a revenue of RM602.6 million and
profit before tax of RM175.9 million in the previous financial
year.
Review of Group Operations
Property Development
In Kuala Lumpur, Verticas Residensi, a 423-unit freehold
development at Bukit Ceylon achieved sales of over 90%
of total units. Another freehold project, the Kondominium
Nobleton Crest is a condominium development comprising
3 low-rise blocks of 25 units. It is sited in the prestigious
heritage locale of Jalan U-Thant and was completed in June
2014.
RM434.6 m
Located next to the Kuala Lumpur City Centre on Jalan
Ampang is the Kondominium Le Nouvel KLCC. The
iconic landmark development, comprising 195 freehold
residences, is designed by the highly acclaimed architect
and Pritzker Prize laureate, Jean Nouvel. The development
is currently under construction; it is expected to be
completed by October 2015 and planned for sale in the last
quarter of 2015.
RM91.3 m
In Penang, Phase 3 of Taman BM Utama comprising
138 units of 2-storey and 3-storey terrace houses was
completed and 99% sold. Phase 4 which comprises
98 units of 2-storey terrace houses and 3-storey
semi-detached houses was 77% completed and 32% sold.
TOTAL REVENUE
PROFIT BEFORE TAX
RM1,683.2 m
TOTAL ASSETS
Phase 1 of Jesselton Hills, which comprises 136 units
of 2-storey and 2½-storey semi-detached houses,
was completed and 96% sold while Phase 2 (Lakeside
Superlink) which comprises 198 units of 2-storey terrace
houses was 72% completed and 50% sold.
Mahkota Impian, a 3-block modern high-rise development
comprising 360 serviced suites, was soft launched in
the current financial year and received by homebuyers
favourably.
Wing Tai Malaysia Berhad (6716-D)
03
The Impiana Commercial Hub is well-occupied and poised
to become the new business and commercial centre in the
Impiana precinct. It comprises 2-storey and 3-storey shop
offices along Jalan Rozhan namely Impiana Boulevard,
Impiana Avenue and Impiana Gallery.
In Johor Bahru, the sale of property viz. Phase I retail and
office balance units and Phase II vacant site of Plaza DNP,
was completed in May 2014.
Property Investment
Following the completion of renovation and refurbishment
works in September 2013, the Group’s serviced
apartments in Kuala Lumpur, the Ambassador Row
Serviced Suites (“ARKL”), recorded a gradual rise in both
the occupancy and average rental rates. It now boasts
75 units of newly renovated and well-appointed rooms,
featuring contemporary designs which complement
an enhanced guest experience.
The Group’s luxury residential apartments at Kondominium
No. 8 continue to record good occupancy rates. Lanson
Place Bukit Ceylon Serviced Residences received its
first guests in August 2013. The spacious luxury
residential suites offer guests full condominium facilities in
the prime estate of the Verticas Residensi Bukit Ceylon
in Kuala Lumpur, setting the highest standards in
luxury serviced residences in the central business district
of the capital city. It is the first hotel in Kuala Lumpur
to be included in the exclusive collection of Small
Luxury Hotels of the World.
Retail
As at 30 June 2014, the Company has 82 retail outlets in
major cities in Malaysia, distributing high-street and
boutique brands such as Topshop, Topman, Dorothy
Perkins, Miss Selfridge, Warehouse, Karen Millen, Pumpkin
Patch, Wallis, BCBG and Ben Sherman. During the current
financial year, with the addition of Furla and Burton to
its retail brand portfolio, the Group now manages 12
international fashion brands.
The Group’s joint venture with Japan’s Fast Retailing
Co. Ltd, successfully operates 18 Uniqlo outlets in Kuala
Lumpur and Penang, 8 of which were opened in the current
financial year. More outlets are expected to be opened in
the coming months.
Corporate Social Responsibility
The Group is mindful of its Corporate Social Responsibility
towards its employees and the communities in which
it conducts its business. The Group has upheld
fair compensation and investment in staff training
and development, and it has contributed to charity
organisations.
The Group also recognises its employees as its most
valuable asset, and has constantly raised the level of
professional knowledge and expertise in its staff through
various developmental programmes, including skills
upgrading, motivation and team building. High safety
standards in the work environment are maintained for all its
employees.
Uniqlo expanded its footprint with an addition of 8 outlets in the current financial year.
04
Dividends
The Board recommends a first and final dividend of 5 sen
per share Single Tier and a special dividend of 2 sen per
share Single Tier for the financial year ended 30 June 2014
subject to shareholders’ approval at the forthcoming Annual
General Meeting of the Company.
Prospects
In consideration of prevailing market conditions, the Group
expects to remain profitable in the next financial year. We
will continue to deliver strong shareholder's return and
excellent customer service to uphold our leading position in
the property and retail markets. Board Movement and Appreciation
On behalf of the Board of Directors, I thank our
shareholders, bankers, business associates, government
agencies and the media for their unstinting support and
confidence in the Group. I also thank our customers for their
patronage and unwavering support of our business.
To my fellow Board members, I am grateful for their counsel
and guidance. To the management and staff, I am deeply
appreciative of their hard work, drive and commitment
towards the Company. A new addition to the retail portfolio, Furla epitomises authentic Italian style with its highquality bags, shoes and accessories.
I will be stepping down from the Board at the upcoming
Annual General Meeting, after 14 enriching years with
the Company. It has been a privilege for me to serve as a
Director and Chairman of Wing Tai Malaysia Berhad. I am
deeply satisfied to have played a part in the Company’s
sustained growth through the years.
I take this opportunity to congratulate and welcome my
successor. I am confident that he will bring exceptional
leadership to growing and strengthening the Company’s
business. In closing, I wish my colleagues and fellow
Directors, and all our partners and shareholders, success in
the years ahead.
Tan Sri Dato’ Mohamed Noordin Bin Hassan
Chairman
10 October 2014
05
5-Year Group Financial Highlights
2014
2013
2012
2011
2010
RM’000
RM’000
RM’000
RM’000
RM’000
Revenue
434,615
602,587
459,128
369,816
354,252
- Property
242,027
416,711
284,874
213,330
214,255
- Retail
185,266
179,140
167,734
148,080
123,682
- Manufacturing
7,322
6,736
6,520
8,406
16,315
Profit Before Tax
91,272
175,898
121,211
96,773
74,385
Profit Net Of Tax
70,665
131,417
84,885
100,411
53,241
Profit Attributable to Shareholders
70,665
131,417
84,885
100,411
53,241
Shareholders’ Equity
1,051,231
1,011,540
905,296
844,750
756,455
Total Assets
1,683,199
1,563,787
1,307,602
1,185,375
996,701
631,968
552,247
402,306
340,625
240,246
- Basic
22.49
41.86
27.11
32.18
17.12
- Diluted
22.41
41.74
27.04
32.07
17.07
3.34
3.22
2.78
2.60
2.35
7
10
8
8
8
Total Liabilities
Earnings Per Share (sen)
Net Tangible Asset/Share (RM)
Gross Rate of Dividend (%)
06
Financial Summary
REVENUE (RM MILLION)
PROFIT BEFORE TAX (RM MILLION)
175.9
602.6
459.1
354.3
434.6
121.2
369.8
96.8
91.3
74.4
2010
2011
2012
2013
2014
SHAREHOLDERS’ EQUITY (RM MILLION)
756.5
844.8
905.3
1,011.5
1,051.2
2010
2011
2012
2013
2014
TOTAL ASSETS (RM MILLION)
1800
1,683.2
1,563.8
1,307.6
1,185.4
996.7
2010
2011
2012
2013
2014
Three-bedroom Duta suite in the newly refurbished Ambassador Row Serviced Suites.
2010
2011
2012
2013
2014
07
Corporate Data
BOARD OF DIRECTORS
REGISTERED OFFICE
Y. Bhg. Tan Sri Dato’ Mohamed Noordin bin Hassan
Chairman
Securities Services (Holdings) Sdn. Bhd.
Level 7, Menara Milenium, Jalan Damanlela,
Pusat Bandar Damansara, Damansara Heights,
50490 Kuala Lumpur
Tel : 603-2084 9000
Fax: 603-2094 9940
Cheng Wai Keung
Managing Director
Edmund Cheng Wai Wing
Executive Director
SOLICITORS
Y. Bhg. Dato’ Roger Chan Wan Chung
Executive Director
Chong Tet On
Y. Bhg. Dato’ Ghazi bin Ishak
Y. Bhg. Tan Sri Dato’ Paduka Dr. Mazlan bin Ahmad
Dr. Poh Soon Sim
Adnan Sundra & Low
Level 11, Menara Olympia,
No. 8, Jalan Raja Chulan,
50200 Kuala Lumpur
Ghazi & Lim
19th Floor, MWE Plaza,
No. 8, Lebuh Farquhar,
10200 Penang
Habibah binti Abdul
PRINCIPAL BANKERS
COMPANY SECRETARY
Chua Siew Chuan
CIMB Bank Berhad
HSBC Bank Malaysia Berhad
Malayan Banking Berhad
OCBC Bank (Malaysia) Berhad
United Overseas Bank (Malaysia) Bhd
REGISTRAR
Securities Services (Holdings) Sdn. Bhd.
50490 Kuala Lumpur
Tel : 603-2084 9000
Fax: 603-2094 9940
STOCK EXCHANGE LISTING
Main Market of
Bursa Malaysia Securities Berhad
COMPANY WEBSITE
AUDITORS
Ernst & Young
21st Floor, MWE Plaza,
No. 8, Lebuh Farquhar,
10200 Penang
08
www.wingtaiasia.com.my
Corporate Structure
INVESTMENT HOLDING
100%
Jayamuria
(M) Sdn. Bhd.
100%
Premium
Strategy
(M) Sdn. Bhd.
100%
Grand Eastern
Realty &
Development
Sdn. Bhd.
100%
Nian Sheng
Investments
Limited
100%
Winswift
Investment
Pte. Ltd.
100%
Wing Tai
Pengurusan
Sdn. Bhd.
25%
PT Windas Development 100%
DNP Jaya Sdn. Bhd.
100%
Tanahnaga Sdn. Bhd.
100%
Seniharta Sdn. Bhd.
100%
Wing Mei (M) Sdn. Bhd.
100%
Tribridge International Limited
100%
Simtron Limited
100%
Hamden Pte. Ltd.
25%
Cyber Cosmos Limited
PROPERTY INVESTMENT/DEVELOPMENT
WING TAI
MALAYSIA
BERHAD
100%
Angel Wing
(M) Sdn. Bhd.
100%
Nikmat Jaya
Sdn. Bhd.
100%
Hartamaju
Sdn. Bhd.
100%
Harta-Aman
Sdn. Bhd.
100%
D & P Realty
Sdn. Bhd.
50%
Kualiti Gold
Sdn. Bhd.
100%
Angkasa Indah Sdn. Bhd.
100%
DNP Hartajaya Sdn. Bhd.
100%
Starpuri Development Sdn. Bhd.
100%
Quality Frontier Sdn. Bhd.
100%
Chanlai Sdn. Bhd.
100%
D & P - Ejenawa Sdn. Bhd.
100%
100%
DNP Property Management Sdn. Bhd.
DNP Land Sdn. Bhd.
RETAIL
100%
Wing Tai Clothing
Sdn. Bhd.
100%
Wing Tai Fashion
Sdn. Bhd.
(formerly known as
DNP Clothing Sdn. Bhd.)
(formerly known as
DNP Fashion Sdn. Bhd.)
100%
Sedi-Intan
Sdn. Bhd.
100%
DNP Enterprises
Sdn. Bhd.
45%
Uniqlo (Malaysia) Sdn. Bhd.
GARMENT MANUFACTURING
100%
DNP Garment
Manufacturing
Sdn. Bhd.
100%
DNP Garments
Lanka (Private)
Limited
100%
Dragon &
Phoenix
Serba Pakaian
Sdn. Bhd.
100%
Sediperak
Sdn. Bhd.
100%
Tanako Sdn. Bhd.
100%
Sri Rampaian
Sdn. Bhd.
100%
Sedimas
Sendirian Berhad
100%
DNP Comercial
Laundry Lanka
(Private) Limited
100%
DNP Sportswear
Lanka (Private)
Limited
09
Directors
Aged 75, Malaysian | Independent Non-Executive
Y. Bhg. Tan Sri graduated from University of Malaya with a B.A. Hon (Econ) and a Master in Public & International Affairs from
University of Pittsburgh, United States of America.
Y. Bhg. Tan Sri had more than 40 years experience working for the government of Malaysia and the corporate sector prior to
joining the Board of the Company. He served in various government departments at district, state and federal levels including
as Deputy Secretary General, Ministry of Trade & Industry, Secretary General, Ministry of Science, Technology & Environment
and Secretary General, Ministry of Education. Prior to joining the Group, he was Vice-President of Petronas Berhad.
He joined the Board as Chairman of Wing Tai Malaysia Berhad on 24 May 2000. He also serves the Company as Chairman of
Employees’ Share Option Committee and Restricted Share Plan Committee and as a member of the Remuneration Committee
and Audit Committee.
Apart from his directorship in the Company, Y. Bhg. Tan Sri holds directorship in several subsidiaries of WingTM Group and
other private limited companies.
Y. Bhg. Tan Sri has no interest in the Company or its subsidiary companies; no family relationship with any Director and/or
major shareholder of the Company; no conflict of interest with the Company; and no conviction for offences within the past 10
years other than traffic offences, if any.
Mr. Cheng Wai Keung
Aged 64, Singaporean | Non-Independent Executive
Mr. Cheng graduated from University of Chicago with a Masters of Business Administration in 1973, and was awarded the
Alumni Service Medal in 2006 in honour of his achievement in service to the University. He earned his Bachelor of Science
degree from Indiana University in 1971.
He is Justice of The Peace appointed by the Singapore President since 2000. He was awarded the Distinguished Service Order
(DUBC-Darjah Utama Bakti Cemerlang) in August 2007, the Public Service Star (BBM) in 1987 and the Public Service Star (Bar)
(BBM-Lintang) in 1997 by the Singapore Government in recognition of his services.
Mr. Cheng was appointed to the Board of Wing Tai Malaysia Berhad on 29 April 1974 and serves as the Managing Director
since 20 September 1975. He is also a Member of the Company’s Remuneration Committee, Employees’ Share Option
Scheme Committee and Restricted Share Plan Committee. Concurrently, Mr. Cheng is the Chairman and Managing Director
of Wing Tai Holdings Limited, the holding company of Wing Tai Malaysia Berhad. He does not hold any directorships in public
companies incorporated in Malaysia and/or listed on the Bursa Malaysia Securities Berhad except for his directorship in the
Company.
Currently Mr. Cheng is the Deputy Chairman of Temasek Holdings (Private) Limited and Vice Chairman of Singapore-Suzhou
Township Development Pte Ltd. He also holds directorships in several public and private companies both locally and overseas,
including Singbridge Holdings Pte Ltd and Singapore Health Services Pte Ltd. He sits on the Board of Supervisors of ChinaSingapore Suzhou Industrial Park Development Group Co., Ltd (People’s Republic of China).
An active participant in public service, Mr. Cheng has served on many government bodies, in Singapore: Economic
Development Board, Singapore Trade Development Board and Singapore Productivity and Standards Board. His past
chairmanships of Singapore companies include:
Power Seraya Limited (1995 - 2000)
MediaCorp TV Singapore Pte Limited (1997 - 2002)
10
Media Corporation of Singapore Pte Limited (1999 - 2002)
Raffles Holdings Limited (2001 - 2006)
Neptune Orient Lines Limited (2002 - 2012)
Mr. Cheng is the brother of Mr. Edmund Cheng Wai Wing, an Executive Director of the Company. He has a direct shareholding
of 110,000 shares (comprising 33,000 ordinary shares of RM1.00 each and 77,000 acceptance of Restricted Share Award
(“RSA”) granted under the Wing Tai Malaysia Berhad Restricted Share Plan of which:
(i)
the vesting of 37,100 RSA is subject to fulfilment of vesting conditions as at vesting dates, i.e. 1 March 2015 and
1 March 2016; and
(ii)
the vesting of 39,900 RSA is subject to fulfilment of vesting conditions as at vesting dates, i.e. 23 September 2015
and 23 September 2016 respectively; and
an indirect shareholding of 191,384,062 ordinary shares of RM1.00 each by virtue of his interests in shares in Wing Tai Holdings
Limited, Wing Tai Investment & Development Pte. Ltd. and Wing Sun Development Pte Ltd. He was also granted the options
to subscribe for 800,000 ordinary shares of RM1.00 each in the Company pursuant to its Employees’ Share Option Scheme.
Mr. Cheng is deemed to be interested in the subsidiary companies of the Company by virtue of his substantial interests in the
Company.
He has not been convicted for offences within the past 10 years other than traffic offences, if any.
Mr. Edmund Cheng Wai Wing
Aged 62, Singaporean | Non-Independent Executive
Mr. Cheng obtained his Bachelor of Science Degree in Civil Engineering from Northwestern University Evanston, Illinois and
Master of Architecture from Carnegie Mellon University, Pittsburgh, Pennslyvania in the United States of America (“USA”).
Prior to his appointment in the Group, he had worked in several engineering, architectural and construction firms in the USA,
Hong Kong and Singapore.
Mr. Cheng plays an active role in public service. He was until September 2013, Chairman of the National Arts Council where
he is keenly involved in efforts at the national level to promote and develop an arts landscape that will enhance vibrancy and
creativity in the economy and society. He was also Chairman of The Singapore Tourism Board from 1993 to 2001. A Past
President of Real Estate Developers’ Association of Singapore (REDAS), Mr. Cheng is also a current Member of its Presidential
Council. Apart from these commitments, he had been involved as board member in a number of public and private companies
as well as schools and statutory boards and public service organizations in Singapore. They included Singapore Airlines Ltd,
SNP Corporation Ltd, Urban Redevelopment Authority, Construction Industry Development Board and as Chairman of The
Esplanade Co Ltd (Singapore’s premier performing arts centre), The Old Parliament House Limited, DesignSingapore Council
(as Founding Chairman) and Nanyang Technological University. He was also an advisor to the Ningbo government in Zhejiang
Province China on city planning. Currently, he is the Chairman of SATS Ltd and Mapletree Investments Pte Ltd. For his
contribution to public service, he was awarded the Public Service Star Award (Bar) in 2010, Public Service Star Award (BBM) in
1999 and Outstanding Contributor to Tourism Award in 2002 by the Singapore Government. In March 2009, he was conferred
“Officier de l’Ordre des Arts et des Lettres” by the Government of Republic of France.
He joined the Board as Executive Director on 8 May 1984 and sits on the board of several subsidiary companies of the Group.
He is also the Deputy Chairman of the Singapore-listed company, Wing Tai Holdings Limited and the Managing Director of
Wing Tai Land Pte Ltd, a wholly owned subsidiary of Wing Tai Holdings Limited which in turn is the holding company of Wing
Tai Malaysia Berhad.
11
He does not hold any directorship in the public companies incorporated in Malaysia except for his directorship in Wing Tai
Malaysia Berhad.
Mr. Cheng is the brother of Mr. Cheng Wai Keung, the Managing Director of the Company. He has a direct shareholding of
110,000 shares (comprising 33,000 ordinary shares of RM1.00 each and 77,000 acceptance of Restricted Share Award (“RSA”)
granted under the Wing Tai Malaysia Berhad Restricted Share Plan of which:
(i)
1 March 2016; and
(ii)
the vesting of 39,900 RSA is subject to fulfilment of vesting conditions as at vesting dates, i.e. 23 September 2015 and
23 September 2016 respectively; and
an indirect shareholding of 191,384,062 ordinary shares of RM1.00 each by virtue of his interests in shares in Wing Tai Holdings
Limited, Wing Tai Investment & Development Pte. Ltd. and Wing Sun Development Pte Ltd. He was also granted the options
to subscribe for 800,000 ordinary shares of RM1.00 each in the Company pursuant to its Employees’ Share Option Scheme.
Mr. Cheng is deemed to be interested in the subsidiary companies of the Company by virtue of his substantial interests in the
Company.
He has not been convicted for offences within the past 10 years other than traffic offences, if any.
Aged 73, Hong Kong | Non-Independent Executive
Dato’ Chan joined the Company as General Manager in June 1971 and he is one of the pioneer staff members of WingTM
Group. With over 40 years of business experience in Malaysia, he assists the Managing Director of the Company in overseeing
the day-to-day operations of the Group.
He was appointed to the Board on 18 August 1988 and sits on the Board of several subsidiaries of WingTM Group and other
private limited company. He does not hold any other directorship in the public company incorporated in Malaysia.
He has a direct shareholding of 1,265,000 shares (comprising 1,079,500 ordinary shares of RM1.00 each and 185,500
acceptance of Restricted Share Award (“RSA”) granted under the Wing Tai Malaysia Berhad Restricted Share Plan of which:
(i)
1 March 2016; and
(ii)
the vesting of 101,500 RSA is subject to fulfilment of vesting conditions as at vesting dates, i.e. 23 September 2015 and
23 September 2016 respectively; and
an indirect shareholding of 2,197,000 ordinary shares of RM1.00 each in the Company by virtue of his spouse’s interest in the
shares of the Company. He is deemed to have an interest in the shares of the subsidiary companies of WingTM to the extent
his spouse has an interest.
Dato’ Chan has no family relationship with any Director and/or major shareholder of the Company; no conflict of interest with
the Company; and no conviction for offences within the past 10 years other than traffic offences, if any.
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Mr. Chong Tet On
Mr. Chong graduated in 1970 as a Chartered Accountant. He is a Fellow Member of the Institute of Chartered Accountants of
England and Wales and a member of Malaysian Institute of Accountants, Malaysian Institute of Certified Public Accountants
and Institute of Certified Public Accountants of Singapore, Fellow of Australian Certified Practicing Accountants.
Prior to 1970, he joined Jollife Cork & Co. as articled student and was an Audit Manager before his resignation. For the
period from 1970 to 1973, he worked as an Audit Senior with Price Waterhouse in London and in Kuala Lumpur. In 1974, he
started his own firm known as Tet O. Chong & Co. and was the Managing Partner of the firm from 1974 until 1990. The firm
subsequently practiced under the name of Moore Stephens AC which was affiliated to Moore Stephens, an international
accounting firm. He became the Managing Partner of Moore Stephens in 1990 and actively involved in mergers and
acquisitions including public floatation both in Malaysia and Europe. Mr. Chong retired as Managing Partner in March 2009
and remains as a consultant of the firm until the practice was absorbed into Baker Tilly Group. He is presently an independent
consultant to the Baker Tilly Group.
Mr. Chong was appointed to the Board on 12 December 2001. He is also the Chairman of the Audit Committee and a Member
of the Nomination Committee of the Company.
He does not hold other directorship in other public companies apart from his directorship in the Company. He also sits on the
board of several private limited companies.
Mr. Chong has no interest in the Company or its subsidiary companies; no family relationship with any Director and/or major
shareholder of the Company; no conflict of interest with the Company; and no conviction for offences within the past 10 years
other than traffic offences, if any.
Dato’ Ghazi, a lawyer by profession is a Barrister at Law from Lincoln’s Inn London, United Kingdom. He was called to
the English Bar in 1971 and joined the Malaysian Government Legal Services upon his return in 1971. He was posted as
a Magistrate in Kuala Lumpur and later as Acting President of Sessions Court in Malacca and Kuala Kubu Bahru. He was
appointed as Deputy Public Prosecutor Penang in 1975 and for a spell acted as State Legal Adviser, Penang.
He resigned from government service on 31 December 1976 and joined a legal firm, Messrs Presgrave & Matthews, as a
partner from 1 March 1977 until 1992 when he formed Messrs Ghazi & Lim.
Dato’ Ghazi is one of the most prominent litigation lawyers in Malaysia having litigated in landmark Malaysian cases in fields
ranging from criminal, commercial, company, banking, construction, constitutional, land law and complex probate and
administration matters involving various jurisdictions. He also handles labour, employment and industrial disputes. Dato’ Ghazi
also advises local authorities and other statutory bodies, including Universiti Sains Malaysia. His corporate experience includes
joint venture agreements involving foreign partners.
Dato’ Ghazi was appointed to the Board on 13 June 2005 and he is also the Chairman of the Remuneration Committee and a
Member of the Audit Committee of the Company.
Dato’ Ghazi also sits on the Board of Oriental Holdings Berhad; a public company listed on the Bursa Malaysia Securities
Berhad.
Dato’ Ghazi has no interest in the Company or its subsidiary companies; no family relationship with any Director and/or major
13
Y. Bhg. Tan Sri graduated from University of Malaya with a Bachelor of Arts (Honours in History), a Masters Degree in Public
Administration from the University of Pittsburgh, United States of America (“USA”) and a PhD in Public Administration from
University of Southern California, Los Angeles, USA. Y. Bhg. Tan Sri also attended the Advanced Management Program at
Harvard University.
Y. Bhg. Tan Sri began his career in the Administrative and Diplomatic Services of the Malaysian Government in August 1966.
During the course of his 33 years in public service, he had served among others as INTAN Director, Secretary General of the
Ministry of Justice, Secretary General of the Ministry of Information, Deputy Secretary General of the Ministry of Finance and
Mayor of Kuala Lumpur. He retired from the Malaysian public service as Director General of the Public Service Department
in December 1998. He was then appointed and served for 6 years as Chairman of the Education Service Commission until
January 2005.
He joined the Board as Independent Non-Executive Director of Wing Tai Malaysia Berhad on 25 May 2007. He also serves the
Company as a Member of Audit Committee and the Chairman of the Nomination Committee.
Y. Bhg. Tan Sri also sits on the Board of MUI Continental Berhad and Malayan United Industries Berhad, public companies
listed on the Bursa Malaysia Securities Berhad.
Y. Bhg. Tan Sri has no interest in the Company or its subsidiary companies; no family relationship with any Director and/or
major shareholder of the Company; no conflict of interest with the Company; and no conviction for offences within the past
10 years other than traffic offences, if any.
Dr. Poh Soon Sim
Dr. Poh graduated from University of Singapore with a MBBS Degree in 1971.
Dr. Poh has been in private medical practice since 1972.
He joined the Board as Independent Non-Executive Director of Wing Tai Malaysia Berhad on 13 September 2007. He also
serves the Company as a Member of the Nomination Committee and Remuneration Committee.
Dr. Poh also sits on the Board of Hong Leong Company (Malaysia) Berhad; a public company incorporated in Malaysia and
Hong Leong Foundation.
Dr. Poh has no interest in the Company or its subsidiary companies; no family relationship with any Director and/or major
14
Cik Habibah Binti Abdul
Cik Habibah graduated from University of Malaya with a Bachelor of Economics (Accounting). She is a Member of the Institute
of Chartered Accountants of England and Wales and a Member of Malaysian Institute of Certified Public Accountants and
Malaysian Institute of Accountants.
She has about 34 years of experience in providing audit and business advisory services to large public listed, multinational and
local corporations.
She was a former partner of Ernst & Young (‘EY’). She was also a former member of the Securities Commission from 1999 to
2002.
Cik Habibah was appointed to the Board as Independent Non-Executive Director of Wing Tai Malaysia Berhad on 1 December
2012. She also serves the Company as a Member of the Audit Committee and Remuneration Committee.
Cik Habibah also sits on the Board of KLCC Property Holdings Berhad and Petronas Gas Berhad; both are public listed
companies. She also holds directorship in non-listed public companies, CIMB Islamic Bank Berhad and CIMB Investment
Bank Berhad.
Cik Habibah has no interest in the Company or its subsidiary companies; no family relationship with any Director and/or major
15
Corporate Governance Statement
During the year under review, the Board of Directors of Wing Tai Malaysia Berhad continued its commitment to the
maintenance of high standards of corporate governance by supporting and applying the Principles and Recommendations of
the Malaysian Code on Corporate Governance 2012 (“the Code”) pursuant to Paragraph 15.25 of Bursa Malaysia Securities
Berhad Main Market Listing Requirements (the “Listing Requirements”).
ESTABLISH CLEAR ROLES AND RESPONSIBILITIES
Clear Functions of the Board and Management
The Board has nine (9) members. Six (6) out of the nine (9) members are independent non-executive directors. A brief profile of
each director is presented on pages 10 to 15 of this Annual Report.
The Board is led by Y. Bhg. Tan Sri Dato’ Mohamed Noordin bin Hassan as the independent non-executive Chairman and the
executive management of the Group is led by Mr. Cheng Wai Keung, the Group Managing Director. There is a clear division of
responsibility between these two (2) roles to ensure a balance of authority and power.
To ensure the effective discharge of its function and responsibilities, the Board delegates certain authorities and discretion
of the Board to the Executive Directors, representing the Management in constituting proper Board Committees. The Board
Committees are entrusted with specific responsibilities to oversee the affairs of the Company, in accordance with their
respective Terms of References.
The presence of the six (6) independent directors, with their different backgrounds and specialisations, complements the
Board with a mix of industry-specific knowledge and broad business and commercial experience. They provide unbiased
and independent views, advice and judgement by taking into account the interest of both the Group and public shareholders.
All non-executive directors are independent of management and free from any relationship, which could interfere with their
independent judgement. The Board complies with paragraph 15.02 of the Listing Requirements, which requires that at least
two (2) directors or one-third (1/3rd) of the Board of the Company, whichever is higher, are independent directors.
The Board believes its current size and composition is appropriate for its purpose.
Board Charter
The Board has a formal Board Charter. The core areas of the Board Charter are as follows:
-
-
-
-
-
-
The Group’s goals, key values and principles
Duties and responsibilities of the Board
Composition of the Board and Board Committees
Process and procedures for convening Board Meetings
Division of authorities, responsibilities and duties between the Board and those delegated to the Management
Communications with shareholders and investors relations
The Board Charter is available on the Company’s website at www.wingtaiasia.com.my.
Roles and Responsibilities
The Board is responsible for the overall corporate governance of the Group, including its strategic direction, formulation of
policies and stewardship of the Group resources.
16
ESTABLISH CLEAR ROLES AND RESPONSIBILITIES (CONTD.)
Roles and Responsibilities (contd.)
This includes key areas such as:
•
•
•
•
•
•
Reviewing and adopting a strategic action plan for the Group;
Overseeing the conduct of the Group’s business including its financial and operating performance;
Reviewing risk management framework and the implementation of appropriate policies to manage these risks;
Succession planning, particularly for senior management;
Developing and implementing an investor relations program; and
Reviewing the adequacy and the integrity of internal control systems and management information system.
Formalised Ethical Standards through Code of Conducts
The directors, officers and employees are required to observe and maintain high standard of integrity in carrying out their roles
and responsibilities and to comply with the Group’s policies as well as the relevant applicable laws and regulations. The Board
has adopted a formal Code of Conducts.
The Code of Conducts covers all aspects of the Company’s business operations, such as show respect in the workplace,
integrity in market place, ensure ethics in business relationships and effective communication.
The Code of Conduct is available on the Company’s website at www.wingtaiasia.com.my.
Strategies Promoting Sustainability
The Board promotes good Corporate Governance in the application of sustainability practices by committing to the global
environment, social, governance aspect throughout the Company, the benefits of which are believed to translate into better
corporate performance.
Qualified and Competent Company Secretary
The Board is satisfied with the performance and support rendered by the Company Secretary to the Board in the discharge of
its functions. The Company Secretary plays an advisory role to the Board in relation to the Company’s Articles of Association,
Board’s policies and procedures and compliance with the relevant regulatory requirements, codes or guidance and legislations.
The Company Secretary supports the Board in managing the Company’s governance model, ensuring it is effective and
relevant. The Company Secretary also ensures that deliberations at the Board meetings are well recorded and minuted.
Access to Information and Advice
All Board members are supplied with information on a timely manner. Board papers are circulated in sufficient time to enable
the directors to obtain further information or clarification, where necessary, in order to be properly briefed before the meeting.
The Board papers provide, among others, periodical financial and corporate information, significant operational, financial and
corporate issues, performance of the various business units and management proposals that requires Board’s approval.
Detailed periodic briefings on industry outlook, company performance and forward previews are also conducted for the
directors to ensure that the Board is well informed on the latest market and industry trends.
The Board has access to the advice and services of the Company Secretary. A procedure exists for the Board of Directors,
whether as a full Board or in their individual capacity, to take independent professional advice, where necessary and in
appropriate circumstances, in furtherance of their duties, at the Company’s expense.
17
STRENGTHEN COMPOSITION
Board Committees
The Board of Directors delegates certain responsibilities to the Board Committees, namely an Audit Committee, an Executive
Share Option Scheme Committee, a Restricted Share Plan Scheme Committee, a Nomination Committee and a Remuneration
Committee.
All Board Committees have written terms of reference and operating procedures, and the Board receives reports of their
proceedings and deliberations.
Nomination Committee
The Nomination Committee comprises three (3) non-executive directors and its members are:
Y. Bhg. Tan Sri Dato’ Paduka Dr. Mazlan bin Ahmad - Chairman, Independent Non-Executive Director
Mr. Chong Tet On
- Independent Non-Executive Director
Dr. Poh Soon Sim
The Board is in the opinion that Tan Sri Dato’ Paduka Dr. Mazlan bin Ahmad, an Independent Non-Executive Director, is
suitable to act as the Chairman of the Nomination Committee, given his experience and available time commitment.
Develop, Maintain and Review the Criteria for Recruitment and Annual Assessment of Directors
The Nomination Committee is responsible for proposing new nominees to the Board and assessing the performance of the
directors of the Company on an on-going basis.
The Board through the Nomination Committee reviews annually its required mix of skill and experience and other qualities,
including core competencies which non-executive and executive directors should have and the effectiveness of the Board as a
whole, the Committees of the Board and the contribution of each of the directors.
The Board has access to the services of the Company Secretary to advise and to ensure that all appointments are properly
made, that all necessary information is obtained from directors, both for the Company’s own records and for the purposes of
meeting statutory obligations, as well as obligations arising from the Listing Requirements or other regulatory requirements.
In accordance with the Company’s Articles of Association, all directors who are appointed to the Board are subject to
re-election by the shareholders at the first Annual General Meeting (“AGM”) since their appointment. The Company’s Articles
of Association also provide that at least one-third (1/3rd) of the Board is subject to re-election at regular intervals and at least
once every three (3) years.
Gender Diversity
The Board does not have any gender diversity policies and targets or any set measures to meet any target. Nevertheless, the
Group is an equal opportunity company and all appointments are based strictly on merits and are not driven by any racial or
gender biased.
18
STRENGTHEN COMPOSITION (CONTD.)
Activities of the Nomination Committee
During the financial year under review, one (1) meeting was held and attended by all its members. In the meeting the
Nomination Committee reviewed and assessed the composition of the Board and Board Committees. It also recommended to
the Board for adoption Evaluation Forms to assess the effectiveness of the Board as a whole and the Committees of the Board
and the contribution and performance of each individual director self assessment.
Remuneration Committee
The Remuneration Committee comprises the following members:
Y. Bhg Dato’ Ghazi bin Ishak Mr. Cheng Wai Keung
- Chairman, Independent Non-Executive Director
- Non-Independent Executive Director
Y. Bhg. Tan Sri Dato’ Mohamed Noordin bin Hassan - Independent Non-Executive Director
Dr. Poh Soon Sim
Cik Habibah binti Abdul
The Remuneration Committee review, assess and recommend to the Board the remuneration packages of the executive
directors in all forms, with other independent professional advice or external advice as necessary. None of the executive
directors participated in any way in determining their individual remuneration.
The Board as a whole determines the remuneration of non-executive directors with individual directors abstaining from
decisions in respect of their individual remuneration.
The current remuneration policy for the directors of the Company is as follows:a.
b.
The remuneration of the executive directors is performance related which is compatible and commensurate with
responsibilities in order to attract, motivate and retain them to run the Company. The Company also reimburses
reasonable expenses incurred by directors where required, in the course of carrying out their duties as directors.
The non-executive directors are paid with directors’ fees and attendance allowance for each Board meeting and Board
Committee meeting attended.
The policy practiced by the Remuneration Committee is to provide the remuneration packages necessary to attract and retain
directors needed to run the Company successfully.
The directors have access to the services of the Company Secretary who must ensure that all decisions made on the
remuneration packages of the executive directors are properly recorded.
Further details of directors’ remuneration are set out in Note 10 to the financial statements of this Annual Report.
REINFORCE INDEPENDENCE
Annual Assessment of Independence
In line with the Code, the Board assessed the independence of the independent non-executive directors annually, taking into
account the individual director’s ability to exercise independent judgement at all times and to contribute to the effectiveness of
the Board function.
19
REINFORCE INDEPENDENCE (CONTD.)
Annual Assessment of Independence (contd.)
The independent non-executive directors are not employees and they do not participate in the day-to-day management as well
as the daily business of the Company. They bring external perspectives, constructively challenge and help develop proposals
on strategy, scrutinise the performance of Management in meeting approved goals and objectives, and monitor risk profile of
the Company’s business and the reporting of quarterly business performances.
The Board is satisfied with the level of independence demonstrated by all the independent non-executive directors and their
ability to act in the best interest of the Company.
Tenure of Independent Directors
One (1) of the recommendation of the Code states that the tenure of an independent director should not exceed a cumulative
term of nine (9) years. However, the Nomination Committee and the Board have determined at the annual assessment carried
out that Y. Bhg. Tan Sri Dato’ Mohamed Noordin bin Hassan, Mr. Chong Tet On and Y. Bhg. Dato’ Ghazi bin Ishak who have
served the Board for more than nine (9) years prior to the next AGM to be held in year 2015 and remained objective and
independent in expressing their views and in participating in deliberations and decision making of the Board and Board
Committees. The length of their services on the Board does not in any way interfere with their exercise of independent
judgement and ability to act in the best interests of the Company.
Shareholders’ Approval for Retention of the Independent Non-Executive Directors
Y. Bhg. Tan Sri Dato’ Mohamed Noordin bin Hassan will not be seeking re-election at the forthcoming Forty Eighth AGM of
the Company. In view thereof, the Board recommends and supports the retention of Mr. Chong Tet On and Y. Bhg. Dato’
Ghazi bin Ishak as independent non-executive directors of the Company which is tabled for shareholders’ approval at the
forthcoming Forty Eighth AGM of the Company.
FOSTER COMMITMENT
Time Commitment
The Board schedules four (4) regular meetings a year, and meets additionally when necessary. During the year under review,
the Board held four (4) regular meetings; where it deliberated upon and considered a variety of matters including the Group’s
financial and operating results, major investments, corporate strategy, the business plan and direction of the Group.
The Board receives documents on matters requiring its consideration prior to and in advance of each meeting. The meeting
papers are issued in sufficient time to enable the directors to obtain further information or clarification where necessary before
the meeting. All proceedings from the Board are recorded and signed by the Chairman of the meeting.
The Board is satisfied with the level of time commitment given by the directors towards fulfilling their roles and responsibilities
as directors of the Company.
20
FOSTER COMMITMENT (CONTD.)
Time Commitment (contd.)
The details of each director’s attendance are as follows:
Name of Director
Cheng Wai Keung
Chong Tet On
Y. Bhg. Dato Ghazi bin Ishak
Dr. Poh Soon Sim
Habibah binti Abdul
Designation
Chairman, Independent Non-Executive Director
Managing Director
Executive Director
Executive Director
Independent Non-Executive Director
Attendance
4/4
4/4
4/4
4/4
4/4
3/4
4/4
4/4
4/4
Directors’ Training
All directors have completed the Mandatory Accreditation Programme prescribed by Bursa Malaysia Securities Berhad.
During the year, the directors have attended training programmes, either individually or collectively, to enhance their skills and
knowledge. They were also encouraged to attend the conferences, seminars and programmes organised by third parties. The
training needs of the directors are evaluated and determined by the Board on an ongoing basis instead of the Nomination
Committee as recommended by the Code.
Some of the trainings/courses attended by the directors during the financial year ended 30 June 2014 are as follows:- Goods & Services Tax (GST) Awareness; and
- MIA International Accountants Conference.
UPHOLD INTEGRITY IN FINANCIAL REPORTING
Compliance with Applicable Financial Reporting Standards
In presenting the annual report, annual financial statements and quarterly announcements to shareholders, the Board aims to
present a balanced and understandable assessment of the Group’s position and prospects. The Board is assisted by the Audit
Committee in scrutinising these reports.
In preparing the financial statements, the Board will ensure that the Group’s financial statements have been prepared in
accordance with the Companies Act, 1965 and applicable approved accounting standards and that reasonable and prudent
estimates have been made.
Assessment of Suitability and Independence of External Auditors
The Audit Committee meets with the external auditors four (4) times a year to discuss their audit plan, audit findings and the
Group’s and Company’s financial statements. At least two (2) of these meetings are held without the presence of the executive
directors and the Management. The Audit Committee also meets with the external auditors additionally whenever it is deemed
necessary. In addition, the external auditors are invited to attend the AGM of the Company and are available to answer
shareholders’ questions on the conduct of the statutory audit and the preparation and contents of their audit report.
21
UPHOLD INTEGRITY IN FINANCIAL REPORTING (CONTD.)
Assessment of Suitability and Independence of External Auditors (contd.)
As part of the Audit Committee review process, the Audit Committee has obtained written assurance from the external auditors
confirming that they are, and have been, independent throughout the conduct of the audit engagement in accordance with the
terms of all relevant professional and regulatory requirements.
RECOGNISE AND MANAGE RISKS
Sound Framework to Manage Risks
The Board’s primary objective and direction in managing the Group’s risk is focused on the achievement of the Group’s
business objectives. The Group has established the internal control procedures with clear lines of accountability and delegated
authority to identify, evaluate and manage significant risks.
The Group has an ongoing process for identifying, evaluating and managing key risks in the context of its business objectives.
These processes are embedded within the Group’s management systems.
Please refer to the Statement on Risk Management and Internal Control set out in pages 29 to 31 of this Annual Report.
Internal Audit Function
The internal audit function is independent of the operations of the Group and provides reasonable assurance that the Group’s
system of internal control is satisfactory and operating effectively.
The internal audit function was performed by an external consultant during the year to identify and assess the principal risks
and to review the adequacy and effectiveness of the internal controls of the Group. Areas for improvement were highlighted
and the implementations of recommendations were monitored. None of the internal control weaknesses have resulted in any
material losses, contingencies or uncertainties that would require disclosure in the Annual Report.
ENSURE TIMELY AND HIGH QUALITY DISCLOSURE
Corporate Disclosure Policy
The Company recognises the value of transparent, consistent and coherent communications with the investment community
consistent with commercial confidentiality and regulatory considerations. The Company aims to build long-term relationships
with shareholders and potential investors through appropriate channels for the management and disclosure of information.
These investors are provided with sufficient business, operations and financial information on the Group to enable them to
make informed investment decisions.
The Company’s website has a “Contact Us” section as well as a dedicated link to the Company’s Investor Relations team, via
[email protected] where shareholders and potential investors may direct their enquiries on the Company. The
Company’s Investor Relations team will endeavour to reply to these queries in the shortest possible time.
Leverage on Information Technology for Effective Dissemination of Information
The Company’s website provides all relevant information on the Company and is accessible by the public. This Investor
Relations section enhances the Investor Relations function by including all announcements made by the Company, annual
reports as well as the corporate and governance structure of the Company.
22
ENSURE TIMELY AND HIGH QUALITY DISCLOSURE (CONTD.)
Leverage on Information Technology for Effective Dissemination of Information (contd.)
The announcement of the quarterly financial results is also made via Bursa LINK immediately after the Board’s approval. This is
important in ensuring equal and fair access to information by the investing public.
STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS
Encourage Shareholders Participation at General Meetings and proactive engagements with Shareholders
The Company recognises the importance of communicating with its shareholders and investors. Announcements and release
of financial results on a quarterly basis provides the shareholders and the investing public with an overview of the Group’s
performance and operations.
The AGM is the principal forum for dialogue with shareholders. Notice of the AGM and the annual report are sent to
shareholders at least twenty one (21) days before the date of the meeting. At the AGM, the shareholders are encouraged to ask
questions both about the resolutions being proposed or about the Group’s operations in general. Members of the Board, the
Chief Financial Officer, as well as, the external auditors of the Company are present to answer questions raised at the meeting.
Additionally, the Executive Directors and/or senior management may meet or release statements to the Press after the AGM
to brief members of the media on the resolutions passed, and answers questions on the Group’s operations fielded by the
reporters.
In the conduct of briefings or presentations, the Company exercises due diligence to ensure that information disseminated is
accurate, clear, timely and complete. The Company is also mindful of the legal and regulatory framework governing the release
of material and price-sensitive information. The Company Secretary assists the Board to oversee and coordinate disclosures to
make sure that the Company complies with Bursa Malaysia Securities Berhad Disclosure Requirements; including disclosure of
information to analysts, institutional investors, the media and the investing public.
In addition, the shareholders also can obtain up-to-date information on the Group’s activities from the Company’s website at
www.wingtaiasia.com.my.
Encourage Poll Voting
There will not be any substantive resolutions to be put forth for shareholders’ approval at the forthcoming AGM.
Nevertheless, the Company would conduct poll voting if demanded by shareholders at the general meeting.
Statement of Compliance with the recommendations of the Code
The Group has generally complied with the recommendations set out in the Code during the financial year ended 30 June
2014, except for the following:
•
The Code recommends the appointment of a senior independent non-executive director to whom concerns may be
conveyed. The Board has not appointed any independent non-executive director to fulfil that role, given the strong and
independent element on the Board, with a recognised independent non-executive Chairman, Tan Sri Dato’ Mohamed
Noordin bin Hassan, whose role is separated from the Managing Director.
This statement is issued in accordance with a resolution of the Board of Directors dated 18 August, 2014.
23
Audit Committee Report
COMPOSITION
The directors who have served in the Audit Committee (the “Committee”) during the financial year ended 30 June 2014 are as
follows:
Chairman
Mr. Chong Tet On
(Independent Non-Executive Director)
(Member of the Malaysian Institute of Accountants)
Members
Y. Bhg. Tan Sri Dato’ Mohamad Noordin Bin Hassan
Y. Bhg. Tan Sri Dato’ Paduka Dr. Mazlan Bin Ahmad
Y. Bhg. Dato’ Ghazi Bin Ishak
Cik Habibah Binti Abdul
(Member of the Malaysian Institute of Accountants)
MEETINGS
The Committee convened four (“4”) meetings during the year under review.
The details of each member’s attendance are as follows:
Name of Director
Chong Tet On
Habibah Binti Abdul
Attendance
4/4
4/4
4/4
3/4
4/4
The meetings were structured through the use of agendas, which were distributed to members with sufficient notification. The
Company Secretary was present at all the meetings. Representatives from Management, external auditors and outsourced
internal auditors, also attended the meetings, upon invitation by the Committee.
24
CONTINUING TRAINING AND ENGAGEMENT
All the members of the Committee have attended relevant training seminars and programmes to enhance their competency in
fulfilling their functions and duties.
During the financial year, the Committee Chairman continuously engaged with senior management and both the internal and
external auditors in order to be kept informed of matters affecting the Group.
ACTIVITIES OF THE COMMITTEE FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
In line with the terms of reference of the Committee, the following activities were carried out by the Committee during the
financial year:
i)
ii)
iii)
Reviewed the annual audit plan, scope and audit report prepared by the external auditors;
Reviewed the quarterly results of the Group before recommending them for approval by the Board;
Reviewed the year-end financial statements, the external auditors’ management letter and management response
therein;
iv) Considered and recommended to the Board audit fees payable to the external auditors and the reappointment of external
auditors;
v) Reviewed the internal audit function’s scope, competency and resource requirements;
vi) Reviewed the internal auditor’s risk assessment report, internal audit plan and quarterly internal audit reports and
management responses therein;
vii) Reviewed the disclosure on related party transactions entered into by the Company and the Group in the annual report;
and
viii) Met with the external auditors twice during the financial year without the presence of Executive Directors and members
of the Management to discuss audit-related or any other matters.
STATEMENT ON RESTRICTED SHARE PLAN (“RSP”)
The Committee had also verified the allocation of Restricted Share Award to eligible employees during the financial year. The
allocation was made in accordance with the criteria of allocation as set out in the Bye-Laws of the Restricted Share Plan
(“RSP”) of Wing Tai Malaysia Berhad.
INTERNAL AUDIT (“IA”) FUNCTION
1.
The principal responsibility of the IA Function is to perform independent, regular and systematic reviews of the adequacy
of the systems of risk management and internal control throughout the Group, so as to provide reasonable assurance to
the Committee that such systems continue to operate effectively and efficiently.
2.
It is the responsibility of the IA Function to provide the Committee with independent and objective reports on the state
of the internal controls and risk management processes of the various business operating units within the Group.
In addition, IA shall conduct independent assessments on the compliance of the Group’s established policies and
procedures, as well as relevant statutory requirements by the business operating units.
25
INTERNAL AUDIT (“IA”) FUNCTION (CONTD.)
3.
During the financial year, the following activities were carried out by the IA Function in discharging its responsibilities:
i) Reviewed the systems of risk management and internal control of various business operating units within the Group;
ii) Recommended improvements to the existing system of risk management and internal control to the Management;
iii) Followed up on the status of previous audit findings and the implementation of recommendations;
iv) Assessed the controls in place in safeguarding the Company’s and the Group’s assets;
v) Performed special reviews or investigations as requested by the Management and/or the Committee; and
vi) Identified opportunities to improve the operations and processes of the Group.
4.
The Group has outsourced its internal audit function to a firm of professionals and an in-house executive has been
designated to coordinate and assist the external professionals in their undertaking.
The professional fees incurred for the internal audit function in respect of the financial year ended 30 June 2014
amounted to approximately RM136,000 (2013: RM136,000).
Further details on the internal audit function and its activities are set out in the Statement on Risk Management and Internal
Control on pages 29 to 31 of the Annual Report.
TERMS OF REFERENCE
Membership
1.
The Audit Committee (the “Committee”) shall be appointed by the Board of Directors (the “Board”) from amongst its
members and shall consist of no fewer than three Directors, majority of whom shall be independent Directors. All
members of the Committee should be Non-Executive Directors.
2.
All members of the Committee should be financially literate. The Board shall at all times ensure that at least one
member of the Committee shall be a member of the Malaysian Institute of Accountants (“MIA”), or if not a member of
MIA, the member must comply with paragraph 15.09(1)(c)(ii) of the Main Market Listing Requirements of Bursa Malaysia
Securities Berhad (“Bursa Securities”).
3.
The Chairman of the Committee shall be an Independent Non-Executive Director elected by the Committee from
amongst its members.
4.
No alternate director of the Board shall be appointed as a member of the Committee.
5.
If the membership for any reasons fall below three members, the Board shall, within three months of that event, appoint
such number of new member(s) to fulfill the requirement of a minimum of three (“3”) members.
6.
The Board shall review the terms of office and performance of the Committee members at least once every three (“3”)
years.
26
TERMS OF REFERENCE (CONTD.)
Meetings
7.
Meetings shall be held not less than four times a year, or more frequently as circumstances dictate.
8.
The Chief Financial Officer, the representatives from the outsourced internal auditors and the external auditors shall
normally be invited to attend the meetings. Other Board members and employees may attend the meetings upon the
invitation of the Committee.
9.
The Company Secretary shall be the Secretary of the Committee.
10. At least twice a year, the Committee will meet with the external auditors without the presence of the Executive Directors
and Management.
11. The Chairman shall call a meeting of the Committee if so requested by any member of the Committee, the Management
or the internal or external auditors.
12. The quorum for a meeting of the Committee shall be the majority of members present whom must be Independent
Non-Executive Directors.
13. Any member of the Committee may participate in a meeting by way of telephone and video conferencing or by means
of other communication equipment whereby all persons participating in the meeting are able to hear each other. In such
event, the member shall be deemed to be physically present at the meeting. A member participating in a meeting in the
manner aforesaid may also be taken into account in ascertaining the presence of a quorum at the meeting. Any meeting
held in such manner shall be deemed to be held at such places as shall be agreed upon by the members attending the
meeting, provided that at least one of the members present at the meeting was at such place for the duration of the
meeting.
Authority
14. The Committee is authorised by the Board to investigate any activity within its terms of reference and to have the
resources required to perform its duties.
15. The Committee shall have direct communication channels with both internal and external auditors, and is authorised to
seek any information it requires from any employee, and all employees are directed to co-operate with any request made
by the Committee.
16. The Committee is authorised by the Board to obtain external legal or other independent professional advice and to
secure the attendance of outsiders with relevant experience and expertise if necessary.
17. Where the Committee is of the view that a matter reported by it to the Board has not been satisfactorily resolved,
resulting in a breach of the Listing Requirements of Bursa Securities, the Committee has the responsibility to promptly
report such matter to Bursa Securities.
27
TERMS OF REFERENCE (CONTD.)
Duties
18. The duties of the Committee shall be:
i) To consider the appointment of the external and internal auditors, the audit fee and terms of reference of their
appointment, and any questions relating to their resignation or dismissal before making recommendations to the
Board;
ii)
To assess the suitability and independence of external auditors;
iii) To review:
a) with the external auditors, their audit plan and scope annually;
b) with the external auditors, their evaluation of the systems of internal controls and their report on significant
weakness;
c) the co-operation given by the Company’s employees to the external auditor; and
d) the adequacy of the scope, functions, competency and resources of the internal audit function, and that it has
the necessary authority to carry out its work;
iv) To do the following where an internal audit function exists:
- review the adequacy of the scope, functions and resources of the internal audit function, and that it has the
necessary authority to carry out its work;
- review the internal audit program and results of the internal audit process and, where necessary, ensure that
appropriate action is taken on the recommendations of the internal audit function;
- review any appraisal or assessment of the performance of members of the internal audit function;
- approve any appointment or termination of senior staff members of the internal audit function; and
- inform itself of resignations of internal audit staff members and provide the resigning staff member an
opportunity to submit his reasons for resigning;
v)
To consider any related party transactions that may arise within the Company or Group;
vi) To verify allocation of Restricted Share Award pursuant to Restricted Share Plan of the Company in compliance with
the criteria stipulated in the Bye-Laws;
vii) To consider the major findings of internal audit investigations and management response, and ensure that
appropriate actions are taken on the recommendations of the internal audit function;
viii) To review the adequacy and effectiveness of the Group’s internal control systems;
ix)
To review the quarterly results and year-end financial statements, focusing particularly on changes in, or
implementation of major accounting policies and procedures, significant and unusual events, significant adjustments arising from the audit, the going concern assumption and compliance with applicable approved accounting standards and other legal and regulatory requirements, before recommending them for the Board’s approval;
x)
To review and report any related party transactions and conflict of interest situation that may arise within the Group
including any transaction, procedure or course of conduct that raise questions on Management integrity; and
xi) To undertake such other functions / responsibilities as may be agreed to by the Committee and the Board.
28
Statement on Risk Management and
Internal Control
Introduction
Pursuant to paragraph 15.26 (b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (the “Bursa
Securities”), the Board of Directors (the “Board”) is pleased to present herewith the Statement on Risk Management and
Internal Control (the “Statement”) which outlines the risk management framework and scope of internal controls of the Group
during the financial year. This Statement has been prepared in accordance with the Statement on Risk Management and
Internal Control: Guidelines for Directors of Listed Issuers (the “Guidelines”) issued by Bursa Securities.
Board responsibilities
The Board affirms its overall responsibility for the Group’s system of internal control and risk management practices to
safeguard shareholders’ investment and the Group’s assets, which also includes reviewing on the adequacy and integrity
of that system. The system of internal control covers not only financial controls but operational and compliance controls. In
view of the inherent limitations in any system of internal controls, the system is designed to manage rather than eliminate the
likelihood of fraud, error or failure to achieve business objectives. Accordingly, the system of internal control can provide only
reasonable and not absolute assurance against material misstatement or loss.
Risk Management
The Board supports the contents of the Guidelines and also Recommendation 6.1 of the Malaysian Code on Corporate
Governance (“MCCG 2012”) which recommends the establishment of a sound framework to manage risks.
The Group has a risk management framework to provide the Board with a Group-wide view of the risks in the respective
business units. As part of the framework, a risk register was set up to document the identified risks and mitigating actions. The
procedures and processes within the framework allow the Group to regularly review the significance and adequacy of its key
risks, consider the effectiveness of the Group’s system of internal controls to limit, mitigate and monitor identified risks and the
implementation of further action plans to manage strategic business risks.
As part of the continuing efforts in improving the risk management policies and systems, the Group with the assistance of a
professional firm of consultants, carried out an exercise to review the Group’s risk register. Dialogue sessions are carried out
with the Management to identify, assess and prioritise the risks with each risk owner. Mitigating actions in managing the key
risks, as well as action plans to address the gaps are considered and documented.
The process will be regularly reviewed by the Board through the Audit Committee.
Internal Audit Function
The Internal Audit (the “IA”) Function provides an independent assessment on the adequacy, efficiency and effectiveness
of the Group’s internal control system. IA performs test of controls, analytical procedures and reviews the internal controls
in key activities of the Group’s businesses based on approved audit plan and reports directly to the Audit Committee (the
“Committee”).
The Committee is chaired by an Independent Non-Executive Director and the Committee comprises of Independent NonExecutive Directors who have varied experience and qualifications. The Committee has access to both internal and external
auditors and receives reports on all audits performed. The Committee, in turn, reports to the Board regarding all audit-related
matters.
29
Internal Audit Function (contd.)
The Group has outsourced its Internal Audit Function to a firm of professionals which provides the Board with much of the
assurance it requires regarding the adequacy and integrity of the system of internal control of the Group. The internal audit
function reviews the internal control in the key activities of the Group’s businesses based on an annual internal audit plan
presented to the Audit Committee for approval. The internal audit function adopts a risk-based approach and prepares its
audit strategy and plan based on the risk profiles of the major business units of the Group. Accordingly, internal audit activities
carried out addressed both financial and operational aspects. Opportunity for improvements to the system of internal control
are identified and presented to the Audit Committee via internal audit reports whilst Management formulates the relevant action
plans to address the issues noted on a periodic basis.
The internal audit work of the Group covered its subsidiaries but did not include the joint ventures and associated companies
in the financial year ended 30 June 2014.
Internal Control
The Board has established an on-going process for identifying, evaluating and managing the significant business risks faced
by the Group and this process is regularly reviewed and accords with the Guidelines.
Apart from the functions of the IA, the management of each business division had established certain procedures and
processes of review and monitoring on their control environment, framework, policies and standards to ensure overall
effectiveness, efficiency and adequacy of the system of internal control at all times.
The key elements of the process are as follows:
•
Detailed budgeting process where key business divisions prepare budgets for the coming year;
•
Regular monitoring of results against budget with major variances being followed up and management action taken,
where necessary;
•
Financial reports, progress reports, key variances and analysis of financial data of the Group’s businesses are provided regularly to the senior management and the Board;
•
Regular management meetings are conducted to review and discuss financial and operational reports and matters;
•
Clear delegation of responsibilities and appropriate level of empowerment and authority limits to various committees of the Board, Executive Directors and members of senior management;
•
Documented corporate policies and procedures covering various aspects and business divisions of the Group and the
internal control culture are promoted through established policies and procedures to ensure compliance with internal
controls;
•
The legal and compliance matters of the Group such as Bursa Securities regulations, regulatory guidelines, legal
documents, shareholders circulars and other statutory reporting requirements are monitored by the Corporate
Secretarial Department. In addition, the Corporate Secretarial Department is assisted by external legal advisors and
corporate secretaries to ensure that the interests of the Group are protected;
•
Adequate insurance and physical safeguards over major assets are in place to ensure that the assets of the Group are
adequately covered against any mishap that may result in material losses to the Group; and
•
The Company reviews the existing corporate governance practices of the Company against the Principles and
Recommendations of the Malaysian Code on Corporate Governance (“MCCG 2012”). Where gaps were noted, the
Board has taken actions in formalising the salient corporate governance policies and procedures such as Board Charter
and Code of Conduct.
The Board is pleased to report that the Managing Director and Chief Financial Officer are satisfied that the Group’s risk
management and internal control systems are operating adequately and effectively, in all material aspects, based on the risks
management and internal control systems of the Group.
30
Conclusion
The Board is of the view that there were no material losses incurred during the financial year as a result of weaknesses in
the systems of risk management and internal control. Notwithstanding this, the Board and senior management will continue
to review all control procedures to enhance the systems of risk management and internal control, so that shareholders’
investment and the Group’s assets are consistently safeguarded.
The external auditors have reviewed this Statement pursuant to paragraph 15.23 of the Listing Requirements of Bursa
Securities, and have reported to the Board that it appropriately reflects the processes that the Board has adopted in reviewing
the adequacy and integrity of the system of internal control and risk management.
This Statement is issued in accordance with the resolution of the Board dated 18 August, 2014.
31
Additional Compliance Information
Share Buy Back
For the financial year ended 30 June 2014, the Company repurchased 17,500 of its issued ordinary shares from the open
market at an average price of RM2.25 per share. For further details, please refer to Note 27(b) to the financial statements.
Options
There were no share options granted during the financial year ended 30 June 2014. A total of 150,600 share options was
exercised during the financial year pursuant to the Company’s Employees’ Share Option Scheme (“ESOS”). For further details,
please refer to Note 30(a) to the financial statements.
Restricted Share Plan (“RSP”)
For the financial year ended 30 June 2014, the Company has granted 577,000 restricted share awards to eligible employees
and directors. For further details, please refer to Note 30(b) to the financial statements.
Non-Audit Fees
The amount of non-audit fees paid to external auditors and companies affiliated to them for the financial year ended 30 June
2014 amounted to RM94,000.
Material Contracts
There were no material contracts (not being contracts entered into in the ordinary course of business) which have been entered
into by the Company and/or its subsidiary companies which involve Directors’ and major shareholders’ interests during the
financial year ended 30 June 2014.
32
Directors’ Responsibility Statement
The Directors are responsible for ensuring that:
1.
The annual financial statements of the Group and the Company are properly drawn up in accordance with Financial
Reporting Standards, the provisions of the Companies Act, 1965 and the Main Market Listing Requirements so as to give
a true and fair view of the financial positions of the Group and of the Company as at 30 June 2014 and of their financial
performance and cash flows for the year then ended, and
2.
Proper internal control are in place to enable the preparation of financial statements that are free from material
misstatement and to safeguard the assets of the Group and the Company.
In the preparation of the financial statements of the Group and the Company for the financial year ended at 30 June 2014, the
Directors have:
-
-
-
applied appropriate accounting policies on a consistent basis;
made judgment and estimates that are reasonable and prudent; and
all applicable approved accounting standards in Malaysia have been followed.
This statement is made in accordance with a resolution of the Board of Directors dated 10 October 2014.
33
Financial Statements
34
35
Directors’ Report
41
Statement by Directors
41
Statutory Declaration
42
Independent Auditors’ Report
44
Statements of Comprehensive Income
46
Statements of Financial Position
48
Statements of Changes in Equity
51
Statements of Cash Flows
54
Notes to the Financial Statements
155
Supplementary Information
– Breakdown of Retained Earnings into Realised and Unrealised
Directors’ Report
The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the
Company for the financial year ended 30 June 2014.
Principal activities
The principal activity of the Company is investment holding. The principal activities of the subsidiaries, an associate and joint
ventures are described in Notes 19 to 21 to the financial statements.
There have been no significant changes in the nature of the principal activities during the financial year.
Results
Group
RM’000
Profit from continuing operations, net of tax
70,665
14,930
-
-
70,665
14,930
70,665
14,930
Loss from discontinued operations, net of tax
Profit net of tax
Company
RM’000
Attributable to:
Owners of the parent
There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the
financial statements.
In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were
not substantially affected by any item, transaction or event of a material and unusual nature other than as disclosed in the
notes to the financial statements.
Dividends
The amounts of dividends paid by the Company since 30 June 2013 were as follows:
RM’000
First and final dividend of 5% single tier on 314,210,132 ordinary shares, declared on 13 November
2013 and paid on 18 December 2013
15,711
Special dividend of 5% single tier on 314,210,132 ordinary shares, declared on 13 November 2013
and paid on 18 December 2013
15,710
31,421
35
Dividends (contd.)
At the forthcoming Annual General Meeting, a first and final dividend, in respect of the financial year ended 30 June 2014, of
5% single tier and a special dividend of 2% single tier on 314,348,732 ordinary shares, amounting to a dividend payable of
RM22,004,411 (7.00 sen net per ordinary share) will be proposed for shareholders' approval. The financial statements for the
current year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in
equity as an appropriation of retained earnings in the financial year ending 30 June 2015.
Directors
The names of the directors of the Company in office since the date of the last report and at the date of this report are:
Y. Bhg. Tan Sri Dato' Mohamed Noordin bin Hassan
Cheng Wai Keung
Y. Bhg. Dato' Roger Chan Wan Chung
Chong Tet On
Y. Bhg. Dato' Ghazi bin Ishak
Y. Bhg. Tan Sri Dato' Paduka Dr. Mazlan bin Ahmad Dr. Poh Soon Sim
Habibah Binti Abdul
Directors' benefits
Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the
Company was a party, whereby the directors might acquire benefits by means of the acquisition of shares in or debentures
of the Company or any other body corporate, other than those arising from the share options granted under the Employees'
Share Options Scheme and Restricted Share Plan.
Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than
benefits included in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salary
of a full-time employee of the Company as shown in Note 10 to the financial statements) by reason of a contract made by
the Company or a related corporation with any director or with a firm of which the director is a member, or with a company in
which the director has a substantial financial interest, except for those benefits which may be deemed to have arisen by virtue
of those contracts, agreements and transactions (either as a supplier, agent, customer or contractor) in respect of trading and
other services entered into in the ordinary course of business between the Company and its subsidiaries and companies in
which the directors are deemed to have interests, as disclosed in Note 38 to the financial statements.
36
Directors' interests
According to the register of directors' shareholdings, the interests of directors in office at the end of the financial year in
shares and options over shares in the Company and its related corporations during the financial year were as follows:
1 July 2013
Number of ordinary shares
Acquired
Sold
30 June 2014
Ultimate holding company
Wing Tai Holdings Limited
Indirect interest
Cheng Wai Keung
395,038,656
310,601,664
-
-
Number of ordinary shares of RM1 each
1 July 2013
Acquired
Sold
395,038,656
310,601,664
30 June 2014
The Company
Direct interest
Cheng Wai Keung
Indirect interest *
Cheng Wai Keung
Interest of spouse of a director
1,000,000
15,900
15,900
36,000
-
15,900
15,900
1,036,000
191,384,062
191,384,062
-
-
191,384,062
191,384,062
2,197,000
-
-
2,197,000
Number of ordinary shares of RM1 each granted
under the Restricted Share Plan
1 July 2013
Granted
Vested
30 June 2014
The Company
Share granted on 01.03.2013
Cheng Wai Keung
53,000
53,000
120,000
-
(15,900)
(15,900)
(36,000)
37,100
37,100
84,000
-
57,000
57,000
145,000
-
57,000
57,000
145,000
Share granted on 23.09.2013
Cheng Wai Keung
37
Directors' interests (contd.)
Number of options over ordinary
shares of RM1 each
Option granted on
1 July 2013
Exercised 30 June 2014
1.12.2005 and 31.1.2007
Exercise price Date of expiry
RM
The Company
Cheng Wai Keung
500,000
500,000
-
500,000
500,000
Number of options over ordinary
shares of RM1 each
Option granted on
1 July 2013
Exercised 30 June 2014
19.5.2010
1.00
1.00
15.5.2015
15.5.2015
Exercise price Date of expiry
RM
The Company
Cheng Wai Keung
300,000
300,000
-
300,000
300,000
1.20
1.20
15.5.2015
15.5.2015
* Cheng Wai Keung and Edmund Cheng Wai Wing by virtue of their interests in shares in Wing Tai Holdings Limited
("WTHL"), Wing Tai Investment & Development Pte. Ltd. ("WTIDPL") and Wing Sun Development Private Limited
("WSDPL"), are deemed interested in the shares of the Company and its related corporations to the extent WTHL,
WTIDPL, WSDPL and the Company have interests.
Y. Bhg. Dato' Roger Chan Wan Chung by virtue of his spouse, Datin Chan Yung Shui Ching's interest in shares in Wing Tai
Malaysia Berhad, is deemed interested in the shares of the Company to the extent his spouse has an interest.
The other directors in office at the end of the financial year do not have any interest in shares in the Company or its related
corporations during the financial year.
Issue of shares
During the financial year, the Company increased its issued and paid-up ordinary share capital from RM326,062,032 to
RM326,358,732 by way of issuance of 150,600 ordinary shares of RM1 each pursuant to the Employees' Share Options
Scheme and vesting of 146,100 ordinary shares of RM1 each granted under Restricted Share Award.
Treasury shares
During the financial year, the Company repurchased 17,500 of its issued ordinary shares from the open market at an average
price of RM2.25 per share. The total consideration paid for the repurchase including transaction costs was RM39,455. The
shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act, 1965.
As at 30 June 2014, the Company held as treasury shares a total of 12,010,000 of its 326,358,732 issued ordinary shares.
Such treasury shares are held at a carrying amount of RM18,250,867 and further relevant details are disclosed in Note 27(b)
to the financial statements.
38
Employees' share options scheme
The Company's Employees' Share Options Scheme ("ESOS") is governed by the bye-laws approved by the shareholders at
an Extraordinary General Meeting held on 11 May 2005. The ESOS was implemented on 16 May 2005 and is to be in force for
a period of 10 years from the date of implementation.
The salient features and other terms of the ESOS are disclosed in Note 30(a) to the financial statements.
Details of options granted to directors are disclosed in the section on Directors' Interests in this report.
Restricted share plan
The Company's Restricted Share Plan ("RSP") is governed by the bye-laws approved by the shareholders at an Extraordinary
General Meeting held on 29 November 2011. The RSP was implemented on 5 January 2012 and is to be in force for a period
of 10 years from the date of implementation.
The salient features and other terms of the RSP are disclosed in Note 30(b) to the financial statements.
Details of shares granted to directors are disclosed in the section on Directors' Interests in this report.
Other statutory information
(a) Before the statements of comprehensive income and statements of financial position of the Group and of the Company
were made out, the directors took reasonable steps:
(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that there were no known bad debts and that adequate provision had been made for doubtful debts in respect of the financial statements of the Group and of the Company; and
(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.
(b) At the date of this report, the directors are not aware of any circumstances which would render:
(i) it necessary to write off any bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; and
(ii) the values attributed to the current assets in the financial statements of the Group and of the Company misleading.
(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render
adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or
inappropriate.
(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or
financial statements of the Group and of the Company which would render any amount stated in the financial statements
misleading.
39
Other statutory information (contd.)
(e) As at the date of this report, there does not exist:
(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or
(ii) any contingent liability of the Group or of the Company which has arisen since the end of the financial year.
(f) In the opinion of the directors:
(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve
months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet
their obligations when they fall due; and
(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the
financial year and the date of this report which is likely to affect substantially the results of the operations of the Group
or of the Company for the financial year in which this report is made.
Significant events
Details of significant events are disclosed in Note 42 to the financial statements.
Subsequent events
Details of subsequent events are disclosed in Note 43 to the financial statements.
Auditors
The auditors, Ernst & Young, have expressed their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the directors dated 10 October 2014.
Cheng Wai Keung
40
Dato' Roger Chan Wan Chung
Statement by Directors
Pursuant to Section 169(15) of the Companies Act, 1965
We, Cheng Wai Keung and Dato' Roger Chan Wan Chung, being two of the directors of Wing Tai Malaysia Berhad, do hereby
state that, in the opinion of the directors, the accompanying financial statements set out on pages 44 to 154 are drawn up
in accordance with Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to
give a true and fair view of the financial positions of the Group and of the Company as at 30 June 2014 and of their financial
performance and cash flows for the year then ended.
The information set out in Note 46 to the financial statements have been prepared in accordance with the 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.
Signed on behalf of the Board in accordance with a resolution of the directors dated 10 October 2014.
Cheng Wai Keung
Dato' Roger Chan Wan Chung
Statutory Declaration
Pursuant to Section 169(16) of the Companies Act, 1965
I, Chew Siew Tin, being the officer primarily responsible for the financial management of Wing Tai Malaysia Berhad, do
solemnly and sincerely declare that the accompanying financial statements set out on pages 44 to 155 are in my opinion
correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of
the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the abovenamed Chew Siew Tin
at Georgetown in the State of Penang
on 10 October 2014: Chew Siew Tin
Before me,
Commissioner for Oaths
41
Independent Auditors’ Report
to the members of Wing Tai Malaysia Berhad (Incorporated in Malaysia)
Report on the financial statements
We have audited the financial statements of Wing Tai Malaysia Berhad, which comprise the statements of financial position as
at 30 June 2014 of the Group and of the Company, and the statements of comprehensive income, statements of changes in
equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant
accounting policies and other explanatory information, as set out on pages 44 to 154.
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 requirements of the Companies Act, 1965 in Malaysia. The directors
are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit
in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement
of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control
relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the
reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company
as at 30 June 2014 and of their financial performance and cash flows for the year then ended in accordance with Financial
Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.
Report on other legal and regulatory requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:
(a)
In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and
its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the
Act.
(b)
We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not
acted as auditors, which are indicated in Note 19 to the financial statements, being financial statements that have been
included in the consolidated financial statements.
42
Report on other legal and regulatory requirements (contd.)
(c)
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial
statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the
consolidated financial statements and we have received satisfactory information and explanations required by us for
those purposes.
(d)
The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification material to the
consolidated financial statements and did not include any comment required to be made under Section 174(3) of the
Act.
Other matters
The supplementary information set out in Note 46 on page 155 is disclosed to meet the requirement of Bursa Malaysia
Securities Berhad. 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.
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act,
1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
Ernst & Young
Lim Foo Chew
AF: 0039
No. 1748/01/16(J)
Chartered AccountantsChartered Accountant
Penang, Malaysia
10 October 2014
43
Statements of Comprehensive Income
For the financial year ended 30 June 2014
Group
Note
Continuing operations
Revenue
Cost of sales
4
5
Gross profit
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
434,615
(233,776)
602,587
(324,205)
19,008
-
18,630
-
200,839
278,382
19,008
18,630
Other income
Administrative expenses
Selling and marketing expenses
Fair value gain on investment properties
Other operating (expenses)/income
Operating profit
6
7,833
(41,886)
(83,555)
8,740
(332)
91,639
4,311
(37,534)
(76,795)
6,643
175,007
11,738
(9,743)
(3,853)
17,150
8,491
(9,583)
(3,114)
14,424
Finance costs
Share of results of an associate and joint
ventures
Profit before tax from continuing operations
7
(7,482)
(7,868)
(7)
(6)
8
7,115
91,272
8,808
175,947
17,143
14,418
Income tax expense
Profit from continuing operations, net of tax
11
(20,607)
70,665
(44,464)
131,483
(2,213)
14,930
(1,209)
13,209
12
70,665
(66)
131,417
14,930
13,209
Discontinued operations
Profit net of tax
44
Group
Note
Profit net of tax
Other comprehensive income:
Item that will not reclassified to profit or loss:
Reversal of impairment loss/(Impairment loss)
offset against revaluation reserve
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
70,665
131,417
14,930
13,209
(1,072)
-
-
28
87
28
(782)
(379)
-
-
(695)
69,970
(1,451)
129,966
14,930
13,209
Profit attributable to:
70,665
131,417
14,930
13,209
Total comprehensive income attributable to:
69,970
129,966
14,930
13,209
Item that may be subsequently reclassified to
profit or loss:
Foreign currency translation
Other comprehensive income for the year,
net of tax
Total comprehensive income for the year
Group
2014
2013
Earnings/(Loss) per share attributable to
owners of the parent (sen per share):
Basic, for profit from continuing operations
Basic, for loss from discontinued operations
Basic, for profit net of tax
13
13
13
22.49
22.49
41.88
(0.02)
41.86
Diluted, for profit from continuing operations
Diluted, for loss from discontinued operations
Diluted, for profit net of tax
13
13
13
22.41
22.41
41.76
(0.02)
41.74
The accompanying accounting policies and explanatory information form an integral part of the financial statements.
45
Statements of Financial Position
As at 30 June 2014
Group
Company
Note
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
15
16(a)
17
18
19
20
21
22
130,647
56,659
138,637
1,488
35,489
24,665
126,743
65,345
129,897
2,369
36
24,338
27,197
23,945
30,148
125
-
23,979
30,148
125
-
387,585
375,925
54,218
54,252
707,220
132,972
183,839
24,200
21,287
226,096
1,295,614
643,374
216,742
167,590
48,581
5,974
105,601
1,187,862
535,740
76
34,238
152
76,336
646,542
565,298
194
34,238
600
1,322
601,652
1,295,614
1,187,862
646,542
601,652
1,683,199
1,563,787
700,760
655,904
Assets
Non-current assets
Property, plant and equipment
Land held for property development
Investment properties
Prepaid land lease payments
Investment in subsidiaries
Investment in an associate
Investment in joint ventures
Deferred tax assets
Current assets
Property development costs
Trade and other receivables
Inventories
Other current assets
Dividends receivable
Tax recoverable
Cash and bank balances
Assets of disposal group classified as
held for sale
Total assets
46
16(b)
23
24
25
26
12
Group
Company
Note
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
31
33
34
169,878
185,424
2,964
417
358,683
87,122
191,534
14,132
292,788
175,046
175,046
114,711
114,711
936,931
895,074
471,496
486,941
245,695
2,027
25,563
273,285
230,819
3,077
25,563
259,459
1,394
1,394
1,524
1,524
631,968
552,247
176,440
116,235
1,051,231
1,011,540
524,320
539,669
Equity and liabilities
Current liabilities
Borrowings
Trade and other payables
Other current liabilities
Tax payable
Net current assets
Non-current liabilities
Borrowings
Deferred tax liabilities
Deferred income
31
22
32
Total liabilities
Net assets
Equity attributable to owners of the parent
Share capital
Share premium
Treasury shares
Other reserves
Retained earnings
27
27
27
28
29
326,359
118,793
(18,251)
14,237
599,398
1,040,536
326,062
118,575
(18,211)
25,141
559,973
1,011,540
326,359
118,793
(18,251)
9,224
88,195
524,320
326,062
118,575
(18,211)
8,557
104,686
539,669
Reserve of disposal group classified as
held for sale
Total equity
12
10,695
1,051,231
1,011,540
524,320
539,669
1,683,199
1,563,787
700,760
655,904
Total equity and liabilities
47
Statements of Changes in Equity
Note
Group
At 1 July 2012
Total comprehensive income
Transactions with owners
Acquisition of treasury shares
Dividends
Issue of ordinary shares pursuant
to ESOS
ESOS/RSP expenses
At 30 June 2013
48
14
Share
capital
(Note 27)
RM’000
Attributable to owners of the parent
Non-distributable
Distributable
Share
Treasury
Other
Retained
premium
shares
reserves
earnings
(Note 27)
(Note 27)
(Note 28)
(Note 29)
RM’000
RM’000
RM’000
RM’000
325,205
118,085
(18,174)
-
-
-
-
(37)
-
857
326,062
490
118,575
(18,211)
-
26,510
(1,451)
(346)
428
25,141
Equity,
total
RM’000
453,670
905,296
131,417
129,966
(25,114)
559,973
(37)
(25,114)
1,001
428
1,011,540
Attributable to owners of the parent
Non-distributable
Group
Retained
earnings
(Note 29)
RM’000
RM’000
-
559,973
1,011,540
(695)
-
70,665
69,970
(181)
-
181
-
326,062
118,575
-
-
-
-
-
-
-
-
151
98
-
(67)
-
-
182
146
-
120
-
-
(266)
1,000
-
-
1,000
326,359
118,793
(10,695)
14,237
10,695
10,695
599,398
1,051,231
14
12
(18,211)
(40)
-
(18,251)
Other
reserves
(Note 28)
RM’000
Equity,
total
Share
premium
(Note 27)
RM’000
Total comprehensive
income
Transactions with
owners
Realisation of revaluation
reserve upon disposal
of property, plant and
equipment
Acquisition of treasury
shares
Dividends
Issue of ordinary shares
pursuant to ESOS
Vesting of ordinary shares
granted under RSP
ESOS/RSP expenses
Reserve of disposal group
classified as held for
sale
At 30 June 2014
Reserve of
disposal
group
classified
as held for
sale
(Note 12)
RM’000
Share
capital
Note (Note 27)
RM’000
At 1 July 2013
Treasury
shares
(Note 27)
RM’000
Distributable
25,141
-
-
(31,421)
(40)
(31,421)
49
Note
Company
At 1 July 2012
Dividends
to ESOS
ESOS/RSP expenses
At 30 June 2013
14
At 1 July 2013
Dividends
to ESOS
granted under RSP
ESOS/RSP expenses
At 30 June 2014
14
Share
capital
(Note 27)
RM’000
Non-distributable
Share
Treasury
premium
shares
(Note 27)
(Note 27)
RM’000
RM’000
(18,174)
Other
reserves
(Note 28)
RM’000
Distributable
Retained
earnings
(Note 29)
RM’000
RM’000
8,475
116,591
550,182
-
13,209
13,209
-
(25,114)
(37)
(25,114)
325,205
118,085
-
-
-
-
(37)
-
857
326,062
490
118,575
(18,211)
(346)
428
8,557
104,686
1,001
428
539,669
326,062
118,575
(18,211)
8,557
104,686
539,669
-
-
-
14,930
14,930
-
-
-
(31,421)
(40)
(31,421)
151
98
146
326,359
120
118,793
-
-
(40)
(18,251)
(67)
-
182
(266)
1,000
9,224
88,195
1,000
524,320
50
Equity,
total
Statements of Cash Flows
Group
Note
Operating activities
Profit/(Loss) before tax from:
Adjustments for:
Depreciation and amortisation
Dividend income
Gain on disposal of property, plant and
equipment and prepaid land lease
payments
Interest expense
Interest income
Inventories written down
Net unrealised loss on foreign exchange
Property, plant and equipment written off
Allowance for impairment on receivables
Amortisation of borrowing cost
Retrenchment benefits
Reversal of:
- impairment loss on land held for
property development
- write down of inventories
- accrual for property development costs
Impairment loss on investment in an
associate
Share of results of joint ventures
ESOS/RSP expenses
Total adjustments
Operating cash flows before changes in
working capital carried forward
2014
RM’000
2014
RM’000
2013
RM’000
91,272
91,272
175,947
(49)
175,898
17,143
17,143
14,418
14,418
11,566
(8,740)
11,048
-
941
(12,400)
-
931
(12,400)
-
(164)
(11,738)
3,975
-
(8,491)
3,099
-
12
4
17
Company
2013
RM’000
8
8
7
9
(463)
6,057
(3,491)
754
10
416
845
999
3
(423)
6,451
(1,576)
2,077
(8)
31
594
878
-
8
8
5
(5,158)
(3,195)
(3,333)
-
8
39
(7,115)
1,000
(3,278)
(8,808)
428
4,164
8
7
6
8
9
87,994
180,062
-
-
1,000
(18,386)
428
(16,433)
(1,243)
(2,015)
51
Group
Note
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
Operating cash flows before changes in
working capital brought forward
87,994
180,062
(1,243)
(2,015)
Changes in working capital
Development properties
Inventories
Payables
Related companies balances
Associates and joint venture companies
Receivables
Total changes in working capital
(131,991)
77,265
(6,888)
599
373
112,523
51,881
(59,272)
8,483
75,074
1,213
(582)
(97,044)
(72,128)
(392)
254
(10)
(2,044)
(2,192)
664
661
(1,775)
(450)
139,875
(3)
(14,547)
(48,152)
107,934
(12,842)
(48,332)
(3,435)
(1,896)
(2,465)
(1,389)
77,173
46,760
(5,331)
(3,854)
Cash generated from/(used in) operations
Retrenchment benefits paid
Interest paid
Taxes paid
Net cash generated from/(used in) operating
activities
Investing activities
Advances to joint ventures
Changes in amounts due to/from subsidiaries
Development expenditure on land held for
property development
Dividend received
Interest received
Proceeds from disposal of:
- property, plant and equipment and prepaid
land lease payments
Purchase of property, plant and equipment
Addition of deposits of more than three months
maturity with licensed banks
Net cash (used in)/generated from investing
activities
52
9
(6,663)
-
(5,659)
-
(6,000)
94,229
(5,000)
13,430
16(a)
4
6
(3,613)
3,491
(4,125)
1,576
12,400
11,738
12,400
8,491
15
4,406
(18,861)
440
(10,721)
333
(1,076)
(1,762)
(2,619)
-
-
(23,002)
(21,108)
111,624
28,978
(343)
Group
Note
Financing activities
Net drawdown of borrowings
Dividend paid to shareholders of the Company
Proceeds from issuance of ordinary shares
Share repurchased
Net cash generated from/(used in) financing
activities
Net increase in cash and cash equivalents
Effect of foreign exchange rate changes
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
14
27
27
26
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
96,633
(31,421)
182
(40)
65,994
(25,114)
1,001
(37)
(31,421)
182
(40)
(25,114)
1,001
(37)
65,354
41,844
(31,279)
(24,150)
119,525
(792)
102,982
221,715
67,496
(371)
35,857
102,982
75,014
1,322
76,336
974
348
1,322
53
Notes to the Financial Statements
1.
Corporate information
Wing Tai Malaysia Berhad (the "Company") is a public limited liability company, incorporated and domiciled in
Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad. The registered office of the Company
is located at Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala
Lumpur.
The immediate and ultimate holding company of the Company is Wing Tai Holdings Limited, which is incorporated in
Singapore and produces financial statements available for public use.
The principal activity of the Company is investment holding. The principal activities of the subsidiaries, an associate
and joint ventures are described in Notes 19 to 21. There have been no significant changes in the nature of the
principal activities during the financial year.
2.
Summary of significant accounting policies
2.1
Basis of preparation
The financial statements of the Group and of the Company have been prepared in accordance with Financial
Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. At the beginning of the
current financial year, the Group and the Company adopted new and revised FRS which are mandatory for the
current financial year as described fully in Note 2.2.
The financial statements have been prepared on the historical cost basis except as disclosed in the accounting
policies below.
The financial statements are presented in Ringgit Malaysia ("RM") and all values are rounded to the nearest
thousand ("RM'000") except when otherwise indicated.
2.2
Changes in accounting policies
The accounting policies adopted are consistent with those of the previous financial year except as follows:
On 1 July 2013, the Group and the Company adopted the following new and amended FRS and IC
Interpretations mandatory for the financial period:
Description
Amendments to FRS 101: Presentation of Financial Statements
(Annual Improvements 2009-2011 Cycle)
FRS 3 Business Combinations (IFRS 3 Business Combinations
issued by IASB in March 2004)
FRS 10 Consolidated Financial Statements
FRS 11 Joint Arrangements
FRS 12 Disclosure of Interests in Other Entities
FRS 13 Fair Value Measurement
54
Effective for annual periods
beginning on or after
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
2.
Summary of significant accounting policies (contd.)
2.2
Changes in accounting policies (contd.)
Description
FRS 119 Employee Benefits
FRS 127 Separate Financial Statements
FRS 127 Consolidated and Separate Financial Statements (IAS 27
as revised by IASB in December 2003)
FRS 128 Investments in Associates and Joint Ventures
IC Interpretation 20 Stripping Costs in the Production Phase of a
Surface Mine
Amendment to IC Interpretation 2: Members’ Shares in Co-operative
Entities and Similar Instruments (Annual Improvements 2009-2011
Cycle)
Amendments to FRS 1: First-time Adoption of Malaysian Financial
Reporting Standards – Government Loans
Amendments to FRS 1: First-time Adoption of Malaysian Financial
Reporting Standards (Annual Improvements 2009-2011 Cycle)
Amendments to FRS 7: Disclosures – Offsetting Financial Assets
and Financial Liabilities
Amendments to FRS 10: Consolidated Financial Statements:
Transition Guidance
Amendments to FRS 11: Joint Arrangements: Transition Guidance
Amendments to FRS 12: Disclosure of Interests in Other Entities:
Transition Guidance
Amendments to FRS 116: Property, Plant and Equipment (Annual
Improvements 2009-2011 Cycle)
Amendments to FRS 132: Financial Instruments: Presentation
(Annual Improvements 2009-2011 Cycle)
Amendments to FRS134: Interim Financial Reporting (Annual
Improvements 2009-2011 Cycle)
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
Adoption of the above standards and interpretations did not have any effect on the financial performance or
position of the Group and the Company except for those discussed below:
FRS 10 Consolidated Financial Statements
FRS 10 replaces the portion of FRS 127 Consolidated and Separate Financial Statements that addresses the
accounting for consolidated financial statements. FRS 10 establishes a single control model that applies to
all entities including special purpose entities. The changes introduced by FRS 10 will require management to
exercise significant judgement to determine which entities are controlled, and therefore, are required to be
consolidated by a parent, compared with the requirements that were in FRS 127. This standard has no material
impact on the Group’s financial position or performance.
55
2.
2.2
Changes in accounting policies (contd.)
FRS 11 Joint Arrangements
FRS 11 establishes the principles for classification and accounting for joint arrangements and supersedes FRS
131, Interest in Joint Ventures. Under FRS 11, a joint arrangement may be classified as joint venture or joint
operation. Interest in joint venture will be accounted for using equity method whilst interest in joint operation
will be accounted for using the applicable FRSs relating to the underlying assets, liabilities, income and
expense items arising from the joint operations. This standard has no material impact on the Group’s financial
position or performance.
FRS 12 Disclosure of Interests in Other Entities
FRS 12 includes all disclosure requirements for interests in subsidiaries, joint arrangements, associates and
structured entities. A number of new disclosures are required. This standard affects disclosures only and has
no impact on the Group’s and the Company’s financial position or performance.
FRS 13 Fair Value Measurement
FRS 13 establishes a single source of guidance under FRS for all fair value measurements. FRS 13 does not
change when an entity is required to use fair value, but rather provides guidance on how to measure fair value
under FRS when fair value is required or permitted. This standard has no material impact on the Group’s and
the Company’s financial position or performance.
FRS 127 Separate Financial Statements
As a consequence of the new FRS 10 and FRS 12, FRS 127 is limited to accounting for subsidiaries, jointly
controlled entities and associates in the separate financial statements of the Company.
FRS 128 Investments in Associates and Joint Ventures
As a consequence of the new FRS 11 and FRS 12, FRS 128 is renamed as FRS 128 Investments in Associates
and Joint Ventures. This new standard describes the application of the equity method to investments in joint
ventures in addition to associates.
Amendments to FRS 7: Disclosures – Offsetting Financial Assets and Financial Liabilities
The amendments require additional information to be disclosed to enable users of financial statements to
evaluate the effect or potential effect of netting arrangements, including rights of set-off associated with the
entity’s recognised financial assets and recognised financial liabilities, on the entity’s financial position. The
amendment affects disclosure only and has no impact on the Group’s and the Company’s financial position or
performance.
56
2.
2.3
Standards and interpretations issued but not yet effective
The Group has not adopted the following standards and interpretations that have been issued but not yet
effective:
Description
Amendments to FRS 10, FRS 12 and FRS 127: Investment
Entities
Amendments to FRS 132: Offsetting Financial Assets and Financial
Liabilities
Amendments to FRS 136: Recoverable Amount Disclosures for
Non-Financial Assets
Amendments to FRS 139: Novation of Derivatives and
Continuation of Hedge Accounting
IC Interpretation 21: Levies
Amendments to FRS 119: Defined Benefit Plans:
Employee Contributions
Annual Improvements to FRSs 2010–2012 Cycle
Annual Improvements to FRSs 2011–2013 Cycle
Agriculture: Bearer Plants (Amendments to FRS 116 and FRS 141)
MFRS 15 Revenue from Contracts with Customers
FRS 9 Financial Instruments (IFRS 9 issued by IASB in
November 2009)
FRS 9 Financial Instruments (IFRS 9 issued by IASB in October 2010)
FRS 9 Financial Instruments: Hedge Accounting and amendments
to FRS 9, FRS 7 and FRS 139
1 January 2014
1 January 2014
1 January 2014
1 January 2014
1 January 2014
1 July 2014
1 July 2014
1 July 2014
1 January 2016
1 January 2017
To be announced
To be announced
To be announced
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, except as disclosed below:
Amendments to FRS 132: Offsetting Financial Assets and Financial Liabilities
The amendments to FRS 132 clarified that a legally enforceable right to set off is a right of set off that must not
be contingent on a future event; and must be legally enforceable in the normal course of business, the event of
default and the event of insolvency or bankruptcy of the entity and all of the counterparties. The amendments
further clarified that an entity will meet the net settlement criterion as provided in FRS 132 if the entity can settle
amounts in a manner that the outcome is, in effect, equivalent to net settlement.
Amendments to FRS 136: Recoverable Amount Disclosures for Non-Financial Assets
The amendments to FRS 136 require additional disclosure on the recoverable amount of any cash-generating
unit with a significant carrying amount of goodwill or intangible assets with indefinite useful lives regardless if
there is any impairment loss recognised. The amendments clarified that the recoverable amount (determined
based on fair value less costs of disposal) is required to be disclosed only when an impairment loss is
recognised or reversed.
57
2.
2.3
Standards and interpretations issued but not yet effective (contd.)
Amendments to FRS 139: Novation of Derivatives and Continuation of Hedge Accounting
The amendments to FRS 139 provide relief from discontinuing hedge accounting in a situation where a
derivative, which has been designated as a hedging instrument, is novated to effect clearing with a central
counterparty as a result of laws or regulation, if specific conditions are met. The amendments further clarified
that a novation indicates that parties to a contract agree or replace their original counterparty with a new one.
IC Interpretation 21 Levies
IC Interpretation 21 address on when an entity should recognise a liability to pay a levy if that liability is within
the scope of FRS 137 Provisions, Contingent Liabilities and Contingent Assets. The interpretation clarified that
the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislation
that triggers the payment of levy. The interpretation further clarified that the liability to pay a levy is recognised
progressively if the obligating event occurs over a period of time.
MFRS 15 Revenue from Contracts with Customers
MFRS 15 outlines a single comprehensive model for entities to use in accounting for revenue from contracts
with customers. It supersedes current revenue recognition guidance including MFRS118 Revenue, MFRS111
Construction Contracts and related Interpretations. Its core principle is that revenue is recognised to depict the
transfer of promised goods or services to customers in an amount that reflects the consideration to which an
entity expects to be entitled in exchange for those goods or services.
A five-step approach to revenue recognition is required:
1. Identify the contract(s) with a customer.
2. Identify the performance obligations in the contract.
3. Determine the transaction price.
4. Allocate the transaction price to the performance obligations in the contract.
5. Recognise revenue when (or as) performance obligations are satisfied.
MFRS 15 also includes requirements for accounting for costs related to a contract with a customer. These are
recognised as an asset if certain criteria are met. Furthermore, MFRS 15 also significantly expands the current
disclosure requirements about revenue recognition.
MFRS 15 is effective for annual periods beginning on or after 1 January 2017, with earlier application being
permitted. An entity may choose to adopt MFRS 15 retrospectively or through a cumulative effect adjustment
as of the start of the first period for which it first applies the Standard. The Group and the Company are in the
process of assessing the impact of this Standard.
58
2.
2.3
Standards and interpretations issued but not yet effective (contd.)
FRS 9 Financial Instruments
FRS 9 reflects the first phase of work on the replacement of FRS 139 and applies to classification and
measurement of financial assets and financial liabilities as defined in FRS 139. The standard was initially
effective for annual periods beginning on or after 1 January 2013, but Amendments to FRS 9: Mandatory
Effective Date of FRS 9 and Transition Disclosures, issued in March 2012, moved the mandatory effective date
to 1 January 2015. Subsequently, on 14 February 2014, it was announced that the new effective date will be
decided when the project is closer to completion. The adoption of the first phase of FRS 9 will have an effect
on the classification and measurement of the Group’s and the Company’s financial assets, but will not have an
impact on classification and measurements of the Group’s and the Company’s financial liabilities. The Group
and the Company will quantify the effect in conjunction with the other phases, when the final standard including
all phases is issued.
Malaysian Financial Reporting Standards (“MFRS Framework”)
On 19 November 2011, the Malaysian Accounting Standards Board ("MASB") issued a new MASB approved
accounting framework, the Malaysian Financial Reporting Standards ("MFRS Framework").
The MFRS Framework is to be applied by all Entities Other Than Private Entities for annual periods beginning
on or after 1 January 2012, with the exception of entities that are within the scope of MFRS 141 Agriculture
("MFRS 141") and IC Interpretation 15 Agreements for Construction of Real Estate ("IC 15"), including its
parent, significant investor and venture (herein called "Transitioning Entities").
Transitioning Entities will be allowed to defer adoption of the new MFRS Framework for additional two years.
Consequently, adoption of the MFRS Framework by Transitioning Entities will be mandatory for annual periods
beginning on or after 1 January 2014.
On 7 August 2013, MASB has decided to allow Transitioning Entities to defer the adoption of the MFRS
Framework for an additional year. Consequently, adoption of the MFRS Framework by Transitioning Entities will
be mandatory for annual periods beginning on or after 1 January 2015.
On 2 September 2014, MASB has decided to allow Transitioning Entities to defer the adoption of the MFRS
Framework for an additional two years. Consequently, adoption of the MFRS Framework by Transitioning
Entities will be mandatory for annual periods beginning on or after 1 January 2017.
The Group falls within the scope definition of Transitioning Entities and accordingly, has the option to prepare
financial statements using the MFRS Framework in its first MFRS financial statements for the year ending
30 June 2018. In presenting its first MFRS financial statements, the Group will be required to restate the
comparative financial statements to amounts reflecting the application of MFRS Framework. The majority of the
adjustments required on transition will be made, retrospectively, against opening retained profits.
The Group and the Company have started the assessment of the differences between Financial Reporting
Standards and accounting standards under the MFRS Framework and are in the process of assessing the
financial effects of the differences. Accordingly, the financial performance and financial position as disclosed
in these financial statements for the year ended 30 June 2014 could be different if prepared under the MFRS
Framework.
The Group and the Company considers that it is achieving its scheduled milestones and expects to be in a
position to fully comply with the requirements of the MFRS Framework for the financial year ending 30 June
2018.
59
2.
2.4
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries
at the reporting date. The financial statements of the subsidiaries used in the preparation of the consolidated
financial statements are prepared as of the same reporting date as the Company. Consistent accounting
policies are applied for like transactions and events in similar circumstances.
The Company controls an investee if and only if the Company has all the following:
(i)
(ii)
(iii)
Power over the investee (i.e existing rights that give it the current ability to direct the relevant activities of the investee);
Exposure, or rights, to variable returns from its investment with the investee; and
The ability to use its power over the investee to affect its returns.
When the Company has less than a majority of the voting rights of an investee, the Company considers the
following in assessing whether or not the Company’s voting rights in an investee are sufficient to give it power
over the investee:
(i) The size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
(ii) Potential voting rights held by the Company, other vote holders or other parties;
(iii) Rights arising from other contractual arrangements; and
(iv) Any additional facts and circumstances that indicate that the Company has, or does not have, the current
ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings.
Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases when the
Company loses control of the subsidiary. All intra-group balances, income and expenses and unrealised gains
and losses resulting from intra-group transactions are eliminated in full.
Losses within a subsidiary are attributed to the non-controlling interests even if that results in a deficit balance.
Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over
the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and
the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. The
resulting difference is recognised directly in equity and attributed to owners of the Company.
When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) the
aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii)
the previous carrying amount of the assets and liabilities of the subsidiary and any non-controlling interest,
is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has been recognised in other
comprehensive income and accumulated in equity are reclassified to profit or loss or where applicable,
transferred directly to retained earnings. The fair value of any investment retained in the former subsidiary at the
date control is lost is regarded as the cost on initial recognition of the investment.
60
2.
2.4
Basis of consolidation (contd.)
Business combinations from 1 July 2010
Acquisitions of subsidiaries are accounted for by applying the acquisition method. Identifiable assets acquired
and liabilities assumed in a business combination are measured initially at their fair values at the acquisition
date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and
the services are received.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and pertinent
conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by
the acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition
date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset
or liability, will be recognised in accordance with FRS 139 either in profit or loss or as change to other
comprehensive income. If the contingent consideration is classified as equity, it is not be remeasured until it is
finally settled within equity.
In business combinations achieved in stages, previously held equity interests in the acquiree are re-measured
to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss.
The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if
any) is recognised on the acquisition date at fair value, or at the non-controlling interest's proportionate share
of the acquiree net identifiable assets.
Any excess of the sum of the fair value of the consideration transferred in the business combination, the
amount of non-controlling interest in the acquiree (if any), and the fair value of the Group's previously held
equity interest in the acquiree (if any), over the net fair value of the acquiree's identifiable assets and liabilities
is recorded as goodwill in the statement of financial position. In instances where the latter amount exceeds the
former, the excess is recognised as a gain on bargain purchase in profit or loss on the acquisition date.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control,
and continue to be consolidated until the date that such control ceases.
In comparison to the above mentioned requirements, the following differences applied:
Business combinations are accounted for by applying the purchase method. Transaction costs directly
attributable to the acquisition formed part of the acquisition costs. The non-controlling interest (formerly known
as minority interest) was measured at the proportionate share of the acquiree's identifiable net assets.
Business combinations achieved in stages were accounted for as separate steps. Adjustments to those fair
values relating to previously held interests are treated as a revaluation and recognised in equity.
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2.4
Basis of consolidation (contd.)
When the Group acquired a business, embedded derivatives separated from the host contract by the acquiree
are not reassessed on acquisition unless the business combination results in a change in the terms of the
contract that significantly modifies the cash flows that would otherwise be required under the contract.
Contingent consideration was recognised if, and only if, the Group had a present obligation, the economic
outflow was more likely than not and a reliable estimate was determinable. Subsequent measurements to the
contingent consideration affected goodwill.
2.5
Transactions with non-controlling interest
Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of
the Company, and is presented separately in the consolidated statement of comprehensive income and within
equity in the consolidated statement of financial position, separately from equity attributable to owners of the
Company.
Changes in the Company owners' ownership interest in a subsidiary that do not result in a loss of control are
accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and noncontrolling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference
between the amount by which the non-controlling interest is adjusted and the fair value of the consideration
paid or received is recognised directly in equity and attributed to owners of the parent.
2.6Subsidiaries
A subsidiary is an entity over which the Group has all the following:
(i) Power over the investee (i.e existing rights that give it the current ability to direct the relevant activities of
the investee);
(ii) Exposure, or rights, to variable returns from its investment with the investee; and
(iii) The ability to use its power over the investee to affect its returns.
In the Company's separate financial statements, investment in subsidiaries are accounted for at cost less
impairment losses.
2.7Associates
An associate is an entity in which the Group has significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of the investee but is not control or joint control over
those policies.
The Group's investment in associates are accounted for using the equity method based on audited or
management financial statements of the associates. Under the equity method, the investment in associates
is measured in the statement of financial position at cost plus post-acquisition changes in the Group's
share of net assets of the associates. Goodwill relating to associates is included in the carrying amount of
the investment. Any excess of the Group's share of the net fair value of the associate's identifiable assets,
liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the
investment and is instead included as income in the determination of the Group's share of the associate's profit
or loss for the period in which the investment is acquired.
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2.7
Associates (contd.)
When the Group's share of losses in an associate equals or exceeds its interest in the associate, the Group
does not recognise further losses, unless it has incurred obligations or made payments on behalf of the
associate.
After application of the equity method, the Group applies FRS 139 Financial Instruments: Recognition and
Measurement to determine whether it is necessary to recognise an additional impairment loss on the Group's
investment in its associates. The Group determines at each reporting date whether there is any objective
evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount
of impairment as the difference between the recoverable amount of the associate and its carrying value and
recognises the amount in profit or loss. Reversal of an impairment loss is recognised to the extent that the
recoverable amount of the investment subsequently increases.
The financial statements of the associates are prepared as of the same reporting date as the Company. Where
necessary, adjustments are made to bring the accounting policies in line with those of the Group.
In the Company's separate financial statements, investment in associates are stated at cost less impairment
losses. On disposal of such investments, the difference between net disposal proceeds and their carrying
amounts is included in profit or loss.
2.8
Joint venture
A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is
subject to joint control, where the strategic financial and operating decisions relating to the activity require the
unanimous consent of the parties sharing control.
It involves the establishment of a corporation, partnership or other entity in which each venturer has an interest.
The entity operates in the same way as other entities, except that a contractual arrangement between the
venturers establishes joint control over the economic activity of the entity.
Investment in joint ventures are accounted for in the consolidated financial statements using the equity method
of accounting as described in Note 2.7.
The financial statements of the joint ventures are prepared as of the same reporting date as the Company.
Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.
In the Company's separate financial statements, its investment in joint ventures is stated at cost less
impairment losses. On disposal of such investment, the difference between net disposal proceeds and the
carrying amount is included in profit or loss.
2.9
Property, plant and equipment, and depreciation
All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant
and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated
with the item will flow to the Group and the Company and the cost of the item can be measured reliably.
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2.9
Property, plant and equipment, and depreciation (contd.)
Subsequent to recognition, plant and equipment and furniture and fixtures are measured at cost less
accumulated depreciation and accumulated impairment losses. When significant parts of property, plant
and equipment are required to be replaced in intervals, the Group and the Company recognise such parts as
individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection
is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if
the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as
incurred. Freehold land and buildings are measured at fair value less accumulated depreciation on buildings
and impairment losses recognised after the date of the revaluation. Valuations are performed with sufficient
regularity to ensure that the carrying amount does not differ materially from the fair value of the freehold land
and buildings at the reporting date.
Any revaluation surplus is recognised in other comprehensive income and accumulated in equity under the
asset revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset
previously recognised in profit or loss, in which case the increase is recognised in profit or loss. A revaluation
deficit is recognised in profit or loss, except to the extent that it offsets an existing surplus on the same asset
carried in the asset revaluation reserve.
Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the
asset and the net amount is restated to the revalued amount of the asset. The revaluation surplus included in
the asset revaluation reserve in respect of an asset is transferred directly to retained earnings on retirement or
disposal of the asset.
Freehold land has an unlimited useful life and therefore is not depreciated. Capital-in-progress are also not
depreciated as these assets are not available for use. Depreciation of other property, plant and equipment is
provided for on a straight-line basis to write off the cost of each asset to its residual value over the estimated
useful life, at the following annual rates:
Buildings
Plant and machinery
2% or over the balance period of the
respective leases, whichever is shorter
10%
Office equipment
10% - 20%
Furniture, fittings, renovation and electrical installation
10% - 33%
Motor vehicles
20%
The carrying values of property, plant and equipment are reviewed for impairment when events or changes
in circumstances indicate that the carrying value may not be recoverable. The residual value, useful life and
depreciation method are reviewed at each financial year-end, and adjusted prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or
loss in the year the asset is derecognised.
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2.
2.10 Investment properties
Investment properties are initially measured at cost, including transaction costs. Subsequent to initial
recognition, investment properties are measured at fair value which reflects market conditions at the reporting
date. Fair value is arrived at by reference to market evidence of transaction prices for similar properties and is
performed by registered independent valuers having an appropriate recognised professional qualification and
recent experience in the location and category of the properties being valued. Gains or losses arising from
changes in the fair values of investment properties are included in profit or loss in the year in which they arise.
A property interest under an operating lease is classified and accounted for as an investment property on a
property-by-property basis when the Group holds it to earn rentals or for capital appreciation or both. Any such
property interest under an operating lease classified as an investment property is carried at fair value.
Investment properties are derecognised when either they have been disposed of or when the investment
property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any
gain or loss on the retirement or disposal of an investment property is recognised in profit or loss in the year of
retirement or disposal.
Transfers are made to or from investment property only when there is a change in use. For a transfer from
investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value
at the date of change in use. For a transfer from owner-occupied property to investment property, the property
is accounted for in accordance with the accounting policy for property, plant and equipment set out in Note 2.9
up to the date of change in use.
2.11 Prepaid land lease payments
Prepaid land lease payments are initially measured at cost. Following initial recognition, prepaid land lease
payments are measured at cost less accumulated amortisation and accumulated impairment losses. The
prepaid land lease payments are amortised over their lease terms.
2.12 Land held for property development and property development costs
i. Land held for property development
Land held for property development consists of land where no development activities have been carried out
or where development activities are not expected to be completed within the normal operating cycle. Such
land is classified within non-current assets and is stated at cost less any accumulated impairment losses.
Land held for property development is reclassified as property development costs at the point when
development activities have commenced and where it can be demonstrated that the development activities
can be completed within the normal operating cycle.
ii. Property development costs
Property development costs comprise all costs that are directly attributable to development activities or that
can be allocated on a reasonable basis to such activities. When the financial outcome of a development
activity can be reliably estimated, property development revenue and expenses are recognised in profit or
loss by using the stage of completion method. The stage of completion is determined by the proportion
that property development costs incurred for work performed to date bear to the estimated total property
development costs.
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2.
2.12 Land held for property development and property development costs (contd.)
ii. Property development costs (contd.)
Where the financial outcome of a development activity cannot be reliably estimated, property development
revenue is recognised only to the extent of property development costs incurred that is probable will be
recoverable, and property development costs on properties sold are recognised as an expense in the period
in which they are incurred.
Any expected loss on a development project, including costs to be incurred over the defects liability period,
is recognised as an expense immediately.
Property development costs not recognised as an expense are recognised as an asset, which is measured
at the lower of cost and net realisable value.
The excess of revenue recognised in the profit or loss over billings to purchasers is classified as accrued
billings within other current assets and the excess of billings to purchasers over revenue recognised in profit
or loss is classified as progress billings within other current liabilities.
2.13 Impairment of non-financial assets
The Group and the Company assess at each reporting date whether there is an indication that an asset may be
impaired. If any such indication exists, or when an annual impairment assessment for an asset is required, the
Group and the Company make an estimate of the asset's recoverable amount.
An asset's recoverable amount is the higher of an asset's fair value less costs to sell and its value in use. For
the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units ("CGU")).
In assessing value in use, the estimated future cash flows expected to be generated by the asset are
discounted to their present value using a pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds
its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised in
respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated
to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or
groups of units on a pro-rata basis.
Impairment losses are recognised in profit or loss except for assets that are previously revalued where the
revaluation was taken to other comprehensive income. In this case the impairment is also recognised in other
comprehensive income up to the amount of any previous revaluation.
An assessment is made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is
reversed only if there has been a change in the estimates used to determine the asset's recoverable amount
since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased
to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined,
net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit
or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation
increase. Impairment loss on goodwill is not reversed in a subsequent period.
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2.
2.14Inventories
Inventories are stated at lower of cost and net realisable value.
Cost is determined using the weighted average basis. The cost of raw materials comprises costs of purchase.
The costs of finished goods and work-in-progress comprise costs of raw materials, direct labour, other direct
costs and appropriate proportions of manufacturing overheads based on normal operating capacity.
The cost of unsold properties comprises cost associated with the acquisition of land, direct costs and
appropriate proportions of common costs.
The cost of trading inventories is determined on the weighted average basis. Cost includes cost of purchase
and other incidental expenses in bringing the items into its present location and condition.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.
2.15 Financial assets
Financial assets 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 instrument.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial
assets not at fair value through profit or loss, directly attributable transaction costs.
The Group and the Company determine the classification of their financial assets at initial recognition, and the
categories include financial assets at fair value through profit or loss, loans and receivables, held-to-maturity
investments and available-for-sale financial assets.
a) Financial assets at fair value through profit or loss
Financial assets are classified as financial assets at fair value through profit or loss if they are held for
trading or are designated as such upon initial recognition. Financial assets held for trading are derivatives
(including separated embedded derivatives) or financial assets acquired principally for the purpose of selling
in the near term.
Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair
value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net gains or net
losses on financial assets at fair value through profit or loss do not include exchange differences, interest
and dividend income. Exchange differences, interest and dividend income on financial assets at fair value
through profit or loss are recognised separately in profit or loss as part of other losses or other income.
Financial assets at fair value through profit or loss could be presented as current or non-current. Financial
assets that are held primarily for trading purposes are presented as current whereas financial assets that
are not held primarily for trading purposes are presented as current or non-current based on the settlement
date.
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2.
2.15 Financial assets (contd.)
b) Loans and receivables
Financial assets with fixed or determinable payments that are not quoted in an active market are classified
as loans and receivables.
Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective
interest method. Gains and losses are recognised in profit or loss when the loans and receivables are
derecognised or impaired, and through the amortisation process.
Loans and receivables are classified as current assets, except for those having maturity dates later than 12
months after the reporting date which are classified as non-current.
c) Held-to-maturity investments
Financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity
when the Group and the Company have the positive intention and ability to hold the investment to maturity.
Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using
the effective interest method. Gains and losses are recognised in profit or loss when the held-to-maturity
investments are derecognised or impaired, and through the amortisation process.
Held-to-maturity investments are classified as non-current assets, except for those having maturity within
12 months after the reporting date which are classified as current.
d) Available-for-sale financial assets
Available-for-sale financial assets are financial assets that are designated as available for sale or are not
classified in any of the three preceding categories.
After initial recognition, available-for-sale financial assets are measured at fair value. Any gains or losses
from changes in fair value of the financial assets are recognised in other comprehensive income, except
that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated
using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously
recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification
adjustment when the financial asset is derecognised. Interest income calculated using the effective interest
method is recognised in profit or loss. Dividends on an available-for-sale equity instrument are recognised in
profit or loss when the Group and the Company's right to receive payment is established.
Investment in equity instruments whose fair value cannot be reliably measured are measured at cost less
impairment loss.
Available-for-sale financial assets are classified as non-current assets unless they are expected to be
realised within 12 months after the reporting date.
A financial asset is 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.
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2.
2.15 Financial assets (contd.)
Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within
the period generally established by regulation or convention in the marketplace concerned. All regular way
purchases and sales of financial assets are recognised or derecognised on the trade date i.e. the date that the
Group and the Company commit to purchase or sell the asset.
2.16 Impairment of financial assets
The Group and the Company assess at each reporting date whether there is any objective evidence that a
financial asset is impaired.
a) Trade and other receivables and other financial assets carried at amortised cost
To determine whether there is objective evidence that an impairment loss on financial assets has been
incurred, the Group and the Company consider factors such as the probability of insolvency or significant
financial difficulties of the debtor and default or significant delay in payments. For certain categories of
financial assets, such as trade receivables, assets that are assessed not to be impaired individually are
subsequently assessed for impairment on a collective basis based on similar risk characteristics. 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 and observable changes in national or local economic conditions that correlate with
default on receivables.
If any such evidence exists, the amount of impairment loss is measured as the difference between the
asset's carrying amount and the present value of estimated future cash flows discounted at the financial
asset's original effective interest rate. The impairment loss is recognised in profit or loss.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets
with the exception of trade receivables, where the carrying amount is reduced through the use of an
allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance
account.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognised, the previously recognised
impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its
amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.
b) Unquoted equity securities carried at cost
If there is objective evidence (such as significant adverse changes in the business environment where the
issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment
loss on financial assets carried at cost has been incurred, the amount of the loss is measured as the
difference between the asset's carrying amount and the present value of estimated future cash flows
discounted at the current market rate of return for a similar financial asset. Such impairment losses are not
reversed in subsequent periods.
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2.
2.16 Impairment of financial assets (contd.)
c) Available-for-sale financial assets
Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or
obligor, and the disappearance of an active trading market are considerations to determine whether there is
objective evidence that investment securities classified as available-for-sale financial assets are impaired.
If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net
of any principal payment and amortisation) and its current fair value, less any impairment loss previously
recognised in profit or loss, is transferred from equity to profit or loss.
Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the
subsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other
comprehensive income. For available-for-sale debt investments, impairment losses are subsequently
reversed in profit or loss if an increase in the fair value of the investment can be objectively related to an
event occurring after the recognition of the impairment loss in profit or loss.
2.17 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term, highly liquid
investments that are readily convertible to known amount of cash and which are subject to an insignificant
risk of changes in value. These also include bank overdrafts that form an integral part of the Group's and the
Company’s cash management.
2.18Provisions
Provisions are recognised when the Group and the Company have a present obligation (legal or constructive)
as a result of a past event, it is probable that an outflow of economic resources will be required to settle the
obligation and the amount of the obligation can be estimated reliably.
Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no
longer probable that an outflow of economic resources will be required to settle the obligation, the provision is
reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax
rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in
the provision due to the passage of time is recognised as a finance cost.
2.19 Financial liabilities
Financial liabilities are classified according to the substance of the contractual arrangements entered into and
the definitions of a financial liability.
Financial liabilities, within the scope of FRS 139, are recognised in the statement of financial position when,
and only when, the Group and the Company become a party to the contractual provisions of the financial
instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or
other financial liabilities.
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2.
2.19 Financial liabilities (contd.)
a) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities held for trading include derivatives entered into by the Group and the Company that
do not meet the hedge accounting criteria. Derivative liabilities are initially measured at fair value and
subsequently stated at fair value, with any resultant gains or losses recognised in profit or loss. Net gains or
losses on derivatives include exchange differences.
The Group and the Company have not designated any financial liabilities as at fair value through profit or
loss.
b) Other financial liabilities
The Group's and the Company's other financial liabilities include trade payables, other payables and loans
and borrowings.
Trade and other payables are recognised initially at fair value plus directly attributable transaction costs and
subsequently measured at amortised cost using the effective interest method.
Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and
subsequently measured at amortised cost using the effective interest method. Borrowings are classified as
current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12
months after the reporting date.
For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are
derecognised, and through the amortisation process.
A financial liability is derecognised when the obligation under the liability is extinguished. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as a derecognition of
the original liability and the recognition of a new liability, and the difference in the respective carrying amounts
is recognised in profit or loss.
2.20 Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse
the holder for a loss it incurs because a specified debtor fails to make payment when due.
Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs.
Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or loss over
the period of the guarantee. If the debtor fails to make payment relating to financial guarantee contract when
it is due and the Group, as the issuer, is required to reimburse the holder for the associated loss, the liability is
measured at the higher of the best estimate of the expenditure required to settle the present obligation at the
reporting date and the amount initially recognised less cumulative amortisation.
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2.
2.21 Borrowing costs
Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the
acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the
activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing
costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their
intended use or sale.
All other borrowing costs are recognised in profit or loss in the period they are incurred. Borrowing costs
consist of interest and other costs that the Group incurred in connection with the borrowing of funds.
2.22 Fair value measurement
The Group and the Company measure financial instruments and non-financial assets such as properties, at fair
value at each reporting date. Also, fair values of financial instruments measured at amortised cost are disclosed
in Note 39(b).
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based on the
presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible to by the Group and the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant
that would use the asset in its highest and best use.
The Group and the Company use valuation techniques that are appropriate in the circumstances and for
which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
- Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
- Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable
- Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable
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2.
2.22 Fair value measurement (contd.)
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group and
the Company determine whether transfers have occurred between levels in the hierarchy by re-assessing
categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at
the end of each reporting period.
The Group and the Company determine the policies and procedures for recurring fair value measurement, such
as properties.
External valuers may be involved for valuation of significant assets, such as properties. Involvement of external
valuers is decided upon annually by the Company. Selection criteria include market knowledge, reputation,
independence and whether professional standards are maintained.
At each reporting date, the Group and the Company analyse the movements in the values of assets and
liabilities which are required to be re-measured or re-assessed as per the Group’s and the Company’s
accounting policies. For this analysis, the Group and the Company verify the major inputs applied in the latest
valuation by agreeing the information in the valuation computation to contracts and other relevant documents.
The Group and the Company, in conjunction with the Group’s and the Company’s external valuers, also
compare the changes in the fair value of each asset and liability with relevant external sources, where practical
to determine whether the change is reasonable.
For the purpose of fair value disclosures, the Group and the Company have determined classes of assets and
liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair
value hierarchy as explained above.
2.23 Income taxes
a) Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted by the reporting date.
Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised
outside profit or loss, either in other comprehensive income or directly in equity.
b) Deferred tax
Deferred tax is provided using the liability method on temporary differences at the reporting date between
the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all temporary differences, except:
- where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability
in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
73
2.
2.23 Income taxes (contd.)
b) Deferred tax (contd.)
- in respect of taxable temporary differences associated with investment in subsidiaries, associates and
interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled
and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax
credits and unused tax losses, to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, and the carry forward of unused tax credits and unused tax
losses can be utilised except:
- where the deferred tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss; and
-
in respect of deductible temporary differences associated with investment in subsidiaries, associates
and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable
that the temporary differences will reverse in the foreseeable future and taxable profit will be available
against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are
recognised to the extent that it has become probable that future taxable profit will allow the deferred tax
assets to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or
substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred
tax items are recognised in correlation to the underlying transaction either in other comprehensive income
or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on
acquisition.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the
same taxation authority.
c) Sales tax
Revenues, expenses and assets are recognised net of the amount of sales tax except:
- where the sales tax incurred in a purchase of assets or services is not recoverable from the taxation
authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as
part of the expense item as applicable; and
- receivables and payables that are stated with the amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the statements of financial position.
74
2.
2.24 Employee benefits
a) Short term benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in the year
in which the associated services are rendered by employees. Short term accumulating compensated
absences such as paid annual leave are recognised when services are rendered by employees that increase
their entitlement to future compensated absences. Short term non-accumulating compensated absences
such as sick leave are recognised when the absences occur.
b) Defined contribution plans
The Group and the Company participate in the national pension schemes as defined by the laws of the
countries in which it has operations. The Malaysian companies in the Group make contributions to the
Employee Provident Fund in Malaysia, a defined contribution pension scheme. Contributions to defined
contribution pension schemes are recognised as an expense in the period in which the related service is
performed.
c) Employee share option plans
Employees of the Group and the Company receive remuneration in the form of share options as
consideration for services rendered. The cost of these equity-settled transactions with employees is
measured by reference to the fair value of the options at the date on which the options are granted, which
takes into account market conditions and non-vesting conditions. This cost is recognised in profit or loss,
with a corresponding increase in the employee share option reserve over the vesting period. The cumulative
expense recognised at each reporting date until the vesting date reflects the extent to which the vesting
period has expired and the Group's and the Company’s best estimate of the number of options that will
ultimately vest. The charge or credit to profit or loss for a period represents the movement in cumulative
expense recognised at the beginning and end of that period.
No expense is recognised for options that do not ultimately vest, except for options where vesting is
conditional upon a market condition or a non-vesting condition, which are treated as vested irrespective
of whether or not the market condition or non-vesting condition is satisfied, provided that all other
performance and/or service conditions are satisfied. In the case where the option does not vest as the
result of a failure to meet a non-vesting condition that is within the control of the Group and the Company
or the employee, this is accounted for as a cancellation. In such case, the amount of the compensation cost
that otherwise would be recognised over the remainder of the vesting period is recognised immediately
in profit or loss upon cancellation. The employee share option reserve is transferred to retained earnings
upon expiry of the share options. When the options are exercised, the employee share option reserve is
transferred to share capital if new shares are issued, or to treasury shares if the options are satisfied by the
reissuance of treasury shares.
d) Restricted share plans
The Company's Restricted Share Plan ("RSP") implemented on 5 January 2012, an equity-settled, sharebased compensation plan, allows eligible employees of the Group and the Company to be entitled for
ordinary shares of the Company. The total fair value of shares granted to employees are recognised as an
employee cost with a corresponding increase in the RSP reserve within equity over the vesting period and
taking into account the probability that the shares will vest. The fair value are measured at grant date, taking
into account, if any, the market vesting conditions upon which the shares were granted but excluding the
impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions
in respect of the number of shares that are expected to be granted on vesting date.
75
2.
2.24 Employee benefits (contd.)
d) Restricted share plans (contd.)
At each financial year end, the Group revises its estimates of the number of shares that are expected to be
granted on vesting date. It recognises the impact of the revision of original estimates, if any, in the profit
or loss, and a corresponding adjustment to equity over the remaining vesting period. The equity amount is
recognised in the RSP reserve.
e) Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date or
whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group and
the Company recognise termination benefits 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 12 months after
reporting date are discounted to present value.
2.25Lease
The determination of whether an arrangement is, or contains, a lease is based on the substance of the
arrangement at inception date, whether fulfilment of the arrangement is dependent on the use of a specific
assets or the arrangement conveys a right to use the assets, even if that right is not explicitly specified in an
arrangement.
a) As a lessee
Finance leases, which transfer to the Group and the Company substantially all the risks and rewards
incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of
the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are
also added to the amount capitalised. Lease payments are apportioned between the finance charges and
reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the
liability. Finance charges are charged to profit or loss. Contingent rents, if any, are charged as expenses in
the periods in which they are incurred.
A leased asset is depreciated over the estimated useful life of the asset. However, if there is no reasonable
certainty that the Group and the Company will obtain ownership by the end of the lease term, the asset is
depreciated over the shorter of the estimated useful life and the lease term.
Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the
lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental
expense over the lease term on a straight-line basis.
76
2.
2.25 Lease (contd.)
b) As a lessor
Leases where the Group and the Company retain substantially all the risks and rewards of ownership of the
asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are
added to the carrying amount of the leased asset and recognised over the lease term on the same bases as
rental income. The accounting policy for rental income is set out in Note 2.26(f).
2.26 Revenue recognition
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.
a) Sale of properties
Revenue from sale of properties is accounted for by the stage of completion method as described in Note
2.12(ii).
b) Sale of goods
Revenue from sale of goods is recognised upon the transfer of significant risk and rewards of ownership of
the goods to the customer. Revenue is not recognised to the extent where there are significant uncertainties
regarding recovery of the consideration due, associated costs or the possible return of goods.
c) Revenue from service apartments
Revenue from rental of service apartments and the related income such as sale of food and beverages are
recognised on an accrual basis.
d) Sales of completed development properties
Revenue from sale of completed development properties is recognised net of discount upon transfer risk
and rewards.
e) Dividend income
Dividend income is recognised when the Group's and the Company’s right to receive payment is
established.
f) Rental income
Rental income is accounted for on a straight-line basis over the lease terms. The aggregate costs of
incentives provided to lessees are recognised as a reduction of rental income over the lease term on a
straight-line basis.
g) Management fees
Management fees are recognised when services are rendered.
77
2.
2.26 Revenue recognition (contd.)
h) Interest income
Interest income is recognised on an accrual basis using the effective interest method.
2.27 Foreign currency
a) Functional and presentation currency
The individual financial statements of each entity in the Group are measured using the currency of the
primary economic environment in which the entity operates ("the functional currency"). The consolidated
financial statements are presented in Ringgit Malaysia ("RM"), which is also the Company's functional
currency.
b) Foreign currency transactions
Transactions in foreign currencies are measured in the respective functional currencies of the Company
and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates
approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in
foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary items
denominated in foreign currencies that are measured at historical cost are translated using the exchange
rates as at the dates of the initial transactions. Non-monetary items denominated in foreign currencies
measured at fair value are translated using the exchange rates at the date when the fair value was
determined.
Exchange differences arising on the settlement of monetary items or on translating monetary items at the
reporting date are recognised in profit or loss except for exchange differences arising on monetary items
that form part of the Group's net investment in foreign operations, which are recognised initially in other
comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign
currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the
foreign operation.
Exchange differences arising on the translation of non-monetary items carried at fair value are included in
profit or loss for the period except for the differences arising on the translation of non-monetary items in
respect of which gains and losses are recognised directly in equity. Exchange differences arising from such
non-monetary items are also recognised directly in equity.
c) Foreign operations
The assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling at the
reporting date and income and expenses are translated at exchange rates at the dates of the transactions.
The exchange differences arising on the translation are taken directly to other comprehensive income. On
disposal of a foreign operation, the cumulative amount recognised in other comprehensive income and
accumulated in equity under foreign currency translation reserve relating to that particular foreign operation
is recognised in the profit or loss.
Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets
and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations
and translated at the closing rate at the reporting date.
78
2.
2.28 Non-current assets held for sale and discontinued operations
A component of the Group is classified as a "discontinued operation" when the criteria to be classified as
held for sale have been met or it has been disposed of and such a component represents a separate major
line of business or geographical area of operations or is part of a single coordinated major line of business
or geographical area of operations. A component is deemed to be held for sale if its carrying amounts will be
recovered principally through a sale transaction rather than through continuing use.
Upon classification as held for sale, non-current assets and disposal groups are not depreciated and are
measured at the lower of carrying amount and fair value less costs to sell. Any differences are recognised in
profit or loss.
2.29 Segment reporting
For management purposes, the Group is organised into operating segments based on their products
and services which are independently managed by the respective segment managers responsible for the
performance of the respective segments under their charge. The segment managers report directly to the
management of the Company who regularly review the segment results in order to allocate resources to the
segments and to assess the segment performance. Additional disclosures on each of these segments are
shown in Note 44, including the factors used to identify the reportable segments and the measurement basis of
segment information.
2.30 Share capital and share issuance expenses
An equity instrument is any contract that evidences a residual interest in the assets of the Group and the
Company after deducting all of its liabilities. Ordinary shares are equity instruments.
Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction
costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the
period in which they are declared.
2.31 Treasury shares
When shares of the Company, that have not been cancelled, recognised as equity are reacquired, the amount
of consideration paid is recognised directly in equity. Reacquired shares are classified as treasury shares and
presented as a deduction from total equity. No gain or loss is recognised in profit or loss on the purchase, sale,
issue or cancellation of treasury shares. When treasury shares are reissued by resale, the difference between
the sales consideration and the carrying amount is recognised in equity.
2.32Contingencies
A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence
will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the
control of the Group and the Company.
Contingent liabilities and assets are not recognised in the statements of financial position of the Group and the
Company.
79
3. Significant accounting judgements and estimates
The preparation of the Group's financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of
contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in
outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.
3.1
Judgements made in applying accounting policies
In the process of applying the Group's accounting policies, management has made the following judgements,
apart from those involving estimations, which have the most significant effect on the amounts recognised in the
financial statements:
i. Classification of investment properties
The Group has developed certain criteria based on FRS 140 in making judgement whether a property
qualifies as an investment property. Investment property is a property held to earn rentals or for capital
appreciation or both.
Some properties comprise a portion that is held to earn rentals or for capital appreciation and another
portion that is held for use in the production or supply of goods or services or for administrative purposes.
If these portions could be sold separately (or leased out separately under a finance lease), the Group
would account for the portions separately. If the portions could not be sold separately, the property is an
investment property only if an insignificant portion is held for use in the production or supply of goods or
services or for administrative purposes.
Judgement is made on an individual property basis, based on management's intention, to determine if a
property qualifies as investment property.
- Classification between investment properties and property, plant and equipment
The Group has classified property held as service apartment to earn rental income on a daily basis as
property, plant and equipment from investment properties as the ancillary services provided by the
Group are so significant that such property does not qualify as investment property.
- Classification between investment properties and inventories
The Group has temporarily sub-let some properties held for sale but has decided not to treat these
properties as investment properties because it is not the Group's intention to hold this property in
long term for capital appreciation or rental income. Accordingly, these properties are still classified as
inventory.
ii. Operating lease commitments – the Group as a lessor
The Group has entered into commercial property leases on its investment properties. The Group evaluated
based on terms and conditions of the arrangement, whether the land and the buildings were clearly
operating leases or finance leases. The Group assessed the following:
- The land titles do not pass to the lessees;
- The lease terms do not form major part of the economic lives of the properties; and
- The lessees do not participate in the residual value of the building.
80
3. Significant accounting judgements and estimates (contd.)
3.1
Judgements made in applying accounting policies (contd.)
ii. Operating lease commitments – the Group as a lessor (contd.)
Management judged that it retains all the significant risks and rewards of ownership of these properties,
thus accounted for the contracts as operating leases.
iii. Classification between land held for property development and property development costs
The Group has developed certain criteria based on FRS 201 in making judgement whether a property
qualifies as a land held for property development. Land held for property development is a land where
no development activities have been carried out or where development activities are not expected to be
completed within the normal operating cycle. Judgement is made based on management's operation plans
and economy forecasting, to determine if a property qualifies as land held for property development.
3.2
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are discussed below:
i. Depreciation of plant and equipment
The cost of retail division's plant and equipment is depreciated on a straight-line basis over the asset's
useful life. The management estimated the useful lives of these plant and equipment to be 3 years.
These are common life expectancies applied in the industry. Changes in the expected level of usage and
technological developments could impact the economic useful lives and the residual values of these
assets, therefore future depreciation charges could be revised. The carrying amount of the Group's and the
Company’s plant and equipment at the reporting date is disclosed in Note 15.
ii. Property development
The Group recognises property development revenue and expenses in the statement of comprehensive
income by using the stage of completion method. The stage of completion is determined by the proportion
that property development costs incurred for work performed to date bear to the estimated total property
development costs.
Significant judgement is required in determining the stage of completion, the extent of the property
development costs incurred, the estimated total property development revenue and costs, as well as the
recoverability of the property development costs. In making the judgement, the Group evaluates based on
past experience and by relying on the work of specialists.
The carrying amounts of assets and liabilities of the Group arising from property development activities are
disclosed in Note 16.
iii. Deferred tax assets and unrecognised tax losses
Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable
profit will be available against which the losses can be utilised. Significant management judgement is
required to determine the amount of deferred tax assets that can be recognised, based on the likely timing
and level of future taxable profits together with future tax planning strategies.
81
3.2
Key sources of estimation uncertainty (contd.)
iii. Deferred tax assets and unrecognised tax losses (contd.)
Assumptions about generation of future taxable profits depend on management's estimates of future
cash flows. These depend on estimates of future production and sales volume, operating costs, capital
expenditure, dividends and other capital management transactions. Judgement is also required about
application of income tax legislation. These judgements and assumptions are subject to risks and
uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may
impact the amount of deferred tax assets recognised in the statements of financial position and the amount
of unrecognised tax losses and unrecognised temporary differences.
The carrying value of deferred tax assets of the Group at 30 June 2014 was RM24,665,000 (2013:
RM27,197,000). The total carrying values of recognised tax losses, capital allowances and other temporary
differences of the Group and of the Company at 30 June 2014 were RM115,032,000 (2013: RM135,724,000)
and RM5,856,000 (2013: RM5,236,000) respectively. The unrecognised tax losses, unabsorbed capital
allowances and other deductible temporary differences of the Group at 30 June 2014 was RM86,950,000
(2013: RM78,038,000).
iv. Impairment of investment in subsidiaries and joint ventures
The management of the Company carried out review of the recoverable amount of its investment in
subsidiaries and joint ventures at each balance sheet date. There is no further impairment loss to be
recognised in the current financial year. The Company carried out the impairment test based on the
estimation of the higher of the value-in-use or the fair value less cost to sell of the cash-generating units
("CGU") to which the investment in subsidiaries and joint ventures belong to. Estimating the recoverable
amount requires the Company to make an estimate of the expected future cash flows from the CGU and
also to determine a suitable discount rate in order to calculate the present value of those cash flows. The
carrying amount of investment in subsidiaries and joint ventures of the Company as at 30 June 2014 was
RM30,148,000 (2013: RM30,148,000) and RM125,000 (2013: RM125,000) respectively. Further details of the
impairment losses recognised are disclosed in Note 19.
v. Impairment of loans and receivables
The Group and the Company assess at each reporting date whether there is any objective evidence that a
financial asset is impaired. To determine whether there is objective evidence of impairment, the Group and
the Company consider factors such as the probability of insolvency or significant financial difficulties of the
debtor and default or significant delay in payments.
Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated
based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of
the Group's and the Company’s loans and receivable at the reporting date is disclosed in Note 23.
vi. Employee share options/Restricted share plan
The Group and the Company measure the cost of equity-settled transactions with employees by reference
to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for
share-based payment transactions requires determining the most appropriate valuation model, which is
dependent on the terms and conditions of the grant. This estimate also requires determining the most
appropriate inputs to the valuation model including the expected life of the share option/share awarded,
volatility and dividend yield and making assumptions about them.
82
3.2
Key sources of estimation uncertainty (contd.)
vii.Revaluation of investment properties
The Group carries its investment properties at fair value, with changes in fair values being recognised in
profit or loss. The Group engaged independent valuation specialists to determine fair value as at 30 June
2014.
The fair value of certain investment properties is determined by independent real estate valuation experts
using recgonised valuation techniques. These techniques comprise both the Yield Method and the
Discounted Cash Flow Method.
The determination of the fair value of the investment properties requires the use of estimates such as
future cash flows from assets (such as lettings, tenants’ profiles, future revenue streams, capital values of
fixtures and fittings, plant and machinery, any environmental matters and the overall repair and condition
of the property) and discount rates applicable to those assets. These estimates are based on local market
conditions existing at the end of each reporting date.
4.Revenue
Group
Manufacturing and retailing of garments
Sale of development properties
Rental income from service apartments
Rental income from investment properties
(Note 17)
Sale of completed development properties
Sale of land held for property development
Dividend income from subsidiaries
Management fees
Rental income from office/factory buildings
Company
2014
2013
RM’000
RM’000
2014
RM’000
2013
RM’000
192,588
85,346
15,156
185,876
325,811
15,743
-
-
6,400
115,125
20,000
434,615
5,803
69,354
602,587
12,400
6,534
74
19,008
12,400
6,160
70
18,630
83
5.
Cost of sales
Group
Cost of manufacturing and retailing of garments
Property development costs (Note 16(b))
Cost of services rendered
Cost of completed development properties sold
Cost of land held for property development sold (Note 16(a))
Reversal of accrual for property development costs
Liquidated ascertained damages
2014
RM’000
2013
RM’000
85,244
56,313
11,532
73,546
12,299
(5,158)
233,776
78,931
194,452
11,075
34,102
5,645
324,205
Included in cost of services rendered is direct operating expenses of revenue generating investment properties
amounting to RM2,426,808 (2013: RM2,307,852).
6.
Other income
Group
Interest income
Rental income from properties held for sale
Sundry income
7.
2014
RM’000
2013
RM’000
3,491
1,553
2,789
7,833
1,576
1,072
1,663
4,311
11,738
11,738
8,491
8,491
Finance costs
Group
Interest expense on bank borrowings
Less: Interest capitalised in qualifying assets:
- Property development costs (Note 16(b))
Net interest expense
Amortisation of borrowing costs
Commitment fees on term loans
Bank charges
84
Company
2014
2013
RM’000
RM’000
2014
RM’000
2013
RM’000
14,582
12,845
(8,525)
6,057
999
193
233
7,482
(6,394)
6,451
878
50
489
7,868
Company
2014
2013
RM’000
RM’000
-
-
7
7
6
6
8. Profit before tax
The following items have been included in arriving at profit before tax:
Group
Company
2014
2013
RM’000
RM’000
2014
RM’000
2013
RM’000
54
82
-
-
367
46
11
327
16
10
106
10
7
96
6
7
11,512
754
10,966
2,077
941
-
931
-
Amortisation of prepaid land lease payments
(Note 18)
Auditors' remuneration:
- current year provision
- under provision in prior year
- other services
Depreciation of property, plant and equipment
(Note 15)
Net gain on disposal of property, plant and
equipment and prepaid land lease payments
Reversal of impairment loss on:
- land held for property development
(Note 16(a))
Reversal of write down of inventories (Note 24)
(Note 17)
Licence fees and central marketing contribution
charged by related companies
Management fees charged by a related
company
Net foreign exchange (gains)/losses
Non-executive directors' remuneration
(Note 10)
Property, plant and equipment written off
Allowance for impairment on receivables
(Note 23)
Impairment loss on investment in an associate
(Note 20)
Rental of equipment
Rental of premises
(463)
-
(423)
(164)
-
-
-
-
-
-
627
143
-
-
1,993
(600)
854
(387)
42
15
436
416
402
31
436
-
402
-
845
594
3,975
3,099
-
-
-
-
85
(8,740)
39
34
34,407
(3,195)
(3,333)
(8)
30,620
Auditors' remuneration
-
3
9.
Employee benefits expense
Group
Wages and salaries
Executive directors' remuneration (Note 10)
Social security contributions
Contributions to defined contribution plans
Gratuity
ESOS/RSP expenses (Note 28)
Retrenchment benefits
Other benefits
Less: Employee benefits expense capitalised in
qualifying assets:
- Property development costs
(Note 16(b))
10.
Company
2014
2013
RM’000
RM’000
2014
RM’000
2013
RM’000
33,684
4,597
413
3,907
1,000
3
5,265
48,869
30,252
5,900
369
4,051
13
428
4,365
45,378
3,517
1,824
13
189
1,000
214
6,757
2,640
3,168
12
273
428
222
6,743
(4,649)
44,220
(5,194)
40,184
6,757
6,743
Directors' remuneration
The details of remuneration receivable by directors of the Company during the year are as follows:
Group
Company
2014
2013
RM’000
RM’000
2014
RM’000
2013
RM’000
1,280
400
144
337
2,161
1,280
1,600
288
129
3,297
1,280
400
144
309
2,133
1,280
1,600
288
109
3,277
365
71
436
31
467
2,628
339
63
402
31
433
3,730
365
71
436
31
467
2,600
339
63
402
31
433
3,710
Directors of the Company
Executive directors' remuneration:
Salaries and other emoluments
Bonus
Pension costs - defined contribution plan
Benefits-in-kind
Non-executive directors' remuneration:
Fees
Other emoluments
Benefits-in-kind
86
10.
Directors' remuneration (contd.)
Group
Company
2014
2013
RM’000
RM’000
2014
RM’000
2013
RM’000
1,684
767
322
113
2,886
1,517
894
321
128
2,860
-
-
5,514
6,590
2,600
3,710
4,597
5,900
1,824
3,168
436
402
436
402
5,033
6,302
2,260
3,570
Directors of subsidiaries
Executive directors' remuneration:
Salaries and other emoluments
Bonus
Pension costs - defined contribution plan
Benefits-in-kind
Total (Note 38(b))
Analysis excluding benefits-in-kind:
Total executive directors' remuneration
excluding benefits-in-kind (Note 9)
Total non-executive directors' remuneration
excluding benefits-in-kind (Note 8)
Total directors' remuneration excluding
benefits-in-kind
The number of directors of the Company whose total remuneration during the year fall within the following bands is
analysed below:
Number of directors
2014
2013
Executive directors:
RM250,001 - RM300,000
RM300,001 - RM350,000
RM350,001 - RM400,000
RM1,450,001 - RM1,500,000
RM2,700,001 - RM2,750,000
1
1
1
-
1
1
1
Non-executive directors:
Below RM50,000
RM50,001 - RM100,000
RM100,001 - RM150,000
5
1
1
4
1
87
11. Income tax expense
Major components of income tax expense
The major components of income tax expense for the years ended 30 June 2014 and 2013 are:
Group
2014
RM’000
2013
RM’000
Company
2014
2013
RM’000
RM’000
Statement of comprehensive income:
Current income tax:
Malaysian income tax
Under/(Over) provision in prior years
Deferred tax (Note 22):
Relating to origination and reversal of
temporary differences
(Over)/Under provision in prior years
Income tax attributable to continuing operations
17,534
1,591
19,125
56,786
(2,871)
53,915
2,227
116
2,343
7,712
(6,230)
1,482
(10,530)
1,079
(9,451)
20,607
44,464
2,213
1,209
-
17
17
-
-
-
17
-
-
20,607
44,481
2,213
1,209
(144)
14
(130)
1,545
45
1,590
(308)
(73)
(381)
Foreign tax:
Current income tax
Under provision in prior years
Income tax attributable to discontinued
operations (Note 12(a))
Income tax expense recognised in profit or loss
88
11. Income tax expense (contd.)
Reconciliation between tax expense and accounting profit/(loss)
The reconciliation between tax expense and the product of accounting profit/(loss) multiplied by the applicable
corporate tax rate for the years ended 30 June 2014 and 2013 are as follows:
Group
Profit/(Loss) before tax from:
Discontinued operations (Note 12(a))
Taxation at Malaysian statutory tax rate of 25%
Adjustments:
Expenses not deductible for tax purposes
Income not subject to tax
Utilisation of previously unrecognised tax losses
Utilisation of previously unrecognised deferred tax asset
Deferred tax assets not recognised during the year
Effect of changes in Real Property Gain Tax
Income subject to different tax rate
Under/(Over) provision of tax expenses in prior years
(Over)/Under provision of deferred tax in prior years
Share of results of an associate and joint ventures
Income tax expense recognised in profit or loss:
Discontinued operations (Note 12(a))
2014
RM’000
2013
RM’000
91,272
91,272
175,947
(49)
175,898
22,818
43,974
4,141
(2,397)
(3)
(1,694)
3,925
52
183
1,591
(6,230)
(1,779)
20,607
5,011
(2)
(35)
(1,632)
1,142
(2,854)
1,079
(2,202)
44,481
20,607
20,607
44,464
17
44,481
Company
Profit before tax
Taxation at Malaysian statutory tax rate of 25%
Adjustments:
Expenses not deductible for tax purposes
Income not subject to tax
Under provision of tax expenses in prior years
Under/(Over) provision of deferred tax in prior years
2014
RM’000
2013
RM’000
17,143
14,418
4,286
3,604
1,346
(3,549)
116
14
2,213
1,176
(3,543)
45
(73)
1,209
89
11. Income tax expense (contd.)
Tax savings recognised during the year arising from:
Group
2014
RM’000
2013
RM’000
3
35
Utilisation of previously unrecognised tax losses
Company
2014
2013
RM’000
RM’000
-
-
12. Discontinued operations and disposal group classified as held for sale
In July 2006, the Group's garment manufacturing operations in Sri Lanka under DNP Garments Lanka (Private)
Limited, DNP Commercial Laundry Lanka (Private) Limited and DNP Sportswear Lanka (Private) Limited (Lanka group
of companies) were discontinued and some of the property, plant and equipment had been disposed off.
The Company had commenced with the liquidation of DNP Garments Lanka (Private) Limited ("DNP Lanka"), a wholly
owned subsidiary of the Company and DNP Lanka's wholly owned subsidiaries, DNP Commercial Laundry Lanka
(Private) Limited and DNP Sportswear Lanka (Private) Limited in the financial year 2013.
On 25 June 2014, Premium Strategy (M) Sdn Bhd, a wholly owned subsidiary of the Company, entered into a
conditional Sale and Purchase Agreement to dispose its 25% interest in the share capital of PT Windas Development,
a joint venture together with the novation of loan owing by PT Windas Development to Winswift Investment Pte Ltd for
a total consideration of USD8,174,603. On 5 September 2014, the disposal of the 25% interest in the share capital of
PT Windas Development, a joint venture and novation of the loan owing by PT Windas Development were completed.
The purchaser is a company connected to one of the shareholders of PT Windas Development.
(a)
Statement of comprehensive income disclosures
During the year, the results from Lanka group of companies are presented separately on the consolidated
statement of comprehensive income as discontinued operations. An analysis of the result of discontinued
operations is as follows:
Group
2014
RM’000
Revenue
Cost of sales
Gross profit
Other income
Administrative expenses
Other operating expenses
Operating loss
Finance costs
Loss before tax from discontinued operations
Income tax expense (Note 11)
2013
RM’000
-
The items included in arriving at loss before tax from discontinued operations are as disclosed in Note 8.
90
(49)
(49)
(49)
(17)
(66)
12. Discontinued operations and disposal group classified as held for sale (contd.)
(a)
Discontinued operations (contd.)
Statement of cash flows disclosures
The cash flows attributable to the discontinued operations are as follows:
Group
Operating cash flows
(b)
2014
RM’000
2013
RM’000
-
118
Disposal group classified as held for sale
The interest in PT Windas Development and the related foreign currency translation reserves are classified as
held for sale in the consolidated statement of financial position of the Group as at 30 June 2014.
Statement of financial position disclosures
Group
2014
RM’000
Assets:
Investment in joint venture
Other receivable
Assets of disposal group classified as held for sale
Reserve:
Foreign currency translation reserves, representing reserve of disposal group
classified as held for sale
-
(i)
(ii)
10,695
(i) Investment in joint venture
Group
2014
RM’000
Unquoted shares at cost
Share of post-acquisition reserves
18,996
(18,996)
-
The Group has not recognised losses relating to PT Windas Development where its share of losses exceeds
the Group’s interest in this joint venture. The Group’s cumulative share of unrecognised losses at the
reporting date was RM5,531,000 (2013: RM5,287,000) of which RM244,000 (2013: profit of RM9,689,000)
was the share of current year’s losses. The Group has no obligation in respect of these losses.
91
12. Discontinued operations and disposal group classified as held for sale (contd.)
(b)
Disposal group classified as held for sale (contd.)
(ii) Other receivable
Group
2014
RM’000
Amount due from a joint venture (unsecured):
- interest bearing
- interest free
29,951
2,685
32,636
(32,636)
-
Less: Allowance for impairment
Other receivables, net
13. Earnings/(Loss) per share
(a) Basic
Basic earnings per share amounts are calculated by dividing profit for the year, net of tax attributable to owners
of the parent by the weighted average number of ordinary shares in issue during the year, excluding treasury
shares held by the Company.
Group
Profit net of tax from continuing operations attributable to owners of
the parent
Loss net of tax from discontinued operations attributable to owners of
the parent
Profit net of tax attributable to owners of the parent
2014
RM’000
2013
RM’000
70,665
131,483
70,665
(66)
131,417
Group
Weighted average number of ordinary shares in issue excluding treasury
shares held by the Company
Basic earnings per share for:
Profit net of tax from continuing operations
Loss net of tax from discontinued operations
Profit net of tax
92
2014
2013
314,204,393
313,913,203
2014
Sen
2013
Sen
22.49
22.49
41.88
(0.02)
41.86
13. Earnings/(Loss) per share (contd.)
(b) Diluted
Diluted earnings per share amounts are calculated by dividing profit for the year, net of tax, attributable to
owners of the parent by weighted average number of ordinary shares in issue during the year, excluding
treasury shares held by the company plus the weighted average number of ordinary shares that would be
issued on dilutive potential ordinary shares via share options granted to employees.
Group
Profit net of tax from continuing operations attributable to owners of
the parent
Loss net of tax from discontinued operations attributable to owners of
the parent
Profit net of tax attributable to owners of the parent
2014
RM’000
2013
RM’000
70,665
131,483
70,665
(66)
131,417
Group
Weighted average number of ordinary shares in issue excluding treasury
shares held by the Company
Effects of dilution from ESOS/RSP
Adjusted weighted average number of ordinary shares in issue and issuable
Diluted earnings per share for:
Profit net of tax from continuing operations
Loss net of tax from discontinued operations
Profit net of tax
2014
2013
314,204,393
1,076,745
315,281,138
313,913,203
909,067
314,822,270
2014
Sen
2013
Sen
22.41
22.41
41.76
(0.02)
41.74
93
14.Dividends
Group and Company
Amount
Net dividend per ordinary share
2014
2013
2014
2013
RM’000
RM’000
Sen
Sen
First and final dividend of 5% single tier, on
314,210,132 ordinary shares, declared on
13 November 2013 and paid on 18 December
2013
Special dividend of 5% single tier, on
2013
First and final dividend of 5% single tier, on
2012
Special dividend of 3% single tier, on
2012
15,711
-
5.00
-
15,710
-
5.00
-
-
15,696
-
5.00
31,421
9,418
25,114
10.00
3.00
8.00
At the forthcoming Annual General Meeting, a first and final dividend, in respect of the financial year ended 30 June
2014, of 5% single tier and a special dividend of 2% single tier on 314,348,732 ordinary shares, amounting to a
dividend payable of RM22,004,411 (7.00 sen net per ordinary share) will be proposed for shareholders' approval.
The financial statements for the current year do not reflect this proposed dividend. Such dividend, if approved by the
shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 30
June 2015.
94
15.
Property, plant and equipment
* Land and
buildings
RM’000
Plant and
machinery
RM’000
Office
equipment
RM’000
Furniture,
fittings,
renovation
and
electrical
installation
RM’000
Motor
vehicles
RM’000
Capital
work-inprogress
RM’000
Total
RM’000
Group
Cost or valuation
At 1 July 2013
At cost
At valuation
Additions
Disposals
Write off
Reclassification
At 30 June 2014
109,854
109,854
53
(4,050)
8,501
114,358
20,244
20,244
668
(24)
(2,892)
17,996
6,333
6,333
2,303
(328)
8,308
53,949
53,949
8,251
(3,102)
59,098
8,932
8,932
721
(1,726)
7,927
1,636
1,636
6,865
(8,501)
-
91,094
109,854
200,948
18,861
(5,800)
(6,322)
207,687
Representing:
At cost
At valuation
At 30 June 2014
114,358
114,358
17,996
17,996
8,308
8,308
59,098
59,098
7,927
7,927
-
93,329
114,358
207,687
Accumulated depreciation and impairment losses
At 1 July 2013
Depreciation
charge for the
year (Note 8)
Disposals
Write off
Reversal of
impairment loss
At 30 June 2014
3,505
19,214
4,644
40,752
6,090
-
74,205
1,195
(1,192)
-
438
(24)
(2,865)
1,081
(294)
7,853
(2,747)
945
(1,468)
-
-
11,512
(2,684)
(5,906)
(87)
3,421
16,763
5,431
45,858
5,567
-
(87)
77,040
1,233
1,233
2,877
2,877
13,240
13,240
2,360
2,360
-
Net carrying amount
At cost
At valuation
At 30 June 2014
110,937
110,937
19,710
110,937
130,647
95
15.
Property, plant and equipment (contd.)
* Land and
buildings
RM’000
Plant and
machinery
RM’000
Office
equipment
RM’000
Furniture,
fittings,
renovation
and
electrical
installation
RM’000
Motor
vehicles
RM’000
Capital
work-inprogress
RM’000
Total
RM’000
Group
Cost or valuation
At 1 July 2012
At cost
At valuation
Additions
Disposals
Write off
At 30 June 2013
109,529
109,529
325
109,854
22,930
22,930
442
(1,720)
(1,408)
20,244
7,715
7,715
1,012
(47)
(2,347)
6,333
58,747
58,747
6,025
(56)
(10,767)
53,949
8,204
8,204
1,281
(553)
8,932
1,636
1,636
97,596
109,529
207,125
10,721
(2,376)
(14,522)
200,948
Representing:
At cost
At valuation
At 30 June 2013
109,854
109,854
20,244
20,244
6,333
6,333
53,949
53,949
8,932
8,932
1,636
1,636
91,094
109,854
200,948
At 1 July 2012
Depreciation
charge for the
year (Note 8)
Disposals
Write off
Impairment loss
At 30 June 2013
1,202
21,969
6,106
43,973
5,767
-
79,017
1,231
1,072
3,505
353
(1,720)
(1,388)
19,214
923
(47)
(2,338)
4,644
7,600
(56)
(10,765)
40,752
859
(536)
6,090
-
10,966
(2,359)
(14,491)
1,072
74,205
1,030
1,030
1,689
1,689
13,197
13,197
2,842
2,842
Net carrying amount
At cost
At valuation
At 30 June 2013
96
106,349
106,349
1,636
1,636
20,394
106,349
126,743
15.
* Land and buildings
Freehold
land
RM'000
Leasehold
land
RM'000
32,676
32,676
5,000
5,000
72,178
53
8,501
(4,050)
76,682
109,854
53
8,501
(4,050)
114,358
-
104
52
156
3,401
1,143
(1,192)
(87)
3,265
3,505
1,195
(1,192)
(87)
3,421
32,676
4,844
73,417
110,937
32,676
32,676
5,000
5,000
71,853
325
72,178
109,529
325
109,854
-
52
52
104
1,150
1,179
1,072
3,401
1,202
1,231
1,072
3,505
32,676
4,896
68,777
106,349
Buildings
RM'000
Total
RM'000
Group
Valuation
At 1 July 2013
Additions
Reclassification
Disposal
At 30 June 2014
At 1 July 2013
Depreciation charge for the year
Disposal
Reversal of impairment loss
At 30 June 2014
Net carrying amount
At 30 June 2014
Valuation
At 1 July 2012
Additions
At 30 June 2013
At 1 July 2012
Impairment loss
At 30 June 2013
Net carrying amount
At 30 June 2013
97
15.
Freehold
land
RM’000
Long term
leasehold
land
RM’000
Buildings
RM’000
Plant and
machinery
RM’000
Office
equipment
RM’000
Furniture,
fittings,
renovation
and
electrical
installation
RM’000
Additions
Disposal
At 30 June 2014
2,550
2,550
2,550
5,000
5,000
5,000
14,417
14,417
53
14,470
454
454
454
349
349
9
358
2,923
2,923
439
3,362
3,268
3,268
575
(532)
3,311
6,994
21,967
28,961
1,076
(532)
29,505
Representing:
At cost
At valuation
At 30 June 2014
2,550
2,550
5,000
5,000
14,470
14,470
454
454
358
358
3,362
3,362
3,311
3,311
7,485
22,020
29,505
-
104
574
345
188
1,042
2,729
4,982
-
52
156
305
879
12
357
57
245
290
1,332
225
(363)
2,591
941
(363)
5,560
2,550
2,550
4,844
4,844
13,591
13,591
97
97
113
113
2,030
2,030
720
720
Motor
vehicles
RM’000
Total
RM’000
Company
Cost or valuation
At 1 July 2013
At cost
At valuation
Accumulated depreciation
At 1 July 2013
Depreciation charge
for the year
(Note 8)
Disposal
At 30 June 2014
Net carrying amount
At cost
At valuation
At 30 June 2014
98
2,960
20,985
23,945
15.
Freehold
land
RM’000
Long term
leasehold
land
RM’000
Additions
Disposal
At 30 June 2013
2,550
2,550
2,550
5,000
5,000
5,000
Representing:
At cost
At valuation
At 30 June 2013
2,550
2,550
5,000
5,000
-
Buildings
RM’000
Plant and
machinery
RM’000
Office
equipment
RM’000
Furniture,
fittings,
renovation
and
electrical
installation
RM’000
Motor
vehicles
RM’000
Total
RM’000
Company
Cost or valuation
At 1 July 2012
At cost
At valuation
-
454
646
3,261
3,268
7,629
14,092
-
-
-
-
21,642
14,092
454
646
3,261
3,268
29,271
325
-
18
-
-
343
-
-
(315)
(338)
-
(653)
14,417
454
349
2,923
3,268
28,961
-
454
349
2,923
3,268
6,994
14,417
-
-
-
-
21,967
14,417
454
349
2,923
3,268
28,961
52
272
333
444
1,093
2,510
4,704
-
52
104
302
12
59
287
219
931
-
-
(315)
(338)
-
(653)
574
345
188
1,042
2,729
4,982
2,550
2,550
-
-
109
161
1,881
539
2,690
4,896
13,843
-
-
-
-
21,289
4,896
13,843
109
161
1,881
539
23,979
Accumulated depreciation
At 1 July 2012
Depreciation charge
for the year
(Note 8)
Write off
At 30 June 2013
Net carrying amount
At cost
At valuation
At 30 June 2013
99
15.
(a) The land and buildings have been revalued in June 2011 based on valuations performed by an accredited
independent professional valuer using the open market value basis.
Details of independent professional valuations of the properties of the Group are as follows:
Year of valuation
Description of property
Amount
RM’000
Basis of valuation
2011
Leasehold land at Rifle Range, Penang
5,000
Open market value
2011
Industrial buildings at Rifle Range, Penang
6,000
Open market value
2011
Industrial freehold land and buildings at
Balik Pulau, Penang
3,300
Open market value
2011
Freehold condominiums at Scotland Road,
Penang
1,060
Open market value
2011
Industrial building at Parit Buntar, Perak
1,213
Open market value
2011
Industrial buildings at Parit Buntar, Perak
3,787
Open market value
2011
Freehold land at Province Wellesley Central,
Penang
1,120
Open market value
2011
Freehold land and service apartments at
Kuala Lumpur
78,000
Open market value
2011
Freehold condominium at Jalan Mayang,
Kuala Lumpur
3,600
Open market value
Had the revalued properties been carried at historical cost less accumulated depreciation and impairment
losses, the net book value of each class of the properties that would have been included in the financial
statements of the Group and of the Company as at 30 June 2014 would be as follows:
Group
Freehold land
Leasehold land
Buildings
100
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
3,001
2,037
92,568
3,001
2,059
87,171
103
2,037
6,369
103
2,059
6,763
15.
(b) The net carrying amount of property, plant and equipment pledged as securities for borrowings as discussed in
Note 31 are as follows:
Group
Freehold land
Buildings
16
2014
RM’000
2013
RM’000
29,000
55,510
84,510
29,000
47,723
76,723
Development
expenditure
RM’000
Total
RM’000
Land held for property development and property development costs
(a)
Land held for property development
Freehold
land
RM’000
Group
Cost
At 1 July 2013
Additions
Disposals (Note 5)
At 30 June 2014
Accumulated impairment losses
At 1 July 2013/30 June 2014
56,934
2,661
(3,428)
56,167
8,411
952
(8,871)
492
65,345
3,613
(12,299)
56,659
-
-
-
Carrying amount at 30 June 2014
56,167
492
56,659
Cost
At 1 July 2012
Additions
At 30 June 2013
53,007
3,927
56,934
8,213
198
8,411
61,220
4,125
65,345
At 1 July 2012
Reversal of impairment loss (Note 8)
At 30 June 2013
Carrying amount at 30 June 2013
56,934
3,195
(3,195)
8,411
3,195
(3,195)
65,345
The net carrying amount of land held for property development pledged as securities for borrowings as
discussed in Note 31 is RM14,563,908 (2013: RM14,546,054).
101
16
Land held for property development and property development costs (contd.)
(b)
Property development costs
Freehold
land
RM’000
Leasehold
land
RM’000
Development
expenditure
RM’000
Total
RM’000
Cumulative property development
costs
At 1 July 2013
Costs incurred during the year
Reclassification
Reversal of completed projects
At 30 June 2014
351,657
26
(25,071)
326,612
58,688
58,688
306,164
204,443
(26)
(120,523)
390,058
716,509
204,443
(145,594)
775,358
Cumulative costs recognised in profit
or loss
At 1 July 2013
Recognised during the year (Note 5)
Transfer to inventories
Transfer to deferred income (Note 32)
Reclassification
At 30 June 2014
(40,108)
(6,268)
(18,166)
(24)
25,071
(39,495)
-
(33,027)
(50,045)
(66,118)
24
120,523
(28,643)
(73,135)
(56,313)
(84,284)
145,594
(68,138)
Property development costs at
30 June 2014
287,117
58,688
361,415
707,220
Group
102
16
Land held for property development and property development costs (contd.)
(b)
Property development costs (contd.)
Freehold
land
RM’000
Leasehold
land
RM’000
Development
expenditure
RM’000
Total
RM’000
Cumulative property development
costs
At 1 July 2012
Costs incurred during the year
At 30 June 2013
441,642
(64)
(89,921)
351,657
57,741
947
58,688
494,072
296,804
(484,712)
306,164
993,455
297,687
(574,633)
716,509
Cumulative costs recognised in profit
or loss
At 1 July 2012
Recognised during the year (Note 5)
Transfer to inventories
Transfer to deferred income (Note 32)
At 30 June 2013
(70,733)
(26,553)
(31,091)
(1,652)
89,921
(40,108)
-
(218,812)
(167,899)
(120,386)
(10,642)
484,712
(33,027)
(289,545)
(194,452)
(151,477)
(12,294)
574,633
(73,135)
Property development costs at
30 June 2013
311,549
58,688
273,137
643,374
Group
Included in property development costs incurred during the financial year are:
Group
Interest expenses (Note 7)
Employee benefits expense (Note 9)
2014
RM’000
2013
RM’000
8,525
4,649
6,394
5,194
The net carrying amount of property development costs pledged as securities for borrowings as discussed in
Note 31 is RM553,107,249 (2013: RM522,158,422).
103
17. Investment properties
Group
At 1 July
Fair value adjustments (Note 8)
Transfer from inventories
At 30 June
2014
RM’000
2013
RM’000
129,897
8,740
138,637
121,660
8,237
129,897
Valuation of investment properties
Investment properties are stated at fair value, which has been determined based on valuations at the reporting date.
Valuations are performed by accredited independent valuer based on the open market value basis.
Further details on the valuation are disclosed in Note 39(a).
Properties pledged as security
Investment properties with an aggregate carrying value of RM120,000,000 (2013: RM115,000,000) are pledged as
securities for borrowings as disclosed in Note 31.
The following amounts are recognised in the statement of comprehensive income:
Group
Rental income (Note 4)
Less: Direct operating expenses arising from investment properties that generated
rental income
104
2014
RM’000
2013
RM’000
6,400
5,803
(3,794)
2,606
(3,611)
2,192
18.
Prepaid land lease payments
Group
2014
RM’000
At 1 July
Amortisation for the year (Note 8)
Disposal
At 30 June
Analysed as:
Short term leasehold land
Long term leasehold land
Amount to be amortised:
- Not later than one year
- Later than one year but not later than five years
- Later than five years
19.
2013
RM’000
2,369
(54)
(827)
1,488
2,451
(82)
2,369
1,488
1,488
2,369
2,369
54
162
1,272
1,488
82
245
2,042
2,369
Investment in subsidiaries
Company
2014
2013
RM’000
RM’000
Less: Accumulated impairment losses
38,028
(7,880)
30,148
38,028
(7,880)
30,148
105
19.
Investment in subsidiaries (contd.)
Details of the subsidiaries are as follows:
Name of subsidiaries
Country of
incorporation
Equity interest
held (%)
2014
2013
Held by the Company:
106
DNP Garment Manufacturing Sdn. Bhd.
Malaysia
100
100
Manufacture of textile garments
Sri Rampaian Sdn. Bhd.
Malaysia
100
100
Sedimas Sendirian Berhad
Malaysia
100
100
DNP Garments Lanka (Private)
Limited * , #
Sri Lanka
100
100
Ceased operation
Angel Wing (M) Sdn. Bhd.
Malaysia
100
100
Property development
Harta-Aman Sdn. Bhd.
Malaysia
100
100
Hartamaju Sdn. Bhd.
Malaysia
100
100
Nikmat Jaya Sdn. Bhd.
Malaysia
100
100
Property development and
investment
D & P Realty Sdn. Bhd.
Malaysia
100
100
Property investment
Premium Strategy (M) Sdn. Bhd.
Malaysia
100
100
Investment holding
Jayamuria (M) Sdn. Bhd.
Malaysia
100
100
Investment holding
Wing Tai Pengurusan Sdn. Bhd.
Malaysia
100
100
Investment holding
Sedi-Intan Sdn. Bhd.
Malaysia
100
100
Trading in garments
DNP Enterprises Sdn. Bhd.
Malaysia
100
100
General merchant and trading
Wing Tai Clothing Sdn. Bhd.
(formerly known as DNP Clothing
Sdn. Bhd.)
Malaysia
100
100
Retailing of garments
Wing Tai Fashion Sdn. Bhd.
(formerly known as DNP Fashion
Sdn. Bhd.)
Malaysia
100
100
19.
Equity interest
held (%)
2014
2013
British Virgin
Islands
100
100
Investment holding
Singapore
100
100
Investment holding
Dragon & Phoenix Serba Pakaian
Sdn. Bhd.
Malaysia
100
100
DNP Commercial Laundry Lanka
(Private) Limited *, #
Sri Lanka
100
100
Ceased operation
DNP Sportswear Lanka (Private)
Limited *, #
Sri Lanka
100
100
Ceased operation
Sediperak Sdn. Bhd.
Malaysia
100
100
Ceased operation
Tanako Sdn. Bhd.
Malaysia
100
100
Ceased operation
Malaysia
100
100
Chanlai Sdn. Bhd.
Malaysia
100
100
Malaysia
100
100
DNP Hartajaya Sdn. Bhd.
Malaysia
100
100
DNP Land Sdn. Bhd.
Malaysia
100
100
Grand Eastern Realty & Development
Sdn. Bhd.
Malaysia
100
100
Starpuri Development Sdn. Bhd.
Malaysia
100
100
Tanahnaga Sdn. Bhd.
Malaysia
100
100
Country of
incorporation
Held by the Company (contd.):
Nian Sheng Investments Limited
Winswift Investment Pte. Ltd.*
Held through subsidiaries:
107
19.
Country of
incorporation
Equity interest
held (%)
2014
2013
Held through subsidiaries (contd.):
Malaysia
100
100
investment
DNP Jaya Sdn. Bhd.
Malaysia
100
100
Property investment
Seniharta Sdn. Bhd.
Malaysia
100
100
Property investment
Malaysia
100
100
Property investment
Hamden Pte. Ltd.
Singapore
100
100
Investment holding
Simtron Limited *
Hong Kong
100
100
Investment holding
Tribridge International Limited
British Virgin
Islands
100
100
Investment holding
Malaysia
100
100
Project management and
maintenance of properties
DNP Property Management Sdn. Bhd.
* Audited by firms other than Ernst & Young
# Classified as discontinued operations since July 2006
Impairment assessment
The management of the Company carried out review of the recoverable amount of its investment in subsidiaries when
there is an indication of impairment. There is no further impairment loss to be recognised in the current financial year.
The recoverable amount was based on the value in use and was determined at the cash generating unit ("CGU") which
consists of the assets of the investment in subsidiaries. In determining value in use for the CGU, the discount rate
applied to cash flow projections is the Group's weighted average cost of capital.
108
20.
Investment in an associate
Group
2014
RM’000
39
39
(39)
-
2013
RM’000
39
(3)
36
36
Details of the associate are as follows:
Name of associate
Country of
incorporation
Equity interest
held (%)
2014
2013
Principal activity
Held through subsidiary:
Cyber Cosmos Limited
British Virgin
Islands
25
25
Investment in technology –
related Companies
The financial information of the associate is not individually material.
Impairment assessment
As at 30 June 2014, the Group carried out a review of the recoverable amount of its investment in Cyber Cosmos
Limited, an associate due to the cessation of its operation. A full impairment loss of RM39,000 has been recognised in
profit or loss, reducing the net carrying amount of the investment to RMnil as at 30 June 2014.
21.
Investment in joint ventures
Group
2014
RM’000
8,585
26,904
35,489
Company
2013
RM’000
27,581
(3,243)
24,338
2014
RM’000
2013
RM’000
125
125
125
125
109
21.
Investment in joint ventures (contd.)
Details of the joint ventures are as follows:
Name of joint ventures
Country of
incorporation
Equity interest
held (%)
2014
2013
Held through Company:
Malaysia
50
50
Property investment
PT Windas Development *
Indonesia
25~
25
investment
Uniqlo (Malaysia) Sdn. Bhd.
Malaysia
45
45
Kualiti Gold Sdn. Bhd.
Held through subsidiaries:
* Wing Tai Land Pte. Ltd., a subsidiary of the ultimate holding company of the Company, Wing Tai Holdings Limited,
has a 45% (2013: 45%) interest in PT Windas Development.
~ Presented as “assets of disposal group classified as held for sale” as disclosed in Note 12(b)
Summarised financial information of Kualiti Gold and Uniqlo, the material joint ventures, are set out below. The
summarised information represents the amounts in the MFRS financial statements of the joint ventures and not the
Group’s share of those amounts.
Summarised statement of financial position
Kualiti Gold
2014
2013
RM’000
RM’000
110
Uniqlo
2014
RM’000
2013
RM’000
Non-current assets
213,600
198,850
66,030
42,044
Cash and cash equivalents
Other current assets
Total current assets
Total assets
3,229
762
3,991
217,591
9,183
1,699
10,882
209,732
12,907
62,406
75,313
141,343
13,633
43,703
57,336
99,380
Current liabilities (excluding trade and other
payables and provisions)
Trade and other payables and provisions
Total current liabilities
(108,760)
(15,688)
(124,448)
(96,760)
(11,729)
(108,489)
(10,219)
(51,491)
(61,710)
(44,358)
(44,358)
Non-current liabilities (excluding trade and
other payables and provisions)
Trade and other payables and provisions
Total non-current liabilities
(107,939)
(107,939)
(107,923)
(107,923)
(769)
(769)
(938)
(938)
Total liabilities
Net (liabilities)/assets
(232,387)
(14,796)
(216,412)
(6,680)
(62,479)
78,864
(45,296)
54,084
21.
Investment in joint ventures (contd.)
Summarised statement of comprehensive income
Revenue
Depreciation and amortisation
Interest income
Interest expense
(Loss)/Profit before tax
Income tax expense
(Loss)/Profit after tax
Kualiti Gold
2014
2013
RM’000
RM’000
2014
RM’000
2013
RM’000
4,803
1,386
19
8,341
2,605
(11,622)
(40)
(11,662)
(11,662)
285,257
11,881
169
47
35,032
(10,252)
24,780
24,780
186,678
7,320
319
14
34,358
(11,439)
22,919
22,919
155
155
(3,011)
(3,011)
(3,011)
Uniqlo
Reconciliation of the summarised financial information presented above to the carrying amount of the Group’s interest
in joint ventures:
Kualiti Gold
2014
2013
RM’000
RM’000
Net (liabilities)/assets at 1 July
(Loss)/Profit for the year
Adjustment for preference shares interest
receivable
Net (liabilities)/assets at 30 June
Interest in joint ventures
Share of losses recognised in other receivables*
Carrying value of Group’s interest in joint
ventures
Uniqlo
2014
RM’000
2013
RM’000
(3,134)
(11,662)
(14,796)
(3,669)
(3,011)
(6,680)
54,084
24,780
78,864
31,165
22,919
54,084
3,592
(11,204)
50%
(5,602)
5,602
3,546
(3,134)
50%
(1,567)
1,567
78,864
45%
35,489
-
54,084
45%
24,338
-
35,489
24,338
-
-
* This relates to losses recognised using the equity method in excess of the carrying amount of the investment in
joint venture.
111
22.
Deferred tax
Group
At 1 July
Recognised in profit or loss (Note 11):
- continuing operations
At 30 June
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
(24,120)
(14,669)
1,524
1,905
1,482
(22,638)
(9,451)
(24,120)
(130)
1,394
(381)
1,524
(24,665)
2,027
(22,638)
(27,197)
3,077
(24,120)
1,394
1,394
1,524
1,524
Presented after appropriate offsetting as
follows:
Deferred tax assets
Deferred tax liabilities
The components and movements of deferred tax assets and liabilities during the year prior to offsetting are as follows:
Deferred tax assets of the Group:
Provisions
RM’000
112
Unused tax
losses and
unabsorbed
capital
allowances
RM’000
Unutilised
tax
credits
RM’000
Total
RM’000
At 1 July 2013
Recognised in profit or loss
At 30 June 2014
(15,276)
3,927
(11,349)
(3,858)
1,246
(2,612)
(14,797)
(14,797)
(33,931)
5,173
(28,758)
At 1 July 2012
At 30 June 2013
(6,873)
(8,403)
(15,276)
(2,814)
(1,044)
(3,858)
(14,797)
(14,797)
(24,484)
(9,447)
(33,931)
22.
Deferred tax (contd.)
Deferred tax liabilities of the Group:
Accelerated
capital
allowances
RM’000
Revaluation
of land and
buildings
RM’000
Total
RM’000
At 1 July 2013
At 30 June 2014
3,341
111
3,452
6,470
(3,802)
2,668
9,811
(3,691)
6,120
At 1 July 2012
At 30 June 2013
3,104
237
3,341
6,711
(241)
6,470
9,815
(4)
9,811
Deferred tax assets of the Company:
Unused tax
losses and
unabsorbed
capital
allowances
RM’000
Provisions
RM’000
Total
RM’000
At 1 July 2013
At 30 June 2014
(823)
(59)
(882)
(486)
(96)
(582)
(1,309)
(155)
(1,464)
At 1 July 2012
At 30 June 2013
(774)
(49)
(823)
(230)
(256)
(486)
(1,004)
(305)
(1,309)
Deferred tax liabilities of the Company:
Accelerated
capital
allowances
RM’000
Revaluation
of land and
buildings
RM’000
Total
RM’000
At 1 July 2013
At 30 June 2014
773
51
824
2,060
(26)
2,034
2,833
25
2,858
At 1 July 2012
At 30 June 2013
788
(15)
773
2,121
(61)
2,060
2,909
(76)
2,833
113
22.
Deferred tax (contd.)
Deferred tax assets have not been recognised in respect of the following items:
Group
Unused tax losses
Unabsorbed capital allowances
Other deductible temporary differences
2014
RM’000
2013
RM’000
40,211
850
45,889
86,950
20,310
766
56,962
78,038
The availability of the unused tax losses, unabsorbed capital allowances and other deductible temporary differences
for offsetting against future taxable profits of the respective subsidiaries are subject to no substantial change in
shareholdings under the Income Tax Act, 1967 and guidelines issued by the tax authority.
No deferred tax assets were recognised in respect of the above as it is not probable that future taxable profit will be
available against which these items can be utilised.
23.
Group
2014
RM’000
Company
2013
RM’000
2014
RM’000
2013
RM’000
3,824
3,824
3,824
5,740
5,740
5,740
Current
Trade receivables
Third parties
Subsidiaries
Companies connected to directors
Retention sums receivables
Trade receivables, net
114
12,815
1,079
61,000
74,894
(556)
74,338
108,689
1,072
53,068
162,829
(506)
162,323
23.
Trade and other receivables (contd.)
Group
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
7
-
-
-
Current (contd.)
Other receivables
Amounts due from related parties:
Subsidiaries
- interest bearing
- interest free
Other related companies
Associate
Joint ventures
Deposits
Sundry receivables
116
475
49,112
49,710
7,984
1,718
59,412
(778)
58,634
132,972
116
6
476
47,520
48,118
6,293
783
55,194
(775)
54,419
216,742
210,831
313,894
60,708
585,433
442
74
585,949
(54,033)
531,916
535,740
184,653
371,911
52,902
609,466
82
68
609,616
(50,058)
559,558
565,298
Non-current
Other receivables
Amount due from a joint venture (unsecured):
- interest bearing
- interest free
Total trade and other receivables (current and
non-current)
Add: Cash and bank balances (Note 26)
Total loans and receivables
-
132,972
226,096
359,068
29,102
2,668
31,770
(31,770)
-
216,742
105,601
322,343
-
-
535,740
76,336
612,076
565,298
1,322
566,620
115
23.
(a) Trade receivables
Trade receivables are non-interest bearing and are generally on 30 to 90 days (2013: 30 to 90 days) terms. They are
recognised at their original invoice amounts which represent their fair values on initial recognition.
Ageing analysis of trade receivables
The ageing analysis of the Group's and the Company's trade receivables is as follows:
Group
Not past due
Past due:
1 to 90 days
91 to 180 days
More than 180 days
Impaired
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
65,433
114,588
3,824
5,740
6,698
149
2,058
8,905
556
74,894
46,389
265
1,081
47,735
506
162,829
3,824
5,740
Receivables that are neither past due nor impaired
Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with
the Group.
None of the Group's and the Company's trade receivables that are neither past due nor impaired have been
renegotiated during the financial year.
Receivables that are past due but not impaired
The Group has trade receivables amounting to RM8,905,000 (2013: RM47,735,000) that are past due at the
reporting date but not impaired.
As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented
by the carrying amounts in the statement of financial position. The Management has taken reasonable steps to
ensure that receivables that are past due but not impaired are measured at their realisable values. A significant
portion of these receivables are regular customers that have been transacting with the Group. The Group uses
ageing analysis to monitor the credit quality of the receivables and any receivables having significant balances past
due more than certain number of days, which are deemed to have higher credit risk, are monitored individually.
None of the Group's trade receivables that are past due but not impaired have been renegotiated during the
financial year.
116
23.
(b)Amounts due from companies connected to directors (current)
The companies connected to directors refer to Wing Tai Corporation Ltd., Outrade Industries Ltd. and Wing Tai
Enterprise Ltd., which are connected to Mr. Cheng Wai Keung and Mr. Edmund Cheng Wai Wing, directors of the
Company. These companies are incorporated in Hong Kong.
The amounts due from companies connected to directors are unsecured, interest free and receivable in
accordance with normal terms of trade.
The normal trade credit terms range from 30 to 90 days (2013: 30 to 90 days). Other credit terms are assessed and
approved on a case-by-case basis.
(c) Amounts due from related parties (current)
The related companies refer to Wing Tai Holdings Limited's subsidiaries, i.e. Wing Tai Property Management Pte.
Ltd. and Wing Tai Clothing Pte. Ltd., both of which are incorporated in Singapore.
The amount due from the Group's associate company, Cyber Cosmos Limited ("Cyber Cosmos"), is advanced via
a wholly owned subsidiary, namely Simtron Limited.
The joint ventures refer to Kualiti Gold Sdn. Bhd. ("Kualiti Gold") and Uniqlo (Malaysia) Sdn. Bhd., both of which are
incorporated in Malaysia.
The amount due from Kualiti Gold relates to the 54,380,000 (2013: 48,380,000) units of 5% cumulative redeemable
preference shares of RM1 each issued by Kualiti Gold to the Company.
The other amounts due from related parties are unsecured, interest free, receivable on demand and to be settled
in cash except for certain amounts due from subsidiaries which bear interest rates of 5.00% (2013: 4.00%) per
annum.
(d)Amount due from a joint venture (non-current)
The amount due from the Group's joint venture, PT Windas Development ("PT Windas"), is advanced via a wholly
owned subsidiary, namely Winswift Investment Pte. Ltd. ("Winswift").
In view of the uncertainties on the recoverability of the amount due from the joint venture, management has made
a total allowance for impairment of RM32,636,000 (2013: RM31,770,000) as at 30 June 2014. The allowance for
impairment has been recognised in profit or loss.
At the request of PT Windas, Winswift had agreed to suspend the interest charge on the outstanding interest
bearing portion with effect from 10 September 2008. The interest charge has been reinstated from 19 August 2011
to 19 August 2013.
On 25 June 2014, Premium Strategy (M) Sdn Bhd, a wholly owned subsidiary of the Company, entered into
a conditional Sale and Purchase Agreement to dispose its 25% interest in the share capital of PT Windas
Development, a joint venture together with the novation of loan owing by PT Windas Development to Winswift
Investment Pte Ltd for a total consideration of USD8,174,603. Accordingly, the amount due from the joint venture
has been presented as “assets of disposal group classified as held for sale” as disclosed in Note 12(b).
On 5 September 2014, the disposal of the 25% interest in the share capital of PT Windas Development, a joint
venture and novation of the loan owing by PT Windas Development were completed as disclosed in Note 43(b).
117
23.
Receivables that are impaired
The Group's trade and other receivables that are impaired at the reporting date and the movement of the allowance
accounts used to record the impairment are as follows:
Individually impaired
Group
2014
RM’000
Trade and other receivables–nominal
amounts
Company
2013
RM’000
2014
RM’000
2013
RM’000
33,051
(33,051)
-
326,764
(54,033)
272,731
122,623
(50,058)
72,565
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
33,051
32,344
50,058
46,959
(32,636)
202
859
(128)
(14)
1,334
113
661
(67)
33,051
3,975
54,033
3,099
50,058
1,334
(1,334)
-
Movement in allowance accounts:
Group
At 1 July
Attributable to disposal group classified
as held for sale
Currency translation differences
Allowance made
Write off of allowance
Write back of allowance
At 30 June
Company
Trade and other receivables that are individually determined to be impaired at the reporting date relate to debtors
that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any
collateral or credit enhancements.
The amount due from one individual receivable constitutes approximately 84% (2013: 87%) of the total other
receivables (current and non-current) as at 30 June 2014.
Further details on related party transactions are disclosed in Note 38.
Other information on financial risks of trade and other receivables are disclosed in Note 40.
118
24.Inventories
Group
Cost
Finished goods
Properties held for sale - residential and commercial units
Properties held for sale - shop-offices and light industrial buildings
Raw materials
Work-in-progress
Net realisable value
Properties held for sale - residential and commercial units
Trading inventories
2014
RM’000
2013
RM’000
894
143,560
21,185
404
190
166,233
680
102,441
26,531
411
316
130,379
17,606
17,606
183,839
25,000
12,211
37,211
167,590
An amount of RMnil (2013: RM3,333,000) write down of inventories has been reversed when the related inventories
were sold above carrying amount.
The net carrying amount of properties held for sale and pledged as securities for borrowings as discussed in Note 31
is RM81,594,723 (2013: RM87,780,445).
25. Other current assets
Group
Prepaid operating expenses
Accrued billings in respect of property
development costs
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
1,966
3,135
76
194
22,234
24,200
45,446
48,581
76
194
119
26.
Group
Cash on hand and at banks
Deposits of up to three months maturity with
licensed banks
Deposits of more than three months maturity
with licensed banks
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
105,057
91,452
106
110
116,658
221,715
11,530
102,982
76,230
76,336
1,212
1,322
4,381
226,096
2,619
105,601
76,336
1,322
Included in cash at banks of the Group is RM101,074,111 (2013: RM85,719,886) held pursuant to Section 7A of the
Housing Developers (Control and Licensing) Act, 1966 and therefore restricted from use in other operations.
Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for
varying periods of between 2 days to 12 months depending on the immediate cash requirements of the Group and the
Company, and earn interests at the respective short-term deposit rates. The weighted average effective interest rates
as at 30 June 2014 for the Group and the Company were 2.95% (2013: 2.87%) and 1.84% (2013: 0.24%) respectively.
Other information on financial risks of cash and cash equivalents are disclosed in Note 40.
For the purpose of the statements of cash flows, cash and cash equivalents comprise the following at the reporting
date:
Group
Cash and cash equivalents
120
Company
2014
RM’000
2013
RM’000
221,715
102,982
2014
RM’000
76,336
2013
RM’000
1,322
27.
Share capital, share premium and treasury shares
Number of ordinary
shares of RM1 each
Share
capital
(issued
and fully
Treasury
paid)
shares
’000
’000
Amount
Share
capital
(issued
and fully
paid)
RM’000
Share
premium
RM’000
Total
share
capital
and share
premium
RM’000
325,205
118,085
443,290
857
144
1,001
326,062
346
118,575
346
444,637
Treasury
shares
RM’000
Group and Company
At 1 July 2012
to ESOS
Transfer from share option
reserve, arising from exercise
of ESOS (Note 28)
Purchase of treasury shares
At 30 June 2013
Issue of ordinary shares
pursuant to ESOS
granted under RSP
Transfer from share option
reserve, arising from exercise
of ESOS (Note 28)
Purchase of treasury shares
At 30 June 2014
325,205
857
326,062
(11,973)
-
(20)
(11,993)
-
(37)
(18,211)
151
-
151
31
182
-
146
-
146
120
266
-
326,359
67
118,793
67
445,152
326,359
(17)
(12,010)
Number of ordinary
shares of RM1 each
2014
2013
’000
’000
Authorised
At 1 July/30 June
(18,174)
400,000
400,000
(40)
(18,251)
Amount
2014
RM’000
2013
RM’000
400,000
400,000
(a) Share capital
The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary
shares carry one vote per share without restrictions and rank equally with regard to the Company's residual assets.
The Company has an employee share option plan under which options to subscribe for the Company's ordinary
shares have been granted to employees of the Group.
121
27.
Share capital, share premium and treasury shares (contd.)
(b)Treasury shares
Treasury shares relate to ordinary shares of the Company that are held by the Company. The amount consists of
the acquisition costs of treasury shares net of the proceeds received on their subsequent sale or issuance.
The shareholders of the Company, by an ordinary resolution passed in the Annual General Meeting held on 13
November 2013, renewed their approval for the Company's plan to repurchase its own shares.
During the current year, the Company repurchased its issued shares from the open market as follows:
Month
Number of
shares
Highest
price
RM
Lowest
price
RM
Average
price
RM
Value of
shares
RM’000
10,000
7,500
2.35
2.11
2.35
2.11
2.35
2.11
24
16
August 2013
February 2014
As at 30 June 2014, the cumulative total number of shares repurchased was 12,010,000 (2013: 11,992,500).
The repurchase transactions were financed by internally generated funds. The shares repurchased are being held
as treasury shares and carried at cost in accordance with the requirement of Section 67A of the Companies Act,
1965.
Of the total 326,358,732 (2013: 326,062,032) issued and fully paid ordinary shares as at 30 June 2014, 12,010,000
(2013: 11,992,500) are held as treasury shares by the Company. As at 30 June 2014, the number of outstanding
ordinary shares in issue and fully paid is therefore 314,348,732 (2013: 314,069,532) of RM1 each.
28.
Other reserves
Note
Revaluation
reserve
RM’000
Foreign
currency
translation
reserve
RM’000
Option/
Grant
reserve
RM’000
Total
RM’000
13,674
12,050
786
26,510
(379)
-
(379)
(379)
-
(1,072)
(1,451)
Group
At 1 July 2012
Impairment loss offset against
revaluation reserve
Transactions with owners:
Transfer to share premium, arising from
exercise of ESOS
ESOS/RSP expenses
At 30 June 2013
122
(1,072)
(1,072)
27
9
12,602
11,671
(346)
428
82
868
(346)
428
82
25,141
28.
Other reserves (contd.)
Note
Revaluation
reserve
RM’000
Foreign
currency
translation
reserve
RM’000
Option/
Grant
reserve
RM’000
Total
RM’000
12,602
11,671
868
25,141
Group
At 1 July 2013
Reversal of impairment loss offset
against revaluation reserve
Realisation of revaluation reserve
Vesting of ordinary shares granted
under RSP
Transfer to share premium, arising from
exercise of ESOS
ESOS/RSP expenses
Reserve of disposal group classified
as held for sale
-
(782)
-
(782)
87
87
(782)
-
87
(695)
-
(181)
(181)
27
9
12
At 30 June 2014
-
-
-
(266)
(266)
-
-
(67)
1,000
(67)
1,000
(181)
12,508
(10,695)
(10,695)
194
667
1,535
(10,695)
(10,209)
14,237
Revaluation
reserve
RM’000
Option/
Grant
reserve
RM’000
Total
RM’000
7,689
786
8,475
At 30 June 2013
7,689
(346)
428
82
868
(346)
428
82
8,557
At 1 July 2013
7,689
868
8,557
7,689
(266)
(67)
1,000
667
1,535
(266)
(67)
1,000
667
9,224
Note
Company
At 1 July 2012
Transfer to share premium, arising from exercise of ESOS
ESOS/RSP expenses
Vesting of ordinary shares granted under RSP
Transfer to share premium, arising from exercise of ESOS
ESOS/RSP expenses
At 30 June 2014
27
9
27
9
123
28.
Other reserves (contd.)
(a) Revaluation reserve
The revaluation reserve represents increases in the fair value of freehold land and buildings, net of tax, and
decreases to the extent that such decreases relate to an increase on the same asset previously recognised in other
comprehensive income.
(b)Foreign currency translation reserve
The foreign currency translation reserve represents exchange differences arising from the translation of the
financial statements of foreign operations whose functional currencies are different from that of the Group's
presentation currency.
(c) Option/Grant reserve
(i) Employee Share Option Scheme (“ESOS”)
ESOS included in the option reserve represents the equity-settled share options granted to employees (Note
30(a)). The reserve is made up of the cumulative value of services received from employees recorded over the
vesting period commencing from the grant date of equity-settled share options, and is reduced by the expiry or
exercise of the share options.
(ii) Restricted Share Plan (“RSP”)
RSP included in the grant reserve represents the equity-settled shares granted to employees (Note 30(b)). The
reserve is made up of the cumulative value of services received from employees recorded over the vesting
period commencing from the grant date and is reduced by the forfeiture or vesting of the shares.
29. Retained earnings
Prior to the year of assessment 2008, Malaysian companies adopted the full imputation system. In accordance with
the Finance Act 2007 which was gazetted on 28 December 2007, companies shall not be entitled to deduct tax on
dividend paid, credited or distributed to its shareholders, and such dividends will be exempted from tax in the hands
of the shareholders ("single tier system"). However, there is a transitional period of six years, expired on 31 December
2013, to allow companies to pay franked dividends to their shareholders under limited circumstances. Companies also
have an irrevocable option to disregard the 108 balance and opt to pay dividends under the single tier system. The
change in the tax legislation also provides for the 108 balance to be locked-in as at 31 December 2007 in accordance
with Section 39 of the Finance Act 2007.
The Company has elected for the irrevocable option to disregard the 108 balance as at 30 June 2011. Hence, the
Company will be able to distribute dividends out of its entire retained earnings as at 30 June 2014 under the single tier
system.
30.
Employee benefits
(a) Employees' Share Options Scheme ("ESOS")
The Company’s ESOS is governed by the bye-laws approved by the shareholders at an Extraordinary General
Meeting held on 11 May 2005. The ESOS was implemented on 16 May 2005 and is to be in force for a period of 10
years from the date of implementation.
124
30.
Employee benefits (contd.)
(a) Employees' Share Options Scheme ("ESOS") (contd.)
The Company’s ESOS is governed by the bye-laws approved by the shareholders at an Extraordinary General
Meeting held on 11 May 2005. The ESOS was implemented on 16 May 2005 and is to be in force for a period of
10 years from the date of implementation.
The salient features of the ESOS are as follows:
i. The ESOS shall be in force for a period of ten years from the effective date of the ESOS.
ii. The Directors (including Non-Executive Directors) and employees who as at the date of offer are confirmed with
at least one year of continuous service in Wing Tai Malaysia Berhad and its subsidiaries ("the Group") are
eligible to participate in the scheme.
iii.
The price at which the grantee is entitled to subscribe for the ESOS shall be at a discount of not more than ten
percent of the weighted average market price of the shares for the five market days immediately preceding the
Date of Offer of the option. Notwithstanding this, the exercise price per share shall in no event be less than its
par value.
iv. The total number of shares which may be made available under the ESOS shall not exceed fifteen percent of
the issued and paid-up share capital of the Company at any point in time during the existence of the ESOS.
v. The ESOS will allow granting of options to all eligible directors and employees by giving them the rights to
subscribe for new shares of RM1.00 each, subject to the terms and conditions of the bye-laws of the ESOS.
vi. Not more than fifty percent (or such percentage as allowable by the relevant authorities) of the shares available
under the ESOS shall be allocated in aggregate, to the Directors and senior management of the Group.
vii.Not more than ten percent (or such percentage as allowable by the relevant authorities) of the shares available
under the ESOS shall be allocated to any Eligible Person who, either singly or collectively through persons
connected with the Eligible Person (as defined in the Listing Requirements), holds twenty percent or more of
the issued and paid-up share capital of the Company.
The following table illustrates the number and weighted average exercise price ("WAEP") of, and movements in,
share options during the financial year:
Outstanding
at 1 July
2013
’000
Option B
Option C
Option D
Option E
Option F
WAEP
Number of share options
Movement during the year
Terminated/
forfeited/
expired
Granted
Exercised
’000
’000
’000
Outstanding
at 30 June
2014
’000
Option
price per
share
RM
Date of
expiry
1.00
1.00
1.00
1.20
1.20
15.5.2015
15.5.2015
15.5.2015
15.5.2015
15.5.2015
1,000
5
46
600
325
1,976
-
(150)
(150)
-
1,000
5
46
600
175
1,826
1.09
-
1.20
-
1.08
There were no share options granted during the financial year ended 30 June 2014.
125
30.
Outstanding
at 1 July
2012
’000
Option B
Option C
Option D
Option E
Option F
WAEP
Number of share options
Terminated/
forfeited/
expired
Granted
Exercised
’000
’000
’000
Outstanding
at 30 June
2013
’000
Option
price per
share
RM
Date of
expiry
1.00
1.00
1.00
1.20
1.20
15.5.2015
15.5.2015
15.5.2015
15.5.2015
15.5.2015
1,000
5
187
600
1,041
2,833
-
(141)
(716)
(857)
-
1,000
5
46
600
325
1,976
1.11
-
1.17
-
1.09
There were no share options granted during the financial year ended 30 June 2013.
The share options granted to directors and senior management since the commencement of the scheme represent
approximately 2.3% (2013: 2.3%) of the issued and paid-up share capital of the Company.
i. Details of share options outstanding at the end of the year
126
WAEP
RM
Exercise period
2014
Option B
Option C
Option D
Option E
Option F
1.00
1.00
1.00
1.20
1.20
15.12.2005 – 15.5.2015
15.12.2005 – 15.5.2015
14.2.2007 – 15.5.2015
10.6.2010 – 15.5.2015
10.6.2010 – 15.5.2015
2013
Option B
Option C
Option D
Option E
Option F
1.00
1.00
1.00
1.20
1.20
15.12.2005 – 15.5.2015
15.12.2005 – 15.5.2015
14.2.2007 – 15.5.2015
10.6.2010 – 15.5.2015
10.6.2010 – 15.5.2015
30.
ii. Share options exercised during the year
As disclosed in Note 27, options exercised during the year resulted in the issuance of 150,600 (2013: 857,500)
ordinary shares at an average price of RM1.20 (2013: RM1.17) each. The related weighted average share price
at the date of exercise was RM2.61 (2013: RM2.00).
(b)Restricted share plan (“RSP”)
The Company's RSP is governed by the bye-laws approved by the shareholders at an Extraordinary General
Meeting held on 29 November 2011. The RSP was implemented on 5 January 2012 and is to be in force for a
period of 10 years from the date of implementation.
The salient features of the RSP are as follows:
i. The RSP shall be in force for a period of ten years from the effective date of the RSP.
ii. The employees and directors of Wing Tai Malaysia Berhad and its subsidiaries but exclude subsidiaries which
are dormant ("the Group") whose employment are confirmed in writing on or before the date of offer, are eligible
to participate in the scheme.
iii.
The Restricted Share Award represents the right of a participant to receive fully paid shares on a Vesting Date,
their equivalent value or combinations thereof, without any cash consideration payable by the participant, upon
the participant achieving pre-determined performance conditions and/or otherwise having performed well and/
or made a significant contribution to the Group.
iv. The number of new shares which may be issued and allotted under the RSP and ESOS on an aggregate basis,
will not be more than fifteen percent of the issued and paid-up share capital of the Company (excluding
treasury shares) at any point in time during the tenure of the RSP.
v.
The new shares to be allotted pursuant to the RSP shall upon allotment and issue, rank pari passu in all
respects with the existing issued shares of the Company except that the new shares so issued shall not be
entitled for any dividend, rights, allotment and/or other distribution declared, made or paid to shareholders
unless the new shares so allotted have been credited to the relevant securities accounts of the shareholders
maintained by the Bursa Depository before the entitlement date and will be subjected to all provisions of the
Articles relating to the transfer, transmission and otherwise.
vi. Not more than ninety percent (or such percentage as allowable by the relevant authorities) of the shares
available under the RSP shall be allocated in aggregate, to the Directors and senior management of the Group.
In addition, not more than ten percent (or such percentage as allowable by the relevant authorities) of the
shares available under the RSP shall be allocated to any Eligible Person who, either singly or collectively
through persons connected with the Eligible Person (as defined in the Listing Requirements), holds twenty
percent or more of the issued and paid-up share capital of the Company.
127
30.
(b)Restricted share plan (“RSP”) (contd.)
The following table illustrates the movement of shares granted by the Company under the RSP to its eligible
employees or directors during the financial year:
Number of ordinary shares awarded
Shares
granted on
01.03.2013
Shares
granted on
23.09.2013
At
30 June
2014
’000
At
1 July 2013
’000
Granted
’000
529
-
(42)
(146)
341
1.03.2014 - 1.03.2016
529
577
577
(40)
(82)
(146)
537
878
23.09.2014 - 23.09.2016
Forfeited
’000
Vested
’000
Vesting period
Number of ordinary shares awarded
Shares
granted on
01.03.2013
At
1 July 2012
’000
Granted
’000
-
535
Forfeited
’000
(6)
Vested
’000
At
30 June
2013
’000
-
529
Vesting period
1.03.2014 - 1.03.2016
The RSP granted to directors and senior management during the financial year ended 30 June 2014 and since the
commencement of the scheme represent approximately 0.4% (2013 : 0.2%) of the issued and paid-up capital of
the Company.
128
30.
(b)Restricted share plan (“RSP”) (contd.)
Fair value of restricted share granted:
The fair value of the restricted shares granted were based on the following assumptions:
30.06.2014
RSP
Grant date
Share price (RM)
Expected dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
- 1 year
- 2 year
- 3 year
1.03.2013
1.90
4.21
21.04
23.09.2013
2.50
4.00
25.96
2.85
2.99
3.08
3.01
3.05
3.26
30.06.2013
RSP
Grant date
Share price (RM)
Expected dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
- 1 year
- 2 year
- 3 year
1.03.2013
1.90
4.21
21.04
2.85
2.99
3.08
129
31.
Borrowings
Group
2014
RM’000
2013
RM’000
29,446
113,432
142,878
40,196
25,705
3,221
69,122
27,000
169,878
18,000
87,122
Current
Secured:
Bank loans
- RM loan COF + 0.75%
Unsecured:
Revolving credits
Non-current
Secured:
Bank loans
Revolving credits
Bank loans (secured)
Total loans and borrowings
49,994
76,207
119,494
245,695
49,986
70,661
110,172
230,819
27,000
388,573
415,573
18,000
299,941
317,941
The remaining maturities of the loans and borrowings as at 30 June 2014 are as follows:
Group
On demand or within one year
More than 1 year and less than 2 years
More than 2 years and less than 5 years
More than 5 years
2014
RM’000
2013
RM’000
169,878
188,208
57,487
415,573
87,122
123,042
107,174
603
317,941
COF denotes Costs of Fund
Revolving credit
The banking and other credit facilities for certain subsidiaries amounting to RM27,000,000 (2013: RM18,000,000) were
obtained from financial institutions on the undertaking that the subsidiaries will not pledge or execute any charges on
its assets.
130
31.
Borrowings (contd.)
RM loan COF+0.75%
The facility is repayable by sixteen quarterly instalments commencing twelve months after the date of the first
drawdown or by way of redemption of the land titles deposited with the bank at 19% of the selling price of the units,
whichever is earlier. It is secured by deposits of certain land titles of a development project (Note 24) of the Group and
the corporate guarantee granted by the Company.
RM loan COF+1.00%
The facility is repayable by a bullet repayment at the end of the tenure which is sixty months from the date of the first
drawdown. It is secured by certain land under property development (Note 16(b)) of the Group and the corporate
guarantee granted by the Company.
RM loan COF+1.25%
The facility is repayable by twenty seven quarterly instalments commencing on the fourth month of the date of the first
drawdown. It is secured by certain investment properties (Note 17) of the Group and the corporate guarantee granted
by the Company.
RM loan COF+1.25%
The facility is repayable by twelve quarterly installments commencing twenty seven months from the date of the first
drawdown. It is secured by certain land under property development (Note 16(b)) of the Group and the corporate
RM loan COF+1.25%
The facility is repayable by eight quarterly installments commencing twenty four months from the date of the first
drawdown. It is secured by deposits of certain land titles of a development project (Note 24) of the Group and the
corporate guarantee granted by the Company.
RM loan COF+1.25%
The facility is repayable by eight quarterly installments commencing thirty nine months from the date of the first
drawdown. It is secured by certain land under property development (Note 16(a)) of the Group and the corporate
RM loan COF+1.50%
The facility is repayable by quarterly instalments on a step-up basis. It is secured by certain land and buildings (Note
15(b)) of the Group and corporate guarantee granted by the Company.
RM loan COF+1.50%
The facility is repayable by six instalments commencing thirty six months from the date of the first drawdown on a prefixed repayment month schedule. It is secured by certain land under property development (Note 16(b)) of the Group
and corporate guarantee granted by the Company.
Other information on financial risks of borrowings is disclosed in Note 40.
131
32. Deferred income
Group
At 1 July
Reversal of unrealised sales to joint venture
Transfer from property development costs (Note 16(b))
At 30 June
2014
RM’000
2013
RM’000
25,563
25,563
19,382
18,475
(12,294)
25,563
On 14 May 2009, Starpuri Development Sdn. Bhd. ("Starpuri"), a wholly owned subsidiary of the Company, entered
into agreement for the sale of 115 units condominium to Kualiti Gold Sdn. Bhd. ("Kualiti Gold"), a joint venture of the
Company, for a cash consideration of RM139.75 million.
The deferred income recognised during the previous year relates to the unrealised profits on progress billings billed to
Kualiti Gold by Starpuri during that year.
33.
Group
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
52,872
737
53,609
66,045
740
66,785
-
-
893
2,621
3,514
31,189
4,941
2,618
89,553
131,815
900
2,013
2,913
7,289
6,117
5,442
102,988
124,749
893
171,497
873
173,263
14
1,103
666
175,046
900
111,024
612
112,536
25
1,661
489
114,711
185,424
415,573
191,534
317,941
175,046
-
114,711
-
600,997
509,475
175,046
114,711
Current
Trade payables
Third parties
Other payables
Amounts due to related parties:
Subsidiaries
Related companies
Sundry payables
Accruals for payroll related expenses
Tenancy deposits received from customers
Accruals
Total trade and other payables
Add: Loans and borrowings (Note 31)
Total financial liabilities carried at
amortised cost
132
33.
Trade and other payables (contd.)
(a) Trade payables
Included in trade payables is retention sum amounting to RM44,176,667 (2013: RM35,117,751).
Trade payables are non-interest bearing and the normal trade credit terms granted to the Group range from 30 to
120 days (2013: 30 to 120 days).
The companies connected to directors refer to Wing Tai Corporation Ltd. and Outrade Industrial Ltd., which are
companies connected to Mr. Cheng Wai Keung and Mr. Edmund Cheng Wai Wing, directors of the Company.
These companies are incorporated in Hong Kong.
The amounts due to companies connected to directors are unsecured, interest free and repayable in accordance
with normal terms of trade.
(b)Amounts due to related companies
The related companies refer to Wing Tai Holdings Limited's subsidiaries, i.e. Wing Tai Retail Management Pte.
Ltd., Wing Tai Clothing Pte. Ltd., Wing Tai Property Management Pte. Ltd., Wing Tai Land Pte. Ltd. and Winshine
Investment Pte. Ltd., which are incorporated in Singapore.
The amounts due to the related companies are unsecured, interest free, repayable on demand and to be settled in
cash.
Further details on related party transactions are disclosed in Note 38.
34.
Other current liabilities
Group
Progress billing in respect of property development costs
2014
RM’000
2013
RM’000
2,964
-
133
35.Commitments
a) Capital commitments
Capital expenditure as at the reporting date is as follows:
Group
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
49,495
55,495
49,495
55,495
Capital expenditure
Approved and contracted for:
Cost of investment in
Kualiti Gold Sdn. Bhd. ^
^
On 23 April 2008, the Company entered into a Joint Venture and shareholders' Agreement for the acquisition
by Kualiti Gold Sdn. Bhd., the joint venture company of 115 condominium units and an option to acquire up to
115 additional car parking bays from Starpuri Development Sdn. Bhd., a wholly owned subsidiary of the
Company, to operate the condominium as serviced apartments and to carry on activities ancillary thereto. The
Company's share of the cost of investment in the joint venture is estimated to be up to RM104 million and the
cash to be injected by the Company will be via subscription for or providing loan capital including redeemable
preference shares or other means of funding.
b) Operating lease commitments – as lessee
In addition to the prepaid land lease payments disclosed in Note 18, the Group has entered into non-cancellable
operating lease agreements for the use of buildings. These leases have an average tenure of between two to three
years with renewal or purchase option included in the contracts. Certain contracts include escalation clauses
or contingent rental arrangements computed based on sales achieved while others include fixed rentals for an
average of three years. There are no restrictions placed upon the Group by entering into these leases.
Minimum lease payments, including amortisation of prepaid land lease payments recognised in profit or loss for
the financial year ended 30 June 2014 amounted to RM31,084,000 (2013: RM30,150,000).
Future minimum rentals payable under non-cancellable operating leases (excluding prepaid land lease payments)
at the reporting date are as follows:
Group
Not later than 1 year
Later than 1 year but not later than 5 years
134
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
30,429
24,300
54,729
27,445
41,152
68,597
-
-
36.
Corporate guarantees
At the reporting date, the Company's exposure to credit risk is represented by a nominal amount of RM471,271,000
(2013: RM374,350,000) relating to corporate guarantees provided by the Company to banks on subsidiaries' and a
joint venture’s bank loans.
37. Material litigation
To the best of the knowledge of the Group, neither the Company nor its subsidiaries are engaged in any material
litigation, claims or arbitration either as plaintiff or defendant and the directors have no knowledge of any proceeding
pending or threatened against the Company and/or its subsidiaries or of any fact likely to give rise to any proceeding
which might materially affect the position or business of the Company and/or its subsidiaries.
38.
Related party disclosures
(a) In addition to the related party information disclosed elsewhere in the financial statements, the Group and the
Company had the following transactions with related parties during the financial year:
2014
RM’000
2013
RM’000
(i),(xi)
(ii),(xi)
(iii),(xi)
(xi)
(xi)
769
138
1,852
184
532
854
143
1,809
19
-
(iv)
1,223
556
(viii)
(vi)
(ix)
1,314
6,663
98
892
56,577
5,659
705
(v)
688
-
Group
Related companies:*
Management fees
License fees and central marketing contribution
Administration charges
Rental income
Sale of motor vehicle
Director:
Professional fee charges
Joint ventures:
Administration charges
Progress billings from sale of development properties
Advances to joint ventures
Interest income
Director and persons connected to the director:
Sales of development properties
135
38.
Related party disclosures (contd.)
2014
RM’000
2013
RM’000
60,474
(31,840)
6,000
12,400
74
6,531
9,805
3,214
(10,329)
5,000
12,400
70
6,157
6,648
Company
Advances from subsidiaries, net
Repayments of advances from subsidiaries, net
Advances to a joint ventures
Dividend income from subsidiaries
Rental income charged to subsidiaries
Management fees charged to subsidiaries
Interest expense charged to subsidiaries
(vii)
(x)
*
Related companies are companies within Wing Tai Holdings Limited group.
(i)
Management fees charged by Lanson Place Hospitality Management (Malaysia) Limited, a company
controlled by Wing Tai Properties Limited, an associate of Wing Tai Holdings Limited.
(ii)
License fees and central marketing contribution charged by Lanson Place Hospitality Management (Malaysia)
Limited and Lanson Place Hotels and Apartments (Bermuda) Ltd., companies controlled by Wing Tai Properties Limited, an associate of Wing Tai Holdings Limited.
(iii)
Administration charges charged by Wing Tai Property Management Pte. Ltd. and Wing Tai Retail Pte. Ltd.
(iv)
Professional fee is charged by Ghazi & Lim, a firm in which a director of the Company is a partner.
(v)
The sale of properties by the property development companies in the Group open to all members of the
public at all times and may in the ordinary course of business sell to any directors or any persons
connected to them who may wish to purchase the properties which have been launched for sales by the
property development companies.
(vi)
Progress billings from the sale of 115 units condominium by Starpuri Development Sdn. Bhd., a wholly
owned subsidiary of the Company to Kualiti Gold Sdn. Bhd., a joint venture.
(vii) Rental arose from premises occupied by the subsidiaries.
(viii) Administration charges charged by Wing Tai Clothing Sdn. Bhd. (formerly known as DNP Clothing Sdn. Bhd.).
(ix) The interest expense charged to PT Windas Development, a joint venture.
(x)
Interest is charged on the amounts due from subsidiaries.
(xi) The directors are of the opinion that the transactions above have been entered into in the normal course of
business and have been established on terms and conditions that are not materially different from those
obtainable in transactions with other parties.
Information regarding outstanding balances from related party transactions as at 30 June 2014 are disclosed in
Notes 23 and 33.
136
38.
(b)Compensation of key management personnel
The remuneration of directors and other members of key management during the year is as follows:
Group
Short term employee benefits
Post-employment benefits:
Defined contribution plan
Company
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
6,616
7,552
3,346
4,319
651
7,267
792
8,344
243
3,589
417
4,736
2014
RM’000
2013
RM’000
2014
RM’000
2013
RM’000
5,514
6,590
2,600
3,710
Included in the total key management personnel are:
Group
Directors' remuneration (Note 10)
Company
Employee Share Options Scheme (“ESOS”)
Executive directors of the Group and the Company and other members of key management have been granted the
following number of options under the ESOS:
Group
2014
RM’000
At 1 July
Granted
Exercised
At 30 June
1,705
(45)
1,660
Company
2013
RM’000
1,960
(255)
1,705
2014
RM’000
2013
RM’000
1,600
1,600
1,600
1,600
The share options were granted on the same terms and conditions as those offered to other employees of the
Group and the Company as disclosed in Note 30(a).
137
38.
(b)Compensation of key management personnel (contd.)
Restricted share plan (“RSP”)
Executive directors of the Group and the Company and other members of key management have been granted the
following number of shares under the RSP:
Group
2014
RM’000
359
397
(50)
(99)
607
At 1 July
Granted
Forfeited
Vested
At 30 June
Company
2014
RM’000
2013
RM’000
2013
RM’000
275
317
(37)
(77)
478
359
359
275
275
The share options were granted on the same terms and conditions as those offered to other employees of the
Group and the Company as disclosed in Note 30(b).
39.
Fair value of assets and liabilities
(a) Fair value of assets and liabilities that are carried at fair value
The following table shows an analysis of each class of assets and liabilities carried at fair value by level of fair value
hierarchy:
Group
Date of
valuation
Quoted
prices
in active
markets for
identical
instruments
(Level 1)
RM’000
Significant
other
observable
inputs
(Level 2)
RM’000
Significant
unobservable
inputs
(Level 3)
RM’000
Total
RM’000
-
-
110,937
138,637
249,574
110,937
138,637
249,574
At 30 June 2014
Assets measured at fair value:
Revalued land and buildings (Note 15) 30 June 2011
Investment properties (Note 17)
30 June 2014
138
39.
Fair value of assets and liabilities (contd.)
(a) Fair value of assets and liabilities that are carried at fair value (contd.)
Fair value hierarchy
The Group classified fair value measurement using a fair value hierarchy that reflects the significance of the inputs
used in making the measurements. The fair value hierarchy has the following levels:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities,
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices), and
Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Information about significant unobservable inputs used in Level 3 fair value measurements
The following table shows the information about fair value measurements using significant unobservable inputs
(Level 3).
Description of significant unobservable inputs to valuation:
Significant
unobservable
inputs
Range
(weighted
average)
220
Market comparable Difference in size and
approach
time factor
RM4.20 –
RM5.02psf
Lot 1321, Mukim 3,
Seberang Perai Tengah, Penang.
200
Market comparable
approach
Difference in size,
nature and condition
of the specific
property
RM2.30 –
RM4.80psf
Lot 1822 & 1823, Mukim 4,
1,050
approach
location
RM5.62 –
RM6.44psf
770
approach
location
RM185 –
RM279psf
Market comparable
approach
RM253 –
RM302psf
Fair value at
30.06.2014
RM’000
Valuation
technique
Investment properties (Note 17)
Lot 1425, Mukim 4,
Unit No. 2.04-2.06, Level 2, Komtar,
Penang Road, Penang.
10 units shoplots in Sering Ukay,
68000 Ampang, Selangor.
7,950
Difference in size,
location and tenure
139
39.
Fair value at
30.06.2014
RM’000
Valuation
technique
Significant
unobservable
inputs
Range
(weighted
average)
Wing Mei (M) Sdn. Bhd. (contd.)
7 units of shop office in Taman
Bukit Minyak Utama, 14000 Bukit
Mertajam, Penang.
8,600
Market comparable
approach
Difference in size,
location and time
factor
RM220 –
RM397psf
1 unit free standing office building
in Taman Bukit Minyak Utama,
14000 Bukit Mertajam, Penang.
2,800
approach
location
RM271 –
RM393psf
340
approach
location
RM55 –
RM78psf
Lot 4868, Mukim 14, Seberang
Perai Tengah, Penang.
DNP Jaya Sdn. Bhd.
No.8, Jalan Ampang Hilir (Lot 263),
55000 Kuala Lumpur.
120,000
Market comparable
approach
Difference in size,
location, nature and
condition of the
specific property
RM736 –
RM931psf
For investment properties, a significant increase/(decrease) in adjusted valuation per square feet based on
management’s assumptions would result in significantly higher/(lower) fair value measurement.
Movements in Level 3 assets measured at fair value
The following table presents the reconciliation for all assets measured at fair value based on significant
unobservable inputs (Level 3).
Group
Property, plant and
equipment
Land and buildings
RM’000
At 1 July 2013
Addition
Reclassification
Disposals
Reversal of impairment loss
At 30 June 2014
140
106,349
53
8,501
(2,858)
(1,195)
87
110,937
39.
Movements in Level 3 assets measured at fair value (contd.)
Group
Investment properties
RM’000
129,897
8,740
138,637
At 1 July 2013
Fair value adjustments
At 30 June 2014
There has been no transfer from Level 1 and Level 2 to Level 3 during the financial year ended 30 June 2014.
(b)Fair value of assets and liabilities by classes that are not carried at fair value and whose carrying amounts
are reasonable approximation of fair value
The following are classes of financial instruments whose carrying amounts are reasonable approximation of fair
value:
Note
Trade and other receivables (non-current)
Trade and other receivables (current)
Borrowings (current)
Borrowings (non-current)
Trade and other payables (current)
23
23
31
31
33
The carrying amounts of these financial assets and liabilities are reasonable approximations of fair values, either
due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on
or near the reporting date.
The carrying amounts of the non-current portion of borrowings and other receivables are reasonable
approximations of fair values due to the insignificant impact of discounting.
40.
Financial risk management objectives and policies
The Group and the Company are exposed to financial risks arising from their operations and the use of financial
instruments. The key financial risks include credit risk, liquidity risk, interest rate risk and foreign currency risk.
The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are
executed by the Chief Financial Officer. The audit committee provides independent oversight to the effectiveness of
the risk management process.
141
40.
Financial risk management objectives and policies (contd.)
It is, and has been throughout the current and previous financial year, the Group's policy that no derivatives shall
be undertaken except for the use as hedging instruments where appropriate and cost-efficient. The Group and the
Company do not apply hedge accounting.
The following sections provide details regarding the Group's and Company's exposure to the above-mentioned
financial risks and the objectives, policies and processes for the management of these risks.
(a) Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default
on its obligations. The Group's and the Company's exposure to credit risk arises primarily from trade and other
receivables. For other financial assets (including cash and bank balances), the Group and the Company minimise
credit risk by dealing exclusively with high credit rating counterparties.
The Group and the Company have no significant concentration of credit risk with any single entity. The Group has
policies in place to ensure that sales of products and services are made only to customers with acceptable credit
standing. The Group trades only with recognised and creditworthy third parties. It is the Group's policy that all
customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable
balances are monitored on an ongoing basis via the Group's management reporting procedures. Since the Group
trades only with recognised and creditworthy third parties, there is no requirement for collateral.
Exposure to credit risk
At the reporting date, the Group's and the Company's exposure to credit risk is represented by:
- The carrying amount of each class of financial assets recognised in the statements of financial position.
Credit risk concentration profile
The Group and the Company determine concentrations of credit risk by monitoring the industry sector profile of
its trade receivables on an ongoing basis. The credit risk concentration profile of the Group's and the Company's
trade receivables at the reporting date are as follows:
RM’000
Group
% of total
RM’000
Company
% of total
66,523
3,199
2,952
1,664
74,338
89
5
4
2
100
3,824
3,824
100
100
30 June 2014
Garment manufacturing
Retail
Property investment
Others
142
40.
(a) Credit risk (contd.)
Credit risk concentration profile (contd.)
RM’000
Group
% of total
RM’000
Company
% of total
154,337
2,425
3,915
1,646
162,323
95
2
2
1
100
5,740
5,740
100
100
30 June 2013
Garment manufacturing
Retail
Property investment
Others
At reporting date, approximately 37% (2013: 22%) of the Group's trade receivables and other receivables were due
from related companies while almost all of the Company's receivables were balances with related parties.
Financial assets that are neither past due nor impaired
Information regarding trade receivables that are neither past due nor impaired is disclosed in Note 23. Deposits
with banks and other financial institutions that are neither past due nor impaired are placed with or entered into
with reputable financial institutions or companies with high credit ratings and have no history of default.
Financial assets that are either past due or impaired
Information regarding financial assets that are either past due or impaired is disclosed in Note 23.
(b)Liquidity risk
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's and the Company's objective is to maintain a
balance between continuity of funding and flexibility through the use of credit facilities. The Group manages its
debt maturity profile, operating cash flows and the availability of funding so as to ensure that all refinancing,
repayment and funding needs are met. As part of its overall liquidity management, the Group maintains sufficient
levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group
strives to maintain available banking facilities of a reasonable level to its overall debt position. As far as possible,
the Group raises committed funding from financial institutions and balances its portfolio with some short term
funding so as to achieve overall cost effectiveness.
143
40.
(b)Liquidity risk (contd.)
Analysis of financial instruments by remaining contractual maturities
The table below summarises the maturity profile of the Group's and the Company's financial assets and liabilities
used for managing liquidity risk at the end of the reporting period based on contractual undiscounted repayment
obligations.
Note
Within 1 year
RM'000
1 to 5 years
RM'000
Over 5 Years
RM'000
Total
RM'000
23
26
132,972
226,096
359,068
-
-
132,972
226,096
359,068
31
169,878
14,286
185,424
369,588
245,695
5,727
251,422
2,883
2,883
415,573
22,896
185,424
623,893
(10,520)
(251,422)
(2,883)
(264,825)
Group
At 30 June 2014
Financial assets:
Non-derivative
Cash, bank balances and deposits
Total undiscounted financial assets
Financial liabilities:
Non-derivative
Borrowings
Interest payable on borrowings
Total undiscounted financial liabilities
33
Total net undiscounted financial liabilities
At 30 June 2013
Financial assets:
Non-derivative
23
26
216,742
105,601
322,343
-
-
216,742
105,601
322,343
31
87,122
12,375
191,534
291,031
230,216
14,073
244,289
603
12
615
317,941
26,460
191,534
535,935
31,312
(244,289)
(615)
(213,592)
Non-derivative
Borrowings
Interest payable on borrowings
Total net undiscounted financial assets/
(liabilities)
144
33
40.
(b)Liquidity risk (contd.)
Analysis of financial instruments by remaining contractual maturities (contd.)
Note
Within 1 year
RM'000
1 to 5 years
RM'000
Over 5 Years
RM'000
Total
RM'000
23
26
535,740
76,336
612,076
-
-
535,740
76,336
612,076
33
175,046
175,046
-
-
175,046
175,046
437,030
-
-
437,030
23
26
565,298
1,322
566,620
-
-
565,298
1,322
566,620
33
114,711
114,711
-
-
114,711
114,711
451,909
-
-
451,909
Company
At 30 June 2014
Financial assets:
Non-derivative
Non-derivative
Total net undiscounted financial assets
At 30 June 2013
Financial assets:
Non-derivative
Non-derivative
Total net undiscounted financial assets
Financial guarantees
At the reporting date, the counterparty to the financial guarantees does not have a right to demand cash as the
default has not occurred. Accordingly, financial guarantees under the scope of FRS139 are not included in the
above maturity profile analysis.
145
40.
(c) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Group's and the Company's financial
instrument will fluctuate because of changes in market interest rates.
The Group's exposure to interest rate risk arises primarily from their interest-bearing borrowings as at 30 June
2014. The investment in financial assets is mainly short term in nature and they are not held for speculative
purposes but have been mostly placed in fixed deposits. The Group places its cash deposits with reputable banks
and financial institutions with a good mix of maturity periods to obtain the most favourable interest rates and
ensure funds are available when required.
The Group seeks to obtain the most favourable interest rates available without increasing its foreign currency
exposure.
Sensitivity analysis for interest rate risk
At the reporting date, if interest rates had been 50 basis points lower/higher, with all other variables held constant,
the Group's profit net of tax would have been RM1,149,000 (2013: RM1,058,000) higher/lower, arising as a result of
lower/higher interest expense on floating rate borrowings.
(d)Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates.
As at reporting date, approximately:
(i) 1.0% (2013: 0.6%) of the Group's trade and other receivables are denominated in foreign currencies, mainly in
United States Dollar ("USD"), Singapore Dollar ("SGD") and Hong Kong Dollar ("HKD").
(ii) 3.5% (2013: 2.2%) of the Group's trade and other payables and 1.0% (2013: 1.3%) of the Company's trade
and other payables are denominated in foreign currencies, mainly in United States Dollar ("USD"), Singapore
Dollar ("SGD"), Australian Dollar ("AUD"), British Pound ("GBP") and Hong Kong Dollar ("HKD").
(iii) Nil % (2013: Nil %) of the Group's cash and bank deposits are denominated in foreign currency.
The Group is also exposed to currency translation risk arising from its net investment in foreign operations,
including Singapore, Hong Kong, Sri Lanka, British Virgin Islands and Indonesia.
146
40.
(d)Foreign currency risk (contd.)
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity of the Group's profit net of tax to a reasonably possible change in
the SGD, USD, GBP and HKD exchange rates against RM, with all other variables held constant.
(Decrease)/Increase
Profit net of tax
Group
2014
RM’000
41.
Company
2013
RM’000
2014
RM’000
2013
RM’000
SGD against RM
- strengthened by 5%
- weakened by 5%
(159)
159
(159)
159
(88)
88
(74)
74
USD against RM
- weakened by 5%
46
(46)
57
(57)
(1)
1
(1)
1
GBP against RM
- weakened by 5%
(98)
98
(85)
85
-
-
HKD against RM
- weakened by 5%
(45)
45
42
(42)
-
-
Capital management
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 Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To
maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to
shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years
ended 30 June 2014 and 30 June 2013.
The Group and the subsidiaries are not subject to any externally imposed capital requirements.
The Group monitors capital using net gearing ratio, which is net debt divided by equity attributable to the owners
of the parent. The Group's policy is to keep the Group net gearing ratio at a level deemed appropriate considering
business, economic and investment conditions.
147
41.
Capital management (contd.)
Group
Note
Equity attributable to the owners of the parent
Borrowings
Less: Cash and bank balances
Net debt
31
26
Net gearing ratio
42.
2014
RM’000
2013
RM’000
1,051,231
1,011,540
415,573
(226,096)
189,477
18%
317,941
(105,601)
212,340
21%
Significant events
The significant events that took place during the financial year were as follows:
(a) During the current financial year, the Company had subscribed for an additional 6,000,000 units of 5% cumulative
redeemable preference shares in Kualiti Gold Sdn. Bhd., a joint venture of the Company, for a cash consideration of RM6.0 million.
(b) On 18 July 2013, Tanako Sdn. Bhd., a wholly owned subsidiary of DNP Garment Manufacturing Sdn. Bhd. (which in
turn is a wholly owned subsidiary of the Company), has entered into a Sale and Purchase Agreement for the
disposal of all that piece of land known as Lot No. 8567, Mukim Kota Lama Kiri, Daerah Kuala Kangsar, Negeri
Perak Darul Ridzuan held under Pajakan Negeri No. Hakmilik 293515 land measuring approximately 20,234 square
metres in area being a leasehold for sixty (60) years expiring on 9 July 2050 together with a factory building bearing
assessment address Lot 583, Kawasan Perindustrian Kuala Kangsar, 33000 Kuala Kangsar, Perak erected thereon
for a total cash consideration of RM3,700,000. The disposal was completed on 15 January 2014.
(c) On 29 August 2013, Harta-Aman Sdn. Bhd., a wholly owned subsidiary of the Company, has entered into a Sale
and Purchase Agreement for the sale of 69 units of retail shop and office at commercial podium of Plaza DNP,
No 59, Jalan Dato' Abdullah Tahir, 80250 Johor Bahru together with 632 lots of car parking bays as accessory
parcels and a Development Rights Agreement for the sale of Development rights over a provisional strata parcel for
Phase 2 of Plaza DNP development bearing Provision Block P1, under Hakmilik Sementara Strata known as
Hakmilik Geran No. 456089 for the construction of a building consisting of 273 parcels both located at Lot 22516,
Bandar Johor Bahru, Daerah Johor Bahru, Johor held under Geran No. 456089 for a total cash consideration of
RM25,000,000 and RM20,000,000 respectively. The sale was completed on 19 May 2014.
(d) On 25 June 2014, Premium Strategy (M) Sdn Bhd, a wholly owned subsidiary of the Company, entered into a
conditional Sale and Purchase Agreement to dispose its 25% interest in the share capital of PT Windas
Development, a joint venture together with the novation of loan owing by PT Windas Development to Winswift
Investment Pte Ltd for a total consideration of USD8,174,603.
148
43. Subsequent events
(a) On 7 August 2014, Quality Frontier Sdn Bhd, a wholly owned subsidiary of Nikmat Jaya Sdn. Bhd. (which in turn is
a wholly owned subsidiary of the Company), completed its acquisition of the freehold land under Lot 683/
GRN42823, Lot 684/GRN42824, Lot 726/GM505 & Lot 727/GM506 with a total land area of approximately
34.17 acres for a total consideration of RM14,915,178 via a Sale and Purchase Agreement dated 22 January 2014.
(b) On 5 September 2014, the disposal of the 25% interest in the share capital of PT Windas Development, a joint
venture and novation of the loan owing by PT Windas Development were completed.
44. Segment information
For management purposes, the Group is organised into business units based on their products and services, and has
four reportable operating segments as follows:
-
The manufacturing segment is involved in manufacturing of textile garments.
The retail segment is involved in retailing of garments.
The property development segment is in the business of developing residential and commercial properties.
The property investment segment is involved in the investment in commercial and hotel properties, project
management and maintenance of properties.
Management monitors the operating results of its business units separately for the purpose of making decisions about
resource allocation and performance assessment. Segment performance is evaluated based on operating profit or
loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss
in the consolidated financial statements. Group financing (including finance costs) and income taxes are managed
on a group basis and are not allocated to operating segments. Unallocated items comprise mainly corporate assets,
liabilities and expenses.
Transfer prices between operating segments are on an arm's length basis in a manner similar to transactions with third
parties.
The Group's four operating segments are mainly located in Malaysia.
In July 2006, the Group had discontinued its garment manufacturing operations in Sri Lanka. These operations are
classified as discontinued operations.
149
44. Segment information (contd.)
Business segments
The following table provides an analysis of the Group's revenue, results, assets, liabilities and other information by
business segment:
Manufacturing
RM’000
Property
Property
Retail development investment Eliminations
RM’000
RM’000
RM’000
RM’000
Total
RM’000
Discontinued
Total
operations operations
RM’000
RM’000
2014
Revenue and
expenses
Revenue
Sales to external
customers
Inter-segment sales
7,322
-
185,266
-
220,471
-
21,556
-
-
434,615
-
-
434,615
-
Total revenue
7,322
185,266
220,471
21,556
-
434,615
-
434,615
1,609
24,651
55,189
13,172
-
94,621
-
94,621
Results
Segment results
Unallocated
expenses
Finance costs
Share of results of
an associate and
joint ventures
150
(2,982)
(7,482)
-
(2,982)
(7,482)
7,115
-
7,115
Profit before tax
Income tax expense
91,272
(20,607)
-
91,272
(20,607)
Profit net of tax
70,665
-
70,665
Business segments (contd.)
Manufacturing
RM’000
Property
Property
Retail
development
investment
RM’000
RM’000
RM’000
Total
RM’000
Discontinued
operations
RM’000
Total
operations
RM’000
As at 30 June 2014
Assets
Segment assets
Unallocated assets:
Tax assets
Corporate assets
9,344
115,528
1,122,230
241,520
1,488,622
63
1,488,685
45,952
148,562
1,683,199
Total assets
Liabilities
Segment liabilities
Unallocated
liabilities:
Borrowings
Tax liabilities
Corporate liabilities
1,616
16,198
184,920
7,548
210,282
5
415,573
2,444
3,664
631,968
Total liabilities
Other segment
information
Capital expenditure
Unallocated capital
expenditure
Depreciation
Amortisation of prepaid
land lease payments
Unallocated
depreciation
Interest income
Unallocated interest
income
Inventories written
down
210,287
16
158
-
14
9,107
7,777
306
740
228
573
3,035
-
8,434
2,063
12
-
17,785
-
17,785
1,076
-
1,076
18,861
-
18,861
10,571
-
10,571
54
-
54
941
-
941
11,566
-
11,566
3,353
-
3,353
138
-
138
3,491
-
3,491
754
-
754
151
The following table provides an analysis of the Group's revenue, results, assets, liabilities and other information by
business segment:
Manufacturing
RM’000
Property
Property
Retail development investment Eliminations
RM’000
RM’000
RM’000
RM’000
Total
RM’000
Discontinued
Total
operations operations
RM’000
RM’000
2013
Revenue and
expenses
Revenue
Sales to external
customers
Inter-segment sales
Total revenue
Results
Segment results
Unallocated
expenses
Finance costs
Share of results of
an associate and
joint ventures
Profit/(Loss)
before tax
Income tax expense
Profit/(Loss)
net of tax
152
6,736
6,736
179,140
179,140
395,165
8,700
403,865
21,546
21,546
(8,700)
(8,700)
602,587
602,587
-
602,587
602,587
1,754
35,679
135,446
5,955
-
178,834
(49)
178,785
(3,827)
(7,868)
-
(3,827)
(7,868)
8,808
-
8,808
175,947
(44,464)
(49)
(17)
175,898
(44,481)
131,483
(66)
131,417
Manufacturing
RM’000
Property
Property
Retail development investment
RM’000
RM’000
RM’000
Total
RM’000
Discontinued
operations
RM’000
Total
operations
RM’000
As at 30 June 2013
Assets
Segment assets
Investment in associates
Unallocated assets:
Tax assets
Corporate assets
Total assets
12,313
69,225
1,150,532
227,081
1,459,151
63
1,459,214
36
33,171
71,366
1,563,787
Liabilities
Segment liabilities
Unallocated liabilities:
Borrowings
Tax liabilities
Corporate liabilities
Total liabilities
Other segment
information
Capital expenditure
Unallocated capital
expenditure
Depreciation
Amortisation of prepaid
land lease payments
Unallocated depreciation
1,571
16,900
189,036
5,768
213,275
5
213,280
317,941
17,209
3,817
552,247
95
267
7,085
6,783
449
1,329
1,966
2,536
13
10,379
-
10,379
343
10,722
-
343
10,722
10,035
-
10,035
82
931
11,048
-
82
931
11,048
1,506
-
1,506
70
1,576
-
70
1,576
Interest income
Unallocated interest
income
-
-
2,077
-
-
2,077
-
2,077
-
-
3,195
-
3,195
-
3,195
-
-
3,333
-
3,333
-
3,333
Reversal of:
- impairment loss on land
held for property
development
- write down of
inventories
164
1,233
153
Geographical information
The primary segment reporting format is determined to be business segments as the Group's risks and rates of
return are affected predominantly by differences in the products and services. The activities of the Group are carried
out mainly in Malaysia and as such, segmental reporting by geographical locations is not presented. The operating
businesses are organised and managed separately according to the nature of the products and services provided,
with each segment representing a strategic business unit that offers different products and serves different markets.
45.
Authorisation of financial statements for issue
The financial statements for the year ended 30 June 2014 were authorised for issue in accordance with a resolution of
the directors on 10 October 2014.
154
46. Supplementary information – breakdown of retained earnings into realised and unrealised
The breakdown of the retained earnings of the Group and of the Company as at 30 June 2014 into realised and
unrealised profits is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated
25 March 2010 and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised
and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing
Requirements, as issued by the Malaysian Institute of Accountants.
The retained earnings as at reporting date may be analysed as follows:
Group
Total retained earnings of the Company and
its subsidiaries:
- Realised
- Unrealised
Total share of accumulated losses from an
associate company:
- Realised
- Unrealised
Total share of profit/(accumulated losses)
from joint ventures:
- Realised
- Unrealised
Add: Consolidation adjustments
Retained earnings as per financial
statements
Company
2014
RM’000
2013
RM’000
423,774
214,712
392,522
207,524
2014
RM’000
89,589
(1,394)
2013
RM’000
106,210
(1,524)
(5)
-
(5)
-
-
-
2,304
(10,695)
(4,811)
(10,695)
-
-
(30,692)
(24,562)
-
-
88,195
104,686
599,398
559,973
155
Group Material Properties
As at 30 June 2014
No. Location
Description
Tenure
Land area
(sq.m)
Age of
buildings
Net
book value
RM’000
Date of
revaluation/
acquisition
1
Hartamaju Sdn. Bhd.
Lot 248, Section 43
Town of Kuala Lumpur.
Under
development
Freehold
4,896.0
-
397,216
*30.06.2008
2
DNP Jaya Sdn. Bhd.
Lot 263, Section 89A,
132 units
condominiums
Freehold
14,535.0
21
120,000
*30.06.2014
3
Seniharta Sdn. Bhd.
Lot 262, Section 89A,
20 storey,
221 units
service
apartments
Freehold
3,849.0
16
84,510
*30.06.2011
4
Chanlai Sdn. Bhd.
Lot 90 Section 89,
held under Geran
Mukim no. 36258,
Bandar and District of
Kuala Lumpur.
22 apartment
units
Freehold
8,981.7
(Built-up)
1
81,595
10.05.2007
5
Lot 326 held under Title
No GRN 66452, Section
89A, Town and District of
Kuala Lumpur,
Wilayah Persekutuan
Kuala Lumpur.
Vacant land
Freehold
8,645.0
-
78,692
12.01.2011
6
Title No. Pajakan Negeri
17395, Lot 64681,
Pekan Penaga, District of
Petaling and State of
Selangor.
Under
development
Leasehold
Leasehold
99 years
expiring
21.3.2093
38,155.0
-
77,200
23.11.2009
156
No. Location
Description
Tenure
Land area
(sq.m)
Under
development
Freehold
243,810.0
Age of
buildings
Net
book value
RM’000
Date of
revaluation/
acquisition
-
66,872
28.10.1996,
23.10.2009,
18.11.1996,
06.12.1996
7
DNP Land Sdn. Bhd.
20877-20878, 20899, 2093420935, 20952-20956 and
20957, PT Nos 3615-3807,
30121-30421, 30423-30425,
30428, 30432, 30434-30435,
30441, 30448-30449, 3045130453, 30455, 30459-30461,
30465-30467, 30471-30472,
30482-30483, 30490-30491,
30493, 30502-30503, 30507,
30511-30512, 30533-30539,
30544-30545, 30547-30548,
30550, 30552-30553,
30557-30558, 30562-30572,
30574-30579, 30582-30588,
30592-30598, 30600-30625
and 30626, Mukim 15, Daerah
Seberang Perai Tengah,
Pulau Pinang.
(Taman Jasa Indah
(Jesselton Hills))
8
Starpuri Development
Sdn. Bhd.
Lot 1315, Section 57,
Bandar Kuala Lumpur,
Daerah Kuala Lumpur,
Negeri Wilayah Persekutuan.
32 apartment
units
Freehold
8,276.5
(Built-up)
2
50,052
13.01.2006
9
DNP Land Sdn. Bhd.
PT Nos 30527-30528,
30536-30537, 30539-30540,
30548, 30557,
30558 and 30561,
Lot 400 and PT 1084,
Mukim 14, Daerah Seberang
Perai Tengah.
(Bukit Minyak Utama)
Under
development
and land held
for future
development
Freehold
39,281.0
-
41,817
21.06.1997,
08.04.2003,
13.03.2009,
24.06.2012
10
Angel Wing (M) Sdn. Bhd.
PT No. 2429-2439 and
3261, Mukim of Ulu Klang,
Gombak, Selangor
Darul Ehsan. (Sering Ukay)
Under
development
Freehold
183,928.0
-
23,651
25.07.1995
157
Analysis of Shareholdings
As at 26 September 2014
Authorised share capital
: RM400,000,000
Issued and paid-up capital
: RM326,519,832^
Class of share : Ordinary Share of RM1.00 each
Voting Rights : Every member of the Company present in person or by proxy or represented by attorney shall on a show of hand have one vote and upon a poll every such member shall have
one vote for every share held by him.
^ inclusive of 12,013,000 treasury shares
Distribution of Shareholdings as at 26 September 2014
Range
No. of Holders
%
Total Holdings
%
Less than 100
100 to 1,000
1,001 to 10,000
10,001 to 100,000
100,001 to 15,725,340
15,725,341* and above
295
1,834
4,114
911
126
2
7,282
4.05
25.18
56.50
12.51
1.73
0.03
100.00
9,062
1,706,943
17,510,057
26,614,542
77,447,314
191,218,914
314,506,832
0.00
0.54
5.57
8.46
24.63
60.80
100.00
* Denotes 5% of the issued shares (after deducting 12,013,000 ordinary shares bought back and held as treasury shares as
at 26 September 2014).
Substantial Shareholders as at 26 September 2014
Name
1. Wing Tai Holdings Limited
2. Wing Tai Investment & Development Pte. Ltd.
3. Wing Sun Development Private Limited
4. Cheng Wai Keung
5. Edmund Cheng Wai Wing
6. Christopher Cheng Wai Chee
7. Edward Cheng Wai Sun
8. Wing Tai Asia Holdings Ltd
9. Deutsche Bank International Trust Co. Limited
10. Deutsche Bank International Trust Co.
(Cayman) Limited
Direct
No. of Shares
%
148,248,914
42,970,000
165,148
33,000
33,000
-
47.14
13.66
0.05
0.01
0.01
-
-
-
Indirect
No. of Shares
42,970,000
191,218,914
191,384,062
191,384,062
191,384,062
191,384,062
191,384,062
191,384,062
***
%
*
*
*
13.66
60.80
60.85
60.85
60.85
60.85
60.85
60.85
191,384,062 *
60.85
**
*
*
*
* Deemed interested by virtue of their interests in shares in Wing Tai Holdings Limited, Wing Sun Development Private
Limited and Wing Tai Investment & Development Pte. Ltd.
** Deemed interested by virtue of its interests in shares in Wing Tai Holdings Limited and Wing Tai Investment & Development
Pte. Ltd.
*** Deemed interest by virtue that Wing Tai Investment & Development Pte. Ltd. is a wholly owned subsidiary of Wing Tai
Holdings Limited.
158
Directors Shareholdings as at 26 September 2014
Ultimate Holding Company
Direct
Name
No. of Shares
1. Cheng Wai Keung
%
Indirect
No. of Shares
395,038,656
318,021,664
%
-
-
50.19
40.40
No. of Shares
%
No. of Shares
%
33,000
33,000
1,079,500
0.01
0.01
0.34
191,384,062 *
191,384,062 *
2,197,000 **
60.85
60.85
0.70
The Company
Name
1. Cheng Wai Keung
3. Y. Bhg. Dato' Roger Chan Wan Chung
* Deemed interested by virtue of their interests in shares in Wing Tai Holdings Limited, Wing Sun Development Private
Limited and Wing Tai Investment & Development Pte. Ltd.
** Deemed interested by virtue of the shares held by his spouse, Datin Chan Yung Shui Ching.
Saved as disclosed, none of the other Directors in office have any interest in the shares and debentures of the Company and
its related corporations as at 26 September 2014.
159
30 Largest Shareholders as at 26 September 2014
Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
Maybank Securities Nominees (Asing) Sdn Bhd
for Wing Tai Investment & Development Pte. Ltd.
DB (Malaysia) Nominee (Asing) Sdn Bhd
for Pangolin Asia Fund
Bobos Company Limited
Citigroup Nominees (Asing) Sdn Bhd
for UBS AG Singapore (Foreign)
for Wallasey Ltd
HSBC Nominees (Asing) Sdn Bhd
for Credit Suisse (SG BR-TST-Asing)
Affin Hwang Nominees (Asing) Sdn Bhd
for Serendip Investments Limited
Yayasan Kelantan Darulnaim
UOB Kay Hian Nominees (Asing) Sdn Bhd
for UOB Kay Hian (Hong Kong) Limited-A/C (Clients)
Chan Yung Shui Ching
Affin Hwang Nominees (Asing) Sdn Bhd
for GF Capital Global Limited
for Dimensional Emerging Markets Value Fund
CIMB Group Nominees (Tempatan) Sdn Bhd
for AMB Smallcap Trust Fund
UOB Kay Hian Nominees (Asing) Sdn Bhd
for UOB Kay Hian Pte Ltd -( A/C Clients)
Lee Joo Ping
Tan Jin Tuan
Impac Sdn Bhd
Citigroup Nominees (Tempatan) Sdn Bhd
for Bank Negara Malaysia National Trust Fund (Hwang)
Chong Yiew On
LTK (Melaka) Sdn Bhd
RHB Nominees (Tempatan) Sdn Bhd
for Sin Khuan Oi
Lee Joo Ping Sdn Bhd
Chow Chong
RHB Nominees (Asing) Sdn Bhd
for Exquisite Holdings Limited
MIDF Amanah Investment Nominees (Asing) Sdn Bhd
for Connie Cheng Wai Ka
HSBC Nominees (Tempatan) Sdn Bhd
for Pertubuhan Keselamatan Sosial
for DFA Emerging Markets Small Cap Series
HSBC Nominees (Tempatan) Sdn Bhd
for AMB Ethical Trust Fund
No. of Shares
%
148,248,914
47.14
42,970,000
13.66
6,334,200
5,948,000
2.01
1.89
5,651,800
1.80
4,738,000
1.51
3,245,400
1.03
3,000,000
2,975,583
0.95
0.95
2,317,500
2,197,000
0.74
0.70
2,000,000
0.64
1,952,900
0.62
1,543,500
0.49
1,324,000
1,151,500
1,079,500
1,071,000
1,025,828
0.42
0.37
0.34
0.34
0.33
1,014,600
968,400
954,600
0.32
0.31
0.30
900,000
800,200
800,000
0.29
0.25
0.25
792,500
0.25
787,000
0.25
738,000
0.23
724,500
0.23
704,200
247,958,625
0.22
78.83
Note: The analysis of shareholdings is based on the issued and paid-up capital of the Company after deducting 12,013,000 ordinary shares bought back by the Company and held as treasury shares as at 26 September 2014.
160
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN THAT the Forty-Eighth Annual General Meeting of the Company will be held at Boeing 2 & 3,
Level 1, Sama-Sama Hotel, KL International Airport, Jalan CTA 4B, 64000 KLIA, Sepang, Selangor Darul Ehsan on Tuesday,
18 November 2014 at 2.00 p.m. to transact the following business:
As Ordinary Business
1.
2.
To receive the Audited Financial Statements for the financial year ended 30 June 2014 together with
the Reports of the Directors and the Auditors thereon.
(refer to Note 1)
To approve the declaration of a First and Final Dividend of 5 sen per share Single Tier and Special
Dividend of 2 sen per share Single Tier for the financial year ended 30 June 2014.
(Resolution 1)
3.
To approve the payment of Directors’ fees for the financial year ended 30 June 2014.
(Resolution 2)
4.
To re-elect Mr Cheng Wai Keung who shall retire in accordance with Article 82 of the Company’s
Articles of Association and being eligible, has offered himself for re-election.
(Resolution 3)
To re-elect Mr Edmund Cheng Wai Wing who shall retire in accordance with Article 84 of the
Company’s Articles of Association and being eligible, has offered himself for re-election.
(Resolution 4)
5.
6.
To consider and if thought fit, to pass the following Ordinary Resolutions in accordance with Section
129 of the Companies Act 1965:(i)
(ii)
(iii)
(iv)
7.
“That Y. Bhg. Dato’ Roger Chan Wan Chung who is retiring pursuant to Section 129 of the
Companies Act, 1965, be and is hereby re-appointed as Director of the Company and to hold
office until the conclusion of the next Annual General Meeting.”
(Resolution 5)
“That Y. Bhg. Dato’ Ghazi bin Ishak who is retiring pursuant to Section 129 of the Companies
Act, 1965, be and is hereby re-appointed as Director of the Company and to hold office until the
conclusion of the next Annual General Meeting.”
(Resolution 6)
“That Mr Chong Tet On who is retiring pursuant to Section 129 of the Companies Act, 1965, be
and is hereby re-appointed as Director of the Company and to hold office until the conclusion of
the next Annual General Meeting.”
(Resolution 7)
“That Y. Bhg. Tan Sri Dato’ Paduka Dr. Mazlan bin Ahmad who is retiring pursuant to Section
129 of the Companies Act, 1965, be and is hereby re-appointed as Director of the Company and
to hold office until the conclusion of the next Annual General Meeting.”
(Resolution 8)
To re-appoint Messrs Ernst & Young as Auditors of the Company until the conclusion of the next
Annual General Meeting and to authorise the Directors to fix their remuneration.
(Resolution 9)
161
As Special Business
To consider and, if thought fit, with or without any modification, to pass the following resolutions as
Ordinary Resolutions:8.
Retention of Y. Bhg. Dato’ Ghazi Bin Ishak as an Independent Non-Executive Director
“That subject to the passing of Ordinary Resolution 6, Y. Bhg. Dato’ Ghazi Bin Ishak be and is
hereby retained as an Independent Non-Executive Director of the Company and to hold office until
the conclusion of the next Annual General Meeting pursuant to Malaysian Code on Corporate
Governance 2012 (“MCCG 2012”).”
9.
Retention of Mr. Chong Tet On as an Independent Non-Executive Director
“That subject to the passing of Ordinary Resolution 7, Mr. Chong Tet On be and is hereby retained as
an Independent Non-Executive Director of the Company and to hold office until the conclusion of the
next Annual General Meeting pursuant to MCCG 2012.”
10.
(Resolution 10)
(Resolution 11)
Proposed Renewal of Share Buy-Back Authority
“THAT subject to the compliance with the Companies Act, 1965, the provisions of the Memorandum
and Articles of Association, Bursa Malaysia Securities Berhad (“Bursa Securities”) and all other
applicable laws, guidelines, rules and regulations, approval be and is hereby given to the Company to
utilise up to an amount not exceeding RM88,195,472 and RM118,792,042 from the Retained Profits
and Share Premium Account of the Company respectively based on its audited financial statements
for the financial year ended 30 June 2014, to purchase and/or hold such amount of ordinary shares
of RM1.00 each in the Company as may be determined by the Directors of the Company from time
to time through Bursa Securities provided that the aggregate number of ordinary shares that can be
purchased pursuant to this Resolution does not exceed 10% of the existing issued and paid-up share
capital of the Company;
AND THAT such authority shall commence immediately upon the passing of this Ordinary Resolution
and will expire at the conclusion of the next Annual General Meeting of the Company following the
passing of this Ordinary Resolution or the expiry of the period within which the next Annual General
Meeting is required by law to be held (unless earlier revoked or varied by ordinary resolution in a
general meeting of shareholders of the Company), whichever occurs first, but so as not to prejudice
the completion of purchase(s) made before such expiry date, in any event in accordance with the
provisions of the guidelines issued by Bursa Securities or any other relevant authorities;
AND THAT authority be and is hereby given to the Directors of the Company to decide in their
absolute discretion to retain the ordinary shares in the Company so purchased by the Company as
Treasury Shares and/or to cancel them and/or to resell them;
AND THAT authority be and is hereby given to the Directors of the Company to take all such steps
as are necessary and to enter into any agreements, arrangements and guarantees with any party and
parties to implement, finalise and give full effect to the aforesaid with full powers to assent to any
conditions, modifications, revaluations, variations and/or amendments (if any) as may be imposed by
the relevant authorities and to do all such acts and things as the Directors may deem fit and expedient
in the interest of the Company.”
162
(Resolution 12)
11.
Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of A
Revenue or Trading Nature As Set Out in Clause 4.2(i) and (ii)
“THAT pursuant to Paragraph 10.09 of the Bursa Malaysia Securities Berhad Main Market Listing
Requirements, approval be and is hereby given for the Company and/or its subsidiaries to enter into
and give effect to the recurrent related party transactions of a revenue or trading nature as set out
in Clause 4.2(i) and (ii) of Part B of the Circular to Shareholders dated 21 October 2014, which are
necessary for the day-to-day operations and undertaken in the ordinary course of business and at
arm’s length basis and on normal commercial terms which are not more favourable to the related party
than those generally available to the public and not prejudicial to the shareholders of the Company
AND THAT such approval, unless revoked or varied by the Company in general meeting, shall continue
in force until:(i)
(ii)
the conclusion of the next Annual General Meeting of the Company;
the expiration of the period within which the next Annual General Meeting of the Company is
required to be held by law; or
(iii) revoked or varied in a general meeting.
whichever is earlier.
AND THAT the Directors of the Company and each of them be authorised to do all such acts and
things (including, without limitation, to execute all such documents) as they or he may consider
necessary, expedient or in the interests of the Company to give effect to this Resolution.”
12.
(Resolution 13)
Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of A
Revenue or Trading Nature As Set Out in Clause 4.2(iii)
“THAT pursuant to Paragraph 10.09 of the Bursa Malaysia Securities Berhad Main Market Listing
Requirements, approval be and is hereby given for the Company and/or its subsidiaries to enter into
and give effect to the recurrent related party transactions of a revenue or trading nature as set out in
Clause 4.2(iii) of Part B of the Circular to Shareholders dated 21 October 2014, which are necessary
for the day-to-day operations and undertaken in the ordinary course of business and at arm’s length
basis and on normal commercial terms which are not more favourable to the related party than those
generally available to the public and not prejudicial to the shareholders of the Company AND THAT
such approval, unless revoked or varied by the Company in general meeting, shall continue in force
until:(i)
(ii)
the conclusion of the next Annual General Meeting of the Company;
the expiration of the period within which the next Annual General Meeting of the Company is
required by law to be held; or
(iii) revoked or varied in a general meeting.
whichever is earlier.
AND THAT the Directors of the Company and each of them be authorised to do all such acts and things
(including, without limitation, to execute all such documents) as they or he may consider necessary,
expedient or in the interests of the Company to give effect to this Resolution.”
(Resolution 14)
163
13.
Authority to issue Shares pursuant to Section 132D of the Companies Act, 1965
“THAT subject always to Section 132D of the Companies Act, 1965, the Articles of Association of the
Company and the approvals of the relevant governmental/regulatory authorities, the Directors be and
are hereby authorised pursuant to Section 132D of the Companies Act, 1965 to allot and issue shares
in the Company at any time to such persons until the conclusion of the next Annual General Meeting
and upon such terms and conditions and for such purposes as the Directors may, in their absolute
discretion, deem fit provided that the aggregate number of shares to be issued does not exceed 10 per
centum of the issued and paid-up share capital of the Company for the time being and the Directors be
and are also empowered to obtain the approval for the listing of and quotation for the additional shares
so issued on Bursa Malaysia Securities Berhad; and that such authority shall commence immediately
upon the passing of this resolution and continue to be in force until the conclusion of the next Annual
General Meeting of the Company.”
(Resolution 15)
14.
164
To transact any other ordinary business for which due notice shall have been given.
Notice of Book Closure
NOTICE IS ALSO HEREBY GIVEN that the First and Final Dividend of 5 sen per share Single Tier and Special Dividend of
2 sen per share Single Tier will be payable on 19 December 2014 to depositors who are registered in the Record of Depositors
at the close of business on 5 December 2014 if approved by members at the Forty-Eighth Annual General Meeting on
18 November 2014.
A Depositor shall qualify for entitlement only in respect of:(i)
Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 5 December 2014 in respect of ordinary
transfers; and
(ii)
Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the Bursa
Malaysia Securities Berhad.
BY ORDER OF THE BOARD
Chua Siew Chuan
Company Secretary
Kuala Lumpur
21 October 2014
Explanatory Note to Special Business :
Resolutions 10-11
Mr. Chong Tet On and Y. Bhg. Dato’ Ghazi Bin Ishak were appointed as Independent Non-Executive Director of the Company
on 12 December 2001 and 13 June 2005 respectively. All of them have served the Board for a cumulative term of nine (9) years
and more.
In accordance with the MCCG 2012, the Board, after having assessed the independence of Mr. Chong Tet On and Y. Bhg.
Dato’ Ghazi Bin Ishak, regarded them to be independent based amongst others, the following justifications and recommends
that they to be retained as Independent Non-Executive Directors of the Company:
(i)
(ii)
(iii)
They have met the independence guidelines as set out in Chapter 1 of the Bursa Malaysia Securities Berhad Main Market
Listing Requirements;
They do not have any conflict of interest with the Company and have not entered/are not expected to enter into any
contract, especially material contracts with the Company and/or its subsidiary companies; and
Their many years of experience on the Board with their incumbent knowledge of the Company, the Group’s activities and
corporate history, have provided invaluable contributions to the Board in discharging their role as Independent NonExecutive Directors.
Resolution 12
The proposed resolution, if passed, will renew the authority granted by the shareholders of the Company at the Forty-Seventh
Annual General Meeting held on 13 November 2013. The proposed renewal will allow the Board to exercise the power of the
Company to purchase of not more than 10% of the issued and paid-up share capital of the Company at any time within the
time period stipulated in the Bursa Malaysia Securities Berhad Main Market Listing Requirements.
165
Resolutions 13-14
These proposed resolutions, if passed, will renew the shareholders’ mandate granted by the shareholders of the Company at
the Forty-Seventh Annual General Meeting held on 13 November 2013. The proposed renewal of the shareholders’ mandate
will enable the Company and its subsidiaries (WingTM Group) to enter into any of the recurrent related party transactions of a
revenue or trading nature which are necessary for WingTM Group’s day-to-day operations, subject to the transactions being
in the ordinary course of business and on normal commercial terms which 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.
Resolution 15
The proposed resolution, if passed, will give a renewed mandate and flexibility to the Directors of the Company, from the date
of the Forty-Eighth Annual General Meeting, to issue and allot shares at any time in their absolute discretion without convening
a general meeting provided that the aggregate number of shares issued does not exceed 10% of the existing issued and
paid-up share capital of the Company. As at the date of this Notice, no new shares in the Company were issued pursuant to
the mandate granted to the Directors at the Forty-Seventh Annual General Meeting held on 13 November 2013 and which will
lapse at the conclusion of the Forty-Eighth Annual General Meeting. The proceeds raised from the renewed mandate, if any will
provide funding for future investment project(s), working capital and /or acquisitions.
Notes:
1.
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 for the Audited Financial Statements from the shareholders. Therefore, this agenda item is not
put forward for voting.
2.
Y. Bhg. Tan Sri Dato’ Mohamed Noordin bin Hassan who is retiring pursuant to Section 129 of the Companies Act,
1965, shall not be seeking for re-appointment as the Director of the Company. Hence, he will retain office until the
conclusion of the Forty-Eighth Annual General Meeting of the Company.
3.
In respect of deposited securities, only members whose names appear in the Record of Depositors on 10 November
2014 (General Meeting Record of Depositors) shall be eligible to attend the Meeting.
4.
A member of the Company entitled to attend and vote at the meeting is entitled to appoint any person as his proxy to
attend and vote in his stead. A proxy may but need not be a member of the Company and a member may appoint any
person to be his proxy without limitation and the provisions of Section 149(1)(b) of the Companies Act 1965 shall not
apply to the Company. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and
vote at the Meeting shall have the same rights as the member to speak at the Meeting.
5.
Where a member appoints more than one proxy, the appointments shall be invalid unless he specifies the proportions of
his holdings to be represented by each proxy.
6.
The instrument appointing proxy shall be in writing under the hand of the appointor or his attorney only authorised in
writing, or if the appointor is a corporation, the proxy form must be given under its common seal or under the hand of
officers of the corporation duly authorised on its behalf.
7.
Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for
multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies
which the exempt authorised nominee may appoint in respect of each omnibus account it holds.
8.
Proxies and other instruments of appointment shall not be treated as valid unless they are deposited at the Registered
Office of the Company at Securities Services (Holdings) Sdn. Bhd., Level 7, Menara Milenium, Jalan Damanlela, Pusat
Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur not less than 48 hours before the time appointed for
holding the meeting or any adjournments thereof.
166
WING TAI MALAYSIA BERHAD (Company No. 6716 - D)
(Incorporated in Malaysia)
Proxy Form
No. of Shares Held
CDS Account No.
*I/We (full name in capital letters) (NRIC No./Company No. )
of ,
being a *member/members of Wing Tai Malaysia Berhad (“the Company”) hereby appoint (full name in capital letters), (NRIC No. ) of or failing *him/her, (full name in capital letters)
(NRIC No. ) of or failing *him/her, the Chairman of the Meeting as *my/our proxy to vote for *me/us and on *my/our behalf at the Forty-Eighth Annual General
Meeting of the Company to be held at Boeing 2 & 3, Level 1, Sama-Sama Hotel, KL International Airport, Jalan CTA 4B, 64000 KLIA, Sepang,
Selangor Darul Ehsan on Tuesday, 18 November 2014 at 2.00 p.m. and at any adjournment thereof.
No.
Resolution 1
Resolution 2
RESOLUTIONS
Declaration of a First and Final Dividend of 5 sen per share Single Tier and Special Dividend of
2 sen per share Single Tier for the financial year ended 30 June 2014.
Approval of the payment of Directors’ fees for the financial year ended 30 June 2014.
Resolution 9
Re-election of Mr Cheng Wai Keung as Director who retires in accordance with Article 82 of the
Company’s Articles of Association.
Re-election of Mr Edmund Cheng Wai Wing as Director who retires in accordance with Article 84 of
the Company’s Articles of Association.
Re-appointment of Y. Bhg. Dato’ Roger Chan Wan Chung as Director who retires pursuant to
Section 129 of the Companies Act, 1965.
Re-appointment of Y. Bhg. Dato’ Ghazi bin Ishak as Director who retires pursuant to Section 129 of
the Companies Act, 1965.
Re-appointment of Mr Chong Tet On as Director who retires pursuant to Section 129 of the
Companies Act, 1965.
Re-appointment of Y. Bhg. Tan Sri Dato’ Paduka Dr. Mazlan bin Ahmad as Director who retires
pursuant to Section 129 of the Companies Act, 1965.
Re-appointment of Messrs Ernst & Young as Auditors of the Company.
Resolution 10
As Special Business (Ordinary Resolutions):
- Retention of Y. Bhg. Dato’ Ghazi Bin Ishak as an Independent Non Executive Director
Resolution 3
Resolution 4
Resolution 5
Resolution 6
Resolution 7
Resolution 8
Resolution 11
Resolution 12
Resolution 13
Resolution 14
Resolution 15
FOR
AGAINST
- Retention of Mr. Chong Tet On as an Independent Non Executive Director
- Proposed Renewal of Share Buy-Back Authority
- Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of A
Revenue or Trading Nature As Set Out in Clause 4.2(i) and (ii).
- Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of
A Revenue or Trading Nature As Set Out in Clause 4.2(iii).
- Authority to issue Shares pursuant to Section 132D of the Companies Act, 1965.
Please indicate with an “X” in the appropriate boxes on how you wish your vote to be cast on the Resolutions specified in the Notice of Annual
General Meeting. Unless voting instructions are indicated in the space above, the proxy will vote as he/she thinks fit.
*Strike out whichever is not applicable
Dated this__________________day of _____________, 2014
___________________________________
Signature of Member/Common Seal
Notes:
1. 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 for the Audited Financial Statements from
the shareholders. Therefore, this agenda item is not put forward for voting.
2. Y. Bhg. Tan Sri Dato’ Mohamed Noordin bin Hassan who is retiring pursuant to Section 129 of the Companies Act, 1965, shall not be seeking for re-appointment as the Director of the
Company. Hence, he will retain office until the conclusion of the Forty-Eighth Annual General Meeting of the Company
3. In respect of deposited securities, only members whose names appear in the Record of Depositors on 10 November 2014 (General Meeting Record of Depositor”) shall be eligible to attend
the Meeting.
4. A member of the Company entitled to attend and vote at the meeting is entitled to appoint any person as his proxy to attend and vote in his stead. A proxy may but need not be a member
of the Company and a member may appoint any person to be his proxy without limitation and the provisions of Section 149(1)(b) of the Companies Act 1965 shall not apply to the Company.
There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the Meeting shall have the same rights as the member to speak at the Meeting.
5. Where a member appoints more than one proxy, the appointments shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.
6. The instrument appointing proxy shall be in writing under the hand of the appointor or his attorney only authorised in writing, or if the appointor is a corporation, the proxy form must be
given under its common seal or under the hand of officers of the corporation duly authorised on its behalf.
7. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus
account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.
8. Proxies and other instruments of appointment shall not be treated as valid unless they are deposited at the Registered Office of the Company at Securities Services (Holdings) Sdn. Bhd.,
Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, 50490 Kuala Lumpur not less than 48 hours before the time appointed for holding the meeting
or any adjournments thereof.
Fold this flap for sealing
Then fold here
AFFIX
STAMP
THE COMPANY SECRETARIES
WING TAI MALAYSIA BERHAD (6716-D)
c/o Securities Services (Holdings) Sdn. Bhd.
50490 Kuala Lumpur
Malaysia
1st fold here
On front cover:
Nobleton Crest, ultra-gracious apartments in the heart of U-Thant, Kuala Lumpur.

Annual Report 2014 - Wing Tai Malaysia Berhad

Transcription

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