Laporan Tahunan Annual Report

Transcription

DFZ CAPITAL BERHAD (104556-X)
L a p o r a n Ta h u n a n
2007
Annual Report
Laporan Tahunan 2007 Annual Report
Serving You
DFZ CAPITAL BERHAD
(104556-X)
Wisma Atlan
8 Persiaran Kampung Jawa
11900 Bayan Lepas, Penang
http://www.dfzcapital.com.my
Tel : 604 641 3200
Fax : 604 642 3200
2007
table of contents
Corporate Information............................................ 2
Corporate Structure............................................... 3
Location Map......................................................... 4
Directors’ Profile..................................................... 5
Managing Director’s Statement.............................. 8
Penyata Pengarah Urusan...................................... 10
董事经理报告.......................................................... 12
Statement On Corporate Governance................... 14
Additional Compliance Information........................ 20
Audit Committee Report........................................ 23
Statement On Internal Control............................... 27
Corporate Social Responsibility............................. 28
Financial Statements.............................................. 29
Analysis Of Ordinary And
Preference Shareholdings...................................... 103
List Of Properties.................................................... 113
Notice Of Annual General Meeting......................... 115
Form Of Proxy
D F Z
C A P I TA L
(Company No.: 104556-X)
B E R H A D
(Incorporated in Malaysia)
Corporate Information
BOARD OF DIRECTORS
Dato’ Paduka Syed Mansor
bin Syed Kassim Barakbah
Independent Non-Executive Director
Dato’ Ong Kar Beau
Managing Director
Dato’ Sri Khalid bin Mohamad Jiwa
Executive Director
Wong Peng Yew
Executive Director
Mohd Kamarudin bin Haron
AUDIT COMMITTEE
AUDITORS
Mohamed Suhaimi bin Sulaiman
Chairman,
Ernst & Young (AF 0039)
Chartered Accountants
Wong Peng Yew
Executive Director
PRINCIPAL BANKERS
Affin Bank Berhad
Alliance Bank Malaysia Berhad
Malayan Banking Berhad
Public Bank Berhad
REMUNERATION COMMITTEE
REGISTERED OFFICE
Chairman,
Wisma Atlan, 8 Persiaran Kampung Jawa,
11900 Bayan Lepas, Penang
Tel No: 604-641 3200
Fax No: 604-642 3200
Managing Director
NOMINATION COMMITTEE
Chairman,
SHARE REGISTRAR
Symphony Share Registrars Sdn. Bhd. (378993-D)
Level 26, Menara Multi-Purpose, Capital Square
No. 8 Jalan Munshi Abdullah
50100 Kuala Lumpur
Tel No: 603-2721 2222
Fax No: 603-2721 2530/ 2721 2531
STOCK EXCHANGE LISTING
Main Board of Bursa Malaysia Securities Berhad
Stock Name/Code : DFZ/5177
Stock Sector : Trading/Services
WEBSITE ADDRESS
COMPANY SECRETARY
Thum Sook Fun (MAICSA 7025619)
D F Z
C A P I TA L
B E R H A D
http://www.dfzcapital.com.my
Corporate Structure
as at 12 May 2008
(formerly known as Sriwani Tours & Travel Sdn. Bhd.)
D F Z
C A P I TA L
B E R H A D
Location Map
D F Z
C A P I TA L
B E R H A D
Directors’ Profile
DATO’ ONG KAR BEAU
Managing Director
DATO’ ONG KAR BEAU, Malaysian, aged 54 is the Managing Director of DFZ. He was appointed
to the Board of DFZ on 9 October 2002. He is also a member of the Remuneration Committee
of DFZ.
Dato’ Ong ran a sole proprietor business in dealing and transportation of palm oil products from
1974 to 1990 and also for logging and gold mining in Terengganu and Kelantan from 1988 to
1991. From 1992 until now, he has been managing his own investment portfolio.
Dato’ Ong does not hold directorship in any other public companies.
Dato’ Ong does not have any family relationship with any director and/or major shareholder of the
Company. He does not have any conflict of interest with the Company. He has had no convictions
for any offences within the past ten (10) years other than traffic offences, if any.
Dato’ Ong has attended all the six (6) Board Meetings held in the financial year ended 31 December
2007.
DATO’ SRI KHALID BIN MOHAMAD JIWA
Executive Director
DATO’ SRI KHALID BIN MOHAMAD JIWA, a Malaysian aged 49, is an Executive Director of DFZ.
He was appointed to the Board of DFZ on 9 October 2002.
Dato’ Sri Khalid began his impressive career in the financial sector when he joined Bank Bumiputera
Malaysia Berhad (“BBMB”) (now known as CIMB Bank Berhad) in 1981. Dato’ Sri Khalid is a
business graduate from UiTM and during his tenure with BBMB, he has gathered vast knowledge
and experience in financial business activities. At the same time, he has contributed significantly in
the company’s operations and business development especially when he was the Head of Credit
at one of its Selangor branches, responsible for analysing and managing credit portfolio.
His tremendous experience in the financial sector and other business fields has led to his
involvement in corporate ventures. Being an aggressive entrepreneur, he began making inroads
into the corporate world when he was appointed as a Director of PASDEC Holdings Berhad – a
public listed company on the Main Board of Bursa Malaysia Securities Berhad. Dato’ Sri Khalid
is also a Director of Naluri Corporation Berhad and United Industries Holdings Sdn Bhd. He is
also the Advisor to the Committee of several community associations.
He is the Executive Chairman of Ace Global Ventures Sdn Bhd and its group of companies,
which is involved in TV media services, supply of TV programmes, events management, supply
of broadcast and other specialised equipment, property, construction and engineering works.
Dato’ Sri Khalid does not have any family relationship with any director and / or major shareholder
of the Company. He does not have any conflict of interest with the Company. He has had no
convictions for any offences within the past ten (10) years other than traffic offences, if any.
Dato’ Sri Khalid has attended five (5) out of the six (6) Board Meetings held in the financial year
ended 31 December 2007.
D F Z
C A P I TA L
B E R H A D
Directors’ Profile (Cont’d)
WONG PENG YEW
Executive Director
WONG PENG YEW, Malaysian, aged 42, is an Executive Director of DFZ. He was appointed to
the Board of DFZ on 15 October 2002. He is also a member of the Audit Committee of DFZ.
He graduated from Monash University, Australia in 1993 with a Bachelor of Economics
(Accounting) and Graduate Diploma in Business Information System. He started his career with
PricewaterhouseCoopers in 1993 and later joined Ban Hin Lee Bank Berhad as a Senior CIS Audit
Supervisor/Analyst Programmer from 1993 to 1994. He was in DFZ Group of Companies from 1994
to 2000. During this period, he holds various senior positions such as Chief Internal Auditor, Chief
Business Engineering Officer, General Manager-Business Development and Director-Corporate
Affairs. He ventured into consultancy business in 2000 to 2002.
Wong Peng Yew also sits on the Board of Naluri Corporation Berhad, a company listed on Bursa
Malaysia Securities Berhad as well as several private limited companies.
He does not have any family relationship with any director and/or major shareholder of the
Company. He does not have any conflict of interest with the Company or any convictions for
offences within the past ten (10) years other than traffic offences, if any.
He has attended all the six (6) Board Meetings held in the financial year ended 31 December
2007.
DATO’ PADUKA SYED MANSOR BIN SYED KASSIM BARAKBAH
DATO’ PADUKA SYED MANSOR BIN SYED KASSIM BARAKBAH, Malaysian, aged 73, is an
Independent Non-Executive Director of DFZ. He was appointed to the Board of DFZ on 11 April
1994. He is also the Chairman of the Nomination Committee, a member of the Audit Committee
as well as the Remuneration Committee of DFZ.
Dato’ Paduka graduated from the University of Malaya in Singapore with a Bachelor of Arts
Degree. He joined the Kedah Civil Service after receiving his Bachelor Degree. He has also served
in various capacities including such posts as Kedah Directors of Land and Mines, State Financial
Officer and finally, the State Secretary before retiring in 1989.
Dato’ Paduka is also a Director of Yayasan Kedah Berhad, Yayasan Sultanah Bahiyah Berhad
and Thong Guan Industries Berhad.
Dato’ Paduka does not have any family relationship with any director and/or major shareholder
of the Company. He does not have any conflict of interest with the Company. He has had no
convictions for any offences within the past ten (10) years other than traffic offences, if any.
Dato’ Paduka has attended four (4) out of the six (6) Board Meetings held in the financial year
ended 31 December 2007.
D F Z
C A P I TA L
B E R H A D
Directors’ Profile (Cont’d)
MOHAMED SUHAIMI BIN SULAIMAN
MOHAMED SUHAIMI BIN SULAIMAN, Malaysian, aged 48, is an Independent Non-Executive
Director of DFZ. He was appointed to the Board of DFZ on 23 April 2004. He is also the Chairman
of the Audit Committee and Remuneration Committee as well as a member of the Nomination
Committee of DFZ.
He graduated from the Central State University, Edmond, Oklahoma with a Bachelor of Business
Administration (Finance).
Mohamed Suhaimi is currently with Konsortium Jaringan Selangor as an Executive Director since
1998. He also served as a credit analyst in Bank Bumiputra Malaysia Berhad (now known as CIMB
Bank Berhad) from 1991 to 2001.
2007.
MOHD KAMARUDIN BIN HARON
MOHD KAMARUDIN BIN HARON, Malaysian, aged 55, is an Independent Non-Executive Director
of DFZ. He was appointed to the Board of DFZ on 2 February 2005. He is also a member of the
Nomination Committee of DFZ.
After finishing his S.E./MCE Form 5 education from English College J.B., he attended various
management programme and courses ranging from 3 months to a year with the Malaysian
Institute of Management. He has over 30 years experience in the construction and property
development industry. He currently has investments as well as directorships in several private
limited companies.
Mohd Kamarudin also sits on the Board of Merge Housing Bhd. as an Independent Non-Executive
Chairman, a company listed on Bursa Malaysia Securities Berhad.
2007.
D F Z
C A P I TA L
B E R H A D
Managing Director’s Statement
On behalf of the Board of Directors, I am pleased to present to you the
Annual Report and Audited Financial Statements of DFZ Capital Berhad
(“DFZ”) for the year ended 31 December 2007.
FINANCIAL HIGHLIGHTS
DFZ Group achieved a total revenue of RM304.97 million
in 2007, which is RM29.04 million or 10.5% higher than
RM275.93 million recorded in 2006. DFZ Group is able
to reap the benefits from the higher arrival of tourists’
with the successful Visit Malaysia Year 2007, and the
increased traveling by Malaysians with the strengthening
of Malaysian economy in 2007. DFZ Group continues to
emphasise on serving its customers with quality products
and services in trading of duty free goods and non-dutiable
merchandise and properties and hospitality segments.
DFZ Group achieved an operating profit of RM30.04 million in 2007, which is RM9.27 million or
44.6% higher than RM20.77 million achieved in 2006. The much higher year-on-year operating
profit growth over the revenue growth in 2007 is because the higher profit margin in 2007 is not
hampered by any one-off additional expenses incurred in 2006. After incurring higher finance
costs and relatively higher tax, DFZ Group achieved a profit after tax of RM18.57 million, which
is RM5.53 million or 42.41% higher than the RM13.04 million achieved in 2006.
BUSINESS DEVELOPMENT
As stated in the 2006 Annual Report, in July 2006, we
commenced the re-development of part of the open-air
car park area and service road at the front of the ZON
Johor Bahru and the adjacent ground and first floors
into a theme entertainment area branded as the FUN
ZON. The re-development includes the following main
components:-
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D F Z
water feature including a fountain at the car park
area;
waterfront broad walk;
beach club besides the waterfront;
open grand staircase leading to the first floor;
bubble lift leading to the second floor above the ZON
Jetty, as well as converting it into an entertainment
hall;
renovation to the ground and first floors at the
ZON Mall leading to the ZON Jetty into theme
entertainment outlets; and
renovation to the ground floor bus bays under the
ZON Jetty into theme restaurants.
C A P I TA L
B E R H A D
Managing Director’s Statement (Cont’d)
The re-development is completed during the year under
review and the increased space has been taken up.
The ZON Johor Bahru has since established itself as
the key player in the hospitality scene in Johor Bahru,
with its quality hotel, convention facilities, duty free
shopping, theme restaurants and entertainment outlets, all
integrated, as well as acting as the gateway to Indonesia
in Johor Bahru.
On 21 September 2007, we signed a shares sale and
purchase agreement with Atlan Holdings Bhd for the
acquisition of the entire equity interest in Emas Kerajang
Sdn Bhd (“EKSB”) for a cash consideration of RM40.0
million. EKSB owns and operates a duty free complex at Padang Besar town, Perlis Indra Kayangan.
The duty free complex offers one-stop shopping for shoppers crossing the Malaysia-Thailand
border at Padang Besar town. DFZ Group already has a presence at the Malaysia-Thailand
border through its subsidiary operating in Bukit Kayu Hitam, Kedah Darul Aman. The acquisition
represents a synergistic move for DFZ Group to further capture the duty free market and hence
dominate the duty free market at the Malaysia-Thailand border. The acquisition was completed
on 8 January 2008.
OUTLOOK
We are cautiously optimistic with our business performance
in 2008, under the environment of global economic
uncertainty. The resilience of the economy in Malaysia
and in the region should help to sustain both domestic
and overseas traveling. We continue to give priority to
customers’ satisfaction and are always embarking on
incremental improvements.
ACKNOWLEDGEMENT
We are deeply saddened by the demise of our Chairman,
the late Tan Sri Dato’ Seri Megat Junid bin Megat Ayob
on 24 January 2008. His leadership to DFZ Group is
extremely invaluable and will be forever remembered. We
wish to express our deepest condolence to the late Tan
Sri’s family.
We continue to receive support from our valued customers,
suppliers, bankers and employees, and invaluable
guidance and assistance of our government officers. We
are indeed grateful to them.
To our shareholders, we thank you for your trust in us from
the bottom of our hearts. Your trust in us encourages us
to move forward and we are committed to delivering our
best.
Yours sincerely,
Ong Kar Beau
Managing Director
22 May 2008
D F Z
C A P I TA L
B E R H A D
Penyata Pengarah Urusan
Bagi pihak Lembaga Pengarah, saya dengan sukacitanya membentangkan
Laporan Tahunan dan Penyata Kewangan DFZ Capital Berhad (“DFZ”) bagi
tahun berakhir 31 Disember 2007 yang telah diaudit.
KAJIAN KEWANGAN
Kumpulan DFZ telah mencapai perolehan sebanyak
RM304.97 juta pada tahun 2007, peningkatan sebanyak
RM29.04 juta atau 10.5% berbanding RM275.93 juta
yang dicatatkan pada tahun 2006. Kumpulan DFZ
berupaya memperoleh manfaat daripada peningkatan
ketibaan pelancong-pelancong dengan kejayaan Tahun
Melawat Malaysia 2007, berserta peningkatan kegiatan
pelancongan oleh rakyat tempatan berikutan pengukuhan
ekonomi Malaysia pada tahun 2007. Kumpulan DFZ
terus memberi penekanan terhadap kualiti barangan dan
perkhidmatan kepada pelanggan-pelanggan di dalam
kedua-dua bahagian peruncitan barangan bebas cukai dan
barangan tidak bercukai, hartanah dan juga hospitaliti.
Kumpulan DFZ telah mencapai keuntungan operasi sebanyak RM30.04 juta pada tahun 2007,
iaitu peningkatan sebanyak RM9.27 juta atau 44.6% daripada RM20.77 juta yang dicapai pada
tahun 2006. Keuntungan operasi lebih tinggi yang dicapai ke atas peningkatan perolehan pada
tahun 2007 ini adalah disebabkan marjin keuntungan pada tahun 2007 tidak dibebankan oleh
perbelanjaan tambahan yang tidak berulang seperti di dalam tahun 2006. Setelah mengambilkira
kos kewangan serta cukai yang lebih tinggi, Kumpulan DFZ mencatat keuntungan selepas cukai
sebanyak RM18.57 juta pada tahun 2007, iaitu peningkatan RM5.53 juta atau 42.41% berbanding
RM13.04 juta yang dicapai pada tahun 2006.
PERKEMBANGAN PERNIAGAAN
Sebagaimana yang dinyatakan di dalam Laporan Tahunan
2006, pada bulan Julai 2006, kami telah memulakan
pembangunan semula sebahagian daripada tempat letak
kereta terbuka dan jalan di hadapan ZON Johor Bahru
berserta tingkat bawah dan tingkat satu di bangunan
bersebelahan menjadi tempat hiburan bertema yang
dijenamakan sebagai FUN ZON. Pembangunan semula
tersebut melibat, komponen-komponen utama yang
berikut:•
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10
D F Z
Tema air termasuk kolam pancutan air di tempat
letak kereta;
Tempat pejalan kaki di kawasan dermaga;
Kelab pantai di tepi kawasan dermaga;
Tangga mewah terbuka yang menghala ke tingkat
satu;
Lif gelembung yang memberi perkhidmatan
sehingga tingkat dua di atas Jeti ZON, yang juga
telah diubahsuai menjadi dewan hiburan;
Pengubahsuaian tingkat bawah dan tingkat satu di
ZON Mall di laluan yang menuju ke Jeti ZON kepada
tempat-tempat hiburan; dan
Pengubahsuaian tempat letak bas di tingkat bawah
Jeti ZON kepada rangkaian restoran bertema.
C A P I TA L
B E R H A D
Penyata Pengarah Urusan (Samb.)
Pembangunan semula ini telah disiapkan sepenuhnya
dalam tahun yang dikaji dan ruang tambahan yang
diwujudkan juga telah disewakan. Semenjak itu, ZON
Johor Bahru telah melakar nama di dalam bidang
hospitaliti di Johor Bahru, dengan adanya hotel berkualiti,
kemudahan konvensyen, pusat membeli-belah bebas
cukai, restoran-restoran bertema dan tempat-tempat
hiburan, kesemuanya bersepadu serta turut berperanan
sebagai gerbang laluan ke Indonesia di Johor Bahru.
Pada 21 September 2007, kami telah menandatangani
satu perjanjian jual beli saham dengan Atlan Holdings
Bhd untuk membeli keseluruhan saham ekuiti dalam Emas
Kerajang Sdn Bhd (“EKSB”) bagi balasan tunai sebanyak
RM40.0 juta. EKSB memiliki dan mengusahakan kompleks barangan bebas cukai di Padang
Besar, Perlis Indra Kayangan. Kompleks barangan bebas cukai ini menawarkan aktiviti membelibelah sepusat kepada para pembeli yang melalui sempadan Malaysia-Thailand di Padang Besar.
Kumpulan DFZ sudahpun menjalankan perniagaan di bidang yang sama di sempadan MalaysiaThailand melalui anak syarikatnya yang beroperasi di Bukit Kayu Hitam, Kedah Darulaman.
Pengambilalihan ini melambangkan satu langkah sinergi kepada Kumpulan DFZ untuk menawan
pasaran bebas cukai dan dengan itu menguasai pasaran bebas cukai di sempadan MalaysiaThailand. Pengambilalihan ini telah disempurnakan pada 8 Januari 2008.
TINJAUAN PERNIAGAAN
Kami optimistik tetapi juga berwaspada terhadap
prestasi perniagaan kami untuk tahun 2008, di dalam
suasana ketidakpastian ekonomi sejagat. Ekonomi yang
agak resilian di Malaysia dan di rantau ini diharap akan
membantu mengekalkan pelancongan tempatan dan luar
negara. Kami akan terus memberikan keutamaan kepada
kepuasan pelanggan dan akan sentiasa mencari ruang
untuk meningkatkan perkhidmatan kami.
PENGHARGAAN
Kami amat berdukacita dengan pemergian Pengerusi
Eksekutif kami, Allahyarham Tan Sri Dato’ Seri Megat Junid
bin Megat Ayob yang telah pulang ke rahmatullah pada
24 Januari 2008. Kepimpinan Allahyarham Tan Sri kepada
Kumpulan DFZ adalah tidak ternilai dan akan dikenang
selama-lamanya. Kami ingin mengucapkan takziah kepada
keluarga Allahyarham Tan Sri.
Kami amat menghargai sokongan berterusan daripada
para pelanggan yang dihargai, para pembekal, pihak bank,
para kakitangan dan panduan berserta bantuan pegawai
Kerajaan kepada Kumpulan kami. Kami amat terhutang
budi kepada mereka.
Kepada para pemegang saham, kami berterima kasih ke
atas kepercayaan yang anda berikan kepada kami. Kepercayaan anda meyakinkan kami untuk
terus bergerak maju dan kami bertekad untuk memberikan yang terbaik untuk anda.
Yang benar,
Ong Kar Beau
Pengarah Urusan
22 Mei 2008
D F Z
C A P I TA L
B E R H A D
11
董事经理报告
我谨代表董事局，提呈截至2007年12月31日止结束的 DFZ Capital Berhad
(“DFZ”) 的常年报告及已稽核财务报告。
财务重点
DFZ 集团在2007财政年的总营业额为3亿497万令
吉，比2006财政年的2亿7千593万令吉，增加2千
904万令吉或相等于10.5％的增长。2007马来西亚旅
游年举办得非常成功，使马来西亚吸引较多的游客入
境，以及马来西亚人民在国家经济强稳推动下，增加
了旅游的次数，这些利好因素都让 DFZ 集团取得更好
的业绩。DFZ集团将继续以具高素质的产品及服务来
服务客户，即在免税商品及非税务商品的贸易业务和
产业及酒店业务方面精益求精。
DFZ 集团在2007财政年的营运盈利为3千零4万令吉，比较2006财政年的 2千零77万令
吉，高出927万令吉或44.6％。在2007年，年对年的营运盈利增长比营业额增长较为高，
是因为2006年存在着一次性的额外开销，而2007年则不受影响。在计算较高的财务成本
及比例下较高的税务之后，DFZ 集团取得了1千857万令吉的税后盈利，比2006年的1千
304万令吉，增加了553万令吉或42.41％。
业务发展
诚如2006年常年报告中所提，我们从2006年7月开
始重新发展位于新山免税区前的部分露天停车场和道
路，以及毗邻的底楼及1楼，作为一个主题娱乐区，
名为 FUN ZON。这项重建发展计划包括下列设施：
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D F Z
在停车场设立流水景观，包括一个喷水池；
滨水区宽阔走道；
滨水区旁的海滨俱乐部；
通往1楼的开放式宽大楼梯；
通往改成娱乐大厅的 ZON 码头2楼的透视玻璃
电梯；
装修通往 ZON 码头的 ZON 商场底楼及1楼成主
题娱乐商店；以及
装修ZON码头底层的巴士停泊区成主题餐馆。
C A P I TA L
B E R H A D
董事经理报告 (继续)
这项重新发展计划已经在检讨年中完成，而增加出来
的空间已被使用。新山免税区已经成为新山主要的休
闲地点，它具备高品质酒店，会议设备，免税购物商
店、主题餐馆、娱乐设施等全部汇聚在一起，也扮演
着新山通往印尼的国际口岸。
在2007年9月21日，我们与 Atlan Holdings Bhd 签署
了一项买卖股票协议，以现金4千万令吉收购 Emas
Kerajang Sdn Bhd (“EKSB”) 的全部股权。EKSB 拥
有及管理位于玻璃市州巴东勿刹的一座免税商场。这
座一站式的免税商场，供通过巴东勿刹口岸往来马泰的人士尽情购物。DFZ 集团在马泰
边境吉打州黑木山，早已拥有自身的免税商场。通过这项收购，可形成协同作用，让
DFZ 集团在马泰边境的免税店市场进一步获取更大，甚至是控制性的市场份额。这项收
购计划已于2008年1月8日完成。
前景
我们对2008财政年的整体业务表现，在全球经济
环境仍是处于不明朗的情况下，保持适度乐观。本
区域及马来西亚的经济还呈现活力，相信这有助于
推动本地及海外的旅游业发展。提供客户满意的服
务，仍然是我们的首要工作，我们会继续寻求更大
的进步空间。
铭谢
我们对于主席 Tan Sri Dato’ Seri Megat Junid bin
Megat Ayob 的逝世深感悲恸。DFZ 集团非常感谢
他过去对于我们的领导及教诲，我们会深深铭记在
心。我们也希望藉此机会向 Tan Sri 的家人表达最深
切的哀悼。
我们持续得到尊贵客户、供应商、银行家及员工的支
持，以及得到政府官员宝贵的督导及协助。我要向他
们献上最诚挚的道谢。
对于我们的股东，我要感谢你们的信任，你们的信
任鼓舞着我们往前迈进，我们承诺会为你们贡献更
好的成就。
董事经理
王家渺谨启
2008年5月22日
D F Z
C A P I TA L
B E R H A D
13
Statement on Corporate Governance
The Board of Directors of DFZ Capital Berhad (“the Board”) is pleased to report to the shareholders on the manner
the Group has applied the principles and the extent of compliance with the best practices of corporate governance
as set out in the Malaysian Code on Corporate Governance (“Code”) together with the provisions contained in the
Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”).
The Board is committed to ensuring that good corporate governance is practised throughout the Group as a
fundamental element and basis of discharging its responsibilities to protect shareholders’ value and enhance
financial performance of the Group both in the immediate future as well as in the long term.
The following statements outline the main corporate governance practices of the Group which were in place
throughout the financial year ended 31 December 2007.
BOARD OF DIRECTORS
The Board comprises members with a wide range of experience which bring an independent judgment to bear on
issues of strategy, performance, resources and standards of conduct.
The Board recognises its ultimate responsibility and accountability for the Group’s operations and retains full and
effective control of the Group. The Board assumes responsibilities for determining the Company’s overall strategic
direction, as well as development and control of the Group. It has further adopted the pertinent responsibilities as
listed in the Code to facilitate the discharge of the Board’s stewardship function.
Key matters, such as approvals of annual and interim financial results, acquisitions and disposals, as well as
material agreements, major capital expenditures, budgets, long term plans and succession planning are reserved
for the Board.
BOARD COMPOSITION AND BALANCE
The Board currently has six (6) members, comprising three (3) Independent Non-Executive Directors and three
(3) Executive Directors. The Company fully complies with the requirement of the Listing Requirements of Bursa
Securities for Independent Non-Executive Directors to make up at least one-third (1/3) of the Board membership,
as well as the requirement for a Director who is a member of the Malaysian Institute of Accountants to sit on the
Audit Committee.
The composition of the Board is deemed fairly balanced and complements itself in providing industry-specific
knowledge, technical knowledge and commercial experience. Together, the Board members bring a wide range
of business and financial experience relevant to ensure the Group continues to be competitive in the duty free,
trading and service industries.
A brief profile of each Director is presented in the preceding pages of this Annual Report.
There is a clear division of responsibilities between the Independent Non-Executive Directors and the Managing
Director to ensure the desired balance of power and authority.
The presence of Independent Non-Executive Directors fulfills a pivotal role in corporate governance accountability
and they are fully independent of management and free from any relationship which could interfere with their
unbiased and independent judgment.
Balance is further ensured by way of active and unrestricted participation of Independent Non-Executive Directors
in the deliberation and decision of the Board. All Directors have full access to background information pertaining
to all matters placed before them for decision and are entitled to call for full disclosure by the management. This
is to ensure that matters moved for decision by the Board can be discussed and examined in a balanced manner
that take into account the long term interests, not only of the shareholders, but also of the employees, suppliers,
customers and the communities with which the Group conducts businesses with.
14
D F Z
C A P I TA L
B E R H A D
Statement on Corporate Governance (Cont’d)
BOARD MEETINGS
The Board has at least four (4) regular scheduled meetings annually, with additional meetings convened as and
when necessary.
Six (6) Board meetings were held during the financial year ended 31 December 2007. The attendance record of
each Director is as follows:
Number of
Date of
Board
Director
appointment
Meetings held
Number of
Board
Meetings
attended
Percentage
(%)
Tan Sri Dato’ Seri Megat Junid15-04-2003
bin Megat Ayob
(Demised on 24-01-2008)
6
3
50
09-10-2002
6
6100
Dato’ Sri Khalid bin Mohamad Jiwa
09-10-2002
6
5
Wong Peng Yew15-10-2002
6
6100
bin Syed Kassim Barakbah11-04-1994
6
4
23-04-2004
6
6100
02-02-2005
6
6100
83
67
SUPPLY OF INFORMATION
All Directors are provided with quarterly reports on major operational, financial and corporate issues prior to the
Board Meetings. Agenda and papers on specific subjects are sent to members of the Board in advance to ensure
that there is sufficient time to enable the Directors to obtain further explanations where necessary and to facilitate
informed decision-making process.
All members of the Board, whether as a full Board or in their individual capacity, have access to all information
within the Group and ready and direct access to the advice and services of the Company Secretary to assist them
in furtherance of their duties. Where necessary, the Board may engage independent professional advisors, at the
Group’s expense, on specialised issues to enable them to discharge their duties proficiently.
APPOINTMENT AND RE-ELECTION OF DIRECTORS
In accordance with the Company’s Articles of Association, one-third (1/3) of the Directors shall retire from office at
every annual general meeting (“AGM”) but shall be eligible for re-election. The Articles also provide that Directors
appointed during the year by the Board shall hold office only until the next AGM, and shall be eligible for reelection.
Director over seventy (70) years of age is subject to re-appointment annually in accordance with Section 129 (6)
of the Companies Act, 1965.
D F Z
C A P I TA L
B E R H A D
15
DIRECTORS’ TRAINING
The Board are mindful that they should receive appropriate continuous training and they have attended seminars
and briefings in order to broaden their perspectives and to keep abreast with the changes on guidelines issued by
the relevant authorities as well as the latest developments in the market place. The Board will continue to undergo
other relevant training programmes as appropriate, to further enhance their skills and knowledge. The Company
organizes trainings at least once every two (2) years for the Board to ensure they are kept up-to-date on relevant
developments.
The Board has attended a training program on improving the Board’s performance, leadership and governance on
22 August 2007.
BOARD COMMITTEES
The Board has appointed Board committees, which operate within clearly defined terms of reference. Standing
committees of the Board include the Audit Committee, the Nomination Committee and the Remuneration
Committee.
(a)
Audit Committee
The Audit Committee’s role and functions are set out on pages 23 to 26 of this Annual Report. (b)
Nomination Committee
The Nomination Committee, comprising exclusively Independent Non-Executive Directors, is given the
responsibility of proposing new nominees for the Board including the Board’s committees and assessing the
performance of each individual Director and overall effectiveness of the Board on an ongoing basis.
The Nomination Committee currently comprises the following:
•
•
•
The appointment of new Directors is the responsibility of the full Board after considering the recommendation
of the Nomination Committee.
In making its recommendation, the Committee will consider the required mix of skills and experience and
other qualities, including core competencies which Directors of the Company should bring to the Board.
The Committee met once during the financial year ended 31 December 2007.
(c)
Remuneration Committee
The Remuneration Committee, comprising a majority of Independent Non-Executive Directors, is given the
responsibility of recommending to the Board the framework and quantum values for the Executive Directors’
remuneration and the remuneration package for each Executive Director.
The Remuneration Committee currently comprises the following:
•
•
•
16
Dato’ Paduka Syed Mansor bin Syed Kassim Barakbah (Chairman)
D F Z
Mohamed Suhaimi bin Sulaiman (Chairman)
Dato’ Paduka Syed Mansor bin Syed Kassim Barakbah
The Committee met once during the financial year ended 31 December 2007 to deliberate on the remuneration
of the Executive Directors for the financial year ended 31 December 2007.
C A P I TA L
B E R H A D
DIRECTORS’ REMUNERATION
The Board endeavours to ensure that the level of remuneration offered to Directors is sufficient to attract and
retain people needed to run the Group successfully. In the case of Executive Directors, the component parts of
remuneration are structured to link rewards to corporate and individual performance. In the case of Non-Executive
Directors, the level of remuneration reflects the experience and level of responsibilities undertaken by the particular
Non-Executive Director concerned.
The policy of the Executive Directors’ Remuneration will be in line with the Group’s overall practice on pay and
benefits. Non-Executive Directors’ and the Independent Non-Executive Chairman’s remuneration will be a matter
to be decided by the Board as a whole with the Director concerned abstaining from deliberation and voting on
decisions in respect of his individual remuneration. The Company will reimburse reasonable expenses incurred by
Non-Executive Directors in the course of their duties as Directors.
A summary of the remuneration of Directors for the financial year ended 31 December 2007 are as follows:
1. Aggregate remuneration of Directors categorised into appropriate components:
Salaries & other
emoluments
RM’000
Allowances
and Fees
RM’000
Executive Directors1,838
Non-Executive Directors
–
2.
Total
RM’000
–1,838
343
343
Number of Directors whose remuneration fall into the following bands:
2007
2006
Number of Directors
Number of Directors
Non-
Non
Executive Executive *
Executive
Executive
Below RM50,000
–
RM100,001 – RM150,000
–
RM150,001 – RM200,000
–
RM400,001 – RM450,0001
RM550,001 – RM600,0001
RM750,001 – RM800,000
–
RM850,001 – RM900,0001
*
2
–
2
2
–1
–
–1
–
–
–
–1
–
–1
–
–1
–
including Tan Sri Dato’ Seri Megat Junid who demised on 24 January 2008.
D F Z
C A P I TA L
B E R H A D
17
ACCOUNTABILITY AND AUDIT
Financial Reporting
In presenting the announcements of annual financial statements and quarterly financial results to shareholders,
investors and regulatory authorities, the Board of Directors aim to present a balanced and understandable assessment
of the Group’s position and prospects. The Audit Committee assists the Board in scrutinising information for
disclosure to ensure accuracy and adequacy.
The Statement by Directors pursuant to Section 169 of the Companies Act, 1965 is set out on page 34 of this
Annual Report.
Statement of Directors’ Responsibilities in respect of the Audited Financial Statements
The Board are required by the Companies Act, 1965 to prepare financial statements which give a true and fair view
of the state of affairs of the Group and the Company at the end of each financial year and of their results and cash
flows for the financial year.
In exercising the functions of the Board, the Directors have considered the following in preparing the financial
statements:
i)
ii)
iii)
Appropriate accounting policies have been consistently applied by the Company;
Reasonable and prudent judgments and estimates have been made; and
All applicable approved accounting standards in Malaysia have been followed.
The Board are responsible for ensuring that the Company keeps proper accounting records, which disclose with
reasonable accuracy the financial position of the Company and to enable them to ensure that the financial statements
comply with the Companies Act, 1965.
The Board has overall responsibilities for taking such steps that are reasonably available to them to safeguard the
assets of the Company and to prevent and detect fraud and other irregularities, if any.
Internal Control
The Board recognise their responsibilities for the maintenance of a system of internal controls and reviewing its
effectiveness. As with any such system, controls can only provide reasonable but not absolute assurance against
material misstatement or loss.
The Group’s Audit and Risk Assessment division regularly reports on compliance with internal financial controls
and procedures to the Audit Committee. It also ensures that the recommendations to improve controls are followed
through by management.
Relationship with the External Auditors
The Board has always maintained a professional and transparent relationship with the External Auditors in seeking
their professional advice through the Audit Committee.
The role of the Audit Committee in relation to the External Auditors is described on pages 23 to 26 of this Annual
Report.
Statement on Internal Control
The Statement on Internal Control provides an overview of the Internal Control within the Group and is set out on
page 27 of this Annual Report.
18
D F Z
C A P I TA L
B E R H A D
RELATIONSHIP WITH SHAREHOLDERS AND INVESTORS
Dialogue between the Company and Investors
The Company acknowledges the importance of transparency and accountability to its shareholders and as such
maintains a constructive communication policy with its shareholders and investors through timely dissemination
of information to ascertain that they are well informed of any major developments of the Group.
In addition to the Company’s compliances with the continuing disclosure and announcement obligations contained in
the Listing Requirements of Bursa Securities, shareholders and investors are kept informed of the Group’s progress
through the provision of Annual Report, quarterly financial results, announcements to Bursa Securities and in the
circulars to shareholders.
The Group has also established a website www.dfzcapital.com.my from which shareholders can access information
on the operations and activities of the Group.
Annual and Extraordinary General Meeting
The Board holds the view that the AGM serves as the primary means of communicating with its shareholders. At
each AGM, the Board presents the progress and performance of the Group’s businesses as contained in the Annual
Report and encourages shareholders to participate in the questions and answers session. The members of the
Board and Board Committees are available to respond to the shareholders’ questions during the meeting.
Extraordinary general meetings (“EGM”) are held as and when shareholders’ approvals are required on specific
matters. Each item of special business included in the notice of the AGM and each item of the EGM are accompanied
by an explanatory statement to facilitate full understanding and evaluation of issue involved.
COMPLIANCE WITH THE BEST PRACTICES OF THE CODE
The Group is in substantial compliance throughout the financial year with the Principles and Best Practices of the
Code.
This statement is made in accordance with a resolution of the Board of Directors dated 31 March 2008.
D F Z
C A P I TA L
B E R H A D
19
Additional Compliance Information
The information set out below is disclosed in compliance with the Listing Requirements of Bursa Malaysia Securities
Berhad.
STATUS OF UTILISATION OF PROCEEDS RAISED FROM CORPORATE PROPOSAL
The status of the utilisation of Rights Issue proceeds are as follows:
Revised
Actual
utilisation
utilisation
RM’000
RM’000 Balance
yet to be
utilised
RM’000
Repayment to Scheme Creditors (1)12,10012,100
Repayment to essential creditors (2)10,00010,000
Working capital
37,442
37,442
Establishment of new duty-free outlets120120
Refurbishment and upkeep of existing duty-free outlets and
hotel of the Group
2,000
2,000
Estimated fees relating to the Existing Restructuring Plan
and/or Proposed Alternative Restructuring Plan
4,602
4,602
–
–
–
–
–
66,264
66,264
–
–
Notes:
(1)
(2)
In event that borrowings are taken to repay the Scheme Creditors prior to completion of the Rights Issue,
such amount shall be used to repay the financial institution(s) from which the borrowings are taken.
Being payment of RM10.0 million to Majlis Bandaraya Johor Bahru, including the lease payments and additional
lease and royalty payments for subsequent period.
SHARE BUY-BACK
During the financial year, on 4 June 2007 and 3 December 2007, the Company had purchased a total of 1,200 of
its issued ordinary shares from the open market at an average price of RM2.03 per share. The total consideration
paid for the purchase was RM2,468 comprising consideration paid amounting to RM2,440 and transaction costs
of RM28 and this was financed by internally generated funds. The shares purchased are being held as treasury
shares in accordance with Section 67A of the Companies Act, 1965. No shares were resold or cancelled during
the financial year.
OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES
No options, warrants or convertible securities were issued during the financial year ended 31 December 2007.
During the financial year, a total of 3,056,969 irredeemable convertible preference shares series A (“ICPS-A”) were
converted into 277,901 new ordinary shares of RM1.00 each at a conversion price of RM1.10 per new ordinary
share which were satisfied by tendering the equivalent par value of ICPS-A for every one (1) new ordinary share.
In addition, a total of 36,416,903 irredeemable convertible preference shares series B1 (“ICPS-B1”) were converted
into 36,416,903 new ordinary shares of RM1.00 each by tendering one (1) unit of ICPS-B1 for conversion into new
ordinary shares of RM1.00 each of which RM0.10 is paid-up and the remaining RM0.90 shall be paid up from the
share premium reserve.
20
D F Z
C A P I TA L
B E R H A D
Additional Compliance Information (Cont’d)
AMERICAN DEPOSITORY RECEIPT (“ADR”) OR GLOBAL DEPOSITORY RECEIPT (“GDR”)
PROGRAMME
During the financial year, the Company did not sponsor any ADR or GDR programme.
SANCTIONS AND/OR PENALTIES
There were no sanctions or penalties imposed on the Company and its subsidiaries, Directors or management by
the relevant regulatory bodies during the financial year.
NON-AUDIT FEES
The amount of non-audit fees paid to the external auditors by the Group and the Company for the financial year
ended 31 December 2007 amounted to RM120,700 and RM13,200 respectively.
VARIATION IN RESULTS
There were no material variations between the audited results for the financial year ended 31 December 2007 and
the unaudited results for the quarter ended 31 December 2007 of the Group announced on 26 February 2008.
There was no profit forecast announced during the financial year.
PROFIT GUARANTEE
During the financial year, there was no profit guarantee given by the Company.
MATERIAL CONTRACTS INVOLVING DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS
Save as disclosed below, there were no material contracts entered into by the Company and its subsidiaries involving
Directors’ and major shareholders’ interests which were still subsisting as at the end of the financial year or if not
then subsisting, entered into since the end of the previous financial year:
(i) Kelana Megah Sdn. Bhd. (“KMSB”), a 85.3% owned subsidiary of DFZ Capital Berhad (“DFZ”) has entered into
a Tenancy Agreement, Deed of Assignment and Power of Attorney with Naluri Corporation Berhad (“Naluri”),
a substantial shareholder of DFZ, in respect of the leaseback of the duty free complex in Johor Bahru from 1
December 2004 onwards for a consideration of RM10.0 million per annum and upon the terms and conditions
contained in the said Tenancy Agreement.
(ii)
KMSB has entered into various agreements with Tenggara Senandung Sdn. Bhd. (“TSSB”), a wholly-owned
subsidiary of Naluri, for the rental and management of a shoplot, the ferry terminal together with the car parks all
located at the duty free complex in Johor Bahru from 1 November 2003 onwards for a total cash consideration
of RM2.4 million per annum and upon the terms and conditions contained in the said agreements.
(iii)
Cergasjaya Sdn. Bhd. and Cergasjaya Properties Sdn. Bhd., both wholly-owned subsidiaries of DFZ, have
also entered into various agreements with TSSB for the management of the car parks located at the duty free
complex in Bukit Kayu Hitam from 30 June 2004 onwards for a total cash consideration of RM0.2 million per
annum and upon the terms and conditions contained in the said agreements.
REVALUATION POLICY ON LANDED PROPERTIES
The Group has not adopted a policy of regular revaluation of such assets as permitted under the transitional
provisions.
D F Z
C A P I TA L
B E R H A D
21
Additional Compliance Information (Cont’d)
RECURRENT RELATED PARTY TRANSACTION
The summary of the Recurrent Related Party Transactions which have been entered by the Group during the financial
year 2007 are as follows:
Interested
Name of subsidiary of DFZ
Nature of transaction
related party
Transaction
value
RM’000
Total sales to Emas Kerajang Sdn. Bhd. (“EKSB”)
Winner Prompt Sdn. Bhd.
Sale of duty free products
DFZ Duty Free Supplies Sdn. Bhd.
Sale of duty free and duty paid
products such as household
items, gift items and toys
Atlan Holdings
Bhd. (“Atlan”)
8,324
Atlan1,313
9,637
Total purchases from EKSB
Cergasjaya Sdn. Bhd.
Purchases of duty free products
Atlan15,411
Jasa Duty Free Sdn. Bhd.
Atlan
1,245
DFZ Duty Free Supplies Sdn. Bhd.
Atlan
1,010
Black Forest Golf And Country
Club Sdn. Bhd.
Purchases of duty free products Atlan
2,424
20,090
However, subsequent to year end, EKSB has become a wholly owned subsidiary of the Company.
22
D F Z
C A P I TA L
B E R H A D
Audit Committee Report
1.
COMPOSITION
The Audit Committee consists of three (3) members of the Board of Directors, the majority of whom are
independent. The members are as follows:
Mohamed Suhaimi bin Sulaiman (Chairman)
Dato’ Paduka Syed Mansor bin Syed Kassim Barakbah
Wong Peng Yew
:
:
:
Executive Director
Wong Peng Yew is a member of the Malaysian Institute of Accountants.
2.
TERMS OF REFERENCE
The terms of reference of the Audit Committee are as follows:
2.1 Objectives
The principal objectives of the Audit Committee are to assist the Board of Directors (“the Board”)
in discharging its statutory duties and responsibilities relating to accounting and financial reporting
practices of the Company and its subsidiaries (“the Group”). In addition, the Audit Committee shall:
(a)
evaluate the quality of the audits performed by the internal and external auditors;
(b) provide assurance that the financial information presented by management is relevant, reliable
and timely;
(c)
oversee compliance with laws and regulations and observance of a proper code of conduct;
and
(d) determine the adequacy and effectiveness of the Group’s internal control environment and quality
of the audits.
2.2 Composition
The Audit Committee shall be appointed by the Board from amongst the directors of the Company
and shall consist of no fewer than three (3) members. A majority of the Audit Committee must be
independent non-executive directors. No alternate director is to be appointed as a member of the Audit
Committee.
At least one (1) member of the Audit Committee:
(a)
must be a member of the Malaysian Institute of Accountants; or
(b) if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3)
years’ working experience and:
(i)
he must have passed the examinations specified in Part I of the 1st Schedule of the
Accountants Act, 1967; or
(ii)
he must be a member of one of the associations of accountants specified in Part II of the
1st Schedule of the Accountants Act, 1967; or
(c) fulfills such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad
(“Bursa Securities”).
The Chairman of the Audit Committee shall be appointed among the members of the Audit Committee
who shall be an independent director.
The definition of “independent director” shall have the meaning given in Chapter 1.01 of the Listing
Requirements of Bursa Securities.
D F Z
C A P I TA L
B E R H A D
23
Audit Committee Report (Cont’d)
2.
TERMS OF REFERENCE (CONT’D)
2.3 Meetings
The Audit Committee shall hold at least four (4) regular meetings per year, with due notice of issues to
be discussed, and shall record its conclusions in discharging its duties and responsibilities. In addition,
the Chairman may call for additional meetings at any time at the Chairman’s discretion.
The quorum for the Audit Committee meeting shall be the majority of members present whom must be
independent directors.
Upon the request of the external auditors, the Chairman of the Audit Committee shall convene a meeting
of the Audit Committee to consider any matter the external auditors believe should be brought to the
attention of the directors or shareholders.
Notice of Audit Committee meetings shall be given to all the Audit Committee members unless the
Audit Committee waives such requirement.
The finance manager, the head of internal audit and representatives of the external auditors shall
normally attend meetings. Other Board members and employees may attend meetings upon the
invitation of the Audit Committee. However, the Audit Committee shall meet with the external auditors,
the internal auditors or both, without other Board members and management present whenever deemed
necessary.
Questions arising at any meeting of the Audit Committee shall be decided by a majority of votes of the
members present, and in the case of equality of votes, the Chairman of the Audit Committee shall have
a second or casting vote.
The Company Secretary shall be the secretary of the Audit Committee.
2.4 Authority
24
D F Z
The Audit Committee shall, in accordance with a procedure to be determined by the Board and at the
expense of the Company:
(a)
have explicit authority to investigate any matter within its terms of reference;
(b) have the resources which are required to perform its duties;
(c)
have full and unrestricted access to any information pertaining to the Company;
(d) have direct communication channels with the external auditors and person(s) carrying out the
internal audit function or activity;
(e)
be able to obtain independent professional or other advice; and
(f)
be able to convene meetings with the external auditors, the internal auditors or both, excluding the
attendance of other directors and employees of the Company, whenever deemed necessary.
Where the Audit Committee is of the view that the matter reported by it to the Board has not been
satisfactorily resolved resulting in a breach of the Listing Requirements, the Audit Committee shall
promptly report such matter to Bursa Securities.
C A P I TA L
B E R H A D
2.
TERMS OF REFERENCE (CONT’D)
2.5 Duties and Responsibilities
The duties and responsibilities of the Audit Committee are as follows:
(a) To consider the appointment of the external auditors, the audit fee and any question of resignation
or dismissal;
(b) To discuss with the external auditors before the audit commences, the nature and scope of the
audit, ensure co-ordination where more than one (1) audit firm is involved;
(c)
To review the quarterly and year-end financial statements before submission to the Board, focusing
particularly on:
•
any changes to the accounting policies and practices;
•
significant adjustments arising from the audit;
•
the going concern assumption; and
•
compliance with accounting standards and other legal requirements.
(d) To discuss problems and reservations arising from the interim and final audits, and any matter
the auditors may wish to discuss (in the absence of management, where necessary);
(e)
To review the external auditors’ management letter and management’s response;
(f)
To do the following, in relation to the internal audit function:
•
review the adequacy of the scope, functions, competency and resources of the internal
audit function, and that it has the necessary authority to carry out its work;
•
review the internal audit programme and results of the internal audit process and, where
necessary, ensure that appropriate actions are taken on the recommendations of the internal
audit function;
•
review any appraisal or assessment of the performance of members of the internal audit
function;
•
approve any appointment or termination of senior staff members of the internal audit
function; and
•
take cognisance of resignations of internal audit staff members and provide the resigning
staff member an opportunity to submit his reasons for resigning.
(g) To consider the major findings of internal investigations and management’s response;
(h) To report its findings on the financial and management performance, and other material matters
to the Board;
(i)
To review any related party transaction and conflict of interest situation that may arise within
the Company or group including any transaction, procedure or course of conduct that raises
questions of management’s integrity;
(j)
To review with the external auditors, their evaluation of the system of internal controls and their
audit report;
(k)
To consider and make recommendations to the Board, to be put to shareholders for approval at
the general meeting in relation to the appointment, re-appointment and removal of the Company’s
external auditors;
(l)
To verify the allocation of share option scheme (“ESOS”) in compliance with the criteria as
stipulated in the by-law of ESOS of the Company, if any; and
(m) To consider and examine any other matters as defined by the Board from time to time.
2.6 Reporting Procedures
Minutes of each meeting shall be distributed to each member of the Audit Committee. The Audit
Committee Chairman shall report on each meeting to the Board.
The minutes of the Audit Committee meeting shall be signed by the Chairman of the meeting at which
the proceedings were held or by the Chairman of the next succeeding meeting.
D F Z
C A P I TA L
B E R H A D
25
3.
ATTENDANCE
The Audit Committee met four (4) times during the financial year ended 31 December 2007 and the attendance
of the Directors for the meetings held during the year are as follows:
Directors
Mohamed Suhaimi Bin Sulaiman
Dato’ Paduka Syed Mansor Bin Syed Kassim Barakbah
Wong Peng Yew
Number of
meetings attended
by Directors
4
4
4
4
4
4
4.
ACTIVITIES OF THE AUDIT COMMITTEE DURING THE FINANCIAL YEAR 2007
During the financial year ended 31 December 2007, the Audit Committee carried out the following activities
in the discharge of its functions and duties:
•
•
•
•
•
•
26
Number of
Audit Committee
meetings held
Reviewed and discussed the re-election of the external auditors of the Company before tabling to the
shareholders for approval at the Annual General Meeting.
Reviewed with the external auditors their audit plan, audit approach and reporting requirements before
the commencement of the audit.
Reviewed the quarterly and annual consolidated financial statements of the Group before submission
to the Board for approval.
Reviewed any related party transactions that may arise within the Group or Company.
Reviewed with the external auditors their audit findings and approved for adoption their
recommendations.
Reviewed the internal audit programme, considered the major findings of the internal audit programme
and management’s response and ensure appropriate action was taken.
5.
INTERNAL AUDIT FUNCTION
The Audit Committee is supported by an independent and adequately resourced internal audit function.
The Committee is aware of the fact that an independent and adequately resourced internal audit function is
essential to assist in obtaining the assurance it requires regarding the effectiveness of the internal control.
The main role of the internal audit function is to review the effectiveness of the system of internal control. This
is performed with impartiality, proficiency and due professional care.
During the financial year, the internal audit activities have been carried out according to the internal audit plan
which has been approved by the Audit Committee.
This report is made in accordance with a resolution of the Board of Directors dated 31 March 2008.
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Statement on Internal Control
The Board assumes the responsibilities for the Group’s system of internal control and for reviewing the adequacy
and integrity of those systems. However, such system is designed to manage the risk of failure to achieve business
objectives, and provide reasonable and not absolute assurance against material misstatement or loss.
In compliance with the Listing Requirements of the Bursa Malaysia Securities Berhad in the annual reports and the
publication of guidance for directors on internal control, “Statement on Internal Control: Guidance for Directors
of Public Listed Companies”, the Board confirms that there is an ongoing process for identifying, evaluating and
managing the significant risks faced by the Group and this has been in place for the financial year and up to the
date of approval of the annual report and financial statements.
The Board further confirms that this process is regularly reviewed by the Board and accords with the guidance.
The Group’s system of internal control is maintained to achieve the following objectives:
•
Safeguard the shareholders’ interest and assets of the Group.
•
Ensure the achievement of financial and operational objectives.
•
Ensure compliance with regulatory requirements.
•
Identify and manage risks affecting the Group.
Salient features of the framework of internal control system of the Group are as follows:
•
The management and organisation structure are well defined, with clear line of responsibilities and delegation
of authorities.
•
Key responsibilities are properly segregated in achieving a proper check and balance review and approval
process.
•
Executive Directors and heads of divisions meet regularly to discuss operational, corporate, financial and key
management issues.
•
The Board continuously assesses the key business risks with the help of the Audit Committee and external
professionals.
•
Financial results are reviewed quarterly by the Board and the Audit Committee.
•
Internal control policies and procedures are properly documented and communicated to all staff members.
•
Through the internal audit process, the effectiveness of internal control policies and procedures are subject
to continuous assessments, reviews and improvements.
•
Effective reporting system to ensure timely generation of financial information for management review.
The Directors are of the opinion that the existing system of internal control is adequate in achieving the above
objectives.
This statement is made in accordance with a resolution of the Board of Directors dated 31 March 2008.
The external auditors have reviewed the Statement on Internal Control as required by paragraph 15.24 of the Listing
Requirements of Bursa Malaysia Securities Berhad. Their review was performed in accordance with Recommended
Practice Guide 5 issued by the Malaysian Institute of Accountants.
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Corporate Social Responsibility
The Board of Directors of DFZ Capital Berhad recognise the importance of balancing the interest of all or key
stakeholders – our customers, our shareholders, our employees, our suppliers and the communities in which we
work. We see the need for corporate social responsibility (“CSR”) as an integral part of the whole operations and
a key factor in our continued growth and success of the businesses of the Group. The CSR initiatives undertaken
by the Group is summarised below.
Community
We encourage all our businesses to support the particular needs of their communities by contributing to local
charities and community initiatives. Support takes the form of employees’ time and skill, gifts in kind and cash
donations. In 2007, we continued to support education and welfares in our local communities and one of the
significant contributions was for the Johor Flood effort in early 2007. In addition to financial contribution to the
effort, the Group also contributed in kind when the employees volunteered their services one weekend to assist in
the clean up and distribution of food and essentials to the flood victims. The Group will continue to support and
encourage all our employees and businesses to find new ways of helping their communities.
Workplace
The Group aims to attract, retain and motivate the highest calibre of employees within the operating structure
that encourages their contribution and development, considers its human resource as its most valuable asset,
and thus, ensures that it is well taken care of. The employees have access to trainings (internal and external) for
their continuous improvement and development so as to help our employees prepare for new initiatives, as well as
equipping them with the very best customer service skills. In addition, health and safety awareness programs and
sports activities were held to encourage employees to lead a healthy lifestyle. The Group also organised annual
dinners and festive celebrations for its employees.
Environment
Good environment practice and the impact that our operations have on the environment are of great importance to
the Group. We undertook several initiatives in preserving the environment, including reducing the usage of paper via
electronic communication and recycling paper and closely monitor energy consumption such as replacing existing
equipments with more energy efficient and fitting temperature control devices.
Marketplace
The Group ensures that its operations are in line with the best practices guidelines set in the Code of Corporate
Governance. All activities are conducted at arms length and do not favour any single party. The Group had carried
out extensive refurbishment and improvement to the shopping floors such as brighter environment and clearer
layout making stores easier to navigate. Our aim is to make shopping environment as convenient and pleasant for
our customers.
Corporate social responsibility is an on-going process, and the Group is committed to continue its efforts to ensure
that it makes a difference to the society and world at large.
28
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Laporan Tahunan Annual Report

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