Annual Report 2007

Transcription

Annual Report 2007

A N N U A L
R E P O R T
2 0 0 7
Contents
Contents
Highlights of Events and Promotional Activities for the year
2
Notice of Annual General Meeting
9
Notice of Dividend Entitlement and Payment
11
Corporate Information
13
Corporate Structure
14
Chairman's Statement
15
Directors’ Profile
19
Statement of Corporate Governance
24
Audit Committee Report
33
Internal Control Statement
37
Financial Statements
39
List of Properties
103
Analysis of Shareholdings
108
List of Thirty Largest Shareholders
109
THE STORE CORPORATION BERHAD 252670-P
( I N C O R P O R A T E D
I N
M A L A Y S I A )
The Store Group
Reward
R
dC
Campaigns
i
ffo
Loyal Customers
The Store Group's
39th Anniversary Celebration
officiated and witnessed by
Y.B. Hoo Seong Chang
Parliamentary Secretary of Ministry of Domestic Trade and Consumer Affairs
Since opening its first outlet in 1968, The Store has continued to be one of the leaders in
the retail industry in terms of its strong values and widespread throughout the Peninsular
Malaysia and Sabah. The Store Group has continued to grow and prosper in 2007
with a solid track record of events and promotional activities to keep The Store Group
relevant and fresh in the minds of the Malaysian society.
In celebration of its 39th Anniversary and to reward its loyal customers, The Store Group
held a ‘Super Rewards Celebration’ Contest which kicked off on 25 May 2007. The
contest ended on 2 September 2007. More than 2 million entry forms were received.
Many also enjoyed special discounts on selected kitchenware while others won
attractive instant gifts in the “Ganjaran Segera” Instant Reward segment. Other Reward
Campaigns such as the “Ganjaran Cash Aidilfitri” contest held from 8 September till 18
November 2007 has also given away attractive cash prizes to lucky shoppers.
2
The Store Group's 39th Anniversary Celebration
2007 - Super Rewards Celebration
3
1 : Cake-cutting ceremony by Y.B. Hoo Seong Chang, Datuk Md Kamal bin Bilal and Dato’ Tang Yeam Soon.
2 : Launching of The Store Group's 39th Anniversary Celebration 2007 - Super Rewards Celebration by
Y.B. Hoo Seong Chang
1
3 : Dato’ Tang Yeam Soon presented a souvenir to YB Encik Hoo Seong Chang as a token of appreciation.
4
"Gong Xi Fa Cai"
Mega Bonanza
Ganjaran Cash
"Adilfitri"
Christmas
Mega Bonanza
6
2
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8
5
4 : Y.B. Dato’ Chor Chee Heung drew 50 entry cards in the first lucky
draw session. Looking on were Mr. Charlie Tan (left), and Mr. Teh
Chee Ming (right).
5 : A second lucky draw session was held later to determine the 17
lucky winners.
6 : Lucky winners of the "Aidilfitri Mega Bonanza" gathered at the Prize
Presentation Ceremony at The Store, Sungai Buloh on 19 January 2007.
7 : Lucky winners of the 39th Anniversary "Super Rewards Celebration"
Contest.
8 : Lucky winners of the "Christmas Mega Bonanza" Contest.
A N N U A L
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2 0 0 7
re Group
Grows Stronger Each Day…
BATU PAHAT MALL, THE BIGGEST SHOPPING MALL
IN BATU PAHAT, JOHOR.
Being the anchor tenant of Batu Pahat Mall - the biggest shopping mall in Batu
Pahat, Pacific Hypermarket & Departmental Store occupies 3 levels of the Mall
with a floor area of 250,000 sq.ft. It boasts of a wide variety of affordable
goods, offering more than 60,000 items ranging from dairy products, fresh
foods, branded electrical items, household items, home furnishing items, gents
and ladies’ wear, babies & children’s apparel, cosmetics and so much more.
The atmosphere at Pacific is permeated with a mixture of class and modernity,
exuding elegance and comfort for shoppers who shop there. Equipped with 24hour surveillance and with over 3,000 free car-parking bays at Batu Pahat
Mall, shoppers enjoy easier access to Pacific while they get to shop there with
peace of mind. It is no doubt the best shopping destination which offers its
customers quality goods at reasonable prices.
now
PACIFIC HOME MART
Pacific Home Mart is a new concept centre
in Pacific Hypermarket & Departmental
Store, offering a wide range of home
appliances such as electrical items, home
furnishings, kitchen appliances, car
accessories and other home essentials.
Pacific Home Mart is now available at
Pacfic, KB Mall and Alor Star Mall.
The Store Corporation Berhad has carried out an internal reorganisation and
rebranding exercise, and with effect from 16 May 2007, the business
operations of all 14 “Fajar” outlets under Fajar Retail Enterprise Sdn Bhd were
consolidated into The Store (Malaysia) Sdn Bhd. The reorganisation and
rebranding exercise is part of the company’s strategy to serve its customers
better continue to do its best in ensuring a pleasant shopping experience for all
customers and to further improve its goods and services at all outlets.
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ALOR STAR
Pacific - Alor Star Mall
Pacific - Komplek Star Parade
KANGAR
The Store - Kayangan Square
SUNGAI PETANI
SUNGAI SIPUT
The Store - Central Square
The Store - SP Plaza
The Store - Jalan Besar
KUALA KANGSAR
The Store - Jalan Kangsar
PERAI
KUALA BHARU
Pacific - Megamall Pinang
The Store - Jalan Padang Garong
Pacific - KB Mall
BUKIT MERTAJAM
The Store - Plaza BM
KUALA TERENGGANU
The Store - Jalan Bandar
KULIM
The Store - Jalan Teoh Moh Soo
GRIK
The Store - Jalan Toh Bandar Ulu Shah
TAIPING
The Store - Wisma Dato' Toh Eng Hoe
The Store - Jalan Kota
The Store - Kamunting
IPOH
The Store - Jalan Kampar
The Store - Jalan Dato' Onn Jaafar
KEMAMAN
The Store - Centre Point
SITIAWAN
KUANTAN
The Store - Jalan Lumut
The Store - Pasar Besar
The Store - Kuantan Parade
TELUK INTAN
The Store - Jalan Ah Cheong
TEMERLOH
The Store - Terminal Utama
SUNGAI BESAR
The Store - Medan Sg. Bear
MENTAKAB
The Store - Jalan Mok Hee Kiang
AMPANG
The Store - Paragon Point Shopping Centre
BENTONG
SHAH ALAM
The Store - Mega Mall
The Store - Plaza Alam Sentral
The Store - Sungai Buloh
KUALA LUMPUR
The Store - Taman Kok Lian
The Store - Sri Petaling
The Store - Pandan Kapital
The Store - Pudu Plaza
The Store - Mid Point Shopping Centre
KLANG
The Store - Show Centrepoint
BANTING
SEMENYIH
The Store - Shopping Centre
SEREMBAN
The Store - Jalan Dato' Sheikh Ahmah
The Store - Jalan Tuanku Munawir
The Store - Centre Point
KLUANG
PORT DICKSON
The Store - Plaza BCB
The Store - Jalan Dato Rauf
The Store - Oceanic Mall
TAMPIN
MALACCA
The Store - Kotamas
The Store - Jalan Tun Ali
MUAR
The Store - Wetex Parade
TANGKAK
The Store - Jalan Payamas
BATU PAHAT
JOHOR BAHRU
The Store - Jalan Rugayah
The Store - Summit Parade
Pacific - Batu Pahat mall
The Store - Jalan Zabedah
The Store - Taman Tun Aminah
The Store - Taman Johor Jaya
The Store - Kompleks Lien Hoe
The Store - Jalan Tebrau Pandan
KUDAT
Jalan Lintas
KOTA MARUDU
Jalan Jaya Pekan Baru
INANAM
Lorong Inanam Plaza
TUARAN
RANAU
Wisma Tai Kong
Jalan Hone
SANDAKAN
KOTA KINABALU
Centre Point Mall
Kojasa Building
LUYANG
LAHAD DATU
Bornion Centre
Centre Point Shopping Centre
PENAMPANG
Beverly Hills Plaza
LIDO
Panggung Lido
KENINGAU 2
Yee Shing Commercial Complex
KUNAK
Kunak Plaza
KENINGAU 1
Jalan Masak
SEMPORNA
TAWAU 1
Complex Cahaya Baru
Semporna New Town Centre
TAWAU 2
Kojasa Kompleks
53 Supermarkets & departmental stores
5
Hypermarket & departmental stores
17 Supermarkets & departmental stores
Active Involvement by The Store Group In
Government
Campaigns
1
After receiving great response from consumers along
with the tremendous support given by the government in
the past few years, The Store Group has once again
collaborated with the Ministry of Domestic Trade and
Consumer Affairs (KPDN) to organise the much-awaited
‘Produk Malaysia, Citarasa Kita’ Promotion Programme
from 17 - 26 August 2007 as well as to officiate the
launching of the Programme at Pacific, Batu Pahat Mall
on 17 August 2007
1 : Official launching of the “Product Malaysia, Citarasa Kita” Promotion Programme by Y.B. Hoo Seong
Chang, Parliamentary Secretary of Ministry of Domestic Trade and Consumer Affairs (second from left)
(17 August 2007).
2
As the largest and oldest Supermarket
and Departmental Store chain in
Malaysia, The Store Group gave full
support to the Gorvernment’s call not to
increase prices by implementing a Price
Cut Campaign 2007 on 1,000 items
at the Supermarket section on a monthly
basis throughout all outlets of The Store,
Pacific in Peninsular Malaysia and
Milimewa in Sabah.
2 : Y.B. Hoo Seong Chang and Mr. Charlie Tan, Executive Director of Pacific Hypermarket & Departmental
Store (second from left) showcased The Store In-house Brand snacks at Pacific, BP Mall (17 August 2007)
3
3 : Thumbs up from Y.B. Datuk Hj Mohd Shafie Bin Hj Apdal, Minister of Domestic Trade & Consumer Affairs (second from right), Dato’ Sri Tang Yeam Soon,
Group Managing Director of The Store Group (left) and Dato’ Sri Md Kamal Bin Bilal, Chairman of The Store Group (first from right) (12 June 2007).
4 : Y.B. Datuk Hj Mohd Shafie Bin Hj Apdal officially launched The Store Group Price Cut Campaign. Looking on were Dato’ Sri Md Kamal Bin Bilal and
Dato’ Sri Tang Yeam Soon (12 June 2007).
4
The Store Group also participated in the
2007 Consumers’ Day Carnival as one
of the main sponsors of the carnival,
which took place at the Shah Alam
Stadium between 25 - 29 July 2007
where Deputy Prime Minister YAB Dato'
Sri Mohd Najib Tun Razak also attended
the event to officiate the launching. The
Managing Director of The Store Group,
Dato’ Sri Tang Yeam Soon also presented
two Mini Malaysian Flags to YAB Dato'
Sri Mohd Najib Tun Razak as a token of
appreciation towards his support for this
carnival. In line with the Consumers' Day
Carnival organised by the Ministry of
Domestic Trade and Consumers Affairs,
The Store Group set up 23 exhibition
Managing Director of the Store Group, Dato’ Sri Tang Yeam Soon (right) presented the Two Mini Malaysian Flags to Deputy Prime
Minister YAB Dato’ Sri Mohd Najib Tun Razak (second from left). Looking on were Minister of Domestic Trade and Consumer Affairs, booths, showcasing a wide range of
Y.B. Datuk Hj Mohd Shafie Bin Hj Apdal (third from left) and Chairman of The Store Group, Dato’ Sri Mohd Kamal Bin Bilal (left).
products at reasonable prices which
included The Store In-house brand products such as mineral water, white rice and many more. The Store Group will
continue to give its fullest support to the coming Consumers’ Day Carnival.
6
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Outstanding
Achievements & Awards
2007/2008
Bronze award as one of the Top 3 Retailers of 2007 in Malaysia as recognized
by the Retail Asia-Pacific Top 500 Ranking & Awards, a prestigious
award for best performing retail companies in 14 markets in the
Asia-Pacific Region.
2007/2008
Ei
Eighteen
Eightee
(18) outlets were
awarded Certificate of Fairr
Price Shop in various
Pri
categories by the Ministry
catego
of Domestic Trade &
Consumer Affairs in
C
recognition of its fair prices,
recognitio
lower tthan other retailers.
2007 ~ 2008
The Store (Malaysia) Sdn. Bhd. outlets in Johorr
Bahru (Tebrau Pandan), Kuantan (Kuantan Parade),, Kuala
Lumpur (Sri Petaling) together with Pacific Hypermarket &
Departmental Store Sdn. Bhd. outlets in Prai, Alor Star
Mall, BP Mall and KB Mall were presented with the
“Quality Merchandise, Courteous Service & Store
Presentation for 2007/2008” Award under the categories
of Supermarket, Hypermarket & Departmental Store. The
Store Johor Bahru (Tebrau Pandan) and Pacific
Hypermarket & Departmental Store Alor Star Mall were
also presented with the Best Supermarket, Hypermarket &
Departmental Store in “Service & Courtesy” Excellence
Awards For Retailers in 2007/2008. Both awards were
organized by the Malaysia Retailers Association (MRA), in
collaboration with the National Productivity Corporation
(NPC) and endorsed by the Ministry of Domestic Trade &
Consumer Affairs.
Under The Category Of Supermarket,
Hypermarket & Departmental Store In
Quality Merchandise, Courteous Service &
Store Presentation For 2007 / 2008
2004 / 2005
20
"Servi & Courtesy"
"Service
Excell
Excellence
Awards
For Retailers
2006 / 2007
""Service & Courtesy"
Excellence Awards
For Retailers
The 5 Pioneer awards
awa ds are:
Under The Category
Of Hypermarket In
Quality Merchandise,
Courteous Service &
Store Presentation
For 2004 / 2005
Overall
O
ll Best
B
Retail
R
il Outlet
O l
In 2004 / 2005
"Service & Courtesy"
Excellence Awards
For Retailers
Best Hypermarket
In 2004 / 2005
Excellence Awards
For Retailers
Best Hypermarket
In 2005 / 2006
Excellence Awards
For Retailers
2005
Largest and Oldest Existing Supermarket cum Departmental
Chain in Malaysia as certified by the Malaysia Book of Records
Year 2001. This recognition has been recertified in August 2005.
2006
Awarded Certificate of
Consumer's Choice Shop
(Kedai Pilihan Pengguna)
by the Ministry of Domestic
Trade & Consumer Affairs.
Best Supermarket, Hypermarket &
Departmental Store In 2007 / 2008
"Service & Courtesy" Excellence Awards
For Retailers
2004 ~ 2007
The Store (Malaysia) Sdn. Bhd. and Pacific Hypermarket &
Departmental Store Sdn. Bhd. received numerous “Service &
Courtesy ” Excellence Awards For Retailers from 2004-2007.
The awards are as follows:
2004 / 2005
200
Excelle
Excellence Awards
For Reta
Overal
eral
alll
Retailerss Ov
Overall
Best R
Outl
tllet
Retaill Out
Outlet
2007/2008
Eighteen (18) outlets were
awarded Consumers’ Choice
Shop (Kedai Pilihan Pengguna)
by the Ministry of Domestic
Trade & Consumer Affairs in
recognition of its “quality,
friendliness and reasonable
prices” motto for essential
consumer products.
Best Hypermarket
In 2006 / 2007
Excellence Awards
For Retailers
2005
Bronze Award
for Malaysia in the Retail
Asia Pacific Top 500 Awards
2005, a leading award for
top performing retail
companies in 14 economies
in the Asia-Pacific Region.
2005
Acknowledged as one
of the top 100 listed
companies in terms of
shareholder value
creation in KPMG /
The Edge Shareholder
Value Awards 2005.
2004 / 2005
Awarded Certificate of
Excellence by the Ministry
of Domestic Trade &
Consumer Affairs for its
successful listing in
Malaysia 1000 for year
2004 / 2005, a directory
of the top1000 performing
companies in Malaysia.
7
The Store Group's
Charity Campaigns &
Contributions
As a responsible corporate citizen, The Store Group
is always actively involved in organising charity
campaigns by raising funds for various charity
associations. Among the major charity associations which
benifited in 2007 were the Thalassaemia Associations (1
Jan untill 30 April 2007), 13 Down Syndrome Associations
(25 May untill 2 September 2007) and 13 Centers of People
with Disabilities (21 September 2007 untill 29 Feb 2008).
The Store Group also contributed to underprivileged families in
conjunction with the Hari Raya Aidilfitri & Deepavali Celebration
1
2007 at Kepala Batas
on 6 October 2007 as well as
the “Cahaya Ramadhan Berkati
Syawal” Berbuka Puasa Dinner
Yayasan Kurang Upaya Kelantan
(YOKUK) at KB Mall on 3 October
2007. It was also a sponsor of the
Malaysian International Batik Festival
2007 on 23 November 2007
organised by the ‘Yayasan Budi
Penyayang Malaysia’. The Store
Group had also organised a
Community Service Programme in
2007 at all outlets nationwide,
helping and serving the community.
‘Hari Kebajikan’ was maintained
continuously at all outlets to give
support and care to the needy.
1 : Group photo with YAB Dato’ Seri Abdullah Bin Haji
Ahmad Badawi (6 October 2007).
2 : Dato’ Sri Tang Yeam Soon, Group Managing Director of
The Store Group (right) shook hands with Prime Minister YAB
Dato’ Seri Abdullah Bin Haji Ahmad Badawi during a charity
event in conjunction with the Hari Raya Aidilfitri & Deepavali
Celebration 2007 at Kepala Batas (6 October 2007).
2
3
3 : Dato’ Sri Tang Yeam Soon gave away goodie bags to the
underprivileged families (6 October 2007).
4
4 : Cheque presentation of
RM95,000 to 13 Homes of
Orphaned,
Underprivileged,
Abused and Neglected Children
in Malaysia at Batu Pahat Mall
(7 April 2007).
5
5 : Cheque
RM91,000 to
Associations in
Pahat Mall (25
presentation of
13 Thalassaemia
Malaysia at Batu
May 2007).
6 : Cheque presentation of
RM75,000 to 13 Down
Syndrome Children Associations
in Malaysia at Alor Star Mall (21
September 2007).
6
8
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8
7 : Adibah Noor, Ambassador of The Store
Group, together with the Down Syndrome
children and the staff at Kiwanis Down
Syndrome Foundation National Centre had a
tea party in conjunction with the Charity
Campaign for 13 Down Syndrome
Associations in Malaysia and The Store
Group’s “Hari Kebajikan” (28 June 2007).
8 : Adibah Noor gave away goodie bags to
the Down Syndrome Children.
A N N U A L
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Notice of 15th
Annual General Meeting
NOTICE IS HEREBY GIVEN that the Fifteenth (15th) Annual General Meeting of the Company will be held at
Holiday Villa Subang, Classics 2, No. 9. Jalan SS12/1, Subang Jaya, 47500 Petaling Jaya, Selangor, on Thursday,
27 March 2008 at 10.00a.m for the following purposes:
Agenda
1. To receive and adopt the audited financial statements of the Company for the financial year ended
30 September 2007 together with the reports of the Directors and Auditors thereon.
Resolution 1
2. To approve the payment of a First and Final Dividend of 3% per share less tax at 26% in respect of the financial
year ended 30 September 2007.
Resolution 2
3. To approve the payment of Directors' Fees for the financial year ended 30 September 2007.
Resolution 3
4. To re-elect the following Directors who retire in accordance with the provisions of the Company's Articles of
Association:
a) Dato' Sri Tang Yeam Soon
Resolution 4
b) Kam Teh Chung
Resolution 5
c) Lim Gin Chuan
Resolution 6
5. To consider and, if thought fit, pass the following resolution pursuant to Section 129(6) of the Companies Act,
1965:
"That Dato' Haji Mohd Yusoff bin Haji Amin (a Director retiring in compliance with Section 129 of the
Companies Act, 1965, being over the age of seventy years) be and is hereby re-elected a Director of the
Company to hold office until the next Annual General Meeting."
Resolution 7
6. To re-appoint Moores Rowland as Auditors of the Company for the ensuing year and to authorise the Board of
Directors to fix their remuneration.
Resolution 8
7. To transact any other ordinary business of which due notice shall have been given.
As Special Business
To consider and, if thought fit, to pass the following resolutions as ordinary resolutions:
8. AUTHORITY TO ALLOT AND ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965
"THAT subject always to the Companies Act, 1965, the Articles of Association of the Company and the
approvals of the relevant governmental and regulatory authorities, the Directors be and are hereby empowered
pursuant to Section 132D of the Companies Act, 1965, to issue shares in the Company at any time and upon
such terms and conditions for such purposes as the Directors may, in their absolute discretion, deem fit,
provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the
issued capital of the Company for the time being and that the Directors be and are also empowered to obtain
the approval for the listing of and quotation for additional shares so issued on Bursa Malaysia Securities
Berhad and that such authority shall continue in force until the conclusion of the next Annual General Meeting
of the Company."
Resolution 9
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Notice of 15th
[ Cont'd ]
9. PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY'S PURCHASE OF ITS OWN SHARES
"THAT, subject to the Companies Act, 1965 (as may be amended, modified or re-enacted from time to time),
the Listing Requirements of Bursa Malaysia Securities Berhad ("Bursa Malaysia"), the Company's Articles of
Association and all other applicable laws, regulations and guidelines and the approvals of all relevant
government and/or regulatory authorities, the Company be and is hereby authorised to purchase such number
of ordinary shares of RM1.00 each in the Company ("Proposed Share Buyback") as may be determined by the
Directors of the Company from time to time through Bursa Malaysia as the Directors may deem fit in the interest
of the Company provided that the aggregate number of shares purchased and/or held pursuant to this
resolution does not exceed ten per centum (10%) of the total issued and paid-up share capital of the Company
at any point of time of the said purchase(s) and the maximum number of shares which may be purchased by
The Store shall not exceed 6,850,360 shares.
AND THAT, upon completion of the purchase by the Company of its own shares ("The Store Shares"), the
Directors are authorised to retain The Store Shares as treasury shares or cancel The Store Shares or retain part
of The Store Shares as treasury shares and cancel the remainder. The Directors are further authorised to resell
the treasury shares on Bursa Malaysia or distribute the treasury shares as dividends to the Company's
shareholders or subsequently cancel the treasury shares or any combination of the three.
AND FURTHER THAT such authority shall be effective immediately upon passing of this resolution and will
continue in force until :
(i)
the conclusion of the next Annual General Meeting of the Company following the general meeting at
which such resolution was passed at which time it shall lapse unless by ordinary resolution passed at
that meeting, the authority is renewed, either unconditionally or subject to conditions;
(ii)
the expiration of the period within which the next Annual General Meeting after that date is required
by law to be held; or
(iii)
revoked or varied by ordinary resolution passed by the shareholders in the general meeting;
whichever occurs first but not so as to prejudice the completion of purchase(s) by the Company before the
aforesaid expiry date and to take all steps as are necessary and/or to do all such acts and things as the
Directors deem fit and expedient in the interest of the Company to give full effect to the Proposed Share Buyback
with full powers to assent to any condition, modification, revaluation, variation and/or amendment (if any) as
may be imposed by the relevant authorities.
Resolution 10
10. PROPOSED RENEWAL OF SHAREHOLDERS' MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS
OF A REVENUE NATURE
"THAT, subject always to the provisions of the listing requirements of Bursa Malaysia Securities Berhad, approval
be and is hereby given to the Company and its wholly-owned subsidiaries, Pacific Hypermarket & Departmental
Store Sdn Bhd and Pacific Bowling Sdn Bhd, to enter into and give effect to specified recurrent related party
transactions of a revenue nature with specified classes of Related Parties as specified in Section 3.2 of the
Circular to shareholders dated 5 March 2008 which are necessary for the day to day operations and/or in the
ordinary course of business of the Company and its subsidiaries and are carried out at arms' length basis on
normal commercial terms of The Store Group on terms not more favourable to the Related Parties than those
generally available to the public and are not detrimental to minority shareholders of the Company and such
mandate shall continue to be in force until:
(i)
the conclusion of the next Annual General Meeting of the Company at which time it will lapse, unless
by a resolution passed at a general meeting, the authority is renewed;
STORE CORPORATION BERHAD 252670-P
10 (THE
I N C O R P O R A T E D I N M A L A Y S I A )
A N N U A L
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Notice of 15th
[ Cont'd ]
(ii)
the expiration of the period within which the next Annual General Meeting after the date it is required
to be held pursuant to Section 143(1) of the Companies Act, 1965 ("Act") (but shall not extend to
such extension as may be allowed pursuant to Section 143(2) of the Act); or
(iii)
revoked or varied by resolution passed by the shareholders in a general meeting,
whichever is the earlier, and
THAT authority be and is hereby given to the Directors of the Company and its subsidiaries to complete and do
such acts and things as they may consider necessary or expedient in the best interest of the Company (including
executing all such documents as may be required) to give effect to the transactions contemplated and/or
authorised by this Ordinary Resolution."
Resolution 11
Notice of Dividend Entitlement and Payment
NOTICE IS ALSO HEREBY GIVEN that the first and final dividend of 3% per share less tax at 26% in respect of the
financial year ended 30 September 2007, if approved, will be paid to shareholders on 25 June 2008. The
entitlement date for the said dividend shall be 28 May 2008.
A Depositor shall qualify for entitlement only in respect of:a)
Shares transferred to the Depositor's Securities Account before 4.00 p.m. on 28 May 2008 in respect
of ordinary transfers; and
b)
Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules
of Bursa Malaysia Securities Berhad.
By Order of the Board
LEE WAI NGAN (Ms) (LS 00184)
HWONG PIK HUA (Ms) (MAICSA 7027798)
Secretaries
Kuala Lumpur
Date : 5 March 2008
Notes:
1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy to attend
and vote in his stead. A member may appoint more than one proxy to attend at the same meeting. Where a
member appoints two or more proxies, he must specify the proportion of his shareholdings to be represented by
each proxy.
2. A proxy need not be a member of the Company.
3. If the appointer is a corporation, the form must be under its Common Seal or under the hand of an officer or
attorney duly authorised.
4. The instrument appointing a proxy must be deposited at the Company's Registered Office at Wisma Selangor
Dredging, 6th Floor, South Block, 142-A Jalan Ampang, 50450 Kuala Lumpur not less than 48 hours before
the time appointed for holding the meeting.
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Notice of 15th
[ Cont'd ]
Explanatory Notes on Special Business
Ordinary Resolution 9 - Authority to Allot and Issue Shares Pursuant to Section 132D of the
Companies Act, 1965
The proposed Resolution No. 9, if passed, will authorise the Directors to issue shares up to 10% of the issued
and paid-up capital of the Company for the time being for such purposes as the Directors consider would be in
the best interest of the Company. This would avoid any delay and costs in convening a general meeting to
specifically approve such an issue of shares. This authority unless, revoked or varied at a general meeting, will
expire at the next Annual General Meeting of the Company.
Ordinary Resolution 10 - Proposed Renewal Of Authority For The Company's Purchase Of Its
Own Shares
The proposed Resolution No. 10, if passed, will renew the mandate for the Company to buy back its own
shares. The mandate shall continue to be in force until the date of the next Annual General Meeting of the
Company unless earlier revoked or varied by ordinary resolution of the Company in a general meeting and is
subject to annual renewal.
Further information on this resolution is set out in the Share Buyback Statement dated 5 March 2008,
despatched together with this Annual Report.
Ordinary Resolution 11 - Proposed Renewal of Shareholders' Mandate For Recurrent Related
Party Transactions Of A Revenue Nature
The proposed Resolution No. 11, if passed, will enable the Company and its subsidiaries to enter into recurrent
transactions involving the interest of related parties, which are of a revenue nature and necessary for the Group's
day-to-day operations, subject to the transactions being carried out in the ordinary course of business and on
terms not to the detriment of the minority shareholders of the Company.
Further information on this resolution is set out in the circular to shareholders dated 5 March 2008, despatched
together with this Annual Report.
12 (THE
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Corporate
Information
Board Of Directors
Dato' Sri Md Kamal bin Bilal ~ Chairman
(Independent Non-Executive Director)
Nomination Committee
Dato' Haji Mohd Yusoff bin Haji Amin ~ Chairman
Dato' Sri Tang Yeam Soon
(Managing Director)
Yeoh Chong Keng
Kam Teh Chung
(Executive Director)
Lim Gin Chuan
Chang Yen Huei
Company Secretaries
Ms Lee Wai Ngan (LS 00184)
Ms Hwong Pik Hua (MAICSA 7027798)
Datin Sri Khor Guik Lee
Dato' Dr. Haji Kardin bin Haji Shukor
Dato' Haji Mohd Yusoff bin Haji Amin
Yeoh Chong Keng
Lim Gin Chuan
Audit Committee
Dato' Dr. Haji Kardin bin Haji Shukor ~ Chairman
Chang Yen Huei
Yeoh Chong Keng
Remuneration Committee
Dato' Dr. Haji Kardin bin Haji Shukor ~ Chairman
Yeoh Chong Keng
Lim Gin Chuan
Registered Office & Registrars
Wisma Selangor Dredging
6th Floor, South Block,
142-A Jalan Ampang,
50450 Kuala Lumpur.
Tel: 603-21615466
Fax: 603-21636968
Auditors
Moores Rowland
Wisma Selangor Dredging
7th Floor, South Block
142-A, Jalan Ampang
50450 Kuala Lumpur
Principal Place of Business
Lot 9A, Jalan 223, Petaling Jaya
46100 Selangor Darul Ehsan
Tel: 603-7960 3233
Fax: 603-7960 3299
Principal Banker
Malayan Banking Berhad
EON Bank Berhad
Stock Exchange Listing
The Company is a public company, incorporated
and domiciled in Malaysia and listed on the Main
Board of Bursa Malaysia Securities Berhad since
3 March 1994.
Sector : Trading
Stock Name : TSTORE
Stock Code : 5711
Website Address : www.tstore.com.my
Email : [email protected]
I N
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13
Corporate
Structure
30%
Tanjung Segi Sdn. Bhd.
70%
The Store Holdings Sdn. Bhd.
100%
Formyarn Sdn. Bhd.
67%
The Store ( Kangar ) Sdn. Bhd.
100%
The Store ( Johore Bahru ) Sdn. Bhd.
100%
The Store ( Johor Jaya ) Sdn. Bhd.
100%
The Store ( Kemaman ) Sdn. Bhd.
100%
Murai Perdana Sdn. Bhd.
100%
Cotler Sdn. Bhd.
92.1%
The Store ( Malaysia ) Sdn. Bhd.
100%
The Store ( Malacca ) Sdn. Bhd.
100%
The Store ( Batu Pahat ) Sdn. Bhd.
100%
THE STORE CORPORATION
BERHAD
The Store ( Subang ) Sdn. Bhd.
100%
Taiping Corporation Sdn. Bhd.
100%
The Store ( Taiping Jaya ) Sdn. Bhd.
100%
Taiping Supermarket Holdings
Sdn. Bhd.
100%
The Store ( Taiping ) Sdn. Bhd.
100%
The Store ( Tampin ) Sdn. Bhd.
100%
The Store ( Terengganu ) Sdn. Bhd.
100%
The Store ( Pusat K.T ) Sdn. Bhd.
100%
The Store ( Kelantan ) Sdn. Bhd.
100%
The Store ( Sungai Petani ) Sdn. Bhd.
100%
The Store ( Kota Bharu ) Sdn. Bhd.
100%
Gold Shopping Centre Holdings
Sdn. Bhd.
100%
70%
The Store ( Taman Kok Lian ) Sdn. Bhd.
100%
The Store ( Shah Alam ) Sdn. Bhd.
100%
The Store ( NS ) Sdn. Bhd.
30%
TS Universal Brands Sdn. Bhd.
100%
The Store ( Bukit Pasir ) Sdn. Bhd.
100%
The Store ( Port Dickson ) Sdn. Bhd.
100%
Summit Superstore Holdings Sdn. Bhd.
100%
Arglye Sdn. Bhd.
100%
TS Retail Systems Sdn. Bhd.
100%
The Store ( Summit Parade ) Sdn. Bhd.
100%
The Store ( Mentakab ) Sdn. Bhd.
100%
The Store ( Muar ) Sdn. Bhd.
100%
The Store ( Seremban ) Sdn. Bhd.
100%
TS Universal Trading Sdn. Bhd.
100%
Pacific Hypermarket Group Sdn. Bhd.
100%
The Store ( Bentong ) Sdn. Bhd.
100%
The Store ( Darul Naim ) Sdn. Bhd.
100%
Pacific Hypermarket ( Prai ) Sdn. Bhd.
100%
Pacific Hypermarket & Departmental
Store Sdn. Bhd.
100%
Bigever Properties Sdn. Bhd.
100%
Pacific Hypermarket Properties Sdn. Bhd.
100%
Pacific Bowling Sdn. Bhd.
100%
Pacific Departmental Store Sdn. Bhd.
100%
Milimewa Superstore Sdn. Bhd.
100%
Delsinar Sdn. Bhd.
100%
29.63%
Nilai Hikmat Sdn. Bhd.
100%
15.63%
54.74%
The Store ( Kuantan Parade ) Sdn. Bhd.
100%
The Store Properties Sdn. Bhd.
100%
The Store Card Sdn. Bhd.
100%
The Store ( Kluang ) Sdn. Bhd.
100%
The Store (Kampar Road) Sdn. Bhd.
100%
Visual Utama Sdn. Bhd.
100%
Yangtze Corporation Sdn. Bhd.
94.98% (Effective Interest)
The Store ( Klang ) Sdn. Bhd.
100%
The Store ( Taman Tun Aminah ) Sdn. Bhd.
100%
The Store ( Central Square ) Sdn. Bhd.
100%
Pacific Department Store ( Prai ) Sdn. Bhd.
100%
Berkat Apparel Sdn. Bhd.
100%
Berkat Garments Sdn. Bhd.
100%
Berkat Marketing Sdn. Bhd.
100%
Berkat Merchandising & Services Sdn. Bhd.
100%
Larut Matang Supermarket Holdings
Berhad
Berkat Supermarket Sdn. Bhd.
100%
Dindings Supermarket Sdn. Bhd.
100%
Fajar Merchandising & Services Sdn. Bhd.
100%
Fajar Retail Enterprise Sdn. Bhd.
100%
Fajar Supermarket (Butterworth) Sdn. Bhd.
100%
Fajar Supermarket ( Melaka ) Sdn. Bhd.
100%
Fajar Supermarket ( Upper Perak ) Sdn. Bhd.
100%
Fajar Supermarket Sdn. Bhd.
100%
Bintang Aspek (M) Sdn. Bhd.
100%
Koaling Development Sdn. Bhd.
100%
Kuala Kangsar Supermarket Sdn. Bhd.
100%
Larut Matang Supermarket ( Taiping) Sdn. Bhd.
100%
Sungei Perak Supermarket Sdn. Bhd.
100%
Fajar Departmental Store & Supermarket ( Sg. Besar ) Sdn. Bhd.
100%
99.99%
14
I N
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Sungai Besar Supermarket Sdn. Bhd.
0.001%
A N N U A L
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Chairman's
Statement
"Dear Valued Shareholders,
On behalf of the Board of Directors, it gives me great
pleasure to present the Company's Annual Report
and Financial Statements for the financial year
ended 30 September 2007.
Financial Performance
During the financial year under review, the Group recorded a significant improvement of 33.4% in its profit before
tax which rose from RM41.1 million in the previous year to RM54.8 million this year. Earnings per share have also
increased from 43.5 sen to 59.0 sen, up by 35.6%. The Group sales and profitability have continued to increase
with contribution from new outlets and improvement in other income which included the recognition of negative
goodwill arising from the acquisition of new outlets.
The Group[ shareholders equity have also rose strongly to RM370.4 million as at 30 September 2007, up by
41.4% from RM261.9 million as at 30 September 2006. The Group's unappropriated profits grew by 23.5%, up
from RM196.3 million to RM242.5 million as at 30 September 2007.
Dividend
The Board resolved to recommend a first and final dividend of 3% per share less Malaysian Tax of 26% for the
financial year ended 30 September 2007. The proposed dividend will be subject to shareholders' approval at the
forthcoming Annual General Meeting.
I N
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15
Statement
Operation Review
Being a dynamic organisation, the Group is constantly undergoing a continuing programme to renovate, refurbish
and upgrade its existing outlets to promote a fresh outlook consistent with the Group's vision. To keep ahead of its
competitors, the outlets will be made more functional for customers' convenience and also more aesthetically
pleasing and attractive as shopping destinations. This is expected to provide an impetus to the growth of all outlets.
During the year, the Group organised a "Price Cut" campaign throughout all outlets, launched by Y.B. Datuk Haji
Mohd Shafie bin Hj Apdal, Minister of Domestic Trade & Consumer Affairs (KPDN). The prices of 1,000 selected
items were reduced until the end of 2007, at discounts of 10%-50% from normal prices. Besides attracting more
shoppers to our outlets, this campaign served to also enhance our market share and increase our profit margin in
the long run.
Another programme done in co-operation with KPDN was "Produk Malaysia, Citarasa Kita" with the aim of
supporting our government's efforts in expediting the growth of the small and medium industry (SMI) in Malaysia,
which at the same time, also reflects our spirit as a Malaysian company. The programme was carried out in all the
Group's outlets to enhance the participation of the SMI in the local market and subsequently to the international
market.
Corporate Development
During the financial year under review, the Company's wholly-owned subsidiary Pacific Hypermarket &
Departmental Store Sdn Bhd (Pacific) had on 27 April 2007 entered into a sale and purchase agreement with LKD
Management Sdn Bhd (LKD) to acquire retail spaces known as Unit 1-888, Unit 2-888 and Unit 2.26 in Batu
Pahat Mall for a total cash consideration of RM59,358,140. The retail spaces measured a total of 150,936.60
sq. feet. At present, it is occupied by Pacific for the operation of a departmental store and food court. Pacific and
LKD have mutually agreed to extend the date of completion of the acquisition due to a dispute between the
previous owner of the land and the purchaser of the land.
On 16 May 2007, the Company undertook an internal re-organisation and re-branding exercise by consolidating
the business operations of all "Fajar" outlets under Fajar Retail Enterprise Sdn Bhd into The Store (Malaysia) Sdn
Bhd. It brought the total number of "The Store" outlets to 53, with the existing 5 "Pacific" and 17 "Milimewa" outlets.
The total number of outlets for the Group now stands at 75 as at the date of this statement. The new structure is
intended to facilitate central planning and control, leading to greater management efficiency and effectiveness as
well as the optimisation of financial and human resources through economies of scale and which may also result in
corporate tax savings.
16
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Chairman's
Statement
The Company had on 12 December 2007 entered into a conditional share sale agreement with Y. S. Tang
Holdings Sdn Bhd for the acquisition of the entire equity stake in Jurus Kota Sdn Bhd (Jurus), for a purchase
consideration of RM130,000,000. Jurus is a property investment company which owns a shopping mall at Alor
Star, Kedah Darul Aman. Alor Star Mall is a two-storey commercial complex with a mezzanine floor and basement
car park. It has a net lettable area of 296,532 sq. ft and 386 car park bays. Alor Star Mall commenced
operations in 2004, with the major tenant being the Pacific outlets which occupy approximately 72% of the total
lettable area of Alor Star Mall. This acquisition had been approved by the shareholders of the Company at an
Extraordinary General Meeting held on 13 February 2008.
The acquisitions of retail spaces are expected to provide a stable stream of rental income as well as provide
synergy to the Group. Upon completion of the above acquisitions, the Group will be on a stronger financial footing
and is able to further tap into the capital and debt market to realize its fund-raising potential to finance future
expansion plans.
Awards & Recognition
During the year under review, the Company was nominated as one of the top 3 retailers of 2007 in Malaysia by
the Retail Asia-Pacific (RAP) Top 500 Awards.
Retail Asia-Pacific Top 500 Awards is a prestigious award which recognises the outstanding achievements of bestperforming retail companies in 14 markets of the Asia-Pacific Region. The Company, as a leading Malaysianowned retail company, came in third in the Malaysian market for the "Top 3 Retail Companies" within each
Country/Economy" segment.
The Group's 18 outlets were recognised as consumers choice shops (Kedai Pilihan Pengguna) by the Ministry of
Domestic Trade & Consumer Affairs in recognition of its "Quality, friendliness and reasonable prices" motto for
essential consumer products. This will further enhance and consolidate The Group's profile and image as one of the
leaders in the retail industry.
Corporate Social Responsibility
The Store group of companies has always undertaken numerous charity-related projects that benefited lessprivileged members of society in pursuing our commitment to corporate responsibility.
The Group continues to work together with the charity organisations to raise funds through the Group's intensive
retail network during sales campaigns. During the year, the Group donated to 13 selected Thalassaemia
Associations in Malaysia (sales campaign from 25 May 2007 to 2 September 2007 and Spastic Children's
Association (sales campaign from 2 September 2007 to 29 February 2008).
The Board acknowledges the importance of corporate social responsibility and views it as an extension of the
Group[ efforts in fostering a strong corporate governance culture.
I N
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17
Chairman's
Statement
Prospects
Retail Group Malaysia has forecast Malaysia’s retail sales to grow by 8% in 2008. Malaysia’s economy grew
strongly by 7.3% in the 4th quarter of 2007, beating an average forecast growth of 6.5% by economists. The
nation’s real Gross Domestic Product (GDP) grew by 6.3% for 2007. The better than expected growth was driven
by robust consumer spending, among other things, according to Bank Negara Malaysia, which also mentioned
that consumer spending was expected to be resilient in view of a firm job market and high commodity prices.
Private consumption grew by 11.1% and the services sector, which includes retail trade, hotels and finance,
expanded 9.1%. Tourists arrivals continue to grow as an extension of Visit Malaysia Year 2007, and the Mega
Sales Carnival and festive seasons are also retail sale boosters. Higher consumer disposable income is expected to
boost domestic demand. Together, these factors should more than offset lower consumer demand brought about by
higher prices. The Group recognises that global economic conditions remain challenging and the local retail
industry will be competitive with expansion of foreign retailers. The Store is confident of sustained improvement in its
financial results as it will continuously upgrade its outlets, develop its marketing plans and promotional strategies in
order to achieve its business target.
Acknowledgment
On behalf of the Board, I would like to express my sincere appreciation to the management and staff for their
commendable and dedicated performance, team spirit, diligence, loyalty and whole-hearted commitment towards
the continuing growth of the Group.
I also convey our deepest appreciation to our valued customers, business associates, bankers and others who have
contributed positively to our growth and success as well as for their support, confidence and trust.
Lastly, I thank our shareholders for their constant support and confidence in the Group.
Thank you.
DatoSri Md Kamal bin Bilal
Chairman
5 March 2008
18
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Director's
Profile
Dato’ Sri Md Kamal bin Bilal,
S.S.A.P., D.M.S.M., JP
Chairman
Malaysian, aged 45, was initially appointed to the Board
on 14 February 2000 as a Non-Executive Director and coopted as Chairman on 2 November 2001.
Dato’ Sri Kamal holds a Bachelor Degree in Business
Management from University of USA. He has over 13
years of experience in the government sector, serving as a
Community Development Officer in the Ministry of National
& Rural Development. After that, he ventured into the
automobile Industry as a Proton Edar dealer in 1995.
Since 2000, he has been the Division Treasurer of UMNO
for Kepala Batas Division and also a treasurer of Barisan
Nasional for Kepala Batas Parliament. Currently, Dato’ Sri
also sits on the board of several private companies and
public listed companies as the Chairman in KBB Resources
Bhd, Borneo Aqua Harreot Bhd and Prime Utilities Bhd.
Dato’ Sri Kamal does not have any family relationship with
any Directors and/or major shareholders of The Store
Corporation Berhad or any personal interest in any
business arrangement involving the Company. He has not
been convicted for any offences within the past 10 years.
Dato’ Sri Tang Yeam Soon, S.S.A.P., D.S.N.S,
Managing Director
Malaysian, aged 48, was appointed to the
Board on 21 February 2001 as an Executive
Director and co-opted as Group Managing
Director on 23 November 2001.
Dato’ Sri Tang has more than 20 years of
experience in the business sector, particularly in
the retail industry. He founded his first company
at the age of 20, and held the position of
Managing Director. Under his leadership, the
company was listed on Bursa Malaysia
Securities Berhad’s Second Board 13 years
later.
Thereafter, he founded Pacific
Hypermarket & Departmental Store Sdn Bhd and
held the position of Managing Director before
forging his career with The Store Group.
I N
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19
Director's
Profile
In 2003, Dato’ Sri Tang was conferred a Doctorate of Philosophy (PhD) in Business
Administration (Honoris Causa) by Honolulu University, Hawaii. This was indeed a
true acknowledgment and recognition of his invaluable contribution to the development
of the country’s retail industry.
As Group Managing Director, Dato’ Sri Tang is mainly responsible for setting and
reviewing the operations strategy and succession plans of the Group, evaluating and
monitoring the Group’s performance goals and management of risks. Presently, Dato’
Sri Tang also sits on the board of several private companies and does not hold any
directorship in any other public companies.
Dato’ Sri Tang is the spouse of Datin Sri Khor Guik Lee who is also a director and a
major shareholder of The Store Corporation Berhad. Save as disclosed, Dato’ Sri does
not have any family relationship with any other Directors and/or major shareholders of
The Store Corporation Berhad. Save for the rental of premises charged to the
Company by companies in which Dato' Sri Tang has a personal interest, as disclosed
in Note 29 of the audited financial statements of the Company, Dato' Sri Tang does
not have any other personal interest in any business arrangement involving the
Company. He has not been convicted for any offences within the past 10 years.
Kam Teh Chung
Executive Director
Malaysian, aged 58, is an Executive Director who
was re-appointed to the Board on 31 May 2001
and is currently holding the position of Group
Operations Director.
He was previously a Board member serving as
Executive Director of The Store Corporation Berhad
until his resignation on 30 March 2000. Prior to
that, he had served in various capacities in the
outlets within the Group. He has deep knowledge of
the supermarket and department store industry
gained from more than 20 years experience. He
also has an impeccable standing in the retail
business industry. He does not hold any other
directorship in any public companies.
Mr Kam does not have any family relationship with
any Directors and/or major shareholders of The
Store Corporation Berhad or any personal interest in
any business arrangement involving the Company.
He has not been convicted for any offences within
the past 10 years.
20 (THE
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Director's
Profile
Chang Yen Huei
Executive Director
Malaysian, aged 43, was appointed to the Board on 2
November 2001 as Executive Director and is currently
holding the position of Group Finance Director and was
appointed as a member of the Audit Committee on 23
November 2001.
He is a fellow of the Chartered Association of Certified
Accountants, UK and a member of the Malaysian
Institute of Accountant. He has gained valuable
experience in accounting and financial management
through his attachment over 10 years in various
industries such as professional accounting firms,
computer and retailing industries.
He was the
Accountant of MCL Corporation Berhad for 3 years
before joining Pacific Hypermarket Group Sdn Bhd
(PHG) as a Group Accountant in 1996. He was
subsequently promoted to Group Financial Controller of
PHG and further appointed as Group Financial
Controller of The Store Corporation Berhad in February
2001. In the same year, he was promoted to Group
Finance Director. He does not hold any directorship in
any other public companies.
Mr Chang does not have any family relationship with any Directors and/or major shareholders of The Store
Corporation Berhad or any personal interest in any business arrangement involving the Company. He has not been
convicted for any offences within the past 10 years.
Executive Director
Malaysian, aged 46, was appointed to the Board on 27
February 2003 as Executive Director. She has more than 20
years of experience in the retail industry. With her spouse,
Dato’ Sri Tang Yeam Soon, they formed a company in which
she held the position of Executive Director and the company
was subsequently listed on the Second Board of Bursa
Malaysia Securities Berhad 13 years later. Thereafter, she
joined Pacific Hypermarket and Departmental Store Sdn Bhd as
an Executive Director. As a board member of Pacific, she
participated actively and constructively in all the board
deliberations towards the future growth and direction of Pacific
group. Presently, she also sits on the board of several private
companies. She does not hold any directorship on any other
public companies.
Datin Sri is the spouse of Dato’ Sri Tang Yeam Soon who is a
director and a major shareholder of The Store Corporation
Berhad. Save as disclosed, Datin Sri does not have any family
relationship with any Directors and/or major shareholders of
The Store Corporation Berhad. Save as disclosed in Note [ ]
of the audited financial statements of the Company, Datin Sri
Khor does not have any personal interest in any business
arrangement involving the Company. She has not been
I N
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21
Director's
Profile
Yeoh Chong Keng
Independent Non-Executive Director
Malaysian, aged 55, is a Non-Executive Director who is a
lawyer by profession and was appointed to the Board on
14 February 2000. He was appointed as a member of
the Nomination Committee on 30 July 2001 and as a
member of the Remuneration Committee on 27 February
2003. On 20 May 2005, he was appointed as a member
of the Audit Committee.
He was a senior police officer in the Royal Malaysian
Police Force before proceeding to read Law at Lincoln’s Inn,
England. He was called to the English Bar and Malaysian
Bar in 1980 and 1981 respectively and is the managing
partner of a legal firm in Kuala Lumpur. He has also acted
as counsel for the Government of Hong Kong. He is an
independent director and member of the audit committee
and chairman of the nomination committee and risk
management committee of TM Asia Life (Malaysia) Bhd.
He does not have any family relationship with any Directors and/or major shareholders of The Store Corporation
Berhad or any personal interest in any business arrangement involving the Company. He has not been convicted
for any offences within the past 10 years.
Dato’ Haji Mohd Yusoff bin Haji Amin SMS., PJK., JP.,
Malaysian, aged 77, is a Non-Executive Director and was
appointed to the Board on 24 April 2000. Dato’ Yusoff
was appointed as a member of the Audit Committee on
31 July 2000 and as Chairman of the Nomination
Committee on 30 July 2001.
He has held many illustrious positions in a distinguished
career in the Public Service. Most notable was the period
he served as the Private Secretary to His Royal Highness,
the late Sultan of Selangor Darul Ehsan. Dato’ Yusoff
served with distinction in this position for over 18 years.
Dato’ Yusoff also has the proud record of holding the
following appointments/positions for varying periods in the
State of Selangor Darul Ehsan namely, Orang Besar
Daerah Petaling, District Councillor of Petaling, Member of
the Dewan DiRaja, Municipal Councillor of Shah Alam,
Member of the Council State Museum, Majlis Agama
Islam and the Council of University Pertanian Malaysia.
Presently, Dato’ Yusoff sits on the board of directors of various public and private companies including Southern
Acids (M) Berhad and Khee San Berhad. He was also the Honorary Advisor to the Council of Justices of the Peace
and Society of the Royal Datos Selangor Darul Ehsan in which he served as President from 1994 to 1997.
Dato’ Yusoff does not have any family relationship with any Directors and/or major shareholders of The Store
Corporation Berhad or any personal interest in any business arrangement involving the Company. He has not been
22 (THE
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Director's
Profile
Dato’ Dr. Haji Kardin bin Haji Shukor, DPNJ, SMI, AMN, PIS., JSM.,
Malaysian, aged 68, is a Non-Executive Director who was
appointed to the Board on 13 December 1993 and appointed
as Chairman of the Audit Committee. He became the Chairman
of the Remuneration Committee on 30 July 2001.
Dato’ Kardin is a qualified Veterinarian and dedicated to his
work in animal husbandry for which he has held many top
positions in the public veterinary service. In 1963, he was
seconded as Assistant Veterinarian with the Institute of Veterinary
Research, Ipoh and subsequently, transferred to Kuala Pilah
district before furthering his studies at the University of
Queensland in 1965.
Upon his return to Malaysia in 1969, Dato’ Kardin was
appointed as Director of Veterinary Service for Kedah followed
by other such appointments in various districts throughout
Peninsular Malaysia. He does not hold any directorship in any
other public companies.
Dato’ Kardin does not have any family relationship with any Directors and/or major shareholders of The Store
Corporation Berhad. He has not been convicted for any offences within the past 10 years. Save for the share
registration and secretarial fees paid by the Company to a company in which Dato' Kardin has a financial interest,
as disclosed in Note 29 of the audited financial statements of the Company, Dato' Kardin does not have any
personal interest in any other business arrangement involving the Company.
Lim Gin Chuan
Malaysian, aged 44, is a Non-Executive Director who was
appointed to the Board on 31 January 2000. He was
appointed as a member of the Remuneration Committee on
30 July 2001 and as a member of the Nomination Committee
on 27 February 2003.
He obtained his Bachelor of Economics (major in Accounting)
and Bachelor of Law Degree from Monash University,
Melbourne, Australia. He served as a legal assistant in a
legal firm from 1989 to 1990. From 1991 until the present
date, he has been a partner in the legal firm. His main areas
of expertise are in the field of conveyancing, banking and
company law. His firm serves as the panel solicitors for
various banks and finance companies. He is also presently a
Director of Wong Engineering Berhad, a public listed
company.
He does not have any family relationship with any Directors
and/or major shareholders of The Store Corporation Berhad
or any personal interest in any business arrangement involving
the Company. He has not been convicted for any offences
within the past 10 years.
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Statement Of
Corporate Governance
The Malaysian Code on Corporate Governance ("the code") was introduced in March 2000, and sets out the
Principles and Best Practices for compliance by any organisation.
The Board of the Company recognizes the paramount importance of good corporate governance to the success of
the Group and believes that good corporate governance results in quantifiable and sustainable long term success
and creation of shareholders value as well as benefit for other stakeholders, all of which are reflected in our
performance track record over the years. As such, the Board is fully committed to the maintenance of high
standards of corporate governance in all aspects of its dealings for which Directors are accountable to
shareholders. The Board is therefore pleased to provide the following statement which narrates the various
measures taken by the Group to strengthen the application. Except for matters specifically identified, the Board of
Directors has complied in the best practice set out in the code.
A. THE BOARD OF DIRECTORS
(i)
Board Composition & Balance
The Company's Articles of Association currently provide for a board comprising a maximum of eleven
directors. There is no change in Board members since the last financial year. The Board has nine
members as at the date of this statement. Of the nine, there are 4 executive directors and the rest are
non-executive who are independent.
The present composition of the Board is in compliance with the requirements of Bursa Malaysia
Securities Berhad whereby at least two directors or one-third of the Board, whichever is the higher
number, must be independent directors.
In the opinion of the Board, the number of members is sufficient and fairly reflects the investment in
the Company by shareholders other than the largest shareholders.
The Board considers that the current non-executive Directors bring a wide range of business, legal and
financial experience required for the successful direction of the group, and provide a solid foundation
for good corporate governance. There is no individual or group of individuals who dominates the
Board's decision-making.
The Board continually evaluates its requirements as to the appropriate mix of skills and experience
required to ensure that its competition remains optimal for the effective discharge of its responsibilities.
All the members of the Board complied with the limitation of directorship requirement pursuant to
listing requirement of Bursa Malaysia Securities Bhd.
A brief profile of each director is presented on pages 19 to 23.
(ii)
Responsibilities
The Board has a fiduciary duty to act in good faith, with due diligence and care and in the best
interest of the Group and all its stakeholders.
The duties and responsibilities of the Board are to review and evaluate strategic performance and
resources for the Group against their budgets and targets in light of any changing circumstances,
whether economic, social or political. The Board is also responsible for satisfying itself as to the
integrity of financial information and effectiveness of the Group's internal control system and
Management Information System including systems in compliance with applicable laws, regulations,
rules, directives and guidelines.
24 (THE
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Statement Of
[ Cont'd ]
There is a clear division of responsibilities between the Chairman and Managing Director and
executive directors to ensure balance of power and authority. The Chairman is primarily responsible
for ensuring Board effectiveness and conduct whilst the Managing Director, with the assistance of
executive directors, has overall responsibilities over the operating units, organization effectiveness
and implementation of Board policies and decisions.
The Independent Non-Executive directors fulfill a pivotal role in corporate accountability providing
unbiased and independent views, advice and judgment.
The Board does not consider it necessary to nominate a recognized Senior Independent NonExecutive Director to the Board to whom any concerns may be conveyed, in view of the present
independent element of the board composition and the separation of the roles of the Chairman and
Managing Director.
(iii)
Board Meeting
During the financial year, the Board held 4 meetings. The Board also noted the decisions and salient
issues deliberated by the Audit Committee and other committees briefed by them at the meetings. In
the intervals between the scheduled Board meetings, any matters requiring Board decisions and
Board approvals are obtained through circular resolutions.
The attendance of the Directors at the board meetings held during the financial year ended 30
September 2007 are as follows:
Name of Directors
1. Dato' Sri Md Kamal bin Bilal
2. Dato' Sri Tang Yeam Soon
3. Dato' Dr. Haji Kardin bin Haji Shukor
4. Dato' Haji Mohd Yusoff bin Haji Amin
5. Kam Teh Chung
6. Chang Yen Huei
7. Datin Sri Khor Guik Lee
8. Yeoh Chong Keng
9. Lim Gin Chuan
(iv)
Number of Board
meetings attended
4/4
4/4
4/4
4/4
4/4
4/4
4/4
4/4
4/4
Supply of Information
Executive Management and the Company Secretaries are responsible for organising the Board
meeting agenda and full set of board papers for each agenda item to be discussed. Adequate
reports with regards to information on Group performance and major operational financial and
corporate issue are disseminated in advance to facilitate informed decision-making process and all
the Directors are entitled to request for additional clarification and information to assist them in
matters that require their decision.
The Board has the services of two Company Secretaries who are responsible for ensuring that all
Board procedures are followed and that applicable laws and regulations are complied with. These
include the obligation of Directors relating to disclosure of interests and disclosure of any conflict of
interest in transactions with the Group. The Company Secretaries are also charged with highlighting
all issues which they feel ought to be brought to the Board's attention.
In exercising their duties and specific responsibilities, Board committees are entitled to obtain advice
on professional opinions from external independent consultants such as merchant bankers, valuers,
human resource consultant etc.
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Statement Of
[ Cont'd ]
(v)
Re-election of Directors
Pursuant to Section 129 (6) of the Companies Act, 1965, directors who are over seventy (70) years
shall retire at every Annual General Meeting and may offer themselves for re-appointment to hold
office until the next Annual General Meeting.
The Company's Articles of Association provide for the following in respect of the re-election of
directors:
a)
all Directors who are appointed during the year will be subject to retirement and re-election by
shareholders at the Annual General Meeting following their appointment; and
b)
one-third (1/3) of the remaining directors, including the Managing Director, or if their number is
not three or a multiple of three, then the number nearest to 1/3, shall retire from office and be
eligible for re-election at each Annual General Meeting; provided always
c)
all the directors, including the Managing Director, shall retire from office once at least in each
three (3) years but shall be eligible for re-election.
At this forthcoming Annual General Meeting, the Company has 4 directors retiring and offering
themselves for re-election. The Board confirms that it is satisfied that the directors, who are required
to stand for re-election and re-appointment respectively at the AGM, continue to demonstrate the
necessary commitment to be fully effective members of the Board. To assist the shareholders in their
decisions, sufficient information such as directors' personal profile, their attendance at the meetings
and shareholdings in the Company for each director standing for re-election are furnished in this
Annual Report.
(vi)
Directors' Continuing Development
All the Directors had attended the Mandatory Accreditation Programme and Continuing Education
Programme as required by Bursa Malaysia. The Board is mindful that they should continually attend
education programmes and seminars to keep abreast with developments in the market place as well
as new regulations and statutory requirements.
Directors are encouraged to visit the Group's operating outlets to have an insight on the Group's
operations which would assist the Board in making effective decisions relating to the Group.
(vii)
Board Committees
The Board has delegated certain responsibilities to its committees which operate within clearly defined
terms of reference. The chairman of the respective committees will report to the Board the outcome of
the committees' meetings and such reports are incorporated in the board papers.
a)
Audit Committee
The composition and terms of reference of this committee together with its reports are presented
on page 33.
26 (THE
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Statement Of
[ Cont'd ]
b)
Remuneration Committee
The Remuneration Committee was established on 30 July 2001. The membership of the
committee has not changed since the last report. The Board considers that the membership of
the committee is in compliance with the code's recommendation. Its present members, all of
whom are independent non-executive directors, are as follows:
~
~ Mr. Yeoh Chong Keng
(Independent Non- Executive Director)
~ Mr. Lim Gin Chuan
-
Chairman
-
Member
-
Member
The Remuneration Committee is responsible for developing the remuneration packages and
benefits of the Executive Directors and making the necessary recommendations to the Board for
approval. Non-Executive Directors' remunerations are determined by the full Board. Directors
do not participate in decisions on their own remuneration packages. Directors' fees are
approved by the shareholders at the Annual General Meeting. The committee meets when
necessary.
c)
Nomination Committee
The Nomination Committee was established on 30 July 2001. The membership of the committee
has not changed since the last report. The Board considers that the committee is in compliance
with the code's recommendation. Its present members, all of whom are independent
non-executive directors, are as follows:~
~
~
Mr. Yeoh Chong Keng
(Independent Non- Executive Director)
Mr. Lim Gin Chuan
-
Chairman
-
Member
-
Member
The Nomination Committee is responsible for nominating new candidates to the Board and to
ensure the appropriate Board balance and size as well as to review the required mix of skills,
experience and other competencies and recommend to the Board accordingly. The Board will
implement the process, which is to be carried out by the Nomination Committee, for assessing
the effectiveness of the individual directors and the Board as a whole.
The Company Secretary is responsible for ensuring that appointments are properly made and
all necessary information is obtained from the directors in compliance with the requirements of
the Companies Act, 1965, Listing Requirements of Bursa Malaysia Securities Berhad, Securities
Industry Act, 1983 and other regulatory requirements. No nominations were received during
the year.
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Statement Of
[ Cont'd ]
B. DIRECTORS' REMUNERATION
The Company's Remuneration scheme for Executive Directors is linked to performance, seniority, experience and
scope of responsibility and is reviewed periodically having regard to market/industry standards. For NonExecutive Directors, the level of remuneration reflects the level of responsibilities, expertise, experience and duties
undertaken by them. In addition, the Board also takes into consideration any relevant information provided by
independent consultant or from survey data.
All the Directors are paid a fixed fee, except for the Chairman who is paid a higher fee in recognition of his
additional responsibilities. The directors are also reimbursed reasonable expenses incurred by them in the course
of carrying out their duties on behalf of the Company.
The Remuneration Committee recommends to the Board the director's fee for each Director of the Company
which is subject to the approval of the shareholders. The members of the Audit Committee are paid fixed fees.
The details of the remuneration of the Directors of the Company comprising remuneration received/receivable
from the Company and subsidiary companies during the financial year under review are set out in the table
below.
Aggregate remuneration of directors categorized into appropriate components:-
Fees
Salaries
Allowance &
other emoluments
Executive
(RM)
Non-Executive
(RM)
516,000
2,664,000
120,000
-
Total
(RM)
636,000
2,664,000
449,000
135,000
584,000
------------------------------------------------------------------------3,629,000
255,000
3,884,000
===============================
Number of Directors whose remuneration falls into the following bands:Range of Remuneration
Executive
Below RM50,000
- RM100,000
RM50,000
RM350,000 - RM400,000
1
RM400,000 - RM450,000
1
RM650,000 - RM700,000
1
RM2,150,000 - RM2,200,000
1
Number of Directors
Non-Executive
4
1
-
Total
4
1
1
1
1
1
C. SHAREHOLDERS AND INVESTORS RELATIONSHIP
The Company places utmost importance on timely and accurate dissemination of information to investors and
shareholders as recommended practice under The Malaysian Code on Corporate Governance. Nevertheless,
whilst the Company endeavors to provide as much information as possible to its shareholders and stakeholders,
it is mindful of the legal and regulatory framework governing the release of material and price-sensitive information.
The Company is committed to maintain an active dialog with shareholders to provide comprehensive updates on
issues pertaining to the Group's strategy, performance and major development. The Company also ensures that
investment analysts fund managers and potential investors are frequently updated through investors briefing
dialogs, and interview.
28 (THE
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Statement Of
[ Cont'd ]
The Company has established a website to enable the public and shareholders to access corporate
information on the promotions, performance and activities undertaken as well as achievements of the Group
at www.tstore.com.my.
The Company has the annual general meeting and extraordinary general meeting as means of communication
for shareholders and investors to seek clarifications on the operations, financial performance and major
developments of the Group. Shareholders are welcome to raise queries by contacting the Company at any time
throughout the year in addition to the meetings.
During shareholders' meetings, the Chairman will undertake to provide written answers to significant questions
that cannot be readily answered at the meetings. Shareholders' suggestions received during the meetings are
reviewed and considered for implementation, whenever possible. The management and the external auditors are
also present at the meetings to provide their professional and independent clarification on issues and concerns
raised by the shareholders. The outcome of all resolutions proposed at the meetings are announced to Bursa
Securities on the same day to enable the public to know the outcome.
D. ACCOUNTABILITY AND AUDIT
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Statement Of
[ Cont'd ]
The Directors are required by the Companies Act, 1965 to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the Company and the Group as
at the financial year end and of the results and cash flows for that year.
The Directors consider that, in preparing the financial statements of the Company for the financial
year ended 30 September 2007, the Company has used appropriate accounting policies, consistently
applied and supported by reasonable and prudent judgments and estimates. The Directors also
consider that all applicable approved accounting standards in Malaysia have been followed and
confirm that the financial statements have been prepared on a going concern basis.
The Directors are responsible for ensuring that the Company keeps accounting records which disclose
with reasonable accuracy at any time the financial positions of the Company which enable them to
ensure that the financial statements comply with the provisions of the Companies Act, 1965.
The Directors are also responsible for taking such steps that are reasonably open to them to
safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
E. COMPLIANCE WITH THE CODE
During the financial year under review, the Group is substantially in compliance with the code, except for
separate disclosure of each director's remuneration. The Board is of the opinion that separate disclosure will
impinge upon the Directors' right of privacy.
This statement is made in accordance with a resolution of the Board of Directors passed on 30 January 2008.
OTHER INFORMATION:
1. UTILISATION OF PROCEEDS
The Company has an existing Commercial Paper and Medium Term Note issuance facility of up to RM200
million available for a period of seven years from 9 July 2003, which was the date of the first issuance. As at the
date of this Annual Report, the Company has an outstanding amount of RM40 million Commercial Papers and
RM60 million Medium Term Notes, for the purpose of financing the Group's working capital requirement and
capital expenditure to set up new branches/outlets, investment in similar businesses and renovation
works/upgrading costs on existing outlets.
2. SHARE BUYBACK
At the extraordinary general meeting of the Company held on 12 May 2004, the shareholders approved
the share buy-back of up to 10% or up to 6,850,360 ordinary shares of the issued and paid up share
capital of the Company. The authority from the shareholders has been renewed at the annual general
meeting of the Company held on 24 September 2004 and 23 December 2005 and was further renewed at
the extraordinary general meeting of the Company held on 29 December 2006 and at the annual general
on 23 March 2007.
30 (THE
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Statement Of
[ Cont'd ]
During the financial year under review, the Company had purchased a total of 1,000 shares, all of which
are retained as treasury shares. A monthly breakdown of the shares bought back during the financial year
under review is set out below:
Month
No. of Shares
Consideration
paid (RM)*
Minimum
price paid
(RM)
Average
price paid
(RM)
Maximum
price paid
(RM)
March 2007
1,000
2,780.67
2.76
2.76
2.76
TOTAL
1,000
2,780.67
2.76
2.76
2.76
All the shares purchased were either retained as treasury shares or resold. None of the shares purchased
has been cancelled. The number of treasury shares held by the Company as at the financial year ended 30
September 2007 is 490,000 Shares. A monthly breakdown of treasury shares resold during the financial
year under review is set out below:
Month
No. of Shares
Proceeds (RM)*
Minimum
price (RM)
Maximum
price (RM)
Average
price (RM)
October 2006
110,000
314,651.20
2.86
2.90
2.88
November 2006
250,000
744,923.36
3.00
3.02
3.01
March 2007
115,400
350,255.55
3.02
3.12
3.07
April 2007
320,600
998,858.06
3.00
3.28
3.14
TOTAL
796,000
2,408,688.17
2.97
3.08
3.02
* Including brokerage, commission, clearing house fee and stamp duty.
3. NON-AUDIT FEES
The amount of non-audit fees paid to the external auditors and its affiliates by the Company and its
subsidiaries for the financial year ended is RM265,000.
4. REVALUATION OF LANDED PROPERTIES
All items of property, plant and equipment are initially recorded at cost.
Subsequent to initial recognition, property, plant and equipment are stated at cost less accumulated
depreciation and impairment losses, except for freehold land and buildings which are stated at valuation
carried out in 2007 less accumulated depreciation and impairment losses. The Group will revalue its
freehold land and buildings at least once in every 5 years. Surplus arising from revaluation is dealt with
through the asset revaluation reserve account. Any deficit arising is set off against the asset revaluation
reserve to the extent of a previous increase for the same property. In all cases, a decrease in carrying
amount will be charged to the income statement.
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Statement Of
[ Cont'd ]
5. RECURRENT RELATED PARTY TRANSACTIONS
In compliance with the requirements of Paragraph 10.09 of the Bursa Malaysia Listing Requirements, at the
forthcoming Annual General Meeting, the Company intends to seek a renewal of the shareholders' mandate
for the Company and its wholly-owned subsidiaries, Pacific Hypermarket & Departmental Store Sdn Bhd and
Pacific Bowling Sdn Bhd to enter into Recurrent Related Party Transactions of a revenue nature with specified
classes of Related Parties as specified in Section 3.2 of the Circular to shareholders dated 5 March 2008
which are necessary for the day to day operations and/or in the ordinary course of business of the Company
and its subsidiaries.
32 (THE
A N N U A L
Audit
R E P O R T
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Committee Report
The Board of Directors of The Store Corporation Bhd is pleased to present the report of the Audit Committee for the
financial year ended 30 September 2007.
The Audit Committee was established in 1994 to serve as a committee to the Board. The members as at the date of
this statement and their attendance at Committee meetings held during the financial year under review are as
follows:
Audit Committee
Designation
Number of meetings attended
Chairman
4/4
Member
4/4
Chang Yen Huei
Member
4/4
Member
4/4
Yeoh Chong Keng
A. TERMS OF REFERENCE
The terms of reference of Audit Committee incorporating the requirements of the Listing Requirements of the
Bursa Malaysia Securities Berhad has been reviewed and adopted by the Audit Committee on 25 November
2005 and the Board of Directors approved it on the same day.
The term of office of the Audit Committee and the terms of reference shall be reviewed by the Board not less
than once every three years.
i)
Membership
a)
The Audit Committee shall be appointed by the Board from among its members.
b)
The Committee shall consist of not less than three members, the majority of which shall be
Independent Non-Executive Directors.
The word "Independent" shall be the same as defined in the Listing Requirements of Bursa
Malaysia Securities Berhad.
c)
An alternate director shall not be appointed as a member of the Committee.
d)
At least one member must be a member of the Malaysian Institute of Accountants; or fulfills such
other requirements as prescribed by Bursa Malaysia Securities Berhad.
e)
The members of the Committee shall select a chairman from among their number and be
appointed by the Board from the Independent Non-Executive Directors.
f)
If a member of the Committee resigns, dies or for any other reason ceases to be a member with
the result that the number of members is reduced to below three, the Board shall, within three
months of the event, appoint such number of new members as may be required to make up the
minimum number of three members.
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A N N U A L
Audit
R E P O R T
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Committee Report
[ Cont'd ]
ii)
iii)
Authority
a)
The Committee is authorised by the Board to investigate any activity within its terms of reference.
It 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.
b)
The Committee is authorised by the Board to obtain outside legal or other independent
professional advice and to secure the attendance of outsiders with relevant experience and
expertise if it considers this necessary.
c)
The Committee shall have direct communication channels with the external auditors and
person(s) carrying out the internal audit function or activity, if any.
d)
The Committee shall promptly report to the Exchange of any matter reported by the Audit
Committee to the Board of Directors of the Company which has not been satisfactorily resolved
resulting in a breach of the Listing Requirements of Bursa Malaysia Securities Berhad.
Functions
The functions of the Committee shall be:
a)
To review and report to the Board :
- with the external auditors, the audit plan;
- with the external auditors, the evaluation of the system of internal accounting controls;
- with the external auditors, the audit report;
- the assistance given by the Company's officers to the external auditors;
- the quarterly results and financial statements of the Company and Group and thereafter to
submit them to the Board of Directors of the Company, particularly on
* any change in or implementation of major accounting policies and practices;
* significant adjustment arising from the audit;
* the going concern assumption; and
* compliance with accounting standards and other legal requirements ;
- any related party transactions and conflict of interest situation that may arise within the Company
or Group.
b)
To do the following for internal audit:
- 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 programme 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.
c)
To consider the appointment, remuneration, resignation and dismissal of external auditors; and
such other functions as may be defined by the Board of Directors.
d)
To review the internal audit plan, consider significant findings and management's response and
report to the Board together with such other functions as may be agreed to by the Committee
and the Board.
e)
Verify the criteria for allocation of options pursuant to a share scheme for employee.
34 (THE
A N N U A L
Audit
iv)
R E P O R T
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Committee Report
Meetings
a)
The Managing Director, the Executive Directors, any other Board Members, General Managers or
any other senior executives as may be requested by the Committee and a representative of the
external auditors shall normally attend meetings. However, the Committee shall meet with the
external auditors at least once a year.
b)
Any two members of the Committee present at the meeting shall constitute a quorum which must be
made up of the Independent Directors.
c)
The Company Secretary shall be Secretary of the Committee.
d)
Meetings shall be held not less than two times a year.
e)
The agenda will be prepared by the Company Secretary and circulated to the Committee prior to
each meeting.
The Company Secretary shall be responsible for keeping minutes of meetings of the Committee and
circulating them to all members of the Committee.
f)
The decision of the Audit Committee shall be by majority of votes and the determination by a
majority of the members shall for all purposes be deemed a determination of the Audit Committee.
In the case of an equality of votes, the Chairman of the meeting shall have a second or casting
vote.
Circular Resolutions signed by all the members shall be valid and effective as if it had been passed
at a meeting of the Audit Committee.
g)
The minutes of proceedings of the Audit Committee shall be kept by the Company Secretary at the
Registered Office of the Company, and shall be opened to the inspection of any member of the
Committee or any member of the Board of Directors.
B. ACTIVITIES DURING THE FINANCIAL YEAR
During the financial year under review, the main activities undertaken by the Committee included the review and
deliberation of:
i)
The related party transactions entered into by the Company and the Group and the disclosure of such
transactions in the annual report and circulars of the Company.
ii)
The external auditors' scope of work and audit plan for the year.
iii)
The statement on Corporate Governance and statements on internal control in compliance with the
Malaysian Code on Corporate Governance and the Listing Requirements respectively recommending the
same to the Board for approval prior to their inclusion in this Annual Report.
iv)
Reviewed the quarterly unaudited financial results and audited financial statements of the Company prior
to submission to the Board of Directors for their consideration and approval.
v)
Reviewed the company's compliance, in particular the quarterly and year end financial statements with
the listing requirements of Bursa Malaysia Securities Bhd and the applicable approved accounting
standard issued by the Malaysian Accounting Standard Board.
vi)
Considered the appointment of the external auditors and audit fees.
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A N N U A L
Audit
R E P O R T
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Committee Report
[ Cont'd ]
C. INTERNAL AUDIT FUNCTION
The Company has an internal audit department whose principal responsibility is to conduct periodic audits on
internal control matters to ensure their compliance with systems and standard operating procedures in each
branch. The main objective of these audits is to provide a reasonable assurance that they operate satisfactorily
and effectively. Investigation has also been conducted with regard to various specific areas of concern and high
risk areas.
This report is made in accordance with a resolution of the Board of Directors passed on 30 January 2008.
36 (THE
A N N U A L
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Internal
Control Statement
The Board of Directors is pleased to provide the following Statement on Internal Control pursuant to paragraph
15.27(b) of the Bursa Malaysia Securities Berhad Listing Requirement. The Board is committed to fulfilling its
responsibility of maintaining a sound system of internal controls in the Group in compliance with the Malaysian
Code on Corporate Governance.
THE BOARD RESPONSIBILITY
The Board of Directors recognises the importance of good corporate governance and affirms its overall
responsibility for maintaining a sound system of internal control that covers all aspects of the Group's business. In
recognition of that responsibility, the Board sets policies and seeks regular assurance that the system of internal
control is operating effectively. While acknowledging their responsibility for the system of internal control, the
directors are aware that a sound system of internal control and risk management can only help to manage but not
totally eliminate the risk that may impede the achievement of the Group's business objectives. Accordingly, such a
system can only provide reasonable rather than absolute assurance against material misstatements, losses, fraud or
breaches of law or regulations.
RISK MANAGEMENT
The Board and Management are responsible for the on-going identification, evaluation and managing of
significant risk faced by the Group. The Group has an embedded process for the identification, evaluation and
reporting of the major business risks within the Group. Policies and procedures have been laid down for the regular
review and management of these risks. Regular reviews of the most significant areas of risk are undertaken to
ensure that key control objectives remain in place.
PRINCIPAL ELEMENTS OF THE GROUP'S SYSTEM OF INTERNAL CONTROL
The principal elements of the internal control functions are inculcated within the various procedures. During the
financial year, the principal elements which formed part of the Group's system of internal control can be
summarised as follows:
Operating structure with clearly defined lines of responsibility and delegated authority
The Group has a properly defined organizational structure with clear lines of accountability, with strict
authorisation, approval and control procedures which provide a sound framework of authority and accountability
within the Group.
Clearly defined authority level
Clearly defined financial limits of authority on all financial commitments for each level of management within the
Group. Such limits are subject to periodic reviews as to their implementation and continuing suitability.
Written operational policies and procedures
Documented internal operating policies and procedures set out in the Group's Standard Operating Procedures
(SOP), which are periodically reviewed, to provide guidelines in compliance with Group objectives.
Performance management framework
- Comprehensive budgeting and costing process for all operating units with monthly monitoring of performances
so that any material variances can be followed up and addressed by management.
- Regular top / senior management meetings were conducted to share information, monitor the progress of
various business units, and to deliberate and decide upon operational matters.
- Regular management visits of its operating business units to ensure all business activities and operational
issues and matters are brought to the prompt attention of the management for further action to be taken and to
gauge the effectiveness of strategies implemented.
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A N N U A L
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Internal
Control Statement
[ Cont'd ]
Advance IT management technologies
Enhanced computerised retail management and operating system for timely monitoring and control of the
Group's business operations.
Corporate values
Corporate values, which emphasise ethical behaviour, are clearly set up in the Group's Code of Business
Conduct and Ethics.
INTERNAL AUDIT FUNCTION
The internal audit function of the Group is carried out by an adequately resourced internal audit department, which
provides the Board with much of the assurance it requires regarding the adequacy and effectiveness of the Group's
system of controls, procedures and operations. The Group's Internal Audit Department undertakes the role as the
risk facilitator in identifying significant risks impacting the achievement of business objectives of the Group. Besides,
it also undertakes reviews of internal controls in all key activities of the Group in assuring its adequacy and integrity.
The internal auditors advise management on areas for improvement and subsequently review the extent to which
the management's responses and the remedial actions on all findings and recommendations in its review process
have been implemented. During the year under review, the internal auditors conducted various audit assignments
which include the review of operational and compliance controls, management efficiency, risk assessment and
reliability of financial records.
CONCLUSION
The Board is satisfied that, during the year under review, the system of internal control being instituted throughout
the Group is sound and effective. The Board remains committed towards operating a sound system of internal
control and therefore recognize that the system must continuously evolve to support the type of business and size of
operations of the Group. As such the Board will, when necessary, put in place appropriate action plans to further
enhance the Group's system of internal control.
This statement was made in accordance with a resolution of the Board of Directors dated 30 January 2008.
38 (THE
A N N U A L
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Report And
For The Year Ended 30 September 2007
Directors' Report
40 - 44
Report of the Auditors
45
Balance Sheets
46 - 47
Income Statements
48
Consolidated Statement of Changes in Equity
49
Statement of Changes in Equity
50
Cash Flow Statements
51 - 53
Notes to and forming part of the Financial Statements
54 - 100
Statements by Directors
101
Statutory Declaration
102
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A N N U A L
R E P O R T
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Directors'
Report
The directors have pleasure in submitting their report and the audited financial statements of the Company and of
the Group or the financial year ended 30 September 2007.
PRINCIPAL ACTIVITIES
The principal activities of the Company are investment holding and the provision of management services.
The principal activities of the subsidiaries are indicated in Note 6 to the financial statements.
There have been no significant changes in the nature of these activities during the financial year.
RESULTS
Net profit for the year
Attributable to:
Shareholders of the Company
Minority interests
DIVIDENDS
Group
RM'000
Company
RM'000
40,056
=====
9,190
=====
40,125
(69)
----------40,056
=====
9,190
----------9,190
=====
Dividend paid or declared by the Company since the end of the previous financial period was as follows:
In respect of the period ended 30 September 2006
- First and final dividend of 7% less 27% tax,
on 68,013,602 ordinary shares, paid on
20 June 2007
RM3,475,495
========
There was an increase in dividend paid amounting to RM40,624 over the amount of RM3,434,871 as disclosed in
the directors' report of the previous financial year. The additional dividend paid was due to the disposal of treasury
shares of 795,000 ordinary shares to the open market prior to the date the dividend was paid.
The directors now recommend the payment of a first and final dividend of 3% less 26% tax on 68,013,602 ordinary
shares, amounting to RM1,509,902 for the financial year ended 30 September 2007 subject to the approval of the
shareholders at the forthcoming annual general meeting.
The proposed first and final dividend is payable in respect of all ordinary shares in issue at the date of the financial
statements, excluding those ordinary shares held as treasury shares under share buy-back.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provisions during the financial year except as disclosed in
the financial statements.
40 (THE
A N N U A L
R E P O R T
2 0 0 7
Directors'
Report
F o r T h e Ye a r E n d e d 3 0 S e p t e m b e r 2 0 0 7
ISSUE OF SHARES AND DEBENTURES
The Company did not issue any shares or debentures during the financial year.
REPURCHASE OF SHARES
At the extraordinary general meeting of the Company held on 12 May 2004, the shareholders approved the share
buy-back of up to 10% or up to 6,850,360 ordinary shares of the issued and paid-up share capital of the
Company. The authority from the shareholders has been renewed at each of the subsequent annual general
meetings of the Company and was last renewed on 23 March 2007.
The directors of the Company are committed to enhancing the value of the Company for its shareholders and
believe that the repurchase plan can be applied in the best interests of the Company and its shareholders.
Todate, the Company had purchased/reissued the following ordinary shares of its issued and paid-up share capital
from/to the open market:
Period ended 2005
No. of
ordinary shares
Average price
per share
RM
Total cost
RM
Total
Consideration
RM
1,642,400
2.44
4,010,921
-
-
Year ended 2006
407,600
( 765,000 )
2.45
2.81
999,721
-
2,147,000
Year ended 2007
1,000
( 796,000 )
-------------490,000
======
2.78
3.03
2,781
-------------5,013,423
======
2,408,689
-------------4,555,689
======
The repurchase transactions were financed by internally generated funds. The repurchased shares are being held as
treasury shares and carried at cost in accordance with the requirements of Section 67A of the Companies Act, 1965.
At 30 September 2007, the total number of treasury shares held by the Company is 490,000 ordinary shares.
DIRECTORS
The directors in office since the date of the last report are:
Dato' Sri Md. Kamal bin Bilal, JP
Dato' Dr. Hj. Kardin bin Hj. Shukor
Mr Lim Gin Chuan
Mr Yeoh Chong Keng
Mr Kam Teh Chung
Mr Chang Yen Huei
I N
M A L A Y S I A )
41
A N N U A L
R E P O R T
2 0 0 7
Directors'
Report
F o r T h e Ye a r E n d e d 3 0 S e p t e m b e r 2 0 0 7
In accordance with the Company's Articles of Association, Dato' Sri Tang Yeam Soon, Mr Kam Teh Chung and
Mr Lim Gin Chuan retire from the board at the forthcoming annual general meeting and, being eligible, offer
themselves for re-election.
Dato' Haji Mohd Yusoff bin Haji Amin, retires from the board at the forthcoming annual general meeting in
accordance with section 129 of the Companies Act, 1965, and, being eligible, offers himself for re-election.
DIRECTORS' INTERESTS IN SHARES
According to the register of directors' shareholdings required to be kept under section 134 of the Companies Act,
1965, none of the directors held any shares or had any interests in shares in the Company or its related
corporations during the financial year except as follows:
------ Number of ordinary shares of RM1 each -----At
Bought
Sold
At
1-10-2006
30-9-2007
- direct interest
- deemed interest
3,028,300
16,269,030
-
-
3,028,300
16,269,030
11,000
-
-
-
11,000
-
1,366,200
17,931,130
-
-
1,366,200
17,931,130
Mr Kam Teh Chung
- direct interest
- deemed interest
352,955
-
-
-
352,955
-
Mr Chang Yen Huei
- direct interest
- deemed interest
1,100
2,640,000
-
-
1,100
2,640,000
Dato' Dr. Hj. Kardin bin Hj. Shukor
- direct interest
- deemed interest
- direct interest
- deemed interest
By virtue of their interests in shares in the Company, Dato' Sri Tang Yeam Soon and Datin Sri Khor Guik Lee are
deemed to be interested in shares in all the subsidiaries to the extent the Company has an interest.
DIRECTORS' BENEFITS
Since the end of the previous financial year, no director of the Company has received or become entitled to receive
any benefit (other than as disclosed in Notes 23 and 29 to the financial statements) by reason of a contract made
by the Company or a related corporation with the director or with a firm of which the director is a member, or with
a company in which the director has a substantial financial interest.
Neither during nor at the end of the financial year was the Company a party to any arrangements whose object is
to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of
the Company or any other body corporate.
42 (THE
A N N U A L
R E P O R T
2 0 0 7
Directors'
Report
OTHER STATUTORY INFORMATION
(a) Before the income statements and balance sheets of the Company and of the Group were made out, the
directors took reasonable steps:
(i)
to ascertain the action taken in relation to the writing off of bad debts and the making of allowance
for doubtful debts and satisfied themselves that there were no known bad debts but that adequate
allowance had been made for doubtful debts; and
(ii)
to ensure that any current assets which were unlikely to realise in the ordinary course of business their
value as shown in the accounting records of the Company and of the Group 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:
(i)
which would render it necessary to write off any debt or the amount of allowance for doubtful debts
in the financial statements of the Company and of the Group inadequate to any substantial extent, or
(ii)
which would render the values attributed to the current assets in the financial statements of the
Company and of the Group misleading, or
(iii)
which have arisen which render adherence to the existing method of valuation of assets or liabilities of
the Company and of the Group misleading or inappropriate.
(c) At the date of this report, there does not exist:
(i)
any charge on the assets of the Company or its subsidiaries 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 Company or its subsidiaries which has arisen since the end of the
financial year.
(d) No contingent or other liability of the Company or its subsidiaries has become enforceable or is likely to
become enforceable within the period of twelve months after the end of the financial year which, in the
opinion of the directors, will or may affect the ability of the Company or its subsidiaries to meet their
obligations as and when they fall due.
(e) At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with in this
report or the financial statements of the Company and of the Group which would render any amount stated
in the respective financial statements misleading.
(f) In the opinion of the directors:
(i)
the results of the operations of the Company and of the Group for the financial year were not
substantially affected by any item, transaction or event of a material and unusual nature; and
(ii)
there has not arisen in the interval between the end of the financial year and the date of this report
any item, transaction or event of a material and unusual nature likely to affect substantially the results
of the operations of the Company and of the Group for the financial year in which this report is made
except as disclosed in Note 35 to the financial statements.
I N
M A L A Y S I A )
43
A N N U A L
R E P O R T
2 0 0 7
Directors'
Report
AUDITORS
The auditors, Moores Rowland, Chartered Accountants, have expressed their willingness to continue in office.
Signed on behalf of the directors in accordance
with a resolution of the directors
DATO' SRI TANG YEAM SOON
Director
30 January 2008
44 (THE
CHANG YEN HUEI
Director
A N N U A L
R E P O R T
2 0 0 7
Report Of The
Auditors To The Members
Financial Statement - 30 September 2007
We have audited the financial statements of the Company set out on pages 46 to 100. These financial statements
are the responsibility of the Company's directors.
It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report
our opinion to you, as a body, in accordance with section 174 of the Companies Act, 1965 and for no other
purpose. We do not assume responsibility to any other person for the content of this report.
We conducted our audit in accordance with approved standards on auditing in Malaysia. These standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by the directors as well as evaluating the overall presentation of the financial statements.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion:
(a) the financial statements have been properly drawn up in accordance with the provisions of the Companies Act,
1965 and applicable MASB Approved Accounting Standards for Entities Other Than Private Entities so as to
give a true and fair view of:
(i)
the state of affairs of the Company and of the Group at 30 September 2007 and of their results and
cash flows for the year ended on that date; and
(ii)
the matters required by section 169 of the Companies Act, 1965 to be dealt with in the financial
statements of the Company and of the Group; and
(b) the accounting and other records and the registers required by the Companies Act, 1965 to be kept by the
Company and by the subsidiaries of which we acted as auditors have been properly kept in accordance with the
provisions of the Act.
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 6 to the financial statements.
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company's
financial statements are in form and content appropriate and proper for the purposes of the preparation of the
consolidated financial statements and we have received satisfactory information and explanations required by us for
those purposes.
The auditors' reports on the financial statements of the subsidiaries were not subject to any qualifications and did
not include any comment made under section 174 (3) of the Act.
MOORES ROWLAND
No. AF: 0539
Chartered Accountants
GAN MORN GHUAT
No. 1499/5/09 (J)
Partner
Kuala Lumpur
30 January 2008
I N
M A L A Y S I A )
45
A N N U A L
R E P O R T
2 0 0 7
Balance
Sheets
As at 30 September 2007
Group
Note
2007
RM'000
3
4
5
6
7
8
9
10
447,837
8,895
21,617
2,341
10,144
1,094
-------------491,928
--------------
11
12
6
Company
2006
RM'000
2007
RM'000
2006
RM'000
19,632
2,336
3,136
1,579
-------------324,330
--------------
3,798
5,329
251,965
-------------261,092
--------------
4,230
5,448
218,257
-------------227,935
--------------
309,690
77,364
9,688
52,125
51,488
-------------500,355
--------------
247,216
66,858
8,001
80,942
31,019
-------------434,036
--------------
10,969
268,474
4,323
313
-------------284,079
--------------
15,508
252,958
2,819
43,000
882
-------------315,167
--------------
992,283
======
758,366
======
545,171
======
543,102
======
68,504
746
68,504
280
68,504
746
68,504
280
59,903
242,497
(1,205)
--------------
196,276
(3,144)
--------------
110,423
(1,205)
--------------
104,708
(3,144)
-------------
370,445
156
-------------370,601
======
261,916
225
-------------262,141
======
178,468
-------------178,468
======
170,348
-------------170,348
======
NON-CURRENT ASSETS
Property, plant and equipment
Prepaid lease payments
Investment properties
Investment in subsidiaries
Investment in associate
Other investments
Intangible assets
Deferred tax assets
289,197
8,450
-
CURRENT ASSETS
Inventories
Trade and other receivables
Amount owing by subsidiaries
Current tax assets
Fixed and time deposits
Cash and bank balances
13
TOTAL ASSETS
EQUITY
Share capital
Share premium
Asset revaluation reserve,
non-distributable
Unappropriated profit
Treasury shares
Equity attributable to shareholders of
the Company
Minority interests
TOTAL EQUITY
46 (THE
14
15
A N N U A L
R E P O R T
2 0 0 7
Balance
Sheets
As at 30 September 2007
Group
Note
Company
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
140,000
6,834
33,135
150,000
3,076
8,156
140,000
164
150,000
-
179,969
161,232
140,164
150,000
388,454
13,327
39,832
100
287,443
6,456
39,832
1,262
4,066
182,641
39,832
-
3,050
179,872
39,832
-
441,713
-------------621,682
--------------
334,993
-------------496,225
--------------
226,539
-------------366,703
--------------
222,754
-------------372,754
--------------
992,283
======
758,366
======
545,171
======
543,102
======
NON-CURRENT LIABILITIES
Commercial paper and medium term notes
Long term liabilities
Deferred tax liabilities
16
17
18
CURRENT LIABILITIES
Trade and other payables
Amount owing to subsidiaries
Bank borrowings
Commercial paper and medium term notes
Current tax liabilities
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
19
6
20
16
Notes to and forming part of the financial statements are set out on pages 54 to 92.
I N
M A L A Y S I A )
47
A N N U A L
R E P O R T
2 0 0 7
Income
Statements
Group
Company
2007
2006
RM'000
RM'000
Note
2007
RM'000
2006
RM'000
Gross revenue
21
1,954,168
1,549,215
28,992
27,580
Cost of sales
22
(1,567,017)
--------------387,151
(1,244,550)
--------------304,665
--------------28,992
--------------27,580
54,211
37,664
8,713
7,351
(233,067)
(190,608)
(140,533)
--------------67,762
Gross profit
Other operating income
Marketing and selling expenses
Administrative and general expenses
Profit from operations
Finance costs
Share of results of associate
Profit before tax
23
Tax expense
24
Attributable to:
Shareholders of the Company
Minority interests
Earnings per share attributable to equity
holders of the Company (sen)
Net dividend per ordinary share (sen)
-
-
(101,469)
--------------50,252
(10,814)
--------------26,891
(3,197)
--------------31,734
(13,004)
(9,774)
(11,630)
(8,595)
--------------54,758
575
--------------41,053
--------------15,261
--------------23,139
(14,702)
--------------40,056
=======
(11,846)
--------------29,207
=======
(6,071)
--------------9,190
=======
(3,881)
--------------19,258
=======
40,125
(69)
--------------40,056
=======
29,263
(56)
--------------29,207
=======
9,190
--------------9,190
=======
19,258
--------------19,258
=======
59.00
=======
43.53
=======
5.11
=======
4.32
=======
5.11
=======
4.32
=======
25
48 (THE
A N N U A L
R E P O R T
2 0 0 7
Consolidated Statement Of
Changes In Equity
At 1 October 2005
Dividend paid (Note 26)
Shares purchased held
as treasury shares
Re-sale of treasury
shares
Asset
UnShare
revaluation appropriated Treasury
Share
capital premium
reserve
profit
shares
RM'000 RM'000
RM'000
RM'000
RM'000
Total
RM'000
68,504
-
-
-
169,884
29,263
(2,871)
(4,011)
-
234,377
29,263
(2,871)
-
-
-
-
(1,000)
(1,000)
280
------------ ------------ -----------280
At 30 September 2006 68,504
Effect of adopting FRS 3
(Note 1 (a)(i))
Effect of adopting
FRS 140(Note 1(a)(iv))
------------ ------------ -----------At 1 October 2006,
68,504
280
restated
Surplus arising from
revaluation of
property, plant and
equipment
Tax effect on
revaluation surplus
transferred to
deferred tax liability
Share of revaluation
suplus of associate
Net gain recognised
directly in equity
Net profit /(loss) for
the year
Total recognised
income and expense
for the year
Shares purchased held
as treasury shares
Re-sale of treasury
shares
Minority
interests
Total
RM'000 RM'000
281
(56)
-
234,658
29,207
(2,871)
(1,000)
1,867
2,147
2,147
------------ ------------ ------------ ------------ -----------196,276 (3,144) 261,916
225
262,141
8,175
8,175
8,175
1,396
-
1,396
-
1,396
------------ ------------ ------------ ------------ -----------205,847
(3,144)
271,487
225
271,712
-
-
56,389
-
-
56,389
-
56,389
-
-
(14,355)
-
-
(14,355)
-
(14,355)
-
-
17,869
-
-
17,869
-
17,869
-
-
59,903
-
-
59,903
-
59,903
-
-
-
40,125
-
40,125
(69)
40,056
-
-
59,903
-
40,125
(3,475)
-
100,028
(3,475)
(69)
-
99,959
(3,475)
-
-
-
466
------------ ------------ -----------746 59,903
At 30 September 2007 68,504
===== ===== =====
-
(3)
(3)
-
(3)
1,942
2,408
2,408
------------ ------------ ------------ ------------ -----------242,497 (1,205) 370,445
156
370,601
===== ===== ===== ===== =====
I N
M A L A Y S I A )
49
A N N U A L
R E P O R T
2 0 0 7
Statement Of
Changes In Equity
Share
capital
RM'000
Share
premium
RM'000
68,504
-
-
Shares purchased held as
treasury shares
At 1 October 2005
Re-sale of treasury shares
At 30 September 2006
Treasury
shares
RM'000
Total
RM'000
88,321
(4,011)
152,814
-
19,258
-
19,258
-
-
(2,871)
-
(2,871)
-
-
-
(1,000)
(1,000)
280
-------------280
-------------104,708
1,867
-------------(3,144)
------------68,504
Unappropriated
profit
RM'000
2,147
------------170,348
-
-
9,190
-
9,190
-
-
(3,475)
-
(3,475)
Shares purchased held as
treasury shares
-
-
-
------------68,504
======
466
------------746
======
-------------110,423
======
50 (THE
(3)
(3)
2,408
1,942
-------------- ------------(1,205)
178,468
====== ======
A N N U A L
R E P O R T
2 0 0 7
Cash Flow
Statements
2007
RM'000
Group
2006
RM'000
Company
2007
2006
RM'000
RM'000
54,758
41,053
15,261
23,139
153
37,065
1,167
(15,376)
1,788
2,100
(1,815)
189
30,569
11
119
432
6,042
-
119
507
-
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments for:
Amortisation of goodwill on acquisition
Amortisation of discount on acquisition
Amortisation of prepaid lease payments
Depreciation of property, plant and equipment
Impairment loss on investment in subsidiaries
Impairment loss on goodwill
Discount on acquisition
Property, plant and equipment written off
(Gain)/Loss on disposal of property, plant
and equipment
Allowance for diminution in value of quoted shares
Allowance for doubtful debts
Dividend income
Interest income
Interest expenses
Hire purchase and finance lease term charges
Operating profit/(loss) before working capital changes
Changes in inventories
Changes in receivables
Changes in payables
Cash generated from/(utilised in) operations
Interest received
Interest paid
Tax paid
Tax refunded
Net cash from/(used in) operating activities
(82)
8
4
(575)
53
(1,838)
(1,798)
12,735
9,273
269
501
--------------- ---------------
90,692
(19)
(27,444)
(26,345)
(8,694)
(7,351)
11,630
8,593
2
--------------- ---------------
79,520
(2,673)
(1,336)
(16,441)
(35,886)
(4,265)
(2,540)
44,631
27,633
--------------- --------------114,617
68,727
4,539
(4,640)
1,016
542
--------------- --------------2,882
(5,434)
1,838
1,798
(12,735)
(9,303)
(14,602)
(13,914)
411
1,728
--------------- --------------89,529
49,036
--------------- ---------------
8,694
7,351
(11,630)
(8,623)
--------------- --------------(54)
(6,706)
--------------- ---------------
I N
M A L A Y S I A )
51
A N N U A L
R E P O R T
2 0 0 7
Cash Flow
Statements
Group
2007
RM'000
2006
RM'000
Company
2007
2006
RM'000
RM'000
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
Purchase of a new subsidiary, net of cash (note 27)
Proceeds from disposal of property, plant and
equipment
Advances to subsidiaries
Dividends received from subsidiaries
Net cash (used in)/from investing activities
(49,712)
(41,952)
1,372
-------------(90,292)
--------------
(54,353)
68
-------------(54,285)
--------------
(39,750)
-
19
(15,516)
(2,078)
20,033
21,547
-------------- -------------(35,214)
19,469
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from re-sale of treasury shares
Advances from/(Repayment to) subsidiaries
Funds raised from commercial paper and medium
term notes
Repayment of commercial paper and medium
term notes
Repayment of bank term loans
Term loan raised
Payment of hire purchase and finance lease
instalments
Hire purchase and finance lease term charges paid
Repurchase of shares
Dividend paid to shareholders of the Company
Net cash (used in)/from financing activities
NET CHANGES IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS BROUGHT
FORWARD
CASH AND CASH EQUIVALENTS
CARRIED FORWARD
52 (THE
2,408
-
2,147
-
2,408
2,769
-
50,000
-
50,000
(10,000)
(1,530)
3,471
(10,000)
(540)
-
(10,000)
-
(10,000)
-
(3,996)
(269)
(3)
(3,475)
-------------(13,394)
-------------(14,157)
(5,605)
(501)
(1,000)
(2,871)
-------------31,630
-------------26,381
2,147
(7,530)
-
(88)
(2)
(3)
(1,000)
(3,475)
(2,871)
-------------- -------------(8,301)
30,656
-------------- -------------(43,569)
43,419
111,028
--------------
84,647
--------------
43,882
463
-------------- --------------
96,871
======
111,028
======
313
43,882
====== ======
A N N U A L
R E P O R T
2 0 0 7
Cash Flow
Statements
Group
Company
2006
2007
RM'000
RM'000
2007
RM'000
2006
RM'000
FIXED AND TIME DEPOSITS
52,125
80,942
-
43,000
CASH AND BANK BALANCES
51,488
31,019
313
882
Represented by:
BANK OVERDRAFTS
(6,742)
-------------96,871
======
(933)
-------------111,028
======
-------------- -------------313
43,882
====== ======
In the previous financial year, the Group purchased property, plant and equipment amounting to RM55,460,000
of which RM1,107,000 was financed under hire purchase and finance lease and the balance of RM54,353,000
was paid by cash.
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Notes To And Forming Parts Of The
For The Year End 30 September 2007
1. SIGNIFICANT ACCOUNTING POLICIES
(a)
Basis of preparation
The financial statements comply with the provisions of the Companies Act, 1965 and applicable
approved accounting standards for entities other than private entities issued by the Malaysian
Accounting Standard Board. At the beginning of the current financial year, the Group and the
Company had adopted all the new and revised Financial Reporting Standards ("FRS") which are
mandatory for financial periods beginning on or after 1 January 2006 and 1 October 2006.
In the opinion of the directors, the adoption of these FRSs other than as described below does not
result in significant changes in the accounting policies of the Group and of the Company, or has
significant impact on the financial statements of the Group and of the Company except for the
presentation of the balance sheets of the Group and of the Company upon the adoption of FRS 101
and the reclassification of investment property upon adoption of FRS 140. The principal changes in
accounting policies and their effects resulting from the adoption of the following FRSs are discussed
below:
(i)
FRS 3 Business Combination, FRS 136 Impairment of Assets and FRS 138 Intangible Assets
FRS 3 has resulted in consequential amendments to two other accounting standards, FRS 136
and FRS 138. In accordance with the transitional provisions, FRS 3 has been applied for
business combinations for which the agreement date is on or after 1 January 2006.
Goodwill
Prior to 1 October 2006, goodwill was amortised on a straight line basis over its estimated
useful life of 10 years and at each balance sheet date, the Group assessed if there was any
indication of impairment of the cash-generating unit in which the goodwill is attached. With the
adoption of FRS 3 and FRS 136, the Group ceased to amortise goodwill. Instead, goodwill is
carried at cost less accumulated impairment losses and is tested for impairment annually, or
more frequently if events or changes in circumstances indicate that it may be impaired.
In accordance with the transitional provisions of FRS 3, the Group has applied the revised
accounting policy for goodwill prospectively from 1 October 2006. The transitional provisions of
FRS 3 also require the Group to eliminate the carrying amount of the accumulated amortisation
at 1 October 2006 amounting to RM11,000,000 against the carrying amount of goodwill. The
net carrying amount of goodwill at 1 October 2006 of RM11,311,000 ceased to be amortised
thereafter. The effects of applying the transitional provisions are shown in Note 9.
Because the revised accounting policy has been applied prospectively, the change has no impact
on amounts reported for 2006 or prior periods. Had there not been a change in accounting
policy, the net profit attributable to the shareholders of the Company for the year ended 30
September 2007 at Group level would decrease by RM2,100,000 arising from goodwill
amortisation which would have been charged to the consolidated income statement for the year.
54 (THE
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Negative Goodwill
Prior to 1 October 2006, negative goodwill was amortised on a straight-line basis over its
estimated useful life of 10 years except to the extent it relates to identified expected future losses
as at the date of acquisition, in which case, it was recognised in the income statement in the
year of acquisition. Under FRS 3, any excess of the Group's interest in the net fair value of
acquiree's identifiable assets, liabilities and contingent liabilities over cost of acquisitions after
reassessment, is now recognised immediately in the consolidated income statement. In
accordance with the transitional provisions of FRS 3, the negative goodwill of the Group at 1
October 2006 of RM8,175,000 was derecognised with a corresponding increase in the
unappropriated profit of the Group as follows:
Group
Increase in unappropriated profit
Decrease in negative goodwill (Note 9)
At 1-10-2006
RM'000
8,175
(8,175)
======
Because the revised accounting policy has been applied prospectively, the change has had no
impact on amounts reported for 2006 or prior periods. Had there not been a change in
accounting policy, the net profit attributable to the shareholders of the Company for the year
ended 30 September 2007 at the Group level would increase by RM1,815,000 arising from
negative goodwill amortisation which would have been credited to the consolidated income
statement for the year.
(ii)
FRS 101 Presentation of Financial Statements
Prior to 1 October 2006, minority interests at the balance sheet date were presented in the
consolidated balance sheet separately from liabilities and equity.
Upon the adoption of FRS 101, minority interests are now presented within total equity. In the
consolidated income statement, minority interests are presented as an allocation of the total
profit or loss for the year. A similar requirement is also applicable to the consolidated statement
of changes in equity. FRS 101 also requires disclosure, on the face of the consolidated statement
of changes in equity, total recognised income and expenses for the year, showing separately the
amounts attributable to equity holders of the Company and to minority interests.
These changes in presentation have been applied retrospectively, and accordingly, the
comparatives have been restated. These changes in presentation have no impact on the
financial statements of the Company.
Prior to 1 October 2006, the Group's share of tax expense of associates accounted for using the
equity method was included as part of the Group's income tax expense in the consolidated
income statement. Upon the adoption of FRS 101, the share of tax expense of associates
accounted for using the equity method is now included in the respective share of profit or loss
reported in the consolidated income statement before arriving at the Group's profit or loss
before tax.
These changes in presentation have been applied retrospectively, and accordingly, the
comparatives have been restated as shown in Note 34. These changes in presentation have no
impact on the financial statements of the Company.
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(iii) FRS 117 Leases
Prior to 1 October 2006, leasehold land held for own use was classified as property, plant and
equipment and was stated at cost less accumulated depreciation and impairment losses. The
adoption of FRS 117 has resulted in a change in accounting policy relating to the classification
of leases of land and buildings. Leases of land and buildings are classified as operating or
finance leases in the same way as leases of other assets and the land and building elements of a
lease of land and land held for own use are now classified as operating lease and where
necessary, the minimum lease payments or the up-front payments made are allocated between
the land and the building elements in proportion to the relative fair values for leasehold interests
in the land element and building element of the lease at the inception of the lease. The up-front
payments represent prepaid lease payments and are amortised on a straight-line basis over the
ease term.
The Group has applied the change in accounting policy in respect of leasehold land in
accordance with the transitional provisions of FRS 117. At 1 October 2006, the unamortised
amount of leasehold land is retained as the surrogate carrying amount of prepaid lease
payments as allowed by the transitional provisions. The reclassification of leasehold land as
prepaid lease payments has been applied for retrospectively, and accordingly, the comparatives
have been restated as shown in Note 34.
(iv) FRS 140 Investment Property
Prior to 1 October 2006, investment properties were included in property, plant and equipment
and were stated at cost less accumulated depreciation and impairment losses.
Upon the adoption of FRS 140, investment properties are now classified separately and stated at
fair value and gains and losses arising from changes in fair value are recognised in the income
statement in the year in which they arise.
The Group has applied FRS 140 in accordance with the transitional provisions. The change in
accounting policy has had no impact on amounts reported for 2006 or prior periods as the
Group had not previously disclosed publicly the required fair value information annually in its
financial statements. Accordingly, the comparatives are not restated. Instead, the changes have
been accounted for by restating the following opening balances of the Group at 1 October 2006:
Group
Increase in unappropriated profit
RM'000
1,396
======
Had there not been a change in accounting policy, the net profit attributable to the shareholders
of the Company for the year ended 30 September 2007 at the Group level would decrease by
RM125,885 arising from annual depreciation charges for the year which would have been
charged to the income statement for the year.
The Group has not opted for early adoption of the following new and revised FRSs which are
applicable to the Group:
- FRS 107 Cash Flow Statements, FRS 112 Income Taxes, FRS 118 Revenue and FRS 137
Provisions, Contingent Liabilities and Contingent Assets, which are effective for financial
periods beginning on or after 1 July 2007 ;and
- FRS 139 Financial Instruments: Recognition and Measurement, which has been deferred to an
effective date yet to be announced.
56 (THE
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The measurement bases applied in the preparation of the financial statements of the Group and
of the Company include cost, amortised cost, recoverable value, realisable value and fair value
as indicated in the accounting policies set out below. Accounting estimates are used in measuring
these values.
The financial statements of the Group and of the Company are presented in Ringgit Malaysia
(RM) which is also the functional currency of the Company. Unless otherwise indicated, the
amounts in these financial statements have been rounded to the nearest thousand.
(b)
Use of estimates and judgements
The preparation of financial statements in conformity with FRSs requires management to make
judgements, estimates and assumptions that affect the application of policies and reported amounts
of assets, liabilities, income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements about carrying amounts
of assets and liabilities that are not readily apparent from other sources.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised, if the revision affects only that
period, or in the period of the revision and future periods, if the revision affects both current and
future periods.
Information about significant areas of estimation uncertainty and critical judgement in applying
accounting policies that have the most significant effect on the amount recognised in the financial
statements are described in the following notes:
(c)
i)
Critical judgement made in applying accounting policies
Note 3 : Classification between property, plant and equipment and investment properties
Note 5 : Classification of investment properties
ii)
Areas of estimation uncertainty
Note 6 : Measurement of impairment loss on investments in subsidiaries
Note 9 : Measurement of the recoverable amount of cash-generating units containing goodwill
Note12: Allowance for doubtful debts on receivables
Subsidiaries
Subsidiaries are entities over which the Group has the power to control the financial and operating
policies so as to obtain benefits from their activities. The existence and effect of potential voting rights
that are currently exercisable or convertible are considered when assessing whether the Group has
such power over another entity.
In the Company's balance sheet, investments in subsidiaries are stated at cost less accumulated
impairment losses, unless the investment is classified as held for sale or included in a disposal group
that is classified as held for sale. On disposal of such investments, the difference between net disposal
proceeds and their carrying amounts is included in the income statement.
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(d)
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and all its
subsidiaries made up to the end of the financial year. Uniform accounting policies are adopted for
like transactions and events in similar circumstances. The financial statements of the subsidiaries are
prepared for the same reporting date as the Company.
All 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.
All intra-group balances, transactions, income and expenses are eliminated in full on consolidation
and the consolidated financial statements reflect external transactions only. Unrealised profits and
losses resulting from intra-group transactions that are recognised in assets are also eliminated in full.
The temporary differences arising from the elimination of unrealised profits and losses are recognised
in accordance with Note 1(t).
Acquisitions of subsidiaries are accounted for using the purchase method of accounting. The
purchase method of accounting involves allocating the cost of a business combination to the fair
value of the assets acquired and liabilities and contingent liabilities assumed at the date of
acquisition. The cost of an acquisition is measured as the aggregate of the fair values, at the date of
exchange, of the assets given, liabilities incurred or assumed and equity instruments issued, plus any
costs directly attributable to the acquisition.
The excess of the cost of a business combination over the Group's interest in the net fair value of the
identifiable assets, liabilities and contingent liabilities represents goodwill. Any excess of Group's
interest in the net fair value of identifiable assets, liabilities and contingent liabilities recognised, over
the Group's cost of a business combination is recognised immediately in the consolidated income
statement after reassessment.
Minority interests represent the portion of profit or loss and net assets of subsidiaries, attributable to
equity interests that are not owned, directly or indirectly through subsidiaries, by the Company.
Minority interests are presented separately in the consolidated balance sheet within equity while
minority interests in the profit or loss of the Group are separately disclosed in the consolidated
income statement.
(e)
Associates
Associates are entities in which the Group has significant influence and that is neither a subsidiary nor
an interest in a joint venture. Significant influence is the power to participate in the financial and
operating policy decisions of the investee but not in control or joint control over those policies.
Investments in associates are accounted for in the consolidated financial statements using the equity
method of accounting unless they are classified as held for sale or included in a disposal group that
is classified as held for sale. Under the equity method, the investments in associates are carried in the
consolidated balance sheet at cost adjusted for post-acquisition changes in the Group's share of net
assets of the associates. The Group's share of the net profit or loss of the associates is recognised in
the consolidated income statement. Where there has been a change recognised directly in the equity
of the associate, the Group recognises its share of such change. In applying the equity method,
unrealised gains and losses on transactions between the Group and the associates are eliminated to
the extent of the Group's interests in the associates. After application of the equity method, the Group
determines whether it is necessary to recognise any additional impairment loss with respect to the
Group's net investment in the associates. The associates are equity accounted for from the date the
Group obtains significant influence until the date the Group ceases to have significant influence over
the associates.
58 (THE
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Goodwill relating to an associate is included in the carrying amount of the investment and is not
amortised. 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 in the period in which the investments are acquired.
When the Group's share of losses in an associate equals or exceeds its interest in the associate,
including any long term interests that, in substance, form part of the Group's net investment in the
associate, the Group does not recognise further losses, unless it has an obligation or has made
payments on behalf of the associate.
In applying the equity method of accounting, the post-acquisition results and reserves of the
associates accounted for are based on the most recent available audited financial statements of the
associates and where the date of the audited financial statements used is not coterminous with that of
the Group, the share of results is derived from the last audited financial statements available and
management financial statements made up to the end of the accounting year. Uniform accounting
policies are adopted for like transactions and events in similar circumstances.
In the Company's balance sheet, investments in associates are stated at cost less accumulated
impairment losses unless they are classified as held for sale or included in a disposal group that is
classified as held for sale.
On disposal of such investments, the difference between net disposal proceeds and their carrying
amounts is included in the income statement.
(f)
Goodwill
Goodwill acquired in a business combination is initially measured at cost, being the excess of the cost
of business combination over the Group's interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities. Following the initial recognition, goodwill is measured at cost less
any accumulated impairment losses. Goodwill is not amortised but instead, it is reviewed for
impairment, annually or more frequently if events or changes in circumstances indicate that the
carrying value may be impaired. Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
(g)
(i)
Measurement basis
All items of property, plant and equipment are initially recorded at cost. Subsequent costs are
included in the asset's carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the
Company and the cost of the item can be measured reliably. The carrying amount of the
replaced part is derecognised. All other repairs and maintenance costs are charged to the
income statement during the financial period in which they are incurred.
Subsequent to initial recognition, property, plant and equipment are stated at cost less
accumulated depreciation and impairment losses, except for freehold land and buildings which are
stated at valuation carried out in 2007 less accumulated depreciation and impairment losses. The
Group will revalue its freehold land and buildings at least once in every 5 years. Surplus arising
from revaluation is dealt with through the asset revaluation reserve account. Any deficit arising is
set off against the asset revaluation reserve to the extent of a previous increase for the same
property. In all cases, a decrease in carrying amount will be charged to the income statement.
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An item of property, plant and equipment is derecognised upon disposal or when no further
economic benefits are expected from its use or disposal. The difference between net disposal
proceeds and its net carrying amount is recognised in the income statement
(ii)
Depreciation
Freehold land and capital work-in-progress are not amortised.
Depreciation is calculated to write off the cost of other property, plant and equipment on a
straight line basis to their residual values over their expected economic useful lives at the
following annual rates:
Buildings
Machinery and equipment
Furniture, fixtures and fittings
Motor vehicles
Renovations
2% - 10%
8% - 10%
5% - 20%
20%
5% - 20%
Capital work-in-progress will only be depreciated when the assets are ready for their intended use.
The residual values, useful lives and depreciation method are reviewed at each financial year
end to ensure that the amount, method and period of depreciation are consistent with previous
estimates and the expected pattern of consumption of the future economic benefits embodied in
the items of property, plant and equipment.
(h)
Leases
(i)
Finance leases - Assets acquired under hire purchase and finance lease agreements
Assets financed by hire-purchase and finance lease arrangements which transfer substantially all
the risks and rewards of ownership to the Group, are capitalised as property, plant and
equipment and the corresponding obligations are treated as liabilities. On initial recognition,
assets acquired by way of hire-purchase and finance leases are stated at an amount equal to
the lower of their fair values and the present values of the minimum hire-purchase and finance
lease payments at the inception of the hire purchase and finance lease agreements. The
property, plant and equipment capitalised are depreciated on the same basis as owned assets.
In calculating the present value of the minimum hire purchase and finance lease payments, the
discount rate is the interest rate implicit in the hire purchase and finance lease agreements, if
this is practicable to determine, if not, the Group's incremental borrowing rates are used.
(ii)
Operating leases
The Group as lessee
Lease payments under operating lease are recognised as an expense on a straight-line basis
over the lease term. The aggregate benefit of incentives provided by the lessors, if any, are
recognised as a reduction of rental expense over the lease term on a straight-line basis.
Land which normally has an indefinite economic life and held under a leasehold title to which
the title is not expected to pass to the Group at the end of the lease term is treated as an
operating lease. Payments made on entering into or acquiring a leasehold land that is treated as
an operating lease are accounted for as prepaid lease payments.
The Group's leasehold land is amortised over the remaining lease periods of between 50 and
999 years in accordance with the pattern of benefits provided.
60 (THE
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The Group as lessor
Assets leased out under operating leases are presented on the balance sheet as investment properties.
Rental income from operating leases is recognised on a straight line basis over the lease term. Initial
direct costs incurred in entering into lease arrangements are included as part of the carrying value of
the leased asset and recognised on a straight line basis over the lease term.
(i)
Investment properties
Investment properties are properties which are held either to earn rentals or for capital appreciation
or for both and are measured initially at cost, including transaction cost. Properties that are occupied
by the Company and companies in the Group are accounted for as owner-occupied under property,
plant and equipment rather than investment properties. Subsequent to initial recognition, the
investment properties are stated at fair value. The fair value, which is determined by the directors, is
arrived at by reference to market evidence of transaction prices for similar properties and reflects
market conditions at the balance sheet date. Gains or losses arising from changes in the fair value of
the investment properties are recognised as income or expense in the income statement in the period
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
for both. Any such property interest under an operating lease classified as an investment property is
carried at fair value.
An investment property is derecognised when either it has been disposed of or when the investment
property is permanently withdrawn from use and no future economic benefit is expected from its
disposal. Any gains or losses on the retirement or disposal of an investment property are recognised
in the income statement in the financial year in which they arise.
(j)
Other investments
Other investments are stated at cost less any diminution in value of the investments. An allowance for
diminution in value is made if the directors are of the opinion that there is a decline in the value of
such investments which is other than temporary. The diminution in value is charged to the income
statement. On disposal of an investment, the difference between net disposal proceeds and its
carrying amount is recognised in the income statement.
(k)
Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost is determined on the first in first out basis. Cost comprises the landed cost of goods purchased
and in the case of finished goods, cost comprises materials and other direct charges.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated
cost of completion and the estimated costs necessary to make the sale.
(l)
Receivables
Receivables are stated at anticipated realisable values. Known bad debts are written off and an
estimate is made for doubtful debts based on a review of all outstanding amounts at the balance
sheet date.
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(m)
Impairment of assets
The carrying amounts of assets other than financial assets, other investments, deferred tax assets and
inventories are reviewed at each balance sheet date to determine whether there is any indication of
impairment. If such an indication exists, the asset's recoverable amount is estimated. For goodwill that
has an indefinite useful life, the recoverable amount is estimated at each balance sheet date or more
frequently when indicators of impairment are identified.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit
exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that
generates cash flows that largely are independent from other assets and groups. Impairment losses
are charged to the income statement. Impairment losses recognised in respect of cash-generating
units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then
to reduce the carrying amount of the other assets in the unit or groups of units on a pro rata basis.
The recoverable amount of an asset or cash-generating unit is the higher of its value in use and its
fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market assessments to the time
value of money and the risks specific to the asset.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment loss
recognised in prior periods are assessed at each balance sheet date for any indications that the loss
has decreased or no longer exists. An impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount. Reversals of impairment losses are credited to
the income statement in the year in which the reversals are recognised.
Any subsequent increase in recoverable amount of an asset is recognised as reversal of previous
impairment loss and should not exceed the carrying amount that would have been determined (net of
amortisation or depreciation, if applicable) had no impairment loss been previously recognised for
the asset.
(n)
Share capital
Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value of
shares issued, if any, are accounted for as share premium. Both ordinary shares and share premium
are classified as equity. Cost directly attributable to the issuance of the shares is accounted for as a
deduction from share premium, otherwise, it is charged to the income statement.
When shares are repurchased, the amount of consideration paid, including directly attributable costs,
is measured at cost and set off against equity. Shares repurchased and not cancelled are classified as
treasury shares.
Dividends on ordinary shares, when declared or proposed by the directors of the Company are
disclosed in the notes to the financial statements. Upon approval and when paid, such dividends will
be accounted for in the shareholders' equity as an appropriation of unappropriated profit in the
financial year in which the dividends are paid.
(o)
Payables
Payables are stated at cost and are recognised when there is a contractual obligation to deliver cash
or another financial asset to settle the obligation.
62 (THE
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(p)
Foreign currencies
Transactions in currencies other than the Company's functional currency, which is the currency of the
primary economic environment in which the Company operates, are recorded in the functional
currency using the exchange rates prevailing at the date of the transactions. At each balance sheet
date, monetary items denominated in foreign currencies are translated at the rates prevailing on the
balance sheet date. Non-monetary items carried at fair value that are denominated in foreign
currencies are translated at the rates prevailing on the date when the fair value was determined. Nonmonetary items that are measured in terms of historical cost in foreign currency are not translated.
Exchange differences arising on the settlement of monetary items, and on the translation of monetary
items, are included in the income statement for the year.
Exchange differences arising on the translation of non-monetary items carried at fair value are
recognised in income statement for the year 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.
(q)
Revenue recognition
Revenue is recognised when it is probable that the economic benefits will flow to the Group and the
Company and when the revenue can be measured reliably, on the following bases:
(i)
Sale of goods
Revenue from sale of goods is measured at the fair value of the consideration received or
receivable, net of returns and discounts and is recognised in the income statement when
significant risks and rewards of ownership have been transferred to the customers.
(ii)
Rental income
Rental income from investment properties and other rental income are recognised on a time
proportion basis over the lease term.
(iii) Concessionary commission
Concessionary commission is recognised on an accrual basis upon sale of concessionary goods.
(iv)
Dividend income
Dividend income is recognised when the shareholder's right to receive payment is established.
(v)
Management fee
Management fee is recognised on an accrual basis when services are rendered.
(vi)
Interest income
Interest income is recognised on a time proportion basis using the effective interest rate
applicable.
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(r)
Borrowings
Borrowings are initially recognised based on the proceeds received net of all incidental costs incurred.
In subsequent periods, borrowings are stated at amortised cost using the effective yield method; any
difference between proceeds (net of all incidental costs) and the redemption value is recognised in the
income statement over the period of the borrowings.
All interest and other costs incurred in connection with borrowings are expensed as incurred as part of
finance costs. Finance costs comprise interest paid and payable on borrowings. The interest
components of hire purchase and finance lease payments are charged to the income statement over
the hire purchase and finance lease periods so as to give a constant periodic rate of interest on the
remaining hire purchase and finance lease liabilities.
(s)
Employee benefits
(i)
Short term benefits
Salaries, wages, allowances, bonuses and social security contributions are recognised as an
expense in the financial year in which the services are rendered by the employees of the Group.
Short term accumulating compensated absences such as paid annual leave are recognised
when services are rendered by employees that increase their entitlements to future compensated
absences, and short term non-accumulating compensated absences such as sick leave are
recognised when the absences occur. Non-monetary benefits such as medical care, housing and
other staff related expenses are charged to the income statement as and when incurred.
(ii)
Defined contribution plan
As required by law, companies in Malaysia make contributions to the Employees Provident Fund
("EPF"). Such contributions are recognised as an expense in the income statement in the financial
year to which they relate.
(iii) Termination benefits
Employee termination benefits are recognised only either after an agreement is in place with the
appropriate employee representatives specifying the terms of redundancy or after individual
employees have been advised of the specific terms.
(t)
Tax expense
The tax expense in the income statement comprises current tax and deferred tax. Current tax is an
estimate of tax payable in respect of taxable profit for the year based on tax rate enacted at the
balance sheet date and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in full, based on the liability method for taxation deferred in respect of all
material temporary differences arising from differences between the tax bases of the assets and
liabilities and their carrying amounts in the financial statements. Deferred tax is not recognised if the
temporary difference arises from the initial recognition of an asset or liability in a transaction which at
the time of the transaction, affects neither accounting profit nor taxable profit.
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences, unused tax losses and unused tax credits can be
utilised.
64 (THE
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Deferred tax is calculated at the tax rate that is expected to apply to the period when the asset is
realised or the liability is settled, based on tax rates that have been enacted or substantively
enacted at the balance sheet date. Current and deferred tax is recognised as an income or an
expense in the income statement or is credited or charged directly to equity if the tax relates to
items that are credited or charged, whether in the same or different period, directly to equity.
(u)
Cash and cash equivalents
Cash and cash equivalents comprise cash and bank balances, bank overdrafts, fixed and time
deposits which exclude those pledged to secure banking facilities and other short term, highly liquid
investments that are readily convertible to known amounts of cash, and which are subject to
insignificant risk of changes in value.
(v)
Financial instruments
A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a
financial liability or equity instrument of another enterprise.
(i)
Financial instruments recognised in the balance sheet
The recognised financial instruments of the Group comprise cash and cash equivalents, other
investments, receivables, payables, borrowings, hire purchase and finance lease liabilities as
well as ordinary share capital. These financial instruments are recognised when a contractual
relationship has been established. All the financial instruments are denominated in Ringgit
Malaysia, unless otherwise stated. The accounting policies and methods adopted, including the
criteria for recognition and the basis of measurement applied, are disclosed above. The
information on the extent and nature of these recognised financial instruments, including
significant terms and conditions that may affect the amount, timing and certainty of future cash
flows are disclosed in the respective notes to the financial statements.
(ii)
Financial instruments not recognised in the balance sheet
The Company has provided corporate guarantees in respect of banking facilities granted to
subsidiaries which represent present obligations existed at the balance sheet date. The corporate
guarantees are not recognised in the financial statements at inception because it is not probable
that an outflow of economic benefits will be required to settle the obligations.
2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group's overall financial risk management objectives and policies are to ensure that the Group creates
value and maximises returns to its shareholders.
Financial risk management is carried out through risk reviews, internal control systems, benchmarking the
industry's best practices and adherence to the Group's financial risk management policies.
The Group has been financing its operations mainly through financing from licensed financial institutions and
internally generated funds. The Group does not find it necessary to enter into derivative transactions based on
its current level of operations.
The main risks arising from the financial instruments of the Group are stated below. The management of the
Group monitors its financial position closely with an objective to minimise potential adverse effects on the
financial performance of the Group. The management reviews and agrees on policies for managing each of
these risks and they are summarised below. These policies have remained unchanged during the financial year.
I N
M A L A Y S I A )
65
A N N U A L
R E P O R T
2 0 0 7
(i)
Credit risk
Credit risk arises when sales are made and services are rendered by certain subsidiaries on deferred
credit terms.
The entire financial assets of the Group are exposed to credit risk except for cash in hand, cash at
banks and fixed and time deposits which are placed with licensed financial institutions in Malaysia.
The Group invests its cash assets safely and profitably by depositing them with licensed financial
institutions.
The management regards credit risk as minimal as most of the Group's businesses are transacted in
cash in the retail branches of the Group. The exposure to credit risk by non-retail subsidiaries is
monitored on an ongoing basis. The Group has credit policies in place to manage the credit risk
exposure. The risk is managed through the application of credit approvals whereby credit evaluations
are performed on all customers requiring credit over a certain amount and period, adherence to
credit limits, regular monitoring and follow up procedures. The Group does not have any significant
exposure to any individual customer.
The Group does not require collateral in respect of financial assets and considers the risk of material
oss from the non-performance on the part of a financial counter-party to be negligible.
(ii)
Interest rate risk
Interest rate risk is the risk that a financial instrument's value will fluctuate as a result of changes in
market interest rates.
The Group is exposed to interest rate risk in respect of its fixed and time deposits placed with licensed
financial institutions, bank borrowings, commercial paper and medium term notes, hire purchase and
finance lease liabilities. This risk is managed through the use of fixed and floating interest rate
financial instruments. It is the Group's policy not to trade in interest rate swap agreement.
Interest rate risk arising from fixed and time deposits placements is managed by sourcing for the
highest interest rate in the market from amongst licensed financial institutions after taking into account
the duration and availability of surplus cash from the Group's operations.
The Group's policy is to borrow principally on a floating rate basis for bank borrowings and on fixed
rate basis for commercial paper and medium term notes. The objective of a mix of fixed and floating
rate borrowings is to reduce the impact of a rise in interest rates and to enable savings to be enjoyed
if interest rates fall. The Group has a policy to ensure that interest rates obtained are competitive.
The Group considers interest rate risk arising from hire purchase and finance lease financing to be
insignificant as the interest rates and repayment terms are fixed at inception.
(iii)
Market risk
The Group is exposed to market risk, which is the risk that a financial instrument's value will fluctuate
as a result of changes in market prices.
The Group's exposure to market risk is in respect of its quoted investments. The investments are
monitored regularly and subject to periodic review. The investments are assessed for any diminution in
the carrying values and allowances are made for such diminution in value which is other than
temporary.
The Group does not use derivative instruments to manage the risk as the investments are held for
long term strategic purposes.
66 (THE
A N N U A L
R E P O R T
2 0 0 7
(iv)
Liquidity and cash flow risk
Prudent liquidity risk management implies maintaining sufficient cash, deposits and the availability of
funding through an adequate amount of committed credit facilities.
The Group's exposure to liquidity and cash flow risk is monitored on an ongoing basis. The
concentration of liquidity and cash flow risk in respect of bank borrowings, commercial paper and
medium term notes, hire purchase and finance lease liabilities are minimal as the amounts
recoverable from the financial assets of the Group are sufficient to meet these liabilities.
3. PROPERTY, PLANT AND EQUIPMENT
Group
2007
Cost/ Valuation
Freehold
Machinery Furniture,
Capital
land and Leasehold Motor
and
fixtures and
work-inbuildings buildings vehicles equipment
fittings
Renovations progress
RM'000 RM'000 RM'000 RM'000
RM'000
RM'000
RM'000
At 1 October at cost 114,903
Effects of adopting
FRS 140
- elimination of
accumulated
depreciation
(1,117)
- reclassification
to investment
properties (Note 5) (6,402)
Total
RM'000
8,839
128,650
129,364
79,736
(148)
-
-
-
-
-
(1265)
(9,121)
-
-
-
-
-
(15,523)
43,939
10,242 521,127
------------------------------------------------------------------------------------------------------------At 1 October,
restated
Acquisition of
subsidiary
Additions
Disposals
Write-off
Reclassifications
Revaluation surplus
107,384
34,670
8,839
128,650
129,364
79,736
10,242
504,339
74,400
5,320
36,932
11,371
259
660
-
2,130
725
(1208)
-
61,155
13,866
(690)
(2,230)
(652)
-
3,897
9,431
(282)
(743)
168
-
5,121
16,466
(619)
(2,685)
10,065
-
917 158,991
3,645
49,732
(2,799)
(5,658)
(10,241)
36,932
-
------------------------------------------------------------------------------------------------------------At 30 September
Cost
Valuation
224,036
46,960 10,486
-
200,099
-
141,835
-
108,084
-
4,563
-
517,501
224,036
------------------------------------------------------------------------------------------------------------141,835 108,084
4,563 741,537
224,036 46,960 10,486 200,099
-------------------------------------------------------------------------------------------------------------
I N
M A L A Y S I A )
67
A N N U A L
R E P O R T
2 0 0 7
Group
2007
Freehold
Capital
and
fixtures and
work-infittings
buildings buildings vehicles equipment
RM'000
RM'000
RM'000 RM'000 RM'000 RM'000
RM'000
Total
RM'000
Accumulated
depreciation
At 1 October
Effects of adopting
FRS 140
19,553
1,948
8,793
(1,117)
(148)
-
71,452
-
89,411
-
35,319
-
226,476
-
-
(1,265)
------------------------------------------------------------------------------------------------------------At 1 October,
restated
Acquisition of
subsidiary
Charge for the year
Disposals
Write-off
Reclassifications
Adjustment for
revaluation
18,436
1,800
8,793
71,452
89,411
35,319
-
225,211
727
3,050
-
1,473
1,209
-
1,611
184
(801)
-
41,068
13,406
(346)
(1,927)
2
2,419
9,538
(87)
(441)
46
3,488
9,678
(275)
(1,502)
(48)
-
50,786
37,065
(1,509)
(3,870)
-
-
-
(19,457)
-
(19,457)
-
-
-
------------------------------------------------------------------------------------------------------------At 30 September
Net carrying amount
At 30 September
Cost
Valuation
4,482 9,787 123,655 100,886
46,660
2,756
288,226
-------------------------------------------------------------------------------------------------------------
221,280
42,478
699
-
76,444
-
40,949
-
61,424
-
4,563
-
226,557
221,280
------------------------------------------------------------------------------------------------------------221,280
42,478
699
76,444
40,949
61,424
4,563
447,837
=============================================
68 (THE
A N N U A L
R E P O R T
2 0 0 7
Group
Cost
Capital
Freehold
work-inand
fixtures and
fittings
buildings buildings vehicles equipment
RM'000
RM'000
RM'000
RM'000 RM'000 RM'000
RM'000
Total
RM'000
At 1 October
Addittions
Disposals
Write-off
Reclassifications
Transfers
114,903
-
12,531
10,242
(1,389)
(11,142)
460,477
55,460
(245)
(19)
-
2006
21,077
16,861
6,001
8,507
382
(50)
-
110,161
13,487
(180)
(11)
985
4,208
117,165
11,049
(11)
(4)
232
933
76,133
3,439
(4)
(4)
172
-
----------------------------------------------------------------------------------------------------------------At 30 September 114,903
43,939
8,839
128,650
129,364
79,736
10,242
515,673
----------------------------------------------------------------------------------------------------------------Accumulated
depreciation
At 1 October,
Charge for
the year
Disposals
Write-off
Reclassifications
17,341
1,256
7,793
61,990
80,141
27,563
-
196,084
2,212
-
692
-
1,050
(50)
-
9,552
(113)
(4)
27
9,304
(4)
(3)
(27)
7,759
(2)
(1)
-
-
30,569
(169)
(8)
-
----------------------------------------------------------------------------------------------------------------At 30 September
19,553
1,948
8,793
71,452
89,411
35,319
-
226,476
----------------------------------------------------------------------------------------------------------------Net carrying
amount
At 30 September
95,350
41,991
46
57,198
39,953
44,417
10,242
289,197
===============================================
I N
M A L A Y S I A )
69
A N N U A L
R E P O R T
2 0 0 7
2007
leasehold
land and
building
Motor
vehicles
Cost
RM'000
RM'000
Company
At 1 October
Addition
Disposal
At 30 September
Equipment
Furniture,
fixtures
and
fittings
Renovations
Total
RM'000
RM'000
RM'000
RM'000
2,550
875
1,294
1,346
1,176
7,241
(124)
(124)
-----------------------------------------------------------------------------------------------------2,550
751
1,294
1,346
1,176
7,117
------------------------------------------------------------------------------------------------------
Accumulated
depreciation
At 1 October
Charge for
the year
Disposal
At 30 September
Net carrying amount
at 30 September
215
874
721
669
532
3,011
51
129
134
118
432
(124)
(124)
-----------------------------------------------------------------------------------------------------750
266
850
803
650
3,319
-----------------------------------------------------------------------------------------------------2,284
1
444
543
526
3,798
===========================================
2006
Cost
At 1 October
Addition/ Disposal
At 30 September
2,550
875
1,294
1,346
1,176
7,241
-----------------------------------------------------------------------------------------------------2,550
875
1,294
1,346
1,176
7,241
------------------------------------------------------------------------------------------------------
Accumulated
depreciation
At 1 October
Charge for
the year
At 30 September
Net carrying amount
at 30 September
164
799
592
535
414
2,504
51
75
129
134
118
507
-----------------------------------------------------------------------------------------------------721
215
874
669
532
3,011
-----------------------------------------------------------------------------------------------------2,335
1
573
677
644
4,230
===========================================
70 (THE
A N N U A L
R E P O R T
2 0 0 7
The directors revalued the freehold land and buildings of the Group in March 2007 based on valuations
carried out by an independent firm of professional valuers using the open market value basis.
The resultant revaluation surpluses arising during the year amounting to RM56,389,000 (including adjustments
for revaluation in accumulated depreciation) have been credited directly to the asset revaluation reserve
account.
The net carrying amount of the revalued freehold land and buildings that would have been included in the
financial statement had these properties been carried at cost less accumulated depreciation is RM 53,241,308.
The properties of the Group charged to an appointed security trustee for commercial paper and medium term
notes granted to the Company are as follows:
Group
At net carrying amount
Freehold land and buildings
Long leasehold land
2007
RM'000
2006
RM'000
142,476
-------------142,476
======
94,424
7,788
-------------102,212
======
The properties of the Group and the Company charged to licensed banks for banking facilities granted to the
Group are as follows:
Group
Leasehold buildings
Company
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
71,392
7,958
-------------79,350
======
6,822
------------6,822
======
2,284
-------------2,284
======
2,335
-------------2,335
======
The property, plant and equipment of the Group acquired under hire purchase and finance lease are as
follows:
Group
Motor vehicles
Machinery and equipment
2007
RM'000
2006
RM'000
445
8,223
-------------8,668
======
25
10,208
-------------10,233
======
I N
M A L A Y S I A )
71
A N N U A L
R E P O R T
2 0 0 7
4. PREPAID LEASE PAYMENTS
Group
At 1 October
Acquisition of subsidiary
Additional/Disposal
At 30 September
Company
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
9,598
625
------------10,223
======
9,598
------------9,598
======
5,950
-------------5,950
======
5,950
-------------5,950
======
1,148
27
153
------------1,328
-------------
959
189
------------1,148
-------------
502
119
-------------621
--------------
383
119
-------------502
--------------
8,895
======
8,450
======
5,329
======
5,448
======
Accumulated amortisation
At 1 October
Charge for the year
At 30 September
Net carrying amount
At 30 September
The Group and Company had previously classified leasehold land as finance lease under property, plant
and equipment. Upon adoption of FRS 117 Leases, the Group and Company account for its leasehold land
as operating lease with the unamortised carrying amount classified as prepaid lease payments in accordance
with the transitional provisions of FRS 117.
Leasehold land of the Group and the Company with net carrying amount of RM8,558,000 and
RM5,329,000 (2006 : RM 8,207,000 and RM5,448,000) respectively are charged to licensed financial
institutions for banking facilities granted to the Group and the Company.
The title deeds for certain leasehold land with a total net carrying amount of RM2,739,000 (2006 : RM 2,759,000)
have yet to be issued by the relevant authorities.
72 (THE
A N N U A L
R E P O R T
2 0 0 7
5. INVESTMENT PROPERTIES
At 1 October
- reclassification from property, plant and equipment
- fair value adjustment
At 1 October, restated
Addition/(Disposal)
Changes in fair value
At 30 September
2007
RM'000
2006
RM'000
-
4,698
-------------21,617
======
--------------------------======
11,759
9,858
-------------21,617
======
-------------======
15,523
1,396
-------------16,919
Investment properties comprise:
Leasehold land and buildings
The properties of the Group charged to an appointed security trustee for commercial paper and medium
term notes granted to the Group are as follow :
At carrying amount
2007
RM'000
2006
RM'000
6,390
7,788
-------------14,178
======
-------------======
The properties of the Group charged to licensed financial institutions for banking facilities granted to the
Group are as follow:
At carrying amount
2007
RM'000
2006
RM'000
2,000
438
-------------2,438
======
-------------======
The title deeds for certain investment properties of the Group with a carrying amount of RM 438,070 have
yet to be issued by the relevant authorities.
I N
M A L A Y S I A )
73
A N N U A L
R E P O R T
2 0 0 7
The properties for investment previously classified under property, plant and equipment have been
reclassified as investment properties during the financial year upon the adoption of FRS 140.
The Group has developed certain criteria based on FRS 140 in making judgement whether a property
qualified as an investment property. Investment property is a property held to earn rentals or for capital
appreciation of for both. In making judgement, the Group considers whether a property generates cash flows
largely independent of other assets held by the Group. Owner-occupied properties generate cash flows that
are attributable not only to the properties, but also other assets and in the production and supply of goods
and services. Judgement is also made on an individual property basis to determine whether ancillary services
are so significant that the property does not qualify as an investment property. The Group has adopted the
fair value model in measuring the above investment properties with effect from 1 October 2006. The fair
value of the investment properties at the end of the financial year was determined by the directors based on
various studies conducted which reasonably reflect market conditions of similar properties at the balance
sheet date.
6. INVESTMENT IN SUBSIDIARIES
Unquoted shares, at cost
Less :
Accumulated impairment loss
2007
RM'000
2006
RM'000
258,007
218,257
6,042
-------------251,965
======
-------------218,257
======
The amount owing by/to the subsidiaries represents unsecured interest free advances which have no fixed
terms of repayment except for advances to subsidiary companies of RM140 million (2006 : RM105 million)
which earn an effective interest rate of 8.50% (2006 : 8.25%) per annum.
Certain unquoted shares of the subsidiaries with a total carrying amount of RM142,151,000 (2006 :
RM142,151,000) are charged to an appointed security trustee for commercial paper and medium term
notes granted to the Company
74 (THE
A N N U A L
R E P O R T
2 0 0 7
The subsidiary companies, all of which are incorporated in Malaysia, are as follows:
Group
equity interest
Principal activities
2006
2007
%
%
Subsidiaries of the Company
The Store (Malaysia) Sdn. Bhd.
100
100
Operation of department stores and
supermarkets
100
100
Operation of department stores and
supermarkets
Larut Matang Supermarket Holdings Bhd.
100
-
Property and investment holdings and the
provision of management services
100
100
Investment holding
The Store (Terengganu) Sdn. Bhd.
100
100
Investment holding
Taiping Supermarket Holdings Sdn. Bhd.
100
100
Property and investment holding
Gold Shopping Centre Holdings Sdn. Bhd.
100
100
Investment holding
Summit Superstore Holdings Sdn. Bhd.
100
100
Investment holding
100
100
Property investment holding
The Store (Kelantan) Sdn. Bhd.
100
100
Investment holding
The Store Card Sdn. Bhd.
100
100
Provision of strategic incentive marketing
solutions and customers loyalty schemes
TS Retail Systems Sdn. Bhd.
100
100
IT and computer related services
TS Universal Trading Sdn. Bhd.
100
100
Importer and distribution of souvenirs and
trading in general goods
95
95
Wholesaling of household and general
goods
*Pacific Hypermarket Group Sdn. Bhd.
100
100
Investment holding
Visual Utama Sdn. Bhd.
100
100
Investment holding
Delsinar Sdn. Bhd.
100
100
Investment holding
Nilai Hikmat Sdn. Bhd.
100
100
Investment holding
The Store (Kemaman) Sdn. Bhd.
100
100
Inactive
The Store (Seremban) Sdn. Bhd.
100
100
Inactive
The Store (Kluang) Sdn. Bhd.
100
100
Inactive
I N
M A L A Y S I A )
75
A N N U A L
R E P O R T
2 0 0 7
Group
equity interest
2006
2007
%
%
Subsidiaries of the Company
The Store (Muar) Sdn. Bhd.
100
100
Inactive
The Store (Mentakab) Sdn. Bhd.
100
100
Inactive
The Store (Taman Tun Aminah) Sdn. Bhd.
100
100
Inactive
The Store (Klang) Sdn. Bhd.
100
100
Inactive
The Store (Central Square) Sdn. Bhd.
100
100
Inactive
The Store (Kampar Road) Sdn. Bhd.
100
100
Inactive
The Store (Kuantan Parade) Sdn. Bhd.
100
100
Inactive
The Store (Bentong) Sdn. Bhd.
100
100
Inactive
The Store (Subang) Sdn. Bhd.
100
100
Inactive
The Store (Port Dickson) Sdn. Bhd.
100
100
Inactive
The Store (Bukit Pasir) Sdn. Bhd.
100
100
Inactive
The Store (Kangar) Sdn. Bhd.
100
100
Inactive
The Store (Darul Naim) Sdn. Bhd.
100
100
Inactive
100
-
Operation of supermarkets, supermarkets and
department stores
Fajar Departmental Store & Supermarket
(Sg. Besar) Sdn. Bhd.
100
-
Investment holding
100
-
Investment holding
Fajar Supermarket (Upper Perak) Sdn. Bhd.
100
-
Investment holding
Berkat Apparel Sdn. Bhd.
100
-
Trading of fashion wears
Berkat Marketing Sdn. Bhd.
100
-
Trading of fashion wears
Berkat Merchandising & Services Sdn. Bhd.
100
-
Merchandising and distribution
100
-
Property investment
100
-
Property investment
Berkat Supermarket Sdn. Bhd.
100
-
Dormant
Subsidiary of Larut Matang
Supermarket Holdings Bhd.
76 (THE
A N N U A L
R E P O R T
2 0 0 7
Group
equity interest
2007
2006
%
%
Subsidiary of Larut Matang
Supermarket Holdings Bhd.
Dindings Supermarket Sdn. Bhd.
100
-
Dormant
Fajar Supermarket (Melaka) Sdn. Bhd.
100
-
Dormant
Fajar Supermarket (Butterworth) Sdn. Bhd.
100
-
Dormant
Kuala Kangsar Supermarket Sdn. Bhd.
100
-
Dormant
Larut Matang Supermarket (Taiping) Sdn. Bhd.
100
-
Dormant
Berkat Garments Sdn. Bhd.
100
-
Dormant
Fajar Merchandising & Services Sdn. Bhd.
100
-
Dormant
The Store (Johore Bahru) Sdn. Bhd.
100
100
Investment holding
100
100
Property investment holding
Formyarn Sdn. Bhd.
67
67
Murai Perdana Sdn. Bhd.
100
100
Investment holding
The Store (Malacca) Sdn. Bhd.
100
100
Inactive
The Store (Batu Pahat) Sdn. Bhd.
100
100
Inactive
100
100
Inactive
100
100
Property and investment holding
The Store (Taiping) Sdn. Bhd.
100
100
Investment holding
100
100
Investment holding
Subsidiaries of The Store Holdings
Sdn. Bhd.
Manufacturing, wholesaling and trading
in garments and underclothings
Subsidiary of The Store (Terengganu)
Sdn. Bhd.
The Store (Pusat K.T.) Sdn. Bhd.
Subsidiaries of Taiping Supermarket
Holdings Sdn. Bhd.
Subsidiary of Gold Shopping Centre
Holdings Sdn. Bhd.
The Store (NS) Sdn. Bhd.
I N
M A L A Y S I A )
77
A N N U A L
R E P O R T
2 0 0 7
Group
equity interest
2007
2006
%
%
Subsidiaries of Summit Superstore
Holdings Sdn. Bhd.
Arglye Sdn. Bhd.
100
100
Inactive
The Store (Summit Parade) Sdn. Bhd.
100
100
Inactive
100
100
Inactive
* Pacific Hypermarket Properties Sdn. Bhd.
100
100
Property investment
* Bigever Properties Sdn. Bhd.
100
100
Property investment
* Pacific Hypermarket & Departmental Store
Sdn. Bhd.
100
100
Investment holding and operation of
department store and hypermarket
* Pacific Bowling Sdn. Bhd.
100
100
Manage and operate bowling centre
* Pacific Department Store Sdn. Bhd.
100
100
Inactive
100
-
Dormant
100
-
Investment holding
100
100
92
92
Subsidiary of The Store (Kelantan)
Sdn. Bhd.
The Store (Sungai Petani) Sdn. Bhd.
Subsidiaries of Pacific Hypermarket
Group Sdn. Bhd.
Group Sdn. Bhd.
Subsidiary of Fajar Departmental
Store & Supermarket (Sg. Besar)
Sdn. Bhd.
Sungei Besar Supermarket Sdn. Bhd.
Subsidiary of Fajar Supermarket
Sdn. Bhd.
Subsidiary of The Store (Johore
Bahru) Sdn. Bhd.
The Store (Johor Jaya) Sdn. Bhd.
Inactive
Subsidiary of Murai Perdana
Sdn. Bhd.
Cotler Sdn. Bhd.
78 (THE
Trading in clothing and general goods
A N N U A L
R E P O R T
2 0 0 7
Group
equity interest
2007
2006
%
%
Subsidiary of Taiping Corporation
Sdn Bhd
100
100
Inactive
100
100
Inactive
The Store (Taman Kok Lian) Sdn Bhd
100
100
Inactive
TS Universal Brands Sdn Bhd
100
100
Trading in clothing
The Store (Kota Bahru) Sdn Bhd
100
100
Inactive
The Store (Shah Alam) Sdn Bhd
100
100
Inactive
* Pacific Hypermarket (Prai) Sdn Bhd
100
100
Inactive
* Pacific Department Store (Prai)
Sdn Bhd
100
100
Inactive
The Store (Taiping Jaya) Sdn Bhd
Subsidiary of The Store (Taiping)
Sdn Bhd
The Store (Tampin) Sdn Bhd
Subsidiaries of The Store (NS)
Sdn Bhd
Subsidiaries of The Store (Sungai
Petani) Sdn Bhd
& Departmental Store Sdn Bhd
* Subsidiaries not audited by Moores Rowland.
(a)
Impairment test for investment in subsidiaries
The management reviews the carrying amount of the investment in subsidiaries at each balance sheet
date to determine whether there is any indication of impairment. The management's assessment on
whether there is an indication is based on external as well as internal sources of information. If such
indication exists, impairment loss on the value of the investment is made to determine the recoverable
amount of the investment.
I N
M A L A Y S I A )
79
A N N U A L
R E P O R T
2 0 0 7
(b)
Key assumptions used in indicative values (value-in-use) calculations
The recoverable amount is determined based on indicative values (value-in-use) calculated using the
cash flow projections based on the financial models approved by the management. The following
describes the key assumptions on which the management has based the cash flow projections to
undertake impairment tests:
(i)
Budgeted revenue
The growth rate used is the average growth rate for the last 2 years
(ii)
Budgeted expenses
Expenses are budgeted to grow at inflation rate
(iii) Discounted rate
The discounted rate used is between 6% and 8%
The management believes that no reasonable possible changes in any of the key assumptions above
would cause the net carrying value of the investment in subsidiaries to exceed their recoverable
amount.
7. INVESTMENT IN ASSOCIATE
Group
2007
RM'000
Less :
Return on capital set-off against cost of investment
Add:
Group's share of post-acquisition results
80 (THE
2006
RM'000
-
16,114
--------------
208
-------------15,906
-------------======
3,726
-------------19,632
======
A N N U A L
R E P O R T
2 0 0 7
In previous financial year, the associate was Larut Matang Supermarket Holdings Bhd, a company incorporated
in Malaysia, in which the Group held 45.26% of the issued and paid-up share capital. During the current
financial year, the Company acquired the remaining 54.74% of the issued and paid-up share capital.
Consequently, Larut Matang Supermarket Holdings Bhd became a wholly-owned subsidiary of the Company.
The financial year end of the associate in the previous financial year was 31 May 2006 and as such not
coterminous with that of the Group. For the purpose of applying the equity method of accounting in the
previous financial year, the last audited financial statements of the associate and the management financial
statements made up to the end of the financial year have been used.
The Group did not have any share of the associates' contingent liabilities incurred jointly with other investors.
The summarised financial information of the associate at year end is as follows:
Group
Assets and liabilities
Non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Total liabilities
Results
Revenue
Profit for the year
2007
RM'000
2006
RM'000
-------------======
112,307
50,297
-------------162,604
======
-------------======
15,537
64,283
-------------79,820
======
======
418,294
1,431
======
8. OTHER INVESTMENTS
Group
2007
RM'000
Shares quoted in Malaysia, at cost
Less :
Allowance for diminution in value
Market value - quoted shares
2006
RM'000
12
12
5
-------------7
2,334
-------------2,341
======
5
-------------7
2,329
-------------2,336
======
9
======
11
======
I N
M A L A Y S I A )
81
A N N U A L
R E P O R T
2 0 0 7
9. INTANGIBLE ASSETS
Goodwill
RM'000
Negative
Goodwill
RM'000
Total
RM'000
22,311
(11,000)
-------------11,311
-------------11,311
--------------
(18,206)
18,206
----------------------------------------
4,105
7,206
-------------11,311
-------------11,311
--------------
8,900
2,100
-------------11,000
(11,000)
-------------1,167
-------------1,167
--------------
(8,216)
(1,815)
-------------(10,031)
10,031
----------------------------------------
684
285
-------------969
(969)
-------------1,167
-------------1,167
--------------
Net carrying amount at 30 September 2007
10,144
======
======
10,144
======
Net carrying amount at 30 September 2006
11,311
======
(8,175)
======
3,136
======
Cost
At 1 October 2005/30 September 2006
At 1 October 2006, restated
Acquisition/Disposal
Accumulated amortisation and impairment
At 1 October 2005
Amortisation for the year
At 1 October 2006, restated
Impairment loss recognised during the year
(a)
Impairment test for cash-generating unit ("CGU") containing goodwill
For the purpose of impairment testing, goodwill is allocated to the Group's operating divisions at
which goodwill is monitored.
(b)
Key assumptions used in value-in-use calculations
The recoverable amount of a CGU is determined based on value-in-use calculations using cash flow
projections based on financial budgets approved by the management covering a five year period.
Cash flows beyond the five year period are extrapolated using the growth rate stated below. The key
assumptions used for value-in-use calculations are as follows:
Gross margin
Growth rate
Discount rate
- 20%
- 5%
- 6% - 8%
82 (THE
A N N U A L
R E P O R T
2 0 0 7
The following describes each key assumption on which the management has based its cash flow
projections to undertake impairment testing of goodwill:
(i)
Budgeted gross margin
The budgeted gross margin is based on the margin achieved in the year immediately before the
budget year and is increased by growth rate to cater for expected improvements in efficiency.
(ii)
Growth rate
The weighted average growth rate used is consistent with the long-term average growth rate for
the industry.
(iii) Discount rate
The discount rates used are pre-tax and reflect specific risks relating to the industry.
(iv) Risk free rate
The risk free rate is based on the yield on a 10 year Malaysian government bond rate at the
beginning of the budget year.
Sensitivity to changes in assumptions
With regard to the assessment of value-in-use, the management believes that no reasonable possible
changes in any of the above key assumptions would cause the carrying amount of the respective
CGUs to materially exceed their recoverable amount.
10. DEFERRED TAX ASSETS
Group
At 1 October
Transfer to income statement
At 30 September
The deferred tax assets comprise:
Deductible temporary differences
- on unused tax losses
- on unabsorbed capital allowances
Taxable temporary differences between net
carrying amount and tax written down value of
property, plant and equipment
2007
RM'000
2006
RM'000
1,579
106
(591)
-------------1,094
=======
2,230
(651)
-------------1,579
======
38
1,270
-------------1,308
1,926
1,006
-------------2,932
(214)
-------------1,094
======
(1,353)
-------------1,579
======
I N
M A L A Y S I A )
83
A N N U A L
R E P O R T
2 0 0 7
At 30 September 2007, the Group has not recognised deferred tax assets arising from the following temporary
differences as it is not probable that future taxable profit will be available against which the assets can be
utilised.
Group
Deductible temporary differences on
- Unused tax losses
- Unabsorbed capital allowances
Taxable temporary differences between net carrying amount and
tax written down value of property, plant and equipment
2007
RM'000
2006
RM'000
4,670
3,137
4,395
2,978
(160)
-------------7,647
======
(79)
-------------7,294
======
11. INVENTORIES
Group
Trading merchandise and finished goods
Raw materials
2007
RM'000
2006
RM'000
309,690
-------------309,690
======
247,141
75
-------------247,216
======
12. TRADE AND OTHER RECEIVABLES
Group
2006
RM'000
2007
RM'000
2006
RM'000
2,641
-
-
392
-------------4,176
16,660
339
-------------2,302
15,972
-------------116
-------------116
11
16,649
49,840
6,699
-------------77,364
======
15,972
44,913
3,671
-------------66,858
======
116
10,773
80
-------------10,969
======
116
15,132
260
-------------15,508
======
2007
RM'000
Gross trade receivables
Less:
Other receivables
Less:
Deposits
Prepayments
84 (THE
Company
4,568
A N N U A L
R E P O R T
2 0 0 7
Trade receivables represent amounts receivable from the sale of goods to customers. All trade receivables are
granted credit periods of between 3 days and 120 days. Other receivables, deposits and prepayments are
from the normal business transactions of the Group.
The collectibility of receivables is assessed on an ongoing basis. An allowance for doubtful debts is made for
any account considered to be doubtful for collection. The allowance for doubtful debts is made based on a
review of all outstanding accounts at the balance sheet date. A considerable amount of judgement is required
in assessing the ultimate realisation of these receivables, including the creditworthiness and the past collection
history of each customer. If the financial conditions of the customers of the Group were to deteriorate, resulting
in an impairment of their ability to make payments, additional allowances may be required.
13. FIXED AND TIME DEPOSITS
The fixed and time deposits are placed with licensed banks and earn effective interest rates of between 2.15%
and 3.70% (2006 : 2.15% and 3.70%) per annum. All the deposits have maturity periods of less than one year.
Fixed deposits amounting to RM1,625,701 (2006 : RM2,442,225) of the Group are pledged to licensed
banks for banking facilities granted to the Group.
14. SHARE CAPITAL
Company
Authorised
88,000,000 ordinary shares of RM1 each
Issued and fully paid
68,503,602 ordinary shares of RM1 each
2007
RM'000
2006
RM'000
88,000
======
88,000
======
68,504
======
68,504
======
15. TREASURY SHARES
Company
At 1 October
Purchase of treasury shares
At 30 September
2007
RM'000
2006
RM'000
3,144
3
(1,942)
-------------1,205
======
4,011
1,000
(1,867)
-------------3,144
======
During the financial year, the Company purchased 1,000 ordinary shares of its issued share capital from the
open market at a total cost of RM2,781. The price paid for the shares purchased was RM2.78 per share. The
repurchase transaction was financed by internally generated funds. The repurchased shares were being held as
treasury shares and carried at cost in accordance with the requirements of section 67A of the Companies Act,
1965. Treasury shares have no rights to voting, dividends and participation in other distribution.
I N
M A L A Y S I A )
85
A N N U A L
R E P O R T
2 0 0 7
During the financial year, the Company re-issued 796,000 of its treasury shares by re-sale in the open market
at an average price of RM3.03 per share at a total cash consideration of RM2,408,689, giving rise to a gain
on re-sale of the treasury shares of RM466,449 which has been accounted for as share premium in the
statements of changes in equity. The proceeds from the re-sale were for working capital requirements.
At 30 September 2007, the number of treasury shares held is 490,000 (2006 : 1,285,000) ordinary shares.
16. COMMERCIAL PAPER AND MEDIUM TERM NOTES
Group/ Company
Commercial paper ("CP")
Medium term notes ("MTN")
Less:
Repayments due within twelve months
(included under current liabilities)
Repayments due after twelve months
2007
RM'000
2006
RM'000
39,832
140,000
-------------179,832
39,832
150,000
-------------189,832
39,832
-------------140,000
======
39,832
------------150,000
======
The proceeds received from the issue of CP are as follows:
Group/ Company
Nominal value of CP issued on 12 July 2007
(2006 : issued on 12 July 2006)
Less:
Interest charged
2007
RM'000
2006
RM'000
40,000
40,000
504
-------------39,496
======
504
-------------39,496
======
The interest charged is amortised to the income statement over the tenure of the CP and is included as part of
finance costs. The effective interest rate of the CP is 5% (2006 : 5%) per annum. The CP has a maturity period
of less than one year.
86 (THE
A N N U A L
R E P O R T
2 0 0 7
Group
Finance lease liabilities
Outstanding finance lease rentals due:
- not later than one year
- later than one year and not later than five years
Less:
Unexpired term charges
Outstanding principal amount due
Less:
Outstanding principal amount due not
later than one year (Note 19)
Outstanding principal amount due later than one
year and not later than five years
2007
RM'000
2006
RM'000
617
-------------617
2,374
617
-------------2,991
14
-------------603
104
-------------2,887
603
2,283
-
604
Bank term loans
Outstanding term loans
8,562
2,669
Less:
Repayments due within twelve months (Note 20)
1,875
500
Repayments due after twelve months
6,687
-------------6,834
======
2,169
-------------3,076
======
The effective interest rates of the hire purchase and finance lease liabilities are between 3.10% and 7.40%
(2006 : 3.50% and 7.90%) and between 5.38% and 5.67% per annum (2006 : 5.38% and 8.36%)
respectively.
The bank term loans of the subsidiaries are secured by legal charges over the freehold and leasehold
properties and fixed deposits of the said subsidiaries.
The bank term loans of the subsidiaries bear effective interest rates of between 3.88% and 8.55% (2006:
7.55% and 8.5%) per annum except for bank term loan under Al-Bai Bithaman Ajil facility which bear a fixed
profit rate of RM4,593 per month.
The bank term loans of the Group are repayable by monthly and quarterly installments commencing between
1996 and 2007.
88 (THE
A N N U A L
R E P O R T
2 0 0 7
The maturity dates and effective interest rates of the MTN and their outstanding amounts are as follows:
Maturity dates
MTN 0001
MTN 0002
MTN 0003
MTN 0004
MTN 0005
MTN 0006
MTN 0007
MTN 0008
MTN 0009
31 December 2007
3 March 2008
3 September 2008
23 April 2007
9 November 2009
8 June 2009
15 June 2009
12 August 2008
8 October 2007
Effective
interest rates
% per annum
Group/Company
RM'000
7.00
6.90
7.05
5.60
6.55
6.35
6.35
6.15
6.65
20,000
10,000
10,000
20,000
10,000
10,000
10,000
50,000
-------------140,000
======
The CP and MTN are secured by certain properties of the Group referred to in Notes 3 and 5 and certain
unquoted shares in subsidiaries referred in Note 6 which have been charged in favour of an appointed security
trustee.
17. LONG TERM LIABILITIES
Group
Hire purchase liabilities
Outstanding hire purchase instalments due:
- later than one year and not later than five years
Less:
Unexpired term charges
Outstanding principal amount due
2007
RM'000
2006
RM'000
684
96
-------------780
808
194
-------------1,002
41
-------------739
65
-------------937
Less:
Outstanding principal amount due not later than
one year (Note 19)
592
634
Outstanding principal amount due later than one
year and not later than five years
147
303
I N
M A L A Y S I A )
87
A N N U A L
R E P O R T
2 0 0 7
18. DEFERRED TAX LIABILITIES
At 1 October
Transfer (to)/from income statement
Transfer from asset revaluation reserve
At 30 September
The deferred tax liabilities comprise:
Taxable temporary differences
- relating to fair value adjustment to
the properties of subsidiary
- relating to revaluation of freehold
building
- between net carrying amount and tax
written down value of property,
plant and equipment
Less:
Deferred tax assets recognised on
deductible temporary differences
- on unused tax losses
- on unabsorbed capital allowances
Group
Company
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
8,156
11,243
(619)
14,355
-------------33,135
======
7,778
378
-------------8,156
======
164
-------------164
======
-------------======
933
-
-
23,201
-
-
-
9,926
-------------34,041
7,223
-------------8,156
164
-------------164
--------------
(498)
(408)
-------------33,135
======
-------------8,156
======
-------------164
======
-------------======
914
19. TRADE AND OTHER PAYABLES
Group
Trade payables
Other payables
Deposits
Accruals
Hire purchase liabilities (Note 17)
Finance lease liabilities (Note 17)
Company
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
341,435
22,407
5,877
17,540
592
603
-------------388,454
======
243,237
20,815
7,759
12,715
634
2,283
-------------287,443
======
715
3,351
-------------4,066
======
830
2,220
-------------3,050
======
Trade payables represent amounts outstanding for trade purchases. The credit periods granted by trade
suppliers are between 7 and 240 days. Other payables, deposits and accruals are from the normal business
transactions of the Group.
I N
M A L A Y S I A )
89
A N N U A L
R E P O R T
2 0 0 7
20. BANK BORROWINGS
Group
Bankers acceptance
- secured
Bank overdrafts
- secured
- unsecured
Current portion of bank term loans (Note 17)
2007
RM'000
2006
RM'000
4,710
5,023
6,400
342
6,742
-------------11,452
1,875
-------------13,327
======
605
328
933
-------------5,956
500
-------------6,456
======
The bankers acceptance and bank overdrafts of the subsidiaries are secured by legal charges over the
properties and fixed deposits of the subsidiaries.
The effective interest rates per annum of the bank borrowings are as follows:
Group
2007
%
Bankers acceptance
Bank overdrafts
2006
%
3.76 to 3.99 2.80 to 4.35
7.45 to 8.75 7.25 to 8.70
======= =======
21. GROSS REVENUE
Group
Sale of goods net of discounts
Concessionary rental income
and commission
Dividend income
Management fees
Rental income from investment
properties
90 (THE
Company
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
1,947,322
1,539,122
-
-
6,654
-
10,061
-
27,444
1,548
26,345
1,235
192
-------------1,954,168
======
32
-------------1,549,215
======
-------------28,992
======
-------------27,580
======
A N N U A L
R E P O R T
2 0 0 7
22. COST OF SALES
Group
Cost of goods sold
Direct operating costs relating to investment properties
- revenue generating
- non revenue generating
2007
RM'000
2006
RM'000
1,566,960
1,244,496
19
38
-------------1,567,017
======
54
-------------1,244,550
======
23. PROFIT BEFORE TAX
Profit before tax is stated after charging:
Group
2007
RM'000
Allowance for diminution in value
of quoted shares
Amortisation of goodwill on acquisition
Amortisation of prepaid lease payments
Auditors' remuneration
- current year
- overestimated in prior year
Depreciation
Directors' remuneration
- Directors of the Company
- fees
- other emoluments
- Directors of subsidiaries
- fees
- other emoluments
Fees paid to a company in which a
director of the Company has
financial interest
Finance costs
- hire purchase and finance lease
term charges
- interest expenses
Impairment loss on goodwill
Impairment loss on investment in
subsidiaries
Loss on disposal of property, plant
equipment
Property, plant and equipment written
off
Rental of premises
-
Company
2006
RM'000
153
4
2,100
189
695
(12)
37,065
2007
RM'000
2006
RM'000
119
119
543
(144)
30,569
38
(2)
432
40
(2)
507
636
3,621
636
1,712
132
3,621
132
1,712
420
182
420
188
24
18
24
18
269
12,735
1,167
501
9,273
-
11,630
-
2
8,593
-
53
1,788
88,756
======
-
-
6,042
-
-
-
======
======
8
11
63,862
======
-
I N
M A L A Y S I A )
91
A N N U A L
R E P O R T
2 0 0 7
Company
Group
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
-
-
19
27,444
8,694
======
26,345
7,351
======
and crediting:
Amortisation of discount on acquisition
Gain on disposal of property, plant
and equipment
Gross dividends from subsidiaries
Interest income
Rental income
15,376
1,815
-
82
1,838
21,078
======
1,798
13,737
======
24. TAX EXPENSE
Company
Group
Current tax expense
- current year
- under/(over)estimated in prior years
Deferred tax expense relating to
origination and reversal of temporary
differences during the year
Deferred tax expense under/(over)
estimated in prior years
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
14,593
137
-------------14,730
10,856
(39)
-------------10,817
5,801
106
-------------5,907
3,875
6
-------------3,881
(368)
2,858
164
-
340
(1,829)
-
-
1,029
-------------11,846
======
164
-------------6,071
======
-------------3,881
======
(28)
-------------14,702
======
92 (THE
A N N U A L
R E P O R T
2 0 0 7
The numerical reconciliations between the tax expense and the product of accounting profit multiplied by the
applicable tax rates are as follows:
Group
Accounting profit (excluding share
of results of associate)
Tax at applicable tax rate of 27%
(2006 : 28%)
Add:
Tax effect of expenses not
deductible in determining taxable
profit
Deferred tax assets arising from
unused tax losses and unabsorbed
capital allowances not recognised
during the year
Less:
Tax effect of income not taxable
in determining taxable profit
Tax effect of utilisation of unused
tax losses and unabsorbed capital
allowances not previously recognised
Tax effect of reduction in tax rate
Crystalisation of deferred tax
liability on amortisation of
revalued properties
Tax effect of different tax rates of
subsidiaries
Add/(Less):
Current tax expense under/(over)
Deferred tax expense under/(over)
Tax expense for the year
Company
2007
RM'000
2006
RM'000
54,758
======
40,478
======
14,785
11,334
4,120
6,479
2,064
3,086
1,850
224
353
-------------17,202
-------------14,420
2,306
2007
RM'000
2006
RM'000
15,261
23,139
====== ======
-------------- -------------5,970
6,703
565
5
2,662
354
-
-
166
-
191
-
-
-
126
-------------14,225
137
340
-------------14,702
======
56
85
-------------13,714
-------------- -------------5,965
3,875
(39)
(1,829)
-------------11,846
======
106
6
-------------- -------------6,071
3,881
====== ======
Based on prevailing tax rate applicable to dividends, the entire unappropriated profit of the Company at year
end is covered by estimated tax credits available under section 108 of the Income Tax Act, 1967 for
distribution of dividends. The Company also has an amount of RM9,204,592 (2006 : RM9,204,592) in its tax
exempt account available for distribution of tax exempt dividends.
I N
M A L A Y S I A )
93
A N N U A L
R E P O R T
2 0 0 7
25. EARNINGS PER SHARE
Earnings per share is calculated based on Group profit after tax and minority interests of RM40,125,000
(2006 : RM29,263,000) and on 68,013,602 (2006 : 67,218,602) ordinary shares in issue during the
financial year after deducting treasury shares calculated as follows:
2006
2007
Number of ordinary shares at 1 October
Less:
Treasury shares
Number of ordinary shares at 30 September
68,503,602
490,000
----------------68,013,602
=======
68,503,602
1,285,000
----------------67,218,602
=======
26. DIVIDEND PAID
Recognised as distribution to equity holders during the year:
Company
First and final dividend of 7% less 27% tax, on
68,013,602 ordinary shares for the financial year
ended 30 September 2006 (2006 : 6% less 28%
tax, on 66,453,602 ordinary shares for the
financial period ended 30 September 2005)
2007
RM'000
2006
RM'000
3,475
======
2,871
======
At the forthcoming annual general meeting, a first and final dividend of 3% less 26% tax, on 68,013,602
ordinary shares amounting to RM1,509,902 (2.22 sen net per ordinary share) in respect of the financial year
ended 30 September 2007 will be proposed for approval by the shareholders of the Company. The proposed
first and final dividend is payable in respect of all ordinary shares in issue at the date of the financial
statements, excluding those ordinary shares held as treasury shares under share buy-back. These financial
statements do not reflect this first and final dividend which will be accounted for in the shareholders' equity as
an appropriation of unappropriated profit in the financial year in which the dividend is paid.
27. ANALYSIS OF ACQUISITION OF A SUBSIDIARY COMPANY
During the financial year, the Company acquired the remaining 54.74% of the equity interest, representing
5,811,391 ordinary shares of RM1 each in Larut Matang Supermarket Holdings Bhd, an existing 45.26%
owned associate, at a total cash consideration of RM39,750,225. The discount on acquisition arising from the
acquisition was RM15,376,477.
The effects of acquisition of the subsidiary on the consolidated net profit, the consolidated financial position
and the consolidated cash flow statement are as follows:
94 (THE
A N N U A L
R E P O R T
2 0 0 7
(a)
Effect on consolidated net profit for the year ended 30 September 2007
RM'000
Gross revenue
254,444
======
Profit before tax
Tax expense
2,918
(845)
-------------2,073
======
Increase in Group's net profit
(b)
Effect on consolidated financial position at 30 September 2007
RM'000
Non-current assets
Current assets
Non- current liabilities
Current liabilities
90,403
29,229
(13,784)
(10,650)
-------------95,198
======
Increase in Group's share of net assets
(c)
Effect on consolidated cash flow statement for the year ended 30 September 2007
RM'000
Fair value of net assets acquired:
Non-current asset
Current assets
Non current liabilities
Current liabilities
Net assets previously held and treated as investment
in associate
Asset revaluation reserve not previously included
in investment in associate
113,613
63,211
(16,526)
(67,671)
(15,376)
(19,632)
(17,869)
-------------39,750
Total purchase consideration
Less:
Cash and cash equivalents
2,202
-------------41,952
======
Net cash flow on acquisition
I N
M A L A Y S I A )
95
A N N U A L
R E P O R T
2 0 0 7
28. EMPLOYEE BENEFITS EXPENSE
Group
Salaries, wages, allowances and
bonuses
- Executive directors
- Other employees
Defined contribution plan
- EPF contributions
Social security contributions
- SOCSO contributions
Other staff related expenses
Company
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
3,805
122,443
1,900
93,541
3,248
-
1,544
-
13,374
9,764
373
168
2,014
2,473
-------------144,109
======
1,325
1,001
-------------107,531
======
2
-------------3,623
======
2
6
-------------1,720
======
29. RELATED PARTY DISCLOSURES
(a)
The Company has a controlling related party relationship with its subsidiaries referred to in Note 6.
(b)
The Group also has related party relationship with companies in which certain directors of the
Company have financial interests.
(c)
The Group has the following significant transactions with the related parties during the financial year:
Group
Management fees from
subsidiaries
Interest income from subsidiaries
Advances from subsidiaries
Repayment of advances from
subsidiaries
Share registration and secretarial
fees paid to a company in which
a director of the Company has
financial interest
Rental of premises charged by
companies in which certain
directors of the Company have
financial interests
Advances to subsidiaries
Company
2007
RM'000
2006
RM'000
-
-
======
======
24
15,652
======
18
8,447
======
2007
RM'000
1,548
8,509
2,769
======
24
15,516
======
2006
RM'000
1,235
7,297
7,350
======
18
2,078
======
Information regarding outstanding balances arising from related party transactions at year end is
disclosed in Note 6.
96 (THE
A N N U A L
R E P O R T
2 0 0 7
(d)
Compensation of key management personnel
The remuneration of directors and other members of key management of the Group and the
Company during the year comprises:
Group
Short-term employee benefits
Post employment benefits
- defined contribution plan
Company
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
6,847
4,520
3,380
1,676
879
======
469
======
373
======
168
======
30. CAPITAL COMMITMENT
Company
Group
2007
RM'000
Approved capital expenditure in
respect of property, plant and
equipment contracted but not
provided for in the financial
statements
Operating lease rental payable
- later than one year
2006
RM'000
314
2007
RM'000
2006
RM'000
-
-
-------------======
-------------======
1,069
934
11,267
12,201
-------------12,515
======
-------------1,069
======
31. CONTINGENT LIABILITIES
Company
Group
(a)
Unsecured corporate
guarantees in respect of
banking and other credit
facilities granted to
subsidiaries
2007
RM'000
2006
RM'000
2007
RM'000
2006
RM'000
======
======
11,400
======
11,400
======
I N
M A L A Y S I A )
97
A N N U A L
R E P O R T
2 0 0 7
(b)
Material litigations
(i)
Summit Parade Sdn Bhd ("Summit") issued a letter of demand dated 5 August 2002 on the
Company and its subsidiary, The Store (Malaysia) Sdn Bhd (collectively known as the
"Defendants"), claiming for allegedly unpaid rental amounting to RM4,669,627. This sum was
disputed by the Defendants and the Defendants had instituted proceedings against Summit in the
Kuala Lumpur High Court seeking for, inter alia, a declaration whether the amount claimed by
Summit was due and payable by the Defendants and for an order to restrain Summit from filing,
presenting, advertising and/or gazetting winding up proceedings against the Defendants. The
matter was heard in March 2004. On 12 March 2004, the High Court dismissed the
Defendants' Originating Summon on the ground that there were several disputes as to the facts
of the case and as such it was not suitable to be decided in an originating summons action. The
High Court had nevertheless, granted the Defendants liberty to refile the claim against Summit in
a writ action.
In view of the court's direction, Summit had served on the Defendants a Writ dated 2 July 2004
filed in the Muar High Court claiming for, inter alia, alleged unpaid rental to date amounting to
RM5,143,762. The Defendants had replied with the Defence and Counterclaim, whereby the
sum claimed was disputed by the Defendants. The Defendant is counter-claiming for damages,
of which the quantum is to be assessed by the court, for breach of tenancy agreement by
Summit. The court has fixed 25 January 2008 for hearing to continue. The matter is now fixed
for further continued trial on 7 March 2008.
Pending the disposal of the said Originating Summons, Summit had via Batu Pahat Sessions
Court obtained a distress order against the Defendants for RM719,103 as the alleged
outstanding rental. Subsequently, the Defendants had via Originating Summons obtained an
injunction against Summit and/or its agent from proceeding further in respect of the distress
proceeding. On 31 January 2003, the Defendants filed an application in the Batu Pahat
Sessions Court to set aside the distress order. As there is a pending case in the High Court, the
Sessions Court would not proceed until the settlement of the High Court case. The matter had
been fixed for further mention on 14 December 2006. On 14 December 2006, the Court
decided to put this matter into abeyance pending the disposal of the aforesaid High Court
matter and that no mention date will be issued therein.
The directors of the Company are of the opinion that there is a reasonable prospect of success
in this case.
(ii)
ZKP Development Sdn Bhd ("ZKP") issued a letter of demand dated 5 August 2002 on the
Company and its subsidiary, The Store (Malaysia) Sdn Bhd (collectively known as the
"Defendants"), claiming for allegedly unpaid rental amounting to RM4,675,886. This sum was
disputed by the Defendants and the Defendants had instituted proceedings against ZKP in the
Kuala Lumpur High Court seeking for, inter alia, a declaration on whether the amount claimed
by ZKP was due and payable by the Defendants and for an order to restrain ZKP from
proceeding further in this matter and/or distress proceedings. The Penang High Court had
granted ZKP's application to transfer the case to the Penang High Court.
At the Penang High Court, ZKP applied for summary judgement against the Defendants, which
was dismissed by the Court on 12 August 2005. ZKP appealed against the decision, which was
also dismissed by the court. The case has now been fixed for case management on 19 February
2008.
The directors of the Company are of the opinion that there is a reasonable prospect of success
in this case.
98 (THE
A N N U A L
R E P O R T
2 0 0 7
32. SEGMENT ANALYSIS
No segment analysis is prepared as the Group is primarily engaged in retail operations in Malaysia.
33. FINANCIAL INSTRUMENTS
(i)
Credit risk
At balance sheet date, the Group did not have any significant exposure to any individual customer or
counterparty or any major concentration of credit risk related to any financial assets.
The maximum exposure to credit risk is represented by the carrying amount of each financial asset in
the balance sheet.
(ii)
Fair values
The carrying amounts of the financial assets and liabilities of the Group and of the Company at
30 September 2007 approximated their fair values except as stated below:
Group
Other investments
Unquoted shares
Company
Carrying
amount
RM'000
Fair
Value
RM'000
Carrying
amount
RM'000
Fair
Value
RM'000
2,334
======
*
======
======
======
* It is not practicable to estimate the fair value of unquoted shares without incurring excessive costs. The
investment is carried at its original cost in the balance sheet and subject to review for diminution in
value. At the end of the financial year, the net tangible assets value of the investment based on the
audited financial statements of the investee company was RM2,851,325.
34. COMPARATIVE FIGURES
The following comparative figures of the Group and the Company have been restated arising from changes in
accounting policies upon adoption of the revised FRS 101 and FRS 117.
(a)
FRS 101 Presentation of Financial Statements
Group
As
restated
RM'000
As
reviously
reported
RM'000
575
======
1,003
(428)
======
Consolidated income statement for
the year ended 30 September 2006
Tax expense of associate
I N
M A L A Y S I A )
99
A N N U A L
R E P O R T
2 0 0 7
(b)
FRS 117 Leases
Group
Company
As
restated
RM'000
As
previously
reported
RM'000
As
restated
RM'000
As
previously
reported
RM'000
289,197
8,450
======
297,647
======
4,230
5,448
======
9,678
======
Balance sheets at
30 September 2006
Prepaid lease payments
35. SUBSEQUENT EVENT
Subsequent to the year end, the Company entered into a conditional Share Sale Agreement with Y.S Tang
Holdings Sdn Bhd for the proposed acquisition of the entire equity interest in Jurus Kota Sdn Bhd, representing
3,000,000 ordinary shares of RM1 each at a cash consideration of RM130 million. The cash consideration
will be funded through internally generated funds and/or bank borrowings of the Group. The proposed
acquisition is pending approval from the relevant authorities.
36. AUTHORISATION FOR ISSUE OF FINANCIAL STATEMENTS
The financial statements of the Company and of the Group were authorised for issue by the directors on 30
January 2008.
100 (THE
A N N U A L
R E P O R T
2 0 0 7
Statement By
Directors
In the opinion of the directors, the financial statements set out on pages 46 to 100 are drawn up:
(a)
so as to give a true and fair view of the state of affairs of the Company and of the Group at 30 September
2007 and of their results and cash flows for the year then ended; and
(b)
in accordance with the provisions of the Companies Act, 1965 and applicable MASB Approved Accounting
Standards for Entities Other Than Private Entities.
Signed on behalf of the directors in accordance
with a resolution of the directors
DATO' SRI TANG YEAM SOON
Director
CHANG YEN HUEI
Director
30 January 2008
I N
M A L A Y S I A )
101
A N N U A L
R E P O R T
2 0 0 7
Statutory
Declaration
I, Chang Yen Huei, being the director primarily responsible for the financial management of The Store Corporation
Berhad, do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set
out on pages 46 to 100 are 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 at
Kuala Lumpur in the Federal Territory
this 30 January 2008
Before me:
Robert Lim Hock Kee (W092)
Commissioner for Oaths
102 (THE
)
)
)
)
)
)
)
CHANG YEN HUEI
A N N U A L
R E P O R T
2 0 0 7
List Of
Properties
Registered Owner/Location
The Store Corporation Bhd.
Q.T.(R) 6366 L.O. Lot 9A,
Jalan 223 Petaling Jaya, Selangor
Description/
Existing use
Approx.
age of
buildings
(years)
Tenure
(years of
expiry)
Industrial Land with
a double storey office
-
1 unit apartment /
rented to third parties
12
Freehold
3 storey shophouse
/hostel
15
Vacant Land /
Car Park
Land Areas
(Built-up
area)
Leasehold
65,340 sq. ft.
99 years
(32,000 sq. ft.)
(28.4.2071)
Date of
NBV
Acquisition
as at
(A) /
30.9.07
Valuation(V) RM'000
2.11.2001 (A)
7,614
959 sq. ft.
4.4.1991 (A)
74
Freehold
3,738 sq. ft.
(9,240 sq. ft.)
2.2.1993 (A)
451
-
Leasehold
99 years
(13.1.2091)
95,104 sq. ft.
14.1.1992 (A)
7,788
4 units of apartment
/staff hostel
12
Freehold
3,400 sq. ft.
3.6.1993 (A)
194
Vacant Land
-
Freehold
234,945 sq. ft.
28.9.1987 (A)
206
4-storey shophouse
/staff hostel
21
Leasehold
99 years
(2.10.2080)
1,400 sq. ft.
(5,300 sq. ft.)
22.7.1992 (A)
266
2-storey pre-war
shophouse /rented
to third parties
74
Leasehold
999 years
(5.2.2930)
9,502 sq. ft.
(19,000 sq. ft.)
23.2.1976 (A)
235
Vacant Land /
Car Park
-
Freehold
49,080 sq. ft.
18.4.1992 (A)
1,757
Vacant Land /
Car Park
-
Freehold
915 sq. ft.
1.4.1993 (A)
94
4-storey shophouse
complex /vacant
29
Freehold
6,859 sq. ft.
(24,130 sq. ft.)
24.6.1982 (A)
2,554
HS(D) 55098 & 55099 NPT 4 & 5,
Sek 91A & 91B Town of Kuala Lumpur
HS(D) 12086 & 12087 PTD 2484 & 2485
Mukim Bandar Penggaram Batu Pahat, Johor.
46, 46A, 46B, 48, 48A & 48B
Jalan Megat, Batu Pahat
Lot No. 196, 197, 198, 199, 200, 201, 336
Bandar KB VIII, Melaka
The Store (Malacca) Sdn. Bhd.
Lots. Nos. A3/w-1, A3/w-2, A3/w-3 and
A3/w-4, Rumah Pangsa Seri Kubu, Melaka
Lot 117, 118, 139, 143, 144, 1331 and 1332
Central District of Province Wellesley, P. Pinang
Lot 0048, Section 46 Pajakan Negeri
393 Bandar Sungei Petani
Kuala Muda Mukim Sungai Petani, Kedah
The Store (Malaysia) Sdn. Bhd.
Lot 710 Section 4 Town of Bukit Mertajam
Province Wellesley Centre, P. Pinang
Grant 3719, Lot 976 & Grant 3720,
Lot 977 Bandar Kuala Terengganu
Grant 9989, Lot 3643 Kuala Terengganu
Taiping Supermarket Holdings
Sdn. Bhd.
Lot No. 1987-1990 Bandar Taiping,
Tempat Taiping, Daerah Larut & Matang, Perak
I N
M A L A Y S I A )
103
A N N U A L
R E P O R T
2 0 0 7
List Of
Properties
Description/
Existing use
Approx.
age of
buildings
(years)
Tenure
(years of
expiry)
Land Areas
(Built-up
area)
4-storey shophouse
complex /business
operation
26
Freehold
7,200 sq. ft.
(24,130 sq. ft.)
30.7.2007 (V)
4,540
Vacant Land
-
Leasehold
999 years
(19.11.2895)
6,767 sq. ft.
-1983- (A)
192
2-storey linkhouse
/hostel
22
Leasehold
99 years
(13.1.2080)
3,522 sq. ft.
(4,044 sq. ft.)
-1983- (A)
193
3 storey shophouse
/vacant
27
Freehold
2,800 sq. ft.
(8,400 sq. ft.)
17.8.1994 (A)
510
2 units of 3-storey
shophouse/
staff hostel
12
Freehold
3,200 sq. ft.
(9,400 sq. ft.)
13.3.1997 (A)
530
Double storey
shophouse /vacant
13
Freehold
3,417 sq. ft.
(9,240 sq. ft.)
25.2.1998 (A)
374
Commercial units
within a
5-commercial centre
/business operation
10
Freehold
198,706 sq. ft.
30.3.2007 (V)
88,295
Commercial units
Parcel G888 & 1888, Ground & First Floor
within a
Megamal, Jalan Baru Prai, Mukim 1,
5-commercial centre
Province Wellesley Central, Penang
/business operation
10
Freehold
111,640 sq. ft.
30.3.2007 (V)
50,061
7
Leasehold
99 years
(6.3.2101)
4,200 sq. ft.
29.2.2000 (A)
557
Lot 70, 71 & 72 in Mukim of Tampin,
Tampin, Negeri Sembilan
Lot 6619, Mukim Azam Kumbang,
Daerah Larut Matang, Taiping, Perak
Lot 2951 & 2952 Town of Taiping
31 & 32, Jalan Convent, Taiping, Perak
H.S. (D) 29489, Lot No. 1439
H.S. (D) 29491, Lot No. 1440
Bandar Bukit Mertajam, Sek 5,
Daerah Seberang Prai Tengah,
Negeri Pulau Pinang
HS(D) 9730 & 9731 PT No. 7227 & 7228
Bandar Mentakab, Temerloh, Pahang
Pacific Hypermarket Properties
Sdn. Bhd.
No. 1497, Jalan Wangka, Taman Semarak
14000 Bukit Mertajam, Penang
Pacific Hypermarket Properties
Sdn. Bhd.
Parcel B888, Basement Floor,
Megamal, Jalan Baru Prai, Mukim 1,
Province Wellesley Central, Penang
Bigever Properties Sdn. Bhd.
Lot No. 11 Block 2 Type B,
Kepong Light Industry Mukim Batu,
District & State of Wilayah, Kuala Lumpur
104 (THE
1 1/2 storey terrace
factory /warehouse
Date of
NBV
Acquisition
as at
(A) /
30.9.07
Valuation(V) RM'000
A N N U A L
R E P O R T
2 0 0 7
List Of
Properties
Formyarn Sdn. Bhd.
No. 150 & 152 Lot 25168 & 25169
Batu 7 3/4, Jalan Kepong, Kuala Lumpur
Lot D4-D8, Sedco Shophouse,
Kunak Town, Sabah
Lot 201-207 & Lot 226-238,
Level 2, Centre Point,
Lahad Datu, Sabah
Lot 20, Block C, Bandar Baru Semporna,
Sabah
Lot 1, Block C, 1st & 2nd Floor,
Kompleks Leila, Sandakan, Sabah
Lot D7, Arsad Shopping Complex,
Phase 2, Keningau, Sabah
Lot 56 & 57, Taman Golfview,
Keningau, Sabah
No.4, Lot 21, Luyang Phase 3,
Jalan Kijang, Sabah
Description/
Existing use
Approx.
age of
buildings
(years)
Tenure
(years of
expiry)
Land Areas
(Built-up
area)
Date of
NBV
Acquisition
as at
(A) /
30.9.07
Valuation(V) RM'000
2 storey shophouse
/warehouse
31
Leasehold
99 years
(9.8.2075)
1,195 sq. ft.
(2,400 sq. ft.)
23.12.1993 (A)
379
5 units of 2-storey
shophouse /business
operation
9
15,000 sq. ft.
Leasehold
99 years
(31.12.2097)
12.5.2005 (V)
1,415
Shoplots /business
operation
9
Leasehold
99 years
(31.12.2097)
6,958 sq. ft.
12.5.2005 (V)
1,985
1 unit of 2-storey
shophouse /
warehouse & hostel
8
Leasehold
99 years
(29.6.2035)
1,250 sq. ft.
12.5.2005 (V)
199
3-storey shophouse
/warehouse & hostel
8
Leasehold
99 years
(31.12.2069)
1,800 sq. ft.
12.5.2005 (V)
65
1 unit of 3 storey
shophouse /rented
to 3rd parties
11
Leasehold
99 years
(31.12.2093)
3,600 sq. ft.
12.5.2005 (V)
348
2 units detached
house /hostel
12
Leasehold
12,304 sq. ft.
99 years
(31.12.2060)
12.5.2005 (V)
186
1 unit semi detached
house /hostel
13
Leasehold
999 years
(26.1.2914)
3,694 sq. ft.
12.5.2005 (V)
166
4-storey of
4 storey shoplots
/business operation
11
Leasehold
999 years
(14.2.2926)
19,200 sq. ft.
12.5.2005 (V)
2,808
Vacant land
/car park
-
Freehold
1,609 sq ft
13.10.2006 (A)
220
Lot 33-36, Taman Beverly Hills,
Phase 2, Jalan Bundusan, Penampang,
Sabah
Lot No. 1637, Mukim of Tupai,
District of Larut & Matang State of Perak
I N
M A L A Y S I A )
105
A N N U A L
R E P O R T
2 0 0 7
List Of
Properties
Description/
Existing use
Approx.
age of
buildings
(years)
Tenure
(years of
expiry)
Land Areas
(Built-up
area)
4 1/2 storey terrace
shoplot /rented to
3rd party
34
Freehold
3,850 sq ft
13.10.2006 (A)
1,907
3 storey mid terrace
shophouse /
hostel & warehouse
13
Leasehold
46 years
(20.8.2032)
1,603 sq ft
13.10.2006 (A)
317
A double storey mid
terrace shophouse
/rented to 3rd party
6
Leasehold
99 years
(22.7.2091)
1,500 sq ft
13.10.2006 (A)
329
An extended double
storey mid terraced
house /vacant
34
Freehold
1,610 sq ft
13.10.2006 (A)
384
3 storey shopping
complex /
rented to 3rd party
15
Freehold
1,195 sq ft
13.10.2006(A)
384
shop office
/vacant
24
Freehold
2,391 sq ft
13.10.2006(A)
649
3 storey shopping
complex /
business operation
16
Freehold
25,827 sq ft
13.10.2006(A)
23,620
4 storey shopping
complex with
basement & roof floor
/ business operation
12
Freehold
44,433 sq ft
13.10.2006(A)
41,320
a double storey
semi - detached
house / hostel
28
Leasehold
99 years
(9.7.2079)
3,689 sq ft
13.10.2006(A)
240
P.T. No.PTBM/C.005 (Lot 723) Mukim 1,
District of Seberang Perai Tengah,
State of Pulau Pinang
Lot No. 314, Town of Sg. Siput,
District of Kuala Kangsar State of Perak
Lot No. 33606, Mukim of Sitiawan,
District of Manjung, State of Perak
P.T. No. 6572, Mukim of Sg. Buloh,
District of Kuala Lumpur,
State of Selangor
Lot. No. 4456, Town of Teluk Intan,
District of Hilir Perak.
State of Perak.
Lot.No.152, Town of Sitiawan
District of Manjung, State of Perak.
P.T. Nos.16743 to 16757, Town of Sitiawan,
District of Manjung, State of Perak.
P.T.No.479, Town of Teluk Intan
District of Hilir Perak, State of Perak.
Fajar Supermarket (Butterworth)
Sdn. Bhd.
P.T. No. PTBM/A/1165, Mukim 1
District of Seberang Perai Tengah,
State of Pulau Pinang
106 (THE
Date of
NBV
Acquisition
as at
(A) /
30.9.07
Valuation(V) RM'000
A N N U A L
R E P O R T
2 0 0 7
List Of
Properties
Fajar Supermarket (Upper Perak)
Sdn. Bhd.
Lot Nos.344 to 347, Town and District of
Kuala Kangsar, State of Perak
Fajar Supermarket (Upper Perak)
Sdn. Bhd.
Lot No.222, Town and District of
Kuala Kangsar, State of Perak
Lot No.1638, Mukim of Tupai
District of Larut & Matang State of Perak
P.T. Nos 1662 to 1671 and
P.T. Nos 2046 to 2051 Town of Sitiawan,
District of Manjung, State of Perak
PN, 4628 to 4632, Town of Sg. Siput
District of Kuala Kangsar
State of Perak
PT 13952, Mukim of Asam Kumbang
District of Larut & Matang, Perak
Fajar Retail Enterprise Sdn. Bhd
Lot PTB 4704 & Lot PTB 4619
Bandar Penggaram, Daerah Batu Pahat,
Johor
2 shoplots unit Nos. 01 & 02
Level 7 of Commercial Signature Office
at BU 8, PN 12392, Lot 49501 Seksyen 39
MK Bandar Petaling Jaya, Selangor
Description/
Existing use
Approx.
age of
buildings
(years)
Tenure
(years of
expiry)
Land Areas
Date of
NBV
(Built-up
Acquisition
as at
area)
(A) /
30.9.07
Valuation(V) RM'000
4 storey terrace shop
/business operation
12
Freehold
6,081 sq ft
13.10.2006(A)
2,377
a single storey
commercial complex
/business operation
12
Freehold
63,434 sq ft
13.10.2006(A)
4,529
shop office /
warehouse
13
Freehold
1,604 sq ft
13.10.2006(A)
530
Vacant land /
car park
-
Freehold
13,763 sq ft
13.10.2006(A)
1,320
5 units of 3 storey
terraced shops
/business operation
22
Leasehold
28years
(20.8.2032)
8,736 sq ft
13.10.2006(A)
2,088
1 1/2 storey
commercial complex
/business operation
7
Leasehold
15 years
(1.6.2018)
132,196 sq ft
13.10.2006(A)
3,508
Double storey
commercial building
/business operations
4
Leasehold
15 years
(3.2.2019)
88,000 sq ft
13.10.2006(A)
4,341
2 units 8-storey shop
office /vacant
1
Leasehold
99 years
(26.10.2102)
17,905 sq ft
13.10.2006(A)
4,562
I N
M A L A Y S I A )
107
A N N U A L
R E P O R T
2 0 0 7
Analysis Of
Shareholdings
As At 11 February 2008
SHARE CAPITAL
Authorised Capital
Issued & Paid-Up Capital
Class of Shares
Voting Rights
:
:
:
:
RM88,000,000
RM68,503,602
Ordinary Shares of RM1.00 each
One Vote per shareholder on a show of hand
One Vote per Ordinary Share on a poll
DISTRIBUTION OF SHAREHOLDING
Holdings
Less than 100 shares
100 to 1,000
1,001 to 10,000
10,001 to 100,000
100,001 to less than 5% of issued shares
5% and above of issued shares
TOTAL
No. of Holders
35
160
1,253
128
47
3
----------1,626
=====
%
2.15
9.84
77.06
7.87
2.89
0.19
----------100.00
=====
Total Holdings
1,761
78,277
2,838,484
3,538,232
49,157,848
12,889,000
---------------68,503,602
=======
%
0.00
0.11
4.14
5.17
71.76
18.82
----------100.00
=====
SUBSTANTIAL SHAREHOLDERS
Accordingly to the register required to be kept under Section 69L of the Companies Act, 1965, the substantial
shareholders of the Company are as follows :
Name of Substantial Shareholders
No. of Shares
%
1. Dato' Sri Tang Yeam Soon (direct and deemed)
19,297,330
28.17
2. Equatorial Century Sdn Bhd (direct)
14,902,830
21.75
3. Datin Sri Khor Guik Lee (direct and deemed)
19,297,330
28.17
7,601,400
11.10
4. Tan Sri Dato' Seri Tan Chee Yioun (direct and deemed)
DIRECTORS' SHAREHOLDINGS
Direct Interest
%
Deemed interest
%
3,028,300
4.42
16,269,030
23.75
Mr Kam Teh Chung
352,955
0.51
-
-
Mr Chang Yen Huei
1,100
0.00
2,640,000
3.85
1,366,200
1.99
17,931,130
26.17
11,000
0.02
-
-
Dato' Dr. Haji Kardin bin Haji Kardin
108 (THE
A N N U A L
R E P O R T
2 0 0 7
List Of Thirty
Largest Shareholders
Name of Shareholders
No. of Shares
%
1.
KAF NOMINEES (TEMPATAN) SDN. BHD. (4125D)
Pledged securities acc for Equatorial Century Sdn. Bhd.
4,389,000
6.41
2.
CIMB GROUP NOMINEES (TEMPATAN) SDN. BHD. (274740T)
4,300,000
6.28
3.
EB NOMINEES (TEMPATAN) SDN. BHD. (43785M)
4,200,000
6.13
4.
MIDF AMANAH INVESTMENT NOMINEES (TEMPATAN)
SDN. BHD. (441214W)
Pledged securities acc for Megastar Ventures Sdn. Bhd.
3,420,000
4.99
5.
SURPLUS-ED CAPITAL SDN. BHD. (568267X)
3,411,400
4.98
6.
HDM NOMINEES (TEMPATAN) SDN. BHD. (41117T)
Pledged securities acc for Amlied Holdings Sdn. Bhd.
3,190,000
4.66
7.
KAF NOMINEES (TEMPATAN) SDN. BHD. (4125D)
Pledged securities acc for Priority Prospect Sdn. Bhd.
3,072,300
4.48
8.
BERJAYA SOMPO INSURANCE BERHAD (62605U)
2,962,100
4.32
9.
MAYBAN NOMINEES (TEMPATAN) SDN. BHD. (258939H)
Pledged securities acc for BBC Capital Sdn. Bhd.
2,304,910
3.36
10. MAYBAN NOMINEES (TEMPATAN) SDN. BHD. (258939H)
Pledged securities acc for Tang Yeam Soon
2,024,000
2.95
11. EB NOMINEES (TEMPATAN) SDN. BHD. (43785M)
Pledged securities acc for Advance Ultimate Sdn. Bhd.
2,000,000
2.92
12. NICETRADE CAPITAL SDN. BHD. (796208U)
1,908,200
2.79
13. ABB NOMINEE (TEMPATAN) SDN. BHD. (37645P)
Pledged securities acc for Vincent Tan Chee Yioun (Berjaya VTCY)
1,898,600
2.77
14. HDM NOMINEES (TEMPATAN) SDN. BHD. (41117T)
Pledged securities acc for Perspektif Bakti Sdn. Bhd.
1,761,590
2.57
15. HDM NOMINEES (TEMPATAN) SDN. BHD. (41117T)
Pledged securities acc for Pan Prosperity Holdings Sdn. Bhd.
1,651,400
2.41
16. SCOTIA NOMINEES (TEMPATAN) SDN. BHD. (374836H)
Pledged securities acc for Berjaya VTCY Sdn. Bhd.
1,434,700
2.09
I N
M A L A Y S I A )
109
A N N U A L
R E P O R T
2 0 0 7
List Of Thirty
Largest Shareholders
No. of Shares
%
Pledged securities acc for Nusraya Holdings Sdn. Bhd.
1,372,800
2.00
18. MALAYSIA NOMINEES (TEMPATAN) SDN. BHD. (6193K)
Pledged securities acc for Great Eastern Life Assurance (Malaysia) Berhad
1,332,000
1.94
Pledged securities acc for Khor Guik Lee
1,329,900
1.94
Pledged securities acc for Azam Spektrum Sdn. Bhd.
1,280,100
1.87
Pledged securities acc for Pancaran Kurnia Sdn. Bhd.
1,233,000
1.80
22. EQUATORIAL CENTURY SDN. BHD. (486808P)
1,049,130
1.53
23. CIMB GROUP NOMINEES (TEMPATAN) SDN. BHD. (274740T)
Pledged securities acc for Tang Yeam Soon for Equatorial Century
Sdn. Bhd.
964,700
1.41
24. CIMB GROUP NOMINEES (TEMPATAN) SDN. BHD. (274740T)
Pledged securities acc for Tang Yeam Soon
795,300
1.16
Pledged securities acc for Great Eastern Life Assurance (Malaysia)
Berhad
677,700
0.99
26. ADVANCE ULTIMATE SDN. BHD. (553622H)
640,000
0.93
27. YAP YAN CHUAN (431009-07-5223)
585,930
0.86
28. PAN PROSPERITY HOLDINGS SDN. BHD. (488007A)
582,050
0.85
Pledged securities acc for Great Eastern Life Assurance (Malaysia)
Berhad
575,700
0.84
30. PUBLIC NOMINEES (TEMPATAN) SDN. BHD. (6464T)
Pledged securities acc for Surinder Singh a/l Wassan Singh
567,000
0.83
--------------56,913,510
=======
--------83.06
====
Name of Shareholders
TOTAL
110 (THE
PROXY FORM
THE STORE CORPORATION BERHAD
(Incorporated In Malaysia)
(252670-P)
I /We (full name) ___________________________________________________________________________________________
of (full address) _____________________________________________________________________________________________
being a member(s) of THE STORE CORPORATION BERHAD (252670-P), hereby appoint
(full name) _________________________________________________________________________________________________
and/or_____________________________________________________________________________________________________
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 fifteenth
(15th) Annual General Meeting of the Company to be held at Holiday Villa Subang, Classics 2, No. 9. Jalan SS12/1, Subang
Jaya, 47500 Petaling Jaya, Selangor on Thursday, 27 March 2008 at 10.00 a.m or at any adjournment thereof, and to vote
as indicated below :
Please indicate with an 'X' in the space below how you wish your votes to be cast.
(If you do not do so, your Proxy will vote or abstain from voting at his/her discretion).
RESOLUTION
FOR
1.
Adoption of Audited Financial Statements
2.
Payment of First and Final Dividend
3.
Directors' Fees
4.
Re-election of Director: Dato' Sri Tang Yeam Soon
5.
Re-election of Director: Kam Teh Chung
6.
Re-election of Director: Lim Gin Chuan
7.
Re-election of Dato' Haji Mohd Yusoff bin Haji Amin under
Section 129 (6) of the Companies Act, 1965
8.
Re-appointment of Moores Rowland as auditors
9.
Authority under Section 132D of the Companies Act, 1965
AGAINST
10. Proposed renewal of shareholders' authority for the Company to
purchase its own shares
11. Proposed shareholders' mandate for recurrent related party
transactions of revenue nature
As witness my/our hands this _________ day of ___________________ 2008
The proportion of my/our holding to be represented
by my/our proxy(ies) is/are as follows:
Number of Shares/%
First Proxy
Second Proxy
Total
________________________________
Signature/common seal of Shareholder(s)
Notes:
1)
2)
3)
4)
A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his stead. A
member may appoint more than one proxy to attend the same meeting. Where a member appoints two or more proxies, he shall specify
the proportion of his shareholdings to be represented by each proxy.
A proxy need not be a member of the Company.
If the appointer is a Corporation, the form must be under its Common Seal or under the hand of an officer or attorney duly authorized.
The instrument appointing a proxy must be deposited at the Company's Registered office, Wisma Selangor Dredging, 6th Floor, South
Block, 142-A Jalan Ampang, 50450 Kuala Lumpur not less than 48 hours before the times appointed for holding the meeting.
FIRST FOLD
Stamp
The Company Secretary
THE STORE CORPORATION BERHAD
Wisma Selangor Dredging,
6th Floor, South Block, 142-A, Jalan Ampang,
50450 Kuala Lumpur
SECOND FOLD

Annual Report 2007

Transcription

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