DFI AR2013.pdf

2013Annual

LAPORAN TAHUNANReport

TABLE OF CONTENTS

This document has been prepared by the Company and its contents have been reviewed by the Company’s sponsor (“Sponsor”), Canaccord Genuity Singapore Pte. Ltd. for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited (“SGX-ST”). Canaccord Genuity Singapore Pte. Ltd. has not independently verified the contents of this document.

This document has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this document, including the correctness of any of the statements or opinions made, or reports contained in this document. The contact person for the Sponsor is Ms. Karen Soh, Managing Director, Corporate Finance, Canaccord Genuity Singapore Pte. Ltd. at 77 Robinson Road #21-02 Singapore 068896, telephone (65) 6854 6160.

Corporate Profile & Our Core Business 1Our Presence 2Corporate Structure 3Financial Highlights 4Chairman’s Message 6Board of Directors 10Key Management Team 11Corporate Information 12Financial Statements Contents 13

Annual Report 2013 1

Corporate profile and oUr Core BUSineSS

Duty Free International Limited (“DFI”) emerges as a

duty free retail group following its successful completion of

the reverse takeover (“RTO”) exercise of DFZ Capital Berhad

(“DFZ”) and Darul Metro Sdn Bhd (“DMSB”) and the ensuing

mandatory general offer in the second quarter of 2011.

The core business of the DFI Group is reflected by the core

business of DFZ, which is significantly in the trading of duty

free merchandise, marketed under the brand name ‘Zon’, in

Peninsular Malaysia. Upon completion of DFI’s disposal of

the Group’s business interests in connection with The Zon

Johor Bahru on 15 March 2013, the Group’s other business

segment, will remain on a much smaller scale, which derives

contributions mainly from its golf course and oil palm plantation

assets, all of which are located near the Malaysia-Thailand

border at Bukit Kayu Hitam.

Backed by business operations of more than 30 years with

an extensive network of outlets throughout the country, DFZ

boasts an established track record in the duty-free retail

business, making DFI Group the largest duty free trading group

in Malaysia. The Group’s retail outlets have strategic presence

at all leading entry and exit points in Peninsular Malaysia

including airports, seaports, international ferry terminal, border

towns and popular tourist destinations. The Group offers the

widest premium selection of imported duty free beverages,

tobacco products, chocolates and confectionery products,

perfumeries and cosmetics.

Being present at the important entry and exit points in

Peninsular Malaysia, the Group is able to manage its product

portfolio to meet the profiles of its customers. The Group’s

duty free outlets are located throughout Peninsular Malaysia,

including Padang Besar, Bukit Kayu Hitam, Langkawi,

Pengkalan Hulu, Rantau Panjang, Kuala Lumpur International

Airport, Johor Bahru and others.

Annual Report 20132

oUr preSenCe

PaDang BeSaRDuty Free Shopping

RanTau PanjangDuty Free Shopping

LangKaWIDuty Free Shopping

PengKaLan HuLuDuty Free Shopping

BuKIT Kayu HITaMDuty Free ShoppingRecreational Facilities

PenangDuty Free Shopping

TIOManDuty Free Shopping

KuaLa LuMPuRDuty Free Shopping

MeLaKaDuty Free Shopping

jOHOR BaHRuDuty Free Shopping

D u t y F r e e


Corporate StrUCtUre

51% Melaka Duty Free Sdn Bhd

100% DFZ Duty Free Supplies Sdn Bhd

100% jasa Duty Free Sdn Bhd

100% DFZ (M) Sdn Bhd

100% Wealthouse Sdn Bhd

100% jelita Duty Free Supplies Sdn Bhd

100% First Influx Sdn Bhd

100% DFZ Duty Free (Langkawi) Sdn Bhd

100% Media Zone Sdn Bhd

100% Zon emporium Sdn Bhd

100% DFZ Tours & Travel Sdn Bhd

100% PT DFZ Indon

100% Orchard Boulevard Sdn Bhd

100% DFZ asia Sdn Bhd

100% DFZ Trading Sdn Bhd

100% Darul Metro Sdn Bhd (DMSB)

100% DFZ Capital Berhad (DFZ)

100% Kelana Megah Sdn Bhd

100% Cergasjaya Properties Sdn Bhd

100% Black Forest golf and Country Club

Sdn Bhd

100% gold Vale Development Sdn Bhd

100% Cergasjaya Sdn Bhd

100% Fleet Car Hire & Tours Sdn Bhd

100% DFZ emporium Sdn Bhd

100% Winner Prompt Sdn Bhd

100% emas Kerajang Sdn Bhd

100% Front Top (M) Sdn Bhd

100% Tenggara Senandung Sdn Bhd

100% Seruntun Maju Sdn Bhd

100% Binamold Sdn Bhd

100% Selasih ekslusif Sdn Bhd

99%

1%

Annual Report 20134

finanCial HigHligHtSyear ended 28 February

PROFIT aFTeR TaX (RM’MILLIOn)

20

30

40

50

60

70CagR: 20.69%

ReVenue (RM’MILLIOn)

100

200

300

400

500

600

eaRnIngS BeFORe InTeReST, DePReCIaTIOn anD TaX (BeFORe eXCePTIOnaL ITeMS) (RM’MILLIOn)

20

40

60

80

100

120

CagR: 1.98% CagR: 11.87%

ReVenue BReaKDOWn By BuSIneSS SegMenTS (RM’MILLIOn)

100

0

200

300

400

500

600

Duty Free Hospitality Services Others

55.50.8

59.0*2.0

506.7

537.2

20132012

598.1*

FY2013

FY2013

73.2*

FY2012

66.8

FY20114

38.1

FY20101

48.7

FP20091,2

34.5

FY2012

563.1

FY2011

573.3

FY20101

526.9

FY2012

101.2

FY20113

99.4

FY20101

78.1

FP20091,2

69.1

FP20091,2

552.9

108.2*

FY20135

* Includes financial results of Discontinued Operations.


Notes:1 Basis of preparation of the financial statements: The financial results of Duty Free International Limited for the 12 months ended 28 February 2011 have been

presented as a continuation of the DFZ Group’s and DMSB’s financial position, results and operations and as such, the historical financial information has also been presented as a continuation of the financial performance and position of DFZ Group and DMSB.

2 FP2009: 14-months from 1 January 2008 to 28 February 2009.

3 Excludes one time costs for the reverse acquisition amounting to RM40.8 million and gains from disposal of assets of RM20.6 million.

4 Includes one time costs for the reverse acquisition amounting to RM40.8 million and gains from disposal of assets of RM20.6 million.

5 Excludes one time costs for the commission paid in relation to the proposed disposal of the Zon Johor Bahru properties amounting to RM6.4 million and gain from disposal of assets of RM7.9 million.

CaSH anD CaSH eQuIVaLenTS (RM’MILLIOn) DIVIDenD PayOuT FOR DFZ & DFI (RM’MILLIOn)

15

30

45

60

75

90

FY2013FP20091,2

46.5

FY20101

55.6

FY2012

44.2

20.2

FY2011

80.3

10

20

30

50

60

40

FY2011

31

FY20101

23

FP20091,2

14

FY2012

41

FY2013

56

DFz DFi

Annual Report 20136

CHairman’S meSSage

Dear Shareholders,

On behalf of the Board of Directors, it gives me great pleasure to once again present to you our annual report for the financial year ended 28 February 2013 (“Fy2013”).

DFI Group achieved another commendable year in its financial results for FY2013 despite the challenging operating environment resulting from the slow recovery of Thailand from the after effects of the 2011 flood crisis, with revenue and pre-tax profit of RM598.14 million and RM96.72 million respectively vis-à-vis preceding financial year’s revenue of RM563.05 million and pre-tax profit of RM86.60 million. The Group has recorded an increase in revenue of RM35.09 million or 6.2% and pre-tax profit of RM10.12 million or 11.7%.

On 10 April 2012, Darul Metro Sdn Bhd (“DMSB”) and Kelana Megah Sdn Bhd (“KMSB”), both wholly-owned subsidiaries of DFI Group, entered into conditional sale and purchase agreements with Pesaka Ikhlas (M) Sdn Bhd, for the disposal of DFI Group’s legal and beneficial interests over the remaining lease period in six land parcels located in The Zon Johor Bahru at Stulang Laut, Johor Bahru (“DMSB agreement”) for RM325 million and for the disposal of an intended lease interest in the land parcel bearing lot number PTB 20379, Stulang Laut, Johor Bahru (“KMSB agreement”) for RM27.99 million (collectively, the “Disposals”).

The conditions precedent as stipulated in DMSB Agreement were fulfilled on 18 December 2012. Accordingly, following the guidelines of FRS 105, Non-current Assets Held for Sale and Discontinued Operations, the assets and goodwill

related to the disposal group under the DMSB Agreement have been presented in the statement of financial position as “Assets of disposal group classified as held for sale” as at 28 February 2013 and its related results are presented separately in profit or loss as “Profit from discontinued operations, net of tax” for the financial year then ended. The DMSB Agreement was successfully completed on 15 March 2013 and going forward, duty free retail business will be our Group’s main driver of revenue and profit, while the other business segment is envisaged to stay minimal with revenue contributions primarily from golf course and oil palm plantation assets. Following the completion of the DMSB Agreement, Selasih Ekslusif Sdn Bhd, a subsidiary of DFI Group, commenced a 25-year tenancy over certain premises within the Johor Bahru duty free zone, with complete and exclusive right over the entire supply chain associated to the import, supply and sale of liquor, spirits, beer, chocolate, tobacco products, perfumery and cosmetics within the duty free zone. As at 28 February 2013, the conditions precedent as stipulated in KMSB Agreement have not been fulfilled and as such, the relevant assets continue to be presented as property, plant and equipment in the statement of financial position as at 28 February 2013.

a review of Fy2013 financial performance

Continuing Operations

For FY2013, DFI Group reported a revenue of RM539.19 million and a pre-tax profit of RM85.19 million, as compared to a revenue of RM507.52 million and a pre-tax profit of RM80.16 million for the previous corresponding period (“Fy2012”), i.e., an increase in revenue of RM31.67 million or 6.2% and pre-tax profit of RM5.03 million or 6.3%.


The single digit revenue growth rate for FY2013 was mainly due to lower revenue registered by our outlets located at the Malaysia-Thailand border during the first quarter of FY2013, as a result of the after-effects of the severe flooding in Thailand, which happened in the last quarter of FY2012. The subsequent quarters of FY2013 recorded improvement in revenue performance following Thailand’s recovery from the prolonged flooding situation and higher retailing prices of certain products.

Earnings before interest, depreciation and tax allowance (“eBITDa”) for FY2013 of RM93.56 million is higher than FY2012’s RM88.22 million by RM5.34 million or 6.0%. The increase was mainly driven by revenue growth and an increase in other operating income of RM5.72 million, which included a one-time gain on disposal of property located in Seberang Perai Tengah, Pulau Pinang, of RM7.92 million. The aforementioned increases were, however, partially offset by a one-off commission paid in relation to the disposals of interests in the Zon Johor Bahru of RM6.4 million and increases in expenses such as rental, employee benefits expenses and donations, amounting to RM5.79 million.

Discontinued Operations

The results relating to the disposal group to be sold under the DMSB Agreement has been separately disclosed in accordance to FRS 105. For FY2013, the disposal group reported a revenue of RM58.95 million and a pre-tax profit of RM11.53 million, as compared to a revenue of RM55.53 million and a pre-tax profit of RM6.44 million for FY2012, i.e., an increase in revenue of RM3.42 million or 6.2% and pre-tax profit of RM5.09 million or 79.0%. The significant increase in pre-tax profit in FY2013 as compared to FY2012 was a result of improvement in revenue performance coupled with the cessation of depreciation charges on Duty Free Zone properties following the classification of the assets held for sale upon fulfillment of the conditions precedent, as well as lower operating expenses.

To reward our Shareholders for their continuous support, DFI has paid a total dividend of RM55.9 million for FY2013 representing SGD$0.02 per ordinary share.

Pursuant to the Shareholders’ share buyback mandate dated 27 June 2012, in the financial year under review, DFI purchased a total of 11,591,000 ordinary shares from the open market, which were subsequently cancelled, thus reducing DFI’s total ordinary shares from 1,115,231,656 to 1,103,640,656.

Outlook and strategy

DFI via its subsidiaries, has 30 years of operating track records in the duty free business and is present at key international gateways in Peninsular Malaysia. Over the years, the Group has established dominant market position at key locations of the Malaysia-Thailand border crossings and at the duty free zone in Johor Bahru. Together with

our airport outlets and the other smaller outlets throughout Peninsular Malaysia, DFI Group remained as a market leader in the duty free sector and seized business growth from growth of international tourism of Malaysia. We will continue to intensify our marketing efforts, enhance our service quality, extend our product offerings and explore new opportunities in duty-free retailing which includes looking beyond Malaysia and exploring strategic alliances with industry players in the duty free space in the Asia Pacific region.

DFI has a stable and resilient business model that consistently generates good revenue. I am confident that this is our platform for future growth. Our strong and long-standing relationships with our suppliers, together with our capable management team will ensure that DFI Group maintains its dominant market position in the duty free sector in Malaysia.

Upon completion of the DMSB Agreement and KMSB Agreement, we will move forward with our existing duty free business. Our lightened and low gearing balance sheet will allow us to be in a position to explore and seek opportunities and businesses that may yield better returns to our shareholders. We will continue to increase our range of products and seek opportunities to expand our distribution channels in Malaysia and the region. At the same time, we will continue to intensify our marketing efforts and enhance our service quality to customers.

Barring unforeseen circumstances, we expect a cautious outlook on the operating performance of the Group for the next 12 months.

appreciation

On behalf of DFI Group, I would like to take this opportunity to convey my sincere appreciation to all our bankers, suppliers, business partners, customers and the various government agencies that have provided valuable support, advice and guidance to us all these years. I wish to express my gratitude to the Board for their advice and guidance, the contribution and commitment of our employees for their hard work and dedication, and to all our shareholders for their continuous support and trust in our Group.

I wish to express my appreciation to Mr. Saw Lip Piau for his valuable contribution to DFI Group. Mr. Saw has resigned as Executive Director on 25 April 2013 due to his retirement plan.

I remain your humble and obedient servant, and pledge to continue my commitment and diligence to the Group.

Thank you.

adam Sani abdullahChairman

Annual Report 20138

penYata pengerUSi

Pemegang-pemegang saham yang dihormati,

Bagi Pihak Lembaga Pengarah, saya amat berbesar hati untuk sekali lagi membentangkan Laporan Tahunan dan Penyata Kewangan untuk tahun berakhir 28 Februari 2013.

Kumpulan DFI mencapai satu lagi tahun yang memberangsangkan di dalam keputusan kewangan bagi tahun kewangan 2013 walaupun persekitaran operasi yang mencabar akibat pemulihan perlahan Thailand daripada kesan selepas krisis banjir 2011, dengan pendapatan dan keuntungan sebelum cukai sebanyak RM598.14 juta dan RM96.72 juta masing-masing berbanding dengan pendapatan tahun kewangan sebelumnya iaitu RM563.05 juta dan keuntungan sebelum cukai sebanyak RM86.60 juta. Kumpulan DFI telah mencatatkan pertambahan pendapatan sebanyak RM35.09 juta atau 6.2% dan keuntungan sebelum cukai sebanyak RM10.12 juta atau 11.7%.

Pada 10 April 2012, Darul Metro Sdn Bhd (“DMSB”) dan Kelana Megah Sdn Bhd (“KMSB”), yang mana kedua-duanya adalah anak syarikat milik penuh Kumpulan DFI, telah memeterai satu perjanjian jual beli bersyarat dengan Pesaka Ikhlas (M) Sdn Bhd, untuk perlupusan hak dan kepentingan Kumpulan DFI terhadap 6 bidang tanah pajakan yang terletak di The Zon Johor Bahru di Stulang Laut, Johor Bahru (“Perjanjian DMSB”) untuk imbalan tunai berjumlah RM325 juta dan untuk perlupusan kepentingan di atas sebidang tanah pajakan bernombor PTB 20379, Stulang Laut, Johor Bahru (“Perjanjian KMSB”) dengan imbalan tunai sebanyak RM27.99 juta (semuanya ini dipanggil “Perlupusan”).

Prasyarat seperti yang ditetapkan di dalam Perjanjian DMSB telah dipenuhi pada 18 Disember 2012. Mengikut garis panduan FRS 105, Aset Bukan Semasa Dipegang untuk Jualan dan Operasi Dihentikan, aset dan muhibah yang berkaitan dengan penjualan kumpulan pelupusan di bawah Perjanjian DMSB telah ditunjukkan di dalam penyata kedudukan kewangan sebagai “Kumpulan aset yang diklasifikasikan sebagai dipegang untuk dijual” pada 28 Februari 2013 dan keputusan yang berkaitan ditunjukkan secara berasingan di dalam Penyata Untung Rugi sebagai “Keuntungan daripada operasi dihentikan, selepas ditolak cukai” bagi tahun kewangan tersebut. Perjanjian DMSB telah berjaya disempurnakan pada 15 Mac 2013, dan sehubungan dengan itu perniagaan runcit bebas cukai akan menjadi pemacu utama pendapatan dan keuntungan Kumpulan kami, manakala perniagaan dari segment lain dijangka kekal memberi sumbangan minima melalui pendapatan yang terdiri daripada padang golf dan aset ladang kelapa sawit. Selepas sempurnanya Perjanjian DMSB itu, Selasih Ekslusif Sdn Bhd, anak syarikat Kumpulan DFI, akan memulakan sewaan 25 tahun ke atas beberapa premis di kawasan bebas cukai, dengan hak eksklusif ke atas keseluruhan rangkaian bekalan yang bersangkutan dengan import, membekal dan menjual minuman beralkohol, coklat, keluaran tembakau, minyak wangi dan kosmetik di dalam zon bebas cukai. Setakat 28 Februari 2013, prasyarat seperti ditetapkan di dalam Perjanjian KMSB masih belum dipenuhi, maka aset tersebut

akan ditunjukkan sebagai hartanah, loji dan peralatan dalam penyata kedudukan kewangan pada 28 Februari 2013.

Kajian semula prestasi bagi tahun kewangan 2013

Operasi berterusan Pada tahun kewangan 2013, Kumpulan DFI mencatatkan pendapatan sebanyak RM539.19 juta dan keuntungan sebelum cukai sebanyak RM85.19 juta, berbanding dengan tempoh tahun kewangan sebelumnya mencatatkan pendapatan sebanyak RM507.52 juta dan keuntungan sebelum cukai sebanyak RM80.16 juta, iaitu pertambahan pendapatan sebanyak RM31.67 juta atau 6.2% dan keuntungan sebelum cukai sebanyak RM5.03 juta atau 6.3%. Kadar pertumbuhan pendapatan yang kecil bagi tahun kewangan 2013 ini adalah disebabkan oleh pendapatan yang lebih rendah dicatatkan oleh kedai-kedai yang terletak di sempadan Malaysia-Thailand pada suku pertama tahun kewangan 2013, akibat daripada kesan selepas banjir yang teruk di Thailand, yang berlaku pada suku terakhir tahun kewangan 2012. Untuk suku berikutnya pada tahun kewangan 2013, telah mencatatkan peningkatan prestasi hasil daripada pemulihan Thailand dari keadaan banjir yang berpanjangan dan harga runcit yang lebih tinggi untuk produk-produk tertentu. Pendapatan sebelum faedah, cukai dan susut nilai (“EBITDA”) bagi tahun kewangan 2013 adalah sebanyak RM93.56 juta, berbanding dengan tahun kewangan 2012 sebanyak RM88.22 juta, iaitu telah melebihi RM5.34 juta atau 6.0%. Pertambahan pendapatan ini adalah disebabkan oleh pertumbuhan hasil dan peningkatan dalam pendapatan operasi lain sebanyak RM5.72 juta, yang termasuk keuntungan sekali daripada penjualan harta yang terletak di Seberang Perai Tengah, Pulau Pinang, sebanyak RM7.92 juta. Bagaimanapun, sebahagian peningkatan pendapatan yang disebutkan di atas telah digunakan untuk membayar komisen yang berkaitan dengan pelupusan kepentingan di atas sebidang tanah di Zon Johor Bahru sebanyak RM6.4 juta dan peningkatan dalam perbelanjaan seperti sewa, perbelanjaan faedah pekerja dan sumbangan berjumlah RM5.79 juta.

Operasi dihentikan

Keputusan kumpulan pelupusan yang berkaitan dengan Perjanjian DMSB telah dilaporkan secara berasingan mengikut FRS 105. Bagi tahun kewangan 2013, Kumpulan pelupusan yang berkaitan dengan Perjanjian DMSB mencatatkan pendapatan sebanyak RM58.95 juta dan keuntungan sebelum cukai sebanyak RM11.53 juta, berbanding dengan pendapatan sebanyak RM55.53 juta dan keuntungan sebelum cukai sebanyak RM6.44 juta bagi tahun kewangan 2012, iaitu pertambahan pendapatan sebanyak RM3.42 juta atau 6.2% dan keuntungan sebelum cukai sebanyak RM5.09 juta atau 79.0%. Peningkatan ketara dalam keuntungan sebelum cukai pada tahun kewangan 2013 berbanding dengan tahun kewangan 2012 adalah hasil daripada pertambahan prestasi


pendapatan dan pemberhentian caj susut nilai hartanah Zon Bebas Cukai yang diklasifikasi sebagai aset yang dipegang untuk jualan setelah memenuhi prasyarat, serta perbelanjaan operasi yang lebih rendah. Untuk memberi ganjaran kepada pemegang saham kami atas sokongan berterusan mereka, DFI telah membayar dividen sebanyak RM55.9 juta bagi tahun kewangan 2013 iaitu Singapura Dolar $0.02 untuk setiap saham biasa. Berdasarkan mandat pembelian balik saham bertarikh 27 Jun 2012, pada tahun kewangan yang dikaji, DFI membeli sejumlah 11,591,000 saham biasa dari pasaran terbuka, yang kemudiannya dibatalkan, dan seterusnya telah mengurangkan jumlah saham biasa DFI dari 1,115,231,656 ke 1,103,640,656.

Tinjauan dan strategi

DFI melalui anak-anak syarikatnya, mempunyai 30 tahun rekod operasi dalam perniagaan bebas cukai dan bertapak di pintu masuk antarabangsa utama di Semenanjung Malaysia. Sejak beberapa tahun lalu, Kumpulan telah menetapkan kedudukan pasaran dominan di lokasi-lokasi utama lintasan sempadan Malaysia-Thailand dan di Zon Bebas Cukai di Johor Bahru. Bersama dengan kedai-kedai di lapangan terbang dan kedai-kedai kecil yang lain di seluruh Semenanjung Malaysia, Kumpulan DFI kekal sebagai peneraju pasaran dalam sektor bebas cukai dan menggalakkan pertumbuhan perniagaan daripada pertumbuhan pelancongan antarabangsa Malaysia. Kami akan terus meningkatkan usaha pemasaran kami, meningkatkan kualiti perkhidmatan kami, meluaskan penawaran produk kami dan meneroka peluang baru dalam peruncitan bebas cukai, termasuk di luar Malaysia dan meneroka kerjasama strategik dengan peserta industri dalam ruang bebas cukai di rantau Asia Pasifik. DFI mempunyai bentuk perniagaan yang stabil dan konsisten untuk menjana pendapatan yang baik. Saya yakin bahawa ini merupakan platform kami untuk pertumbuhan pada masa depan. Hubungan yang teguh dan kukuh dengan pembekal kami, bersama dengan pasukan pengurusan yang berkemampuan, akan memastikan Kumpulan DFI terus mengekalkan kedudukan pasaran yang dominan dalam sektor bebas cukai di Malaysia.

Setelah sempurnanya Perjanjian DMSB dan Perjanjian KMSB, kami akan melangkah ke hadapan dengan perniagaan bebas cukai yang sedia ada. Dengan lembaran imbangan duga yang ringan dan penggearan yang rendah membolehkan kami berada dalam kedudukan terbaik untuk meneroka dan mencari peluang dan perniagaan yang boleh menghasilkan pulangan yang lebih baik kepada pemegang saham. Kami akan terus meningkatkan pelbagai produk kami dan mencari peluang untuk memperluaskan saluran pengedaran kami di Malaysia dan serantau. Pada masa yang sama, kami akan terus meningkatkan usaha pemasaran dan kualiti perkhidmatan kepada pelanggan. Kami menjangkakan prospek yang lebih berhemat ke atas prestasi operasi Kumpulan untuk tempoh 12 bulan akan datang. Penghargaan

Bagi pihak Kumpulan DFI, saya ingin mengambil kesempatan ini untuk menyampaikan penghargaan ikhlas kepada pihak bank, para pembekal, rakan kongsi perniagaan, para pelanggan dan para agensi kerajaan yang telah memberikan sokongan yang tak terhingga, nasihat dan bimbingan kepada kami semua tahun ini. Saya ingin mengucapkan terima kasih kepada Lembaga Pengarah atas nasihat dan bimbingan, sumbangan dan komitmen pekerja di atas kerja keras dan dedikasi, dan kepada para pemegang saham di atas sokongan dan kepercayaan mereka yang berterusan kepada Kumpulan kami. Saya ingin mengucapkan penghargaan kepada Encik Saw Lip Piau atas sumbangan beliau untuk Kumpulan DFI. Encik Saw telah meletak jawatan sebagai Pengarah Eksekutif pada 25 April 2013 kerana bersara. Saya dengan rendah diri berjanji untuk sedia berkhidmat meneruskan komitmen saya kepada Kumpulan.

Terima kasih.

adam Sani abdullah Pengerusi

Annual Report 201310

Board of direCtorS

Dato’ Sri Adam Sani bin Abdullah, a Malaysian citizen, is the Non-Executive Chairman of DFI. He is a self-made entrepreneur for more than 30 years. In 2000, he acquired the controlling stake in Atlan Holdings Bhd (“Atlan”), and was subsequently appointed as chairman and non-executive director of Atlan in June 2000. Atlan is listed on Bursa Malaysia and its subsidiaries are involved in a wide array of businesses in duty-free trading and retailing, property development, investment and hospitality as well as manufacturing of automotive component parts.

Mr. Lee Sze Siang, a Malaysian citizen, is responsible for the financial management and corporate services function. He is presently the finance director and an executive director of Atlan. He was appointed as the executive director of Atlan on 16 June 2000, re-designated as a non-executive director on 27 December 2004 and subsequently re-designated as an executive director of Atlan on 8 October 2008. During this period, he was appointed to Naluri Corporation Berhad as an executive director. He holds a professional qualification from the Australian Society of Certified Practising Accountants. He is also a member of the Malaysian Institute of Accountants. Previously, he was with KPMG, a firm of public accountants, where he last held the position of manager. He obtained a Bachelor of economics degree from Monash University in 1994.

General Tan Sri Dato’ Seri Mohd Azumi bin Mohamed (Retired), a Malaysian citizen, was appointed to the Board on 7 January 2011. He has wide experience in international peacekeeping, having served with the United Nations (“UN”) Mission in Iraq / Kuwait following the First Gulf War and was responsible for the development of Malaysian Peacekeepers to Somalia, Kuwait, Iraq, Bosnia Herzegovina and Cambodia. He is a recipient of the UN medal for Peacekeeping and was bestowed the French Award Officer Ordre National du Merite by the previous French President Jacques René Chirac. He is also a Trustee of the Perdana Global Peace Foundation and sits on the board of several private limited companies. He holds a Master of Science in Natural Resources and Strategy from the Dwight D Eishenhower School for National Security and Resource Strategy National Defense University Washington DC and a Graduate Diploma in Strategic Studies from the Australian Capital Territory National Accreditation Agency. He is also a member of The Alliance Leadership Team of the Petronas owned Sabah Urea and Ammonia Project. General Tan Sri Dato’ Seri Mohd Azumi bin Mohamed (Retired) is also a Member of The Perak State Dewan Negara. He is also the Chairman of Cyber Security Malaysia an agency under the Ministry of Science, Technology and Innovation Malaysia and also the Chairman of the Organization of Islamic Conference Computer Emergency Response Team.

Mr. Chew Soo Lin, a Singapore citizen, joined the Board as an Independent Director on 26 August 2011. He qualified as a Chartered Accountant in 1971 and worked for international audit firms till 1978 when he joined the Khong Guan group of companies. Mr. Chew is currently the executive chairman of Khong Guan Flour Milling Limited and is also an independent director and audit committee member of Asia-Pacific Strategic Investments Limited and MTQ Corporation Limited.

Dato’ Sri adam Sani bin abdullahnon-executive Chairman

Mr. Lee Sze Siangexecutive Director(Finance and Corporate Services)

general Tan Sri Dato’ Seri Mohd azumi bin Mohamed (Retired)Independent Director

Mr. Chew Soo LinIndependent Director


KeY management team

Saw Lip PiauChief executive Officer

Mr. Saw Lip Piau, a Malaysian citizen, is the Chief Executive Officer of the Group. He joined the Group in year 2008 and was tasked with executing and strategic business directions set by the Board, and overseeing the operations and business development of the duty-free division of the Group. Currently, Mr. Saw is servicing his notice period as Chief Executive Officer and his last date of service in this capacity will be 25 October 2013, or such earlier date as may be mutually agreed between him and the Company.

Cheah Im BeeFinancial Controller

Ms. Cheah Im Bee, a Malaysian Citizen, is the Financial Controller of the Group. She joined the Group as Financial Controller in year 2006 where she is responsible for overseeing the functions of the finance department.

Chiam Tow Cheanggeneral Manager – Marketing, Sales and Merchandising

Mr. Chiam Tow Cheang, a Malaysian citizen, is the General Manager – Marketing, Sales and Merchandising. He joined the Group on 2 May 2013 where he is responsible for formulating, implementing and reviewing sales, marketing and merchandising strategies for the Group’s retail business.

Stuart Saw Teik Siewassistant general Manager – group Merchandising

Mr. Stuart Saw Teik Siew, a Malaysian citizen, is the Assistant General Manager – Group Merchandising. He joined the Group in year 2004 where he is responsible for the Group’s procurement of duty free merchandise.


Corporate information

Board of Directors

Dato’ Sri Adam Sani bin Abdullah(Non-Executive Chairman)

Mr. Lee Sze Siang(Executive Director)

General Tan Sri Dato’ Seri Mohd Azumi bin Mohamed (Retired)(Independent Director)

Mr. Chew Soo Lin(Independent Director)

audit Committee

General Tan Sri Dato’ Seri Mohd Azumi bin Mohamed (Retired)Mr. Chew Soo Lin

Nominating Committee

General Tan Sri Dato’ Seri Mohd Azumi bin Mohamed (Retired) (Chairman)Mr. Chew Soo Lin

Remuneration Committee

General Tan Sri Dato’ Seri Mohd Azumi bin Mohamed (Retired) (Chairman)Dato’ Sri Adam Sani bin Abdullah

Company Secretaries

Mr. Wong Chee Meng Lawrence (LL.B (Hons))Ms. Shirley Tan Sey Liy (ACiS)

Registered Office

6 Battery Road #10-01 Singapore 049909Tel No : (65) 6381 6966Fax No : (65) 6381 6967

Share Registrar

Boardroom Corporate & Advisory Services Pte. Ltd.50 Raffles Place#32-01 Singapore Land TowerSingapore 048623

auditors

ernst & young LLPOne Raffles QuayNorth Tower, Level 18048583 Singapore

Partner-in-charge

Ms. Lee Lai Hiang(Date of appointment: since financial year ended 29 February 2012)


Financial StatementS

Corporate Governance Report 14

Directors’ Report 29

Statement by Directors 33

Independent Auditor’s Report 34

Consolidated Income Statement 36

Consolidated Statement of Comprehensive Income 37

Consolidated Statements of Financial Position 38

Statements of Changes in Equity 40

Consolidated Cash Flow Statement 44

Notes to the Financial Statements 46

Statistics of Shareholdings 123

Statistics of Warrant Holdings 125

Notice of Annual General Meeting 126

Proxy Form


corporate GoVernance report

Duty Free International Limited (the “Company”) and its subsidiaries (collectively the “Group”) is committed and dedicated to maintaining a high standard of corporate governance within the Company and the Group in order to protect and enhance the interests of its shareholders. The corporate governance practices in place are in line with the recommendations of the Code of Corporate Governance 2005 (the “Code”). The Board of Directors (the “Board”) has also considered certain corporate practices with reference to the revised Code of Corporate Governance 2012 issued on 2 May 2012 which takes effect in respect of financial years commencing on or after 1 November 2012.

This report sets out the Group’s main corporate governance practices that were in place throughout the financial year or which will be implemented and where appropriate, we have provided explanations for deviation from the Code.

(A) BOARD MATTERS

Board’s Conduct of Affairs

Principle 1: Every company should be headed by an effective Board to lead and control the company. The Board is collectively responsible for the success of the company. The Board works with Management to achieve this and the Management remains accountable to the Board.

The Board’s primary role is to protect and enhance long-term shareholder value. It sets the overall strategy for the Group and supervises executive Management. To fulfill this role, the Board sets the Group’s strategic direction, establishes goals for Management and monitors the achievement of these goals, thereby taking responsibility for the overall corporate governance of the Group.

The Board currently holds at least 4 scheduled meetings each year. In addition, it holds additional meetings at such other times as may be necessary to address specific significant matters that may arise. Important matters concerning the Group are also put to the Board for its decision by way of written resolutions. The Company’s Articles of Association (the “Articles”) has provision for Board meetings to be held via telephone or videoconference.

To assist in the execution of its responsibilities, the Board had established a number of Board Committees, namely the Audit Committee (“AC”), the Nominating Committee (“NC”) and the Remuneration Committee (“RC”). These Committees function within clearly defined terms of reference and operating procedures, which are reviewed on a regular basis to ensure their continued relevance. The effectiveness of each Committee is also constantly monitored.

In addition to its statutory duties, the Board’s principal functions are:-

1. approving the Group’s strategic plans, key operational initiatives, major investments and divestments and funding requirements;

2. approving the annual budget, reviewing the performance of the business and approving the release of the financial results of the Group to shareholders;

3. providing guidance in the overall management of the business and affairs of the Group;

4. overseeing the processes for risk management, financial reporting and compliance; and

5. approving the recommended framework of remuneration for the Board and key executives by the Management.


corporate GoVernance report (cont’d)

All Directors are updated regularly on changes in the Group policies and regulatory changes. All newly appointed Directors are given briefings by Management on the history and business operations and corporate governance practices of the Group. The Company will, from time to time, organise seminars and briefing sessions for the Directors to enable them to keep pace with regulatory changes. The Company provides opportunities for ongoing education and training on Board processes and best practices as well as updates on changes in legislation and financial reporting standards, regulations and guidelines from the Listing Manual Section B: Rules of Catalist (“Catalist Rules”) of the Singapore Exchange Securities Trading Limited (the “SGX-ST”) that affects the Company and/or the Directors in discharging their duties.

Newly appointed Directors receive appropriate training, if required. The Group provides background information about the history, mission and values to its Directors. In addition, the Management regularly updates and familiarizes the Directors on the business activities of the Company during Board meetings. Directors will also be given opportunities to visit the Group’s operational facilities and meet the Management so as to gain a better understanding of the Group’s business.

During the financial year, the number of meetings held and the attendance of each member at the Board meetings and Board Committees meetings are as follows:

Name

BoardAudit

CommitteeNominatingCommittee


No. of meetings

Held

No. of meetings Attended

No. of meetings

Held


No. of meetings

Held


No. of meetings

Held


Dato’ Sri Adam Sani bin Abdullah

6 6 6 1(4) 1 – 1 1

Mr. Saw Lip Piau(1) 6 5 6 4(4) 1 – 1 –

Mr. Lee Sze Siang 6 6 6 5(4) 1 – 1 –

General Tan Sri Dato’ Seri Mohd Azumi bin Mohamed (Retired)

6 6 6 6 1 1 1 1

Mr. Stevan Kong Han Junn(2) 6 6 6 6 1 1 1 1

Mr. Chew Soo Lin 6 6 6 6 1 1 1 –

Mr. Eugene Francis McCarthy(3) 6 0 6 – 1 – 1 –

(1) Resigned on 25 April 2013

(2) Appointment ceased on 3 May 2013

(3) Resigned on 30 May 2012

(4) By Invitation

The Directors are also updated regularly with changes to the Catalist Rules, risk management, corporate governance, insider trading and the key changes in the relevant regulatory requirements and financial reporting standards and the relevant laws and regulations to facilitate effective discharge of their fiduciary duties as Board or Board Committees members.

New releases issued by the SGX-ST and Accounting and Corporate Regulatory Authority (“ACRA”) which are relevant to the Directors are circulated to the Board. The Company Secretary would inform the Director of upcoming conferences and seminars relevant to their roles as Directors of the Company. Annually, the external auditors update the AC and the Board on the new and revised financial reporting standards.



Board Composition and Guidance

Principle 2: There should be a strong and independent element on the Board, which is able to exercise objective judgment on corporate affairs independently, in particular, from Management. No individual or small group of individuals should be allowed to dominate the Board’s decision making.

Presently, the Board comprises one Executive Director, one Non-Executive Chairman and two Independent Directors:-

Name of DirectorPosition Held on the Board

Date of first Appointment

Date of Last Re-election

Dato’ Sri Adam Sani bin Abdullah Non-Executive Chairman 7 January 2011 27 June 2012

Mr. Lee Sze Siang Executive Director 13 August 2010 28 June 2011


Independent Director 7 January 2011 –

Mr. Chew Soo Lin Independent Director 26 August 2011 27 June 2012

Mr. Saw Lip Piau (“Mr. Saw”) resigned as the Executive Director and Chief Executive Officer (“CEO”) of the Company on 25 April 2013 due to retirement upon expiry of his service contract. Mr. Saw’s resignation as Executive Director took immediate effect while he will continue to serve as CEO for a notice period of 6 months. His last date of service in this capacity will be 25 October 2013, or such earlier date as may be mutually agreed between him and the Company.

Mr. Stevan Kong Han Junn (“Mr. Kong”) was disqualified as a Director as a bankruptcy order has been made against him on 3 May 2013. Consequently, his office as a Director of the Company was vacated with effect from 3 May 2013 in accordance with Article 102(1)(i) of the Memorandum and Articles of Association of the Company and Section 148 of the Companies Act, Chapter 50. Mr. Kong was the Chairman of the AC and a member of the NC and the RC.

The Company is sourcing for a suitable candidate to take over the position of CEO and would also endeavor to fill the vacancy of Mr. Kong in accordance with Rule 704(7) of the Catalist Rules.

The Board would like to express its gratitude and appreciation to Mr. Saw and Mr. Kong for their services and invaluable contributions to the Board during their tenure of office with the Company.

The NC has reviewed the independence of each Independent Director and is of the view that these Directors are independent. The NC also confirms that the Independent Directors make up at least one-third of the Board. The NC considers an “independent” Director as one who has no relationship with the Company, its related companies or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the Directors’ independent judgment of the Group’s affairs.

Non-Executive Director and Independent Directors exercise no Management functions in the Group. Although all the Directors have equal responsibility for the performance of the Group, the role of the Non-Executive Director and Independent Directors is particularly important in ensuring that the strategies proposed by Management are fully disclosed and rigorously examined and take into account the long-term interests, not only of the shareholders, but also of the employees, customers, suppliers and the communities in which the Group conducts its business and reviewing the performance of Management in meeting agreed goals and objectives and monitor the reporting of performance. The NC considers its Non-Executive Director and Independent Directors to be of sufficient caliber and size and their views to be of sufficient weight such that no individual or small group of individuals dominates the Board’s decision-making process.



The Board is made up of Directors who are qualified and experienced in various fields including business administration and finance. Accordingly, the current Board comprises of persons who as a group, have core competencies necessary to lead and manage the Company.

The NC has reviewed the size and composition of the Board. It is satisfied that after taking into account the scope and nature of operations of the Group in the year under review, the current Board size is appropriate, which facilitates effective decision-making.

The profiles of each of the Directors are set out on page 10 of this Annual Report.

Chairman and Chief Executive Officer (“CEO”)

Principle 3: There should be a clear division of responsibilities at the top of the Company – the working of the Board and the executive responsibility of the company’s business – which will ensure a balance of power and authority, such that no one individual represents a considerable concentration of power.

The roles of the Chairman and CEO are separate and distinct, each having their own areas of responsibilities. The Company believes that a distinctive separation of responsibilities between the Chairman and the CEO will ensure an appropriate balance of power, increased accountability and greater capacity of the Board for independent decision-making.

The Chairman, Dato’ Sri Adam Sani bin Abdullah is a Non-Executive Chairman, who was appointed as Chairman of the Board of the Company on 7 January 2011. He is consulted on the Group’s strategic direction and formulation of policies. The Chairman ensures the smooth running of the Board. His responsibilities include:-

(1) Ensuring that all Board meetings are convened and held as and when required;

(2) Ensuring that Directors receive accurate, timely and clear information, and ensuring effective communication with shareholders;

(3) Ensuring that proper procedures are set to comply with the Code; and

(4) Acting in the best interest of the Group and of the shareholders.

The Company Secretary may be called to assist the Non-Executive Chairman in any of the above.

Currently, Mr. Saw is serving his notice period as the CEO and his last date of service in this capacity will be 25 October 2013, or such earlier date as may be mutually agreed between him and the Company. The Board is sourcing for a suitable candidate to take over this position. During this period, the Board and the Executive Director are responsible for overseeing the overall management and strategic development of the Group.



Board Membership

Principle 4: There should be a formal and transparent process for the appointment of new directors to the Board.

The NC comprises the following members:

Nominating Committee

General Tan Sri Dato’ Seri Mohd Azumi bin Mohamed (Retired) (Chairman) (Independent Director)

Mr. Chew Soo Lin (Member) (Independent Director)

All members of the NC including the Chairman are Independent Directors.

Mr. Kong was a member of the NC. He was disqualified as a Director with effect from 3 May 2013 as a bankruptcy order had been made against him on 3 May 2013. The Company would be reconstituting the NC arising from his vacancy.

The NC is responsible for:

(a) re-nominating Directors (including Independent Directors) taking into consideration each Director’s contribution and performance;

(b) determining annually whether or not a Director is independent;

(c) deciding whether or not a Director is able to and has been adequately carrying out his duties as a Director;

(d) proposing a set of objective performance criteria to the Board for approval and implementation, to evaluate the effectiveness of the Board as a whole and the contribution of each Director to the effectiveness of the Board;

(e) reviewing and making recommendations to the Board on all candidates nominated for appointment to the Board of the Company; and

(f) reviewing and recommending to the Board on an annual basis, the Board structure, size and composition, taking

into account, the balance between Executive Director, Non-Executive Director and Independent Directors to ensure that the Board as a whole possesses the right blend of relevant experiences and core competencies to effectively manage the Company.

Pursuant to the Articles of the Company:-

(a) one third of the Directors shall retire from office at every Annual General Meeting (“AGM”); (b) Directors appointed during the course of the year must submit themselves for re-election at the next AGM of the

Company; and

(c) a new Director who is appointed by the Board during the financial year is subject to re-election by shareholders at the next AGM following his appointment.

Each member of the NC shall abstain from voting on any resolutions in respect to his re-nomination as a Director.



The NC has recommended to the Board that General Tan Sri Dato’ Seri Mohd Azumi bin Mohamed (Retired) be nominated for re-election at the forthcoming AGM. The Board had accepted the recommendation and the retiring Director will be offering himself for re-election.

The NC, in considering the re-appointment of any Director, considers factors including but not limited to attendance record at meetings of the Board and Board Committees, participation at meetings, and the quality of contributions to the development of strategy, the degree of preparedness, industry and business knowledge and the experience each Director possesses which is crucial to the Group’s business.

The NC is responsible for identifying and recommending new Directors to the Board, after considering the necessary and desirable competencies. In selecting potential new Directors, the NC will seek to identify the competencies required to enable the Board to fulfill its responsibilities. The NC may engage consultants to undertake research on, or assess, candidates applying for new positions on the Board, or to engage such other independent experts, as it considers necessary to carry out its duties and responsibilities. Recommendations for new Directors are put to the Board for its consideration.

New Directors are appointed by way of a Board resolution following which they are subject to re-election at the next AGM.

For the financial year under review, the NC is of the view that the Independent Directors of the Company are independent as defined in the Code and are able to exercise judgment on the corporate affairs of the Group independent of the Management.

Despite some of the Directors having other Board representations, the NC is satisfied that these Directors are able to and have adequately carried out their duties as Directors of the Company.

The names and the key information of the Directors of the Company in office at the date of this Statement are set out in page 10 of this Annual Report.

Board Performance

Principle 5: There should be a formal assessment of the effectiveness of the Board as a whole and the contribution by each director to the effectiveness of the Board.

The Group implemented the Board-approved evaluation process and performance criteria to assess the performance of the Board as a whole as well as the contribution of each individual Director.

The NC has adopted a formal process to assess the effectiveness of the Board and Committees of the Board as a whole. The evaluation exercise is carried out annually by way of a Board Assessment Checklist, which is circulated to the Board members for completion and thereafter for the NC to review and determine the actions required to improve the corporate governance of the Company and effectiveness of the Board as a whole.

A review of the Board’s performance is undertaken collectively by the Board annually and informally on a continuous basis by the NC with input from the other Board members.

The performance of the Directors is evaluated using agreed criteria, aligned as far as possible with appropriate corporate objectives. The criteria include short and long term measures and cover financial and non-financial performance indicators such as the strength of his experience and stature, and his contribution to the proper guidance of the Group and its businesses.



The NC is satisfied that the current size and composition of the Board provides it with adequate ability to meet the existing scope of needs and the nature of operations of the Company. From time to time, the NC will review the appropriateness of the current Board size, taking into consideration the changes in the nature and scope of operations as well as the regulatory environment.

Access to Information

Principle 6: In order to fulfill their responsibilities, Board members should be provided with complete, adequate and timely information prior to Board meetings and on an on-going basis.

The Board is provided with complete and adequate information prior to Board meetings and kept informed of on-going developments within the Group. Board papers are generally made available to Directors before the meeting and would include financial management reports, reports on performance of the Group, papers pertaining to matters requiring the Board’s decision, updates on key outstanding issues, strategic plans and developments in the Group. This is to enable the Directors to be properly briefed on matters to be considered at the Board and Board Committees meetings.

The Directors have separate and independent access to the Company’s Senior Management and the Company Secretaries at all times to address any enquiries. Should the Directors, whether as a group or individually, require independent professional advice, such professionals (who will be selected with the concurrence of the Chairman or the Chairman of the Committees requiring such advice) will be appointed at the Company’s expense. The appointment and removal of the Company Secretaries is subject to the approval of the Board.

The Company Secretaries or their representative administer, attend and prepare minutes of all Board and Board Committees meetings and assists the Chairman of the Board and/or the AC, RC and NC in ensuring that proper procedures at such meetings are followed and reviewed so that the Board and the Committees function effectively.

(B) REMUNERATION MATTERS

Procedures for Developing Remuneration Policies

Principle 7: There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual Directors. No director should be involved in deciding his own remuneration.

The RC comprises the following members:


General Tan Sri Dato’ Seri Mohd Azumi bin Mohamed (Retired) (Chairman) (Independent Director)

Dato’ Sri Adam Sani bin Abdullah (Member) (Non-Executive Chairman)

The Chairman of the RC is an Independent Director and Dato’ Sri Adam Sani bin Abdullah is a Non-Executive Director.

Mr. Kong was a member of the RC. He was disqualified as a Director with effect from 3 May 2013 as a bankruptcy order had been made against him on 3 May 2013. The Company would be reconstituting the RC arising from his vacancy.



The RC is responsible for:

(a) reviewing and submitting to the Board for endorsement, a framework of remuneration and the specific remuneration packages and terms of employment (where applicable) for each Director (including CEO) and key executives;

(b) reviewing and approving annually the total remuneration of the Directors and key executives; and

(c) reviewing and submitting its recommendations for endorsement by the Board, any long term incentive schemes which may be set up from time to time and to do all acts necessary in connection therewith.

No Director will be involved in determining his own remuneration. The RC has full authority to engage any external professional advice on matters relating to remuneration as and when the need arises. The expense of such services shall be borne by the Company.

Level and Mix of Remuneration

Principle 8: The level of remuneration should be appropriate to attract, retain and motivate the directors needed to run the company successfully but companies should avoid paying more than is necessary for this purpose. A significant proportion of executive directors’ remuneration should be structured so as to link rewards to corporate and individual performance.

The RC will take into account the industry norms, the Group’s performance as well as the contribution and performance of each Director when determining remuneration packages.

The Independent Directors and Non-Executive Director receive Directors’ fees in accordance with their contributions, taking into account factors such as effort and time spent, responsibilities of the Directors and the need to pay competitive fees to attract, retain and motivate the Directors. The Independent Directors and Non-Executive Director shall not be over-compensated to the extent that their independence may be compromised.

The remuneration for the Executive Directors and certain key executives comprise a fixed and variable component. The variable component is performance related and is linked to the Group’s performance as well as the performance of each individual Executive Director and key executive.

Disclosure on Remuneration

Principle 9: Each company should provide clear disclosure of its remuneration policy, level and mix of remuneration, and the procedure for setting remuneration in the company’s annual report. It should provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to directors and key executives, and performance.



A breakdown of the level and mix of remuneration paid/payable to each Director in remuneration bands of S$250,000 for FY2013 are as follows:

Remuneration Band and Name of Directors Salary & Bonus Directors’ fees Others Benefits Total

% % % %

Below S$250,000

Dato’ Sri Adam Sani bin Abdullah – 100 – 100

Mr. Lee Sze Siang 100 – – 100


– 100 – 100

Mr. Stevan Kong Han Junn(1) – 100 – 100

Mr. Chew Soo Lin – 100 – 100

Mr. Eugene Francis McCarthy(2) – 100 – 100

S$250,000 to below S$500,000

Mr. Saw Lip Piau(3) 100 – – 100

(1) Appointment ceased on 3 May 2013

(2) Resigned on 30 May 2012

(3) Resigned on 25 April 2013

The total Directors’ fees for FY2013, which will be put to shareholders for approval at the AGM, amounted to S$122,000 (FY2012: S$135,000). The details of remuneration paid to the Executive Officers of the Group (who are not Directors) for the year ended 28 February 2013 are set out below:

Name of executives Salary and bonus%

Below S$250,000Goh Seng Choon * 100%Cheah Im Bee 100%Stuart Saw Teik Siew 100%

* Goh Seng Choon has resigned as the General Manager – Group Sales and Marketing on 30 April 2013.

The three Executive Officers of the Group received total remuneration of less than S$250,000 each in FY2013.

There were no employees who are related to the CEO or a Director whose remuneration exceeds S$150,000 in the Group’s employment during the financial year under review.

In view of confidentiality of remuneration matters, the Board is of the opinion that it is in the best interests of the Group not to disclose the exact remuneration of Executive Officers in the Annual Report.



(C) ACCOUNTABILITY AND AUDIT

Accountability

Principle 10: The Board should present a balanced and understandable assessment of the Company’s performance, position and prospects.

Accountability to our shareholders is demonstrated through the presentation of our quarterly and annual financial statements, results announcements and all announcements on the Group’s business and operations.

The Management provides the Board with appropriately detailed Management accounts of the Company’s performance, position and prospects on a quarterly basis and when deemed appropriate by particular circumstances.

Management maintains regular contact and communication with the Board by various means including the preparation and circulation to all Board members of quarterly and full year financial statements of the Group. This allows the Board to monitor the Group’s performance as well as Management’s achievements of the goals and objectives determined and set by the Board.

Risk Management and Internal Controls

Principle 11: The Board is responsible for the governance of risk. The Board should ensure that Management maintains a sound system of risk management and internal controls to safeguard the shareholders’ interests and the company’s assets, and should determine the nature and extent of the significant risks which the Board is willing to take in achieving its strategic objectives.

The Board as a whole is responsible for the governance of risk and:

– ensures that Management maintains a sound system of risk management and internal controls to safeguard shareholders’ interests and the Company’s assets;

– determines the nature and extent of the significant risks, and the level of risk tolerance, which the Board is willing to take in achieving its strategic objectives;

– provides oversight in the design, implementation and monitoring of the risk management framework, and system of internal controls (including financial, operational, compliance and information technology controls), including ensuring that Management puts in place action plans to mitigate the risks identified where possible;

– reviews the adequacy and effectiveness of the risk management and internal controls systems annually; and

– sets and instills the appropriate risk-aware culture throughout the Company for effective risk governance.

The Group’s internal auditors conduct an annual review of the effectiveness of the Company’s material internal controls, including financial, operational, compliance and information technology controls, and a risk assessment at least annually to ensure the adequacy thereof. The findings of the review conducted by the internal auditors together with the review undertaken by the external auditors as part of their statutory audit were presented in their findings to the AC. Any material non-compliance or failures in internal controls and recommendations for improvements are reported to the AC. The AC also reviews the effectiveness of the actions taken by the Management on the recommendations made by the internal auditors and external auditors in this respect.



A Risk Management Team (the “RMT”) will be established in FY2014 to assist the AC and Board in carrying out its responsibilities of overseeing the Group’s risk management framework and policies. The RMT will be tasked to:

1. provide executive oversight and coordination of risk management efforts across the Group;

2. conduct reviews of its risk management framework and processes to ensure their adequacy and effectiveness on a regular basis;

3. maintain a risk register which identifies the material risks facing the Group and the internal controls in place to manage or mitigate those risks; and

4. review and update risk register regularly by the business and corporate heads in the Group.

The AC assists the Board to oversee Management in the formulation, updating and maintenance of an adequate and effective risk management framework while the Board reviews the adequacy and effectiveness of the system of risk management and internal controls.

The AC is responsible to review the audit reports from the internal auditors and external auditors and assess the effectiveness of the actions taken by the Management on the recommendations made by the internal auditors and external auditors for resolving lapses or weaknesses in the controls, taking into account any views the Management has.

For the financial year ended 28 February 2013, the Board has received assurance from the CEO, Finance Director and Financial Controller that the financial records have been properly maintained and the financial statements give a true and fair view of the Company’s operations and finances, and that the Company’s risk management and internal controls system are adequate and effective.

Based on the internal controls established and maintained by the Group, reviews performed by Management, and work performed by the external auditors and internal auditors, the Board, with the concurrence of the AC, is of the opinion that the Group’s internal controls are adequate and effective in addressing the financial, operational, compliance and information technology risks of the Group.

Audit Committee

Principle 12: The Board should establish an Audit Committee with written terms of reference which clearly set out its authority and duties.

The AC comprises the following members:

Audit Committee

General Tan Sri Dato’ Seri Mohd Azumi bin Mohamed (Retired) (Member) (Independent Director)

Mr. Chew Soo Lin (Member) (Independent Director)

The AC assists the Board to maintain a high standard of corporate governance, particularly by providing an independent review of the effectiveness of the financial reporting, management of financial and control risks, and monitoring of the internal control systems.



All members of the AC are Independent Directors of the Company. The members have had many years of experience in accounting, business and financial management. The Board considers that the members of the AC are appropriately qualified to discharge the responsibilities of the AC.

Mr. Kong was a Chairman of the AC. He was disqualified as a Director with effect from 3 May 2013 as a bankruptcy order had been made against him on 3 May 2013. The Company would be reconstituting the AC arising from his vacancy.

The AC has written terms of reference, setting out their duties and responsibilities, which include the following:

(1) to review with the external auditors:-

(a) the audit plan, including the nature and scope of the audit before the audit commences,

(b) their evaluation of the system of internal accounting controls,

(c) their audit report,

(d) their management letters and the Management’s response,

(2) to discuss with the external auditors any problems or concerns arising from their quarterly reviews, interim and final audits, and any other matters which the external auditors may wish to discuss;

(3) to ensure co-ordination where more than one audits firm is involved;

(4) assess the adequacy and effectiveness of the internal control (including financial, operational, compliance, information technology controls and risk management) systems established by Management to identify, assess, manage, and disclose financial and non-financial risks;

(5) to monitor the scope and results of the external audit, its cost effectiveness and the independence and objectivity of the external auditors annually and give recommendations to the Board and the Company in general meeting regarding the appointment, re-appointment or removal of the external auditors;

(6) review and ensure that the assurance has been received from the CEO (or equivalent) and the Chief Financial Officer (or equivalent) in relation to the interim/financial unaudited financial statement;

(7) to review the internal audit programme and ensure co-ordination between the internal auditors and external auditors and the Management;

(8) to review the quarterly, half-yearly and full year financial statements of the Company and of the Group, including announcements relating thereto, to shareholders and the SGX-ST, and thereafter to submit them to the Board for approval;

(9) to review interested person transactions (as defined in Chapter 9 of the Catalist Rules) and report its findings to the Board;

(10) to undertake such other reviews and projects as may be requested by the Board or as the Committees may consider appropriate; and

(11) to undertake such other functions and duties as may be required by law or by the Catalist Rules, as amended from time to time.



Apart from the duties listed above, the AC is given the task of commissioning investigations into matters where there is suspected fraud or irregularity, or failure of internal controls or infringement of any law, rule or regulation which has or is likely to have a material impact on the Company’s operating results or financial position, and to review its findings.

In July 2010, SGX-ST and ACRA had launched the “Guidance to Audit Committees on Evaluation of Quality of Work performed by External Auditors” which aims to facilitate the AC in evaluating the external auditors. Accordingly, the AC had evaluated the performance of the external auditors based on the key indicators of audit quality set out in the said Guidance.

The Group has implemented a whistle blowing policy whereby accessible channels are provided for employees to raise concerns about possible improprieties in matters of financial reporting or other matters which they become aware and to ensure that:

(i) independent investigations are carried out in an appropriate and timely manner;

(ii) appropriate action is taken to correct the weakness in internal controls and policies which allowed the perpetration of fraud and/or misconduct and to prevent a recurrence; and

(iii) administrative, disciplinary, civil and/or criminal actions that are initiated following the completion of investigations are appropriate, balance and fair, while providing reassurance that employees will be protected from reprisals or victimisation for whistle-blowing in good faith and without malice.

As of to-date, there were no reports received through the whistle-blowing mechanism.

The AC has full access to and the co-operation of Management and the full discretion to invite any Director or Executive Officer to attend its meetings, and has reasonable resources to enable it to discharge its functions properly. The external auditors have unrestricted access to the AC.

The AC will meet with the external auditors and internal auditors without the presence of Management, as and when necessary, to review the adequacy of audit arrangement, with emphasis on the scope and quality of their audit, the independence, objectivity and observations of the external auditors. Annually, the AC meets with the external auditors and internal auditors without the presence of the Management and conducts a review of all non-audit services provided by the external auditors and is satisfied that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors. In the financial year ended 28 February 2013, the aggregate amount of fees paid or payable to the Company’s external auditors, Ernst & Young LLP, was S$101,000, comprising approximately S$75,000 of audit fees and S$26,000 of non-audit fees; whereas the aggregate amount of fees paid or payable to other auditors of the Group was S$307,000, comprising approximately S$249,000 of audit fees and S$58,000 of non-audit fees.

The AC has recommended to the Board the nomination of Ernst & Young LLP for re-appointment as external auditors of the Company at the forthcoming AGM. The Company confirmed that Rule 712 and Rule 715 of the Catalist Rules have been complied with.

Internal Audit

Principle 13: The Company should establish an effective internal audit function that is adequately resourced and independent of the activities it audits.

The Company has an internal audit department which reports directly to the Chairman of the AC and administratively to the CEO.

The AC will review the adequacy of the internal audit function annually and ensures that the internal audit function is adequately resourced and has appropriate standing within the Company.



The AC has reviewed with the internal auditors their audit plan and their evaluation of the system of internal controls, their audit findings and Management’s processes to those findings, the effectiveness of material internal controls, including financial, operational, compliance and information technology controls and overall risk management of the Company. The AC is satisfied that the internal audit function is adequately resourced and has appropriate standing within the Group.

(D) COMMUNICATION WITH SHAREHOLDERS

Principle 14: Companies should engage in regular, effective and fair communication with shareholders.

The Company ensures that timely and adequate disclosure of information on matters of material impact on the Company are made to shareholders of the Company via SGXNET and press where appropriate, in compliance with the requirements set out in the Catalist Rules with particular reference to the Corporate Disclosure Policy set out therein.

Where there is inadvertent disclosure made to a selected Group, the Company will make the same disclosure publicly to all others as soon as practicable. Communication is made through:-

• annual reports that are prepared and sent to all shareholders. The Board ensures that the annual report includes all relevant information about the Company and the Group, including future developments and other disclosures required by the Companies Act, Chapter 50 and Singapore Financial Reporting Standards;

• quarterly announcements containing a summary of the financial information and affairs of the Group for that period;

• notices of explanatory memoranda for AGMs and Extraordinary General Meetings (“EGMs”). The notice of AGMs and EGMs are also advertised in a national newspaper; and

• the Company’s website at http://www.dfi.com.sg at which our shareholders can access financial information, corporate announcements, press releases, annual reports and profile of the Group.

The Company does not practice selective disclosure. Price sensitive information is first publicly released through SGXNET, before the Company meets with any investors or analysts. All shareholders of the Company will receive the annual report with notice of AGM by post and published in the newspapers within the mandatory period, which is held within four months after the close of the financial year.

GREATER SHAREHOLDER PARTICIPATION

Principle 15: Companies should encourage greater shareholder participation at AGMs, and allow shareholders the opportunity to communicate their views on various matters affecting the company.

The shareholders are encouraged to attend the Company’s AGMs and EGMs to ensure a high level of accountability and to stay informed of the Group’s strategies and growth plans. Notice of the AGM is dispatched to shareholders, together with explanatory notes or a circular on items of special businesses (if necessary), at least 14 days’ notice in writing (exclusive both of the day on which the notice is served or deemed to be served and of the day for which the notice is given). The Board welcomes questions from shareholders who wish to raise issues, either informally or formally before or during the AGM. The Chairman of the AC, NC and RC are normally present and available to address questions relating to the work of their respective Committees at general meetings. Furthermore, the external auditors are present to assist our Board in addressing any relevant queries by our shareholders.

If any shareholder is unable to attend, he/she is allowed to appoint up to two proxies to vote on his/her behalf at the meeting through proxy forms sent in advance.



Each item of special business included in the notice of the general meetings will be accompanied by explanation of the effects of a proposed resolution. Separate resolutions are proposed for each substantially separate issue at general meetings.

(E) DEALINGS IN COMPANY’S SECURITIES

The Company has adopted and implemented policies in line with the SGX-ST’s best practices in relation to dealing in the securities of the Company. The Company and its officers are not allowed to deal in the Company’s shares during the period commencing two weeks before the announcement of the Company’s financial results for each of the first three quarters of its financial year, and one month before the announcement of the Company’s full-year financial results, and ending on the date of the announcement of the relevant results. Officers of the Company are also discouraged from dealing in the Company’s securities on short-term considerations and in circumstances where they are in possession of unpublished price-sensitive information of the Group. They are also advised to be mindful of the laws on insider-trading at all times. Save for certain share buy-back transactions undertaken during the period from 2 January 2013 to 14 January 2013, the Company has been in compliance with the best practices on dealing in securities set out under Rule 1204(19) of the Catalist Rules.

(F) INTERESTED PERSON TRANSACTIONS

The aggregate value of interested person transaction entered during the financial year was as follows:

Name of interested person Aggregate value of all interested person transactions during the financial period under review

(excluding transactions less than $100,000 and transactions conducted

under shareholders’ mandate pursuant to Rule 920)

RM’000

Aggregate value of all interested person transactions conducted under

shareholders’ mandate pursuant to Rule 920 (excluding transactions

less than $100,000)RM’000

Atlan Holdings Bhd 2,400 –

(G) MATERIAL CONTRACTS

Save for the service agreements entered into between the Executive Directors and the Company, there was no material contract entered into by the Company and its subsidiaries involving the interests of any Director or controlling shareholders, either still subsisting at the end of the financial year ended 28 February 2013, or if not then subsisting, entered into since the end of the previous financial year ended 28 February 2012.

(H) CATALIST SPONSOR

The Company is currently under the SGX-ST Catalist sponsor-supervised regime. The continuing Sponsor of the Company is Canaccord Genuity Singapore Pte. Ltd. (the “Sponsor“).

With reference to Rule 1204(21) of the Catalist Rules, the Sponsor did not receive any fees other than continuing sponsor fees in FY2013.


DirectorS’ report

The directors are pleased to present their report to the members together with the audited consolidated financial statements of Duty Free International Limited (the “Company”) and its subsidiary companies (collectively, the “Group”) and the statement of financial position and statement of changes in equity of the Company for the financial year ended 28 February 2013.

Directors

The directors of the Company in office at the date of this report are:

Dato’ Sri Adam Sani bin Abdullah Non-Executive ChairmanLee Sze Siang Executive DirectorChew Soo Lin Independent DirectorGeneral Tan Sri Dato’ Seri Mohd Azumi bin Mohamed (Retired) Independent Director

Arrangements to enable directors to acquire shares or debentures

Except as described aforesaid and below, neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable directors of the Company to acquire benefits by means of the acquisition of shares or debentures of the Company or any other body corporate.

Directors’ interests in shares, warrants or debentures

The following directors, who held office at the end of the financial year, had, according to the register of directors’ shareholdings required to be kept under Section 164 of the Singapore Companies Act, Chapter 50, an interest in shares, warrants or debentures of the Company and related corporations (other than wholly-owned subsidiaries) as stated below:

Direct interest Deemed interest

Name of directorAs at

01.03.2012As at

28.02.2013As at

21.03.2013As at

01.03.2012As at

28.02.2013As at

21.03.2013

Ordinary shares of the CompanyDato’ Sri Adam Sani bin Abdullah – – – 905,028,113 905,028,113 905,028,113Chew Soo Lin 1,208,615 1,558,615 1,558,615 133,000 133,000 133,000

Warrants of the CompanyDato’ Sri Adam Sani bin Abdullah – – – 90,502,811 90,502,811 90,502,811Chew Soo Lin 110,784 110,784 1,110,784 – – –


DirectorS’ report (cont’d)

Directors’ interests in shares, warrants or debentures (cont’d)

Direct interest Deemed interest

Name of directorAs at

01.03.2012As at

28.02.2013As at

21.03.2013As at

01.03.2012As at

28.02.2013As at

21.03.2013

Ordinary shares of RM1.00 each in the immediate holding company (Atlan Holdings Bhd)

Dato’ Sri Adam Sani bin Abdullah 64,061 64,061 64,061 127,255,153 127,255,153 127,255,153Saw Lip Piau(3) – – – 952,559 952,559 952,559Chew Soo Lin(1) 3,805,838(1) 3,808,238(1) 3,842,966(1) – – –

Ordinary shares of RM1.00 each in the ultimate holding company (Distinct Continent Sdn Bhd)

Dato’ Sri Adam Sani bin Abdullah(2) 1 1 1 999 999 999

(1) Mr. Chew Soo Lin is the sole beneficial owner of the ordinary shares in Atlan Holdings Bhd held in nominee accounts.

(2) Distinct Continent Sdn Bhd is a private limited company incorporated in Malaysia whose director is Dato’ Sri Adam Sani bin

Abdullah. As such, Dato’ Sri Adam Sani bin Abdullah is deemed to be interested in the shares held by the Company in all its

subsidiaries companies by virtue of Section 7 of the Singapore Companies Act, Chapter 50.

(3) Mr. Saw Lip Piau has resigned as Executive Director on 25 April 2013.

Except as disclosed in this report, no director who held office at the end of the financial year had an interest in shares, warrants or debentures of the Company or of related corporations, either at the beginning of the financial year, or date of appointment if later, or at the end of the financial year.

Directors’ contractual benefits

Since the end of the previous financial year, no director of the Company has received or become entitled to receive any benefits by reason of a contract made by the Company or a related corporation with the director, or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest, except that the executive directors have employment relations with the Group and have received remuneration in those capacities.



Audit Committee

The Audit Committee (the “AC”) carried out its functions in accordance with section 201B (5) of the Singapore Companies Act, Chapter 50, including the following:

(a) Reviews the audit plans of the internal and external auditors of the Company, and reviews the internal auditors’ evaluation of the adequacy of the Company’s system of internal accounting controls and the assistance given by the Company’s management to the external and internal auditors;

(b) Reviews the quarterly and annual financial statements and the auditors’ report on the annual financial statements of the Company before their submission to the Board of Directors (the “Board”);

(c) Reviews effectiveness of the Company’s material internal controls, including financial, operational and compliance controls and risk management via reviews carried out by the internal auditors;

(d) Meets with the external auditors, other committees, and management in separate executive sessions to discuss any matters that these groups believe should be discussed privately with the AC;

(e) Reviews legal and regulatory matters that may have a material impact on the financial statements, related compliance policies and programmes and any reports received from regulators;

(f) Reviews the cost effectiveness and the independence and objectivity of the external auditors;

(g) Reviews the nature and extent of non-audit services provided by the external auditors;

(h) Recommends to the Board the external auditors to be nominated, approves the compensation of the external auditors and reviews the scope and results of the audit;

(i) Reports actions and minutes of the AC to the board of directors with such recommendations as the AC considers appropriate; and

(j) Reviews interested person transactions falling within the scope of Chapter 9 of the Listing Manual – Section B: Rules of Catalist of the Singapore Exchange Securities Trading Limited.

The AC, having reviewed all non-audit services provided by the external auditors to the Group, is satisfied that the nature and extent of such services would not affect the independence of the external auditors. The AC has also conducted a review of interested person transactions.

The AC convened six meetings during the financial year with full attendance from all members. The AC has also met with internal auditors and external auditors, without the presence of the Company’s management, at least once during the financial year.

Further details regarding the AC are disclosed in the Report on Corporate Governance.



Options

There is presently no option scheme on unissued shares of the Company or any related corporation in the Group.

Auditor

Ernst & Young LLP have expressed their willingness to accept reappointment as auditor.

On behalf of the Board:

Chew Soo LinDirector

Lee Sze SiangDirector

Singapore28 May 2013


Statement BY DirectorS

We, Chew Soo Lin and Lee Sze Siang, being two of the directors of Duty Free International Limited, do hereby state that, in the opinion of the directors,

(i) the accompanying statements of financial position, consolidated income statement, consolidated statement of comprehensive income, statements of changes in equity and consolidated cash flow statement together with notes thereto are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 28 February 2013 and the results of the business, changes in equity and cash flows of the Group and the changes in equity of the Company for the year then ended on that date; and

(ii) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

On behalf of the Board:

Chew Soo LinDirector

Lee Sze SiangDirector

Singapore28 May 2013


inDepenDent auDitor’S reportFor the financial year ended 28 February 2013To the members of Duty Free International Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Duty Free International Limited (the “Company”) and its subsidiary companies (collectively the “Group”) set out on pages 36 to 122, which comprise the statements of financial position of the Group and the Company as at 28 February 2013, the statements of changes in equity of the Group and the Company, and the consolidated income statement, consolidated statement of comprehensive income and consolidated cash flow statement of the Group for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act, Chapter 50 (the “Act”) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements of the Group and the statement of financial position and statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 28 February 2013 and the results, changes in equity and cash flows of the Group and the changes in equity of the Company for the year ended on that date.


inDepenDent auDitor’S report (cont’d)For the financial year ended 28 February 2013

To the members of Duty Free International Limited

Report on Other Legal and Regulatory Requirements

In our opinion, the accounting and other records required by the Act to be kept by the Company have been properly kept in accordance with the provisions of the Act.

Ernst & Young LLPPublic Accountants andCertified Public AccountantsSingapore

28 May 2013


conSoliDateD income StatementFor the financial year ended 28 February 2013

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.

GroupNote 28.02.2013 29.02.2012

RM’000 RM’000(restated)

Revenue 4 539,190 507,520Changes in inventories 72,903 24,227Inventories purchased and materials consumed (448,447) (380,282)Other income 5 16,412 10,693Amortisation of land use rights 15 (668) (723)Depreciation of property, plant and equipment (5,027) (4,952)Employee benefits expenses 6 (27,014) (25,249)Rental of premises (20,440) (17,897)Commission expenses (1,720) (1,931)Commission paid in relation to the proposed disposal of the Zon Johor

Bahru properties 22(a) (6,411) –Professional fees (1,995) (1,698)Promotional expenses (1,156) (1,365)Utilities and maintenance expenses (5,000) (5,173)Gain arising from changes in fair values of biological assets 14 220 606Other operating expenses 8 (22,414) (20,407)

Operating profit from continuing operations 88,433 83,369Finance expense 9 (3,244) (3,208)

Profit before tax from continuing operations 85,189 80,161Income tax expense 10 (21,474) (18,197)

Profit from continuing operations, net of tax 63,715 61,964

Profit from discontinued operations, net of tax 22(a) 9,533 4,876

Profit for the year 73,248 66,840

Attributable to:Owners of the Company

Profit from continuing operations, net of tax 63,736 62,056Profit from discontinued operations, net of tax 9,533 4,876

Profit for the year attributable to owners of the Company 73,269 66,932Non-controlling interests (21) (92)

73,248 66,840

Earnings per share from continuing operations attributable to owners of the Company (cents per share)

Basic 11(a) 5.72 5.56Diluted 11(a) 5.72 5.56

Earnings per share (cents per share)Basic 11(b) 6.58 6.00Diluted 11(b) 6.58 6.00


conSoliDateD Statement oF compreHenSiVe income

For the financial year ended 28 February 2013


Group28.02.2013 29.02.2012


Profit for the year 73,248 66,840

Other comprehensive income, net of tax:Foreign currency translation 5 5

Total comprehensive income for the year 73,253 66,845

Attributable to:Owners of the Company 73,274 66,937Non-controlling interests (21) (92)

Total comprehensive income for the year 73,253 66,845

Attributable to:Owners of the Company

Total comprehensive income from continuing operations, net of tax 63,741 62,061Total comprehensive income from discontinued operations, net of tax 9,533 4,876

Total comprehensive income for the year attributable to owners of the Company 73,274 66,937



StatementS oF Financial poSitionAs at 28 February 2013

Group CompanyNote 28.02.2013 29.02.2012 28.02.2013 29.02.2012

RM’000 RM’000 RM’000 RM’000Assets

Non-current assetsProperty, plant and equipment 12 61,187 231,008 2 5Land held for development 13 – 305 – –Biological assets 14 4,420 4,200 – –Land use rights 15 23,042 22,486 – –Goodwill 16 28,816 49,670 – –Investments in subsidiaries 17 – – 974,316 974,316Other receivables 18 15 63 – –Deferred tax assets 19 6,496 6,647 – –

123,976 314,379 974,318 974,321

Current assetsInventories 20 209,458 138,732 – –Tax recoverable 549 743 – –Trade and other receivables 18 20,036 19,126 1 6,189Prepayments 10,164 5,497 28 245Cash and bank balances 21 32,663 54,270 3,493 2,097

272,870 218,368 3,522 8,531

Assets of disposal group classified as held for sale 22 185,686 5,740 – –

458,556 224,108 3,522 8,531

Total assets 582,532 538,487 977,840 982,852

Equity and liabilities

Current liabilitiesProvisions 23 547 547 – –Income tax payable 4,174 2,192 21 –Borrowings 24 69,700 94,755 25,020 28,895Trade and other payables 25 140,457 98,930 28,837 17,359Derivative liabilities 26 18 95 – –

214,896 196,519 53,878 46,254

Net current assets/(liabilities) 243,660 27,589 (50,356) (37,723)


StatementS oF Financial poSition (cont’d)As at 28 February 2013


Group CompanyNote 28.02.2013 29.02.2012 28.02.2013 29.02.2012

RM’000 RM’000 RM’000 RM’000

Non-current liabilitiesDeferred tax liabilities 19 5,776 6,009 – –Borrowings 24 20,787 753 – –

26,563 6,762 – –

Total liabilities 241,459 203,281 53,878 46,254

Net assets 341,073 335,206 923,962 936,598

Equity attributable to owners of the Company

Share capital 27 483,602 495,082 977,202 988,682Share premium 27(b) 2,778 2,778 – –Other reserves 27(a) (111,526) (111,531) 31,681 31,681Accumulated losses (34,075) (51,438) (84,921) (83,765)

340,779 334,891 923,962 936,598

Non-controlling interests 294 315 – –

Total equity 341,073 335,206 923,962 936,598

Total equity and liabilities 582,532 538,487 977,840 982,852



StatementS oF cHanGeS in eQuitYFor the financial year ended 28 February 2013

Group Attributable to owners of the Company

Ordinary shares

Sharepremium

Totalother

reserves

Foreign currency

translation reserve

Premium paid on

acquisition of non-

controlling interests

Warrants reserve

Accumulated losses Total

Non-controlling interests

Totalequity

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

(Note 27)

At 1 March 2012 495,082 2,778 (111,531) 26 (143,238) 31,681 (51,438) 334,891 315 335,206

Profit, net of tax – – – – – – 73,269 73,269 (21) 73,248

Other comprehensive income for the year – – 5 5 – – – 5 – 5

Total comprehensive income for the year – – 5 5 – – 73,269 73,274 (21) 73,253

Transactions with owners:

Acquisition and cancellation of ordinary shares (11,480) – – – – – – (11,480) – (11,480)

Dividends (Note 37) – – – – – – (55,906) (55,906) – (55,906)

(11,480) – – – – – (55,906) (67,386) – (67,386)

At 28 February 2013 483,602 2,778 (111,526) 31 (143,238) 31,681 (34,075) 340,779 294 341,073


StatementS oF cHanGeS in eQuitY (cont’d)For the financial year ended 28 February 2013


Group Attributable to owners of the Company

Ordinary shares

Sharepremium

Totalother

reserves

Foreign currency

translation reserve

Premium paid on

acquisition of non-

controlling interests

Warrants reserve

Accumulated losses Total

Non-controlling interests

Totalequity


(Note 27)

At 1 March 2011 494,081 2,778 (108,698) 21 (140,349) 31,630 (77,258) 310,903 1,781 312,684

Profit, net of tax – – – – – – 66,932 66,932 (92) 66,840

Other comprehensive income for the year – – 5 5 – – – 5 – 5

Total comprehensive income for the year – – 5 5 – – 66,932 66,937 (92) 66,845


Acquisition of non- controlling interests in relation to Mandatory General Offer (“MGO”) (Note 27(a)) 993 – (2,836) – (2,889) 53 – (1,843) (1,374) (3,217)

Exercise of warrants 8 – (2) – – (2) – 6 – 6

Dividends (Note 37) – – – – – – (41,112) (41,112) – (41,112)

1,001 – (2,838) – (2,889) 51 (41,112) (42,949) (1,374) (44,323)

At 29 February 2012 495,082 2,778 (111,531) 26 (143,238) 31,681 (51,438) 334,891 315 335,206




CompanyOrdinaryshares

Warrant reserves

Accumulated losses

Totalequity

RM’000 RM’000 RM’000 RM’000(Note 27)

At 1 March 2012 988,682 31,681 (83,765) 936,598

Profit, net of tax – – 54,750 54,750

Other comprehensive income for the year – – – –

Total comprehensive income for the year – – 54,750 54,750


Acquisition and cancellation of ordinary shares (11,480) – – (11,480)

Dividends (Note 37) – – (55,906) (55,906)

(11,480) – (55,906) (67,386)

At 28 February 2013 977,202 31,681 (84,921) 923,962




CompanyOrdinaryshares

Warrant reserves

Accumulated losses

Totalequity

RM’000 RM’000 RM’000 RM’000(Note 27)

At 1 March 2011 987,681 31,630 (83,761) 935,550

Profit, net of tax – – 41,108 41,108

Other comprehensive income for the year – – – –

Total comprehensive income for the year – – 41,108 41,108


Increase in equity in relation to the MGO (Note 27(a)) 993 53 – 1,046

Exercise of warrants 8 (2) – 6

Dividends (Note 37) – – (41,112) (41,112)

1,001 51 (41,112) (40,060)

At 29 February 2012 988,682 31,681 (83,765) 936,598



conSoliDateD caSH FloW StatementFor the financial year ended 28 February 2013

Group28.02.2013 29.02.2012

Note RM’000 RM’000

Cash flows from operating activitiesProfit before tax from continuing operations 85,189 80,161Profit before tax from discontinued operations 11,532 6,442

Profit before tax, total 96,721 86,603Adjustments for:

Allowances for doubtful receivables 18 68 506Amortisation of land use rights 15 668 723Bad debts written off 125 32Deposit forfeited (39) (6)Depreciation of property, plant and equipment 12 8,938 9,782Finance costs 9,22 4,066 4,922Gain arising from changes in fair values of biological assets 14 (220) (606)Gain on disposal of property, plant and equipment (8,031) (130)Impairment loss on land held for development 305 –Interest income (661) (864)Inventories written down 523 157Inventories written off 259 262Net unrealised foreign exchange loss/(gain) 1,491 (663)Property, plant and equipment written off 230 201Reversal of short term accumulating compensated absences (12) (5)Reversal of inventories written down (312) (199)Reversal of impairment losses for property, plant and equipment 12 (697) (683)Reversal of impairment losses for land use rights 15 (150) (147)Waiver of debts (290) –

Operating cash flows before working capital changes 102,982 99,885Increase in receivables (1,030) (3,453)Decrease/(increase) in prepayments 1,833 (2,718)Increase in inventories (71,195) (24,339)Increase/(decrease) in payables 22,580 (10,049)

Cash generated from operations 55,170 59,326Interest paid (3,828) (5,087)Taxes paid (27,879) (21,788)

Net cash generated from operating activities 23,463 32,451


conSoliDateD caSH FloW Statement (cont’d)For the financial year ended 28 February 2013


Group28.02.2013 29.02.2012

Note RM’000 RM’000

Cash flows from investing activitiesAdditions of biological assets 14 – (208)Interest received 661 864Proceeds from deposit for the proposed disposal of the

Zon Johor Bahru properties 26,000 7,060Proceeds from disposal of property, plant and equipment 13,856 144Purchase of property, plant and equipment 12 (3,127) (2,714)Purchase of land use rights 15 (1,074) –

Net cash generated from investing activities 36,316 5,146

Cash flows from financing activitiesAcquisition of non-controlling interests – (3,217)Proceeds from term loans 24,000 52,386Repayment of term loans (34,989) (74,000)Changes in amount due to immediate holding company – (7,264)Changes in amounts due to related companies – (17,072)Changes in amounts due to former shareholders – (169)Decrease in pledged fixed deposits 332 267Acquisition of ordinary shares (11,480) –Proceeds from other short term borrowings 1,309 10,229Proceeds from exercise of warrants – 6Net repayment of hire purchase and lease financing (432) (360)Dividends paid (62,619) (34,399)

Net cash used in financing activities (83,879) (73,593)

Net decrease in cash and cash equivalents (24,100) (35,996)Effects of foreign exchange rate changes 82 (88)Cash and cash equivalents at beginning of the year 44,202 80,286

Cash and cash equivalents at end of the year 21 20,184 44,202


noteS to tHe Financial StatementS– 28 February 2013

1. Corporate information

Duty Free International Limited (the Company) is a limited liability company incorporated and domiciled in Singapore and is listed on the Singapore Exchange Securities Trading Limited (“SGX-ST”).

The ultimate holding company of the Company is Distinct Continent Sdn Bhd (“DCSB”) whereas the immediate holding company is Atlan Holdings Bhd (“Atlan”). DCSB is a private limited company incorporated in Malaysia. Atlan is a public limited company incorporated in Malaysia and listed on Bursa Malaysia Securities Berhad.

The registered office of the Company is located at 6 Battery Road #10-01, Singapore 049909.

The principal activity of the Company is that of investment holding. The principal activities of its subsidiary companies are disclosed in Note 17 to the financial statements.

2. Summary of significant accounting policies

2.1 Basis of preparation

The consolidated financial statements of the Group and the statement of financial position and statement of changes in equity of the Company have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”).

The financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below.

The financial statements are presented in Malaysian Ringgit (RM) and all values in the tables are rounded to the nearest thousand (RM’000) as indicated.

2.2 Changes in accounting policies

With effect from 1 March 2012, the Group has adopted all the new and revised FRS and Interpretation (“INT”) FRS that are mandatory for financial years beginning on or after 1 January 2012. The adoption of these FRS and INT FRS did not have any significant impact on the financial performance or position of the Group and the Company.


noteS to tHe Financial StatementS (cont’d)– 28 February 2013

2. Summary of significant accounting policies (cont’d)

2.3 Standards issued but not yet effective

The Group has not adopted the following standards and interpretations that have been issued but not yet effective:

Description

Effective for annualperiods beginning

on or after

Amendments to FRS 1 – Presentation of Items of Other Comprehensive Income 1 July 2012Revised FRS 19 – Employee Benefits 1 January 2013FRS 113 – Fair Value Measurements 1 January 2013Amendments to FRS 107 Disclosures – Offsetting of Financial Assets and Financial Liabilities 1 January 2013Improvements to FRSs 2012 1 January 2013- Amendment to FRS 1 Presentation of Financial Statements 1 January 2013- Amendment to FRS 16 Property, Plant and Equipment 1 January 2013- Amendment to FRS 32 Financial Instruments: Presentation 1 January 2013Revised FRS 27 – Separate Financial Statements 1 January 2014Revised FRS 28 – Investments in Associates and Joint Ventures 1 January 2014Amendments to FRS 32 – Offsetting of Financial Assets and Financial Liabilities 1 January 2014FRS 110 – Consolidated Financial Statements 1 January 2014FRS 111 – Joint Arrangements 1 January 2014FRS 112 – Disclosure of Interests in Other Entities 1 January 2014

Except for the Amendments to FRS 1 and FRS 112, the directors expect that the adoption of the other standards and interpretations above will have no material impact on the financial statements in the period of initial application. The nature of the impending changes in accounting policy on adoption of the Amendments to FRS 1 and FRS 112 are described below.

Amendments to FRS 1 Presentation of Items of Other Comprehensive Income

The Amendments to FRS 1 Presentation of Items of Other Comprehensive Income (“OCI”) is effective for financial periods beginning on or after 1 July 2012.

The Amendments of FRS 1 changes the grouping of items presented in OCI. Items that could be reclassified to profit or loss at a future point in time would be presented separately from items which will never be reclassified. As the Amendments only affect the presentations of items that are already recognised in OCI, the Group does not expect any impact on its financial position or performance upon adoption of this standard.

FRS 112 Disclosure of Interests in Other Entities

FRS 112 Disclosure of Interests in Other Entities is effective for financial periods beginning on or after 1 January 2014.

FRS 112 is a new and comprehensive standard on disclosure requirements for all forms of interest in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. FRS 112 requires an entity to disclose information that helps users of its financial statements to evaluate the nature and risks associated with its interests in other entities and the effects of those interests on its financial statements. The Group is currently determining the impact of the disclosure requirements. As this is a disclosure standard, it will have no impact to the financial position and financial performance of the Group when implemented in 2014.




2.4 Basis of consolidation and business combinations

A) Basis of consolidation

Basis of consolidation from 1 March 2010

The consolidated financial statements comprise the financial statements of the Company and its subsidiary companies as at the end of the reporting period. The financial statements of the subsidiary companies used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions and dividends are eliminated in full.

Subsidiary companies 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.

Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit balance.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it:

– De-recognises the assets (including goodwill) and liabilities of the subsidiary at their carrying amounts at the date when controls is lost;

– De-recognises the carrying amount of any non-controlling interest;

– De-recognises the cumulative translation differences recorded in equity;

– Recognises the fair value of the consideration received;

– Recognises the fair value of any investment retained;

– Recognises any surplus or deficit in profit or loss;

– Re-classifies the Group’s share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate.




2.4 Basis of consolidation and business combinations (cont’d)

A) Basis of consolidation (cont’d)

Basis of consolidation prior to 1 March 2010

Certain of the above-mentioned requirements were applied on a prospective basis. The following differences, however, are carried forward in certain instances from the previous basis of consolidation:

– Acquisition of non-controlling interests, prior to 1 March 2010, were accounted for using the parent entity extension method, whereby, the difference between the consideration and the book value of the share of the net assets acquired were recognised in goodwill.

– Losses incurred by the Group were attributed to the non-controlling interest until the balance was reduced to nil. Any further losses were attributed to the Group, unless the non-controlling interest had a binding obligation to cover these. Losses prior to 1 March 2010 were not reallocated between non-controlling interest and the owners of the Company.

– Upon loss of control, the Group accounted for the investment retained at its proportionate share of net asset value at the date control was lost. The carrying value of such investments as at 1 March 2010 have not been restated.

B) Business combinations

Business combinations from 1 March 2010

Business combinations are accounted for by applying the acquisition method. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the services are received.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognised in accordance with FRS 39 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it is not be remeasured until it is finally settled within equity.




2.4 Basis of consolidation and business combinations (cont’d)

B) Business combinations (cont’d)

Business combinations from 1 March 2010 (cont’d)

In business combinations achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss.

The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets.

Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill. The accounting policy for goodwill is set out in Note 2.10. In instances where the latter amount exceeds the former, the excess is recognised as gain on bargain purchase in profit or loss on the acquisition date.

Business combinations prior to 1 March 2010

In comparison to the above mentioned requirements, the following differences applied:

Business combinations are accounted for by applying the purchase method. Transaction costs directly attributable to the acquisition formed part of the acquisition costs. The non-controlling interest (formerly known as minority interest) was measured at the proportionate share of the acquiree’s identifiable net assets.

Business combinations achieved in stages were accounted for as separate steps. Adjustments to those fair values relating to previously held interests are treated as a revaluation and recognised in equity. Any additional acquired share of interest did not affect previously recognised goodwill.

When the Group acquired a business, embedded derivatives separated from the host contract by the acquiree were not reassessed on acquisition unless the business combination resulted in a change in the terms of the contract that significantly modified the cash flows that otherwise would have been required under the contract.

Contingent consideration was recognised if, and only if, the Group had a present obligation, the economic outflow was more likely than not and a reliable estimate was determinable. Subsequent adjustments to the contingent consideration were recognised as part of goodwill.




2.5 Transactions with non-controlling interests

Non-controlling interest represents the equity in subsidiary companies not attributable, directly or indirectly, to owners of the Company, and are presented separately in the consolidated statement of comprehensive income and within equity in the consolidated statement of financial position, separately from equity attributable to owners of the Company.

Changes in the Company’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

2.6 Foreign currency

The Group’s consolidated financial statements are presented in RM, which is also the Company’s functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

(a) Transactions and balances

Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiary companies and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the end of the reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the end of the reporting period are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.

(b) Consolidated financial statements

For consolidated purpose, the assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling at the end of the reporting period and their profit or loss are translated at the exchange rates prevailing at the date of the transactions. The exchange differences arising on the translation are recognised in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in profit or loss.

In the case of a partial disposal without loss of control of a subsidiary that includes a foreign operation, the proportionate share of the cumulative amount of the exchange differences is re-attributed to the non-controlling interest and is not recognised in profit or loss. For partial disposals of associates or jointly controlled entities that are foreign operations, the proportionate share of the accumulated exchange differences is reclassified to profit or loss.




2.7 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. Such cost includes the cost of replacing part of the property, plant and equipment and borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying property, plant and equipment. The accounting policy for borrowing costs is set out in Note 2.20. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

Subsequent to initial recognition, property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.

Certain freehold land and buildings are stated at revalued amount, which is the fair value at the date of revaluation less accumulated depreciation and any impairment losses. The land and buildings of the Group have not been revalued since they were first revalued in 1991. The Directors have not adopted the policy of regular revaluations of such assets and no later valuation has been recorded. As permitted under FRS 16 (Revised) Property, Plant and Equipment, these assets continue to be stated at their 1991 valuation less accumulated depreciation.

Leasehold land is measured at cost less accumulated amortisation and accumulated impairment losses.

Any revaluation surplus is recognised in other comprehensive income and accumulated in equity under the asset revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss, in which case the increase is recognised in profit or loss. A revaluation deficit is recognised in profit or loss, except to the extent that it offsets an existing surplus on the same asset carried in the asset revaluation reserve.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. The revaluation surplus included in the asset revaluation reserve in respect of an asset is transferred directly to retained earnings on retirement or disposal of the asset.

Freehold land has an unlimited useful life and therefore is not depreciated. Capital-work-in-progress, which comprise the refurbishment and renovation of building and land improvements are also not depreciated as these assets are not available for use.




2.7 Property, plant and equipment (cont’d)

Depreciation of other property, plant and equipment is provided for on a straight-line basis to write off the cost of each asset to its residual value over the estimated useful life, at the following annual rates:

Leasehold land amortised over 99 yearsBuildings over 27 to 48 yearsGolf course over the remaining lease term of 60 yearsFurniture and fittings 5% – 20%Electrical installation and air conditioner 5% – 20%Other assets 5% – 20%

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted prospectively, if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in profit or loss in the year the asset is derecognised.

2.8 Land held for development

Land held for development consists of land where no development activities have been carried out or where development activities are not expected to be completed within the normal operating cycle. Such land is classified within non-current assets and is stated at cost less any accumulated impairment losses.

2.9 Biological assets

Biological assets, which comprise mature and immature oil palm plantations, are stated at fair value less estimated point-of-sale costs, with any resultant gain or loss recognised in profit or loss.

The fair value of the oil palm plantations is estimated by reference to independent professional valuations using the discounted cash flows of the underlying biological assets. The expected cash flows from the whole life cycle of the oil palm plantations is determined using the market price and the estimated yield of the agricultural produce, being fresh fruit bunches (“FFB”), net of maintenance and harvesting costs and any costs required to bring the oil palm plantations to maturity. The estimated yield of the oil palm plantations is dependent on the age of the oil palm trees, the location of the plantations, soil type and infrastructure. The market price of the FFB is largely dependent on the prevailing market prices of crude palm oil and palm kernel.




2.10 Goodwill

Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.

For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each cash-generating unit (or group of cash-generating units) to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in profit or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.

Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative fair values of the operations disposed of and the portion of the cash-generating unit retained.

Goodwill and fair value adjustments arising on the acquisition of foreign operation on or after 1 January 2005 are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated in accordance with the accounting policy set out in Note 2.6.

Goodwill and fair value adjustments which arose on acquisitions of foreign operations before 1 January 2005 are deemed to be assets and liabilities of the Group and are recorded in RM at the exchange rates prevailing at the date of acquisition.

2.11 Land use rights

Land use rights are initially measured at cost. Following initial recognition, land use rights are measured at cost less accumulated amortisation. The land use rights are amortised on a straight-line basis over the respective lease terms of 38 to 60 years.

2.12 Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when an annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. Where the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples or other available fair value indicators.




2.12 Impairment of non-financial assets (cont’d)

The Group bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Group’s cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses of continuing operations are recognised in profit or loss in those expense categories consistent with the function of the impaired asset, except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case, the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase.

2.13 Subsidiary companies

A subsidiary company is an entity over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities.

In the Company’s separate financial statements, investments in subsidiary companies are accounted for at cost less impairment losses.

2.14 Financial assets

Initial recognition and measurement

Financial assets are recognised when, and only when, the Group becomes a party to the contractual provisions of the financial instrument. The Group determines the classification of its financial assets at initial recognition.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.




2.14 Financial assets (cont’d)

Subsequent measurement

The subsequent measurement of financial assets depends on their classification as follows:

(a) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. This category includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by FRS 39. Derivatives, including separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value of the financial assets are recognised in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss include exchange differences, interest and dividend income.

(b) Loans and receivables

Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less impairment. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Derecognition

A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

Regular way purchase or sale of a financial asset

All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e., the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concerned.




2.15 Impairment of financial assets

The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired.

(a) Financial assets carried at amortised cost

For financial assets carried at amortised cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be recognised are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss on financial assets carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account. The impairment loss is recognised in profit or loss.

When the asset becomes uncollectible, the carrying amount of impaired financial assets is reduced directly or if an amount was charged to the allowance account, the amounts charged to the allowance account are written off against the carrying value of the financial asset.

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

2.16 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. These also include bank overdrafts that form an integral part of the Group’s cash management.




2.17 Inventories

Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the inventories to their present location and condition are accounted for on a first-in first-out basis.

Where necessary, allowance is provided for damaged, obsolete and slow moving items to adjust the carrying value of inventories to the lower of cost and net realisable value.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs necessary to make the sale.

2.18 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

2.19 Financial liabilities

Initial recognition and measurement

Financial liabilities are recognised when, and only when, the Group becomes a party to the contractual provisions of the financial instrument. The Group determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value plus in the case of financial liabilities not at fair value through profit or loss, directly attributable transaction costs.

Subsequent measurement

The measurement of financial liabilities depends on their classification as follows:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss includes financial liabilities held for trading and financial liabilities designated upon initial recognition at fair value through profit or loss. Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Subsequent to initial recognition, financial liabilities at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value of the financial liabilities are recognised in profit or loss.

The Group has not designated any financial liabilities upon initial recognition at fair value through profit or loss.




2.19 Financial liabilities (cont’d)

Other financial liabilities

After initial recognition, other financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

2.20 Borrowing costs

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

2.21 Classification of financial instruments

Financial liabilities and equity instruments issued by the Group are classified as liabilities or equity according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs. Derivative liabilities are stated at fair value at each balance sheet date with changes in fair value charged to profit or loss.

The classification of a financial instrument as financial liability or equity is not revised for changes in circumstances which, had they occurred before initial recognition of the instrument, would have changed its classification.

2.22 Employee benefits

(a) Short term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.




2.22 Employee benefits (cont’d)

(b) Defined contribution plans

Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities or funds and will have no legal or constructive obligation to pay further contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years. Such contributions are recognised as an expense in profit or loss as incurred. As required by law, companies in Malaysia make such contributions to the Employees Provident Fund (“EPF”).

(c) Employee leave entitlements

Employees entitlements to annual leave are recognised when they accrue to employees. An accrual is made for estimated liability for annual leave as a result of services rendered by employees up to the end of the reporting period.

(d) Termination benefits

Termination benefits are payable when employment is terminated before the normal retirement date in accordance with the provisions of the employment contract and/or local labour laws.

2.23 Leases

The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date: whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement.

For arrangements entered into prior to 1 January 2005, the date of inception is deemed to be 1 January 2005 in accordance with the transitional requirements of INT FRS 104.

(i) As lessee

Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss. Contingent rents, if any, are charged as expenses in the periods in which they are incurred.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.




2.23 Leases (cont’d)

(ii) As lessor

Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income. The accounting policy for rental income is set out in Note 2.25 (v).

2.24 Assets held for sale and discontinued operations

Non-current assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Non-current assets are classified as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. A component of the Group is classified as “discontinued operations” when the criteria to be classified as held for sale have been met or it has been disposed of and such a component represents a separate major line of business or geographical area of operations or is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations.

In profit or loss of the current reporting period, and of the comparative period of the previous year, all income

and expenses from discontinued operations are reported separately from income and expenses from continuing operations, down to the level of profit after taxes, even when the Group retains a non-controlling interest in the subsidiary after the sale. The resulting profit or loss (after taxes) is reported separately in profit or loss.

Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or amortised.

2.25 Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is made. Revenue is measured at the fair value of consideration received or receivable, taking into account contractually defined terms of payment and excluding discounts, rebates, and sales taxes or duty. The Group assesses its revenue arrangements to determine if it is acting as principal or agent. The Group has concluded that it is acting as a principal in all of its revenue arrangements. The following specific recognition criteria must also be met before revenue is recognised:

(i) Sale of goods

Revenue from sale of goods is recognised upon transfer of significant risks and rewards of ownership of the goods to the customer, usually on delivery of goods. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.




2.25 Revenue (cont’d)

(ii) Rental of hotel rooms and other services

Revenue from rental of hotel rooms and other related services are recognised on an accrual basis.

(iii) Sales of food and beverage

Sales of food and beverage are recognised as and when the services are performed.

(iv) Sale of high speed diesel

Sale of high speed diesel is recognised on an accrual basis.

(v) Rental income

Rental income is recognised on a straight-line basis over the term of the lease. The aggregate costs of incentives provided to lessees are recognised as a reduction of rental income over the lease term on a straight-line basis.

(vi) Revenue from ferry terminal operations

Revenue from ferry terminal operations is recognised on an accrual basis. (vii) Revenue from parking operations

Revenue from parking operations is recognised as and when the services are rendered.

(viii) Management income

Management income is received from a third party operator who manages the golf course of a subsidiary. The income is recognised on an accrual basis.

(ix) Sale of fresh oil palm fruit bunches

Revenue from sale of fresh oil palm fruit bunches is recognised when significant risks and rewards of ownership of goods are transferred to the customer.

(x) Interest income

Interest income is recognised using the effective interest method.




2.26 Taxes

(a) Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the end of the reporting period, in the countries where the Group operates and generates taxable income.

Current income taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

(b) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except:

– Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither accounting profit nor taxable profit or loss; and

– In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except:

– Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither accounting profit nor taxable profit or loss; and

– In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.




2.26 Taxes (cont’d)

(b) Deferred tax (cont’d)

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the end of each reporting period.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, would be recognised subsequently if new information about facts and circumstances changed. The adjustment would either be treated as a reduction to goodwill (as long as it does not exceed goodwill) if it incurred during the measurement period or in profit or loss.

(c) Sales tax

Revenues, expenses and assets are recognised net of the amount of sales tax except:

– Where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

– Receivables and payables that are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

2.27 Segment reporting

For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Group who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 36, including the factors used to identify the reportable segments and the measurement basis of segment information.




2.28 Share capital and share issuance expenses

Proceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental costs directly attributable to the issuance of ordinary shares are deducted against share capital.

The Group’s own equity instruments, which are reacquired are recognised at cost and deducted from equity. No gain or loss is recognised in profit or loss on the purchase or cancellation of ordinary shares.

2.29 Contingencies

A contingent liability is:

(a) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group; or

(b) a present obligation that arises from past events but is not recognised because:

(i) It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

(ii) The amount of the obligation cannot be measured with sufficient reliability.

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group.

Contingent liabilities and assets are not recognised on the statement of financial position of the Group, except for contingent liabilities assumed in a business combination that are present obligations and which the fair values can be reliably determined.

2.30 Related parties

A related party is defined as follows:

(a) A person or a close member of that person’s family is related to the Group and Company if that person:

(i) Has control or joint control over the Company;

(ii) Has significant influence over the Company; or

(iii) Is a member of the key management personnel of the Group or Company or of a parent of the Company.




2.30 Related parties (cont’d)

(b) An entity is related to the Group and the Company if any of the following conditions applies:

(i) The entity and the Company are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others);

(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member);

(iii) Both entities are joint ventures of the same third party;

(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity;

(v) The entity is a post-employment benefit plan for the benefit of employees of either the Company or an entity related to the Company. If the Company is itself such a plan, the sponsoring employers are also related to the Company;

(vi) The entity is controlled or jointly controlled by a person identified in (a); and

(vii) A person identified in (a) (i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

3. Significant accounting judgments and estimates

The preparation of the Group’s consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of each reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in the future periods.

3.1 Judgments made in applying accounting policies

In the process of applying the Group’s accounting policies, management has made the following judgments, apart from those involving estimations, which have the most significant effect on the amounts recognised in the consolidated financial statements:

(i) Impairment of financial assets

The Group follows the guidance of FRS 39 in determining when a financial asset is considered impaired. This determination requires significant judgement. The Group evaluates, among other factors, the duration and extent to which the fair value of a financial asset is less than its cost; and the financial health of and the near-term business outlook of the issuer of the instrument, including factors such as industry performance, changes in technology and operational and financing cash flows.



3. Significant accounting judgments and estimates (cont’d)

3.1 Judgments made in applying accounting policies (cont’d)

(ii) Biological assets

The Group’s biological assets are stated at fair value less point-of-sale costs. This is estimated by reference to an independent valuer’s assessment of the fair value of the biological assets. Changes in the conditions of the biological assets could impact the fair value of the assets. The carrying amount of the Group’s biological assets as at 28 February 2013 was approximately RM4,420,000 (29.02.2012: RM4,200,000).

(iii) Classification between investment properties and property, plant and equipment

In the prior financial year, the Group had entered into an agreement with a third party operator to manage its golf course. The golf course is recorded as a property, plant and equipment item because the golf course is only part of the enlarged property, which also has an oil palm plantation and a duty free store that are not insignificant. In addition, the property cannot be sold separately.

The carrying amount of the golf course which included in property, plant and equipment as at 28 February 2013 was approximately RM27,670,000 (29.02.2012: RM27,646,000).

3.2 Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of each reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. The Group based its assumptions and estimates on parameters available when the financial statements was prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

(i) Impairment of goodwill

The Group assesses whether there are any indicators of impairment for goodwill at each reporting date. Goodwill is tested for impairment annually and at other times when such indicators exist.

When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows.

The carrying amount of the Group’s goodwill excluding those relating to discontinued operations as at 28 February 2013 was RM28,816,000 (29.02.2012: RM49,670,000).

(ii) Useful lives of plant and equipment

The cost of plant and equipment is depreciated on a straight-line basis over the plant and equipment’s estimated useful lives. Management estimates the useful lives of these plant and equipment (excludes leasehold land, golf course and buildings) to be within 1 to 10 years. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. The carrying amount of the Group’s plant and equipment at 28 February 2013 was RM10,734,000 (29.02.2012: RM18,803,000).



3. Significant accounting judgments and estimates (cont’d)

3.2 Key sources of estimation uncertainty (cont’d)

(iii) Impairment of loans and receivables

The Group assesses at each balance sheet date whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of the Group’s loans and receivables at the reporting date is disclosed in Note 18.

(iv) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent that it is probable that taxable profit will be available against which the losses and capital allowances can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

The carrying value of recognised tax losses and capital allowances at 28 February 2013 was RM5,572,000 (29.02.2012: RM5,546,000) and the unrecognised tax losses and capital allowances of the Group at 28 February 2013 was RM260,426,000 (29.02.2012: RM274,946,000).

4. Revenue

Group28.02.2013 29.02.2012


Sale of goods 535,288 504,797Parking operations 1,884 1,935Sale of fresh oil palm fruit bunches 1,477 248Management income 540 540Rental income 1 –

539,190 507,520



5. Other income

The following items have been included in arriving at other income:

Group28.02.2013 29.02.2012


Gain on disposal of property, plant and equipment 8,033 103Incentive income received from suppliers 223 584Interest income from bank balances 572 820Net foreign exchange gain 847 2,262Rental income- advertisement space 3,688 3,377- property, plant and equipment and land use rights 889 1,224Reversal of impairment losses for property, plant and equipment 697 683Reversal of impairment losses for land use rights 150 147Warehousing and logistics income 277 431Waiver of debts by a creditor 290 –Miscellaneous 746 1,062

16,412 10,693

6. Employee benefits expenses

Group28.02.2013 29.02.2012


Wages and salaries 22,935 21,302Social security contributions 270 261Short term accumulating compensated absences (1) (10)Contributions to defined contribution plan 2,646 2,492Staff welfare and employee meals 436 413Staff uniforms 85 135Accommodation benefits 184 118Medical benefits 113 161Other benefits 346 377

27,014 25,249

Included in employee benefits expenses are executive directors’ remuneration as further disclosed in Note 7.



7. Directors’ remuneration

Group28.02.2013 29.02.2012

RM’000 RM’000Executive directors’ remuneration:

Other emoluments 3,312 3,244

Non-executive directors’ remuneration:Fees 305 325Other emoluments – –

305 325

Total directors’ remuneration 3,617 3,569

Benefits-in-kind received by the directors amounted to RM570 (29.02.2012: RM560).

8. Other operating expenses

The following items have been included in arriving at other operating expenses:

Group28.02.2013 29.02.2012


After charging/(crediting):Non-executive directors’ remuneration 305 325Allowance for doubtful receivables 42 469Assessment and quit rent 891 975Auditors’ remuneration:- Statutory audit 688 698- Non-audit services 178 130Bad debts written off 125 32Bank charges 958 1,091Donations 3,171 1,694Impairment loss on land held for development (Note 13) 305 –Insurance 1,438 1,096Inventories written down 523 157Inventories written off 259 262Management fee paid to a related company 2,400 2,400Packing materials 952 1,040Printing and stationery 424 411Property, plant and equipment written off 222 195Reversal of inventories written down ** (312) (199)Rental of equipment 75 75Transportation costs 4,086 3,806Travelling expenses 963 1,133

** The reversal of inventories written down was made when the related inventories were sold above their carrying amounts.



9. Finance expense

Group28.02.2013 29.02.2012


Interest expense on:- Bank borrowings 3,180 3,144- Hire purchase and finance lease liabilities 64 64

3,244 3,208

10. Income tax expense

Major components of income tax expense

The major components of income tax expenses for the financial years ended 28/29 February 2013 and 2012 are:

Group28.02.2013 29.02.2012


Consolidated income statement:

Current income tax – continuing operations:Current income taxation - 21,389 18,564Under provision in respect of prior years- 114 134

21,503 18,698

Deferred tax – continuing operations:Origination and reversal of temporary differences- (37) (484)Under/(over) provision in respect of prior years- 8 (17)

(29) (501)

Income tax attributable to continuing operations 21,474 18,197

Income tax attributable to discontinued operations:Current income tax - 2,052 1,550Deferred tax- (53) 16

Income tax expense recognised in profit or loss 23,473 19,763



10. Income tax expense (cont’d)

Relationship between tax expense and accounting profit

A reconciliation of income tax expense applicable to profit before tax at the statutory income tax rate to income tax expense at the effective income tax rate of the Group is as follows:

Group28.02.2013 29.02.2012


Profit before tax from continuing operations 85,189 80,161Profit before tax from discontinued operations (Note 22(a)) 11,532 6,442

Accounting profit before tax 96,721 86,603

Tax at the domestic rate applicable to profits in the country where the Groupoperates 24,180 21,651

Adjustments:Effect of income not subject to tax (2,027) (359)Effect of expenses not deductible for tax purposes 4,980 3,361Effect of different tax rates in other country 890 372Utilisation of previously unrecognised deferred tax assets (4,711) (5,489)Deferred tax assets not recognised during the year 42 73Under provision of deferred tax in prior years 8 29Under provision of current tax in prior years 111 125

Income tax expense for the year 23,473 19,763

The nature of expenses that are not deductible for income tax purposes are as follows:

Group28.02.2013 29.02.2012

RM’000 RM’000

Non tax-deductible corporate expenses 1,859 624Non-qualified depreciation 1,511 1,577Non tax-deductible professional fees and related expenses 587 311Tax and secretary fees 81 75Impairment loss on land held for development 76 –Donation 42 54Interest restriction 29 444Others 795 276

4,980 3,361



11. Earnings per share (a) Continuing operations

Basic earnings per share from continuing operations are calculated by dividing profit from continuing operations, net of tax, attributable to owners of the Company by the weighted average number of ordinary shares outstanding during the financial year.

Diluted earnings per share from continuing operations are calculated by dividing profit from continuing operations, net of tax, attributable to owners of the Company by the weighted average number of ordinary shares outstanding during the financial year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

The following tables reflect the profit and share data used in the computation of basic and diluted earnings per share for the years ended 28/29 February 2013 and 2012:

Group28.02.2013 29.02.2012


Profit for the year attributable to owners of the Company 73,269 66,932Less: Profit from discontinued operations, net of tax, attributable to

owners of the Company (9,533) (4,876)

Profits from continuing operations, net of tax, attributable to owners of the Company used in the computation of basic and diluted earnings per share from continuing operations 63,736 62,056

No. of shares No. of shares’000 ’000

Weighted average number of ordinary shares for basic earnings per share computation (’000) 1,114,164 1,115,137

Weighted average number of ordinary shares for diluted earnings per share computation (’000) 1,114,164 1,115,137

125,486,000 (29.02.2012: 125,486,000) warrants issued pursuant to the reverse acquisition and mandatory general offer have not been included in the calculation of diluted earnings per share because they are anti-dilutive.

Subsequent to the year end and up to the date of this report, the details on conversion of warrants are disclosed in Note 38(b).

(b) Earnings per share computation

The basic and diluted earnings per share are calculated by dividing the profit for the year, attributable to owners of the Company by the weighted average number of ordinary shares for basic earnings per share computation and weighted average number of ordinary shares for diluted earnings per share computation respectively. These profit and share data are presented in the tables in Note 11(a) above.



12. Property, plant and equipment

GroupFreehold

landLeasehold

land BuildingsGolf

course

Capitalwork-in-progress

Furnitureand

fittings

Electrical installation

and air conditioner

Otherassets Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost or valuation

At 1 March 2012 – 25,344 189,954 44,648 – 23,048 5,940 39,190 328,124

Additions – – – – 261 569 100 2,637 3,567

Disposals – – – – – (5) – (615) (620)

Write offs – – – – – (681) (67) (1,108) (1,856)

Reclassifications – – – – – 9 – (9) –

Reclassified as assets held for sale (Note 22) – (24,960) (151,953) – – (8,404) (1,135) (6,545) (192,997)

At 28 February 2013 – 384 38,001 44,648 261 14,536 4,838 33,550 136,218

Representing:

At cost – 384 33,438 44,648 261 14,536 4,838 33,550 131,655

At valuation – – 4,563 – – – – – 4,563

At 28 February 2013 – 384 38,001 44,648 261 14,536 4,838 33,550 136,218

Cost or valuation

At 1 March 2011 2,051 25,344 194,814 44,648 174 22,226 5,819 38,507 333,583

Additions – – 55 – 37 848 132 1,988 3,060

Disposals – – – – – – – (620) (620)

Write offs – – – – (68) (26) (11) (422) (527)

Reclassifications – – 73 – (143) – – 70 –

Reclassified as assets held for sale (Note 22) (2,051) – (4,988) – – – – (333) (7,372)

At 29 February 2012 – 25,344 189,954 44,648 – 23,048 5,940 39,190 328,124

Representing:

At cost – 25,344 185,391 44,648 – 23,048 5,940 39,190 323,561

At valuation – – 4,563 – – – – – 4,563

At 29 February 2012 – 25,344 189,954 44,648 – 23,048 5,940 39,190 328,124



12. Property, plant and equipment (cont’d)

GroupLeasehold

land BuildingsGolf

course


Furnitureand

fittings


and air conditioner

Otherassets Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Accumulated depreciation and impairment losses

At 1 March 2012

Accumulated depreciation 1,767 28,164 7,964 – 13,787 4,729 30,859 87,270

Accumulated impairment losses 45 763 9,038 – – – – 9,846

1,812 28,927 17,002 – 13,787 4,729 30,859 97,116

Depreciation charge for the year 247 3,621 601 – 1,673 192 2,604 8,938

Reversal of impairment losses * – (72) (625) – – – – (697)

Disposals – – – – (5) – (530) (535)

Write offs – – – – (536) (64) (1,026) (1,626)

Reclassifications – – – – 8 – (8) –

Reclassified as assets held for sale (Note 22) (1,945) (16,727) – – (3,866) (458) (5,169) (28,165)

At 28 February 2013 114 15,749 16,978 – 11,061 4,399 26,730 75,031

Representing:

At cost 114 12,013 16,978 – 11,061 4,399 26,730 71,295

At valuation – 3,736 – – – – – 3,736

At 28 February 2013 114 15,749 16,978 – 11,061 4,399 26,730 75,031

Analysed as:

Accumulated depreciation 69 15,058 8,565 – 11,061 4,399 26,730 65,882

Accumulated impairment losses 45 691 8,413 – – – – 9,149

At 28 February 2013 114 15,749 16,978 – 11,061 4,399 26,730 75,031

Net carrying amount

At cost 270 21,425 27,670 261 3,475 439 6,820 60,360

At valuation – 827 – – – – – 827

At 28 February 2013 270 22,252 27,670 261 3,475 439 6,820 61,187




GroupFreehold

landLeasehold

land BuildingsGolf

course


Furnitureand

fittings


and air conditioner

Otherassets Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Accumulated depreciation and impairment losses

At 1 March 2011

Accumulated depreciation – 1,444 25,616 7,376 – 12,035 4,537 29,044 80,052

Accumulated impairment losses – 45 833 9,651 – – – – 10,529

– 1,489 26,449 17,027 – 12,035 4,537 29,044 90,581

Depreciation charge for the year – 323 4,160 588 – 1,776 203 2,732 9,782

Reversal of impairment losses * – – (70) (613) – – – – (683)

Disposals – – – – – – – (606) (606)

Write offs – – – – – (24) (11) (291) (326)

Reclassified as assets held for sale (Note 22) – – (1,612) – – – – (20) (1,632)

At 29 February 2012 – 1,812 28,927 17,002 – 13,787 4,729 30,859 97,116

Representing:

At cost – 1,812 25,360 17,002 – 13,787 4,729 30,859 93,549

At valuation – – 3,567 – – – – – 3,567

At 29 February 2012 – 1,812 28,927 17,002 – 13,787 4,729 30,859 97,116

Analysed as:

Accumulated depreciation – 1,767 28,164 7,964 – 13,787 4,729 30,859 87,270

Accumulated impairment losses – 45 763 9,038 – – – – 9,846

At 29 February 2012 – 1,812 28,927 17,002 – 13,787 4,729 30,859 97,116

Net carrying amount

At cost – 23,532 160,031 27,646 – 9,261 1,211 8,331 230,012

At valuation – – 996 – – – – – 996

At 29 February 2012 – 23,532 161,027 27,646 – 9,261 1,211 8,331 231,008

* reversal of impairment loss has been made to increase the carrying value of the golf course to its estimated recoverable

amount based on indicative valuation provided by an independent firm of valuers.




Other assets comprise office equipment, computer, renovations, motor vehicles, crockery, kitchenware, linen and uniform for hotel operations.

Officeequipment

and computerCompany RM’000

At 28 February 2013

CostAt 1 March 2011 7Write off (2)

At 28 February 2013 5

Accumulated depreciationAt 1 March 2011 2Depreciation charge for the year 2Write off (1)


Net carrying amount 2

At 29 February 2012

CostAt 1 March 2011 8Addition 1Write off (2)


Accumulated depreciationAt 1 March 2011 2Depreciation charge for the year 1Write off (1)


Net carrying amount 5




(a) The land and buildings of the Group were revalued in 1991 by the directors based on valuations by independent professional valuers on a fair market value basis in 1990 and as revised by the Government Valuers. Had the land and buildings been carried at historical cost, the carrying amount that would have been in the financial statements as at the end of the year would be as follows:

Group28.02.2013 29.02.2012

RM’000 RM’000

Land use rights 37 43Buildings 581 706

618 749

(b) Assets held under finance leases

During the financial year, the Group acquired property, plant and equipment by the following means:

Group Company28.02.2013 29.02.2012 28.02.2013 29.02.2012

RM’000 RM’000 RM’000 RM’000

Cash payment 3,127 2,714 – 1Obligations under finance leases 440 346 – –

3,567 3,060 – 1

The net carrying amount of motor vehicles held by the Group under finance leases at reporting date was RM1,249,000 (29.02.2012: RM1,148,000).

(c) Assets pledged as security

The net carrying amounts of property, plant and equipment pledged as securities for borrowings (Note 24) are as follows:

Group Company28.02.2013 29.02.2012 28.02.2013 29.02.2012

RM’000 RM’000 RM’000 RM’000

Freehold land – 2,051 – –Buildings – 3,376 – –

– 5,427 – –

As at 28 February 2013, the charges on the property, plant and equipment as mentioned above were discharged by the bank.



13. Land held for development

Freeholdland

RM’000

Group

CostAt 1 March 2011 and 29 February 2012 3,839

At 1 March 2012 and 28 February 2013 3,839

Accumulated impairment lossesAt 1 March 2011 and 29 February 2012 3,534

At 1 March 2012 3,534Impairment losses for the year * (Note 8) 305

At 28 February 2013 3,839

Carrying amount at:29 February 2012 305

28 February 2013 –

* An impairment loss had been made to reduce the net carrying amount of the freehold land to its estimated recoverable

amount as it is not feasible to develop the land at this juncture.

14. Biological assets

Group28.02.2013 29.02.2012

RM’000 RM’000

At fair value:At beginning of year 4,200 3,386Additions – 208Gain arising from changes in fair values 220 606

At end of year 4,420 4,200

Mature oil palm trees produce fresh fruit bunches (“FFB”), which are used to produce Crude Palm Oil (“CPO”) and Palm Kernel. The fair values of oil palm plantations are determined by an independent valuer using the discounted future cash flows of the underlying plantations. The expected future cash flows of the oil palm plantations are determined using the forecast market price of FFB, which is largely dependent on the projected selling prices of CPO and Palm Kernel in the market.



14. Biological assets (cont’d)

Significant assumptions made in determining the fair values of the oil palm plantations are as follows:

(a) oil palm trees have an average life of 25 years, with the first 3 to 4 years as immature and the remaining years as mature;

(b) discount rate per annum of 12.0% (29.02.2012: 13.0%). Such a discount rate represents the asset specific rate for the Group’s oil palm plantation operations which is applied in the discounted future cash flows calculation;

(c) average selling price of CPO at RM2,500 (29.02.2012: RM2,500) per tonne;

(d) average selling price of Palm Kernel of RM1,250 (29.02.2012: RM1,250) per tonne; and

(e) average yield is 20.6 (29.02.2012: 19.0) tonnes of FFB per hectare over the average life of 25 years.

During the year, the Group’s oil palm plantations produced approximately 2,700 tonnes (29.02.2012: 1,100 tonnes) of FFB. The selling prices per tonne for those FFB ranged between RM1,100 to RM3,600 (29.02.2012: RM1,600 to RM3,800).

At the end of the financial year, the Group’s total planted area and related value of mature and immature plantations are as follows:

Group28.02.2013 29.02.2012Hectares Hectares

Planted area:Mature 126.5 126.5Immature 8.0 4.0

134.5 130.5

15. Land use rights

Group28.02.2013 29.02.2012

RM’000 RM’000

CostAt beginning of year 32,263 32,263Additions 1,074 –

At end of year 33,337 32,263



15. Land use rights (cont’d)

Group28.02.2013 29.02.2012

RM’000 RM’000

Accumulated amortisation and impairment lossesAt beginning of yearAccumulated amortisation 8,591 7,868Accumulated impairment losses 1,186 1,333

9,777 9,201Amortisation charge for the year 668 723Reversal of impairment losses (150) (147)

At end of year 10,295 9,777

Analysed as:Accumulated amortisation 9,259 8,591Accumulated impairment losses 1,036 1,186

10,295 9,777

Net carrying amount at end of year 23,042 22,486

Amount to be amortised:- Not later than one year 668 723- Later than one year but not later than five years 2,673 2,889- Later than five years 19,701 18,874

23,042 22,486

16. Goodwill

Group28.02.2013 29.02.2012

RM’000 RM’000CostAt beginning of year 49,670 49,670Reclassified to assets held for sale (Note 22) (20,854) –

At end of year 28,816 49,670



16. Goodwill (cont’d)

Impairment tests for goodwill

(a) Allocation of goodwill

Goodwill has been allocated to the Group’s cash generating unit (“CGU”) identified according to business segment as follows:

28.02.2013 29.02.2012RM’000 RM’000

Trading of duty free goods and non-dutiable merchandise 28,816 28,816Property and hospitality – 20,854

Total 28,816 49,670

(b) Key assumptions used in value-in-use calculations

The recoverable amount of the CGUs is determined based on value-in-use calculations using cash flow projections based on financial forecasts with key assumptions approved by management covering a 5-year period with a growth rate of approximately 5%. The forecasted growth rate used to extrapolate cash flow beyond the 5-year period is 1% (29.02.2012: 1%).

Key assumptions and management’s approach to determine the values assigned to each key assumption are as follows:

(i) Budgeted gross margin

The basis used to determine the value assigned to the budgeted gross margin is the average gross margin achieved in the year immediately before the budgeted year increased for expected efficiency improvements. The budgeted gross margin for trading of duty free goods and non-dutiable merchandise segment are in the range of 9% to 27% (29.02.2012: 11% to 27%) whereas for property and hospitality segment, it is nil (29.02.2012: 41% to 73%).

(ii) Selling price

The selling price used to calculate the cash inflows from operations was determined after taking into consideration price trends of the industries, which the CGUs are exposed to. Values assigned are consistent with the external sources of information.

(iii) Discount rate

The discount rate applied to the cash flow projections of 9.3% (29.02.2012: 8.5%) is based on the weighted average cost of capital of the Group.



16. Goodwill (cont’d)

(c) Sensitivity to changes in assumptions

With regard to the assessment of value-in-use of all CGUs, management believes that any reasonable change in any of the above key assumptions would not cause the carrying value of the units to materially exceed their recoverable amounts.

17. Investments in subsidiaries

Company28.02.2013 29.02.2012

RM’000 RM’000

Equity shares, at cost 974,316 974,316

The Company has the following subsidiary companies as at 28 February 2013:

Name of company

Country of incorporation and place of

businessPrincipal activities Percentage of equity held Cost of investment

28.02.2013 29.02.2012 28.02.2013 29.02.2012% % RM’000 RM’000

Held by the Company

DFZ Capital Berhad ^ Malaysia Investment holding

100 100 743,671 743,671

Darul Metro Sdn Bhd ^ Malaysia Letting out properties

100 100 230,645 230,645



17. Investments in subsidiaries (cont’d)

Name of company


business Principal activitiesPercentage of

equity held28.02.2013 29.02.2012

% %

Held by DFZ Capital Berhad

Orchard Boulevard Sdn Bhd ^ Malaysia Investment holding and resort development

100.00 100.00

DFZ Trading Sdn Bhd ^ Malaysia Investment holding and management services

100.00 100.00

Selasih Ekslusif Sdn Bhd ^ Malaysia Retailer of duty free and non-dutiable merchandise and operation of a supermarket and department store

100.00 100.00

Winner Prompt Sdn Bhd ^ Malaysia Licensed distributor and wholesaler of duty free merchandise

100.00 100.00

DFZ Asia Sdn Bhd ^ Malaysia Investment holding 100.00 100.00

Emas Kerajang Sdn Bhd ^ Malaysia Retailer of duty free and non-dutiable merchandise

100.00 100.00

Seruntun Maju Sdn Bhd ^ Malaysia Retailer of duty free and non-dutiable merchandise

100.00 100.00

Binamold Sdn Bhd ^ Malaysia Property investment 100.00 100.00

Tenggara Senandung Sdn Bhd ^ Malaysia Operator of ferry terminal, carpark, and trading of high speed diesel

100.00 100.00




Name of company

Country of incorporation and place of business Principal activities

Percentage ofequity held

28.02.2013 29.02.2012% %

Held by Orchard Boulevard Sdn Bhd

Gold Vale Development Sdn Bhd ^ Malaysia Property development 100.00 100.00

Kelana Megah Sdn Bhd ^ Malaysia Resort development and operating of duty free complex and hotel

100.00 100.00

Cergasjaya Properties Sdn Bhd ^ Malaysia Resort development and properties management and cultivation of oil palm

100.00 100.00

Black Forest Golf And Country Club Sdn Bhd ^

Malaysia Golf and country club operator and a wholesaler and retailer of duty free and non-dutiable merchandise

100.00 100.00

Held by DFZ Trading Sdn Bhd

Cergasjaya Sdn Bhd ^ Malaysia Wholesaler and retailer of duty free and non-dutiable merchandise

100.00 100.00

Melaka Duty Free Sdn Bhd ^ Malaysia Retailer of duty free and non-dutiable merchandise

51.00 51.00

DFZ Duty Free Supplies Sdn Bhd ^ Malaysia Wholesaler and distributor of duty free and non-dutiable merchandise

100.00 100.00

Jasa Duty Free Sdn Bhd ^

MalaysiaRetailer of duty free and non-dutiable merchandise

100.00 100.00

DFZ Emporium Sdn Bhd ^

MalaysiaRetailer of duty free and non-dutiable merchandise

100.00 100.00

DFZ (M) Sdn Bhd ^ Malaysia Retailer of duty free and non-dutiable merchandise

100.00 100.00

Wealthouse Sdn Bhd ^ Malaysia Retailer of duty free and non-dutiable merchandise

100.00 100.00




Name of company


business Principal activitiesPercentage of

equity held28.02.2013 29.02.2012

% %

Held by DFZ Trading Sdn Bhd (cont’d)

Jelita Duty Free Supplies Sdn Bhd ^ Malaysia Wholesaler and distributor of duty free and non-dutiable merchandise

100.00 100.00

DFZ Duty Free (Langkawi) Sdn Bhd ^ Malaysia Retailer of duty free and non-dutiable merchandise

100.00 100.00

Media Zone Sdn Bhd ^ Malaysia Dormant 100.00 100.00

DFZ Tours & Travel Sdn Bhd ^ Malaysia Investment holding, tours and travel activities

100.00 100.00

Zon Emporium Sdn Bhd ^ Malaysia Retailer of duty free and non-dutiable merchandise

100.00 100.00

First Influx Sdn Bhd ^ Malaysia Licensed distributor and wholesaler of duty free merchandise. Temporarily ceased operation during the year.

100.00 100.00

Held by DFZ Tours & Travel Sdn Bhd

Fleet Car Hire & Tours Sdn Bhd ^ Malaysia Dormant 100.00 100.00

Held by DFZ Emporium Sdn Bhd

PT DFZ Indon Indonesia Dormant 99.00 99.00

Held by DFZ Asia Sdn Bhd

PT DFZ Indon Indonesia Dormant 1.00 1.00

Held by Emas Kerajang Sdn Bhd

Front Top (M) Sdn Bhd ^ Malaysia Dormant 100.00 100.00

^ Audited by Ernst & Young, Chartered Accountants (Malaysia), a member firm of the Malaysian Institute of Accountants



18. Trade and other receivables

Group Company28.02.2013 29.02.2012 28.02.2013 29.02.2012

RM’000 RM’000 RM’000 RM’000

Trade receivables (current):Third parties 13,671 12,952 – –Allowance for impairment (179) (147) – –

Trade receivables, net 13,492 12,805 – –

Other receivables (current):Deposits 2,066 2,327 – –Dividend receivable from subsidiaries – – – 5,984Due from a subsidiary – – 1 –Staff loans 48 128 – –Sundry receivables 4,486 4,370 – 205Allowance for impairment (56) (504) – –

Other receivables, net 6,544 6,321 1 6,189

Total trade and other receivables (current) 20,036 19,126 1 6,189

Other receivables (non-current):Staff loans 15 63 – –

Total trade and other receivables (current and non-current) 20,051 19,189 1 6,189

Add: Cash and bank balances (Note 21) 32,663 54,270 3,493 2,097

Total loans and receivables 52,714 73,459 3,494 8,286

Trade receivables

Trade receivables are non-interest bearing and are generally on 14 to 90 days’ terms. Other credit terms are assessed and approved on a case-by-case basis. Trade receivables are recognised at their original invoice amounts, which represent their fair values on initial recognition.



18. Trade and other receivables (cont’d)

Related party balances and staff loans

Amount due from a subsidiary is advances, which is unsecured, non-interest bearing and is repayable on demand.

Staff loans are unsecured and bear interest at 2.0% (29.02.2012: 2.0%) per annum. Non-current amounts have an average maturity of 1.0 years (29.02.2012: 1.2 years).

Further details on related party transactions are disclosed in Note 32.

Trade receivables that are past due but not impaired

The Group has trade receivables amounting to RM7,313,000 (29.02.2012: RM7,555,000) that are past due at the balance sheet date but not impaired. These receivables are unsecured and the analysis of their aging at the balance sheet date is as follows:

Group28.02.2013 29.02.2012

RM’000 RM’000Trade receivables past due:

Less than 30 days 1,711 1,77530 to 60 days 2,423 2,06061 to 90 days 677 1,953More than 90 days 2,502 1,767

7,313 7,555

Trade receivables that are impaired

The Group’s trade receivables that are impaired at the balance sheet date and the movement of the allowance accounts used to record the impairment are as follows:

Individually impaired Group

28.02.2013 29.02.2012RM’000 RM’000

Trade receivables – nominal amounts 179 147Less: Allowance for impairment (179) (147)

– –



18. Trade and other receivables (cont’d)

Trade receivables that are impaired (cont’d)

Individually impaired Group

28.02.2013 29.02.2012RM’000 RM’000

Movement in allowance accounts:At beginning of year 147 2,689Charge for the year 32 37Written off – (2,579)

At end of year 179 147

Other receivables that are impaired

The Group’s other receivables that are impaired at the balance sheet date and the movement of the allowance accounts used to record the impairment are as follows:

Individually impairedGroup Company

28.02.2013 29.02.2012 28.02.2013 29.02.2012RM’000 RM’000 RM’000 RM’000

Other receivables – nominal amounts 56 504 – 469Less: Allowance for impairment (56) (504) – (469)

– – – –

Movement in allowance accounts:At beginning of year 504 2,443 469 –Charge for the year 36 469 15 469Written off (484) (2,408) (484) –

At end of year 56 504 – 469

Trade and other receivables that are individually determined to be impaired at the balance sheet date relate to debtors that are in legal dispute or financial difficulties, and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.



19. Deferred tax

Group28.02.2013 29.02.2012

RM’000 RM’000

At beginning of year (638) (153)Recognised in income statement (82) (485)

At end of year (720) (638)

Presented after appropriate offsetting as follows:Deferred tax assets (6,496) (6,647)Deferred tax liabilities 5,776 6,009

Net deferred tax assets (720) (638)

The components and movements of deferred tax liabilities and assets during the year prior to offsetting are as follows:

Deferred tax liabilities/(assets):

Deferred tax liabilities Deferred tax assets

Property,plant and

equipmentRevaluation

surplus

Unused tax losses and

unabsorbed capital

allowances Others TotalRM’000 RM’000 RM’000 RM’000 RM’000

At 1 March 2011 1,159 5,482 (5,522) (1,272) (153)Recognised in income

statement 4 (185) (24) (280) (485)

At 29 February 2012 and 1 March 2012 1,163 5,297 (5,546) (1,552) (638)

Recognised in income statement (174) (187) (26) 305 (82)

At 28 February 2013 989 5,110 (5,572) (1,247) (720)



19. Deferred tax (cont’d)

Deferred tax assets have not been recognised in respect of the following items:

Group28.02.2013 29.02.2012

RM’000 RM’000

Unused tax losses 202,642 212,612Unabsorbed capital allowances 57,784 62,334

260,426 274,946

Deferred tax assets have not been recognised in respect of these items as they may not be used to offset taxable profits of other subsidiaries in the Group and they have arisen in subsidiaries that have a recent history of losses.

The unused tax losses, unabsorbed capital allowances and other deductible temporary differences of the Group are available for offsetting against future taxable profits subject to no substantial change in shareholdings under the Malaysian Income Tax Act, 1967 and guidelines issued by the tax authority.

20. Inventories

Group28.02.2013 29.02.2012

RM’000 RM’000

Trading goods 208,668 137,823Food and beverage 435 555Consumables 355 354

Total inventories at lower of cost and net realisable value 209,458 138,732

Income statement:

Inventories recognised as an expense in cost of sales 375,544 356,055Inventories recognised as an expense in other operating expenses

Inclusive of the following charge/(credit):- Inventories written down 523 157- Reversal of inventories written down (312) (199)

The reversal of inventories written down was made when the related inventories were sold above their carrying amounts.



21. Cash and bank balances

Group Company28.02.2013 29.02.2012 28.02.2013 29.02.2012

RM’000 RM’000 RM’000 RM’000

Cash at banks and on hand 15,432 12,905 3,493 2,097Deposits with licensed banks 17,231 41,365 – –

32,663 54,270 3,493 2,097

Cash at banks earns interest at floating rates based on daily bank deposit rates. Deposits with licensed banks are readily converted to cash and are subject to insignificant risk of changes, and earn interest at the respective deposit rates. The weighted average effective interest rate of deposits is 3.05% (29.02.2012: 2.90%) per annum.

Deposits with licensed banks of the Group amounting to RM9,575,000 (29.02.2012: RM9,907,000) are pledged to banks for credit facilities granted to certain subsidiaries as disclosed in Note 24.

For the purpose of the consolidated cash flow statement, cash and cash equivalents comprise the following at the balance sheet date:

Group Company28.02.2013 29.02.2012 28.02.2013 29.02.2012

RM’000 RM’000 RM’000 RM’000

Cash and deposits with licensed banks 32,663 54,270 3,493 2,097Bank overdrafts (2,904) (161) – –Deposits pledged with licensed banks (9,575) (9,907) – –

Cash and cash equivalents 20,184 44,202 3,493 2,097

22. Assets of disposal group classified as held for sale

(a) As at 28 February 2013

On 10 April 2012, the Company’s subsidiaries entered into the following sale and purchase agreements with Pesaka Ikhlas (M) Sdn Bhd (“Pesaka”), a subsidiary of Berjaya Assets Berhad, a corporation listed on the Bursa Malaysia Securities Berhad:

(i) The sale of Darul Metro Sdn Bhd’s (“DMSB”) legal and beneficial interests over the remaining lease

period in six land parcels located in The Zon Johor Bahru at Stulang Laut, Johor Bahru (the “Duty Free Zone”) to Pesaka for a consideration of RM325,000,000 (“DMSB Agreement”); and

(ii) The sale of Kelana Megah Sdn Bhd’s intended lease interests in the land parcel bearing lot number

PTB 20379 to Pesaka for a consideration of RM27,990,000 (“KMSB Agreement”). (collectively, the “Proposed Disposals”)



22. Assets of disposal group classified as held for sale (cont’d)

(a) As at 28 February 2013 (cont’d)

The conditions precedent as stipulated in DMSB Agreement were fulfilled on 18 December 2012. Accordingly, the assets related to the proposed disposals under DMSB Agreement have been presented in the statement of financial position as “Assets classified as held for sale” as at 28 February 2013 and the results for the hotel, complex and ferry terminal operations, occupying land area of approximately 14.2 acres, related to these assets are presented separately on profit or loss as “Profit from discontinued operations, net of tax” for the year then ended. The goodwill which was related to the hotel, complex and ferry terminal operations in the Zon Johor Bahru, was also reclassified as assets classified as held for sale. In addition, there was also a one-off commission payment of RM6,411,000 in relation to the proposed disposals. Balance sheet disclosures

The major classes of assets of disposal group classified as held for sale as at 28 February 2013 are as follows:

Group28.02.2013

RM’000

Property, plant and equipment, net carrying amount 164,832Goodwill 20,854

Assets of disposal group classified as held for sale 185,686

Income statement disclosures The results of the discontinued operations for the years ended 28/29 February are as follows:

Group28.02.2013 29.02.2012

RM’000 RM’000

Revenue 58,951 55,533Expenses (46,597) (47,377)

Profit from operations 12,354 8,156Finance costs (822) (1,714)

Profit before tax from discontinued operations 11,532 6,442Taxation related to profit from ordinary activities of the discontinued

operations (1,999) (1,566)

Profit from discontinued operations, net of tax 9,533 4,876




(a) As at 28 February 2013 (cont’d)

Cash flow statement disclosures The cash flows attributable to the discontinued operations are as follows:

Group28.02.2013 29.02.2012

RM’000 RM’000

Operating 16,341 19,880Investing 25,850 6,241Financing (43,405) (23,965)

Net cash (outflows)/inflows (1,214) 2,156

Included in the net cash generated from investing activities are proceeds from deposit for the proposed disposals of RM26,000,000 (29.02.2012: RM7,060,000). The net cash used in financing activities are mainly repayment of advances from the related companies.

Profit per share disclosures

Group28.02.2013 29.02.2012

RM’000 RM’000Profit per share from discontinued operations attributable to owners of

the Company (cents per share)Basic 0.86 0.44Diluted 0.86 0.44

The basic and diluted profit per share from discontinued operations are calculated by dividing the profit from discontinued operations, net of tax, attributable to owners of the Company by the weighted average number of ordinary shares for basic earnings per share computation and weighted average number of ordinary shares for diluted earnings per share computation respectively. These profit and share data are presented in the tables in Note 11(a).

(b) As at 29 February 2012

DFZ Duty Free Supplies Sdn Bhd (“DSSB”), a wholly-owned subsidiary of the Company, owned two adjoining pieces of lands held under HS(D) 40166 Lot No 5947 and HS(D) 40167 Lot No 5948, located in Seberang Perai Tengah, Pulau Pinang together with a warehouse erected thereon (“SPT Property”).

In previous financial year, management actively marketed the SPT Property, which was ready for sale in its present condition. As at 29 February 2012, management assessed that the disposal was highly probable and the carrying amount of the said warehouse of RM5.7 million was reclassified from property, plant and equipment to assets held for sale.




(b) As at 29 February 2012 (cont’d)

Group29.02.2012

RM’000

Carrying amount of property, plant and equipment

Freehold land 2,051Buildings 3,376

5,427

Renovation 313

Assets classified as held for sale 5,740

On 1 March 2012, DSSB entered into a conditional sales and purchase agreement with an external party to dispose SPT Property for net cash proceeds of RM13,657,000. The disposal was completed in May 2012 and a net gain of RM7,917,000 before tax was recognised.

23. Provisions

GroupRM’000

Liquidated damages

At 28 February 2013 and 29 February 2012 547

Liquidated damages

Provision for liquidated damages is in respect of projects undertaken by a subsidiary. The provision is recognised for expected liquidated damages claims based on the terms of the applicable sale and purchase agreements.


NOTES TO THE FINANCIAL STATEMENTS (Cont’d)– 28 February 2013

24. Borrowings

Group Company28.02.2013 29.02.2012 28.02.2013 29.02.2012

Maturity RM’000 RM’000 RM’000 RM’000

Short term borrowingsSecured:

Bankers’ acceptances 2014 7,541 4,623 – –Bank overdrafts On demand 2,904 161 – –USD trade loans 2014 9,610 10,663 – –Obligations under finance

leases (Note 28) 2014 290 316 – –Term loans: - RM loan at discount rate 2014 20,000 50,000 – –- RM loan at effective cost of

funds + 1.50% 2014 4,000 – – –- SGD bank loan at SIBOR +

0.75% 2013 – 28,895 – 28,895- SGD bank loan at SIBOR +

2.50% 2014 - 2016 25,020 – 25,020 –Interest payable 2014 255 17 – –

69,620 94,675 25,020 28,895Unsecured:Interest payable 2014 80 80 – –

69,700 94,755 25,020 28,895

Long term borrowingsSecured:RM term loan at effective cost

of funds + 1.50% 2015 - 2017 20,000 – – –Obligations under finance

leases (Note 28) 2015 - 2018 787 753 – –

20,787 753 – –

Total borrowingsBankers’ acceptances 7,541 4,623 – –Bank overdrafts 2,904 161 – –USD trade loans 9,610 10,663 – –Term loans 69,020 78,895 25,020 28,895Obligations under finance

leases (Note 28) 1,077 1,069 – –

90,152 95,411 25,020 28,895Interest payable 335 97 – –

90,487 95,508 25,020 28,895



24. Borrowings (cont’d)

Bankers’ acceptances

Bankers’ acceptances are denominated in RM with weighted average effective interest rate of 4.50% p.a. (29.02.2012: 5.00% p.a.).

Bank overdrafts

Bank overdrafts are denominated in RM and bear interest at Base Lending Rate (“BLR”) + 1.25% (29.02.2012: BLR + 1.5% p.a.).

Obligations under finance leases

These obligations are secured by a charge over the leased assets (Note 12). The average discount rate implicit in the leases of the Group is 2.94% p.a. (29.02.2012: 2.94% p.a.).

USD trade loans

These trade loans are due in the next financial year. The average interest rate for the loans ranged from 1.70% to 2.70% p.a. (29.02.2012: 1.60% to 1.90% p.a.).

RM loan at discount rate

This loan is due in the next financial year. The average discount rate for the loan ranged from 4.30% to 4.60% p.a. (29.02.2012: 4.30% to 4.60%).

RM loan at effective cost of funds + 1.50%

This callable loan is secured by a corporate guarantee from the Company of RM24,000,000 and is repayable in 7 semi-annual repayments commencing June 2013. The average interest rate for the loan is 4.97% p.a. (29.02.2012: nil).

SGD bank loan at SIBOR + 0.75%

This loan was secured by a bank guarantee of S$12,000,000 and 4.5% of DFZ Capital Berhad’s issued ordinary shares. The repayment of this loan was due on 23 March 2012. On 23 March 2012, the Company obtained a new loan (SGD bank loan at SIBOR + 2.50% described below) to refinance this bank loan.

SGD bank loan at SIBOR + 2.50%

This loan is secured by a corporate guarantee from Atlan. This callable loan is repayable over 3 years commencing September 2012.

The bankers’ acceptances, bank overdrafts and other bank facilities are secured by way of:

• fixed charges on certain properties of the Group with a net carrying amount of RM5,427,000 as at 29 February 2012 and these charges were discharged by the bank as at 28 February 2013;

• deposits with licensed banks amounting to RM9,575,000 (29.02.2012: RM9,907,000); and• corporate guarantees from a subsidiary, DFZ Capital Berhad, the Company and Atlan.

Other information on financial risks of borrowings are disclosed in Note 34.



25. Trade and other payables

Group Company28.02.2013 29.02.2012 28.02.2013 29.02.2012

RM’000 RM’000 RM’000 RM’000

Trade payablesThird parties 83,125 56,991 – –Retention sums 301 301 – –

83,426 57,292 – –

Other payablesDue to subsidiaries – – 27,905 9,245Accruals 5,416 7,319 747 757Accrued payroll related expenses 3,375 3,417 – –Contribution costs payable 209 209 – –Rental payables 2,556 3,351 – –Deposits received for the proposed disposal (Note 22(a)) 33,060 7,060 – –Other deposits received 2,639 3,363 – –Dividend payables – 6,713 – 6,713Royalty payables 933 907 – –Sundry payables 8,843 9,299 185 644

57,031 41,638 28,837 17,359

Total trade and other payables 140,457 98,930 28,837 17,359Add: Borrowings (Note 24) 90,487 95,508 25,020 28,895

Total financial liabilities carried at amortised cost 230,944 194,438 53,857 46,254



25. Trade and other payables (cont’d)

(a) Trade payables

Trade payables are non-interest bearing and the normal trade credit terms granted to the Group range from 30 to 90 days (29.02.2012: 30 to 90 days).

(b) Amounts due to subsidiaries

The amounts due to subsidiaries are mainly advances which are interest free, unsecured and are repayable on demand.

Further details on related party transactions are disclosed in Note 32.

Other information on financial risks of trade and other payables are disclosed in Note 34.

26. Derivatives

28.02.2013 29.02.2012Notional amount Assets Liabilities

Notional amount Assets Liabilities

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Group

Forward currency contracts 6,709 – 18 13,595 – 95

The Group uses forward foreign exchange contracts to manage some of its transaction exposure. These contracts are not designated as cash flow or fair value hedges and are entered into for periods consistent with currency translation exposure and fair value changes exposure. Such derivatives do not qualify for hedge accounting. The derivatives represent total financial liabilities at fair value through profit or loss, classified held for trading.



27. Share capital

Number of ordinaryshares with no par value Amount

Company 28.02.2013 29.02.2012 28.02.2013 29.02.2012’000 ’000 RM’000 RM’000

At beginning of the year 1,115,232 1,114,124 988,682 987,681Acquisition and cancellation of shares

pursuant to Share Buy-Back Mandate approved by the shareholders on 27 June 2012 (11,591) – (11,480) –

Issuance of shares pursuant to MGO – 1,100 – 993Conversion of warrants – 8 – 8

At end of the year 1,103,641 1,115,232 977,202 988,682

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions. The ordinary shares have no par value.

(a) Other reserves

Group28.02.2013 29.02.2012

RM’000 RM’000

Warrants reserve 31,681 31,681Foreign currency translation reserve 31 26Premium paid on acquisition of non-controlling interests (143,238) (143,238)

(111,526) (111,531)

(i) The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency.

(ii) Pursuant to the MGO exercise undertaken by the Company, the difference between the carrying amount of non-controlling interests at the point of acquisition and the consideration paid was reflected as premium paid. The Compulsory Acquisition was completed on 1 April 2011.

(iii) Warrants reserve relates to the fair value at initial recognition of warrants issued pursuant to the reverse acquisition exercise (inclusive of warrants issued to advisers) and MGO for shares of DFZ Capital Berhad. The warrants are exercisable at anytime at 35 cents per warrant within five years from date of issuance. As at 28 February 2013, there are 125,478,000 outstanding warrants (29.02.2012: 125,478,000).

(b) Share premium

Share premium represents the excess of consideration received from the issue of shares over the nominal (par) value, which is based on the Companies Act 1965 (Malaysia). This is presented in the consolidated financial statements consistent with reverse acquisition accounting principles, which reflect the equity balances of DFZ Capital Berhad and Darul Metro Sdn Bhd.



28. Obligations under finance leases

Group28.02.2013 29.02.2012

RM’000 RM’000

Future minimum lease payments:Not later than 1 year 341 366Later than 1 year and not later than 2 years 375 300Later than 2 year and not later than 5 years 468 512

Total future minimum lease payments 1,184 1,178Less: Future finance charges (107) (109)

Present value of finance lease liabilities 1,077 1,069

Analysis of present value of finance lease liabilities:Not later than 1 year 290 316Later than 1 year and not later than 2 years 342 267Later than 2 year and not later than 5 years 445 486

1,077 1,069Less: Amount due within 12 months (290) (316)

Amount due after 12 months 787 753

The Group has hire purchase contracts on property, plant and equipment. There are no restrictions placed upon the Group by entering into these leases.

29. Commitments

(a) Capital commitments

Group28.02.2013 29.02.2012

RM’000 RM’000

Capital expenditure

Approved and contracted for:Property, plant and equipment 1,034 18

Approved but not contracted for:Property, plant and equipment 5,875 456

6,909 474



29. Commitments (cont’d)

(b) The Group as lessee

Operating lease payments represent rentals payable by the Group for use of buildings.

Future minimum rental payable under non-cancellable operating leases (excluding land use rights) at the end of the reporting period are as follows:

Group28.02.2013 29.02.2012

RM’000 RM’000

Future minimum rentals payable:Not later than 1 year – 12Later than 1 year and not later than 5 years – –Later than 5 years – –

– 12

(c) The Group as lessor

Operating lease receipts represent rentals receivable by the Group from renting out the land and buildings. The lease had remaining non-cancellable lease terms of 25 months as at 29 February 2012. Following the disposal of SPT Property in May 2012, the lease had been novated to the purchaser accordingly.

The future minimum lease payments receivable under non-cancellable operating leases contracted for as at the balance sheet date but not recognised as receivables, are as follows:

Group28.02.2013 29.02.2012

RM’000 RM’000

Future minimum rentals receivable:Not later than 1 year – 780Later than 1 year and not later than 5 years – 845

– 1,625

30. Contingent liabilities

Company28.02.2013 29.02.2012

RM’000 RM’000

Corporate guarantees for banking facilities to certain subsidiaries 62,173 17,845



31. Material litigations

The following are the material litigations involving the Group. Based on legal advice, management has assessed that no liability should be recognised on these contingent liabilities as at 28 February 2013 (29.02.2012: Nil).

DFZ Capital Berhad (“DFZ”) and its subsidiaries, Kelana Megah Sdn Bhd (“KMSB”) and DFZ Duty Free (Langkawi) Sdn Bhd (“DDFL”)

(a) Arbitration Proceedings by Mancon Berhad (“MB”) on behalf of Nilai Barisan Sdn Bhd (“NBSB”)

MB, on behalf of NBSB, had commenced arbitration proceedings against KMSB on 24 May 1999 for the sum of approximately RM2,467,776 in relation to NBSB’s engagement as a sub-contractor nominated by KMSB for the supply, installation, testing and commissioning of air-conditioning and mechanical ventilation works in the construction of the Johor Bahru Duty Free Complex. KMSB has counter-claimed that it incurred loss/damage in the sum of approximately RM1,908,898 in rectifying defective and/or incomplete works of NBSB.

NBSB has been wound up on 8 August 2000. In view that NBSB has been wound up, parties were not able to resume the arbitration proceedings and the same is currently in abeyance.

KMSB’s solicitors had issued numerous letters to the Arbitrator to seek the Arbitrator’s instructions on the arbitration proceedings and/or instructions that the arbitration proceedings be closed. To date, KMSB has not received any response from the Arbitrator. KMSB’s solicitors had also written to the liquidator of NBSB to request that the liquidator decides either if NBSB wishes to continue with the arbitration proceedings or to withdraw the claims against KMSB. To date, KMSB has not received any response from the liquidator.

(b) Writ of Summons and Statement of Claim by LH Technology Sdn. Bhd. (“LHT”)

LHT had commenced legal proceedings at the High Court against KMSB on 30 December 1999, claiming a sum of RM1,025,855 in relation to LHT’s engagement as a sub-contractor for the design, supply and installation of curtain walling, frameless glass panel, shopfront, balustrading, aluminum and glazing works in the construction of the Johor Bahru Duty Free Complex.

On 26 June 2000, the Senior Assistant Registrar of the High Court allowed LHT’s application for a summary judgment against KMSB. KMSB appealed to the High Court Judge against the said summary judgment, and this appeal was allowed. LHT then appealed to the Court of Appeal against the decision of the High Court Judge. The Court of Appeal had dismissed LHT’s appeal on 28 July 2008. To date, the High Court has not fixed any date for the suit.



31. Material litigations (cont’d)

(c) Writ of Summons and Statement of Claim by EEB

EEB had commenced legal proceedings at the High Court on 31 January 2004 against DDFL and two other defendants in respect of an alleged tort of conspiracy on a long-term lease of twenty-eight (28) years entered into between EEB and DDFL for a duty-free outlet and staff living quarters in Langkawi (collectively, “premises”).

EEB had also applied to the High Court via an interlocutory application to compel DDFL to quit, vacate and deliver up to EEB the premises. EEB’s application was dismissed by the High Court on 6 December 2005. EEB then appealed to the Court of Appeal against the said dismissal by the High Court. The Court of Appeal dismissed EEB’s appeal on 27 May 2009.

DDFL had filed an application for an interim injunction to restrain EEB and its subsidiary companies from exercising self-help to regain vacant possession of the premises and interfering with DDFL’s quiet enjoyment of the same. DDFL also filed another application subsequently for an interim injunction to restrain EEB and its subsidiary companies from prohibiting and qualifying DDFL’s use of lanes around the premises for access to or egress from the premises. Consent Order was duly recorded between the parties on 23 November 2010 before the High Court Judge wherein EEB withdraws all claims against DDFL and DDFL withdraws its counterclaim against EEB without any order as to costs (“Consent Order”).

Pursuant to the terms of the Consent Order, the parties had duly appointed their respective valuers to undertake a valuation of the market rate for Lot No. 970, 971, 973, and 1556, Mukim Kedawang, Daerah Langkawi (excluding the staff living quarters) (“Demised Premises”). However, as there is a dispute arising from the Consent Order, DDFL had on 24 May 2011 filed a Writ of Summons and Statement of Claim (“Case”) in the Alor Setar High Court vide Civil Suit No. 22-158-2011, seeking amongst others, for the following declaratory reliefs:

(i) a declaration that paragraph (c) of the Consent Order be declared void for uncertainty;

(ii) a declaration that the valuation dated 3 January 2011 by EEB’s valuer be declared null and void; and

(iii) an order that EEB grant a lease of the Demised Premises occupied by DDFL for a term of three (3) years commencing from 1 January 2011 and thereafter, renewable every three (3) years until 31 March 2024 at the rate of RM1.60 per square feet in accordance with the valuation by DDFL’s valuer.

The Case has been fixed for mention on 25 July 2011. Subsequent thereto, a Summons In Chambers and an Affidavit In Support had been filed on 26 June 2011 seeking for the following orders:

(i) an interim injunction to restrict and prohibit EEB whether by itself, or through its employees or agents or any of them, from exercising self-help to recover vacant possession of the Demised Premises until the determination or conclusion of the suit; and

(ii) an interim injunction to restrict and prohibit any interference with the peaceful possession, occupation and quiet enjoyment of the Demised Premises until the determination or conclusion of the suit.

(collectively “Application for Injunction”)



31. Material litigations (cont’d)

(c) Writ of Summons and Statement of Claim by EEB (cont’d)

On 17 June 2011, EEB had filed a Summons In Chambers together with an Affidavit In Support to strike out DDFL’s Case (“Striking Out Application”). The High Court had on 10 July 2011 directed for parties to exchange affidavits in respect of both the Application for Injunction and for the Striking Out Application and has fixed the matter for case management on 18 April 2012.

DDFL had on 7 March 2012 filed a Summons In Chambers together with an Affidavit In Support to amend the State of Claim (“Amendment Application”). The High Court had on 16 April 2012 allowed the Amendment Application. Trial had commenced on 22 April 2012 and the High Court had fixed the matter for continued trial on 1 and 15 July 2012. The trial was concluded on 1 July 2012 and the High Court had fixed 7 August 2012 for decision. The High Court on 30 August 2012 granted judgment in favour of EEB. An appeal to the Court of Appeal against the High Court’s decision has been filed by DDFL on 5 September 2012.

An application to stay enforcement proceedings pursuant to the Court of Appeal’s Judgment dated 30 August 2012 in respect of the Consent Order (Stay Application) had been filed in the High Court on 9 September 2012. The High Court has dismissed the Stay Application with costs of RM1,500 on 21 October 2012.

DDFL had on 23 October 2012 filed an appeal to the Court of Appeal to stay execution proceedings pending a decision by the Court of Appeal (in respect of the appeal by DDFL to the Court of Appeal on 5 September 2012). The parties had on 12 November 2012 recorded a consent judgment whereby amongst others, parties agreed to stay all further execution proceedings pending disposal of the appeal filed by DDFL on 5 September 2012.

The Court of Appeal has been informed by the solicitors that the matter has been resolved and pending execution of the formal settlement agreement and the registration of the lease. Upon such event, DDFL will file a notice of discontinuance and will request the Court of Appeal to fix the appeal for disposal. Whereupon, the appeal will be formally withdrawn.

32. Related party disclosures

An entity or individual is considered a related party of the Group for the purpose of the financial statements if: i) it possesses the ability, directly or indirectly, to control or exercise significant influence over the operating and financial decisions of the Group or vice versa; or ii) it is subject to common control or common significant influence.



32. Related party disclosures (cont’d)

(a) Significant transactions

In addition to those related party information disclosed elsewhere in the financial statements, the following significant transactions between the Group and related parties who are not members of the Group took place during the financial year on terms agreed between the parties.

Group Company28.02.2013 29.02.2012 28.02.2013 29.02.2012

RM’000 RM’000 RM’000 RM’000

Subsidiaries:- Dividends received – – 65,929 45,763

Related companies:- Management fee 2,400 2,400 – –- Interest expense – 52 – –- Income for licensing of “ZON”

trademark 48 48 – –- Rental income 1 – – –

Related party:- Donation to Yayasan Harmoni * 3,000 1,500 – –

* The Non-Executive Chairman of the Company is the founder and executive chairman of Yayasan Harmoni.

(i) Management fees were made according to negotiated prices between the parties.

(ii) Rental income was made in accordance with prices negotiated between the parties.

Information regarding outstanding balances arising from related party transactions as at 28 February 2013 and 29 February 2012 are disclosed in Notes 18 and 25.

(b) Compensation of key management personnel

The remuneration of certain directors and other members of key management during the year were as follows:

Group28.02.2013 29.02.2012

RM’000 RM’000

Short-term employee benefits 2,943 2,809Defined contribution plan 353 339

3,296 3,148

Comprise amounts paid to:Directors of the Company 1,422 1,388Other key management personnel 1,874 1,760

3,296 3,148



33. Fair value of financial instruments

(a) Fair value of financial instruments that are carried at fair value

The following table shows an analysis of the financial instruments carried at fair value by level of fair value hierarchy:

Quoted prices in active

markets for identical

instruments

Significant other

observable inputs

Significantunobservable

inputs Total(Level 1) (Level 2) (Level 3)RM’000 RM’000 RM’000 RM’000

At 28 February 2013Financial liabilities:Derivatives- Forward foreign exchange

contracts – 18 – 18

At 29 February 2012Financial liabilities:Derivatives- Forward foreign exchange

contracts – 95 – 95

Fair value hierarchy

The Group classifies fair value measurement using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

• Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;• Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or

liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and• Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable

inputs).

Determination of fair value

Derivatives (Note 26): Forward currency contracts are valued using a valuation technique with market observable inputs (Level 2). The most frequently applied valuation techniques include forward pricing models, using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates and interest rate curves.



33. Fair value of financial instruments (cont’d)

(b) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not a reasonable approximation of fair value

28 February 2013 29 February 2012

NoteCarrying amount Fair value

Carrying amount Fair value

RM’000 RM’000 RM’000 RM’000

Financial liabilities:

Obligations under finance leases 28 1,077 1,092 1,069 1,063

(c) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are a reasonable approximation of fair value

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are a reasonable approximation of fair value:

Note

Other receivables (non-current) 18Trade and other receivables (current) 18Trade and other payables (current) 25Borrowings (non-current) 24Borrowings (current) 24

The carrying amounts of these financial assets and liabilities are a reasonable approximation of fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the reporting date.

The carrying amounts of the current portion of borrowings are reasonable approximations of fair values due to the insignificant impact of discounting.

The fair values of current borrowings are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.

Amounts due from related companies, staff loans, finance lease obligations and fixed rate bank loans

The fair values of these financial instruments are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.



34. Financial risk management objectives and policies

The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group’s businesses whilst managing its interest rate risks (both fair value and cash flow), foreign currency risk, liquidity risk and credit risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below. The Audit Committee provides independent oversight to the effectiveness of the risk management process.

The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks.

(a) Credit risk

The Group’s credit risk is primarily attributable to trade receivables. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis. Since the Group trades only with recognised and creditworthy third parties, there is no requirement for collateral.

The credit risk of the Group’s other financial assets, which comprise cash and cash equivalents, arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these financial assets.

The Group does not have any significant exposure to any individual customer or counterparty nor does it have any major concentration of credit risk related to any financial assets.

Financial assets that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment record with the Group. Cash and cash equivalents and derivatives that are neither past due nor impaired are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 18.



34. Financial risk management objectives and policies (cont’d)

(b) Liquidity risk

The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that refinancing, repayment and funding needs are met. As part of its overall liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group strives to maintain available banking facilities at a reasonable level to its overall debt position. As far as possible, the Group raises committed funding from both capital markets and financial institutions and balances its portfolio with some short term funding so as to achieve overall cost effectiveness.

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group’s financial assets and liabilities at the balance sheet date based on contractual undiscounted obligations.

28 February 2013 29 February 2012One year or

lessOne to five

years TotalOne year or

lessOne to five

years TotalGroup RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Financial assetsTrade and other receivables 20,037 15 20,052 19,129 64 19,193Cash and bank balances 32,663 – 32,663 54,270 – 54,270

Total undiscounted financial assets 52,700 15 52,715 73,399 64 73,463

Financial liabilitiesTrade and other payables 140,457 – 140,457 98,930 – 98,930Borrowings 70,695 22,334 93,029 94,805 812 95,617Derivatives – forward

currency contracts:- gross payments 6,709 – 6,709 13,595 – 13,595- gross receipts (6,691) – (6,691) (13,500) – (13,500)

Total undiscounted financial liabilities 211,170 22,334 233,504 193,830 812 194,642

Total net undiscounted financial liabilities (158,470) (22,319) (180,789) (120,431) (748) (121,179)




(b) Liquidity risk (cont’d)

Analysis of financial instruments by remaining contractual maturities (cont’d)


lessOne to five


lessOne to five

years TotalCompany RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Financial assetsTrade and other receivables 1 – 1 6,189 – 6,189Cash and bank balances 3,493 – 3,493 2,097 – 2,097

Total undiscounted financial assets 3,494 – 3,494 8,286 – 8,286

Financial liabilitiesTrade and other payables 28,837 – 28,837 17,359 – 17,359Borrowings 25,020 – 25,020 28,895 – 28,895

Total undiscounted financial liabilities 53,857 – 53,857 46,254 – 46,254

Total net undiscounted financial liabilities (50,363) – (50,363) (37,968) – (37,968)

As at 28 February 2013, the Group was in a net undiscounted financial liabilities position of RM178.4 million. The net liabilities position was due mainly to short term borrowings of RM25.0 million procured by the Company from a financial institution to fund the MGO exercise. The table below shows the contractual expiry by maturity of the Company’s contingent liabilities. The maximum amount of the financial guarantee contracts are allocated to the earliest period in which the guarantee could be called.


lessOne to five


lessOne to five

years TotalCompany RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Corporate guarantees 62,173 – 62,173 17,845 – 17,845




(c) Interest rate risks

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group’s and the Company’s exposure to interest rate risk arises primarily from interest-bearing borrowings. Borrowings at floating rates expose the Group to cash flow interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk.

The Group manages its interest rate exposure by maintaining a mix of fixed and floating rate borrowings.

Sensitivity analysis for interest rate risk

The table below demonstrates the sensitivity to a reasonably possible change in interest rates with all other variables held constant, of the Group’s profit net of tax (mainly through the impact on interest expense on floating rate loans and borrowings).

Increase/(decrease) in basis points

Effect on profit net of

taxRM’000

28 February 2013

Group

- Ringgit Malaysia +10 (27)- Singapore Dollar +10 (19)- United States Dollar +10 (7)

- Ringgit Malaysia -10 27- Singapore Dollar -10 19- United States Dollar -10 7

Company

- Singapore Dollar +10 (19)

- Singapore Dollar -10 19




(c) Interest rate risks (cont’d)

Increase/(decrease) in basis points

Effect on profit net of

taxRM’000

29 February 2012

Group

- Ringgit Malaysia +10 (10)- Singapore Dollar +10 (22)- United States Dollar +10 (8)

- Ringgit Malaysia -10 10- Singapore Dollar -10 22- United States Dollar -10 8

Company

- Singapore Dollar +10 (22)

- Singapore Dollar -10 22

(d) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group has transactional currency exposures arising from purchases that are denominated in a currency other than the functional currency of the operations to which they relate, primarily United States Dollars (“USD”) and Singapore Dollar (“SGD”). The foreign currencies in which these transactions are denominated are mainly USD and SGD. Approximately 57% (29.02.2012: 49%) of the Group’s purchases are denominated in foreign currencies. Foreign currency exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level.

At balance sheet date, the Group and the Company have a balance of short term borrowings of RM25.0 million, which are denominated in SGD.




(d) Foreign currency risk (cont’d)

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible change in the USD and SGD exchange rates against the respective functional currencies of the Group entities, with all other variables held constant.

28.02.2013 29.02.2012RM’000 RM’000

USD/RM - strengthened 3% (1,426) (801)- weakened 3% 1,426 801

SGD/RM - strengthened 3% (695) (850)- weakened 3% 695 850

35. Capital management

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the year/period under review.

The Group monitors capital using a gearing ratio, which is total external debt divided by total capital.

The Group’s policy is that the gearing ratio shall not be more than 2.00 times to comply with covenants from its borrowings.



35. Capital management (cont’d)

The Group includes within total external debt, all financial borrowings of the Group. Total external debt due and payable within 12 months consists of bankers’ acceptances, USD trade loans, bank overdrafts, interest payable and current portion of hire purchase and finance lease liabilities. Capital includes equity attributable to the owners of the parent.

Group28.02.2013 29.02.2012

RM’000 RM’000

Borrowings (non-current) (Note 24) 20,787 753Borrowings (current excluding term loan, i.e. due and payable within 12 months) 20,680 15,860Borrowings (current - term loans) (Note 24) 49,020 78,895

Total external debt 90,487 95,508

Total equity attributable to the owners of the parent 340,779 334,891

Gearing ratio (times) 0.27 0.29

36. Segment information

(a) Operating segments

For management purposes, the operating businesses are organised and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The Group’s risks and rates of return are affected predominantly by differences in the products and services produced. The Group has the following reportable operating segments:

(i) Trading of duty free goods and non-dutiable merchandise

This segment includes revenues from sale of goods.



36. Segment information (cont’d)

(a) Operating segments (cont’d)

The Group comprises the following main business segments:

(ii) Properties and hospitality (discontinued operations)

This segment includes revenues from the following:

– rental of hotel rooms and other services;

– sale of food and beverage;

– rental income;

– sale of high speed diesel;

– ferry terminal operations; and

– parking operations.

This segment has been classified as discontinued operations during the financial year (Note 22(a)).

(iii) Investment holding and others

This segment includes revenues from the following:

– management fee income; and

– sale of fresh oil palm fruit bunches.

The activities of the Group are carried out mainly in Malaysia and as such, segmental reporting by geographical locations is not presented. The Group has no major customers.

(b) Allocation basis and transfer pricing

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

The directors are of the opinion that transfer prices between operating segments are based on negotiated prices. Segment revenue, expenses and results include transfers between operating segments. These transfers are eliminated on consolidation.




Operating segments

The following table provides an analysis of the Group’s revenue, results, assets, liabilities and other information by operating segment:

Trading of duty free goods and non-

dutiable merchandise

Properties and hospitality (discontinued operations)

Investment holdings and others

Adjustments and eliminations Notes

Per consolidated financial statements

28.02.2013 29.02.2012 28.02.2013 29.02.2012 28.02.2013 29.02.2012 28.02.2013 29.02.2012 28.02.2013 29.02.2012


Revenue:

Sales to external customers 537,170 506,697 58,951 55,533 2,020 823 (58,951) (55,533) A 539,190 507,520

Inter-segment sales 984 671 4,860 4,708 72,991 49,088 (78,835) (54,467) B – –

Total revenue 538,154 507,368 63,811 60,241 75,011 49,911 (137,786) (110,000) 539,190 507,520

Results:

Interest income 506 653 89 44 66 167 (89) (44) 572 820

Depreciation and amortisation 4,716 4,690 3,911 4,830 979 985 (3,911) (4,830) 5,695 5,675

Reversal of impairment losses for non-financial assets – – – – 847 830 – – 847 830

Gain arising from changes in fair values of biological assets – – – – 220 606 – – 220 606




Operating segments (cont’d)

Trading of duty free goods and non-

dutiable merchandise

Properties and hospitality (discontinued operations)

Investment holdings and others

Adjustments and eliminations Notes

Per consolidated financial statements

28.02.2013 29.02.2012 28.02.2013 29.02.2012 28.02.2013 29.02.2012 28.02.2013 29.02.2012 28.02.2013 29.02.2012


Impairment loss on land held for development – – – – 305 – – – 305 –

Other non-cash income/ (expenses) (6,877) 470 (16) 41 905 (584) 16 (41) C (5,972) 114

Segment profit/(loss) 89,873 76,266 21,797 19,146 62,040 45,123 (88,521) (60,374) D 85,189 80,161

Assets

Additions to non-current assets 4,402 2,119 150 846 89 303 – – E 4,641 3,268

Segment assets 326,543 284,230 201,501 201,443 47,443 45,424 7,045 7,390 F 582,532 538,487

Segment liabilities 112,582 84,757 47,310 21,466 27,617 38,857 53,950 58,201 G 241,459 203,281





Notes Nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial statements

A The amounts relating to the properties and hospitality segment has been excluded to arrive at amounts

shown in profit or loss as they are presented separately in the income statement within one line item, “profit from discontinued operations, net of tax”.

B Inter-segment revenues are eliminated on consolidation.

C Other material non-cash income/expenses consist of allowances for doubtful receivables, bad debts written off, deposits forfeited, gains on disposal of non-financial assets, inventories written off, net unrealised foreign exchange gain/loss, reversal of inventories written down, inventories written down, waiver of debts and provisions as presented in the respective notes to the financial statements.

D The following items are deducted from segment profit to arrive at profit before tax presented in the income statement:

28.02.2013 29.02.2012RM’000 RM’000

Segment results of discontinued operations 21,797 19,146Inter-segment transactions (9,443) (10,990)Inter-segment dividend income 72,923 49,010Finance costs 3,244 3,208

88,521 60,374

E Additions to non-current assets consist of:

28.02.2013 29.02.2012RM’000 RM’000

Property, plant and equipment 3,567 3,060Land use rights 1,074 –Biological assets – 208

4,641 3,268





Notes Nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial statements

F The following items are added to segment assets to arrive at total assets reported in the consolidated statement of financial position:

28.02.2013 29.02.2012RM’000 RM’000

Deferred tax assets 6,496 6,647Tax recoverable 549 743

7,045 7,390

G The following items are added to segment liabilities to arrive at total liabilities reported in the consolidated statement of financial position:

28.02.2013 29.02.2012RM’000 RM’000

Deferred tax liabilities 5,776 6,009Income tax payable 4,174 2,192Borrowings 44,000 50,000

53,950 58,201

37. Dividends

Group and Company 28.02.2013RM’000

Dividends on ordinary shares

- First interim one tier tax exempt dividend for 28.02.2013: S$0.01 cents per share 28,025- Second interim one tier tax exempt dividend for 28.02.2013: S$0.01 cents per share 27,881

55,906

Group and Company 29.02.2012RM’000

Dividends on ordinary shares

- First interim one tier tax exempt dividend for 28.02.2012: S$0.005 cents per share 13,785- Second interim one tier tax exempt dividend for 28.02.2012: S$0.0075 cents per share 20,614- Third interim one tier tax exempt dividend for 28.02.2012: S$0.0025 cents per share 6,713

41,112



38. Events occurring after the reporting period

(a) On 15 March 2013, DMSB Agreement was completed. With the completion of DMSB Agreement, the Group is expected to realize an estimated gain of approximately RM120 million net of tax for the financial year ending 28 February 2014.

Upon completion of DMSB Agreement, Selasih Ekslusif Sdn Bhd (“Selasih”), a subsidiary of the Company,

commenced a tenancy of 8 terms of 3 years each and 1 final period of 1 year, constituting a 25-year tenancy over certain premises within the Duty Free Zone (“Selasih Tenancy Agreement”). Pursuant thereto, Selasih shall also retain completely and exclusively within the Duty Free Zone, the entire supply chain of its duty free business of importing, wholesaling and retailing and goodwill associated thereto in respect of the import, supply and sale within the Duty Free Zone of liquor, spirits, beer, chocolate, tobacco products, perfumery and cosmetics for a period of 25 years from the date of the commencement of the Selasih Tenancy Agreement.

Future minimum rental payable under the non-cancellable Selasih Tenancy Agreement as follows:

GroupRM’000

Future minimum rentals payable:Not later than 1 year 8,800Later than 1 year and not later than 5 years 35,200Later than 5 years 205,000

249,000

(b) Subsequent to the year end and up to the date of this report, the Company purchased a total of 102,000 shares in the Company on the open market for a total consideration of approximately RM110,300 (including transaction costs), financed by internally generated funds. The shares acquired by the Company were cancelled immediately upon purchase.

Subsequent to the year end and up to the date of this report, there was also an increase in the number of issued ordinary shares of the Company by way of allotment and issuance of 1,011,504 new ordinary shares pursuant to the exercise of 1,011,504 warrants at the exercise price of S$0.35.

As at 28 May 2013, the Company’s issued and fully paid up shares comprises 1,104,550,160 ordinary shares and the Company has 124,466,982 outstanding convertible warrants each with an exercise price of S$0.35 expiring on 6 January 2016.



39. Comparative figures

The presentation of the income statement for the year ended 29 February 2012 has been changed to present the performance of continuing operations and discontinued operations separately.

In addition, certain incentive income received from suppliers previously recognised in other income has been reclassified as reduction against inventories purchased and material consumed as management assessed that these incentives are effectively reduction in purchase cost. The following table illustrates these changes:

As As previouslyreclassified reported

RM’000 RM’000

Inventories purchased and materials consumed (380,282) (402,067)Other income 10,693 19,512

40. Authorisation of financial statements

The financial statements for the financial year ended 28 February 2013 were authorised for issue in accordance with a resolution of the directors on 28 May 2013.


StatiSticS oF SHareHolDinGSAs at 20 May 2013

Class of shares : Ordinary shareNo. of shares (excluding treasury shares) : 1,104,550,160Voting rights : One vote per share

As at 20 May 2013, the Company did not hold any treasury shares.

DISTRIBUTION OF SHAREHOLDINGS

No. ofSize of Shareholdings Shareholders % No. of Shares %

1 – 999 389 35.82 102,603 0.011,000 – 10,000 455 41.90 1,678,256 0.1510,001 – 1,000,000 222 20.44 17,583,357 1.591,000,001 AND ABOVE 20 1.84 1,085,185,944 98.25

TOTAL 1,086 100.00 1,104,550,160 100.00

TWENTY LARGEST SHAREHOLDERS

No. Name No. of Shares %

1 ATLAN HOLDINGS BHD 905,028,113 81.942 BANK OF SINGAPORE NOMINEES PTE LTD 35,807,132 3.243 HSBC (SINGAPORE) NOMINEES PTE LTD 29,603,396 2.684 MAYBANK KIM ENG SECURITIES PTE LTD 29,414,709 2.665 UOB KAY HIAN PTE LTD 14,486,107 1.316 CITIBANK NOMINEES SINGAPORE PTE LTD 13,146,848 1.197 DBS VICKERS SECURITIES (S) PTE LTD 10,130,862 0.928 ABN AMRO NOMINEES SINGAPORE PTE LTD 10,000,000 0.919 PHILLIP SECURITIES PTE LTD 8,988,388 0.8110 SOH CHONG CHAI 5,309,780 0.4811 DB NOMINEES (S) PTE LTD 4,358,156 0.3912 RAFFLES NOMINEES (PTE) LTD 3,877,605 0.3513 E-FOS SDN BHD 2,472,722 0.2214 BNP PARIBAS SECURITIES SERVICES 2,134,021 0.1915 LOW SIEW KHENG DENIS 2,084,311 0.1916 DMG & PARTNERS SECURITIES PTE LTD 1,967,572 0.1817 UNITED OVERSEAS BANK NOMINEES (PTE) LTD 1,792,917 0.1618 CIMB SECURITIES (SINGAPORE) PTE LTD 1,726,305 0.1619 CHOO YEOW MING 1,485,000 0.1320 HONG LEONG FINANCE NOMINEES PTE LTD 1,372,000 0.12

TOTAL 1,085,185,944 98.23


StatiSticS oF SHareHolDinGS (cont’d)As at 20 May 2013

SUBSTANTIAL SHAREHOLDERS AS AT 20 MAY 2013(As recorded in the Register of Substantial Shareholders)

Number of SharesDirect Interest % Deemed Interest %

Atlan Holdings Bhd 905,028,113 81.94 – –Distinct Continent Sdn Bhd – – 905,028,113 81.941

Sebastian Paul Lim Chin Foo – – 905,028,113 81.942

Dato’ Sri Adam Sani bin Abdullah – – 905,028,113 81.943

Berjaya Corporation Berhad – – 905,028,113 81.944

Tan Sri Dato’ Seri Vincent Tan Chee Yioun – – 905,028,113 81.945

Notes:

1 Distinct Continent Sdn Bhd is a substantial shareholder of Atlan Holdings Bhd (“AHB”). Distinct Continent Sdn Bhd is deemed

interested in the shares held by AHB by virtue of Section 7 of the Companies Act, Cap. 50.

2 Sebastian Paul Lim Chin Foo is deemed interested in the shares held by AHB through his majority interest in Distinct Continent Sdn

Bhd by virtue of Section 7 of the Companies Act, Cap. 50.

3 Dato’ Sri Adam Sani bin Abdullah is deemed interested in the shares held by AHB through Distinct Continent Sdn Bhd. His son,

Sebastian Paul Lim Chin Foo has a majority interest in Distinct Continent Sdn Bhd.

4 Berjaya Corporation Berhad (“BCB”) is deemed interested in the shares of Duty Free International Limited via AHB. BCB currently

has a direct and indirect interest totalling 26.30% in AHB.

5 Tan Sri Dato’ Seri Vincent Tan Chee Yioun is deemed interested in the shares of Duty Free International Limited held by AHB

through his interest in BCB. BCB currently has a direct and indirect interest totalling 26.30% in AHB. Tan Sri Dato’ Seri Vincent Tan

Chee Yioun is a major shareholder of BCB.

PERCENTAGE OF SHAREHOLDING IN PUBLIC’S HANDS

As at 20 May 2013, 17.91% of the Company’s shares are held in the hands of the public. Accordingly, the Company has complied with Rule 723 of the Listing Manual – Section B: Rules of Catalist of the SGX-ST which requires 10% of the equity securities (excluding preference shares and convertible equity securities) in a class that is listed to be in the hands of the public.


StatiSticS oF Warrant HolDinGSAs at 20 May 2013

DISTRIBUTION OF WARRANT HOLDINGS

No. ofSize of Warrant Holdings Warrant Holders % No. of Warrants %

1 – 999 10 12.82 3,019 0.001,000 – 10,000 34 43.59 77,273 0.0610,001 – 1,000,000 25 32.05 4,796,446 3.861,000,001 AND ABOVE 9 11.54 119,590,244 96.08

TOTAL 78 100.00 124,466,982 100.00

TWENTY LARGEST WARRANT HOLDERS

No. Name No. of Warrants %

1 ATLAN HOLDINGS BHD 90,502,811 72.712 CHOO YEOW MING 13,111,476 10.533 HSBC (SINGAPORE) NOMINEES PTE LTD 3,802,280 3.054 YEO WEE KIONG 3,250,000 2.615 CITIBANK NOMINEES SINGAPORE PTE LTD 2,346,994 1.896 MAYBANK KIM ENG SECURITIES PTE LTD 2,328,894 1.877 UOB KAY HIAN PTE LTD 1,937,972 1.568 PHILLIP SECURITIES PTE LTD 1,199,033 0.969 CHEW SOO LIN 1,110,784 0.8910 DB NOMINEES (S) PTE LTD 984,515 0.7911 ONG CHONG GHEE MARK (WANG ZONGYI MARK) 575,000 0.4612 BNP PARIBAS SECURITIES SERVICES 560,402 0.4513 DBS VICKERS SECURITIES (S) PTE LTD 525,562 0.4214 CIMB SECURITIES (SINGAPORE) PTE LTD 374,934 0.3015 THAM WYE-KIN AYLMER (TAN WEIJIAN, AYLMER) 310,000 0.2516 E-FOS SDN BHD 247,272 0.2017 WEE KWEE HUAY HELENE 224,000 0.1818 ABN AMRO NOMINEES SINGAPORE PTE LTD 206,060 0.1719 QUAH SIEU ENG ROBERT 120,000 0.1020 ARIYANTO BUDIDARMO 100,000 0.08

TOTAL 123,817,989 99.47


notice oF annual General meetinG

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Duty Free International Limited (“the Company”) will be held at 6 Battery Road #10-01 Singapore 049909 on Tuesday, 25 June 2013 at 11.00 a.m. for the following purposes:

AS ORDINARY BUSINESS

1. To receive and adopt the Audited Financial Statements of the Company for the financial year ended 28 February 2013 together with the Directors’ Report and the Auditors’ Report thereon.

2. To re-elect General Tan Sri Dato’ Seri Mohd Azumi bin Mohamed (Retired), a Director of the Company retiring pursuant to Articles 104 of the Articles of Association of the Company.

[See Explanatory Note (i)]

3. To approve the payment of Directors’ fees of S$122,000 for the financial year ended 28 February 2013 (2012: S$135,000).

4. To re-appoint Messrs Ernst & Young LLP as the Auditors of the Company and to hold office until the conclusion of the next Annual General Meeting and to authorise the Directors of the Company to fix their remuneration.

5. To transact any other ordinary business which may properly be transacted at an Annual General Meeting.

AS SPECIAL BUSINESS

To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any modifications: 6. Authority to allot and issue shares in the capital of the Company pursuant to Section

161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual - Section B: Rules of Catalist of the Singapore Exchange Securities Trading Limited

That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806(2) of the Listing Manual - Section B: Rules of Catalist of the Singapore Exchange Securities Trading Limited (“SGX-ST”), the Directors of the Company be authorised and empowered to:

(a) (i) issue shares in the Company (“shares”) whether by way of rights, bonus or otherwise; and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) options, warrants, debentures or other instruments convertible into shares,

at any time and upon such terms and conditions and for such purposes and to such persons as the Directors of the Company may in their absolute discretion deem fit; and

(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors of the Company while this Resolution was in force,

Resolution 1

Resolution 2

Resolution 3

Resolution 4


notice oF annual General meetinG (cont’d)

(the “Share Issue Mandate”)

provided that:

(1) the aggregate number of shares (including shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution) shall not exceed one hundred per cent (100%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares and Instruments to be issued other than on a pro rata basis to existing shareholders of the Company shall not exceed fifty per cent (50%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below);

(2) (subject to such calculation as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number of shares and Instruments that may be issued under sub-paragraph (1) above, the percentage of issued shares and Instruments shall be based on the number of issued shares (excluding treasury shares) in the capital of the Company at the time of the passing of this Resolution, after adjusting for:

(a) new shares arising from the conversion or exercise of the Instruments or any convertible securities;

(b) new shares arising from exercising share options or vesting of share awards outstanding and subsisting at the time of the passing of this Resolution; and

(c) any subsequent consolidation or subdivision of shares;

(3) in exercising the Share Issue Mandate conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual - Section B: Rules of Catalist of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association of the Company; and

(4) unless revoked or varied by the Company in a general meeting, the Share Issue Mandate shall continue in force (i) until the conclusion of the next Annual General Meeting (“AGM”) of the Company or the date by which the next AGM of the Company is required by law to be held, whichever is earlier or (ii) in the case of shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution, until the issuance of such shares in accordance with the terms of the Instruments.

[See Explanatory Note (ii)]

7. Renewal of Share Purchase Mandate

That for the purposes of Sections 76C and 76E of the Companies Act, Cap. 50, the Directors of the Company be and are hereby authorised to make purchases or otherwise acquire issued shares in the capital of the Company from time to time (whether by way of market purchases or off-market purchases on an equal access scheme) of up to ten per centum (10%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as ascertained as at the date of AGM of the Company) at the price of up to but not exceeding the Maximum Price as defined in the Appendix to the Notice of AGM dated 10 June 2013 (the “Appendix”), in

Resolution 5


notice oF annual General meetinG (cont’d)

accordance with the authority and limits of the renewed Share Purchase Mandate set out in the Appendix, and this mandate shall, unless revoked or varied by the Company in general meeting, continue in force until the conclusion of the next AGM of the Company or the date by which the next AGM of the Company is required by law to be held, whichever is earlier.

[See Explanatory Note (iii)]

By Order of the Board

Wong Chee Meng LawrenceShirley Tan Sey LiyCompany SecretariesSingapore, 10 June 2013

Explanatory Notes:

(i) General Tan Sri Dato’ Seri Mohd Azumi bin Mohamed (Retired) will, upon re-election as a Director of the Company, remain as the Chairman of the Nominating Committee and Remuneration Committee and a member of the Audit Committee and will be considered independent.

(ii) The Ordinary Resolution 5 above, if passed, will empower the Directors of the Company from the date of this AGM until the date of the next AGM of the Company, or the date by which the next AGM of the Company is required by law to be held or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares, make or grant instruments convertible into shares and to issue shares pursuant to such instruments, up to a number not exceeding in total one hundred per cent (100%) of the total number of issued shares (excluding treasury shares) in the capital of the Company, of which up to fifty per cent (50%) may be issued other than on a pro rata basis to existing shareholders of the Company.

For determining the aggregate number of shares that may be issued, the percentage of issued shares in the capital of the Company will be calculated based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time this Resolution is passed after adjusting for new shares arising from the conversion or exercise of the Instruments or any convertible securities, the exercise of share options or the vesting of share awards outstanding or subsisting at the time when this Resolution is passed and any subsequent consolidation or subdivision of shares.

(iii) Resolution 6 above, if passed, will empower the Directors of the Company from the date of this AGM until the next AGM of the Company or the date by which the next AGM of the Company is required by law to be held, whichever is the earlier, to repurchase ordinary shares of the Company by way of market purchases or off-market purchases of up to ten per centum (10%) of the total number of issued shares (excluding treasury shares) in the capital of the Company at the Maximum Price as defined in the Appendix. The rationale for, the authority and limitation on, the sources of funds to be used for the purchase or acquisition including the amount of financing and the financial effects of the purchase or acquisition of ordinary shares by the Company pursuant to the Share Purchase Mandate on the audited consolidated financial accounts of the Group for the financial year ended 28 February 2013 are set out in greater detail in the Appendix.

Notes:

1. A Member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint not more than two proxies to attend and vote in his/her stead. A proxy need not be a Member of the Company.

2. If the appointor is a corporation, the proxy must be executed under seal or the hand of its duly authorised officer or attorney. 3. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 6 Battery Road #10-01

Singapore 049909 not less than forty-eight (48) hours before the time appointed for holding the Meeting.

Resolution 6

DUTY FREE INTERNATIONAL LIMITED(Company Registration No. 200102393E) (Incorporated in the Republic of Singapore)

proXY Form(Please see notes overleaf before completing this Form)

IMPORTANT:

1. For investors who have used their CPF monies to buy DUTY FREE INTERNATIONAL LIMITED’s shares, this Annual Report is forwarded to them at the request of their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them.

I/We,

of

being *a member/members of DUTY FREE INTERNATIONAL LIMITED (the “Company”), hereby appoint:

Name NRIC/Passport No. Proportion of shareholdings to be represented by proxy (%)

Address

* and/or (delete as appropriate)

Name NRIC/Passport No. Proportion of shareholdings to be represented by proxy (%)

Address

or failing him/her/them, the Chairman of the meeting as my/our proxy/our proxies to vote for me/us on my/our behalf and, if necessary to demand a poll, at the Annual General Meeting of the Company (the “Meeting”) to be held at 6 Battery Road #10-01 Singapore 049909, on Tuesday, 25 June 2013 at 11.00 a.m. and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed at the Meeting as indicated hereunder. If no specific direction as to voting is given, the proxy/proxies will vote or abstain from voting at his/their discretion, as he/they will on any matter arising at the Meeting.

(Please indicate your vote “For” or “Against” with a tick [ ] within the box provided.)

AS ORDINARY BUSINESS: For Against

1 To receive and adopt the Audited Financial Statements of the Company for the financial year ended 28 February 2013 and the Report of the Directors and Auditors thereon.

2 To re-elect General Tan Sri Dato’ Seri Mohd Azumi bin Mohamed (Retired) retiring pursuant to Article 104 of the Company’s Articles of Association.

3 To approve the Directors’ fees of S$122,000 for the financial year ended 28 February 2013 (FY 2012: S$135,000).

4 To re-appoint Messrs Ernst & Young LLP as Auditors of the Company and to authorise the Directors to fix their remuneration.

5 To authorise Directors to issue shares pursuant to Section 161 of the Companies Act (Cap. 50) and the Listing Rules of the Singapore Exchange Securities Trading Limited.

6 Renewal of Share Purchase Mandate.

Dated this day of 2013

Total number of Shares in: No. of Shares

(a) In CDP Register

(b) In Register of Members

Signature of Shareholder(s)or, Common Seal of Corporate Shareholder

* Delete where inapplicableIMPORTANT: PLEASE READ NOTES OVERLEAF

Notes:-

1. Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of Shares. If you have Shares registered in your name in the Register of Members, you should insert that number of Shares. If you have Shares entered against your name in the Depository Register and Shares registered in your name in the Register of Members, you should insert the aggregate number of Shares entered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by you.

2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint not more than two proxies to attend and vote in his/her stead. A proxy need not be a member of the Company.

3. Where a member appoints two proxies, the appointments shall be invalid unless he/she specifies the proportion of his/her shareholding (expressed as a percentage of the whole) to be represented by each proxy.

4. Completion and return of this instrument appointing a proxy shall not preclude a member from attending and voting at the Meeting. Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the meeting in person, and in such event, the Company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy to the Meeting.

5. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 6 Battery Road #10-01 Singapore 049909 not less than 48 hours before the time appointed for the Meeting.

6. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an officer or attorney duly authorised. Where the instrument appointing a proxy or proxies is executed by an attorney on behalf of the appointor, the letter or power of attorney or a duly certified copy thereof must be lodged with the instrument.

7. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore.

General:-

The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible, or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of Shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have Shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Meeting, as certified by The Central Depository (Pte) Limited to the Company.

THE COMPANY SECRETARYDUTY FREE INTERNATIONAL LIMITED

(Company No.: 200102393E)

6 Battery Road #10-01

Singapore 049909

Affixpostagestamp

www.dfi.com.sg6 Battery Road #10-01 Singapore 049909

DFI AR2013.pdf

Documents

Transcript of DFI AR2013.pdf