Johan Holdings Berhad (314-K)...2 Johan Holdings Berhad (314-K) Dear Shareholders, On behalf of your...

annual report for the financial year ended 31 January 2013Johan H

oldings Berhad (314-K)

for the financial year ended 31 January 2013

Corporate Johan began its activities in 1920 as Johan Tin Dredging Ltd. It operated a mining lease off the Sungei Johan in the Kinta District of Perak, Malaysia with a paid-up capital of RM136,000 which remained unchanged for 61 years until 1981. In 1979, the Company was renamed Johan Holdings Berhad.

Since 1979, Johan diversified away from its tin mining business and through acquisitions and organic growth, the Johan Group today is a Malaysian grown international group with diversified operations and business dealings in Malaysia, Singapore, Brunei, Australia and New Zealand.

Johan is listed on the Main Board of Bursa Malaysia Securities Berhad. Its subsidiary, Jacks International Limited is listed on the Mainboard of the Singapore Exchange Securities Trading Limited.

Johan Group’s current principal activities are as franchise operator for Diners Club charge and credit cards, travel and tours, manufacture of ceramics wall and floor tiles, distribution and retailing of health foods and supplements, metal fabrication, property development, resorts and hotels.

Profile

Contents

Corporate ProfileChairman’s StatementReview of OperationsProfile of DirectorsGroup Senior Management Five-Year Group Financial HighlightsCorporate Information Statement on Corporate GovernanceStatement on Corporate Social Responsibility Audit Committee Report Statement on Risk Management & Internal ControlAdditional InformationFinancial StatementsShareholders' InformationStatement on Directors’ InterestsList of Properties Held Notice of Annual General MeetingStatement Accompanying The Notice of Annual General Meeting Form of Proxy

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Johan Holdings Berhad (314-K)2

Dear Shareholders,

On behalf of your Board of Directors, I am pleased to present the Annual Report of Johan Holdings Berhad for the financial year ended 31 January 2013.

Chairman’sStatement

ECONOMIC AND BUSINESS ENVIRONMENT REVIEW

The global economic growth dropped to 3.2% in 2012 from 3.9% in 2011 with the European sovereign debt crisis still unresolved. Many developed economies are still recovering from the 2008 to 2009 economic downturn especially in Europe and in the United States. The onslaught of the global economic slowdown had an adverse impact on the regional markets. Emerging economies in the Asian region including China and India experienced slower growth which have far reaching impact to the world economy.

For Year 2012, the Malaysian economy expanded to 5.6% from 5.1% in the previous year. The growth was supported by domestic demand mainly from private investment and consumption. The push from the Economic Transformation Programme has provided the impetus for domestic demand and supported growth in the local economy. Moreover, private consumption supported by stable employment conditions and income growth, helped fuel investment activities which were mainly driven by capital spending in domestic oriented industries and the ongoing implementation of infrastructure projects in Iskandar Malaysia and Greater Kuala Lumpur. Consumer spending remained strong despite a stricter debt service ratio implemented by Bank Negara Malaysia to contain the ballooning household debt. The external sector was pressured by the weakening of global demand amidst the economic crisis in Europe and deceleration in the Asian economic growth.

Singapore’s trade dependent economy grew 1.3% in 2012, slightly above the Ministry of Trade and Industry’s advance estimate of 1.2%. In 2011, the economy grew 4.9%. The 1.5% expansion in the 4th quarter from a year ago was led by the services sector, with financial services and business services each growing at 3.3% year on year. Singapore, whose trade is around three times GDP, has been badly hit by the weaknesses in Western economies that has crippled demand for many of its exports.

In Australia, compared to the same quarter a year earlier, GDP increased 3.1% in the December of 2012 quarter. The industries that drove growth in the December quarter were Mining, Manufacturing, Health and Finance, with each industry contributing 0.1% to the increase in GDP. GDP growth for Year 2012 was 3.1%.

In New Zealand, growth for 2012 was 2.5%, the best since early 2008, the start of the economic recession. Fifteen of the 16 industries recorded increases in the fourth, reflecting the broad-based nature of growth, led by agriculture, forestry and fishing, up 2.6 %. Retail trade and accommodation was up 2.3%, the strongest gain since early 2007.

Annual Report 2013 3

Chairman’s Statementcont’d

REVIEW OF FINANCIAL RESULTS

For the financial year ended 31 January 2013 (FY2013), your Group achieved higher revenue of RM305.564 million, up 4.28% from RM293.020 million for financial year ended 31 January 2012 (FY2012). This was mainly attributed to higher revenue from the Diners credit & charge cards businesses in Malaysia, Singapore and New Zealand, Diners World Travel (Malaysia) Sdn Bhd, Prestige Ceramics Sdn Bhd, The Orient Star Resort Lumut, George Kent (Singapore) Pte Ltd and Nature’s Farm Pte Ltd.

Administrative expenses totalled RM122.935 million, down 18.5% from RM150.947 million for FY2012 in line with measures implemented to reduce costs in the Group. Finance cost of RM41.940 million was down by 16.2% from RM50.073 million for FY2012, attributed mainly to lower funding cost as a result of Diners Club Singapore’s migration on 5 September 2011 to a revised Asset Securitisation Programme.

Your Group incurred a pre-tax loss of RM27.732 million, down 36.51% compared to pre-tax loss of RM43.681 million for FY2012. Income tax expense of RM4.243 million was marginally lower compared to RM4.571 million for FY2012. Group loss after tax was RM31.975 million compared to loss after tax of RM48.252 million for FY2012.

Loss per share was 5.11 sen compared to loss per share of 7.90 sen for FY2012. Net assets per share was 36.90 sen compared to 42.40 sen for FY2012.

DIVIDEND

Your Board does not propose to declare any dividend for the financial year under review.

BUSINESS OUTLOOK AND PROSPECTS

The fragile global economic climate will continue to affect markets including those in Asia due to fundamental issues like the Eurozone financial crisis, the US debt ceiling and China’s domestic slowdown. Against this backdrop, the global economic outlook for 2013 remains uncertain, with growth expected to be at a moderate level.

Malaysia’s economic growth is expected to be sustained at between 5% to 6% in 2013, led by private investment growth amid an improving external trade landscape, as reported by Bank Negara Malaysia in its 2012 annual report. Economic activity will be anchored by the continued resilience of domestic demand and supported by a gradual improvement in the external sector. Domestic demand is expected to be the main driver of the economy as private investment is seen growing at 15.6%, lower when compared with the 22% expansion a year ago. Much of the investment was related to the government’s Economic Transformation Programme which aims to lift Malaysia into the ranks of high-income nations by 2020, by upgrading industry and infrastructure. However challenges from the external environment such as re-emergence of instability in the Eurozone or slower growth in Malaysia’s major trading partners may affect the Malaysian economy.

The immediate task is to return the Group to profitability. Despite the challenges, your Board will continue to enhance cost control measures and operational efficiencies. Your Board remains positive, albeit cautious, of the prospects for the current year.

ACKNOWLEDGEMENT

On behalf of your Board of Directors, I wish to thank the management and staff at all levels for their commitment, dedication and collective contribution to the Group’s performance. I wish also to thank our valued customers, suppliers, business partners and shareholders for their continued support.

TAN SRI DATO’ TAN KAY HOCKChairman31 May 2013


Review of Operations

THE JOHAN GROUP’S BUSINESSES

The businesses of the Johan Group are principally as franchise operator for Diners Club charge and credit cards, air ticketing and travel management, manufacture of ceramic floor and wall tiles, distribution and retailing of health foods and supplements, air ticketing and travel management, metal fabrication, property development and resort hotel operation. The Group’s businesses are based mainly in Malaysia, Singapore, Australia and New Zealand.

DINERS CLUB CHARGE/CREDIT CARDS & HOSPITALITY DIVISION

The Diners Club charge/credit cards franchise for Singapore, Malaysia and New Zealand are operated respectively by Diners Club (Singapore) Pte Ltd, Diners Club (Malaysia) Sdn Bhd and Diners Club (New Zealand) Ltd, Diners World Travel (Malaysia) Sdn Bhd and Diners World Travel Pte Ltd provide air management services while resort hotel accommodation and yacht club membership is via The Orient Star Resort, Lumut and the Lumut International Yacht Club respectively.

For FY2013, this Division recorded total revenue of RM177.901 million, up marginally from RM176.516 million for FY2012. As a result of lower operating and finance costs, a lower loss before tax of RM7.350 million was recorded, compared to a loss before tax of RM20.244 million for FY2012.

Diners Club Malaysia Sdn Bhd (“DCM”)

DCM continued to expand its cobrand card growth with contest such as “Apply & Win” to win Smart Phones to attract applications by new cardmembers through Short Messaging Services (SMS) channel. To increase card usage and revenue, a cash rebate programme was launched at Metrojaya and Secret Recipe and cash vouchers promotion for cardmembers who spent at Giant supermarket. We also added a new service provider, Unifi to a wide list of our service providers for our Auto-billing Service.

DCM key focus in 2012 was to increase Diners Club’s brand awareness by placing signage and new decals at prominent merchants nationwide. To further enhance the brand, uniforms were provided to Merchant Service Staff as part of the Diners Club Brand Ambassador programme.

DinersCA$H, introduced in 2011, was a successful platform for DCM to embark into the next level of business transformation. At the initial launch, the target segment was prioritized towards existing cardmembers. The 2nd Quarter of 2012 stamped a new milestone when the marketing and sales team successfully rolled out the high demand loan service to new customers beyond DCM database. Backed by strong market demand, within the span of two (2) months, DCM successfully opened up telemarketing channel, direct sales and also appointed two (2) external agencies to implant strong geographical coverage within Peninsula Malaysia market.


Review of Operationscont’d

Diners Club (Singapore) Pte Ltd (“DCS”)

During the financial year under review, DCS continued to grow new cardmembers through its expanded cobrand partnerships to tie up card acquisition and usage programs with popular chain stores so as to increase take up rate and gain wider market presence. Besides card growth and initiative to drive cardmember spending, DCS focused on a new money lending product, DinersCA$H where cardmembers can obtain loans from their credit card account and repay over a period of 4 years. The distribution channels for this loan product has been expanded to include in-house call center, “Apply at Kiosk” and Diners Club card members can conveniently now apply for the loan at 7-Eleven Stores.

In April 2012, DCS launched the Taxi campaign to create market awareness for both our money lending product and the various cobrand partnership. In the same year, DCS signed up a major international fashion store, Forever 21, to add to its extensive acceptance network in Singapore.

During the year, DCS, in partnership with Diners Club International, introduced the Merchant Signage Program where selected key merchants at prominent sites will feature “big” Diners Club and Discover logo as part of the brand awareness program in the market. This program has significantly increased cardmembers use of the card.

DCS had invested up to S$6 million in computer hardware and software system to implement EMV chip cards, to comply with a mandatory requirement by the Monetary Authority of Singapore for all Singapore card issuers and processors to implement EMV chip cards. DCS successfully migrated issue of EMV chip card by March 2012, the first few Diners Club franchise to achieve this feat. DCS also successfully migrated all its EDC terminals to accept EMV chip cards in end May 2012.

Diners Club (New Zealand) Ltd (“DCNZ”)

DCNZ’s key focus in 2012 was to aggressively grow the Personal Loan market. The key loan acquisition channels for DCNZ were Telesales and Digital/Web. Particular focus was spent on using SEM (Search Engine Marketing) through Google Awards to promote Personal Loans and continue to the overall growth of the Personal Loan portfolio. DCNZ launched the “Life of Pi” in cinema brand campaign in late 2012 with the help of Diners Club International as part of their global campaign in partnership with 20th Century Fox in 26 countries. The Diners Club “Life of Pi” 30 second brand advertisement was seen by 692,000 (17.3%) New Zealanders over the Christmas holiday period.

DCNZ Golf programme continues to bring in new Cardmembers with now over 9,000 cards in force originating from 303 Golf Clubs around New Zealand.

Additionally, Diners Club and Discover Cards can be used at over 100,000 points of sale throughout New Zealand for the convenience of our Cardmembers.

DCNZ will be working on various major compliance projects over 2013 and 2014. These include new anti money laundering requirements and chip & wave card technology.

Diners World Travel (Malaysia) Sdn Bhd (“DWTM”)

Airlines recognitions for International sales achieved by DWTM for the Year 2012 were:-

• “Agent Award” by Malaysia Airline Systems; and• “Certificate of Appreciation” by Emirates Airlines.

Award Year 2012 presented by Malaysia Airlines Agent

Certificate of AppreciationAwarded by Emirates Airlines

Diners World Travel (Singapore) Pte Ltd (“DWTS”)

DWTS was again awarded “Top Agent Award” by Insight Vacations in 2012. In December 2012, DWTS embarked on its Customer Centric Initiative (CCI) project to develop its online travel portal. The objective of this initiative is to enable DWTS to have an online presence that will serve customers’ leisure travel needs and also enable DWTS to extend its product offerings to a wider market reach.


Lumut Park Resort Sdn Bhd (“LPR”) owns and operates The Orient Star Resort Lumut (“the Hotel”) located in the heart of the coastal town of Lumut in Perak Darul Ridzuan. The Hotel boasts 150 rooms comprising 9 suites, 24 deluxe rooms and 117 superior rooms all commanding a panaromic view of the sea.

The Hotel registered an increase in revenue by 7.9% in FY2013 when compared to the previous financial year. However due to higher payroll cost, operating expenses and building depreciation, it recorded a lower profit before tax of RM1.865 million as against profit before tax of RM2.484 million in FY2012.

Lumut Marine Resort Berhad (“LMR”) owns and operates The Lumut International Yacht Club (“LIYC”) located about a kilometre from The Orient Star Resort Lumut. The LIYC continues to operate annually at a small loss in view of its membership base which is still below the optimum level to enable it to operate profitability.

BUILDING MATERIALS & ENGINEERING DIVISION

Prestige Ceramics Sdn Bhd manufactures ceramic floor and wall tiles for residential, commercial and other construction projects in its manufacturing facilities in Puchong. William Jacks (Australia) Pty Ltd, an engineering company involved in metal fabrication, installation of piping and ducting business in Australia.

For FY2013, this whole Division recorded total revenue of RM65.018 million, down 7.0% from RM69.915 million for FY2012. The lower revenue was mainly attributed to the Engineering business in Australia as no major contracts were secured during the year under review. As a result, this Division incurred a loss before tax of RM2.218 million compared to a loss before tax of RM3.721 million for FY2012.


Prestige Ceramics Sdn Bhd (“Prestige”)

The market for domestic ceramic tiles was weak and also competition locally was intense due to influx of cheaper tiles from China and also over-production of tiles from existing local manufacturers. The growth of imported tiles from China was aided by the reduction of import duty on tiles to 20% from 50% - 60% in January 2012.

In spite of the challenging operating environment, Prestige will remain focus on costs reduction initiatives and to improve productivity to mitigate the pressure on margins. Prestige will continue to be innovation focused and to upgrade technology to equip itself well to compete in terms of better quality and superior design ceramic tiles.

William Jacks (Australia) Pty Ltd (“WJA”)

In Australia, the lack of major contracts secured by WJA’s sole operating subsidiary, Skinner Engineering Pty Ltd (“Skinner”) to date was of major concern. In view of the dwindling jobs order book on hand, the future of Skinner was not encouraging. The nature of Skinner’s business is non-core and volatile, being heavily dependant on securing contracts with adequate margins to operate profitably.

WJA had on 23 May 2013 entered into a Share Sale Agreement with MSR Steeled Enterprises Pty Ltd for disposal of its entire equity interest in Skinner for a cash consideration of A$293,000. Skinner ceased to be a subsidiary of the Group upon completion of the disposal on 31 May 2013.



TRADING OF HEALTH FOODS & SUPPLEMENTS DIVISION

Retailing of health foods and supplements business are undertaken by Nature’s Farm Pte Ltd (23 outlets in Singapore and 2 outlets in Brunei) and Nature’s Farm (Health Foods) Sdn Bhd (5 outlets in Klang Valley, Malaysia).

For FY2013, this Division generated revenue of RM62.452 million, up 34.4% from RM46.452 million for FY2012. Net loss before tax was RM2.456 million, compared to a loss of RM2.088 million for FY2012. Overall, the lower performance was due to increase in marketing and distribution costs in venturing into new markets and also because more events were held to boost sales and to promote new products launches. Higher operating expenses and finance costs also affected profits.

The year 2012 marks the 30th Anniversary of Nature’s Farm since it first started business in 1982. In conjunction with Nature’s Farm 30th Anniversary, a six month campaign was kicked off on 4 May 2012 to promote premium products such as Nature’s Farm Pycnogenol, NorthIsland Premium Manuka Honey, Senseiro’s Agaricus Blazei Murill, Norwegian Fish Oil with Astaxanthin and Collagen Matrix Age-Defying Collagen supplement on selected buses in Singapore. Various promotions campaign launched as part of the 30th Anniversary celebration include:

• The Great Singapore Sale 2012 promotion from May 1 to July 31, 2012

• Nature’s Farm own Mid Year Sale from May 25 to July 31, 2012

• Nature’s Farm Amazing $9.90 Deals for 2nd Item from June 28 to July 31, 2012

• Happy 47th Birthday Singapore! From July 28 to August 31, 2012

• The Mid Autumn Festival Sale from August 30 to September 30, 2012

• “Shop & Fly” with Nature’s Farm Pycnogenol from September to 31 October for a trip for two to Hokkaido

• “Shop & Fly” with Haddrell’s of Cambridge & Comvita Manuka Honey range from 29 October to 30 November, 2012 for a trip for two to Melbourne

Nature’s Farm continuously sources new niche products to widen its products range. New products introduced to the market during 2012 include Nature’s Farm Trim & Shape 90’s, Trans-Resveratrol Plus, Comvita Manuka Honey and Skin Care range, Derma-E range of Anti-Aging Pycnogenol Cleanser & Toner, Microdermabrasion Scrub and Hyaluronic Hydrating Mask. Two of the noteworthy new products launched on 26 November 2012 during Nature’s Farm 30th Anniversary Event at Tampines Mall and at all its retail outlets were Bluebonnet nutrition products and NutriXant–Ultra Age Defence Formula.

PROPERTY DEVELOPMENT

The Property Division of Lumut Park Resort Sdn Bhd will continue with the development of its land bank in the vicinity of Lumut town.

Dated: 31 May 2013


Profile of Directors

Name TAN SRI DATO’ TAN KAY HOCK PUAN SRI DATIN TAN SWEE BEE

Age 65 66

Nationality Malaysian Permanent Resident

Qualification Barrister-at-Law Barrister-at-Law

Position on Board Chairman & Chief Executive(Non-Independent Executive Director)

Group Managing Director(Non-Independent Executive Director)

Date of Appointment 5 November 1980 29 January 1983

Working Experience A lawyer by training having been called to the Bar by the Honourable Society of Lincoln’s Inn, UK in 1971. In 1972, he was admitted as an advocate and solicitor to the Supreme Court of Malaysia. He is a non-practising lawyer. Since 1982, he is the non-Executive Chairman of George Kent (Malaysia) Berhad (“GKM”), listed on the Main Market of Bursa Malaysia Securities Berhad. GKM is an engineering company involved in brass products manufacturing, trading and investment, development of water infrastructure projects, building and construction works. He is a Member of the Iskandar Regional Development Authority (IRDA), a Committee Member of the Malaysian Phillipines Business Council and a Trustee of Malaysian Humanitarian Foundation.

A lawyer by training having been called to the Bar by the Honourable Society of Lincoln’s Inn, UK in 1971. In 1972, she was admitted as an advocate and solicitor to the Supreme Court of Malaysia. She is a non-practising lawyer. She was appointed Managing Director of Johan Group since 17 December 1984. Since 1989, she is a Non-Executive Director of George Kent (Malaysia) Berhad (“GKM”), listed on the Main Market of Bursa Malaysia Securities Berhad. GKM is an engineering company involved in brass products manufacturing, trading and investment, development of water infrastructure projects, building and construction works.

Other directorships of public companies

• George Kent (Malaysia) Berhad• Jacks International Limited

• George Kent (Malaysia) Berhad• Jacks International Limited

Family relationship with any director and/or major shareholders of the Company

Husband to Puan Sri Datin Tan Swee Bee, the Group Managing Director

Wife to Tan Sri Dato’ Tan Kay Hock, the Chairman and Chief Executive of the Company

Conflict of interest with the Company

NIL NIL

List of convictions for offences within the past ten (10) years

NIL NIL

Committee • Risk Management Committee - Chairman• ESOS Committee - Member

• Remuneration Committee - Member• Risk Management Committee - Member• ESOS Committee - Member


Profile of Directorscont’d

TAN SRI DATO’ SERI DR TING CHEW PEH DATO’ AHMAD KHAIRUMMUZAMMIL BIN MOHD YUSOFF

OOI TENG CHEW

70 71 66

Malaysian Malaysian Malaysian

Bachelor of Arts from University of Malaya in 1970, Master of Science from University of London in 1972 and Doctor of Philosophy from University of Warwick in 1976.

Bachelor of Arts (Economics Honours) from University of Malaya

Fellow member of Institute of Chartered Accountants in England and Wales (since 1979) and member of Malaysian Institute of Certified Public Accountants (since 1971)

Director(Non-Independent Non-Executive Director)

Director(Independent Non-Executive Director)

Director(Independent Non-Executive Director)

1 November 2003 4 July 2005 12 March 2009

He was formerly the Lecturer (1974-1980) and Associate Professor (1981-1987) for Faculty of Humanities and Social Science of National University of Malaya. He was also a Parliament Secretary (Ministry of Health) (1988-1989), Deputy Minister (Prime Minister’s Department) (1989-1990) and Minister of Housing and Local Government (1990-1999). He was a Member of Parliament (1987-February 2008) and was the Chairman of Klang Port Authority (2000-2004).

He was a Deputy Chairman of the Urban Development Authority (UDA) Kuala Lumpur from 1978 to 1981. He was subsequently appointed the Director-General, Chief Executive and Board Member of UDA in 1981. From May 1986 to 1994, he held various senior management positions in the Kumpulan Guthrie Berhad Group and also Executive Director of Kumpulan Guthrie Berhad from May 1986 to December 1987. He was a Vice President and a Director of HICOM Holdings Berhad from February 1995 to July 2000 and subsequently held the post of Group Director in the DRB-Hicom Group until March 2006. He is currently the Chairman of Metrojaya Berhad.

He was in public practice since 1974 in Messrs Ernst & Young and its predecessor firms. He retired in 2001. He is currently the Chairman of RGB International Berhad. He is also the Director of Wawasan Open University Sdn Bhd and its related company, Disted Pulau Pinang Sdn Bhd.

• Pan Malaysia Capital Berhad• Puncak Niaga Holdings Berhad• Hua Yang Bhd• Pan Malaysia Corporation Berhad• Huaren Education Foundation

• Metrojaya Berhad • RGB International Berhad

NIL NIL NIL

NIL NIL NIL

NIL NIL NIL

• Remuneration Committee - Chairman• Audit Committee - Member• Nominating Committee - Member

• Audit Committee - Chairman• Nominating Committee - Chairman• Remuneration Committee - Member

• Audit Committee - Member• Nominating Committee - Member


Group Senior Management

CORPORATE HEAD OFFICE

Tan Sri Dato’ Tan Kay Hock Chairman and Chief Executive

Puan Sri Datin Tan Swee Bee Group Managing Director

Teh Yong Fah Group Secretary

Ng Yew Soon Senior General Manager – Finance

Sia Chin Yap Senior Internal Audit Manager

Yap Ee Seong General Manager – Properties

PRINCIPAL OPERATING SUBSIDIARIES

Prestige Ceramics Sdn. Bhd. Caffrey Chin Kek Fu General Manager

Diners Club (Malaysia) Sdn. Bhd. } James Koh Chuan LimDiners Club (Singapore) Pte. Ltd. } Executive Director – Regional Operations Diners Club (New Zealand) Limited }

William Jacks & Co. (Singapore) Pte. Ltd. } Simon Low Kean JinNature’s Farm Pte. Ltd. } Regional DirectorNature’s Farm (Health Food) Sdn. Bhd. }

The Orient Star Resort, Lumut Vincent Ee Kim Chuan(owned by Lumut Park Resort Sdn. Bhd.) Hotel Manager

Diners World Travel (Malaysia) Sdn. Bhd. Catherine Wong Tet Fah General Manager

Diners World Travel (Singapore) Pte. Ltd. Robert Koh Senior General Manager


Five-Year Group Financial Highlights

Year Ended 31 January

2013 2012 2011 2010 2009

RM’000 RM’000 RM’000 RM’000 RM’000

Restated Restated Restated Restated

INCOME STATEMENT

Revenue 305,564 293,020 294,541 315,675 338,850

(Loss)/Profit Before Tax (27,732) (43,681) 8,572 29,261 28,207

Income Tax (Expense)/Credit (4,243) (4,571) (5,094) (3,630) (4,480)

(Loss)/Profit for the year (31,975) (48,252) 3,478 25,631 23,727

STATEMENTS OF FINANCIAL POSITION

Total non-current assets 320,034 324,708 321,888 207,103 205,563

Total current assets 791,013 744,607 795,676 801,307 693,346

Shareholders’ fund 220,819 254,874 301,911 214,434 185,730

Non-controlling Interest 9,024 9,235 8,233 4,659 3,808

Shareholders’ Equity 229,843 264,109 310,144 219,093 189,538

Total non-current liabilities 50,734 51,775 102,518 22,159 61,078

Total current liabilities 830,470 753,431 704,901 767,158 648,293

SHARE INFORMATION

Per Ordinary Share

Earnings, basic (sen) (5.11) (7.90) 0.48 4.03 3.70

Net assets (sen) 36.90 42.40 49.79 35.80 34.00

Share price as at 31 January (RM) 0.15 0.22 0.32 0.28 0.16

FINANCIAL RATIOS

Return on equity (%) (14.42) (19.32) 1.40 11.70 12.42

Net Debt-Equity ratio (Note 1) 0.78:1 0.80 : 1 0.75 : 1 0.75 : 1 0.75 : 1 Note 1 : Net Debt comprise current & non-current loan and borrowings, trade and other payables, funding from non-recourse investors’

certificates and senior certificates less cash and bank balances.


Tan Sri Dato’ Tan Kay HockChairman & Chief Executive

Puan Sri Datin Tan Swee BeeGroup Managing Director

Tan Sri Dato’ Seri Dr Ting Chew PehNon-Independent Non-Executive Director

COMPANY SECRETARY Teh Yong Fah (MACS00400)

AUDITORSDeloitte & ToucheChartered Accountants

SHARE REGISTRAR

Johan Management Services Sdn. Bhd. 11th Floor, Wisma E&CNo. 2 Lorong Dungun KiriDamansara Heights 50490 Kuala LumpurTel : 603-2092 1858Fax : 603-2092 2812E-mail : [email protected]

REGISTERED OFFICE 11th Floor, Wisma E&CNo. 2 Lorong Dungun KiriDamansara Heights 50490 Kuala LumpurTel : 603-2092 1858Fax : 603-2092 2812

AUDIT COMMITTEE Dato’ Ahmad Khairummuzammil Bin Mohd Yusoff(Chairman)

Tan Sri Dato’ Seri Dr Ting Chew Peh

Ooi Teng Chew

RISK MANAGEMENT COMMITTEETan Sri Dato' Tan Kay Hock(Chairman)

Puan Sri Datin Tan Swee Bee

Ng Yew Soon

REMUNERATION COMMITTEETan Sri Dato’ Seri Dr Ting Chew Peh(Chairman)

Dato’ Ahmad Khairummuzammil Bin Mohd Yusoff

Puan Sri Datin Tan Swee Bee

NOMINATING COMMITTEE Dato’ Ahmad Khairummuzammil Bin Mohd Yusoff(Chairman)

Tan Sri Dato’ Seri Dr Ting Chew Peh

Ooi Teng Chew

BUSINESS OFFICE 11th Floor, Wisma E&CNo. 2 Lorong Dungun KiriDamansara Heights 50490 Kuala LumpurTel : 603-2092 1858Fax : 603-2092 2812E-mail : [email protected] : www.johanholdings.com

GROUP PRINCIPAL BANKERS (in alphabetical order)

Australia and New Zealand Banking Group LimitedCIMB Bank BerhadDBS Bank LtdMalayan Banking BerhadRoyal Bank of Scotland GroupThe Bank of East Asia, Limited

STOCK EXCHANGE LISTING Main Board, Bursa Malaysia Securities Berhad Stock Name : JOHANStock Code : 3441 Sector : Finance

CORPORATE WEBSITE

www.johanholdings.com

Dato’ Ahmad Khairummuzammil Bin Mohd YusoffIndependent Non-Executive Director

Ooi Teng ChewIndependent Non-Executive Director

BOARD OF DIRECTORS

Corporate Information


Statement on Corporate Governance

The Board is committed to ensuring high standards of corporate governance throughout the Group and endeavours to ensure consistency of policies and procedures of Group companies in different geographical regions. This statement illustrates the extent of which the Board has embodied the spirit and principles of the new Malaysian Code on Corporate Governance 2012 (“The Code”). The Code sets out the broad principles and specific recommendations on structures and processes which companies should adopt in making good corporate governance an integral part of the business dealings and culture. Unless otherwise stated below, the Company is in compliance with the requirements of the Code.

Board Composition

The Board presently comprises the following members:-

Tan Sri Dato’ Tan Kay Hock Chairman and Chief ExecutivePuan Sri Datin Tan Swee Bee Group Managing DirectorDato’ Ahmad Khairummuzammil bin Mohd Yusoff Independent Non-Executive DirectorTan Sri Dato’ Seri Dr Ting Chew Peh Non-Independent Non-Executive DirectorMr Ooi Teng Chew Independent Non-Executive Director

The Directors who together have a diverse wealth of experience as well as skills and knowledge in the aspect of law, economics, banking, accounting and general management. The profile of each director is included in Pages 8 and 9 of this Annual Report.

Although the Chairman who also acts as the Chief Executive Officer, nevertheless, he is only responsible for long range strategic planning for the Group whilst the Group Managing Director has overall responsibility in managing the Group’s business. As such, there is clear segregation of responsibilities between the Chairman and Group Managing Director to ensure a balance of power and authority. The two (2) Independent Non-Executive Directors provide unbiased and independent view, advice and judgement.

Code of Conduct and Code of Ethics

The Board of Directors adhere to the Code of Ethics for Company Directors issued by the Companies Commission of Malaysia. This Code of Ethics provide good guidance for a standard of ethical behaviour for Directors based on trustworthiness and values that can be accepted and to uphold the spirit of responsibility and social responsibility in line with the legislation, regulations and guidelines for administrating a company.

To ensure comprehensive, accurate and timely disclosures, the Board of Directors are fully aware of and guided by the Corporate Disclosure Guide 2011 issued by Bursa Malaysia Securities Berhad on 22 September 2011. The Guide aimed at providing shareholders and investors with comprehensive, accurate and quality information on a timely and even basis, and not merely meeting the minimum requirements under the Listing Requirements.

Duties and Responsibilities

The Board recognises its duties and responsibilities to the shareholders of the Company, which principally include the following:

• Reviewing and adopting a strategic plan for the Company and the Group• Overseeing the overall conduct of the Company’s business and that of the Group• Identifying principal risks and ensuring that an appropriate system of internal control exists to manage these risks• Reviewing the adequacy and integrity of internal controls system and management information system in the Company

and within the Group


Duties and Responsibilities cont’d

• Developing and implementing a sound communications policy for investor relations• Succession planning, including appointing and determining compensation of senior management• Assessing the effectiveness of the Board, Board Committees and individual Directors

Re-election Of Directors

In accordance with the Articles of Association of the Company at least one-third of the Directors including the Managing Director are required to retire by rotation at each Annual General Meeting but shall be eligible for re-election.

Pursuant to Section 129(6) of the Companies Act 1965, Dato’ Ahmad Khairummuzammil bin Mohd Yusoff and Tan Sri Dato’ Seri Dr Ting Chew Peh both 70 years of age or above are subject to re-appointment as a director on a yearly basis at the Annual General Meeting.

Independent Director

The Code recommended an annual assessment of the independence of the Independent Directors. A Director who has served the Board for a tenure of 9 years is subject to review before re-appointment by shareholders in a general meeting.

Tan Sri Dato’ Seri Dr Ting Chew Peh, accordingly was re-designated as Non-Independent Director of the Company on 1 November 2012, upon reaching his tenure of 9 years as an Independent Director.

Supply Of Information

All Directors are given complete and timely information before each Board Meeting to be convened together with an agenda and set of Board papers. Board papers are circulated in sufficient time to enable Directors to obtain further explanation, if necessary, in order to be properly briefed before each meeting. Senior management staff are also invited to attend Board Meetings when necessary to present to the Board further explanation and clarification on matters being tabled. Through regular Board Meetings, the Board receives updates on the development and business operations of the Group. Presentation from the respective business units were arranged to brief the Board on the progress of business operations of the Group.

Company Secretary

All Directors have access to the advice and services of the Company Secretary and are updated on new statutory or regulations requirements concerning their duties and responsibilities. The Company Secretary also advise and assist the Board on matters relating to compliance, corporate governance and best practices and boardroom effectiveness.

The Company Secretary oversees the uniformity of conduct and effective boardroom practices throughout the Group, including overall corporate secretarial functions of the Group, both in Malaysia and the region where the Group operates.

Statement on Corporate Governancecont’d



Board of Directors’ Meetings

At least four (4) Board Meetings are held annually, each meeting being scheduled to be held within two (2) months after each quarter to consider the quarterly financial results and review operational performance. Additional meetings are convened as and when necessary.

During the financial year ended 31 January 2013, the number of Board of Directors’ Meetings held and the attendance of each Director were as follows:-

No. of Board Meetings

Directors Held Attended

Tan Sri Dato’ Tan Kay Hock 5 5

Puan Sri Datin Tan Swee Bee 5 5

Tan Sri Dato’ Seri Dr Ting Chew Peh 5 5

Dato’ Ahmad Khairummuzammil bin Mohd Yusoff 5 5

Ooi Teng Chew 5 5

Directors’ Training

All Board members have attended and completed the Mandatory Accreditation Programme as required under the Listing Requirements of Bursa Malaysia Securities Berhad. The Board encourages its Directors to attend talks, seminars, workshops and in-house conferences to update and enhance their skills and knowledge and to keep abreast with developments in regulatory and corporate governance issues. During the year the Directors in their individual capacity and as director of other public listed companies in Malaysia, had attended many courses, briefings and seminars, relating to risk management, corporate governance, investors relations and financial statements reporting under IFRS.

Board Committees

The Board had delegated certain responsibilities and duties to the following Board Committees which operate within clearly defined terms of reference. Except for the Remuneration Committee, the other Committees as listed below do not have executive powers but report to the Board on all matters considered and their recommendations thereon.

(a) Audit Committee

The Audit Committee comprises of three (3) members, all being Non-Executive Directors. The members comprises the following:-

1. Dato’ Ahmad Khairummuzammil Bin Mohd Yusoff (Independent Non-Executive Director - Chairman)2. Tan Sri Dato’ Seri Dr Ting Chew Peh (Non-Independent Non-Executive Director)3. Ooi Teng Chew (Independent Non-Executive Director)



Board Committees cont’d

(a) Audit Committee cont’d

The Audit Committee’s terms of reference include the review of the Group’s quarterly and financial year end results, review of any major audit findings raised by external auditors and internal auditors and management’s response thereon. The Chairman and Chief Executive, Group Managing Director, Senior General Manager of Finance, Internal Audit Manager and representatives from the External Auditors attend the meetings at the invitation of the Audit Committee

At each Audit Committee Meeting held to review the Group’s quarterly and financial year end results, the agenda of Audit Committee Meetings also include internal audit findings of operating units of the Group and investigations carried out by internal auditors. The Audit Committee shall meet with the external auditors at least once a year without any Executive Directors being present.

The Audit Committee Report for the financial year pursuant to Paragraph 15.15 of the Bursa Securities Listing Requirements is contained in Pages 22 to 24 of this Annual Report.

(b) Risk Management Committee

The members of Risk Management Committee (“RMC”) are as follows:-

1. Tan Sri Dato’ Tan Kay Hock (Non-Independent Executive Director - Chairman)2. Puan Sri Datin Tan Swee Bee (Group Managing Director)3. Ng Yew Soon (Senior General Manager - Finance)

The RMC’s primary responsibility is to oversee the overall risk management of the Group, particularly on the strategic areas of the business. The RMC is supported by various sub-RMCs established at respective business units that are responsible for identifying, mitigating and managing risks through a systematic risk evaluation/profiling exercise. The Risk Profile of respective business unit is reviewed and revised on a half-yearly basis and submitted to the RMC for review. The key features of the Group risk management framework are set out in the Statement on Risk Management & Internal Control on Pages 25 to 26 of this Annual Report.

(c) Remuneration Committee

The Remuneration Committee comprised of two (2) Non-Executive Directors and one (1) Executive Director. The members are:-

1. Tan Sri Dato’ Seri Dr Ting Chew Peh (Non-Independent Non-Executive Director - Chairman)2. Dato’ Ahmad Khairummuzammil bin Mohd Yusoff (Independent Non-Executive Director)3. Puan Sri Datin Tan Swee Bee (Group Managing Director)

The Remuneration Committees’ primary responsibilities are to recommend to the Board the remuneration package and the terms of employment of each executive. The fees payable to Non-Executive Director will be determined by the Board as a whole, and a director shall not participate in the decision on his own remuneration package.



Board Committees cont’d

(c) Remuneration Committee cont’d

The Remuneration Committee is also responsible for developing the Group’s remuneration policy and determining the remuneration packages of senior executive employees of the Group.

(d) Nominating Committee

The Nominating Committee was established on 27 March 2013 and comprises the following members:-

1. Dato’ Ahmad Khairummuzammil Bin Mohd Yusoff (Independent Non-Executive Director - Chairman)2. Tan Sri Dato’ Seri Dr Ting Chew Peh (Non-Independent Non-Executive Director)3. Ooi Teng Chew (Independent Non-Executive Director)

The Nominating Committee’s terms of reference include the authority delegated by the Board to oversee the selection and assessment of Directors. The Nominating Committee shall:-

(i) recommend to the Board for the appointment of new Director in accordance to the nomination and selection policies;

(ii) assess the effectiveness of the Board as a whole, the committees of the Board and the contribution of each existing individual Director, in terms of the appropriate size and skills, balance between Executive Directors, Non-Executive and Independent Director, the mixture of skills and other core competencies required;

(iii) assess the independence of Independent Directors to consider whether the Independent Director can continue to bring independent and objective judgement to board deliberations; and

(iv) to recommend to the board if an Independent Director who serves the board for more than 9 years is justifiable to remain independent on board.

(e) Employee Share Option Scheme (“ESOS”) Committee

The ESOS Committee was established on 31 October 2003 to administer the ESOS of the Group implemented to be in force for a period of five (5) years commencing from 31 October 2003 to 30 October 2008. At the Eighty-Third Annual General Meeting of the Company, the shareholders had approved the extension of the duration of the ESOS for an extended period of five (5) years from 1 November 2008 to 31 October 2013. The ESOS Committee comprises the following members:-

1. Tan Sri Dato’ Tan Kay Hock (Non-Independent Executive Director) - Chairman2. Puan Sri Datin Tan Swee Bee (Non-Independent Executive Director) 3. Yuen Kum Fong (Human Resource Manager)

At the ESOS Committee held on 31 October 2003, a 1st tranche of 3,147,000 option shares at an exercise price of RM0.50 per share were granted to eligible employees of the Group. No new option shares were granted to the employees for the financial year end and no option shares were exercised by employees up to 31 January 2013.



Directors’ Remuneration

The remuneration of Directors is determined at levels which enable the Company to attract and retain Directors with the relevant experience and expertise to manage the Groups effectively.

The Non-Executive Directors are paid an annual basic fee, any increase of which are subject to approval by shareholders at the annual general meeting. The Chairman of Audit Committee is paid an allowance of RM1,500/- per meeting and Audit Committee member is paid RM1,000/- per meeting.

The aggregate remuneration of the Directors categorised into the respective components for the year ended 31 January 2013 are as follows:-

Fees

Salaries & Other

EmolumentsBenefits-In-

Kind Total

(RM’000) (RM’000) (RM’000) (RM’000)

Executive Directors

Tan Sri Dato’ Tan Kay Hock - 861 105 966

Puan Sri Datin Tan Swee Bee - 659 35 694

Non-executive Directors

Dato’ Ahmad Khairummuzammil bin Mohd Yusoff 50 11 - 61

Tan Sri Dato’ Seri Dr Ting Chew Peh 50 4 - 54

Ooi Teng Chew 50 4 - 54

150 1,539 140 1,829

The number of Directors whose remuneration falls into bands of RM50,000 are as follows:-

Directors

Range of Remuneration Executive Non-executive

RM10,000 to RM100,000 - 3

RM800,001 to RM1,000,000 1 -

RM1,000,001 to RM1,300,000 1 -

2 3

Shareholders Communication And Investors Relationship Policy

The Board acknowledges the need for shareholders to be informed of all material business and developments concerning the Group. In addition to various announcements made during the year, the Board had ensured timely release of financial results on a quarterly basis to provide shareholders with an overview of the Group’s performance and operations. Copies of the full announcement are supplied to shareholders and members of the public upon request.



Shareholders Communication And Investors Relationship Policy cont’d

The Annual General Meeting is the principal forum for communicating with shareholders. Shareholders who are unable to attend are allowed to appoint not more than two (2) proxies, who need not be shareholders, to attend and vote on their behalf. Board members as well as the Senior General Manager-Finance and the External Auditors of the Company are present to answer questions raised by shareholders. Shareholders are given the opportunity to ask questions during the questions and answers session prior to each resolution being proposed for consideration by shareholders.

Corporate and financial information of the Company and the Group are also available via the Company’s website, http://www.johanholdings.com.

Financial Reporting

The Board acknowledge their responsibility to ensure that the financial statements of the Company and the Group are prepared in accordance with the provisions of the Companies Act, 1965 and approved accounting standards in Malaysia so as to give a true and fair view of the state of affairs and the result of the Company and of the Group. The Board recognise the ability of Audit Committee in ensuring the Company’s financial statements is a reliable source of financial information and it comply with applicable financial reporting standards.

In preparing these financial statements, the Directors have:-

- adopted suitable accounting policies and applying them consistently;

- made judgement and estimates that are prudent and reasonable;

- ensured applicable approved accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

- prepared the financial statements on the going concern basis.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements are prepared in compliance with the Companies Act, 1965. The Directors are also responsible for safeguarding the assets of the Company and the Group and to take reasonable steps for the prevention and detection of fraud and other irregularities.

Internal Control and Risk Management

The Board acknowledges its overall responsibility for ensuring that a sound system of internal control is maintained throughout the Group and the need to review its effectiveness regularly. The Board recognises that risks cannot be totally eliminated and the system of internal controls instituted can only help to minimise and manage risks and provide some assurance that the assets of the Company and of the Group are safeguarded against material loss and unauthorised use and that financial statements are not materially misstated. The information on the Group’s internal control is presented in the Statement on Internal Control and Risk Management on Pages 25 to 26 of this Annual Report.


Relationship With External Auditors

A transparent and appropriate relationship with the external auditors to enable them to independently report to shareholders in accordance with statutory and professional requirement is established through the Audit Committee. The role of the Audit Committee members in relation to the external auditors is set out in the Audit Committee Report on of the Annual Report.

This Statement is made in accordance with the resolution of the Board of Directors dated 30 May 2013.



The Johan Group, as a responsible corporate citizen, is committed to the sound principles of Corporate Social Responsibility (“CSR”) which is integral to the way we conduct our businesses, creating value to our shareholders and underpins our long-term growth strategy. The development and implementation of the Group’s CSR policies and practices are directed in key areas of environmental, management, employment, health and safety, community support and supply chain management.

The Environment

We acknowledge our responsibilities for managing and reducing the impact that our businesses has on the environment and continues to operate in a responsible manner by optimising our resources and reducing the generation of waste.

Prestige Ceramics Sdn Bhd, which manufactures ceramic flour and wall tiles, conducts regular occupational safety and awareness programmes for its employees. The manufacturing plant in Puchong is connected to the national gas grid and hence this alternative energy source for gas firing of ceramics times help to reduce its dependency on fossil fuel consumption. The management also perform periodic checks and institute controls on environmental care and controls in the plant’s intake and ensure proper treatment and discharge of its effluents.

The Community

We believe in adding value to the communities in which we operate our businesses through providing support in diverse areas of social welfare. The Group also supports charitable organisations in their noble efforts to help the needy and the disadvantaged. All employee are encouraged to participate in community projects and undertake voluntary works to help the needy.

Our hotel, The Orient Star Resort Lumut, on 7 October 2012, hosted a high-tea reception for 60 guests, including corporate clients and orphans from Rumah Haruman Kasih, Ayer Tawar, Perak. During this function, the orphanage received donations in the form of bags of rice, condensed milk and beverage packages.

The Workplace

The Group recognises that our people are our key assets and acknowledges their invaluable contribution to the Group’s growth. The Group places strong emphasis on talent management and developing human capital and has in place structured development programmes designed to develop leadership skills, technical knowledge and soft skills among difference group of employees. With employees best interest in mind, medical benefits such as treatment at hospitals and clinics, insurance coverage for personal accidents, hospitalisation and surgery, and dental treatment are provided. The Group’s human resource policies and procedures are regularly reviewed to keep abreast of industry benchmarks and best practices.

The Marketplace

The Group recognises the importance of market perception and confidence on the sustainability of our businesses. As such various policies, standards, best practices and procedures on quality, health and safety, good corporate governance and stake holders engagement have been adopted. Details of the Group’s corporate governance and investor relations are set out in the Statement on Corporate Governance on Pages 13 to 20 of the Annual Report.

Statement on Corporate Social Responsibility


Audit Committee Report

MEMBERS

Dato’ Ahmad Khairummuzammil bin Mohd Yusoff (Chairman - Independent Non-Executive Director)Tan Sri Dato’ Seri Dr. Ting Chew Peh (Non-Independent Non-Executive Director)Ooi Teng Chew (Independent Non-Executive Director)

A. TERMS OF REFERENCE

Constitution

i) The Audit Committee (“the Committee”) was established by the Board of Directors (“the Board”) of the Company at its meeting held on 8 March 1994.

ii) The Board shall ensure that the composition and functions of the Committee comply as far as possible with both the Bursa Securities Listing Requirements as well as other regulatory requirements.

Objectives

i) To assist the Board in fulfilling its fiduciary responsibilities relating to corporate accounting and reporting practices of the Company and the Group.

ii) To maintain, through regularly scheduled meetings, a direct line of communication between the Board and the external auditors as well as the internal auditors.

iii) To act upon the Board of Directors’ request to investigate and report on any issue or concern with regard to the management of the Group.

Duties and Responsibilities

i) To review with the external auditors the audit plan, audit report, findings, recommendations and their evaluation of the system of internal controls.

ii) To review and approve the scope and results of the external audit and to assess the suitability and independence of the external auditors.

iii) To consider and recommend for approval of the Board the appointment or re-appointment of the external auditors, the audit fees and any questions of their resignation or dismissal.

iv) To review the adequacy of the internal audit plans, scope of examination of the internal auditors and ensure that appropriate action is taken by Management in respect of the audit observations and the Committee’s recommendations.

v) To review the quarterly, half-yearly and annual financial statements before submission to the Board for approval. The review should focus primarily on compliance with applicable financial reporting standards as well as other regulatory requirements and the adequacy of information disclosure for a fair and full presentation of the financial affairs of the Company and the Group.


A. TERMS OF REFERENCE cont’d

Duties and Responsibilities cont’d

vi) To review any related party transaction and conflict of interest situation that may arise within the Company and the Group including any transaction, procedure or conduct that raises questions of management integrity.

vii) To direct any special investigations on the Group’s operations to be carried out by the Group Internal Audit Division or any other appropriate agencies.

viii) To discuss problems and reservations arising out of external or internal audits and any matters which the auditors wish to bring up in the absence of Senior Management or the Executive Directors of the Group where necessary.

ix) To perform other related duties as may be agreed by the Committee and the Board.

x) To meet with external and internal auditors without the presence of the Senior Management or the Executive Directors at least twice a year.

Employees Share Option Scheme (“ESOS”)

During the financial year ended 31 January 2013, no further share options were allocated pursuant to the Company’s ESOS.

B. MEETINGS AND ACTIVITIES

During the financial year ended 31 January 2013, four (4) Audit Committee Meetings were held. Details of attendance of each Committee member were as follows:-

No. of Meetings

Audit Committee Held Attended

Dato’ Ahmad Khairummuzammil bin Mohd Yusoff (Chairman) 4 4

Tan Sri Dato’ Seri Dr Ting Chew Peh 4 4

Ooi Teng Chew 4 4

At each of these Committee Meetings, both the Senior General Manager-Finance, the Internal Audit Manager and the representative(s) of the external auditors were invited to review with the Committee members the quarterly reports, half-year and annual financial statements as the case may be focusing on matters as listed out in the Duties and Responsibilities above.

After each Committee Meeting, the Chairman of the Committee reports to the Board on the proceedings conducted thereat and to convey the recommendations by the Committee on the quarterly reports, half-year and annual financial statements with or without amendments as the case may be to be approved and adopted by the Board for release to the Bursa Securities.

Audit Committee Reportcont’d


B. MEETINGS AND ACTIVITIES cont’d

Highlights of Activities

In line with the terms of reference of the Committee, the following activities were carried out by the Committee during the year ended 31 January 2013 in the discharge of its functions and duties:-

i) Review of the audit plans and scope for the year for the Group prepared by Internal Audit department and the external auditors;

ii) Review of the audit reports for the Group prepared by the Internal Audit department and the external auditors and consideration of the major findings by the auditors and management’s responses thereto. Monitored the corrective actions on the outstanding audit issues to ensure that all the key risks and control lapses have been addressed;

iii) Review of the quarterly and annual reports of the Group prior to submission to the Board for consideration and approval;

iv) Review of the related party transactions entered into by the Group to ensure that current procedures for monitoring of related parties transactions have been complied with;

v) Review of the fees of the external auditors.

C. INTERNAL AUDIT FUNCTION

Johan has since December 1990 established an Internal Audit department to carry out internal audit function of the Group’s key operations in Malaysia and overseas. The scope of internal audit works are conducted on a rotation basis and as and when directed by the management. The internal audit reports generated were reviewed and discussed at each of the Audit Committee Meetings to assist the Committee to discharge its functions more effectively. The internal audit team is independent and has no involvement in the operations of Group companies.

The total cost incurred for the internal audit function for the year ended 31 January 2013 was RM409,453 (2012 : RM413,000).


Audit Committee Reportcont’d


Statement on Risk Management and Internal Control

The new Malaysian Code on Corporate Governance 2012 requires listed companies to maintain a sound system of risk management and internal control to safeguard shareholders’ interest and the Company’s assets. This statement is prepared in accordance with paragraph 15.26 (b) of the Main Market Listing Requirements (“LR”) and Guidelines for Directors of Listed Issuer – Statement on Risk Management and Internal Control of Bursa Malaysia Securities Berhad.

Directors’ Responsibilities

The Board recognizes its responsibilities for and the importance of governance of risk. A sound system of internal controls and risk management practices are crucial and shall be embedded in the governance framework. However, it should be noted that such systems are designed to manage rather than eliminate risk. Also any system can only provide reasonable and not absolute assurance against material loss or misstatement.

Risk Management Framework

The Board has established a proper risk management framework and it is an ongoing process for identifying, understanding, communicating, treating and monitoring risk to achieve the Group’s business objectives. This process has been in place throughout the year under review and carried out in the following perspective:-

• Board of Directors

The Board is fully responsible in determining the Group’s risk appetite and level of risk exposure. In its regular Board Meetings, the Directors are brought to the attention on significant risk and material issues which require decisions to be made. To safeguard shareholders’ interest and the Group’s asset, the Board ensures that business risks are identified, assessed and managed, in the Group’s strategic planning and decision making process.

• Audit Committee

The Audit Committee (“AC”) is assisted by an in-house Internal Audit Department (“IAD”) which performs regular independent reviews, monitor and ensure compliance with the Group’s policies, procedures and systems of risk management & internal control. The AC, in every Committee Meeting, review internal audit reports for the Group prepared by the IAD. It will consider major findings of the internal auditors and management response thereto. Monitoring on the corrective actions of any outstanding audit issues are on-going to ensure that all the risks and control lapses have been addressed.

• Risk Management Committee

The Risk Management Committee (“RMC”) was set up by the Board in September 2002. The RMC, assisted by the IAD, identifies, evaluates and manages significant risk faced by the Group. Risk Profiles are submitted by the RMC of operating subsidiaries on a half year basis to be reviewed by the Head Office RMC. The Risk Profiles are also presented to the Audit Committee periodically.

The Risk Management Policy of the Group is in place to ensure a systematic approach to identify key risks faced by the Group and to monitor them on a regular basis. The policy helps to determine the appropriate risk appetite or level of exposure for the Group. The risk appetite for the Johan Group may be controllable and uncontrollable and it depends on several factors such as knowledge of the matter, past experience and magnitude of potential gains/losses.


Statement on Risk Management and Internal Controlcont’d

Risk Management Framework cont’d

• All operating business units

Standard operating policies and procedures (SOPP) were formalized to guide the operations of the Group’s operating business units. It documents how transactions are captured and where internal controls are applied. In addition, as part of the performance monitoring process, management information in the form of annual budgets, revised forecasts, quarterly management accounts and monthly management reports are submitted to the Head Office Finance Department for review and onward presentation to the Board for review and approval.

Internal Control Framework

The Board acknowledges that a sound system of internal control forms part of good governance practice and risk management forms part of the internal control. The following key elements constitute a controlled environment which shall encompass the System of Internal Control of the Johan Group:-

• Organizational structures in place for each operating unit with clearly defined levels of authority.• Operational management has clear responsibility for identifying risks affecting their business and for instituting adequate

procedures and internal controls to mitigate and monitor such risks on an ongoing basis. • The SOPP of each business unit sets out clear definition of authorisation procedures and clear line of accountability, with

strict authorisation, approval and control within the Group. • The IAD, staffed by a team of professionally qualified personnel which is independent and has no involvement in the

operations of Group companies, provides the Audit Committee with reasonable independent assurance on the effectiveness and integrity of the Group’s system of internal control.

• The duty of reviewing and monitoring the effectiveness of the Group’s system of internal control were vested to the AC which provides independent views. Periodic reports from the IAD to the AC are conducive in recommending remedial action to be taken by the Management.

• The existence of the RMC to oversee the overall risk management holds responsibility to identify, assessing, managing and monitoring significant risk within the Group.

The Board, however, recognises that a sound system of internal control will reduce, but cannot eliminate the possibility of poor judgement in decision-making, human error, control processes being deliberately circumvented by employees and others, management overriding controls and the occurrence of unforeseeable circumstances.

Review of Effectiveness

The Board is satisfied with the procedures outlined above and believes, with assurance from the Chairman & Chief Executive Officer and Senior General Manager – Finance that, the risk management and system of internal controls had continued to operate adequately and effectively in the financial year under review.

The Board also relies on the assessment by internal auditors to evaluate the state of internal controls and risk management at each operating unit. The Board is committed to the continuous improvement of internal controls and risk management practices within the Group to meet its business objectives.

This Statement has been approved by the Board and reviewed by the external auditors as required under Paragraph 15.23 of the LR. Based on their review, the external auditors have reported to the Board that nothing has come to their attention that cause them to believe that this Statement is inconsistent with their understanding with the procedures adopted by the Board in the review of the adequacy and integrity of the internal control systems of the Group.



Utilisation Of Proceeds Raised From Any Corporate Proposal

The Company did not implement any fund raising corporate exercise during the financial year ended 31 January 2013.

Share Buybacks

The Company does not have a scheme to buy back its own shares.

Options, Warrants Or Convertible Securities Exercised

There were no exercise of options during the financial year ended 31 January 2013.

The Company did not issue any warrants or convertibles securities during the financial year ended 31 January 2013.

American Depository Receipt (“ADR”) Or Global Depository Receipt (“GDR”)

The Company did not sponsor any ADR or GDR programme during the financial year ended 31 January 2013.

Sanctions and/or Penalties Imposed

No sanctions and/or penalties were imposed on the Company and its subsidiaries, directors or management by the relevant regulatory bodies during the financial year ended 31 January 2013.

Non-Audit Fees

During the financial year ended 31 January 2013, the Group/Company did not incur any non-audit fees to the Company’s auditors (2012: RM72,400).

Variation In Results For The Financial Year

There was no deviation of 10% or more between the profit after tax and minority interest stated in the announced unaudited results and the audited financial statements of the Company and the Group for the year ended 31 January 2013.

Profit Guarantee

The Company has not given any profit guarantee in respect of any corporate exercise to-date.

Material Contracts and Contracts Relating To Loan

There are no material contracts including contracts relating to any loan entered into by the Company and its subsidiaries involving Directors’ and major shareholders’ interests.

Additional Information


Financial Statements

Report of the DirectorsIndependent Auditors‘ ReportStatements of Comprehensive Income Statements of Financial PositionStatements of Changes in EquityStatements of Cash FlowsNotes to the Financial StatementsSupplementary InformationStatement by DirectorsDeclaration by the Officer Primarily Responsible for the Financial Management of the Company

29343738404144

137138138


Report of the Directors

The directors of JOHAN HOLDINGS BERHAD hereby submit their report and the audited financial statements of the Group and of the Company for the financial year ended January 31, 2013.

PRINCIPAL ACTIVITIES The principal activities of the Company are that of investment holding and provision of management services to its subsidiaries.

The principal activities of the subsidiaries are set out in Note 16 to the Financial Statements.

There have been no significant changes in the nature of the activities of the Company and its subsidiaries during the financial year.

RESULTS OF OPERATIONS The results of operations of the Group and of the Company for the financial year are as follows:

The Group The Company

RM’000 RM’000

Loss before tax 27,732 8,824

Income tax expense 4,243 37

Loss for the year 31,975 8,861

Loss attributable to:

Owners of the Company 31,851 8,861

Non-controlling interests 124 -

31,975 8,861

In the opinion of the directors, the results of operations of the Group and of the Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature.

DIVIDENDS

No dividend has been paid or declared by the Group and the Company since the end of the previous financial year. The directors also do not recommend any dividend payment in respect of the current financial year.

RESERVES AND PROVISIONS There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements.


Report of the Directorscont’d

ISSUE OF SHARES AND DEBENTURES The Company has not issued any new shares or debentures during the financial year.

SHARE OPTIONS The Company’s Employee Share Option Scheme (“ESOS”) is governed by the by-laws approved by the shareholders at an Extraordinary General Meeting held on June 19, 2003. The ESOS was implemented on October 31, 2003 and was to be in force for a period of 5 years expiring on October 30, 2008. Subsequently, at the Annual General Meeting of the Company held on July 24, 2008, shareholders’ approval was obtained for the ESOS to be extended for another period of 5 years commencing from November 1, 2008 and expiring on October 31, 2013.

The salient features and other terms of the ESOS are disclosed in Note 22 to the Financial Statements.

The Company has been granted exemptions by the Companies Commission of Malaysia vide their letter dated April 10, 2013 from having to disclose in this report the names of employees who have been granted options to subscribe for less than 16,000 ordinary shares of RM0.50 each.

The list of employees of the Group that have been granted options to subscribe for 16,000 or more ordinary shares of RM0.50 each during the financial year is as follows:

No. of options over ordinary shares of RM0.50 each

Balance at 1.2.2012 Granted

Exercised/Lapsed

Balance at31.01.2013

Registered in the name

Teh Yong Fah 45,000 - - 45,000

Ng Yew Soon 41,000 - - 41,000

Koh Chuan Tiok @ Koh Chuan Lim 40,000 - - 40,000

Robert Koh 22,000 - - 22,000

Yap Ee Seong 20,000 - - 20,000

Leong Kwee Heng 20,000 - - 20,000

Yuen Kum Fong 18,000 - - 18,000

Peter Tam Kui Pui 16,000 - - 16,000

Yeap Khiam Leong 16,000 - (16,000) -

Details of options granted to directors are disclosed in Director’s Interests.



OTHER STATUTORY INFORMATION Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the directors took reasonable steps: (a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance

for doubtful debts, and had satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts; and

(b) to ensure that any current assets which were unlikely to realise their book values in the ordinary course of business

had been written down to their estimated realisable values.

At the date of this report, the directors are not aware of any circumstances:

(a) which would render the amount written off for bad debts or the amount of allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; or

(b) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or

(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate; or

(d) not otherwise dealt with in this report or financial statements which would render any amount stated in the financial statements of the Group and of the Company misleading.

At the date of this report, there does not exist: (a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which

secures the liability of any other person; or (b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.

No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

In the opinion of the directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of operations of the Group and of the Company for the succeeding financial year.


DIRECTORS The following directors served on the Board of the Company since the date of the last report: Tan Sri Dato’ Tan Kay HockPuan Sri Datin Tan Swee BeeTan Sri Dato’ Seri Dr Ting Chew PehDato’ Ahmad Khairummuzammil Bin Mohd YusoffOoi Teng Chew

DIRECTORS’ INTERESTS

The shareholdings in the Company of those who were directors at the end of the financial year, as recorded in the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act, 1965, are as follows:

No. of ordinary shares of RM0.50 each

Balance at 1.2.2012 Addition Disposal


Direct and indirect interest

Tan Sri Dato’ Tan Kay Hock & Puan Sri Datin Tan Swee Bee 237,108,584 - - 237,108,584

Ooi Teng Chew 200,000 - - 200,000

In addition to the above, the following directors are deemed to have an interest in the shares of the Company as a result of the options granted pursuant to the ESOS of the Company:


Balance at 1.2.2012 Granted Exercised


Tan Sri Dato’ Tan Kay Hock 100,000 - - 100,000

Puan Sri Datin Tan Swee Bee 100,000 - - 100,000

Tan Sri Dato’ Tan Kay Hock and Puan Sri Datin Tan Swee Bee, by virtue of their interests in the shares in the Company, are also deemed to have interest in the shares of the subsidiaries of the Company to the extent that the Company has an interest.

None of the other directors in office at the end of the financial year held shares or had beneficial interest in the shares of the Company or of its related companies during and at the end of the financial year.



DIRECTORS’ BENEFITS

Since the end of the previous financial year, none of the directors of the Company has received or become entitled to receive any benefit (other than the benefits included in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salary of a full time employee of the Company as disclosed in Note 10 to the Financial Statements) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest except for any benefit which may be deemed to have arisen by virtue of the transactions between the Company and certain companies in which certain directors of the Company are also directors and/or shareholders as disclosed in Note 31 to the Financial Statements.

During and at the end of the financial year, no arrangement subsisted to which the Company was a party whereby directors of the Company might acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate except for the options granted to certain directors pursuant to the Company’s ESOS as disclosed above.

AUDITORS The auditors, Messrs. Deloitte & Touche, have indicated their willingness to continue in office.

Signed on behalf of the Boardin accordance with a resolution of the Directors,

PUAN SRI DATIN TAN SWEE BEE DATO’ AHMAD KHAIRUMMUZAMMIL BIN MOHD YUSOFF

Kuala LumpurMay 30, 2013



REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of JOHAN HOLDINGS BERHAD, which comprise the statements of financial position of the Group and of the Company as of January 31, 2013, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 37 to 136.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation of these financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance 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 auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of January 31, 2013 and of their financial performance and cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

Independent Auditors’ Reportto the Members of Johan Holdings Berhad(Incorporated in Malaysia)


REPORT ON OTHER LEGAL AND REGULATORY REqUIREMENTS

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report that:

(a) in our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors, have been properly kept in accordance with the provisions of the Act;

(b) we have considered the accounts and auditors’ reports of all the subsidiaries, of which we have not acted as auditors, which are indicated in Note 16 to the Financial Statements, being financial statements that have been included in the consolidated financial statements;

(c) we are satisfied that the accounts of the subsidiaries that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group, and we have received satisfactory information and explanations as required by us for those purposes; and

(d) the auditors’ reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

OTHER REPORTING RESPONSIBILITIES

The supplementary information set out in Note 39 on page 137 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1 “Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements” as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

OTHER MATTERS

As stated in Note 2 to the Financial Statements, the Group and the Company adopted the Malaysian Financial Reporting Standards on February 1, 2012 with a transition date of February 1, 2011. These standards were applied retrospectively by the directors to the comparative information in these financial statements, including the statements of financial position as of January 31, 2012 and February 1, 2011, and the statements of comprehensive income, statements of changes in equity and statements of cash flows for the year ended January 31, 2012 and related disclosures. We were not engaged to report on the restated comparative information and it is unaudited. Our responsibilities as part of our audit of the financial statements of the Group and of the Company for the year ended January 31, 2013 have, in these circumstances, included obtaining sufficient appropriate audit evidence that the opening balances as of February 1, 2012 do not contain misstatements that materially affect the financial position as of January 31, 2013 and financial performance and cash flows for the year then ended.

Independent Auditors’ Reportto the Members of Johan Holdings Berhad

(Incorporated in Malaysia)cont’d


OTHER MATTERS cont’d

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purposes. We do not assume responsibility towards any other person for the contents of this report.

The financial statements of the Group and of the Company for the preceding financial year ended January 31, 2012 were audited by another firm of auditors whose report thereon dated May 30, 2012 expressed an unmodified opinion on those financial statements.

DELOITTE & TOUCHE HUANG KHEAN YEONGAF 0834 Partner - 2993/05/14 (J)Chartered Accountants Chartered Accountant

May 30, 2013

Independent Auditors’ Reportto the Members of Johan Holdings Berhad(Incorporated in Malaysia)cont’d



Note 2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Revenue 5 305,564 293,020 1,313 6,538

Cost of sales 6 (106,474) (101,738) - -

Gross profit 199,090 191,282 1,313 6,538

Other operating income 11,299 12,542 1,296 97,616

Distribution expenses (42,700) (40,238) - -

Administrative expenses (122,935) (150,947) (11,401) (6,579)

Other operating expenses (30,546) (6,247) - (153,944)

Finance costs 7 (41,940) (50,073) (32) (39)

Loss before tax 8 (27,732) (43,681) (8,824) (56,408)

Income tax expense 11 (4,243) (4,571) (37) (1)

Loss for the year (31,975) (48,252) (8,861) (56,409)

Other comprehensive (loss)/income

Foreign currency translation difference for foreign operations (2,291) 2,217 - -

Total other comprehensive (loss)/income for the year, net of tax (2,291) 2,217 - -

Total comprehensive loss for the year (34,266) (46,035) (8,861) (56,409)

Loss attributable to:

Owners of the Company (31,851) (49,241) (8,861) (56,409)

Non-controlling interests (124) 989 - -

(31,975) (48,252) (8,861) (56,409)

Total comprehensive (loss)/income attributable to:

Owners of the Company (34,055) (47,037) (8,861) (56,409)

Non-controlling interests (211) 1,002 - -

(34,266) (46,035) (8,861) (56,409)

Loss per share attributable to owners of theCompany (sen)

Basic and diluted 12 (5.11) (7.90)

Statements of Comprehensive IncomeFor the financial year ended January 31, 2013

The accompanying Notes form an integral part of the Financial Statements


The Group Note 31.1.2013 31.1.2012 1.2.2011RM’000 RM’000 RM’000

ASSETSNon-Current AssetsProperty, plant and equipment 13 278,087 287,994 295,278Inventories – non-current 14 6,100 6,100 6,097Intangible assets 15 25,062 21,368 11,267Investment securities 17 1,418 67 69Deferred tax assets 18 9,367 9,179 9,177Total Non-Current Assets 320,034 324,708 321,888

Current AssetsInvestment securities 17 10,689 13,752 15,822Inventories 14 35,537 34,633 32,346Trade receivables 19 646,414 572,215 560,184Other receivables and prepaid expenses 20 24,992 28,685 46,541Tax recoverable 618 281 372Cash and bank balances 30 72,763 95,041 140,410Total Current Assets 791,013 744,607 795,675

TOTAL ASSETS 1,111,047 1,069,315 1,117,563

EqUITY AND LIABILITIESCapital and ReservesShare capital 21 311,474 311,474 311,474Share premium 23 69,415 69,415 69,415Exchange reserve 23 9,865 12,069 9,865Accumulated losses (169,935) (138,084) (88,843)

220,819 254,874 301,911Non-controlling interests 9,024 9,235 8,233Total Equity 229,843 264,109 310,144

Non-Current LiabilitiesLoans and borrowings 24 9,424 9,564 66,069Senior certificates 26 33,500 33,500 30,500Deferred tax liabilities 18 7,810 8,711 5,949Total Non-Current Liabilities 50,734 51,775 102,518

Current LiabilitiesTrade payables 27 83,394 60,796 86,824Other payables and accrued expenses 28 67,341 53,990 73,130Loans and borrowings 24 228,821 222,095 134,097Investor certificates 26 411,653 387,430 392,780Deferred revenue 29 30,570 24,693 13,728Tax liabilities 8,691 4,427 4,342Total Current Liabilities 830,470 753,431 704,901Total Liabilities 881,204 805,206 807,419

TOTAL EqUITY AND LIABILITIES 1,111,047 1,069,315 1,117,563

Statements of Financial PositionAs of January 31, 2013


The Company Note 31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

ASSETS

Non-Current Assets

Property, plant and equipment 13 861 941 1,038

Investment in subsidiaries 16 168,782 138,782 53,442

Total Non-Current Assets 169,643 139,723 54,480

Current Assets

Other receivables 20 275 235 203

Amount owing by subsidiaries 16 21,506 57,791 204,403

Tax recoverable 244 281 372

Cash and bank balances 30 165 3,208 2,557

Total Current Assets 22,190 61,515 207,535

TOTAL ASSETS 191,833 201,238 262,015

EqUITY AND LIABILITIES

Capital and Reserves

Share capital 21 311,474 311,474 311,474

Share premium 23 69,415 69,415 69,415

Accumulated losses (219,216) (210,355) (153,946)

Total Equity 161,673 170,534 226,943

Non-Current Liability

Loans and borrowings 24 400 415 549

Current Liabilities

Other payables and accrued expenses 28 128 530 430

Amount owing to subsidiaries 16 29,553 29,555 33,882

Loans and borrowings 24 79 204 211

Total Current Liabilities 29,760 30,289 34,523

Total liabilities 30,160 30,704 35,072

TOTAL EqUITY AND LIABILITIES 191,833 201,238 262,015

Statements of Financial PositionAs of January 31, 2013

cont’d



Attributable to owners of the Company

Non-distributable reserves

The GroupShare

capitalShare

premiumExchange

reserveAccumulated

losses Total

Non-controlling

interestsTotal

equity

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

Balance as of February 1, 2011 311,474 69,415 9,865 (88,843) 301,911 8,233 310,144

Total comprehensiveincome/(loss) for the year - - 2,204 (49,241) (47,037) 1,002 (46,035)

Balance as of January 31, 2012 311,474 69,415 12,069 (138,084) 254,874 9,235 264,109

Balance as of February 1, 2012 311,474 69,415 12,069 (138,084) 254,874 9,235 264,109

Total comprehensive lossfor the year - - (2,204) (31,851) (34,055) (211) (34,266)

Balance as of January 31, 2013 311,474 69,415 9,865 (169,935) 220,819 9,024 229,843

The CompanyShare

capital

Non -distributable

reservesShare

premiumAccumulated

losses Total

RM’000 RM’000 RM’000 RM’000

Balance as of February 1, 2011 311,474 69,415 (153,946) 226,943

Total comprehensive loss for the year - - (56,409) (56,409)

Balance as of January 31, 2012 311,474 69,415 (210,355) 170,534 Balance as of February 1, 2012 311,474 69,415 (210,355) 170,534

Total comprehensive loss for the year - - (8,861) (8,861)

Balance as of January 31, 2013 311,474 69,415 (219,216) 161,673

Statements of Changes in EquityFor the financial year ended January 31, 2013




2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES

Loss before tax (27,732) (43,681) (8,824) (56,408)

Adjustments for:

Interest expense 41,940 50,073 32 39

Depreciation of property, plant and equipment 8,270 9,020 176 189

Allowance for doubtful debts:

Amount owing to subsidiaries - - 5,318 3

Trade receivables 9,412 17,774 - -

Other receivables - 1,000 - -

Net fair value loss on investment securities 1,995 2,684 - -

Amortisation on intangible assets 3,063 1,883 - -

(Gain)/Loss on disposal of investment securities (22) 115 - -

Inventories written down 1,034 582 - -

Allowance for doubtful debts no longer required:

Amount owing by subsidiaries - - - (97,172)

Trade receivables (650) (5,244) - -

Other receivables (31) (19) - -

Write back of inventories written down (754) (291) - -

Impairment loss on investment in subsidiaries - - - 153,900

Interest income (3,219) (2,581) (1,241) (428)

Unrealised (gain)/loss on foreign exchange - net (6,060) 849 - -

Write back of deposits written off previously - (1,700) - -

Property, plant and equipment written off - 190 - 1

Impairment of property, plant and equipment 243 - - -

Dividend income (630) (729) - (5,164)

Gain on disposal of property, plant and equipment (55) (127) (7) (75)

Operating Profit/(Loss) Before Working Capital Changes 26,804 29,798 (4,546) (5,115)

(Increase)/Decrease in:

Inventories (1,184) (2,581) - -

Trade receivables (88,170) (27,217) - -

Other receivables and prepaid expenses 3,724 18,575 (40) (32)

Statements of Cash FlowsFor the financial year ended January 31, 2013



2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Increase/(Decrease in):

Trade payables 28,658 (26,877) - -

Other payables and accrued expenses 13,351 (19,140) (402) 100

Deferred revenue 5,877 10,965 - -

Cash Used In Operations (10,940) (16,477) (4,988) (5,047)

Income tax (paid)/refund - net (1,429) (1,474) - 90

Net Cash Used In Operating Activities (12,369) (17,951) (4,988) (4,957)

CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES

Purchase of property, plant and equipment (2,589) (1,796) (25) (19)

Proceeds from disposal of property, plant and equipment 336 624 7 132

Proceeds from disposal of investment securities 2,737 2,024 - -

Purchase of intangible assets (3,091) (4,697) - -

Decrease in amount owing by subsidiaries - - 967 4,541

Acquisition of investment securities (2,998) (2,751) - -

Dividend income recieved 630 729 - 5,164

Interest received 3,219 2,581 1,241 428

Net Cash (Used In)/From Investing Activities (1,756) (3,286) 2,190 10,246

Statements of Cash FlowsFor the financial year ended January 31, 2013cont’d



Note 2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES

Interest paid (41,940) (50,073) (32) (39)

Increase/(Decrease) in:

Deposits pledged with licensed financial institutions 1,120 (264) - -

Net proceeds from/(payments for) investorand senior certificates 24,223 (2,350) - -

Proceeds for loans and borrowings, excluding bank overdraft 53,230 24,072 (211) (272)

Increase in amount owing to subsidiaries - - (2) (4,327)

Net Cash From/(Used In) Financing Activities 36,633 (28,615) (245) (4,638)

NET INCREASE/(DECREASE) IN CASH AND CASH EqUIVALENTS 22,508 (49,852) (3,043) 651

Effect of foreign exchange rate changes 7,060 3,318 - -

CASH AND CASH EqUIVALENTS AT BEGINNING OF YEAR 19,571 66,105 3,208 2,557

CASH AND CASH EqUIVALENTS AT END OF YEAR 30 49,139 19,571 165 3,208

Statements of Cash FlowsFor the financial year ended January 31, 2013

cont’d



Notes to the Financial StatementsFor the financial year ended January 31, 2013

1. GENERAL INFORMATION The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed on the Main

Market of Bursa Malaysia Securities Berhad.

The principal activities of the Company are that of investment holding and provision of management services to its subsidiaries.

The principal activities of the subsidiaries are set out in Note 16.

There have been no significant changes in the nature of the principal activities of the Company and its subsidiaries during the financial year.

The registered office and principal place of business of the Company is located at 11th Floor, Wisma E&C, 2 Lorong Dungun Kiri, Damansara Heights, 50490 Kuala Lumpur, Malaysia.

The financial statements of the Group and of the Company were authorised by the Board of Directors for issuance on May 30, 2013.

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The financial statements of the Group and of the Company have been prepared in accordance with the Malaysian Financial Reporting Standards (“MFRS”), International Financial Reporting Standards (“IFRS”) and the provisions of the Companies Act, 1965 in Malaysia.

The financial statements of the Group and of the Company are presented in Ringgit Malaysia (“RM”), and all values are

rounded to the nearest thousand (RM’000) except when otherwise indicated.

2.1 Adoption of Malaysian Financial Reporting Standards

The Group’s and the Company’s financial statements for the financial year ended January 31, 2013 have been prepared in accordance with MFRSs for the first time. In the previous years, these financial statements were prepared in accordance with Financial Reporting Standards (“FRSs”).

The transition to MFRSs is accounted for in accordance with MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards, with February 1, 2011 as the date of transition. The changes in accounting policies as a consequence of the transition to MFRSs and the reconciliations of the effects of the transition to MFRSs are presented in Note 37.



cont’d

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS cont’d

2.2 Standards and Amendments in issue but not effective

At the date of authorisation for issue these financial statements, the new and revised Standards and Amendments relevant to the Group and the Company which were in issue but not yet effective and not early adopted by the Group and the Company are listed below.

MFRS 7 Financial Instruments: Disclosures [Amendments relating to Mandatory Effective Date of MFRS 9and Transition Disclosures] (IFRS 9 issued by IASB in November 2009 and October respectively)1

MFRS 7 Financial Instruments: Disclosures (Amendments relating to Disclosures - Offsetting Financial Assets and Liabilities)2

MFRS 9 Financial Instruments (IFRS 9 issued by IASB in November 2009)3

MFRS 9 Financial Instruments (IFRS 9 issued by IASB in October 2010)3

MFRS 10 Consolidated Financial Statements2

MFRS 10 Consolidated Financial Statements (Amendments relating to Transition Guidance)2

MFRS 11 Joint Arrangements2

MFRS 11 Joint Arrangements (Amendments relating to Transition Guidance)2

MFRS 12 Disclosures of Interests in Other Entities2

MFRS 12 Disclosures of Interests in Other Entities (Amendments relating to Transition Guidance)2

MFRS 13 Fair Value Measurement2

MFRS 101 Presentation of Financial Statements (Amendments relating to Presentation of Items of OtherComprehensive Income)4

MFRS 119 Employee Benefits (IAS 19 as amended by IASB in June 2011)2

MFRS 127 Separate Financial Statements (IAS 27 as amended by IASB in May 2011)2

MFRS 128 Investment in Associates and Joint Ventures (IAS 28 as amended by IASB in May 2011)2

MFRS 132 Financial Instruments: Presentation (Amendments relating to Offsetting Financial Assets andFinancial Liabilities)5

Amendments to MFRSs contained in the document entitled Annual Improvements 2009 - 2011 cycle2

1 Effective immediately on issuance date of March 1, 2012

2 Effective for annual periods beginning on or after January 1, 2013

3 Effective for annual periods beginning on or after January 1, 2015 instead of January 1, 2013 immediately upon the issuance of Amendments to MFRS 9 (IFRS 9 issued by IASB in November 2009 and October 2010 respectively) and MFRS 7 relating to “Mandatory Effective Date of MFRS 9 and Transition Disclosures” on March 1, 2012

4 Effective for annual periods beginning on or after July 1, 2012

5 Effective for annual periods beginning on or after January 1, 2014


Notes to the Financial StatementsFor the financial year ended January 31, 2013cont’d


2.2 Standards and Amendments in issue but not effective cont’d

The directors anticipate that the abovementioned Standards and Amendments will be adopted in the annual financial statements of the Group and of the Company when they become effective and that the adoption of these Standards and Amendments will have no material impact on the financial statements of the Group and of the Company in the period of initial application, except as disclosed below.

Amendments to MFRS 7 and MFRS 132: Offsetting Financial Assets and Financial Liabilities and the related disclosures

The amendments to MFRS 132 clarify existing application issues relating to the offset of financial assets and financial liabilities requirements. Specifically, the amendments clarify the meaning of “currently has a legally enforceable right of set-off” and “simultaneous realisation and settlement”.

The amendments to MFRS 7 introduce new disclosure requirements relating to rights of offset and related arrangements for financial instruments under an enforceable master netting agreements or similar arrangements. Both MFRS 132 and MFRS 7 require retrospective application upon adoption.

To date, the Group has not entered into any such agreements or similar arrangements. However, the directors anticipate that the application of these amendments to MFRS 132 and MFRS 7 may result in more disclosures being made with regard to offsetting financial assets and financial liabilities in the future.

MFRS 9 and Amendments relating to Mandatory Effective Date of MFRS 9 and Transition Disclosures

MFRS 9 (IFRS 9 issued by IASB in November 2009) introduces new requirements for the classification and measurement of financial assets. MFRS 9 (IFRS 9 issued by IASB in October 2010) includes the requirements for the classification and measurement of financial liabilities and for derecognition.

The amendments to MFRS 9 (IFRS 9 issued by IASB in November 2009 and October 2010 respectively) (“FRS 9”) relating to “Mandatory Effective Date of FRS 9 and Transition Disclosures” which became effective immediately on the issuance date of March 1, 2012 amended the mandatory effective date of FRS 9 to annual periods beginning on or after January 1, 2015 instead of on or after January 1, 2013, with earlier application still permitted as well as modified the relief from restating prior periods. MFRS 7 which was also amended in tandem with the issuance of the aforementioned amendments introduces new disclosure requirements that are either permitted or required on the basis of the entity’s date of adoption and whether the entity chooses to restate prior periods.

Key requirements of MFRS 9 are described as follows:

l All recognised financial assets that are within the scope of MFRS 139 Financial Instruments: Recognition and Measurement to be subsequently measured at amortised cost or fair value. Specifically, debt investments that are held with a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortised cost at the end of subsequent accounting periods. All other debt investments and equity investments are measured at their fair values at the end of subsequent accounting periods. In addition, under MFRS 9, entities may make an irrevocable election to present subsequent changes in the fair value of equity instrument (that is not held for trading) in other comprehensive income, with only dividend income generally recognised in profit or loss.



cont’d



MFRS 9 and Amendments relating to Mandatory Effective Date of MFRS 9 and Transition Disclosures cont’d

Key requirements of MFRS 9 are described as follows: cont’d

l With regard to the measurement of financial liabilities designated as at fair value through profit or loss, MFRS 9 requires that the amount of changes in the fair value of the financial liability that is attributable to changes in the credit risk of that liability, is presented in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability’s credit risk are not subsequently reclassified to profit or loss. Previously, under FRS 139, the entire amount of the change in the fair value of the financial liability designated as at fair value through profit or loss was presented in profit or loss.

The directors anticipate that the application of MFRS 9 may affect the amounts reported in respect of the Group’s and the Company’s financial assets and financial liabilities. However, it is not practicable to provide a reasonable estimate of the effect of MFRS 9 until a detailed review has been completed.

MFRS 10, MFRS 11, MFRS 12, MFRS 127 and MFRS 128

In November 2011, a package of five Standards on consolidation, joint arrangements, associates and disclosures was issued, comprising MFRS 10, MFRS 11, MFRS 12, MFRS 127 (IAS 27 as amended by IASB in May 2011) and MFRS 128 (IAS 28 as amended by IASB in May 2011).

Key requirements of these five Standards are described below:

MFRS 10 replaces the parts of MFRS 127 Consolidated and Separate Financial Statements that deal with consolidated financial statements. IC Int. 112 Consolidation – Special Purpose Entities will be withdrawn upon the effective date of MFRS 10. Under MFRS 10, there is only one basis for consolidation, that is, control. In addition, MFRS 10 includes a new definition of control that contains three elements: (a) power over an investee, (b) exposure, or rights, to variable returns from its involvement with the investee, and (c) the ability to use its power over the investee to affect the amount of the investor’s returns. Extensive guidance has been added in MFRS 10 to deal with complex scenarios.

MFRS 11 replaces MFRS 131 Interests in Joint Ventures. MFRS 11 deals with how a joint arrangement of which two or more parties have joint control should be classified. IC Int. 113 Jointly Controlled Entities – Non-monetary Contributions by Venturers will be withdrawn upon the effective date of MFRS 11. Under MFRS 11, joint arrangements are classified as joint operations or joint ventures, depending on the rights and obligations of the parties to the arrangements. In contrast, under MFRS 131, there are three types of joint arrangements: jointly controlled entities, jointly controlled assets and jointly controlled operations. In addition, joint ventures under MFRS 11 are required to be accounted for using the equity method of accounting, whereas jointly controlled entities under MFRS 131 can be accounted for using the equity method of accounting or proportionate consolidation.





MFRS 10, MFRS 11, MFRS 12, MFRS 127 and MFRS 128 cont’d

Key requirements of these five Standards are described below: cont’d

MFRS 12 is a disclosure standard and is applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. In general, the disclosure requirements in MFRS 12 are more extensive than those in the current standards.

In July 2012, the amendments to MFRS 10, MFRS 11 and MFRS 12 were issued to clarify certain transitional guidance on the application of these MFRSs for the first time.

The directors anticipate that the application of these five standards may not have significant impact on amounts reported in the consolidated financial statements except for MFRS 12.

MFRS 13

MFRS 13 establishes a single source of guidance for fair value measurements and disclosures about fair value measurements. The Standard defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. The scope of MFRS 13 is broad; it applies to both financial instrument items and non-financial instrument items for which other IFRSs require or permit fair value measurements and disclosures about fair value measurements, except in specified circumstances. In general, the disclosure requirements in MFRS 13 are more extensive than those required in the current standards. For example, quantitative and qualitative disclosures based on the three-level fair value hierarchy currently required for financial instruments only under MFRS 7 Financial Instruments: Disclosures will be extended by MFRS 13 to cover all assets and liabilities within its scope.

The directors anticipate that the application of the new Standard may affect the amounts reported in the financial statements and result in more extensive disclosures in the financial statements.

Amendments to MFRS 101: Presentation of Items of Other Comprehensive Income

The amendments to MFRS 101 retain the option to present profit or loss and other comprehensive income in either a single statement or in two separate but consecutive statements. However, the amendments to MFRS 101 require additional disclosures to be made in the other comprehensive income section such that items of other comprehensive income are grouped into two categories: (a) items that will not be reclassified subsequently to profit or loss; and (b) items that will be reclassified subsequently to profit or loss when specific conditions are met. Income tax on items of other comprehensive income is required to be allocated on the same basis – the amendments do not change the option to present items of other comprehensive income either before tax or net of tax.

The amendments also introduce new terminology for the statement of comprehensive income and income statement. Under the amendments to MFRS 101, the “statement of comprehensive income” is renamed “statement of profit or loss and other comprehensive income” and the “income statement” is renamed the “statement of profit or loss”.



cont’d



Amendments to MFRS 101: Presentation of Items of Other Comprehensive Income cont’d

The amendments will be applied retrospectively upon adoption and hence, the presentation of items of other comprehensive income will be modified accordingly to reflect the changes. Other than the abovementioned presentation changes, the application of the amendments to MFRS 101 would not result in any impact on profit or loss, other comprehensive income and total comprehensive income.

Amendments to MFRSs: Annual Improvements 2009 - 2011 Cycle

The Annual Improvements 2009 - 2011 Cycle include a number of amendments to various MFRSs. The amendments to MFRSs include:

l Amendments to MFRS 101 Presentation of Financial Statements; lAmendments to MFRS 116 Property, Plant and Equipment; and lAmendments to MFRS 132 Financial Instruments: Presentation

The amendments relevant to the Company are as follows:

Amendments to MFRS 101

MFRS 101 requires an entity that changes accounting policies retrospectively, or makes a retrospective restatement or reclassification to present a statement of financial position as at the beginning of the preceding period (third statement of financial position). The amendments to MFRS 101 clarify that an entity is required to present a third statement of financial position only when the retrospective application, restatement or reclassification has a material effect on the information in the third statement of financial position and that related notes are not required to accompany the third statement of financial position. Hence, the adoption of the amendments when it becomes effective will affect the presentation of the third statement of financial position and related notes in the future periods.


The amendments to MFRS 116 clarify that spare parts, stand-by equipment and servicing equipment should be classified as property, plant and equipment when they meet the definition of property, plant and equipment in MFRS 116 and as inventory otherwise. The directors do not anticipate that the amendments to MFRS 116 will have a significant effect on the Group’s and the Company’s financial statements.


The amendments to MFRS 132 clarify that income tax relating to distributions to holders of an equity instrument and to transaction costs of an equity transaction should be accounted for in accordance with MFRS 112 Income Taxes. The directors anticipate that the amendments to MFRS 132 will have no effect on the Group’s and the Company’s financial statements as this treatment has already been adopted.



3. SIGNIFICANT ACCOUNTING POLICIES 3.1 Basis of Accounting

The financial statements of the Group and of the Company have been prepared under the historical cost convention. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

The financial statements of the Group and of the Company are presented in Ringgit Malaysia (“RM”), and all values are rounded to the nearest thousand (RM’000) except when otherwise indicated.

3.2 Basis of Consolidation and Subsidiaries

The consolidated financial statements incorporate the financial statements of the Company and entities (including special purpose entities) controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

Income and expenses of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate. Total comprehensive income of subsidiaries is attributable to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

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

When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. When assets of the subsidiary are carried at revalued amounts or fair values and the related cumulative gain or loss has been recognised in other comprehensive income and accumulated in equity, the amounts previously recognised in other comprehensive income are accounted for as if the Group had directly disposed of the relevant assets (i.e. reclassified to profit or loss or transferred directly to retained earnings as specified by applicable Standards). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under MFRS 139 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or jointly controlled entity.

3.2.1 Subsidiaries Investment in subsidiaries, which are eliminated on consolidation, are stated at cost less any accumulated

impairment losses, if any, in the Company’s financial statements.



cont’d

3. SIGNIFICANT ACCOUNTING POLICIES cont’d 3.3 Business Combinations

Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value which is calculated as the sum of the acquisition-date fair values of assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.

At acquisition date, the identifiable assets acquired and liabilities assumed are recognised at the fair value, except that:

l deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements are recognised and measured in accordance with MFRS 112 Income Taxes and MFRS 119 Employee Benefits respectively.

l liabilities or equity instruments related to the replacement by the Group of an acquiree’s share-based payment awards are measured in accordance with MFRS 2 Share-based Payment; and

l assets (or disposal groups) that are classified as held for sale in accordance with MFRS 5 Non-current Assets Held for Sale and Discountinued Operations are measured in accordance with that Standard.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.

Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests’ proportionate share of the recognised amounts of the acquiree’s identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Other types of non-controlling interests are measured at fair value or, when applicable, on the basis specified in another Standard.

Where the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the measurement period (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.

The subsequent accounting for changes in the fair value of contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or liability is remeasured at subsequent reporting dates in accordance with MFRS 137 Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss being recognised in profit or loss.



3. SIGNIFICANT ACCOUNTING POLICIES cont’d 3.3 Business Combinations cont’d

Where a business combination is achieved in stages, the Group’s previously held equity interests in the acquiree are remeasured to fair value at the acquisition date (i.e. the date when the Group attains control) and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised at that date.

3.4 Revenue Recognition

Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the Group and the Company and the amount of revenue can be measured realiably. Revenue is measured at the fair value of consideration received and receivable in the normal course of business.

The following specific recognition criteria must also be met before revenue is recognised:

(i) Dividend income

Dividend income from investments is recognised when the right to receive payment has been established. (ii) Charge and credit card operations

Charge and credit card commissions, cardholders’ subscriptions, renewal fees and service charges are recognised on inception of the respective events.

Provision of charge and credit card services that result in award credits for cardholders are accounted for as multiple element revenue transactions and the fair value of the consideration received or receivable is allocated between the services provided and the reward credits granted. The consideration allocated to the award credits is measured by reference to their fair value. Such transaction is not recognised as revenue at the time of the initial transaction but is deferred and recognised as revenue when the reward credits are redeemed and the Group’s obligations have been fulfilled.

(iii) Ticketing and travel revenue

Revenue from ticket sales is recognised upon issue and delivery of tickets and revenue from travel services is recognised upon departure or arrival dates of the tours and services rendered.



cont’d

3. SIGNIFICANT ACCOUNTING POLICIES cont’d 3.4 Revenue Recognition cont’d

(iv) Sales of goods

Revenue is recognised upon the transfer of significant risk and rewards of ownership of the goods to the customer, which generally coincides with delivery and acceptance of the goods sold. 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.

(v) Revenue from hotel operations

Revenue fom rental of hotel rooms, sale of food and beverage and other related income are recognised on an accrual basis.

(vi) Revenue from development properties

Revenue from sale of development properties is recognised in the profit or loss when significant risks and rewards of ownership of the properties have been transferred to the buyer on delivery in its entirety at a single time on vacant possession.

(vii) Contract revenue

Contract revenue and contract costs are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the end of the reporting period, when the outcome of an engineering contract can be estimated reliably. When the outcome of an engineering contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that are likely to be recoverable and contract costs are recognised as expense in the period in which they are incurred. An expected loss on the engineering contract is recognised as an expense immediately when it is probable that total contract costs will exceed total contract revenue.

Contract revenue comprises the initial amount of revenue agreed in the contract and variations in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue and they are capable of being reliably measured.

The stage of completion is determined by reference to the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs.

(viii) Interest income

Interest income is recognised on an accrual basis using the effective interest rate method.

(ix) Rental income

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



3. SIGNIFICANT ACCOUNTING POLICIES cont’d 3.5 Foreign Currency Conversion The individual financial statements of each group entity are presented in the currency of the primary economic

environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each group entity are expressed in Ringgit Malaysia (‘RM’), which is the functional currency of the Company and the presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual entities, transactions in currencies other than the functional currency (foreign currencies) are recorded at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair values were determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences are recognised in profit or loss in the period in which they arise except for:

l Exchange differences arising on the retranslation of non-monetary items carried at fair value in respect of which gain and losses are recognised in other comprehensive income. For such non-monetary items, the exchange component of that gain or loss is also recognised in other comprehensive income;

l Exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;

l Exchange differences on transactions entered into in order to hedge certain foreign currency risks; and

l Exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore, forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated into Ringgit Malaysia (“RM”) using exchange rates prevailing at the end of the reporting period. Income and expenses items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity (attributable to non-controlling interests as appropriate).

On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, loss of joint control over a jointly controlled entity that includes a foreign operation, or loss of significant influence over an associate that includes a foreign operation), all of the accumulated exchange differences in respect of that operation attributable to the Group are reclassified to profit or loss. Any exchange differences that have previously been attributed to non-controlling interests are derecognised, but they are not reclassified to profit or loss.



cont’d

3. SIGNIFICANT ACCOUNTING POLICIES cont’d 3.5 Foreign Currency Conversion cont’d

In addition, in relation to a partial disposal of a subsidiary that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. of associates or jointly controlled entities that do not result in the Group losing significant influence or joint control), the proportionate share of the accumulated exchange differences is reclassified to profit or loss.

Goodwill and fair value adjustments on identifiable assets and liabilities arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are recognised in other comprehensive income and accumulated in equity.

3.6 Employee Benefits

3.6.1 Short-term benefits

Wages, salaries, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered by employees of the Group and the Company. Short-term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short-term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

3.6.2 Defined contribution plans

The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. The Malaysian companies in the Group make contributions to the Employees Provident Fund (“EPF”) in Malaysia, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed.

3.6.3 Employee share options plans

The Employee Share Options Scheme (“ESOS”), an equity-settled, share-based compensation plan, allows the Group’s employees to acquire ordinary shares of the Company. The total fair value of share options granted to employees is recognised as an employee cost with a corresponding increase in the share option reserve within equity over the vesting period and taking into account the probability that the option will vest. The fair value of share options is measured at grant date, taking into account, if any, the market vesting conditions upon which the options were granted but excluding the impact of any non-market vesting conditions.

Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable on vesting date.



3. SIGNIFICANT ACCOUNTING POLICIES cont’d

3.6 Employee Benefits cont’d

3.6.3 Employee share options plans cont’d

At the end of each reporting period, the Group revises its estimates of the number of share options that are expected to become exercisable on vesting date. It recognises the impact of the revision of original estimates, if any, in profit or loss, and a corresponding adjustment to equity over the remaining vesting period. The equity amount is recognised in the share option reserve until the option is exercised, upon which it will be transferred to retained earnings, or until the option expires, upon which it will be transferred directly to retained earnings.

The proceeds received net of any directly attributable transaction costs are credited to equity when the

options are exercised.

3.7 Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

The Group as lessee

Assets held under finance leases are initially recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation.

Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Group’s general policy on borrowing costs (see 3.8 below). Contingent rentals are recognised as expenses in the periods in which they are incurred.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.



cont’d


3.7 Leases cont’d

The Group 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 3.4 (ix) above.

3.8 Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for recognised.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred. Borrowing costs consist of interest and other costs that the Group and the Company incurred in connection with the borrowing of funds.

3.9 Income Tax Income tax expense for the year comprises current and deferred tax.

3.9.1 Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statements of comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

3.9.2 Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profits will be available against which those deductible temporary differences, unused tax losses and unused tax credits can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.




3.9 Income Tax cont’d

3.9.2 Deferred tax cont’d

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

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 profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group and the Company expect, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group and the Company intend to settle its current tax assets and liabilities on a net basis.

3.9.3 Current and deferred tax for the period

Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items that are recognised outside profit or loss (whether in other comprehensive income or directly in equity), in which case the current and deferred tax is also recognised in other comprehensive income or directly in equity respectively. Where current or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

3.10 Impairment of Non-Financial Assets Other Than Goodwill

At the end of each reporting period, the Group reviews the carrying amounts of its non-financial assets other than goodwill to determine whether there is any indication that these assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimate the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.



cont’d


3.10 Impairment of Non-Financial Assets Other Than Goodwill cont’d

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset (or cash-generating unit) for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

3.11 Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses. Gain or loss arising from the disposal of an asset is determined as the difference between the estimated net

disposal proceeds and the carrying amount of the asset, and is recognised in profit or loss.

Freehold land is not depreciated. Long-term leasehold land are depreciated based on the carrying values of the land over the remaining period of the leases.

Depreciation of other property, plant and equipment is computed using the straight-line method to write off the cost of the various assets over their estimated useful lives at the following annual rates:

Freehold buildings 2%Long-term leasehold buildings 1.76% - 2%Long-term leasehold hotel properties 2%Plant and machinery, furniture, equipment and motor vehicles 5% - 33.3%

At the end of each reporting period, the residual values, useful lives and depreciation methods of property, plant and equipment are reviewed, and the effects of any change in estimates are recognised prospectively.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets.




3.12 Intangible Assets

3.12.1 Goodwill

Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination.

The cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or loss in the consolidated statement of comprehensive income. An impairment loss recognised for goodwill is 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.

On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

3.12.2 Other intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful lives of intangible assets are assessed to be either finite of indefinite. Intangible assets with finite lives are amortised on a straight-line basis over the estimated economic useful lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each reporting date.

Computer software acquired are amortised on a straight-line basis over a period of 7 years (their estimated useful lives).



cont’d


3.13 Inventories

Inventories are stated at lower of cost and net realisable value. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.

3.13.1 Raw materials, work-in-progress, finished goods and merchandise

Cost of raw materials, finished goods and merchandise is determined on a weighted average or first-in-first-out basis, as appropriate, according to the category of inventories concerned. Cost of materials and merchandise comprises the original purchase price plus the costs incurred in bringing the inventories to their present location and condition. Cost of work-in-progress and finished goods include the costs of raw materials, direct labour, other direct costs and appropriate production overheads.

3.13.2 Contract work-in-progress

Contract work-in-progress include amounts of work completed and estimates of the realisable value of work done but not charged to clients at the end of the reporting period. The statements of comprehensive income reflects the profits and losses on contracts completed prior to the end of the reporting period and the results of current contracts based on the percentage of completion method.

3.13.3 Land held for property development

Land held for property development consists of land on which no development activities have been undertaken or where development activities are not expected to be completed within the normal operating cycle. Such land is classified as non-current asset and is stated at cost less accumulated impairment losses.

Cost associated with the acquisition of land includes the purchase price of the land, professional fees, stamp duties, commissions, conversion fees and other relevant levies.

Land held for property development is transferred to property development costs (under current assets) when development activities have commenced and where the development activities are expected to be completed within the normal operating cycle.

3.13.4 Properties under development

Cost of properties under development not recognised as an expense is recognised as an asset. Properties under development comprise costs associated with the acquisition of land and all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities.

3.13.5 Developed properties held for sale

Cost of developed properties held for sale consists of costs associated with the acquisition of land, direct costs and appropriate proportions of common costs attributable to developing the properties to completion.




3.14 Provisions

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

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

3.15 Progress Billing in Respect of Property Development

Progress billing in respect of property development refers to progress billings attributable to the sale of properties under development for which the said properties under development have yet to be delivered.

3.16 Financial Instruments

Financial assets and financial liabilities are recognised when, and only when, the Group and the Company become a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of the financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs that are directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Financial Assets

Financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’ (FVTPL), ‘held-to-maturity’ investments, ‘available-for-sale’ (AFS) financial assets and, ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame establish by regulation or convention in the marketplace.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.



cont’d


3.16 Financial Instruments cont’d

Financial Assets cont’d

Effective interest method cont’d

Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL.

Financial assets at FVTPL

Financial assets are classified as at FVTPL when the financial asset is either held for trading or it is designated as at FVTPL.

A financial asset is classified as held for trading if:

l it has been acquired principally for the purpose of selling it in the near term; or

l on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or

l it is a derivative that is not designated and effective as a hedging instrument.

Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss.

AFS financial assets

AFS financial assets are non-derivatives that are either designated as available-for-sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at FVTPL.

All AFS assets are measured at fair value at the end of the reporting period. Fair value is determined in the manner described in Note 34. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the investments revaluation reserve, with the exception of impairment losses, interest calculated using the effective interest method, and foreign exchange gains and losses on monetary assets, which are recognised in profit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss.

AFS equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity investments are measured at cost less any identified impairment losses at the end of the reporting period.

Dividends on AFS equity instruments are recognised in profit or loss when the Group’s right to receive the dividends is established.






AFS financial assets cont’d

The fair value of AFS monetary assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. The foreign exchange gains and losses that are recognised in profit or loss are determined based on the amortised cost of the monetary asset. Other foreign exchange gains and losses are recognised in other comprehensive income.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

Objective evidence of impairment could include:

lSignificant financial difficulty of the issuer or counterparty; or

lDefault or delinquency in interest or principal payments; or

l It becoming probable that the borrower will enter bankruptcy or financial reorganisation.

For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period, as well as observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets carried at amortised cost, the amount of the impairment loss recognised is 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.



cont’d




Impairment of financial assets cont’d

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognised in other comprehensive income are reclassified to profit or loss in the period.

For financial assets measured at amortised cost, 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 through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

In respect of AFS equity securities, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised in other comprehensive income and accumulated under the heading of investments revaluation reserve. In respect of AFS debt securities, impairment losses are subsequently reversed through profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss.

Derecognition of financial assets

The Group and the Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group and the Company neither transfer nor retain substantially all the risks and rewards of ownership and continue to control the transferred asset, the Group and the Company recognise their retained interest in the asset and an associated liability for amounts it may have to pay. If the Group and the Company retain substantially all the risks and rewards of ownership of a transferred financial asset, the Group and the Company continue to recognise the financial asset and also recognise a collateralised borrowing for the proceeds received.

On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss.





Financial Liabilities and Equity Instruments issued by the Group and the Company

Classification as debt or equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group and the Company are recognised at the proceeds received, net of direct issue costs. Ordinary shares are equity instruments.

Financial liabilities

Financial liabilities are classified as either financial liabilities ‘at FVTPL’ or ‘other financial liabilities’.

Other financial liabilities

Other financial liabilities are initially measured at fair value, net of transaction costs and are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Derecognition of financial liabilities

The Group and the Company derecognise financial liabilities when, and only when, the Group’s and the Company’s obligations are discharged, cancelled or they expire.

3.17 Statement of Cash Flows

The Group and the Company adopt the indirect method in the preparation of the statements of cash flows.

Cash and cash equivalents are short-term, highly liquid investments with maturities of three months or less from the date of acquisition that are readily convertible to a known amount of cash with insignificant risk of changes in value, against which bank overdrafts, if any, are deducted.



cont’d

4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

(i) Critical judgements in applying the Group’s and the Company’s accounting policies

In the process of applying the Group’s and the Company’s accounting policies, which are described in Note 3 above, management is of the opinion that there are no instances of application of judgement which are expected to have a significant effect on the amounts recognised in the financial statements.

(ii) Key sources of estimation uncertainty

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

(a) Engineering contracts

The Group recognises contract revenue by reference to the stage of completion of the contract activity at the end of each reporting period, when the outcome of an engineering contract can be estimated reliably. The stage of completion is measured by reference to the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs. Significant assumptions are required to estimate the total contract costs and the recoverable variation works that will affect the stage of completion. The estimates are made based on past experience and knowledge of the project engineers.

(b) Impairment of goodwill

The Group determines whether goodwill is impaired at least on an annual basis. This requires the estimation of the value-in-use of the cash-generating units to which goodwill is allocated. Estimating the value-in-use requires the Group to make an estimate of the expected future cash flows from the cash-generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of the Group’s goodwill at January 31, 2013 was RM5,267,000 (2012:RM5,241,000; 2011:RM5,241,000). Further details are disclosed in Note 15.

(c) Depreciationofplantandequipment

The cost of property, plant and equipment are depreciated on a straight-line basis over the assets’ useful lives. Management estimates the useful lives of these plant and machinery to be within 3 to 20 years. The carrying amount of the Group’s property, plant and equipment at January 31, 2013 are disclosed in Note 13. Changes in the expected level of maintenance, usage and technological developments could impact the economic lives and the residual values of these assets, therefore future depreciation charges could be revised.



4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY cont’d

(ii) Key sources of estimation uncertainty cont’d

(d) Impairmentofproperty,plantandequipment

The Group assesses whether there is any indication of impairment for all non-financial assets other than goodwill at each reporting date. Non-financial assets other than goodwill are tested for impairment when there are indicators that the carrying amounts may not be recoverable. In the current financial year, the Group carried out the impairment test on plant and machinery with indication of impairment based on a variety of estimations including the value-in-use of the cash-generating units (“CGU”) to which the plant and machinery are allocated. Estimating the value-in-use requires the Group to make an estimate of the expected future cash flows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows. Further details of the impairment testing of plant and machinery performed during the year are disclosed in Note 13.

(e) Deferredrevenue

Deferred revenue arising from customer reward points of the Group pertains to the fair value of the award credits awarded to card members based on the spending on their credit and charge cards that could be redeemed for services and merchandise at a later date. There is no expiry date attached to these reward points.

(f) Deferred tax assets

Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profits will be available against which the deductible temporary differences, unused tax losses and unsused tax credits 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 total carrying value of deferred tax assets recognised is disclosed in Note 18.

(g) Impairment of trade and other receivables

The Group assesses at the end of each reporting period 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 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. While the estimation process includes historical data and analysis, there is a significant amount of judgement applied in selecting inputs and analysing the results produced to determine the impairment allowances. The carrying amounts of the Group’s loans and receivables at the end of the reporting period are disclosed in Notes 19 and 20.



cont’d

5. REVENUE


2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Charge and credit cards operations 147,617 132,843 - -

Sale of goods 107,644 92,106 - -

Ticketing and travel 29,810 36,882 - -

Hotel operations 7,804 6,791 - -

Engineering contracts 12,496 24,261 - -

Management services 193 137 - -

Management fees from subsidiaries - - 1,313 1,374

Dividend income from subsidiaries - - - 5,164

305,564 293,020 1,313 6,538

6. COST OF SALES

The Group

2013 2012

RM’000 RM’000

Cost of inventories sold 70,990 66,492

Ticketing and travel service costs 20,099 19,414

Hotel operations costs 634 591

Engineering contracts costs 14,751 15,241

106,474 101,738



7. FINANCE COSTS


2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Interest expense on:

Non-recourse investors’ certificates and seniorcertificates 29,822 33,378 - -

Bank borrowings 11,613 15,871 - -

Finance leases 407 776 29 37

Others 98 48 3 2

41,940 50,073 32 39

8. LOSS BEFORE TAX

Loss before tax is arrived at after the following (charges)/credits:


2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Employee benefits expense (Note 9) (86,161) (91,125) (4,073) (4,726)

Raw materials and consumables used (19,889) (21,048) - -

Rental for:

Land and buildings (14,221) (14,984) (530) (502)

Office equipment (5,051) (4,539) (9) (11)

Allowance for doubtful debts:

Amount owing by subsidiaries (Note 16) - - (5,318) (3)

Trade receivables (Note 19) (9,412) (17,774) - -

Other receivables (Note 20) - (1,000) - -

Depreciation of property, plant and equipment (Note 13) (8,270) (9,020) (176) (189)

Asset securitisation programme expenses (6,123) (10,656) - -

Gain/(Loss) on foreign exchange - net:

Realised (1,139) 1,312 (12) (41)

Unrealised 6,060 (849) - -

Amortisation of intangible asset (Note 15) (3,063) (1,883) - -

Net fair value loss on investment securities (1,995) (2,684) - -

Inventories written down (1,034) (582) - -



cont’d

8. LOSS BEFORE TAX cont’d

Loss before tax is arrived at after the following (charges)/credits: cont’d


2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Audit fee:Auditors of the Company (206) (239) (54) (72)Other auditors (913) (906) - -Overprovision in prior year 7 - - -

Impairment of property, plant and equipment (243) - - -Property, plant and equipment written off - (190) - (1)Impairment loss on investment in subsidiaries (Note 16) - - - (153,900)Write back of inventories written down 754 291 - -Dividend income from investment securities 630 729 - -Interest income 3,219 2,581 1,241 428Bad debts recovered 531 3,748 - -Changes in finished goods and work-in-progress 1,314 (4,855) - -Gain on disposal of property, plant and equipment 55 127 7 75Allowance for doubtful debts no longer required:

Amount owing by subsidiaries (Note 16) - - - 97,172Trade receivables (Note 19) 650 5,244 - -Other receivables (Note 20) 31 19 - -

Write back of deposits written off previously (Note 33) - 1,700 - -Gain/(Loss) on disposal of investment securities 22 (115) - -

9. EMPLOYEE BENEFITS EXPENSE


2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Salaries, bonuses and allowance 73,001 75,092 3,572 4,145Social security contributions 208 866 17 15Contributions to defined contribution plans 7,599 8,465 269 393Other staff related expenses 5,353 6,702 215 173

86,161 91,125 4,073 4,726 Included in employee benefits expense of the Group and of the Company are Executive Directors’ remuneration

amounting to RM3,822,000 (2012: RM3,325,000) and RM1,510,000 (2012: RM1,264,000) respectively as further disclosed in Note 10.



10. DIRECTORS’ REMUNERATION

Directors’ remuneration of the Group and of the Company classified into executive and non-executive Directors are as follows:


2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Directors of the Company

Executive directors:

Salary and other emoluments 2,230 1,862 1,510 1,264

Non-executive directors:

Fees 150 155 150 155

Salary and other emoluments 19 14 19 14

169 169 169 169

2,399 2,031 1,679 1,433

Director of the subsidiaries company


Salary and other emoluments 1,549 1,428 - -

Contributions to defined contribution plans 43 35 - -

1,592 1,463 - -

Non-executive director:

Fees 106 104 - -

1,698 1,567 - -

Total 4,097 3,598 1,679 1,433

The estimated monetary value of benefits-in-kind received and receivable by the directors otherwise than in cash from the Group and the Company amounted to RM116,000 (2012: RM116,000).



cont’d

10. DIRECTORS’ REMUNERATION cont’d

The number of directors of the Company whose total remuneration during the year fell within the following bands is analysed below:

Number of Directors

2013 2012


RM800,001 - RM1,000,000 1 1

RM1,000,001 - RM1,300,000 1 1

Non-executive directors:

RM10,000 - RM100,000 3 3

11. INCOME TAX EXPENSE


2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Estimated tax payable:

Current year:

Malaysian tax 384 262 - -

Foreign tax 5,041 1,334 - -

Under/(Over)provision in prior years (69) 54 37 1

5,356 1,650 37 1

Deferred tax (Note 18):

Current year (1,158) 3,601 - -

(Over)/Underprovision in prior years 45 (680) - -

(1,113) 2,921 - -

4,243 4,571 37 1

Domestic income tax is calculated at the Malaysian statutory tax rate of 25% (2012: 25%) of the estimated taxable profit for the year. Taxation of other jurisdictions is calculated at the rate prevailing in the respective jurisdictions.



11. INCOME TAX EXPENSE cont’d

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

The Group The Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Loss before tax (27,732) (43,681) (8,824) (56,408)

Tax credit at the applicable statutory tax rate of 25% (6,933) (10,920) (2,206) (14,102)Effect of different tax rate of subsidiaries operating

in different jurisdictions (1,850) (1,329) - -Tax effects of:

Expenses that are not tax deductible 11,341 34,867 1,846 38,530Income not subject to tax (515) (25,617) - (25,462)Income exempted from tax (971) (134) - -

Deferred tax assets not recognised 3,195 8,330 360 1,034Under/(Over) provision in prior years:

Current tax (69) 54 37 1Deferred tax 45 (680) - -

4,243 4,571 37 1

12. LOSS PER SHARE

Basic and diluted loss per share

Basic and diluted loss per share of the Group is calculated by dividing loss for the year attributable to owners of the Company by the number of ordinary shares in issue during the financial year.

Diluted loss per share amount is the same as basic loss per share. The ESOS shares are not included as the effect is anti-dilutive.

The Group2013 2012

Loss attributable to owners of the Company (RM’000) (31,851) (49,241)

Number of ordinary shares in issue 622,948 622,948

Basic/Diluted loss per share (sen) (5.11) (7.90)

There have been no other transactions involving ordinary shares or potential ordinary shares since the end of the reporting period and before the completion of these financial statements.



cont’d

13. PROPERTY, PLANT AND EQUIPMENT

The GroupFreehold

landFreeholdbuildings

Long-term leasehold

land

Long-term leasehold land and buildings

Long-term leasehold

hotel properties

Plant and machinery

Furniture, equipment and motor

vehicles Total

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

Cost

Balance as ofFebruary 1, 2011 81,180 23,820 52,050 61,074 38,000 95,207 68,548 419,879

Additions - - - - - 721 1,680 2,401

Transfer to intangible assets(Note 15) - - - - - - (1,072) (1,072)

Disposals - - - - - - (1,614) (1,614)

Write-offs - - - - - (289) (764) (1,053)

Exchange differences - - - 995 - 203 1,401 2,599

Balance as of January 31,2012/February 1, 2012 81,180 23,820 52,050 62,069 38,000 95,842 68,179 421,140

Additions - - - - - 517 3,094 3,611

Disposals - - - - - (289) (13,038) (13,327)

Write-offs - - - - - - (2,672) (2,672)

Exchange differences - - - (845) - - (3,902) (4,747)

Balance as ofJanuary 31, 2013 81,180 23,820 52,050 61,224 38,000 96,070 51,661 404,005

Accumulated Depreciation

Balance as ofFebruary 1, 2011 - - 18,957 23 - 47,893 57,728 124,601

Charge for the year - 632 406 1,124 1,077 3,409 2,372 9,020

Disposals - - - - - - (1,117) (1,117)

Write-offs - - - - - (140) (723) (863)

Exchange differences - - - 198 - 173 1,134 1,505

Balance as of January 31, 2012/February 1, 2012 - 632 19,363 1,345 1,077 51,335 59,394 133,146

Charge for the year - 632 406 868 1,077 3,730 1,557 8,270

Disposals - - - - - (70) (12,976) (13,046)

Write-offs - - - - - - (2,672) (2,672)

Impairment - - - - - 243 - 243

Exchange differences - - - - - (64) 41 (23)

Balance as ofJanuary 31, 2013 - 1,264 19,769 2,213 2,154 55,174 45,344 125,918



13. PROPERTY, PLANT AND EQUIPMENT cont’d

The GroupFreehold

landFreeholdbuildings

Long-term leasehold

land

Long-term leasehold land and buildings

Long-term leasehold

hotel properties

Plant and machinery

Furniture, equipment and motor

vehicles Total

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

Net Book Value




The Company

Furniture and

equipment Motor

vehicles Total

RM’000 RM’000 RM’000

Cost

Balance as of February 1, 2011 2,122 1,540 3,662

Additions 7 143 150

Disposals - (262) (262)

Write-offs (5) - (5)

Balance as of January 31, 2012/February 1, 2012 2,124 1,421 3,545

Additions 25 71 96

Disposals - (75) (75)

Balance as of January 31, 2013 2,149 1,417 3,566

Accumulated Depreciation

Balance as of February 1, 2011 1,963 661 2,624

Charge for the year 28 161 189

Disposals - (205) (205)

Write-offs (4) - (4)

Balance as of January 31, 2012/February 1, 2012 1,987 617 2,604

Charge for the year 15 161 176

Disposals - (75) (75)

Balance as of January 31, 2013 2,002 703 2,705



cont’d


The Company

Furniture and

equipment Motor

vehicles Total

RM’000 RM’000 RM’000

Net Book Value

Balance as of January 31, 2013 147 714 861

Balance as of January 31, 2012 137 804 941

Balance as of January 31, 2011 159 879 1,038

(a) Assets acquired under finance lease

During the financial year, the Group and the Company acquired property, plant and equipment at aggregate cost of RM3,767,000 (2012: RM2,401,000) and RM96,129 (2012: RM150,000), respectively of which RM1,022,000 (2012: RM605,000) and RM71,184 (2012: RM131,000), respectively were acquired by means of finance lease arrangements. The net book value of property, plant and equipment held under finance lease arrangements were as follows:

31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

The Group

Furniture, equipment and motor vehicles 2,965 2,573 3,181

The Company

Furniture, equipment and motor vehicles 709 895 940

(b) Assets pledged as security

Certain property, plant and equipment have been pledged as security for the bank loans under a mortgage. The Group is not allowed to pledge these assets as security for other borrowings or to sell them to another entity. The pledged assets are as follows:

The Group

31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Freehold land and buildings 103,736 104,368 105,000

Long-term leasehold land and buildings 47,932 60,518 60,845

Plant and machinery 40,534 43,952 46,849

192,202 208,838 212,694




(c) Impairment of plant and machinery

During the financial year, Prestige Ceramics Sdn Bhd, a subsidiary, recognised an impairment loss of RM242,696 (2012: RMNil) on an idle machine that requires repair. Management currently does not have any future plan to use the said machine and thus, an impairment loss is recognised.

As of January 31, 2013, the remaining plant and machinery of the said subsidiary, with net book value of RM40,534,000 (2012: RM43,952,000; 2011: RM46,849,000), have been subjected to impairment review.

The recoverable amounts of the plant and machinery were determined based on value-in-use calculations using directors’ best estimates of cash flows projections based on the remaining useful lives of the plant and machinery from the approved financial budget. The cash flows were discounted at a rate of 5.53% (2012: 8.00%).

Keyassumptionsusedinvalueinusecalculations

(a) Budgeted gross margins: Gross margins are based on the average results achieved in the current financial year.

(b) Discount rate: Discount rate reflects the current market assessment of the risks specific to the industry in which the subsidiary operates. The discount rate was estimated based on the average percentage of a weighted average cost of capital for the industry. This rate was further adjusted to reflect the market assessment of any risk specific to the subsidiary for which future estimates of cash-flows have not been adjusted.

(c) Average remaining useful life: The average remaining useful life of plant and machinery is used to calculate the value in use for the CGU.

(d) Growth rates: The forecasted growth rates are based on the management’s approved business plan which ranged between 2% to 3%.

Sensitivitytochangesinassumption

The management believes that no reasonable possible changes in any of the key assumptions above will cause the carrying amount of the plant and machinery to materially exceed its recoverable amount.



cont’d

14. INVENTORIES

(a) Inventories - non-current

Inventories - non-current consist of land held for property development as follows:

The Group 31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Leasehold land 4,351 4,351 4,351

Development expenditure 1,749 1,749 1,746

6,100 6,100 6,097

(b) Inventories - current

Inventories - current consist of the following:

The Group 31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Properties under development:

Leasehold land 223 223 223

Development costs 5,230 4,716 124

5,453 4,939 347

Other inventories at cost:

Raw materials 9,408 9,898 7,153

Work-in-progress 968 607 473

Contract work-in-progress - 154 58

Finished goods 19,043 14,075 20,716

Goods in transit 249 495 1,976

29,668 25,229 30,376

Other inventories at net realisable value:

Finished goods 416 4,465 1,623

35,537 34,633 32,346

During the financial year, the amount of other inventories other than contract work-in progress recognised as an expense in cost of sales of the Group amounted to RM70,990,000 (2012: RM 83,743,000).



15. INTANGIBLE ASSETS

The Group GoodwillComputer

software Total

RM’000 RM’000 RM’000

Cost


Additions - 10,612 10,612

Transfer from property, plant and equipment (Note 13) - 1,072 1,072

Exchange differences 27 403 430

Balance as of January 31, 2012/February 1, 2012 5,241 21,332 26,573

Additions - 6,151 6,151

Disposals - (136) (136)

Exchange differences 26 724 750


Accumulated amortisation

Balance as of February 1, 2011 - 3,192 3,192

Amortisation for the year - 1,883 1,883

Exchange differences - 130 130

Balance as of January 31, 2012/February 1, 2012 - 5,205 5,205

Amortisation for the year - 3,063 3,063

Disposals - (136) (136)

Exchange differences - 144 144

Balance as of January 31, 2013 - 8,276 8,276

Net carrying amount




Assets acquired under finance lease

During the financial year, the credit and charge card business and hospitality segment of the Group acquired computer software at aggregate costs of RM6,151,000 (2012: RM10,612,000) of which RM3,060,000 (2012: RM5,915,000) was acquired by means of finance lease arrangements. The net carrying amount of computer software held under finance lease arrangements as at January 31, 2013 amounted to RM8,025,000 (2012: RM7,844,000; 2011: RM3,355,000).



cont’d

15. INTANGIBLE ASSETS cont’d

Impairment of goodwill

The net carrying amount of goodwill allocated to the cash generating units (“CGU”) of Diners Club (Singapore) Pte Ltd (“DCS”), which is under the credit and charge card business and hospitality segment, for impairment testing is as follows:

Provision for charge card and credit card services segment

The Group

31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Net carrying amount of goodwill 5,267 5,241 5,214

The recoverable amount of DCS is determined based on value-in-use calculation using cash flow projections based on financial budgets approved by directors covering a period of 5 years. The pre-tax discount rate and the forecasted growth rates applied to the cash flow projections for the five-year period are 10% and ranging from 4.0% to 16.5% respectively (2012 and 2011: 11% and 5% respectively).

Sensitivity to changes in assumptions

The management believes that no reasonable possible changes in any of the key assumptions above will cause the carrying amount of the goodwill to materially exceed its recoverable amount.

16. INVESTMENT IN SUBSIDIARIES

The Company 31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Shares, at cost 380,557 350,557 111,317

Less: Accumulated impairment losses (211,775) (211,775) (57,875)

168,782 138,782 53,442

Movements in accumulated impairment losses are as follows:

The Company 31.1.2013 31.1.2012

RM’000 RM’000

At beginning of year 211,775 57,875

Additions during the year (Note 8) - 153,900

At end of year 211,775 211,775



16. INVESTMENT IN SUBSIDIARIES cont’d

The details of the subsidiary companies are as follows:

Name of Company Effective Equity Interest Principal Activities

31.1.2013 31.1.2012 1.2.2011

% % %

Incorporated in Malaysia

Johan ManagementServices Sdn Bhd

100 100 100 Provision of secretarial and management services

Johan Land Sdn Bhd 100 100 100 Property development and investmentholding

Johan PropertiesSdn Bhd (2)

100 100 100 Property holding and investment

Johan Pasifik Sdn Bhd (2) 100 100 100 Investment holding

Johan Capital Sdn Bhd 100 100 100 Investment holding and management services

Johan Equities Sdn Bhd 100 100 100 Investment trading

Diners Club (Malaysia)Sdn Bhd

100 100 100 Provision of charge and credit card services under Diners Club Franchise

Diners World Travel(Malaysia) Sdn Bhd

100 100 100 In-bound and out-bound tour andticketing agent

Prestige Ceramics Sdn Bhd 100 100 100 Manufacturing and marketing of ceramictiles

William Jacks &Company (Malaysia)Sendirian Berhad

100 100 100 Investment holding and trading ofengineering and building material

Nature’s Farm (Health Foods) Sdn Bhd

100 100 100 Trading in health foods and supplements

Vitamin World Sdn Bhd (2) 100 100 100 Inactive

Wismer AutomationSdn Bhd (2)

96.68 96.68 96.68 Inactive



cont’d


The details of the subsidiary companies are as follows: cont’d


31.1.2013 31.1.2012 1.2.2011

% % %

Incorporated in Malaysia cont’d

Lumut Marine Resort Bhd 70 70 70 Operation and management of marineclub

Mustika Resort Sdn Bhd 85 85 85 Operation of hotel and resort relatedbusiness

Lumut Park Resort Sdn Bhd

80 80 80 Operation of hotel and resort relatedbusiness

JCC Equities Sdn Bhd 100 100 100 Management services

Jacks Edar Sdn Bhd (2) 100 100 100 Inactive

Johan Leasing Sdn Bhd (2) 100 100 100 Inactive

Johan Nominess(Tempatan) Sdn Bhd (2)

100 100 100 Inactive

Johan Air Servies Sdn Bhd (2)


Johan Industries (Malaysia) Sdn Bhd (2)


Strategic Usage Sdn Bhd 100 100 100 Investment holding

Domayne Asset 2Corporation Berhad (5)

- - - Provision of financing agreementbetween Diners Club (Malaysia) Sdn Bhd and institutional lenders






31.1.2013 31.1.2012 1.2.2011

% % %

Incorporated in Singapore

Johan Investment PrivateLimited (1)

100 100 100 Investment holding

Diners Club (Singapore)Private Limited (1)

100 100 100 Provision of charge card and credit cardservices under Diners Club franchise

Johan Air Services Pte Ltd (1)


Diners World TravelPte Ltd (1)

100 100 100 In-bound and out-bound tour andticketing agent

Diners World Holdings Pte Ltd (1)


Diners Publishing PrivateLimited (1)


Lifestyle Collection (S) Pte Ltd (1)

100 100 100 Merchandiser

George Kent (Singapore)Pte Limited (1)

100 100 100 Trading in engineering products

Kent Precision Engineering Pte Ltd (1)


Jacks International Limited (2) (3)

86.75 86.75 86.75 Investment holding

William Jacks & Co(Singapore) Pte Ltd (2)

86.75 86.75 86.75 Trading in health foods and supplements

Nature’s Farm Pte Ltd (2) 86.75 86.75 86.75 Trading in health foods and supplements

Nutra-Source Pte Ltd (2) 86.75 86.75 86.75 Trading in health foods and supplements



cont’d




31.1.2013 31.1.2012 1.2.2011

% % %

Incorporated in Singapore cont’d

Wismer Automation(Singapore) Pte Ltd (2)

77.90 77.90 77.90 Inactive

Card Centre Asset Purchase CompanyPte Ltd (1) (5)

- - - Provision of financing agreement between Diners Club (Singapore)Private Limited and institutionallenders

DCS Asset FundingPte Ltd (1) (5)

- - - Provision of financing arrangement between Diners Club (Singapore) Pte. Ltd. and institutional lenders

Incorporated in Hong Kong

AIH Holdings Ltd (2) 100 100 100 Investment holding and management

Johan InternationalLimited (2)


Worldwide VictoryLimited (2)


Incorporated in The Netherlands

Abacus Pacific N.V. (4) 100 100 100 Investment holding

Fidelity Capital B.V. (4) - 100 100 Investment holding. The company has been deregistered from theCommercial Register of the Chamberof Commerce for Amsterdam onOctober 22, 2012

Incorporated in Australia

William Jacks(Australia) Pty Ltd (2)

86.75 86.75 86.75 Property and investment holding

Skinner Engineering Pty Ltd (2)

86.75 86.75 86.75 Engineering






31.1.2013 31.1.2012 1.2.2011

% % %

Incorporated in Bahamas

Jacks Overseas Limited (4) 86.75 86.75 86.75 Investment holding and management

Incorporated in People’s Republic of China

Nature’s Farm (Shanghai) Co Ltd (2)

86.75 86.75 86.75 Trading in health foods and supplements

Incorporated in British Virgin Islands

Capital Prime Ltd (2) 100 100 100 Investment holding

Incorporated in Brunei

William Jacks and Co(Borneo) Sdn Bhd

- - 86.75 Inactive. The company has been strikeoff from the Register by the Registrar of Companies, Brunei Darussalam during 2012

Incorporated in New Zealand

DCNZ Holdings Limited (1)


Diners Club (NZ) Limited (1)

100 100 100 Provision of charge card services underDiners Club franchise

Perpetual TrustLimited (2) (5)

- - N/A Provision of financing agreement between Diners Club NZ Limited andinstitutional lenders

Trustee of Kowhai Trust (1) N/A N/A - Provision of financing agreement between Diners Club NZ Limited andinstitutional lenders



cont’d



(1) The financial statements of these subsidiaries are audited by member firm of Deloitte & Touche

(2) The financial statements of these subsidiaries are audited by auditors other than the auditors of the Company

(3) Quoted on the Singapore Exchange Securities Trading Limited

(4) Not required to present audited financial statements under the laws of its country of incorporation

(5) Although the Group does not hold shares in these special purpose entities (“SPE”), they are considered as subsidiaries as the activities of the SPE are being conducted on behalf of the Group according to its specific business needs and that the Group retains the majority of the residual or ownership risk related to these companies on their assets. The Group’s residual or ownership risk related to these companies on their assets. The Group’s consolidated financial statements include the results, assets and liabilities of these SPE.

The Company increased its investments in certain subsidiaries in 2013 and 2012 by way of capitalising the amounts owing by these subsidiaries. In 2012, the Company also provided additional impairment losses of RM153,900,000 on its various investment in subsidiaries due to indications of impairment and has written down these investments to their estimated recoverable value.

During the financial year, Fidelity Capital B.V, a wholly-owned subsidiary, was deregistered and its remaining liabilities were assumed by another subsidiary, Abacus Pacific N.V (“APNV”).

Amount owing by subsidiaries consist of the following:

The Company 31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Amount owing by subsidiaries 29,780 60,747 304,528

Less: Allowance for doubtful debts (8,274) (2,956) (100,125)

21,506 57,791 204,403

As disclosed above, the Company increased its investments on certain subsidiaries by capitalising RM30,000,000 (2012: RM239,240,000) from the amount owing by its subsidiaries.

Amount owing by/to subsidiaries, which arose mainly from payments on behalf, is unsecured and repayable on demand. Amount owing by subsidiaries bears interest at rates ranging from 2.95% to 3.45% (2012: 2.95%; 2011: interest-free) per annum while amount owing to subsidiaries is interest-free.




Movement in the allowance for doubtful debts:

The Company 31.1.2013 31.1.2012

RM’000 RM’000


Additions during the year (Note 8) 5,318 3

Allowance no longer required (Note 8) - (97,172)

At end of year 8,274 2,956

17. INVESTMENTS SECURITIES

The Group

31.1.2013 31.1.2012 1.2.2011

Carrying amount

Market value

of quoted investments

Carrying amount

Market value of quoted

investmentsCarrying amount


investments

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

Current:

Fair value through profitor loss

Held for tradinginvestments

- Equity instruments (quoted in Malaysia) 7,101 7,101 9,485 9,485 12,208 12,208

- Equity instruments (quoted outside Malaysia) 3,588 3,588 4,267 4,267 3,614 3,614

Total current investment securities 10,689 13,752 15,822



cont’d

17. INVESTMENTS SECURITIES cont’d

The Group

31.1.2013 31.1.2012 1.2.2011

Carrying amount

Market value

of quoted investments

Carrying amount


investmentsCarrying amount


investments

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

Non-Current:

Available-for-salefinancial assets

- Equity instruments (quoted outside Malaysia) 1,411 1,411 60 44 62 50

- Equity instruments (unquoted), at cost 7 * 7 * 7 *

1,418 67 69

Total investmentsecurities 12,107 13,819 15,891

* Unquoted shares are stated at cost after their initial recognition, as they do not have a quoted market price and the fair value cannot be reliably measured.

Investment pledged as security

The Group’s investment in equity instruments amounting to RM8,800,212 (2012: RM5,627,000; 2011: RM5,716,000) are pledged as security for a short term bank loan as disclosed in Note 24.



18. DEFERRED TAX ASSETS/(LIABILITIES)

Deferred tax assets

The Group 31.1.2013 31.1.2012

RM’000 RM’000


(Charge)/Credit to profit or loss for the year:

Property, plant and equipment 316 (4,370)

Inventories (235) 428

Trade receivables 81 (76)

Deferred revenue (30) (154)

Other payables and accrued expenses 55 519

Unabsorbed capital allowances (45) 3,420

Unused tax losses (32) -

110 (233)

Exchange differences 78 235


The deferred tax assets provided in the financial statements are in respect of the tax effects on the following:

The Group 31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Deferred tax liabilities (before offsetting):

Temporary differences arising from property, plant and equipment (15,288) (15,604) (11,234)

Offsetting 15,288 15,604 11,234

Deferred tax liabilities (after offsetting) - - -



cont’d

18. DEFERRED TAX ASSETS/(LIABILITIES) cont’d

Deferred tax assets cont’d

The Group 31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Deferred tax assets (before offsetting):

Temporary differences arising from:

Inventories 193 428 -

Trade receivables 471 390 465

Deferred revenue 1,653 1,605 1,525

Other payables and accrued expenses 753 698 179

Unabsorbed capital allowances 3,375 3,420 -

Unutilised reinvestment allowances 9,386 9,386 9,386

Unused tax losses 8,824 8,856 8,856

24,655 24,783 20,411

Offsetting (15,288) (15,604) (11,234)

Deferred tax assets (after offsetting) 9,367 9,179 9,177

Deferred tax liabilities

The Group 31.1.2013 31.1.2012

RM’000 RM’000


(Charge)/Credit to profit or loss for the year:

Property, plant and equipment 170 1,226

Accrued interest income (1,090) 1,145

Trade receivables (119) (13)

Other payables and accrued expenses 126 342

Deferred revenue (90) (12)

(1,003) 2,688

Exchange differences 102 74





The deferred tax liabilities provided in the financial statements are in respect of the tax effects on the following:

The Group 31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Deferred tax liabilities (before offsetting):


Property, plant and equipment 6,597 6,325 5,025

Accrued interest income 3,438 4,528 3,383

10,035 10,853 8,408

Offsetting (2,225) (2,142) (2,459)

Deferred tax liabilities (after offsetting) 7,810 8,711 5,949

Deferred tax assets (before offsetting):


Trade receivables 245 126 113

Other payables and accrued expenses 923 1,049 1,391

Deferred revenue 1,057 967 955

2,225 2,142 2,459

Offsetting (2,225) (2,142) (2,459)

Deferred tax assets (after offsetting) - - -

As mentioned in Note 3, the tax effects of deductible temporary differences, unused tax losses and unused tax credits which would give rise to deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. As of January 31, 2013, the estimated amount of deductible temporary differences, unused tax losses and unused tax credits for which the deferred tax assets have not been recognised in the financial statements due to uncertainty of their realisation are as follows:

The Group 31.12.2013 31.12.2012 1.2.2011

RM’000 RM’000 RM’000


Unabsorbed capital allowances 2,859 2,616 2,150

Other deductible temporary differences - - 11,350

145,319 132,540 101,736



cont’d


The Company 31.12.2013 31.12.2012 1.2.2011

RM’000 RM’000 RM’000


Amount owing by subsidiaries 1,990 2,180 -


Unabsorbed capital allowances 69 - -

14,721 13,280 9,144

The unused tax losses, unabsorbed capital allowances and unutilised reinvestment allowances are subject to the agreement of the tax authorities.

19. TRADE RECEIVABLES

The Group 31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Securitised trade receivables 533,550 472,602 464,672

Non-securitised trade receivables 312,016 286,311 267,333

845,566 758,913 732,005

Less: Allowance for doubtful debts

Collective impairment (185,811) (172,645) (157,359)

Individual impairment (13,341) (14,053) (14,462)

(199,152) (186,698) (171,821)

646,414 572,215 560,184

The Group’s credit period generally ranges from 30 to 90 days (2012 and 2011: 30 to 90 days). Other credit terms are assessed and approved on case-by-case basis.

Trade receivables disclosed above include amounts (see below for aged analysis) that are past due at the end of the reporting period but against which the Group has not recognised an allowance for doubtful debts because there has not been a significant change in credit quality and the amounts are still considered recoverable. The Group does not hold any collateral or other credit enhancements over these balances nor does it have a legal right of offset against any amounts owed by the Group to the counterparty.



19. TRADE RECEIVABLES cont’d

Ageing of trade receivables not impaired

The Group 31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Not past due 524,458 419,643 438,025

Past due 30 days 63,986 65,618 47,102

Past due 31 - 60 days 23,788 21,646 8,694

Past due 61 - 90 days 8,782 8,130 3,699

Past due more than 90 days 25,400 57,178 62,664

646,414 572,215 560,184

The Group’s trade receivables that are subject to collectively/individually impairment review at the end of the reporting period are as follows:

The Group Collectively Individually Total

RM’000 RM’000 RM’000

As of January 31, 2013

Trade receivables - gross amounts 711,725 133,841 845,566


525,914 120,500 646,414




569,905 973 570,878

As of February 1, 2011



559,495 689 560,184



cont’d


Movement in the allowance for doubtful debts

Movement in allowance accounts for individual and collective impairment are as follows:

The Group 31.1.2013 31.1.2012

RM’000 RM’000


Additions during the year (Note 8) 9,412 17,774

Allowance no longer required (Note 8) (650) (5,244)

Bad debts written off (1,517) (309)

Exchange differences 5,209 2,656

At end of year 199,152 186,698

In determining the recoverability of the trade receivables, the Group considers any change in the credit quality of the trade receivables from the date credit was initially granted up to the reporting date. The directors believe that there is no further credit provision required in excess of the allowance for doubtful debts.

The currency profile of trade receivables is as follows:

The Group

31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Singapore Dollar 467,334 428,825 439,182

New Zealand Dollar 90,533 84,230 54,444

Ringgit Malaysia 86,830 57,637 63,311

Australian Dollar 1,717 1,523 3,247

646,414 572,215 560,184




Securitised trade receivables in Singapore, New Zealand and Malaysia are disclosed as follows:

(a) Singapore

On September 9, 2010, Diners Club (Singapore) Private Limited (“DCS”) renewed its Asset Securitisation Programme (the “Programme”) with Card Centre Purchase Company Pte Ltd (“CCAPC”), a special purpose entity set up for this purpose, and a private institution lender to raise funds up to SGD223,000,000 (RM528,500,000) over a 18 month period through the securitisation of its credit and charge card receivables which meet pre-determined criteria (“Eligible Trade Receivables”).

In CCAPC, a trust is declared over the Eligible Trade Receivables sold by DCS. The ownership of trust assets is held through six certificates of beneficial interest, namely Class A certificates, Class B certificates, Class C certificates, Class D certificates, Class D2 certificates and Seller Certificates. Class D2 certificates and Seller Certificates are the two certificates representing DCS’ interest in the trust assets. Neither DCS nor any other entities within the Group are obliged to support any losses suffered by the investors.

During the period of the programme, the Eligible Trade Receivables outstanding as at the ninth working day before the sixth of each month (referred to as “Calculation Date”) will be sold to CCAPC subject to the receivable purchase agreement. The collections from securitised trade receivables, received by DCS in trust for CCAPC, between two settlement dates (sixth calendar day of two consecutive months) will be utilised as follows:

(i) a percentage of 15% of the collections up to the Target Interest Collection will be used by CCAPC to meet the financing costs, administrative expenses and other costs incurred relating to the programme. Any excess will be paid by CCAPC to DCS on the next settlement date; and

(ii) the balances of the collections will be advanced by CCAPC to DCS on a daily basis for the purchase of new receivables at the next calculation date.

The Company elected to exit the programme with CCPAC in 2012 and migrated to a revised Asset Securitisation Programme on September 5, 2011 with DCS Asset Funding Pte Ltd (“DCSAF”), a special purpose entity set up for this purpose to raise funds up to SGD223,000,000 over a 30 month period through the securitisation of Eligible Receivable.

In DCSAF, a trust is declared over the Eligible Receivable sold by the Company. The ownership of the trust assets is held through five certificates of beneficial interest, namely Class A certificates, Class B certificates, Class C certificates, Class D certificates and Seller Certificates. Seller Certificates are the certificates representing DCS’ interest in the trust assets. The proceeds from the Notes will be used to repay DCS for the sold receivables on each receivable purchase date (ie. each business day other than seventh of each month).



cont’d


(a) Singapore cont’d

During the period of the programme, the Eligible Receivable outstanding as at the tenth working day before the seventh of each month (“Calculation Date”) will be sold to DCSAF subject to the receivable purchase agreement. The collections from securitised trade receivables, received by DCS in trust for DCSAF, between two settlement dates (sixth calendar day of two consecutive months) will be utilised as follows:

(i) 10% of the collection up to the Target Interest Collection will be used by DCSAF to meet the financing costs, administrative expenses and other costs incurred relating to the programme. Any excess will be paid by DCSAF to DCS on the next settlement date; and

(ii) the balances of the collections will be advanced by DCSAF to DCS on a daily basis for the purchase of new receivables at the next calculation date.

The securitised trade receivables have not been derecognised as DCS retains the rights and obligations over the securitised trade receivables sold.

The funding from investors in relation to securitised trade receivables are disclosed as Investor Certificates in Note 26.

(b) New Zealand

In December 2010, Diners Club (NZ) Limited (“DCNZ”) entered into a new arrangement for its Asset Securitisation Programme (the “Programme”) involving the revolving sale of its charge and credit card receivables (“Card Receivables”) to Perpetual Trust Limited, in its capacity as the trustees of Craigieburn Trust (the “Trust”), a special purpose entity set up for the purpose to raise funds of up to NZD60,600,000 (RM142,200,000) over a three year period.

The Trust has two beneficiaries: DCNZ is the income beneficiary of the Trust and Development Bank of Singapore (“DBS”) is the capital beneficiary of the Trust. As income beneficiary, DCNZ is entitled to receive distributions from the Trust as per the Trust Deed. The capital beneficiary has the right to receive only any residual sums remaining in the Trust on its termination and after effecting certain distributions. The securitised Card Receivables continue to be recognised in DCNZ’s financial statements as DCNZ retains substantially all of the risks and rewards over the securitised card receivables sold.

During the period of the Programme, the eligible card receivables outstanding as at the last working day of the end of the month (referred to as “Calculation Date”) will be sold to the Trust subject to the receivable purchase agreement. Between two consecutive transaction dates, the collections from securitised card receivables will be utilised as follows:

(i) 7% to 9% of the collection will be used by the Trust to meet the financing costs, administrative expenses and audit fees incurred relating to the Programme. Any excess will be paid back to DCNZ on a monthly basis on the sixteenth calendar day of the following month or the next working day where the sixteenth is a non working day.

(ii) The balances of the collections are held by the Trust to acquire new eligible card receivables sold by DCNZ under the receivable purchase agreement.




(b) New Zealand cont’d

The funding from investors in relation to securitised trade receivables are disclosed as investor certificates in Note 26.

(c) Malaysia

On April 29, 2010, Diners Club (Malaysia) Sdn Bhd (“DCM”) redeemed its Asset Securitisation Programme (the “Programme”) which was used to raise funds of up to RM132.0 million with Domayne Asset Corporation Berhad (“DACB”), a special purpose entity set up for the Programme and private institution lenders through the securitisation of DCM’s charge card receivables (“Eligible Trade Receivables”).

On April 1, 2010, DCM entered into new agreements (“Agreements”) with private institution lenders for a new asset securitisation programme (the “new Programme”) to raise funds of up to RM150,000,000 over a 4.25 year period with Domayne Asset 2 Corporation Berhad (“DA2CB”), a special purpose entity set up for this purpose and private institution lenders through the securitisation of DCM’s charge card and credit card receivables which are eligible for the new Programme (“Eligible Trade Receivables”). The new Programme will be expiring on July 10, 2014.

In DA2CB, a trust is declared over the eligible trade receivables sold by DCM to DA2CB (“Securitised Trade Receivables”) and all other assets of DA2CB. The ownership of the trust assets is held through two certificates of beneficial interest, namely Senior Certificates issued to private institution investors and Subordinated Certificates, the latter being retained by DCM. Neither DCM nor any other entities in the Group are obliged to support any losses suffered by the investors.

DCM receives on behalf of DA2CB collections from the securitised trade receivables sold by DCM. The collections are placed in designated trust accounts in DA2CB and are utilised as follows:

(i) 7% of the collections will be placed in a designated trust account in DA2CB and will be used by DA2CB to meet Programme-related expenses including Senior Certificate interest, administrative expenses and other costs as stated in the Agreements. Any excess will be paid by DA2CB to DCM on the next settlement date as variable interest on the Subordinated Certificates. The settlement dates are on the tenth calendar day of each month; and

(ii) 93% of the collections will be placed in a designated trust account in DA2CB (“Principal Collections Account”) and will be advanced by DA2CB to DCM on a daily basis for the purchase of new Eligible Trade Receivables by DA2CB from DCM.

During the period of the Programme, the Eligible Trade Receivables outstanding as at the fifth business day before the end of each month (referred to as “Collection Date”) will be sold to DA2CB pursuant to terms of the Agreements. Collections from Securitised Trade Receivables sold at the previous calculation date will be advanced on a daily basis to DCM for the purchase by DA2CB of new Eligible Trade Receivables before they are identified as Securitised Trade Receivables at the next calculation date. The amount of Eligible Trade Receivables purchased on a daily basis shall be equal to the balance in the Principal Collections Account (“Daily Cash Amount”) on each day divided by 93%. The purchase price is the Daily Cash Amount, which is 93% of the face value of the Eligible Trade Receivables purchased. The balance advanced on a daily basis is subject to Eligible Trade Receivable balances available.



cont’d


(c) Malaysia cont’d

The Securitised Trade Receivables are secured to obtain the funding from investors disclosed as Senior Certificates in Note 26. Collections from these Securitised Trade Receivables are restricted for utilisation as described in the two preceding paragraphs.

The Securitised Trade Receivables have not been derecognised in DCM as DCM retains certain rights and obligations over the Securitised Trade Receivables sold.

Pursuant to the terms of the Programme, 1% of the proceeds from the issuance of Senior Certificates is retained in a designated trust account in DA2CB and will be returned to DCM upon termination of the Programme, subject to the terms of the Programme.

20. OTHER RECEIVABLES AND PREPAID EXPENSES

The Group 31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Other receivables and refundable deposits 20,005 89,361 109,225

Less: Allowance for doubtful debts (11) (67,880) (66,899)

19,994 21,481 42,326

Less: Prepaid expenses 4,998 7,204 4,215

24,992 28,685 46,541

The Company 31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Other receivables 103 63 25

Refundable deposits 172 172 178

275 235 203

The Group and the Company has no significant concentration of credit risk for other receivables that may arise from exposure to a single debtor or to groups of debtors.



20. OTHER RECEIVABLES AND PREPAID EXPENSES cont’d

Movement in the allowance for doubtful debts

The Group 31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

At beginning of year 67,880 66,899 67,907

Additions during the year (Note 8) - 1,000 -

Allowance no longer required (Note 8) (31) (19) (1,008)

Bad debt written off against allowance (67,838) - -

11 67,880 66,899

21. SHARE CAPITAL

The Group and the Company

31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Authorised:

1,000,000,000 ordinary shares of RM0.50 each 500,000 500,000 500,000

Issued and fully paid:

622,948,000 ordinary shares of RM0.50 each 311,474 311,474 311,474

22. EMPLOYEE SHARE OPTIONS SCHEME

On October 31, 2003, the Company implemented an Employee Share Options Scheme (“ESOS”) which is governed by the by-laws and was approved by the shareholders at an Extraordinary General Meeting held on June 19, 2003. The ESOS has been extended based on approval by the shareholders of the Company at the Annual General Meeting held on July 24, 2008.

The main features of the ESOS are as follows:

(i) The ESOS shall be in force for a period of five (5) years from October 31, 2003 and extended for an additional five (5) years commencing from November 1, 2008 until October 31, 2013;

(ii) Eligible persons are employees of the Group (including executive directors) who have been confirmed in the employment of the Group and have served for at least two (2) years before the date of the offer. The eligibility for participation in ESOS shall be at the discretion of the ESOS Committee appointed by the Board of Directors;



cont’d

22. EMPLOYEE SHARE OPTIONS SCHEME cont’d

The main features of the ESOS are as follows: cont’d

(iii) The total number of shares to be offered shall not exceed in aggregate 10% of the issued share capital of the Company at any point of time during the tenure of the ESOS;

(iv) The option price for each share shall be the weighted average of the mean market quotation of the shares of the Company in the daily official list issued by the Bursa Malaysia Securities Berhad for the five (5) trading days preceeding the date of offer, or the par value of the shares of the Company of RM0.50, whichever is higher;

(v) No option shall be granted for less than 1,000 shares nor more than 500,000 shares to any eligible employee;

(vi) An option granted under the ESOS shall be capable of being exercised by the grantee by notice in writing to the Company commencing from the date of the offer but before the expiry date;

(vii) All new ordinary shares issued upon exercise of the options granted under the ESOS will rank pari passu in all respects with the existing ordinary shares of the Company; and

(viii) The person to whom the options have been granted have no right to participate by virtue of the options in any share issue of any other company.

The numbers of share options granted and vested under the ESOS on October 31, 2003 are 3,147,000 shares with the

exercise price of RM0.50 per share. The share options outstanding as at the end of the year are as follows:


Balance at 1.2.2012 Granted Lapsed

Balance at 31.1.2013

’000 ’000 ’000 ’000

Exercise period

October 31, 2003 to October 31, 2013 1,324 - (74) 1,250

23. OTHER RESERVES (a) Share premium

The share premium arose from the issuance of ordinary shares of the Company. (b) Exchange reserve

Exchange reserve represents exchange difference arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Group’s investment in foreign operations.



24. LOANS AND BORROWINGS

The Group 31.1.2013 31.1.2012 1.2.2011

Maturity RM’000 RM’000 RM’000

Current

Secured:

Bank overdrafts (Note 30) On demand 18,426 70,720 66,989

Revolving credits and short-term loans 2013 191,791 130,492 23,092

Trust receipts and bankers’ acceptance 2013 3,875 5,801 7,052

Term loans 2013 6,295 12,687 11,102

Finance lease payables (Note 25) 2013 2,840 2,395 1,572

223,227 222,095 109,807

Unsecured:

Short-term loan 2013 4,026 - -

Bank overdrafts (Note 30) On demand 1,568 - 2,830

Revolving credits - - - 21,460

5,594 - 24,290

Total Current 228,821 222,095 134,097

Non-current

Secured:

Term loans 3,842 4,835 63,433

Finance lease payables (Note 25) 5,582 4,729 2,636

Total Non-Current 9,424 9,564 66,069

Total 238,245 231,659 200,166

The Company

Obligation under finance lease (Note 25):

- current portion 79 204 211

- non-current portion 400 415 549

Total 479 619 760



cont’d

24. LOANS AND BORROWINGS cont’d

The remaining maturities of borrowings as of January 31, 2013 are as follows:

The Group 31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

On demand or within one year 228,821 222,095 134,097

More than 1 year and less than 2 years 7,244 8,060 64,011

More than 2 years and less than 5 years 1,274 604 1,046

5 years or more 906 900 1,012

238,245 231,659 200,166

The Company 31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Within one year 79 204 211

More than 1 year and less than 2 years 120 179 199

More than 2 years and less than 5 years 280 209 331

5 years or more - 27 19

479 619 760

The weighted average interest rates per annum for borrowings as of January 31, 2013 are as follows:

The Group 31.1.2013 31.1.2012 1.2.2011

% % %

Bank overdrafts 6.50 6.57 6.93

Revolving credits and short-term loans 4.53 4.19 6.31

Trust receipts and bankers’ acceptance 3.95 5.56 5.14

Term loans 5.20 6.05 6.68

Obligation under finance lease 6.34 7.23 6.64

The Company

Obligation under finance lease 3.37 3.58 3.62

The secured term loans of the Group are secured by charges over certain freehold land and buildings, long-term leasehold land and buildings, plant and machinery, land held for property development, investment securities and fixed deposits as disclosed in Notes 13, 14, 17 and 30, respectively.



25. FINANCE LEASE PAYABLES

The Group and the Company have entered into finance lease arrangements for certain items of its furniture, equipment and motor vehicles (Note 13). These leases do not have terms of renewal, but have purchase options at nominal values at the end of the lease term. The Group’s and the Company’s finance lease payables are secured by the financial institutions’ charge over the assets under finance lease.

Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows:

The Group 31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Minimum lease payments:

Not later than 1 year 3,290 3,023 1,776

Later than 1 year but not later than 5 years 5,988 5,197 2,957

Later than 5 years - 31 29

Total minimum lease payments 9,278 8,251 4,762

Less: Future finance charges (856) (1,127) (554)

Present value of minimum lease payables 8,422 7,124 4,208

Present value of payments:

Not later than 1 year 2,840 2,395 1,572

Later than 1 year but not later than 5 years 5,582 4,702 2,536


Present value of minimum lease payables 8,422 7,124 4,208

Less: Amount due within the next 12 months (current portion) (2,840) (2,395) (1,572)

Non-current portion 5,582 4,729 2,636



cont’d

25. FINANCE LEASE PAYABLES cont’d

The Company 31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Minimum lease payments:

Not later than 1 year 218 234 243

Later than 1 year but not later than 5 years 316 457 621

Later than 5 years 31 31 22

Total minimum lease payments 565 722 886

Less: Future finance charges (86) (103) (126)

Present value of lease payables 479 619 760

Present value of payments:

Not later than 1 year 79 204 211

Later than 1 year but not later than 5 years 400 388 530


Present value of lease payables 479 619 760

Less: Amount due within the next 12 months (current portion) (79) (204) (211)

Non-current portion 400 415 549

26. INVESTOR AND SENIOR CERTIFICATES

The investor certificates relate to the funding for securitised trade receivables of DCS and DCNZ as disclosed in Note 19. Interest rates payable on the investor certificates range from 3.93% to 14.28% (2012: 3.05% to 14.20%; 2011: 5.33% to 7.75%) per annum, respectively.

The senior certificates related to the funding for securitised trade receivables of DCM as disclosed in Note 19. The interest rate payable on senior certificates is 9.20% (2012: 9.20%; 2011: 9.20%) per annum.



27. TRADE PAYABLES

The normal credit period granted to the Group for trade purchases ranges from 30 to 120 days (2012 and 2011: 30 to 120 days).

The currency profile of trade payables is as follows:

The Group

31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000



New Zealand Dollar 3,572 4,085 -

Australian Dollar 758 1,077 2,368

US Dollar 501 348 -

Chinese Renminbi 96 - -

Canadian Dollar 12 17 -

Yen - 182 -

83,394 60,796 86,824

28. OTHER PAYABLES AND ACCRUED EXPENSES

The Group

31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

The Group

Other payables and accrued expenses 67,341 53,990 73,130

The Company

Other payables and accrued expenses 128 530 430



cont’d

28. OTHER PAYABLES AND ACCRUED EXPENSES cont’d

The currency profile of other payables and accrued expenses is as follows:

The Group

31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000




Chinese Renminbi 1,457 5 -

US Dollar 9 9 9

Australian Dollar - 31 -

Euro - 24 25

67,341 53,990 73,130

29. DEFERRED REVENUE

31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Arising from:

Customer reward points (i) 14,143 13,226 11,869

Interest income (ii) 10,717 6,096 1,727

Progress billings in respect of properties under development (iii) 5,710 5,371 132

30,570 24,693 13,728

(i) Deferred revenue arising from customer reward points awarded to the card members based on the spending on their credit cards are recognised in accordance with Note 3.4(ii). There is no expiry date attached to these reward points.

(ii) Deferred revenue arising from interest income are in respect of the unearned interest income from cash advances granted to credit card customers.

(iii) Deferred revenue arising from program billings are in respect of properties under development that are yet to be delivered.



30. CASH AND CASH EqUIVALENTS

Cash and cash equivalents included in the statements of cash flows represent the following:

The Group 31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Deposits with licensed financial institutions 9,708 14,482 18,441

Cash and bank balances 63,055 80,559 121,969

72,763 95,041 140,410

Less: Bank overdrafts (Note 24) (19,994) (70,720) (69,819)

Less: Pledged deposits with licensed financial institutions (3,630) (4,750) (4,486)

49,139 19,571 66,105

The Company 31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Deposits with licensed banks - 2,350 2,350

Cash and bank balances 165 858 207

165 3,208 2,557

Fixed deposits of the Group amounting to RM3,630,000 (2012: RM4,750,000; 2011: RM4,486,000) are pledged with financial institutions as security for banking facilities extended to the subsidiaries as disclosed in Note 24.

Included in deposits with licensed banks and cash and bank balances of the Group are amounts held in the designated trust accounts of the special purpose entities totalling RM30,426,000 (2012: RM32,779,000; 2011: RM53,491,000) pursuant to the terms of the respective Programmes. These amounts are restricted for use for the purposes as disclosed in Note 19.

The effective interest rates and maturities of deposits as at the end of the financial year were as follows:

The Group and the Company

31.1.2013 31.1.2012 1.2.2011

Effective interest

ratesMaturities

days

Effective interest

ratesMaturities

days

Effective interest

ratesMaturities

days

(%) (%) (%)

Licensed banks 0.7 - 8.85 1 - 365 0.19 - 12.50 1 - 365 0.25 - 16.13 1 - 365

Licensed financialinstitutions 2.36 365 3.12 365 2.44 365



cont’d

30. CASH AND CASH EqUIVALENTS cont’d

The currency profile of cash and bank balances is as follows:

The Group

31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000




Australian Dollar 3,837 8,742 8,637

Chinese Renminbi 514 218 -

Brunei 262 348 -

US Dollar 80 468 26

Pound Sterling 1 1 1

72,763 95,041 140,410

31. RELATED PARTY TRANSACTIONS

During the financial year, significant related party transactions undertaken between the Group and the Company with related parties, which are determined on a basis as negotiated between the related parties, are as follows:

The Group 2013 2012

RM’000 RM’000

Transactions with corporations in which the directors, Tan Sri Dato’ Tan Kay Hockand Puan Sri Datin Tan Swee Bee are deemed interested through their interestin George Kent (Malaysia) Berhad:

- Sales of air tickets 419 125

- Sales of tiles 7 110

- Recovery of share registration charges 121 94

- Rental expenses for motor vehicles - 11

- Purchase of goods 6,513 -

Provision of management services to a firm related to a director - 576

Sale of 2 units shop offices to a director - 1,465



31. RELATED PARTY TRANSACTIONS cont’d

The Company 2013 2012

RM’000 RM’000

Transaction with subsidiaries :

Interest charged on amount owing by subsidiaries 1,217 428

Secretarial fee payable 109 40

Dividend income - 5,164

Management fees receivable 1,313 1,374

Compensation of Key Management Personnel

The key management personnel of the Group and of the Company include directors of the Company and subsidiaries and certain members of senior management of the Group and the Company. Their compensation, other than the directors’ remuneration as disclosed in Note 10, are as follows:


2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Salaries and other short-term employee benefits 9,015 8,177 1,793 2,031

Contributions to defined contribution plans 375 358 - -

9,390 8,535 1,793 2,031

32. COMMITMENTS

(i) Capital commitments

Capital expenditure as at the reporting date is as follows:

The Group 2013 2012

RM’000 RM’000

Capital expenditure

Approved and contracted for:

Property, plant and equipment 3,332 3,047



cont’d

32. COMMITMENTS cont’d

(ii) Operating lease commitments

The Group has entered into commercial property leases for the use of land and buildings and office equipment. These leases have an average tenure of between one to five years with no renewal option or contingent rent provision included in the contracts. Lease terms do not contain restrictions on the Group’s activities concerning dividends, additional debt or further leasing.

As at the end of the reporting period, the Group has non-cancellable operating lease commitments in respect of the rental of premises as follows:

The Group 2013 2012

RM’000 RM’000

Within one year 13,377 12,501

In the second to fifth year 12,047 12,642

25,424 25,143

33. CONTINGENT ASSETS

A subsidiary, Johan Properties Sdn Bhd (“JPSB”) had on July 25, 1996 filed a lawsuit against five Defendants for wrongful repudiation or breach of a contract in relation to a property held under Lot 289, Section 57, Bandar Kuala Lumpur (the “Property”). JPSB’s Statement of Claim was for (i) return of the Deposit sum of RM1,700,000; (ii) special damages amounting to RM4,300,000; (iii) general damages; and (iv) interest and cost.

On June 2, 2003, the High Court dismissed JPSB’s suit and the Defendents’ counter claim. On July 21, 2010, the Court of Appeal had allowed JPSB’s appeal against the decision of the High Court on June 2, 2003. The Defendents’ application for leave to appeal to the Federal Court was dismissed on April 4, 2011.

Pursuant to the decision of the Court of Appeal, JPSB is entitled to claim from the Defendants the return of the deposit sum of RM1,700,000 and interest at rate of 8% per annum from October 19, 2000 to the date of full settlement and costs awarded totalling RM45,000. The decision for JPSB’s application to assess special damages, general damages and interest and costs against the Defendents is presently pending before the High Court.



34. FINANCIAL INSTRUMENTS AND CAPITAL RISK MANAGEMENT

(a) Capital risk management

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended January 31, 2013 and January 31, 2012.

The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group includes within net debt, loans and borrowings, trade and other payables, funding from non-resource investors certificates and senior certificates, less cash and bank balances. Capital includes equity attributable to the owners of the Company.

The Group 31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Loans and borrowings (Note 24 ) 238,245 231,659 200,166

Trade and other payables (Notes 27 and 28) 150,735 114,786 159,954

Funding from non-recourse investor certificates and seniorcertificates (Note 26) 445,153 420,930 423,280

Less: Cash and bank balances (Note 30) (72,763) (95,041) (140,410)

Net debt 761,370 672,334 642,990

Equity attributable to the owners of the Company 220,819 254,874 301,911

Capital and net debt 982,189 927,208 944,901

Gearing ratio 76% 73% 68%

(b) Significant accounting policies

Details of significant accounting policies and methods adopted (including the criteria for recognition, the bases of measurement, and the bases for recognition of income and expenses) for each class of financial assets, financial liabilities and equity instruments are disclosed in Note 3.



cont’d

34. FINANCIAL INSTRUMENTS AND CAPITAL RISK MANAGEMENT cont’d

(c) Categories of financial instruments

The Group 31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Financial assets

Loans and receivables:

Trade receivables (Note 19) 646,414 572,215 560,184

Other receivables and refundable deposits (Note 20) 19,994 21,481 42,326

Cash and bank balances 72,763 95,041 140,410

Fair value through profit or loss:

Held for trading investments (Note 17) 10,689 13,752 15,822

Available-for-sale:

Equity investments (Note 17) 1,418 67 69


At amortised cost:

Trade payables (Note 27) 83,394 60,796 86,824

Other payables and accrued expenses (Note 28) 67,341 53,990 73,130

Senior certificates (Note 26) 33,500 33,500 30,500

Investor certificates (Note 26) 411,653 387,430 392,780

Loans and borrowings (Note 24) 238,245 231,659 200,166

The Company

Financial assets

Loans and receivables:

Other receivables and refundable deposits (Note 20) 275 235 203

Amount owing by subsidiaries (Note 16) 21,506 57,791 204,403

Cash and bank balances 165 3,208 2,557


At amortised cost:

Other payables and accrued expenses (Note 28) 128 530 430

Amount owing to subsidiaries (Note 16) 29,553 29,555 33,882

Loans and borrowings (Note 24) 479 619 760




(d) Financial risk management

The operations of the Group are subject to various financial risks which include credit risk, foreign currency risk, interst rate risk, liquidity risk and market price risk in connection with its use or holding of financial instruments. The Group has adopted a financial risk management framework with the principal objective of effectively managing risks and minimising any potential adverse effects on the financial performance of the Group.

The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are executed by the general managers of the respective operating units. The Audit Committee provides independent oversight to the effectiveness of the risk management process.

It is, and has been throughout the current and previous financial year, the Group’s policy that no derivatives shall be undertaken except for the use as hedging instruments where appropriate and cost-efficient.

The following sections provide details regarding the Group’s and the Company’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks.

(e) Credit risk management

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade and other receivables. The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure.

The Group controls its credit risk by the application of credit approval limits and monitoring procedures. Credit evaluations are performed on customers requiring credit over a certain amount. Trade receivables are monitored on an on-going basis.

At the end of the reporting period, the maximum credit exposure of the Group and the Company is represented by the carrying amounts of the trade and other receivables as shown on the statements of financial position.



cont’d


(e) Credit risk management cont’d

The Group determines concentration of credit risk by monitoring the country and industry section profile of its trade receivables on an ongoing basis. The credit risk concentration profile of the Group’s trade receivables at the reporting date are as follows:

The Group

31.1.2013 31.1.2012 1.2.2011

RM’000 % RM’000 % RM’000 %

By country:

Singapore 467,334 72 428,735 75 439,182 78

Australia 1,717 0 1,523 0 3,247 1

New Zealand 90,533 14 84,320 15 54,444 10

Malaysia and others 86,830 14 57,637 10 63,311 11

646,414 100 572,215 100 560,184 100

By segment:

Engineering andbuilding materials 11,482 2 7,647 1 12,442

2

General trading 152 0 112 0 1,000 0

Credit and chargecards business and hospitality 634,668 98 564,421 99 546,722

98

Investment holdingand secretarialservices 112 0 35 0 20

0

646,414 100 572,215 100 560,184 100

(f) Foreign currency risk management

Foreign currency risk is that 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 sales and purchases that are denominated in a currency other than a respective functional currencies of Group entities, primarily Ringgit Malaysia (“RM”), Singapore Dollar (“SGD”), Australian Dollar (“AUD”) and New Zealand Dollar (“NZD”).

As a result of significant operating activities in Singapore, Australia, New Zealand and Hong Kong, the Group’s statement of financial position can be affected significantly by movements in the SGD, AUD, NZD and United States Dollar (“USD”) against RM exchange rate.




(f) Foreign currency risk management cont’d

The Group is also exposed to currency translation risk arising from its net investments in foreign operations, including Singapore, Australia, New Zealand and Hong Kong.

Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level.

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity of the Group’s loss after tax to a reasonably possible change in the SGD and USD exchange rates against the respective functional currencies of the Group entities, with all other variables held constant.

The Group

31.1.2013 31.1.2012 1.2.2011

RM’000 RM’000 RM’000

Loss after tax Equity



SGD/RM -strengthened 5% +490 +2,959 +694 +7,078 +4,616 +7,754

-weakened 5% -490 -2,959 -694 -7,078 -4,616 -7,754

USD/RM -strengthened 5% +5 +422 +20 +415 +906 +625

-weakened 5% -5 -422 -20 -415 -906 -625

(g) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in the market interest rates. The Group’s and the Company’s exposure to interest rate risk arise primarily from their loans and borrowings bearing interest at floating rates.

Sensitivity analysis for interest rate risk

The sensitivity analysis’s below have been determined based on the exposure to interest rate for deposits with licensed financial institutions and loans and borrowings bearing interest at floating rates at the end of the reporting period. At the reporting date, if interest rates had been 10 basis points lower/higher, with all other variables held constant, the Group’s loss after tax would have been RM303,000 lower/higher (2012: RM224,000; 2011: RM175,000), arising mainly as a result of lower/higher interest expense on floating rate loans and borrowings and higher/lower interest income from floating rate deposits. The assumed movement in basis points for interest rate sensitivity analysis is based on management’s assessment on the currently observable market environment.



cont’d


(h) Liquidity risk management

Liquidity risk is the risk that the Group and the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.

At the reporting date, approximately 90% (2012: 96%; 2011: 67%) and 16% (2012: 33%; 2011: 28%) of the Group’s and the Company’s loans and borrowings (Note 24) respectively will mature in less than one year based on the carrying amounts reflected in the financial statements.

Liquidity tables

The following tables detail the Group’s and the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayments periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group and the Company can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate at the end of the reporting period. The contractual maturity is based on the earliest date on which the Group and the Company may be required to pay.

Maturity profile

The Group NoteLess than

1 year1 - 5

years5+

years Total

RM’000 RM’000 RM’000 RM’000

January 31, 2013

Non-interest bearing:

Trade payables 27 83,394 - - 83,394

Other payables and accrued expenses 28 67,341 - - 67,341

Interest bearing:

Senior certificates 26 - 36,515 - 36,515

Investor certificates 26 411,653 - - 411,653

Loans and borrowings 24 229,271 8,924 906 239,101

791,659 45,439 906 838,004




(h) Liquidity risk management cont’d

Liquidity tables cont’d

Maturity profile


1 year1 - 5

years5+

years Total

RM’000 RM’000 RM’000 RM’000

January 31, 2012


Trade payables 27 60,796 - - 60,796


Interest bearing:



Loans and borrowings 24 232,121 9,102 1,582 242,805

734,337 45,617 1,582 781,536

February 1, 2011


Trade payables 27 86,824 - - 86,824


Interest bearing:



Loans and borrowings 24 140,771 68,448 1,747 210,966

693,505 101,754 1,747 797,006



cont’d



Liquidity tables cont’d

Maturity profile

The Company NoteLess than

1 year1 - 5

years5+

years Total

RM’000 RM’000 RM’000 RM’000

January 31, 2013


Other payables and accrued expenses 28 128 - - 128

Interest bearing:

Amount owing to subsidiaries 16 29,553 - - 29,553

Loans and borrowings 24 218 316 31 565

29,899 316 31 30,246

January 31, 2012



Interest bearing:



30,319 457 31 30,807

February 1, 2011




Interest bearing:


34,555 621 22 35,198





The following table details the Group’s and the Company’s expected maturity for its non-derivative financial assets. The table has been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets. The inclusion of information on non-derivative financial assets is necessary in order to understand the Group’s liquidity risk management as the liquidity is managed on a net asset and liability basis.

Maturity profile


1 year1 - 5

years5+

years Total

RM’000 RM’000 RM’000 RM’000

January 31, 2013


Investment securities 17 10,689 1,418 - 12,107

Trade receivables 19 646,414 - - 646,414

Other receivables and refundable deposits 20 19,994 - - 19,994

Cash and bank balances 30 72,763 - - 72,763

749,860 1,418 - 751,278

January 31, 2012


Investment securities 17 13,752 67 - 13,819




702,489 67 - 702,556

February 1, 2011


Investment securities 17 15,822 69 - 15,891




758,742 69 - 758,811



cont’d



Maturity profile

The Company NoteLess than

1 year1 - 5

years5+

years Total

RM’000 RM’000 RM’000 RM’000

January 31, 2013


Other receivables and refundable deposits 20 275 - - 275

Amount owing by subsidiaries 24 21,506 - - 21,506

Cash and bank balances 30 165 - - 165

21,946 - - 21,946

January 31, 2012





61,234 - - 61,234

February 1, 2011





207,163 - - 207,163

(i) Fair values

The fair values of financial instruments refer to the amounts at which the instruments could be exchanged or settled between knowledgeable and willing parties in an arm’s length transaction. Fair values have been arrived at based on prices quoted in an active, liquid market or estimated using certain valuation techniques such as discounted future cash flows based upon certain assumptions. Amounts derived from such methods and valuation techniques are inherently subjective and therefore do not necessarily reflect the amounts that would be received or paid in the event of immediate settlement of the instruments concerned.

On the basis of the amounts estimated from the methods and techniques as mentioned in the preceding paragraph, the carrying amount of the various financial assets and financial liabilities reflected on the statement of financial position approximate their fair values.




(i) Fair values cont’d

The following methods and assumptions were used to estimate the fair values of the principal financial assets and liabilities of the Group and of the Company:

l Cash and cash equivalents, trade and other receivables, refundable deposits, amount owing by/to subsidiaries, trade and other payables and accrued expenses: The carrying amounts are considered to approximate the fair values as they are either within the normal credit terms or they have short-term maturity period.

l Investment securities: Investment securities are carried at market value.

l Loans and borrowings: As the loans and borrowings were obtained from licensed financial institutions at the prevailing market rate, the carrying value of these financial liabilities approximates its fair value.

l Senior certificates and investor certificates: The fair values of senior certificates and investor certificates are determined by estimating future cash flows on a borrowing-by-borrowing basis, and discounting these future cash flows using an interest rate which takes into consideration the Group’s incremental borrowing rate at year end for similar types of debt arrangements.

Fair value measurements recognised in the statements of financial position

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

lLevel 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

lLevel 2 fair value measurements are those derived from 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

lLevel 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).



cont’d


(i) Fair values cont’d

The Group Level 1 Level 2 Level 3 Total

RM’000 RM’000 RM’000 RM’000

January 31, 2013


Held for trading investment securities 10,689 - - 10,689

Available-for-sale financial assets

Investment securities 1,418 - - 1,418

31 December 2011




Investment securities 67 - - 67

1 January 2011




Investment securities 69 - - 69

There were no transfers between Levels 1 and 2 during the financial year.

(j) Market price risk management

Market price risk is the risk that fair value or future cash flows of the Group’s financial instrumets will fluctuate because of charges in market prices (other than interest or exchange rates).

The Group is exposed to equity price risk arising from its investments is quoted equity instruments in Malaysia, Singapore, Indonesia, Thailand and Hong Kong stock exchanges. These instruments ae mainly classified as fair value through profit or loss. The Group does not have exposure to commodity price list.

Sensitivity analysis for equity price risk

At the reporting date, if the share price had been 5% (2012 and 2011: 5%) higher/lower with all other variable held constant, the Group’s profit net of tax would have been RM596,000 higher/lower (2012: RM516,000; 2011: RM593,000), arising as result of higher/lower fair value gains on its investments in quoted equity instruments.



35. SEGMENT INFORMATION

For the Group’s chief operating decision maker (“CODM”) purposes, the Group is organised into business units based on their products and services, and has five reportable operating segments as follows:

(i) Engineering and building materials

(ii) General trading

(iii) Property

(iv) Credit and charge cards business and hospitality

(v) Investment holding and secretarial services

Except as indicated above, no operating segments have been aggregated to form the above reportable segments.

CODM monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing (including finance costs) and income taxes are managed on a group basis and are not allocated to operating segments.



cont’d

35.

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35. SEGMENT INFORMATION cont’d

Note: Nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial statements

A Inter-segment revenues and expenses eliminations.

B Other material non-cash expenses and income consist of the following items as presented in the respective notes to the financial statements.

2013 2012

RM’000 RM’000

Net fair value loss/(gain) on investment securities 1,995 2,684

Loss/(gain) on disposal of investment securities (22) 115

(Gain)/loss on disposal of property, plant and equipment (55) (127)

Allowance for doubtful receivables - trade and other receivables 9,412 18,774

Allowance for doubtful debt no longer required

- trade and other receivables (681) (5,263)

Debt waiver - -

Net unrealised foreign exchange loss /(gain) (6,060) 849

Write back of inventories written down (754) (291)

Inventories written down 1,034 582

Property, plant and equipment written off - 190

Impairment of property, plant and equipment 243 -

Write back of deposits previously written off - (1,700)

5,112 15,813

C Additions to non-current assets consist of:

2013 2012

RM’000 RM’000


Intangible assets 6,151 10,612

9,762 13,013



cont’d

35. SEGMENT INFORMATION cont’d

D The following items are deducted from segment assets to arrive at total assets reported in the consolidated statement of financial position:

2013 2012RM’000 RM’000

Deferred tax assets - (189)

Inter-segment assets (159,971) (212,372)

(159,971) (212,561)

E The following items are deducted from segment liabilities to arrive at total liabilities reported in the consolidated statement of financial position:

2013 2012RM’000 RM’000

Inter-segment liabilities 387 (5,016)

Geographical information

Revenue and non-current assets information based on the geographical location of customers and assets respectively are as follows:

Revenue Non-current assets2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Singapore 187,094 174,279 60,624 43,922

Malaysia and others 86,970 80,043 189,901 257,247

New Zealand 19,004 19,717 8,620 13,073

Australia 12,496 24,191 50,104 1,220

Non-current assets information presented above consist of the following items as presented in the consolidated statement of financial position:

2013 2012RM’000 RM’000


Land held for property development 6,100 6,100

Intangible assets 25,062 21,368

309,249 315,462



36. COMPARATIVE FIGURES

Certain comparative figures have been reclassified to conform with their presentation in the current financial year as follows:

As previously reported

RMReclassifications

RM

Asreclassified

RM

Statement of Financial Position

The Group


Other receivables 42,698 (42,698) -

Prepaid operating expenses 4,215 (4,215) -

Other receivables and prepaid expenses - 46,541 46,541

Tax recoverable - 372 372

Other payables and accrued expenses (74,857) 1,727 (73,130)

Deferred revenue - (13,596) (13,596)

Provision for reward points (11,869) 11,869 -


Trade receivables 570,878 1,337 572,215

Other receivables 21,762 (21,762) -

Prepaid operating expenses 7,204 (7,204) -

Other receivables and prepaid expenses - 28,685 28,685


Other payables and accrued expenses (58,749) 4,759 (53,990)

Deferred revenue - (19,322) (19,322)

Provision for reward points (13,226) 13,226 -



cont’d

36. COMPARATIVE FIGURES cont’d

As previously reportedRM’000

ReclassificationsRM’000

Asreclassified

RM’000

The Company


Other receivables 550 (550) -

Prepaid operating expenses 25 (25) -

Other receivables and prepaid expenses - 203 203



Other receivables 491 (491) -

Prepaid operating expenses 25 (25) -

Other receivables and prepaid expenses - 235 235


37. EXPLANATION OF TRANSITION TO MFRSs

This is the first year that the Group’s and the Company’s financial statements were prepared and presented in accordance with MFRSs. The last financial statements under FRSs were for the year ended January 31, 2012 and the date of transition to MFRSs was therefore, February 1, 2011.

An opening statement of financial position as at the date of transition has been prepared based on the accounting policies as described in Note 3. The transition to MFRSs has been accounted for in accordance with MFRS 1, as disclosed in Note 2.1.

The disclosures set out below explain how the transition from FRSs to MFRSs have affected the financial position, financial performance and cash flows of the Group. The changes in accounting policies as a consequence of transition to MFRSs are as described in the notes following the aforementioned disclosures. The transition to MFRSs does not have any impact on the reported financial position, financial performance and cash flows of the Group other than as disclosed below.



37. EXPLANATION OF TRANSITION TO MFRSs cont’d

37.1 Effect of MFRSs adoption for the statement of financial position

February 1, 2011 January 31, 2012

(date of transition) (end of last period presented under FRSs)

The Group FRSs

Effect of transition to MFRSs MFRSs FRSs

Effect of transition to MFRSs MFRSs

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

ASSETS

Non-current assets

Property, plant andequipment 202,529 92,749 295,278 196,333 91,661 287,994

Land held for property development 6,097 (6,097) - 6,100 (6,100) -

Inventories - non-current - 6,097 6,097 - 6,100 6,100

Intangible assets 11,267 - 11,267 21,368 - 21,368

Investment securities 69 - 69 67 - 67

Deferred tax assets 11,085 (1,908) 9,177 11,036 (1,857) 9,179

Total non-current assets 231,047 90,841 321,888 234,904 89,804 324,708

Current assets

Investment securities 15,822 - 15,822 13,752 - 13,752

Property development costs 348 (348) - 2,481 (2,481) -

Inventories 31,999 347 32,346 29,694 4,939 34,633

Trade receivables 560,184 - 560,184 572,215 - 572,215

Other receivables andprepaid expenses 46,541 - 46,541 28,685 - 28,685

Tax recoverable 372 - 372 281 - 281

Cash and bank balances 140,410 - 140,410 95,041 - 95,041

Total current assets 795,676 (1) 795,675 742,149 2,458 744,607

Total assets 1,026,723 90,840 1,117,563 977,053 92,262 1,069,315



cont’d


37.1 Effect of MFRSs adoption for the statement of financial position cont’d



The Group FRSs



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

EqUITY AND LIABILITIES

Capital and reserves

Share capital 311,474 - 311,474 311,474 - 311,474

Share premium 69,415 - 69,415 69,415 - 69,415

Revaluation reserve 30,954 (30,954) - 30,594 (30,594) -

Exchange reserve 9,865 - 9,865 12,069 - 12,069

Retained earnings (206,978) 118,135 (88,843) (252,551) 114,467 (138,084)

214,730 87,181 301,911 171,001 83,873 254,874

Non-controlling interests 8,233 - 8,233 9,235 - 9,235

Total equity 222,963 87,181 310,144 180,236 83,873 264,109

Non-current liabilities

Loans and borrowings 66,069 - 66,069 9,564 - 9,564

Senior certificates 30,500 - 30,500 33,500 - 33,500

Deferred tax liabilities 2,290 3,659 5,949 5,533 3,178 8,711

Total non-current liabilities 98,859 3,659 102,518 48,597 3,178 51,775




37.1 Effect of MFRSs adoption for the statement of financial position cont’d



The Group FRSs



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

Current liabilities

Trade payables 86,824 - 86,824 60,796 - 60,796

Other payables and accruedexpenses 73,130 - 73,130 53,990 - 53,990

Loans and borrowings 134,097 - 134,097 222,095 - 222,095

Program billings in repect ofProperty development cost 132 (132) - 160 (160) -

Investors certificates 392,780 - 392,780 387,430 - 387,430

Deferred revenue 13,596 132 13,728 19,322 5,371 24,693

Tax liabilities 4,342 - 4,342 4,427 - 4,427

Total current liabilities 704,901 - 704,901 748,220 5,211 753,431

Total liabilities 803,760 3,659 807,419 796,817 8,389 805,206

Total equity and liabilities 1,026,723 90,840 1,117,563 977,053 92,262 1,069,315



cont’d


37.2 Effect of MFRSs adoption for the statement of comprehensive income for year ended January 31, 2012 (the latest period presented under FRSs)

The Group FRSs


RM’000 RM’000 RM’000

Revenue 298,230 (5,210) 293,020

Cost of sales (104,195) 2,457 (101,738)

Gross profit 194,035 (2,753) 191,282

Other operating income 12,542 - 12,542

Distribution expenses (40,238) - (40,238)

Administrative expenses (149,859) (1,088) (150,947)

Other operating expenses (6,247) - (6,247)

Finance costs (50,073) - (50,073)

Loss before tax (39,840) (3,841) (43,681)

Income tax expense (4,681) 110 (4,571)

Loss for the year (44,521) (3,731) (48,252)

Other comprehensive income/(loss):

Foreign currency translation difference for foreign operations 2,217 - 2,217

Revaluation of land (423) 423 -

Other comprehensive income for the year, net of tax 1,794 423 2,217

Total comprehensive loss for the year (42,727) (3,308) (46,035)




37.3 Reconciliation of accumulated losses

The Group

February 1,2011

(date of transition)

January 31, 2012

(end of last period presented

under FRSs)

RM RM

Total accumulated losses under FRSs (206,978) (252,551)

Transfer of revaluation reserve brought forward from previous years toaccumulated losses 30,954 30,954

Revaluation of land and buildings 87,181 86,266

Revenue previously recognised under FRSs - (5,210)

Cost of sales previously recognised under FRSs - 2,457

Total adjustment to accumulated losses 118,135 114,467

Total retained earnings under MFRSs (88,843) (138,084)

37.4 Notes to the reconciliations

(i) Property, plant and equipment

Prior to the adoption of MFRSs, the Group had availed itself of the transitional provision which was made available upon first application of the MASB Approved Accounting Standard IAS 16 (revised) Property, Plant and Equipment which was effective for periods beginning on or after September 1, 1998. By virtue of this transitional provision, the Group has recorded its freehold land at revalued amounts but had not adopted a policy of revaluation and continue to carry the freehold land and buildings, long-term leasehold land and buildings and long-term leasehold hotel properties on the basis of their previous revaluation subject to continuity in its depreciation policy and requirement to write down the assets to its recoverable amount for impairment adjustments.

Upon transition to MFRSs, the Group had decided to measure the freehold land and buildings, long-term leasehold land and buildings and long-term leasehold hotel properties using the cost model under MFRS 116 Property, Plant and Equipment and apply the optional exemption to measure an item of property, plant and equipment at the date of transition to MFRSs at its fair value and use that fair value as its deemed cost at that date.



cont’d


37.4 Notes to the reconciliations cont’d

(i) Property, plant and equipment cont’d

Consequently, the Group revalued the freehold land and buildings, long-term leasehold land and buildings and long-term leasehold hotel properties of the Group on February 1, 2011, the date of transition, based on an independent valuation performed by an independent qualified valuer by reference to recent market value on arm’s length terms, and regard the resulted fair values as their deemed costs on that date.

The resulting increase in revaluation surplus of RM92,749,000 as of February 1, 2011 was recognised as an increase in property, plant and equipment and a corresponding increase, net of deferred tax of RM5,567,000, recognised in retained earnings. The revaluation surplus of RM30,954,000 as at February 1, 2011 was also transferred to retained earnings.

The statement of financial position of the Group as of January 31, 2012 and the statement of comprehensive income of the Group for the year then ended reflect the same adjustments but also include the additional depreciation charge of RM1,088,000 and the related tax effect of RM110,000 for the year ended January 31, 2012.

(ii) Property under development

Prior to the adoption of MFRS, the Group had accounted its property development activities in accordance with FRS 201 Property Development Activities.

Under FRS 201, an entity that is involved in property development activities applies percentage of completion method in recognising revenue and profit from the sale of real estate. Land held for future property development are classified as non-current asset and stated at cost less any accumulated impairment losses.

Upon transition to MFRS, the Group applies IC Interpretation 15, Agreements for the Construction of Real Estate, retrospectively at the date of transition. Under IC 15, an agreement for the construction of real estate that does not meet the definition of a construction contract (MFRS 11) shall be accounted for under MFRS 118, Revenue. Revenue from sale of goods agreement is recognised by reference to the stage of completion, if and only if, the revenue recognition criteria of MFRS 118 are met continuously as construction progress (ie. continuous transfer of significant risk and rewards of ownership). An entity may need to account for a piece of land as:

(i) Investment property if it is held for undetermined future use; or

(ii) Inventory if it is held for planned development.




37.4 Notes to the reconciliations cont’d

(ii) Property under development cont’d

Consequently, as of February 1, 2011 (the date of transition) and January 31, 2012, the financial statements of the Group reflect the following:

(i) The reclassification of amount previously recognised as land held for property development under FRS to inventories-non-current.

(ii) The reclassification of amount previously recognised as property, development costs under FRS to inventories.

(iii) The reversal of revenue and cost of sales from related property development activities previously recognised under FRS.

(iv) The reclassification of amount previously recognised as progress billings in respect of property development cost to deferred revenue.

38. SUBSEQUENT EVENT

On May 23, 2013, William Jacks Australia Pty Ltd, a wholly-owned subsidiary of the Group, had entered into a conditional share sale agreement for the disposal of its wholly-owned subsdiary, Skinner Engineering Pty Ltd, for a cash consideration of AUD293,000 (RM857,000). Both companies are incorporated in Australia.



cont’d

39. SUPPLEMENTARY INFORMATION - DISCLOSURE ON REALISED AND UNREALISED PROFITS/LOSSES

On March 25, 2010, Bursa Malaysia Securities Berhad (“Bursa Malaysia”) issued a directive to all listed issuers pursuant to Paragraphs 2.06 and 2.23 of the Bursa Securities Main Market Listing Requirements. The directive requires all listed issuers to disclose the breakdown of the unappropriated profits or accumulated losses as of the end of the reporting period, into realised and unrealised profits or losses.

On December 20, 2010, Bursa Malaysia further issued guidance on the disclosure and the prescribed format of disclosure.

The breakdown of the retained earnings of the Group and of the Company into realised and unrealised profits or losses, pursuant to the directive, is as follows:


31.1.2013 31.1.2012 31.1.2013 31.1.2012

RM RM RM RM

Total (accumulated losses)/retained profits of the Company and its subsidiaries:

- Realised (533,391) (405,508) (219,216) (210,355)

- Unrealised 98,371 89,684 - -

(435,020) (315,824) (219,216) (210,355)

Less: Consolidation adjustments 265,085 177,740 - -

Accumulated losses as per financial statements (169,935) (138,084) (219,216) (210,355)

The determination of realised and unrealised profits or losses is based on Guidance of Special Matter No. 1 “Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Securities Listing Requirements” as issued by the Malaysian Institute of Accountants on December 20, 2010. A charge or a credit to the profit or loss of a legal entity is deemed realised when it is resulted from the consumption of resource of all types and form, regardless of whether it is consumed in the ordinary course of business or otherwise. A resource may be consumed through sale or use. Where a credit or a charge to the profit or loss upon initial recognition or subsequent measurement of an asset or a liability is not attributed to consumption of resource, such credit or charge should not be deemed as realised until the consumption of resource could be demonstrated.

This supplementary information have been made solely for complying with the disclosure requirements as stipulated in the directives of Bursa Malaysia Securities Berhad and is not made for any other purposes.


Statement by Directors

Declaration by the OfficerPrimarily Responsible for the Financial Management of the Company

The directors of JOHAN HOLDINGS BERHAD state that, in their opinion, the accompanying financial statements are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of January 31, 2013 and of the financial performance and the cash flows of the Group and of the Company for the year ended on that date.

The supplementary information set out in Note 39, which is not part of the financial statements, is prepared in all material respects, in accordance with Guidance on Special Matter No. 1 “Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements” as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities Berhad.

Signed in accordance with a resolution of the Directors,

DATO’ AHMAD KHAIRUMMUZAMMIL BIN MOHD YUSOFF PUAN SRI DATIN TAN SWEE BEE Kuala LumpurMay 30, 2013

I, NG YEW SOON, the officer primarily responsible for the financial management of JOHAN HOLDINGS BERHAD, do solemnly and sincerely declare that the accompanying financial statements are, in my opinion, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed NG YEW SOON at KUALA LUMPUR this 30th day of May, 2013. NG YEW SOON

Before me,

SHAFIE B. DAUDNo. W350COMMISSIONER FOR OATHS38A, Jalan Tun Mohd Fuad 1Taman Tun Dr. Ismail60000 Kuala Lumpur


Shareholders’ Informationas at 22 May 2013

SHARE CAPITAL INFORMATION Authorised Share Capital : RM500,000,000.00 Issued and Fully Paid-up Capital : RM311,474,263.50 Total Number of Shares Issued : 622,948,527 Class of Securities : Ordinary Shares of 50 sen each Voting Rights : One (1) vote per Ordinary Share DISTRIBUTION OF SHAREHOLDINGS

No. of Holders % Size of Holdings

Total Holdings %

101 1.06 Less than 100 shares 3,050 0.00

2,645 27.74 100 to 1,000 shares 2,471,788 0.40

4,917 51.56 1,001 to 10,000 shares 21,902,641 3.52

1,624 17.03 10,001 to 100,000 shares 55,027,214 8.83

246 2.58 100,001 to less than 5% of issued shares 423,813,617 68.03

3 0.03 5% and above of issued shares 119,730,217 19.22

9,536 100.00 Total 622,948,527 100.00

LIST OF THIRTY LARGEST REGISTERED SHAREHOLDERS (as shown in the Record of Depositors)

No. Name of ShareholdersNo. of

Shares Held %

1 STAR WEALTH INVESTMENT LIMITED 47,306,117 7.59

2 TAN KAY HOCK 37,519,100 6.02

3 TAN SWEE BEE 34,905,000 5.60

4 HSBC NOMINEES (ASING) SDN BHD - FOR SUNCROWN HOLDINGS LIMITED

30,675,000 4.92

5 ASIAN RIM LIMITED 29,779,418 4.78

6 RHB NOMINEES (ASING) SDN BHDOSK CAPITAL SDN BHD FOR PRIME CHAMPION INVESTMENTS LIMITED

26,500,500 4.25

7 RHB NOMINEES (ASING) SDN BHDOSK CAPITAL SDN BHD FOR TRINITY STAR DEVELOPMENTS LIMITED

26,500,500 4.25

8 HECTOMIC LIMITED 25,912,200 4.16

9 KIN FAI INTERNATIONAL LIMITED 25,413,000 4.08

10 KWOK HENG HOLDINGS LIMITED 25,194,000 4.04

11 HSBC NOMINEES (ASING) SDN BHD- FOR TAN SWEE BEE

23,970,900 3.85


LIST OF THIRTY LARGEST REGISTERED SHAREHOLDERS cont’d (as shown in the Record of Depositors)

No. Name of ShareholdersNo. of

Shares Held %

12 CIMB GROUP NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR TAN SWEE BEE (TAN KAY HOCK)

14,753,467 2.37

13 NORRIS PIE LIMITED 14,477,800 2.32

14 HDM NOMINEES (ASING) SDN BHD - PLEDGED SECURITIES ACCOUNT FOR PROMOTO COMPANY LIMITED

12,591,000 2.02

15 HSBC NOMINEES (ASING) SDN BHD - EXEMPT AN FOR COUTTS & CO LTD (HK BRANCH)

12,400,000 1.99

16 CIMB GROUP NOMINEES (TEMPATAN) SDN BHD- PLEDGED SECURITIES ACCOUNT FOR TAN KAY HOCK (49545 JPLE)

11,355,000 1.82

17 HSBC NOMINEES (ASING) SDN BHD - EXEMPT AN FOR CREDIT SUISSE (SG BR-TST-ASING)

10,613,900 1.70

18 ECML NOMINEES (ASING) SDN. BHD. - DMG & PARTNERS SECURITIES PTE LTD FOR KEEN CAPITAL INVESTMENTS LTD

6,750,400 1.08

19 EB NOMINEES (ASING) SENDIRIAN BERHAD - PLEDGED SECURITIES ACCOUNT FOR TAN SWEE BEE

5,901,000 0.95

20 RCI VENTURES SDN BHD 5,550,000 0.89

21 HDM NOMINEES (ASING) SDN BHD - PLEDGED SECURITIES ACCOUNT FOR AIMUP CONSULTANTS LIMITED

5,350,000 0.86

22 CHEAH SEE HAN 5,164,700 0.83

23 CIMSEC NOMINEES (TEMPATAN) SDN BHD - CIMB BANK FOR TAN KAY HOCK (MY0041)

5,121,000 0.82

24 CIMSEC NOMINEES (ASING) SDN BHD - CIMB BANK FOR TAN SWEE BEE (MY0022)

5,100,000 0.82

25 RHB NOMINEES (ASING) SDN BHDOSK CAPITAL SDN BHD FOR HECTOMIC LIMITED

5,000,000 0.80

26 RHB NOMINEES (ASING) SDN BHDOSK CAPITAL SDN BHD FOR NORRIS PIE LIMITED

5,000,000 0.80

27 HSBC NOMINEES (ASING) SDN BHDEXEMPT AN FOR BSI SA (BSI BK SG-NR)

4,513,600 0.72

28 EB NOMINEES (TEMPATAN) SENDIRIAN BERHADPLEDGED SECURITIES ACCOUNT FOR TAN KAY HOCK

3,796,000 0.61

29 MEGA FIRST HOUSING DEVELOPMENT SDN BHD 2,834,200 0.45

30 MAYBANK NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR ANG PIANG KOK

2,600,000 0.42

472,547,802 75.81

Shareholders’ Informationas at 22 May 2013cont’d


SUBSTANTIAL SHAREHOLDERS (EXCLUDING BARE TRUSTEES) AS AT 22 MAY 2013(as per Register of Substantial Shareholders)

No. Of Shares Held

Name of Substantial ShareholderDirect

Interest %Deemed Interest %

Tan Sri Dato’ Tan Kay Hock 59,491,100 9.55 213,817,484 * 34.32

Puan Sri Datin Tan Swee Bee 85,219,367 13.68 188,089,217 * 30.19

Star Wealth Investment Limited 47,306,117 7.59 - -

Notes:-* Deemed interested by virtue of their equity interest in Kin Fai International Limited, Kwok Heng Holdings Limited and Suncrown Holdings

Limited, shares beneficially held under various nominee companies and shares held in each other’s name including call options granted over all existing JHB shares held by Star Wealth Investment Limited as well as options over unissued shares granted pursuant to the Employee Share Option Scheme.

Shareholders’ Informationas at 22 May 2013

cont’d


Statement on Directors’ Interests In The Company And Related Corporationas at 22 May 2013

DIRECTORS’ INTEREST IN SHARES (as shown in the Register of Directors’ Holdings)

In Johan Holdings Berhad No. of Ordinary Shares of RM0.50 each

Name of DirectorDirect


Tan Sri Dato’ Tan Kay Hock 59,391,100 9.53 213,817,484 * 34.32

Puan Sri Datin Tan Swee Bee 85,119,367 13.66 188,089,217 * 30.19

Tan Sri Dato’ Seri Dr Ting Chew Peh - - - -

Dato’ Ahmad Khairummuzammil bin Mohd Yusoff - - - -

Ooi Teng Chew 200,000 0.03 - -

* Deemed interested by virtue of their equity interest in Kin Fai International Limited, Kwok Heng Holdings Limited and Suncrown Holdings Limited, shares beneficially held under various nominee companies and shares held in each other’s name including call option granted over all existing Johan shares held by Star Wealth Investment Limited.

In Johan Holdings Berhad Options over Ordinary Shares of RM0.50 each

Name of DirectorDirect


Tan Sri Dato’ Tan Kay Hock 100,000 # 0.02 - -

Puan Sri Datin Tan Swee Bee 100,000 # 0.02 - -

Tan Sri Dato’ Seri Dr Ting Chew Peh - - - -

Dato’ Ahmad Khairummuzammil bin Mohd Yusoff - - - -

Ooi Teng Chew - - - -

# Options granted pursuant to the Employee Share Option Scheme (“ESOS”)


List of Properties Heldas at 31 January 2013

Location DescriptionArea

Sq. metre Tenure

Net Book Value

RM’000

Age of Building(Years)

Year of Revaluation

Year of Acquisition

1) MALAYSIA

PT 6280 HS(D) 2595Mukim DengkilDaerah SepangSelangor Darul Ehsan

Offices, factory and warehouse

112,390 Freehold 103,736 17 2011 1996

Lot 4182 Jalan Titi Panjang32200 Lumut, Perak

Marine Club

12,141 Leasehold - Expiring 29.4.2093

8,741 17 2011 1996

PT 4106Mukim LumutDaerah ManjungPerak Darul Ridzuan

Hotel 16,137 Leasehold - Expiring 14.1.2092

35,845 21 2011 1992

No. S1-221st Floor, Wisma AbadCentury GardenJohor Bharu

Office lot 22 Freehold 35 24 - 1989

P.T.3005 H.S.(D) DGS6374 & PT3014 H.S(D) DGS6362Pulau Pangkor,Mukim Lumut,Daerah Manjung

Leasehold land

58.43 acres

Leasehold - Expiring 4.5.2094

32,492 - 2011 1995

2) SINGAPORE

7500E Beach Road#02-201, #03-301,#04-201, The Plaza

Offices 1,435 Leasehold - Expiring 2.9.2067

47,133 35 2011 1978

18 Kaki Bukit Road 3#05-16Entrepreneur Business CentreSingapore

Office 395 Leasehold-Expiring 8.1.2055

2,860 18 2011 2004


Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the Eighty-eighth Annual General Meeting of the Company will be held at George Kent Technology Centre, Lot 1115, Batu 15 Jalan Dengkil 47100 Puchong, Selangor Darul Ehsan on Thursday, 11th July 2013 at 11:00 a.m. for the following purposes:-

ORDINARY BUSINESS 1. To receive the Audited Financial Statements for the financial year ended 31 January 2013 and

the Directors’ and Auditors’ Reports thereon.

2. To re-elect Tan Sri Dato’ Tan Kay Hock who retires by rotation as a Director pursuant to Article 83 of the Articles of Association and being eligible, has offered himself for re-election.

3. To approve a resolution that pursuant to Section 129(6) of the Companies Act, 1965, Dato’ Ahmad Khairummuzammil bin Mohd Yusoff, who is over the age of seventy, be and is hereby re-appointed as Director of the Company to hold office until the next Annual General Meeting.

4. To approve a resolution that pursuant to Section 129(6) of the Companies Act, 1965, Tan Sri Dato’ Seri Dr Ting Chew Peh, who is over the age of seventy, be and is hereby re-appointed as Director of the Company to hold office until the next Annual General Meeting.

5. To approve the payment of Directors’ fee of RM150,000 in respect of the financial year ended 31 January 2013.

6. To re-appoint Auditors and to authorise the Directors to fix their remuneration.

SPECIAL BUSINESS 7. To consider and if thought fit, pass with or without modifications the following as Ordinary

Resolution:-

Authority To Allot And Issue Shares In General Pursuant To Section 132D Of The Companies Act, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965 and subject to the approvals of the relevant governmental/regulatory authorities, the Directors be and are hereby empowered to issue shares in the capital of the Company from time to time and upon the terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company for the time being AND THAT the Directors be and are also empowered to obtain the approval from Bursa Malaysia Securities Berhad for the listing of and quotation for the additional shares so issued AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

8. To transact any other business of which due notice shall have been given.

By Order Of The Board

Teh Yong FahGroup Secretary (MACS00400)KUALA LUMPUR19th June 2013

(Please refer to Note A)

(Resolution1)

(Resolution2)

(Resolution3)

(Resolution4)

(Resolution5)

(Resolution6)


Notice of Annual General Meeting cont’d

Notes:-

A. This Agenda item is meant for discussion only. The provisions of Section 169 of the Companies Act, 1965 and the Articles of Association of the Company require that the audited financial statements and the Reports of the Directors and Auditors thereon be laid before the Company at its Annual General Meeting. As such this Agenda item is not a business which requires a resolution to be put to the vote by shareholders.

1. A member entitled to attend and vote at the meeting of the Company is entitled to appoint not more than two proxies (who need not be members of the Company) to attend and vote instead of the member. Where a member appoints two proxies, he shall specify the proportion of his shareholdings to be represented by each proxy.

2. Where a holder of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

3. The instrument appointing a proxy or proxies must be deposited at the Registered Office of the Company at 11th Floor, Wisma E&C, No. 2 Lorong Dungun Kiri, Damansara Heights 50490 Kuala Lumpur not less than forty-eight (48) hours before the time appointed for holding the meeting.

ExplanatoryNotesonSpecialBusiness

Authority to Allot and Issue Shares in general pursuant to Section 132D of The Companies Act, 1965

The proposed Ordinary Resolution if passed will empower the Directors to issue shares of the Company up to 10% of the issued capital of the Company for the time being for such purposes as the Directors consider would be in the interest of the Company. This would avoid any delays and costs in convening a general meeting to specifically approve such an issue of shares. This authority unless revoked or varied by the Company in general meeting will expire at the next Annual General Meeting (“AGM”) of the Company.

The Company has not issued any new shares under this general authority which was approved at the last AGM held on 17 July 2012 and which will lapse at the conclusion at this AGM. A renewal of this general authority is being sought at this AGM under the proposed resolution 6. The renewed mandate is to provide flexibility to the Company for any possible future fund raising activities including but not limited to placement of shares for purposes of funding future investments, working capital and/or acquisition.


Statement Accompanying The Notice Of Annual General Meeting

Pursuant to Paragraph 8.27(2) of the Bursa Securities Listing Requirements:-

(a) The Directors who are standing for re-election/re-appointment at the Eighty-eighth Annual General Meeting of the Company are as follows:-

Tan Sri Dato’ Tan Kay Hock - Article 83 of the Articles of Association

Dato’ Ahmad Khairummuzammil bin Mohd Yusoff - Section 129 of the Companies Act, 1965

Tan Sri Dato’ Seri Dr Ting Chew Peh - Section 129 of the Companies Act, 1965

(b) The profile and further details of the above Directors are set out on Pages 8 and 9 in the Annual Report;(c) Details of any interest in securities of the Company are set out on Page 142 in the Annual Report; and(d) Their attendance of Board Meetings held during the financial year ended 31 January 2013 can be found on Page 15 in the

Annual Report.

Information for Shareholders

The Eighty-eighth Annual General Meeting of the Company will be held at George Kent Technology Centre, Lot 1115, Batu 15 Jalan Dengkil 47100 Puchong, Selangor Darul Ehsan on Thursday, 11th July 2013 at 11:00 a.m.

Details of the Eighty-eighth Annual General Meeting are set out in the Notice of Annual General Meeting which accompanies the Annual Report 2013 together with a Form of Proxy.

The Company has requested Bursa Malaysia Depository Sdn Bhd, in accordance with Article 57(1) of the Company’s Articles of Association and Section 34(1) of the Securities Industry (Central Depositories) Act 1991, to issue a Record of Depository (ROD) as at 13th June 2013 for the purpose of determining the members to whom the Notice of the Eighty-eighth Annual General Meeting shall be given by the Company. Only a depositor whose name appears on the ROD as at 13th June 2013 shall be given the notice of the said meeting.

The General Meeting ROD as at 5th July 2013 will determine a member who shall be entitled to attend the Eighty-eighth Annual General Meeting or to appoint proxy(s) to attend and/or vote on his/her behalf.

I/We (Company/NRIC/Passport No. )

of

being a member/members of JOHAN HOLDINGS BERHAD hereby appoint:-

Name Address NRIC/Passport No.Proportion of

Shareholding (%)

and/or (delete as appropriate)

Name Address NRIC/Passport No.Proportion of

Shareholding (%)

as my/our proxy/proxies to vote for me/us on my/our behalf at the Eighty-eighth Annual General Meeting of the Company, to be held at George Kent Technology Centre, Lot 1115, Batu 15 Jalan Dengkil 47100 Puchong, Selangor Darul Ehsan on Thursday, 11th July 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 hereunder indicated.

RESOLUTIONS For Against

1 To re-elect Tan Sri Dato’ Tan Kay Hock as a Director

2 To re-appoint Dato’ Ahmad Khairummuzammil bin Mohd Yusoff as a Director

3 To re-appoint Tan Sri Dato’ Seri Dr Ting Chew Peh as a Director

4 To approve the payment of Directors’ fees

5 Re-appointment of Auditors and to authorise Directors to fix their remuneration

6 Authority to Directors to allot shares

(Please indicate with a cross (“X”) in the appropriate box against each Resolution how you wish your proxy/proxies to vote. If this proxy form is returned without any indication as to how the proxy/proxies shall vote, the proxy/proxies will vote or abstain as he/their think fit.)

Dated this day of , 2013.

Signature/Common Seal

FORM OF PROXY (Before completing the form, please refer to notes on next page)

No. of Shares Held

CDS Account No.

AFFIXSTAMP

1st Fold Here

Then Fold Here

The Company SecretaryJOHAN HOLDINGS BERHAD11th Floor, Wisma E&CNo. 2 Lorong Dungun KiriDamansara Heights50490 Kuala Lumpur

Notes:-1. Vote may be given personally or by proxy/proxies (not more than two proxies) or in the case of a corporation by a representative duly

authorised. Where a member appoints two proxies, he shall specify the proportion of his shareholdings to be represented by each proxy. The instrument appointing proxy/proxies shall be in writing under the hand of the appointor or his attorney or if such an appointor is a corporation under its Common Seal or the hands of its attorney. Proxy/proxies need not be a member of the Company.

2. The attendance of the appointer at the Annual General Meeting and exercising his/her voting rights at the Annual General Meeting personally will automatically revoke the proxy.

3. Where a holder of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

4. The instrument appointing proxy/proxies and the power of attorney (if any) under which it is signed or a notarially certified copy of the power or authority, shall be deposited at the Registered Office of the Company at 11th Floor, Wisma E&C, No. 2 Lorong Dungun Kiri, Damansara Heights 50490 Kuala Lumpur not less than forty-eight (48) hours before the time for holding the meeting or adjourned meeting (as the case may be) at which the person named in such instrument propose to vote but no instrument (other than power of attorney under seal) appointing proxy/proxies shall be valid after the expiration of twelve months from the date of its execution.


Group Corporate DirectoryPrincipal Companies

MALAYSIA

Johan Holdings Berhad11th Floor, Wisma E&CNo. 2 Lorong Dungun KiriDamansara Heights50490 Kuala LumpurTel : 603 2092 1858Fax : 603 2092 2812Website : www.johanholdings.com

Prestige Ceramics Sdn BhdLot 1115, Batu 15, Jalan Puchong47100 PuchongSelangor Darul EhsanTel : 603 8062 5388Fax : 603 8062 1418

Lumut International Yacht Club (owned by Lumut Marine Resort Berhad)Lot 4182, Jalan Titi Panjang32200 Lumut, Perak Darul RidzuanTel : 605 683 5191Fax : 605 683 7700

The Orient Star Resort, Lumut(owned by Lumut Park Resort Sdn Bhd)Lot 203 & 366 Jalan Iskandar Shah32200 LumutPerak Darul RidzuanTel : 605 683 4199Fax : 605 683 4223Website : www.orientstar.com.my

Diners Club (Malaysia) Sdn Bhd15th Floor, Menara Tan & Tan207 Jalan Tun Razak50400 Kuala LumpurTel : 603 2161 1322Fax : 603 2161 1518Website : www.dinersclub.com.my

Diners World Travel (Malaysia) Sdn BhdSuit 16.03, 16th Floor, Menara Tan & Tan207 Jalan Tun Razak50400 Kuala LumpurTel : 603 2164 0068Fax : 603 2162 4577

Nature’s Farm (Health Foods) Sdn BhdNo. 9-1, Block A, Jaya OneNo. 72A, Jalan Universiti46200 Petaling JayaTel : 603 7960 6133Fax : 603 7960 6136

SINGAPORE

Jacks International Limited7500-E, Beach Road#03-201, The Plaza Singapore 199595Tel : 65 6295 2027Fax : 65 6296 5981

Diners Club (Singapore) Pte Ltd7500-E, Beach Road#02-201, The PlazaSingapore 199595Tel : 65 6166 0800Fax : 65 6294 0534Website : www.dinersclub.com.sg

Diners World Travel Pte Ltd7500-E, Beach Road#02-201, The Plaza Singapore 199595Tel : 65 6298 8988Fax : 65 6295 1485Website : www.dinerstravel.com.sg

Nature’s Farm Pte Ltd18, Kaki Bukit Road 3#05-16 Entrepreneur Business CentreSingapore 415978Tel : 65 6748 9818Fax : 65 6748 8135Website : www.naturesfarm.com

AUSTRALIA

Skinner Engineering Pty Ltd89 Miller StreetEpping, Victoria 3076AustraliaTel : +61 3 9408 8711Fax : +61 3 9401 3565Website : www.skinnerengineering.com.au

NEW ZEALAND

Diners Club (New Zealand) LtdFirst Floor, 109, Carlton Gore RoadNewmarket, Auckland, New ZealandTel : +64 9 359 7796Fax : +64 9 359 7800Website : www.dinersclub.co.nz

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