2015 annual report 2015 - Atlan Holdings Bhd report/documents/ATLAN... · He joined Berjaya Group...

Correspondence address :

17th Floor, Menara Atlan161B, Jalan Ampang50450 Kuala Lumpur

Tel : 603 2179 2000Fax : 603 2179 2390

www.atlan.com.my

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annual report

2015laporan tahunan

AtlanARcov2015_FINAL.indd 1 6/26/15 4:26 PM

Corporate Structure 02

Corporate Information 04

Profile Of Directors 05

Financial Highlights 09

Chairman Statement 11

Statement On Corporate Governance 17

Additional Compliance Information 28

Audit And Risk Management Committee Report 29

Statement On Risk Management And Internal Control 34

Corporate Social Responsibility 36

Statement Of Directors’ Responsibility 38

Financial Statements 39

Analysis Of Shareholdings 147

List Of Properties 150

Notice Of Annual General Meeting 153

Form Of Proxy

Table ofCONTENTS

ATLAN HOLDINGS BHD (173250-W) I ANNUAL REPORT 2015

2

CORPORATE STRUCTUREAs at 29 May 2015

50%

50%

28%

69%

19%

81%

Atlan Management Sdn. Bhd.

Atlan Capital Sdn. Bhd.

RZ Equities Sdn. Bhd.

Timeless Image Sdn. Bhd.

Blossom Time Sdn. Bhd.

Arah Induk Sdn. Bhd.

Atlan Orient Sdn. Bhd.

Radiant Ranch Sdn. Bhd.

Gardenia Success Sdn. Bhd.

Duty Free International Limited

Atlan Technology Sdn. Bhd.

Tropika Ferringhi ManagementSdn. Bhd.

Atlan Properties Sdn. Bhd.

Naluri Properties Sdn. Bhd.

Atlan Development Sdn. Bhd.

Ocean Pride Sdn. Bhd.

Tegapasti Sdn. Bhd.

International Aviation Consultants Sdn. Bhd.

Atlan Assets Sdn. Bhd.

Front Top (M) Sdn. Bhd.

100%

100%

Binamold Sdn. Bhd.

100%

DFZ Asia Sdn. Bhd.

1%

99% PT DFZ Indon

100%

Cergasjaya Properties Sdn. Bhd.

100%

Gold Vale Development Sdn. Bhd.

100%

Kelana Megah Sdn. Bhd.

100%

DFZ Tours & Travel Sdn. Bhd.100%

Media Zone Sdn. Bhd.

100%

First Influx Sdn. Bhd.

100%

Tenggara Senandung Sdn. Bhd.

100%

100%

100%

100%

100%

100%

100%

100%

100%

82.29%

100%

100%

100%

100%

100%

Belia Karisma Sdn. Bhd.100%

100%

100%

100%

100%

100%

Trifiniti Networks Sdn. Bhd.

Naluri Corporation Sdn. Bhd.100%

Naluri International Limited100%

DFZ Capital Berhad100%

Orchard Boulevard Sdn. Bhd.100%

United Industries HoldingsSdn. Bhd. 100%

DFZ Trading Sdn. Bhd.

Emas Kerajang Sdn. Bhd.

Seruntun Maju Sdn. Bhd.

69.90%

69.80%

100%

Selasih Ekslusif Sdn. Bhd.100%

100% Winner Prompt Sdn. Bhd.

Kadar Prisma Sdn. Bhd.

100% Black Forest Golf And CountryClub Sdn. Bhd.

100% Zon Hospitality ServicesSdn. Bhd.

Scandinavian Avionics (Malaysia)Sdn. Bhd. 25%

Darul Metro Sdn. Bhd.100%

100%

UVI Advance Technology Sdn. Bhd.100%

United Industries Sdn. Bhd.100%

TRIM CapitalManagement (M) Sdn. Bhd.100%

100%

100%

100%

United Sanoh Industries Sdn. Bhd.70%

United FilterSdn. Bhd.

Danco MarketingSdn. Bhd.

Freighter Industries (M) Sdn. Bhd.

UEW Plastic IndustriesSdn. Bhd.

United Vehicles IndustriesSdn. Bhd.

DFZ Duty Free (Langkawi) Sdn. Bhd.100%

Jelita Duty Free Supplies Sdn. Bhd.

100%

Zon Emporium Sdn. Bhd.100%

DFZ (M) Sdn. Bhd.69.89%

Wealthouse Sdn. Bhd.28.60%

Jasa Duty Free Sdn. Bhd.

100%

DFZ Duty Free Supplies Sdn. Bhd.100%

Melaka Duty Free Sdn. Bhd. 51%

Cergasjaya Sdn. Bhd.100%

DFZ Emporium Sdn. Bhd.29.30%

100% DFZ Utara Sdn Bhd

ANNUAL REPORT 2015 I ATLAN HOLDINGS BHD (173250-W)

3

corporate structureAs at 29 May 2015 (cont’d.)

50%

50%

28%

69%

19%

81%

Atlan Management Sdn. Bhd.

Atlan Capital Sdn. Bhd.

RZ Equities Sdn. Bhd.

Timeless Image Sdn. Bhd.

Blossom Time Sdn. Bhd.

Arah Induk Sdn. Bhd.

Atlan Orient Sdn. Bhd.

Radiant Ranch Sdn. Bhd.

Gardenia Success Sdn. Bhd.

Duty Free International Limited

Atlan Technology Sdn. Bhd.

Tropika Ferringhi ManagementSdn. Bhd.

Atlan Properties Sdn. Bhd.

Naluri Properties Sdn. Bhd.

Atlan Development Sdn. Bhd.

Ocean Pride Sdn. Bhd.

Tegapasti Sdn. Bhd.

International Aviation Consultants Sdn. Bhd.

Atlan Assets Sdn. Bhd.

Front Top (M) Sdn. Bhd.

100%

100%

Binamold Sdn. Bhd.

100%

DFZ Asia Sdn. Bhd.

1%

99% PT DFZ Indon

100%

Cergasjaya Properties Sdn. Bhd.

100%

Gold Vale Development Sdn. Bhd.

100%

Kelana Megah Sdn. Bhd.

100%

DFZ Tours & Travel Sdn. Bhd.100%

Media Zone Sdn. Bhd.

100%

First Influx Sdn. Bhd.

100%

Tenggara Senandung Sdn. Bhd.

100%

100%

100%

100%

100%

100%

100%

100%

100%

82.29%

100%

100%

100%

100%

100%

Belia Karisma Sdn. Bhd.100%

100%

100%

100%

100%

100%

Trifiniti Networks Sdn. Bhd.

Naluri Corporation Sdn. Bhd.100%

Naluri International Limited100%

DFZ Capital Berhad100%

Orchard Boulevard Sdn. Bhd.100%

United Industries HoldingsSdn. Bhd. 100%

DFZ Trading Sdn. Bhd.

Emas Kerajang Sdn. Bhd.

Seruntun Maju Sdn. Bhd.

69.90%

69.80%

100%

Selasih Ekslusif Sdn. Bhd.100%

100% Winner Prompt Sdn. Bhd.

Kadar Prisma Sdn. Bhd.

100% Black Forest Golf And CountryClub Sdn. Bhd.

100% Zon Hospitality ServicesSdn. Bhd.

Scandinavian Avionics (Malaysia)Sdn. Bhd. 25%

Darul Metro Sdn. Bhd.100%

100%

UVI Advance Technology Sdn. Bhd.100%

United Industries Sdn. Bhd.100%

TRIM CapitalManagement (M) Sdn. Bhd.100%

100%

100%

100%

United Sanoh Industries Sdn. Bhd.70%

United FilterSdn. Bhd.

Danco MarketingSdn. Bhd.

Freighter Industries (M) Sdn. Bhd.

UEW Plastic IndustriesSdn. Bhd.

United Vehicles IndustriesSdn. Bhd.

DFZ Duty Free (Langkawi) Sdn. Bhd.100%

Jelita Duty Free Supplies Sdn. Bhd.

100%

Zon Emporium Sdn. Bhd.100%

DFZ (M) Sdn. Bhd.69.89%

Wealthouse Sdn. Bhd.28.60%

Jasa Duty Free Sdn. Bhd.

100%

DFZ Duty Free Supplies Sdn. Bhd.100%

Melaka Duty Free Sdn. Bhd. 51%

Cergasjaya Sdn. Bhd.100%

DFZ Emporium Sdn. Bhd.29.30%

100% DFZ Utara Sdn Bhd


4

CORPORATE INFORMATION

AUDIT AND RISK MANAGEMENT COMMITTEE

Mohd Sharif Bin Hj Yusof (Chairman)Dato’ Shagul Hamid Bin K.R. Williams @ AbdullahJeneral Tan Sri Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad (B)Tan Thiam Chai

REMUNERATION COMMITTEE

Dato’ Sri Adam Sani Bin Abdullah (Chairman)Jeneral Tan Sri Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad (B)Dato’ Shagul Hamid Bin K.R. Williams @ AbdullahDato’ Sri Robin Tan Yeong Ching

NOMINATION COMMITTEE

Dato’ Sri Adam Sani Bin Abdullah (Chairman)Tengku Abdul Rahman Ibni Sultan Haji Ahmad Shah Al-Mustain Billah, DK II, SSAPDato’ Shagul Hamid Bin K.R. Williams @ Abdullah

COMPANY SECRETARIES

Chua Siew Chuan(MAICSA 0777689)Thum Sook Fun (MIA 24701)

REGISTERED OFFICE

Level 4, Wisma Atlan8 Persiaran Kampung Jawa11900 Bayan Lepas, PenangMalaysiaTel: 604 – 641 3200Fax: 604 – 641 3303

INVESTOR RELATIONS

Lee Sze Siang17th Floor, Menara Atlan161B Jalan Ampang50450 Kuala Lumpur, MalaysiaTel: 603 – 2179 2000Fax: 603 – 2179 2390Email: [email protected]

CORRESPONDENCE ADDRESS

17th Floor, Menara Atlan161B Jalan Ampang50450 Kuala Lumpur, MalaysiaTel: 603 – 2179 2000Fax: 603 – 2179 2390 Web: http://www.atlan.com.my

SHARE REGISTRAR

Securities Services (Holdings)Sdn. Bhd. (36869-T)Level 7, Menara MileniumJalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala Lumpur, MalaysiaTel: 603 – 2084 9000Fax: 603 – 2094 9940 / 2095 0292

PRINCIPAL BANKERS

Affin Bank BerhadBank Islam Malaysia BerhadBank Kerjasama Rakyat Malaysia BerhadRHB Bank BerhadAlliance Bank Malaysia Berhad

AUDITORS

Ernst & YoungLevel 23A, Menara MileniumJalan DamanlelaPusat Bandar Damansara50490 Kuala LumpurTel: 603 – 7495 8000Fax: 603 – 2095 9078

STOCK EXCHANGE LISTING

Main Market ofBursa Malaysia Securities BerhadStock Name : AtlanStock Code : 7048Stock Sector : Trading / Services Date Listing : 15 January 1996

Dato’ Shagul Hamid Bin K.R. Williams @ AbdullahIndependent Non-Executive Director

Mohd Sharif Bin Hj YusofSenior Independent Non-Executive Director

Tan Thiam ChaiNon-Independent Non-Executive Director

Dato’ Woo Hon KongIndependent Non-Executive Director

Ong Bok SiongNon-Independent Non-Executive Director

BOARD OF DIRECTORS

Dato’ Sri Adam Sani Bin AbdullahChairmanNon-Independent Non-Executive Director

Lee Sze SiangExecutive Director

Tengku Abdul Rahman Ibni Sultan HajiAhmad Shah Al-Mustain Billah, DK II, SSAPIndependent Non-Executive Director

Dato’ Sri Robin Tan Yeong ChingNon-Independent Non-Executive Director

Jeneral Tan Sri Dato’ Sri Abdullah BinAhmad @ Dollah Bin Amad (B)Independent Non-Executive Director


5

DATO’ SRI ADAM SANI ABDULLAHChairmanNon-Independent Non-Executive Director

DATO’ SRI ADAM SANI ABDULLAH, a Malaysian, age 59, was appointed as Chairman of the Company on 16 June 2000.

Dato’ Sri Adam is a self-made entrepreneur for more than 30 years. He received his primary education in Malaysia and secondary education in the United Kingdom.

Dato’ Sri Adam also serves as Chairman of the Remuneration and Nomination Committees of the Company. He is also the Non-Executive Chairman of Duty Free International Limited, a company listed on the Catalist Board of the Singapore Exchange Securities Trading Limited.

Dato’ Sri Adam does not have any family relationship with any director. Mr. Sebastian Paul Lim Chin Foo, a substantial shareholder of the Company, is the son of Dato’ Sri Adam.

Dato’ Sri Adam has no conflict of interests with the Company.

LEE SZE SIANGExecutive Director

LEE SZE SIANG, a Malaysian, age 44, was appointed as Executive Director of the Company on 16 June 2000. He was re-designated to Non-Executive Director on 27 December 2004 and subsequently re-designated as Executive Director of the Company on 8 October 2008.

He holds a professional qualification from the Australia Society of Certified Practicing Accountants. He is also a member of the Malaysian Institute of Accountants. Previously, he was with KPMG, a firm of public accountants.

He is the Executive Director (Finance and Corporate Services) of Duty Free International Limited, a company listed on the Catalist Board of the Singapore Exchange Securities Trading Limited.

Lee Sze Siang does not have any family relationship with any director and/or major shareholder of the Company and has no conflict of interests with the Company.

TENGKU ABDUL RAHMAN IBNI SULTAN HAJI AHMAD SHAH AL-MUSTAIN BILLAH, DK II, SSAPIndependent Non-Executive Director

TENGkU ABDUL RAHMAN IBNI SULTAN HAjI AHMAD SHAH AL-MUSTAIN BILLAH, a Malaysian, age 55, was appointed as an Independent Non-Executive Director of the Company on 9 October 2000.

He was educated at Harrow College, United Kingdom in Business Administration. He was a Director on the Board of Public Bank Berhad from 1983 to March 2011. He also served as a Director for Public Islamic Bank Berhad and Public Investment Bank Berhad till March 2011.

Tengku Abdul Rahman also serves as a member of the Nomination Committee of the Company.

He does not have any family relationship with any director and/or major shareholder of the Company and has no conflict of interests with the Company.

PROFILE OF DIRECTORS


6

DATO’ SRI ROBIN TAN YEONG CHINGNon-Independent Non-Executive Director

DATO’ SRI ROBIN TAN YEONG CHING, a Malaysian, age 41, was appointed as a Non-Independent Non-Executive Director of the Company on 18 December 2012.

He graduated with a Bachelor of Social Science degree in Accounting/Law from the University of Southampton, United Kingdom, in 1995. He joined Berjaya Group Berhad in 1995 as an Executive and subsequently became the General Manager, Corporate Affairs in 1997.

Currently, he is the Chairman/ Chief Executive Officer (“CEO”) of Berjaya Corporation Berhad, the CEO of Berjaya Sports Toto Berhad, an Executive Director of Sports Toto Malaysia Sdn. Bhd. and the Executive Chairman of Berjaya Food Berhad. He is also the Chairman of Berjaya Media Berhad, Sun Media Corporation Sdn Bhd and Informatics Education Ltd, Singapore and a Director of Berjaya Sompo Insurance Berhad, KDE Recreation Berhad and Berjaya Golf Resort Berhad. He also holds directorships in several other private limited companies in the Berjaya Corporation Group of companies. He is also a Commission Member of Companies Commission of Malaysia.

He serves as a member of the Remuneration Committee of the Company.

He does not have any family relationship with any director. His father, Tan Sri Dato’ Seri Vincent Tan Chee Yioun is a deemed major shareholder of the Company.

JENERAL TAN SRI DATO’ SRI ABDULLAH BIN AHMAD @ DOLLAH BIN AMAD (B)Independent Non-Executive Director

jENERAL TAN SRI DATO’ SRI ABDULLAH BIN AHMAD @ DOLLAH BIN AMAD (B), a Malaysian, age 66, was appointed as an Independent Non-Executive Director of the Company on 26 January 2011.

He is graduated from Royal Air Force Staff College in Bracknell, United Kingdom in 1982. He holds Master Degree in International Relations and Strategic Studies from University of Lancaster, United Kingdom in 1986. He joined the Royal Malaysian Air Force (“RMAF”) in 1968 as a cadet officer and had served the RMAF for 36 years before retiring as the Chief of RMAF in 2004 with last rank as General.

He serves as a member of the Audit and Risk Management and Remuneration Committee of the Company.


DATO’ SHAGUL HAMID BIN K.R. WILLIAMS @ ABDULLAHIndependent Non-Executive Director

DATO’ SHAGUL HAMID BIN k.R. WILLIAMS @ ABDULLAH, a Malaysian, age 66, was appointed as an Independent Non-Executive Director of the Company on 30 December 2004.

He holds B.A. (Hons), 2nd Lower, Degree in English Studies, University of Malaya (1973). He joined the Pensions Division of Public Services Department as Assistant Director in 1973 and was subsequently promoted and has held various positions in the Public Sector. His last held position as a full-time public servant was as Head of Languages Division in the National Institute of Public Administration Kuala Lumpur (INTAN) in 1997. However, he had been back several times in the Public Sector, to hold several contract positions.

Dato’ Shagul serves as a member of the Audit and Risk Management, Remuneration and Nomination Committees of the Company. He does not have any family relationship with any director and/or major shareholder of the Company and has no conflict of interests with the Company.

profile of directors(cont’d.)


7

MOHD SHARIF BIN HJ YUSOFSenior Independent Non-Executive Director

MOHD SHARIF BIN Hj YUSOF, a Malaysian, age 76, was appointed as an Independent Non-Executive Director of the Company on 23 January 2009.

He is a Fellow Member of the Institute of Chartered Accountants, England and Wales and an Associate Member of the Malaysian Institute of Accountants. He has had more than 20 years experience in the government and financial sectors, serving the Selangor State Government, Bumiputra Merchant Bankers Berhad (now known as CIMB Bank Berhad) and thereafter British American Life & General Insurance Co Bhd (now known as Manulife Insurance (Malaysia) Berhad) where he held the position of Senior Vice President, Finance/Company Secretary at the time he retired.

He serves as Chairman of the Audit and Risk Management Committee of the Company.

He currently sits on the board of Ireka Corporation Berhad, Axis Reit Managers Berhad and AYS Ventures Bhd.


TAN THIAM CHAINon-Independent Non-Executive Director

TAN THIAM CHAI, a Malaysian, age 56, was appointed as a Non-Independent Non-Executive Director of the Company on 18 December 2012.

He graduated with a Diploma in Commerce (Financial Accounting) from Kolej Tunku Abdul Rahman and also completed The Association of Chartered Certified Accountants (UK) professional course in 1981. He is a Fellow member of the Association of Chartered Certified Accountants (UK) since 1990 and also a member of the Malaysian Institute of Accountants.

He started work with an accounting firm in Kuala Lumpur for about 2 years and thereafter served in various Finance and Accounting positions with the Hong Leong Group of Companies in Malaysia as well as in Hong Kong for about 8 years. He joined the Berjaya Corporation Group of Companies in early 1991 as a Finance Manager of an operating subsidiary and was promoted to Operation Manager later that year. In year 1992, he was transferred to the Corporate Head Office of Berjaya Group Berhad to head the Group Internal Audit function and subsequently in 1993, he was promoted to oversee the Group Accounting function of Berjaya Group Berhad.

Currently, he is the Chief Financial Officer of Berjaya Corporation Berhad. He is also an Executive Director of Berjaya Land Berhad and Berjaya Assets Berhad, a Director of Magni-Tech Industries Berhad, Berjaya Food Berhad, Indah Corporation Berhad, Cosway Corporation Berhad, Tioman Island Resort Berhad, Cosway Corporation Limited (Hong Kong) and Taiga Building Products Ltd (Canada). He also holds directorships in several other private limited companies in the Berjaya Corporation Group of companies.

He serves as a member of the Audit and Risk Management Committee of the Company.




8

DATO’ WOO HON KONGIndependent Non-Executive Director

DATO’ WOO HON kONG, a Malaysian, age 50, was appointed as Non-Independent Non-Executive Director of the Company on 24 April 2002. He was re-designated to the Executive Director position on 5 July 2002 and subsequently re-designated as Non-Independent Non-Executive Director of the Company on 30 October 2008. He was further re-designated to Independent Non-Executive Director of the Company on 16 May 2014.

He holds a Bachelor of Laws degree from the University of Canterbury, New Zealand. He started his career in 1988 as a legal assistant and joined a mid size legal firm as a partner in 1989 until 1994. He subsequently oversees the management and financial matters of companies involved in real estate and equities market locally and overseas prior to joining Atlan Group.

Dato’ Woo does not hold directorship in any other public companies in Malaysia. He does not have any family relationship with any director and/or major shareholder of the Company and has no conflict of interests with the Company.

ONG BOK SIONGNon-Independent Non-Executive Director

ONG BOk SIONG, a Malaysian, age 56, was appointed as Executive Director of the Company on 26 August 2010. He was re-designated to Group Managing Director on 30 April 2012 and subsequently re-designation as Non-Independent Non-Executive Director on 26 June 2013.

He holds a Bachelor of Laws degree from the University of London, United Kingdom, Bachelor of Science degree in Building Economics and Quantity Surveying (first class honours) from the Heriot-Watt University, Scotland, United Kingdom and Diploma in Building Technology from Tunku Abdul Rahman College. He also holds professional membership with various professional bodies.

He started his career in the construction and property industry in 1983 and had involved in mega construction and property development projects. He was the Chief Executive Officer and Executive Director of Meda Inc. Berhad and Group Chief Executive Officer of Andaman Consolidated Sdn Bhd Group before joining Atlan Group. Currently, he is also the Managing Director of Duty Free International Limited, a company listed on the Catalist Board of the Singapore Exchange Securities Trading Limited.




9

FY 2

008

FY 2

007

FY 2

006

FY 2

009

FY 2

010

FY 2

011

FY 2

012

FY 2

013

FY 2

014

FY 2

015

FY 2

008

FY 2

007

FY 2

006

FY 2

009

FY 2

010

FY 2

011

FY 2

012

FY 2

013

FY 2

014

FY 2

015

600.0

700.0

800.0

900.0

500.0

400.0

300.0

200.0

100.0

-

100.0

200.0

300.0

400.0

500.0

600.0

-

REVENUE (RM’MILLION)

EARNINGS BEFORE INTEREST, TAX, DEPRECIATIONAND AMORTISATION(BEFORE EXCEPTIONAL ITEMS) (RM’MILLION)

REVENUE BY BUSINESS SEGMENTS (RM’MILLION)

Duty Free Automotive Property & hospitality

FY 2

008

FY 2

007

FY 2

006

FY 2

009

FY 2

010

FY 2

011

FY 2

012

FY 2

013

FY 2

014

FY 2

015

50.0

100.0

150.0

- (150.0)

(100.0)

(50.0)

50.0

100.0

150.0

200.0

250.0

-

FY 2

008

FY 2

007

FY 2

006

FY 2

009

FY 2

010

FY 2

011

FY 2

012

FY 2

013

FY 2

014

FY 2

015

PROFIT AFTER TAX AND NON-CONTROLLINGINTERESTS (RM’MILLION)

FINANCIAL HIGHLIGHTS


10

FY 2

008

FY 2

006

FY 2

009

FY 2

010

FY 2

011

FY 2

012

FY 2

013

FY 2

014

FY 2

015

(80.00)

(60.00)

(40.00)

(20.00)

20.00

40.00

60.00

80.00

100.00

-

BASIC EARNINGS PER SHARE ATTRIBUTABLETO OWNERS OF THE PARENT (SEN)

DIVIDEND PAYOUT (RM’MILLION)

FY 2

008

FY 2

007

FY 2

006

FY 2

009

FY 2

010

FY 2

011

FY 2

012

FY 2

013

FY 2

014

FY 2

015

FY 2

008

FY 2

007

FY 2

006

FY 2

009

FY 2

010

FY 2

011

FY 2

012

FY 2

013

FY 2

014

FY 2

015

-

20.0

40.0

60.0

100.00

120.00

140.00

160.00

180.00

80.0

-

0.20

0.40

0.60

1.00

1.20

1.40

1.60

1.80

0.80

NET TANGIBLE ASSETS PER SHARE (RM) CASH AND CASH EQUIVALENTS (RM’MILLION)

-

(20.0)

20.0

40.0

80.00

100.00

120.00

140.00

180.00

160.00

60.0

FY 2

007

FY 2

008

FY 2

006

FY 2

009

FY 2

010

FY 2

011

FY 2

012

FY 2

013

FY 2

014

FY 2

015

FY 2

007

financial highlights(cont’d.)

CHAIRMANSTATEMENT

Bismillahir Rahmanir RahimAssalamu Alaikum wa Rahmatullahi wa Barakatuh

On behalf of the Board of Directors, it is my pleasure to present the Annual Report and Financial Statements of Atlan Holdings Bhd. (“Atlan”) for the financial year ended 28 February 2015 (“FY2015”).

Despite a challenging environment in the financial year ended 28 February 2015 (“FY2015”), Atlan and its subsidiaries (“Atlan Group”) had remained resilient and ended the financial year with a revenue of RM730.7 million, as compared to RM758.4 million for the financial year ended 28 February 2014 (“FY2014”). The pre-tax profit (not including discontinued operations) for FY2015 was RM82.2 million, which was 41% lower than the pre-tax profit for FY2014 of RM139.3 million mainly due to gains on disposal of certain properties totaling RM45.4 million that were recorded in FY2014.

OUTLOOK

On the global front, although the growth momentum is strengthening in the US economy, the subdued growth in several major economies (e.g. Japan, Middle East, certain Euro Zone) has caused the global economy to remain vulnerable to downside risks. The moderate recovery of the global economy projected for 2015 continues to be challenging with volatile raw material and commodity costs, decline in global oil prices and unpredictable foreign exchange rates.

In the midst of global uncertainties as mentioned above, coupled with the weakening of Ringgit Malaysia against the US Dollar, and the cautious spending by the general public, the performance for Atlan Group remains challenging for the financial year ending 29 February 2016 (“FY2016”). The Group will continue to intensify its efforts to improve operation efficiency and enhance its service quality, extend its product offerings and explore opportunities in its three main business segments, namely, Duty Free, Automotive, and Property and Hospitality segments.

DIVIDEND

I am pleased to inform that Atlan has paid a total dividend of RM88.8 million for FY2015, representing RM0.35 per ordinary share, as a reward to our loyal Shareholders for their continuous support.


12

chairman statement(cont’d)

ACKNOWLEDGEMENT

On behalf of the Board, I would like to convey my utmost appreciation to all the Government authorities for constantly providing us invaluable advice and assistance.

I would like to thank all our shareholders, bankers, customers, suppliers and business partners for their valuable support, advice and guidance. I wish to express my gratitude to my fellow Directors for their advice and guidance, and to the management and staff of Atlan Group for their contribution, commitment, hard work and dedication.

On my part, I remain your humble and obedient servant and pledge to continue my dedication and diligence to the Atlan Group.

Thank you.Wasallamu Alaikum wa Rahmatullahi wa Barakatuh

ADAM SANI BIN ABDULLAHChairman

17 June 2015

PENYATAPENGERUSI

Bismillahir Rahmanir RahimAssalamu Alaikum wa Rahmatullahi wa Barakatuh

Bagi Pihak Lembaga Pengarah, s a y a d e n g a n s u k a c i t a n y a membentangkan Laporan Tahunan dan Penyata Kewangan At lan Holdings Bhd (“Atlan”) bagi tahun kewangan berakhir 28 Februari 2015 (“tahun Kewangan 2015”).

Meskipun berada di dalam persekitaran yang mencabar bagi tahun kewangan 2015, Atlan dan anak-anak syarikatnya (“Kumpulan Atlan”) kekal berdaya tahan dan mengakhiri tahun kewangannya dengan mencatatkan perolehan RM730.7 juta berbanding RM758.4 juta untuk tahun kewangan sebelumnya iaitu tahun kewangan 2014. Keuntungan sebelum cukai (tidak termasuk operasi dihentikan) untuk tahun kewangan 2015 ialah sebanyak RM82.2 juta, iaitu 41% lebih rendah daripada keuntungan sebelum cukai untuk tahun kewangan 2014 yang berjumlah RM139.3 juta, yang disebabkan oleh keuntungan dari pelupusan beberapa hartanah sebanyak RM45.4 juta yang telah dicatatkan di tahun kewangan 2014.

TINJAUAN

Di peringkat global, walaupun momentum pertumbuhan adalah kukuh di dalam ekonomi Amerika Syarikat, pertumbuhan lembab di beberapa ekonomi utama (contoh Jepun, Timur Tengah dan beberapa zon Euro) telah menyebabkan ekonomi global masih terdedah kepada risiko. Pemulihan ekonomi dunia yang sederhana terus memberi cabaran kepada tahun 2015 dengan turun naik harga bahan mentah dan komoditi, penurunan harga minyak dunia dan kadar pertukaran wang asing yang tidak menentu.

Di tengah-tengah ketidaktentuan global yang disebutkan di atas, ditambahkan lagi dengan kelemahan Ringgit Malaysia berbanding Dollar Amerika, dan pembelian berhati-hati dari pengguna, prestasi Kumpulan Atlan kekal mencabar untuk tahun kewangan berakhir 29 Februari 2016. Dengan itu, Kumpulan akan terus memperhebatkan lagi usaha untuk memperbaiki keberkesanan operasi dan meningkatkan kualiti perkhidmatan, memperkembangkan tawaran produk dan meneroka peluang-peluang di tiga segmen perniagaannya iaitu Bebas Cukai, Otomotif dan Hartanah dan Hospitaliti.

DIVIDEN

Dengan sukacitanya, Atlan telah membayar dividen berjumlah RM88.8 juta yang mewakili RM0.35 sesaham biasa, sebagai penghargaan kepada pemegang saham di atas sokongan yang berterusan.


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penyata pengerusi(cont’d.)

PENGHARGAAN

Bagi pihak Ahli Lembaga Pengarah, saya ingin menyampaikan penghargaan kepada semua agensi kerajaan yang telah memberi bimbingan dan nasihat yang berterusan.

Saya ingin mengucapkan terima kasih kepada para pemegang saham, pihak bank, para pelanggan, pembekal dan rakan kongsi perniagaan di atas sokongan yang tak terhingga, nasihat dan bimbingan. Saya ingin mengucapkan penghargaan kepada rakan Pengarah di atas nasihat dan tunjuk ajar, dan kepada pihak pengurusan dan kakitangan Kumpulan Atlan di atas sumbangan, komitmen, kerja keras dan dedikasi mereka.

Saya dengan rendah diri berjanji untuk sedia berkhidmat meneruskan komitmen dan usaha saya kepada Kumpulan.

Terima kasih.Wasallamu Alaikum wa Rahmatullahi wa Barakatuh

ADAM SANI BIN ABDULLAHPengerusi

17 Jun 2015

董事主席献词

我很荣幸代表董事会，提呈益联控股有限公司（“益联”）截至二零一五年二月二十八日（“2015财政年”）的年度报告和财务报表。

虽然身处在充满挑战的环境下，在2015财政年度里，益联及其子公司（“益联集团”）仍然保持弹性及竞争力，并取得七亿三千七十万令吉的营业额，相较于截至二零一四年二月二十八日（“2014财政年）的七亿五千八百四十万令吉营业额。2015财政年的税前利润（不包含停业单位）为八千两百二十万令吉，相较于截至二零一四年二月二十八日（“2014财政年）的一亿三千九百三十万令吉低了四十一巴仙，其主要因素乃是2014财政年里通过脱售资产而获利四千五百四十万令吉。

展望

纵观环球趋势，虽然美国的经济保持正面的增长，其他主要经济体（如日本、中东、部分欧洲区）却呈现缓慢的增长，使得全球经济依然脆弱。2015年全球经济适度复苏的展望仍然受到原料和原产品不稳定、全球原油价格下跌以及外汇兑换率未可预测的影响。

就如以上所说的不稳定因素，伴随着马币兑换美元的疲软和大众的谨慎消费，益联集团在来临一年截至二零一六年二月二十九日(“2016财政年”）的整体表现仍然充满着挑战。益联集团将继续全力以赴地在三个核心业务，即免税商店、汽车零件、办公楼和酒店方面加强营运效率和服务素质，并提高产品品质和探讨商机。

股息

我很高兴的通知益联已经在2015财政年支付了八千八百八十万令吉的股息，即每普通股三十五仙予我们的忠实股东，以报答股东们一直以来的支持。


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董事主席献词(继续)

致谢

我谨此代表董事会向相关的政府部门所给予的宝贵质询和协助，致予最深切的谢意。

我要感谢所有股东，银行家，客户，供应商和生意伙伴所给予的支持，协助和指导。借此我向董事会的同伴所给与的协助和指导以及管理人员和员工的贡献，辛勤工作和奉献精神，致上万二分的谢意。

而我，作为你的谦恭的仆人，承诺持续全力以赴为益联集团尽力。

谢谢。

ADAM SANI BIN ABDULLAH董事主席

2015年六月十七日


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The Board of Directors (“Board”) of Atlan Holdings Bhd. recognises the importance of adopting good corporate governance throughout the Group as a fundamental part of discharging its responsibilities to protect and enhance shareholders’ value and the financial performance of the Group. The Group will continue to endeavour to apply the recommendations of the Malaysian Code on Corporate Governance 2012 (“the Code”) in its effort to observe high standards of transparency, accountability and integrity.

This statement outlines the Group’s main corporate governance practices and policies in alignment with the recommended principles of the Code as below: -

• Establish clear roles and responsibilities• Strengthen composition• Reinforce independence• Foster commitment• Uphold integrity in financial reporting• Recognise and manage risks• Ensure timely and high quality disclosure• Strengthen relationship between company and shareholders

The following paragraphs describe how the Group has applied the Principles of the Code and how the Board has complied with the Recommendations supporting the Principles during the financial year ended 28 February 2015.

PrinciPle 1 - establish clear roles and resPonsibilities

1.1 Board should establish clear functions reserved for the Board and those delegated to Management

An effective Board is the one that made up of a combination of executive directors with intimate knowledge of the business and non-executive directors from diversified industry/business background to bring broad business and commercial experience to the Group. The Board has the overall responsibility for Corporate Governance, establishing goals, strategies and direction, reviewing the Group’s performance and critical business issues and ultimately the enhancement of long term shareholders’ value. It monitors and delegates the implementation of the strategic direction to the management.

The Board has a formal schedule of matters reserved for its decision which include, amongst others, the following:-

i) Reviewing and adopting strategic plans for the Company which will enhance the future growth of the Company;

ii) Overseeing the conduct of the Company’s businesses to evaluate whether the businesses are being properly managed;

iii) Identifying principal risks of the business and ensuring the implementation of appropriate systems to manage these risks;

iv) Reviewing the adequacy and integrity of the Company’s internal control systems and management information systems;

v) To ensure all candidates appointed to senior management positions are of sufficient calibre and satisfied that there are programmes in place to provide for the orderly succession of senior management; and

vi) Overseeing the development and implementation of a shareholder communications policy for the Company.

As part of its efforts to ensure the effective discharge of its duties, the Board has delegated certain functions to certain Committees with each operating within its clearly defined terms of reference. The Chairman of each Committee will report to the Board on the outcome of the Committee’s meetings which also include the key issues deliberated at the Committee’s meetings. Minutes of the Committees’ meetings are a permanent agenda of the Board’s meeting and these are circulated at the Board’s meeting for notation.

STATEmENT ON COrpOrATe GOverNANCe


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1.2 Board should establish clear roles and responsibilities in discharging its fiduciary and leadership functions

There is a clear division of responsibility between the Non-Executive Chairman and Executive Director to ensure there is a balance of power and authority. The Chairman is primarily responsible for orderly conduct and working of the Board whilst the Executive Director is responsible for the day-to-day business operations and implementation of Board policies and decisions.

The Board placed great importance on the balance of its independent Directors where they serve as an essential source of impartial and professional guidance to protect the interest of the shareholders. The Independent Non-Executive directors are professionals of high calibre and credibility who play a pivotal role in corporate accountability by contributing their knowledge, advice and experience towards making independent judgment on issues of strategies, performance, resources and standards of conducts. Any material and important proposals that will significantly affect the policies, strategies, directions and assets of the Group will be subject to approval by the Board. None of the members of the Board has unfettered powers of decision.

1.3 Formalise ethical standards through a code of conduct and ensure its compliance

Employees are introduced to the ethical corporate culture of the Group during employee induction and thereafter, employees are constantly monitored to ensure the culture is upheld in their dealings within the Group and also in their association with our customers, distributors, suppliers, governmental and regulatory authorities and other business associates. Any employee may report directly to the Chairman of any ethical misconduct discover within the Group.

The Board of Directors conducted themselves in an ethical manner while executing their duties and functions, and complied with the Company’s Code of Ethics recommended by the Companies Commission of Malaysia.

In addition to the Company Directors’ Code of Ethics established by the Companies Commission of Malaysia, the Group also gives emphasis on the behavioral ethics and conduct that sets out the sound principles and standards of good practice within the Group’s business landscape, which are expected to be observed by the Directors and employees. Both Directors and employees are required to uphold the highest integrity in discharging their duties and in dealings with various stakeholders such as shareholders, customers, fellow employees and regulators.

1.4 Ensure the Company’s strategy promote sustainability

The Company focuses on key areas of environment conservation and social contribution with the aim to promote sustainable development. A report on sustainability activities, demonstrating the Company’s commitment to the global environmental, social, governance and sustainability agenda, appears in the Corporate Social Responsibility Statement of this Annual Report.

1.5 Procedures to allow the Directors access to information and advice

All directors have full and timely access to information through the Board papers distributed in a timely manner prior to the Board meetings. The Board papers provide, among others, periodic financial information, annual budget, operational and corporate issues, investment proposals and management proposals that require Board’s approval. Senior management staff may be invited to attend Board meetings to provide the Board detailed explanations and clarifications on certain matters that are tabled to the Board. The Directors may also interact directly with the Management, or request further explanation, information or updates on any aspect of the Company’s operations or business concerns from them. In this way the Board has full access to all information on the Company’s affairs to enable the proper discharge of duties.

The Board may seek independent professional advice at the Company’s expense on specific issues to enable it to discharge its duties in relation to the matters being deliberated. Individual Directors may also obtain independent professional or other advice in furtherance of their duties, subject to the approval of the Chairman or the Board, depending on the quantum of the fees involved.

Statement on Corporate Governance (cont’d.)


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1.6 Ensure Board is supported by suitably qualified and competent company secretary

The Board is satisfied with the performance and support rendered by the Company Secretaries to the Board in the discharge of its functions. The Company Secretaries play an advisory role to the Board in relation to the Company’s constitution, Board’s policies and procedures and compliance with the relevant regulatory requirements, codes or guidance and legislations. The Board is supported by suitably qualified and competent company secretaries who are members of a professional body.

The Board has ready and unrestricted access to the advice and services of the Company Secretaries, who are considered capable of carrying out the duties to which the post entails.

1.7 Formalise, periodically review and make public the Board Charter

The Board understands the importance of the roles and responsibilities between the Board and Management. As part of the good corporate governance process, the Board has documented these roles and responsibilities in the Board Charter to ensure accountability of both parties and also to provide reference for directors in relation to the Board’s role, powers, duties and functions. The Board will continuously review the Board Charter to ensure it remains consistent with the Board’s objectives and responsibilities, and all the relevant standards of corporate governance from time to time.

PrinciPle 2: strengthen comPosition

2.1 Establish a Nominating Committee which should comprise exclusively non-executive directors, a majority of whom must be independent

The Nomination Committee of the Company comprises exclusively of non-executive directors, a majority of whom must be independent directors. Its composition is as follows:-

Position name directorship

Chairman Dato’ Sri Adam Sani Bin Abdullah Non-Executive Director

Member Tengku Abdul Rahman Ibni Sultan Haji Ahmad Shah Al-Mustain Billah, DK II, SSAP

Independent and Non-Executive Director

Member Dato’ Shagul Hamid Bin K.R. Williams @ Abdullah Independent and Non-Executive Director

The Nomination Committee had convened a meeting during the financial year 2015.

2.2 Nominating Committee should develop, maintain and review criteria for recruitment process and annual assessment of directors

The Nomination Committee is empowered to bring to the Board, recommendations as to the appointment of any new director or to fill board vacancies as and when they arise. In making its recommendation, the Nomination Committee will consider the required mix of skills, knowledge, expertise, experience and other qualities, including core competencies which Directors of the Company should bring to the Board.



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The duties and functions of the Nomination Committee are as follows: -

• To recommend to the Board, candidates for all directorships to be filled by the shareholders or the Board. In making its recommendation, the Committee should consider the candidate's: -i) Skills, knowledge, expertise and experience;ii) Competencies, commitment, contribution and performance;iii) Professionalism;iv) Integrity; andv) In the case of the candidates for the position of Independent Non-Executive Directors, the

Nomination Committee should also evaluate the candidate’s ability to discharge such responsibilities/ functions as expected from Independent Non-Executive Directors

• To consider, in making recommendations, candidates for directorships proposed within the bounds of practicability, by any senior executive or any director or shareholder.

• To ensure the Board composition meets the needs of the Company• To develop, maintain and review the criteria to be used in the recruitment process and annual

assessment of directors• To recommend to the Board, directors to fill the seats on Board committees • To review its required mix of skills and experience and other qualities, including core

competencies which Directors of the Company should bring to the Board• To annually assess the effectiveness of the Board as a whole and assess the contribution of

each individual director, including Independent Non-Executive Directors, as well as the chief executive officer

• To review the re-appointment and re-election of Directors of the Company• To facilitate Board induction and training programmes

The Nomination Committee also assesses the effectiveness of the Board as a whole and the contribution of each individual director including Independent Non-Executive Director. All assessments and evaluations carried out by the Nomination Committee in discharging its functions have been well documented.

During the financial year 2015, the Nomination Committee conducted an annual assessment of its Directors and the effectiveness of the Board of Directors as a whole. It also conducted an assessment of the Directors who are subject to retirement at the forthcoming annual general meeting in accordance with the provisions of the Articles of Association of the Company and the relevant provisions of the Companies Act, 1965.

2.3 Board should establish formal and transparent remuneration policies and procedures to attract and retain directors

The Remuneration Committee of the Company comprises a majority of Non-Executive Directors and

its composition is as follows:


Chairman Dato’ Sri Adam Sani Bin Abdullah Non-Executive Director

Member Dato’ Shagul Hamid Bin K.R. Williams @ Abdullah Independent and Non-Executive Director

Member Jeneral Tan Sri Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad (B)

Independent and Non-Executive Director

Member Dato’ Sri Robin Tan Yeong Ching Non-Independent and Non-Executive Director

The Remuneration Committee is primarily responsible for recommending the policy and framework of directors’ remuneration, including the terms and remuneration of the Executive Directors, to the Board in order to align with the business strategy and long term objectives of the Company. The remuneration of directors is determined at levels which enable the Company to attract and retain Directors with the relevant experience and expertise to govern the Group effectively.



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During the financial year 2015, the Remuneration Committee had performed its duty to assess annually the remuneration package of its Executive Director and proposed the remuneration of Executive Director to the Board for consideration.

The remuneration of Non-Executive Directors is determined by the Board which comprises the following:-

Directors’ Fees These fees are payable to the Non-Executive Directors and are recommended by the Board for the approval of the shareholders at each annual general meeting.

Meeting Allowances These allowances are payable to the Non-Executive Directors for attendance of the Board and Committee meetings. The meeting allowance is determined by the Board.

A summary of the remuneration of the Directors in the Company for services rendered to the Group for the financial year ended 28 February 2015 is analysed as follows:-

i. Directors’ Remuneration

in rm’000 allowances and Fees salaries total

Executive Directors- Company – – –- Subsidiaries – 722 722

Non-Executive Directors- Company 253 – 253- Subsidiaries 100 1,367 1,467

353 2,089 2,442

ii. Range of Remuneration

Number of Directors Executive Non-Executive

RM50,000 and below – 7RM100,000 to RM150,000 – 1RM700,001 to RM750,000 1 –RM1,350,001 to RM1,400,000 – 1

PrinciPle 3 – reinForce indePendence

3.1 Board should undertake an assessment of its independent directors annually

The Board through the Nomination Committee assessed the Independent Directors on an annual basis, with a view to ensure the Independent Directors bring independent and objective judgment to the Board and this mitigates arising from conflict of interest or undue influence from interested parties. Where there is a likely conflict of interest position, the Board would take appropriate action to rectify the situation. Should any director have an interest in any matter under deliberation, he is required to disclose his interest and abstain from participating discussions on the matter.

The Board also received confirmation in writing from the Independent Directors of their independence. The Board is satisfied with the assessment of the Independent Directors.



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3.2 Tenure of Independent Director should not exceed cumulative term of 9 years. Upon completion of tenure, Independent Director can continue serving but as Non-Executive Director

One of the recommendation of the Code states that the tenure of an Independent Director should be capped at 9 years, either be a consecutive service of nine (9) years or a cumulative service of nine years with intervals. Upon completion of the nine years tenure in office, an Independent Director may continue to serve on the company subject to the re-designation as a Non-Independent Director.

Currently, the longest serving Independent Directors are Tengku Abdul Rahman Ibni Sultan Haji Ahmad Shah Al-Mustain Billah, DKII.SSAP and Dato’ Shagul Hamid Bin K.R. Williams @ Abdullah who have served the Board for more than nine years.

Both the Nomination Committee and the Board have assessed the independence of Tengku Abdul Rahman Ibni Sultan Haji Ahmad Shah Al-Mustain Billah, DKII.SSAP and Dato’ Shagul Hamid Bin K.R. Williams @ Abdullah and are satisfied with the skills, contribution and independent judgment that the said Independent Directors bring to the Board and was of the view that the said Independent Directors remain objective and independent in expressing their views and in participating in deliberations and decision making of the Board and Board Committees. The length of their service on the Board does not in any way interfere with their exercise of independent judgment and ability to act in the best interests of the Company.

In line with the Recommendation 3.3 of the Code, the Company will be seeking its shareholders’ approval at this forthcoming Annual General Meeting to retain Tengku Abdul Rahman Ibni Sultan Haji Ahmad Shah Al-Mustain Billah, DKII.SSAP and Dato’ Shagul Hamid Bin K.R. Williams @ Abdullah as Independent Directors of the Company.

3.3 Shareholders’ Approval for Re-appointment as Independent Non-Executive Director after a Tenure of Nine Years

This was explained in the foregoing section.

3.4 Separation of Positions of the Chairman and Executive Officer

There is a clear division of roles and responsibilities between the Chairman (non-executive) and Executive Director. The Chairman holds a non-executive position and is primarily responsible for the leadership of the Board and ensures effectiveness of the Board matters. The Executive Director oversees the business operations of the Group and the implementation of the Board’s decisions and policies. The distinct and separate role of the Chairman and Executive Director, with a clear division of responsibilities, ensure a balance of power and authority, such that no one individual has unfettered powers of decision-making.

The Independent Non-Executive Directors of the Company are independent of management and

free from any business relationship which could materially interfere with the exercise of their judgment. They provide guidance, unbiased, fully balanced and independent views, advice and judgment to many aspects of the Group’s strategy so as to safeguard the interests of minority shareholders and to ensure that the highest standards of conduct and integrity were maintained by the Group.

3.5 The Board must comprise majority Independent Directors if the Chairman is not an Independent Director

The Board is mindful on the recommendation of the Code that the Board must comprise a majority of Independent Directors where the Chairman of the Board is not an Independent Director. However, the Board has assessed the situation and is satisfied with the present Board composition which comprised of sufficient Independent Directors of the Board with wide boardroom experience and expertise to provide the necessary check and balance.

The Board currently comprises of four (4) Non-Independent Non-Executive Directors, an Executive Director and five (5) Independent Non-Executive Directors. The Board has complied with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements”) that at least 1/3 of the Board are Independent Directors.



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The Directors collectively, with their different background and specialization, bring with them a diverse wealth of experience and expertise in areas such as business, finance, legal, engineering, regulatory and operations which is relevant to the Group. A brief profile of each individual Directors are set out in this annual report.

The Board is satisfied that the Independent Directors represent the interest of public shareholders in the Company and En. Mohd Sharif Bin Hj Yusof is the Senior Independent Non-Executive Director to whom concerns may be conveyed.

PrinciPle 4: Foster commitment

4.1 Board should set expectations on time commitment for its members and protocols for accepting new directorships

The Board meets at least quarterly, to consider all matters relating to the overall control, business performance and strategy of the Company. Additional meeting will be called when and if necessary. The relevant reports and Board Papers are distributed to all Directors in advance of the Board Meeting to allow the Directors sufficient time to peruse for effective discussion and decision making during the meetings. All pertinent issues discussed at the meetings in arriving at decisions and conclusions are properly recorded in the discharge of the Board’s duties and responsibilities.

The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles and responsibilities as Directors of the Company. For the financial year ended 28 February 2015, the Board held six (6) meetings. The attendance record of the Directors for the financial year ended 28 February 2015 was satisfactory. This is evidenced by the attendance record of the Directors at the Board meetings as set out in the below table:-

directors attendance

1. Dato’ Sri Adam Sani Bin Abdullah 6/62. Tengku Abdul Rahman Ibni Sultan Haji Ahmad Shah Al-Mustain Billah, DK II, SSAP 5/63. Dato’ Shagul Hamid Bin K.R. Williams @ Abdullah 6/64. Jeneral Tan Sri Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad (B) 6/65. Dato’ Woo Hon Kong 6/66. Mohd Sharif Bin Hj Yusof 6/67. Ong Bok Siong 6/68. Lee Sze Siang 6/69. Dato’ Sri Robin Tan Yeong Ching 5/610. Tan Thiam Chai 6/6

All the Directors have complied with the minimum 50% attendance requirement in respect of Board Meeting as stipulated in the Listing Requirements. In the intervals between Board Meetings, for any matters requiring Board’s decisions, the Board’s approvals are obtained through circular resolutions. The resolutions passed by way of such circular resolutions are then noted at the next Board Meeting.

4.2 Board should ensure members have access to appropriate continuing education programme

The Directors are mindful that they should receive appropriate continuous training to further enhance their skills and knowledge. Accordingly, the Company organises trainings at least once every two (2) years for the Board to ensure they are kept up-to-date on relevant developments.



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Some of the seminars and briefings attended by the directors during the financial year to broaden their perspectives and to keep abreast with the changes on the guidelines issued by the relevant authorities as well as the latest developments in the market place were as follows:-

• Sustainability - Building a better tomorrow• Construction Insurance• Additional preliminaries – how to evaluate them• Driving Infrastructure Sustainability in 11th Malaysia Plan by The Chartered Institute of Building

(“CIOB”)• Forbes Asia Forum – The Next Tycoons – A Generation Emerges • Customised Advocacy Session For Directors by Bursa Malaysia Securities Berhad• Government Intervention in Business, Some Public Policy Issues by Bursatra Sdn Bhd• The Capital Market – Marketplace Huddle by Bursa Malaysia Securities Berhad• Appointed as ACCA Approved Employer – Trainee Development Gold• Related Party Transaction Reporting and Disclosure • Annual Budget & Recent Developments Seminar 2015 – A New Tax and Increased Compliance

Obligations: Are You Ready• Nominating & Remuneration Committees – what every director should know by Bursatra Sdn

Bhd• Limited Liability Partnership Act 2012 by MAICSA

The Company Secretaries circulated the relevant guidelines on statutory and regulatory requirements from time to time to the Board for reference. The External Auditors also briefed the Board members on any changes to the Malaysian Financial Reporting Standards that affect the Company’s financial statements during the year.

During the financial year 2015, the Directors were updated on the amendments to the Listing Requirements of Bursa Securities.

PrinciPle 5: UPhold integrity in Financial rePorting

5.1 Audit Committee should ensure financial statements comply with applicable financial reporting standards

In presenting the annual audited financial statements and quarterly announcements of results to shareholders, the Board take responsibility to present a balanced and meaningful assessment of the Group’s position and prospect and to ensure that the financial statements are drawn up in accordance with the provisions of Companies Act, 1965 and applicable accounting standards in Malaysia. The Audit and Risk Management Committee assists the Board in scrutinizing information for disclosure to ensure accuracy, adequacy and completeness. The Responsibility Statement by the Directors in relation to the preparation of the financial statements is also set out in this Annual Report.

The Audit and Risk Management Committee normally meets with the Group’s external auditors to review the scope and adequacy of the audit process, the annual financial statements and their audit findings. In line with the good corporate governance practices, the Audit and Risk Management Committee also meets with the external auditors at least twice a year. These meetings are held without the presence of the Executive Director and the Management. The Audit and Risk Management Committee also meets with the external auditors additionally whenever it deems necessary.

5.2 Audit Committee should have policies and procedures to assess suitability and independence of external auditors

On an annual basis, the Audit and Risk Management Committee would review and monitor the suitability and independence of the external auditors. The Audit and Risk Management Committee also reviewed the provision of non-audit services by the external auditors and noted that the total amount of fees paid for non-audit services rendered by the Group external auditors for the financial year 2015 were RM253,000 only.



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The Audit and Risk Management Committee had obtained a written assurance from the external auditors confirming that they were, and had been, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements.

The Audit and Risk Management Committee is satisfied with the competence and independence of the external auditors and had recommended the re-appointment of the external auditors for shareholders’ consideration at the annual general meeting.

PrinciPle 6: recognise and manage risks

6.1 Board should establish a sound framework to manage risks

The Board acknowledges that risk management is an integral part of the Group business operations. It is an ongoing process which involves different levels of managements to identify, evaluate, monitor and manage and mitigate the risks that may affect the achievement of its business and corporate objectives.

The management is responsible for creating risk awareness culture and to build the necessary environment for effective risk management. Significant issues related to internal controls and risk management are highlighted to the Board. If deemed necessary, assistance from external parties shall be consulted on issues in which the Board needs to seek an opinion.

The Company has established the Risk Management Team which is under the purview of the Audit and Risk Management Committee to oversee the risk management of the Group. The Risk Management Framework was adopted by the Directors. The Board through the Audit and Risk Management Committee would obtain report from the Internal Auditors on the periodic check on the internal control system. The details of the Company’s internal control system and framework are set out in the Statement on Risk Management and Internal Control on pages 34 to 35 of this Annual Report.

The Audit and Risk Management Committee’s Terms of Reference has been revised on 26 April 2013 which is entrusted to provide advice and assistance to the Board in fulfilling its statutory and fiduciary responsibilities relating to the Company’s internal and external audit functions, risk management and compliance systems and practice, financial statements, accounting and control systems and matters that may significantly impact the financial condition or affairs of the business. The Audit and Risk Management Committee’s role and functions are set out on pages 29 to 33 of this Annual Report.

6.2 Internal Audit Function

It is responsibility of the Board to maintain sound systems of internal controls to safeguard shareholders’ investment.

As the systems of internal controls are designed to mitigate rather than eliminate the likelihood of errors or fraud, these systems can only provide a reasonable assurance against material misstatement or loss.

In order to maintain sound systems of internal controls, the Board has established an Audit & Risk Assessment (“ARA”) department, which is completely independent from all operations to monitor and review the effectiveness of the internal controls within the organisation. The scope of work covered by the internal audit function during the financial year set out on pages 29 to 33 of this Annual Report.

The internal auditors adopt a risk-based approach towards the planning and conduct of audits, which are consistent with the Group’s framework in designing, implementing and monitoring its internal control system.

The internal audit function is guided by Internal Audit Charter which was approved by the Audit and Risk Management Committee. Audit engagement is focused on areas of priority according to their risk assessment and in accordance with the annual audit plans approved by the Audit and Risk Management Committee.



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The Head of the ARA department attended the meetings and reported directly to the Audit and Risk Management Committee on the annual internal audit plan and internal audit reports on the audit conducted in accordance with the annual audit plan.

During the financial year, the ARA department has issued internal audit reports to Audit and Risk Management Committee and management in regards to any major audit finding on the weaknesses in the system and controls of the operation. Areas for improvement were highlighted and the implementation of recommendations was monitored. None of the internal control weaknesses have resulted in any material losses, contingencies or uncertainties that would require disclosure in the Annual Report.

The total costs of the internal audit function in respect of the financial year ended 28 February 2015 was approximately RM1,300,000.

PrinciPle 7: ensUre timely and high qUality disclosUre

7.1 Corporate Disclosure Policies

The Board is aware of the need to establish corporate disclosure policies and procedures to enable comprehensive, accurate and timely disclosures relating to the Company to the regulators, shareholders and stakeholders. The Company has identified persons authorized and responsible to approve and disclose material information to shareholders and stakeholders to ensure compliance with the Listing Requirements. The Board has delegated the authority to the Executive Director to approve all announcements for release to Bursa Securities. The Executive Director works closely with the Board, the senior management and the company secretaries who are privy to the information to maintain strict confidentiality of the information.

7.2 Leverage on Information Technology for Effective Dissemination of Information

The Company continues to recognise the importance of transparency and accountability to its shareholders and investors. The Board always ensures that the shareholders are informed of the financial performance and major corporate activities of the Company. Such information is communicated to shareholders and investors through various disclosures and announcements to Bursa Malaysia Securities Berhad, including the quarterly financial results, annual reports and where appropriate, circulars and press releases.

Apart from the mandatory announcements through Bursa Malaysia Securities Berhad, the Company also maintains a website www.atlan.com.my to which shareholders and investors can have access to information on the operations and business activities of the Group.

Investor relations activities such as meetings with fund managers and analysts and interviews by the press are held at appropriate time to explain the Group’s strategy, performance and major developments.

PrinciPle 8: strengthen relationshiP between comPany and shareholders

8.1 Encourage Shareholder Participation at General Meetings

The Company provides information to the shareholders with regard to, amongst others, details of the Annual General Meeting, their entitlement to attend the Annual General Meeting, the right to appoint a proxy and also the qualifications of a proxy.

To further promote participation of members through proxy(ies), which is in line with the insertion of Paragraph 7.21 of the Listing Requirements, the Company had amended its Articles of Association to include explicitly the right of proxies to speak at general meetings, to allow a member who is an exempt authorized nominee to appoint multiple proxies for each omnibus account it holds and expressly disallow any restriction on proxy’s qualification.



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8.2 Encourage Poll Voting

The Chairman of the meeting would remind the shareholders, proxies and corporate representatives on their rights to demand for a poll in accordance with the provisions of the Articles of Association of the Company for any resolutions. The voting process at the annual general meeting shall be by way of show of hands unless a poll is demanded. The Chairman may demand for a poll for any substantive resolutions put forward for voting at the shareholders’ meetings, if so required. The Company’s share registrar’s system is well equipped for any poll voting should the circumstances arise.

8.3 Effective Communication and Proactive Engagements

In maintaining the commitment to effective communication with shareholders, the Group adopts the practice of comprehensive, timely and continuing disclosures of information to its shareholders as well as to the general investing public. The practice of disclosure of information is not just established to comply with the requirements of the Listing Requirements. It also adopts the recommendations of the Code with regard to strengthening engagement and communication with shareholders. Where possible and applicable, the Group also provides additional disclosure of information on a voluntary basis. The Group believes that consistently maintaining a high level of disclosure and extensive communication with its shareholders is vital to shareholders and investors to make informed investment decisions.

The Annual Report is the main channel of communication between the Company and its stakeholders. The Annual Report communicates comprehensive information of the financial results and activities undertaken by the Group. As a listed issuer, the contents and disclosure requirements of the annual report are also governed by the Listing Requirements.

Another key avenue of communication with its shareholders is the Company’s Annual General Meeting, which provides a useful forum for shareholders to engage directly with the Company’s Directors. At each annual general meeting, the Directors of the Company would be present at the meetings to answer any questions that the shareholders may ask. The Chairman of the meeting provided time for the shareholders to ask questions for each agenda in the notice of the annual general meeting. The external auditors were also present at the annual general meeting to answer any questions that the shareholders may ask. The shareholders were also able to meet with the Directors after the meeting while they mingled with the shareholders, proxies and corporate representatives.

comPliance statement

The Board is satisfied that in financial year 2015, save for the above relevant explanations, the Company is in compliance with principles and recommendations of the Code.

This statement is made in accordance with the resolution of the Board dated 17 June 2015.



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AddiTiONAL COmpLIANCe INfOrmATION

The information set out below is disclosed in compliance with the Listing Requirements of Bursa Malaysia Securities Berhad:-

1. Utilisation of Proceeds

During the financial year ended 28 February 2015, the Company did not raise any funds through any corporate proposal/shareholders’ mandate under Section 132D of the Companies Act, 1965.

2. share buy-back

There was no share buy-back made by the Company during the financial year.

3. options or convertible securities

No options, warrant or convertible securities were exercised during the financial year.

4. depository receipt Programme

The Company did not sponsor any depository receipt programme during the financial year.

5. sanctions and/or Penalties

There were no sanctions or penalties imposed on the Company and its subsidiaries, directors or management by the relevant regulatory bodies during the financial year.

6. non-audit Fees

Non-audit fees paid to external auditors by the Company and by the Group for the financial year ended 28 February 2015 amounted to RM30,000 and RM253,000 respectively.

7. Variation in results

There were no material variations between the audited results and the unaudited results for the year ended 28 February 2015 as previously announced.

There was no profit forecast announced during the financial year.

8. Profit guarantee

There was no profit guarantee given by the Company during the financial year.

9. material contracts involving directors’ and major shareholders’ interests

There were no material contracts entered into by the Company and its subsidiaries involving directors’ and major shareholders’ interests, either still subsisting at the end of the financial year or entered into since the previous financial year end.

10. recurrent related party transactions of a revenue nature

There were no recurrent related party transactions of a revenue nature entered into during the financial year ended 28 February 2015.


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AUdiT ANd RiSk mANAGemeNT COmmITTee repOrT

The Audit and Risk Management Committee comprises the following members:-


Chairman Mohd Sharif Bin Hj Yusof Senior Independent Non-Executive Director

Member Dato’ Shagul Hamid Bin K.R Independent Non-Executive Director Williams @ Abdullah

Member Jeneral Tan Sri Dato’ Sri Abdullah Bin Independent Non-Executive Director Ahmad @ Dollah Bin Amad (B)

Member Tan Thiam Chai Non-Independent Non-Executive Director

attendance

The Audit and Risk Management Committee met six (6) times during the financial year ended 28 February 2015. Details of the attendance of the Committee members holding office during the financial year are as follows:-

members attendance

Mohd Sharif Bin Hj Yusof 6/6Dato’ Shagul Hamid Bin K.R. Williams @ Abdullah 6/6Jeneral Tan Sri Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad (B) 5/6Tan Thiam Chai 6/6

sUmmary oF the terms oF reFerence oF the aUdit and risk management committee

1. Primary Purposes

1.1 Assist the Board in discharging its statutory duties and responsibilities relating to accounting and reporting practices of the Company and each of its subsidiaries.

1.2 Evaluate the quality of the audits conducted by the internal and external auditors.

1.3 Provide reasonable assurance that the financial information presented by management is relevant, reliable and timely.

1.4 Oversee compliance with laws and regulation and observance of a proper code of conduct.

1.5 Determine the quality, adequacy and effectiveness of the Company’s control environment.

1.6 Determine and evaluate the risk management process.

2. composition

2.1 The Committee shall be appointed by the Board from amongst its directors which fulfill the following requirements:-

(i) The Audit and Risk Management Committee shall be no fewer than three (3) members;

(ii) All the Committee members must be non-executive directors, with a majority of members must be independent directors. No alternate director is appointed as a member of the Committee; and

The definition of “independent directors” shall have the meaning given in Chapter 1 of the Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements”).


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(iii) At least one (1) member of the Audit and Risk Management Committee:-

(i) must be a member of the Malaysian Institute of Accountants (“MIA”); or

(ii) if he is not a member of MIA, he must have at least 3 years’ working experience; and

a) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act, 1967; or

b) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act, 1967; or

(iii) fulfils such other requirements as prescribed or approved by Bursa Securities.

2.2 The Chairman of the Audit and Risk Management Committee shall be appointed among the members of the Committee who shall be an independent director. In the absence of the Chairman of the Committee and/or an appointed deputy, the remaining Committee members present shall elect one of themselves to chair the Audit and Risk Management Committee meeting.

3. authority

The Committee shall in accordance with the procedure determined by the Board and at the expense of the Company:-

(i) have authority to investigate any matter within its terms of reference;(ii) have the resources which are required to perform its duties;(iii) have full and unrestricted access to any information pertaining to the Company and its

subsidiaries;(iv) have direct communication channels with the external auditors and person(s) carrying out

the internal audit function or activity;(v) be able to obtain independent professional or other advice and to secure the attendance of

outsiders with relevant experience and expertise if it considers necessary; and(vi) be able to convene meeting with the external and internal auditors or both and exclude the

directors and employees, whenever deemed necessary.

Where the Audit and Risk Management Committee is of the view that the matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the Listing Requirements, the Committee shall promptly report such matter to Bursa Malaysia Securities Berhad.

4. Functions and duties

The Board must ensure the Committee discharges the following functions, amongst others:-

4.1 To review the independence and objectivity of the external auditors and recommend for the appointment/re-appointment of the external auditors, the audit fee and any questions of resignation or dismissal and whether there is any reason (supported by grounds) to believe that the external auditors are not suitable for re-appointment.

4.2 To review with the external auditors: -

• their audit plans;• its evaluation of the systems of internal controls;• its audit reports;• the assistance given by the employees of the Company and its subsidiaries to the external

auditors; and• the external auditors’ management letter and the management’s response thereto.

Audit and Risk management Committee report(cont’d.)


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4.3 To establish policies governing the circumstances under which the contract in relation to the provision of non-audit services can be entered into by the Group with its external auditors and procedures that need to be adhered.

4.4 To do the following in relation to the internal audit functions:

• ensure the internal audit function is independent of the activities it audits and the head of internal audit reports directly to the Audit and Risk Management Committee. The head of internal audit will be responsible for the regular review and/or appraisal of the effectiveness of the risk management, internal control and governance processes within the Company and its subsidiaries

• review the adequacy of the scope, functions competency and resources of the internal audit functions and having all the necessary authority to carry out its work

• review the internal audit programme and the results of the internal audit process or investigation undertaken

• to consider the major findings and whether or not appropriate action is taken on the recommendations of the internal audit function and management’s response thereto

• review any appraisal or assessment of the performance of members of the internal audit function

• to consider the appointment or resignation of senior staff members of the internal audit function, take cognisance of resignation of internal audit staff members (for in-house internal audit function) or the internal audit service provider (for out-sourced internal audit function) and provide the resigning staff member or the internal audit service provider an opportunity to submit his/her reasons for resigning, if necessary

• to support, as deem necessary, the internal audit activities

4.5 To review the quarterly results and year end financial statements, prior to the approval by the Board of Directors, focusing particularly on:-

• any changes in or implementation of major accounting policies and practices• significant adjustments arising from the audit and any other significant and unusual

events• compliance with accounting standards and other legal requirements• any related party transaction and conflict of interest situation that may arise within the

Company or Group including any transaction, procedure or course of conduct that raises questions of the management’s integrity

4.6 To review the adequacy and effectiveness of risk management and internal control systems instituted within the Group.

4.7 To undertake the following risk management activities:-

• To determine the overall risk management processes• To establish effectiveness of risk management proceses• To ensure that risk management processes are integrated into all core business processes• To establish risk reporting mechanism• To act as steering committee for the group wide risk management programme

4.8 To consider and examine any other matters as defined by the Board of Directors from time to time.



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5. meetings

5.1 To form a quorum in respect of a meeting of the Committee, the majority of members present must be independent directors.

5.2 The Committee shall meet at least four (4) times a year.

5.3 The external auditors may request a meeting if they consider that one is necessary and the Chairman of the Committee shall convene a meeting of the Committee to consider any matters the external auditors believe should be brought to the attention of the Directors or shareholders.

5.4 The external auditors have the rights to appear and be heard at any meeting of the Committee.

5.5 The Committee may invite any Board member or any member of the senior management or any relevant employee within the Company or the Group whom the Committee thinks fit to attend its meetings to assist in resolving and clarifying matters raised in audit reports.

5.6 The internal auditors shall be in attendance at meetings of the Committee to present and discuss the audit reports of findings and the recommendations relating thereto and to follow up on decisions made at these meetings.

6. secretary

6.1 The Company Secretary shall be the Secretary of Audit and Risk Management Committee.

6.2 The Secretary shall cause minutes to be duly entered in the books for the purpose of all resolutions and proceeding of all meetings of the Audit and Risk Management Committee. Such minutes shall be signed by the Chairman of the meeting at which the proceedings were held or by the Chairman of the next succeeding meeting.

6.3 The Secretary shall circulate the minutes of meeting of the Committee to all members of the Board.

7. Function in relation to risk management

7.1 To review the adequacy, integrity and effectiveness of the risk management process; and

7.2 To report to the Board on any pertinent risk issues.



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sUmmary oF actiVities oF the aUdit and risk management committee

The activities of the Audit and Risk Management Committee for the financial year ended 28 February 2015 are as follows: -

• reviewed and discussed the re-appointment of the external auditors of the Company before tabling to the shareholders for approval at the Annual General Meeting.

• reviewed and discussed the external auditors’ nature and scope of the audit plan, system of internal control review, audit report and any significant audit findings encountered;

• reviewed and discussed the budget for the year;

• reviewed the quarterly and annual financial statements prior to recommending them to the Board for approval and ensure that it is prepared in accordance with the applicable approved accounting standards and the provisions of the Companies Act, 1965;

• reviewed any related party transactions that may arise within the Group or the Company;

• reviewed the adequacy of the scope, functions and resources of the internal audit function and the internal audit plan; and

• reviewed the scope of the internal audit programme, the internal audit findings, recommendations and corrective actions taken.

sUmmary oF actiVities oF the internal aUdit FUnction

The internal audit function is independent of the auditable areas in the organisation and reports to the Audit and Risk Management Committee. The responsibilities include reviewing the adequacy of the system of internal controls and evaluating the various financial and operational risks faced by the organisation.

The internal audit activities are specified in the annual audit plan, which is submitted to the Audit and Risk Management Committee for approval. Internal audit reports with findings and recommendations are forwarded to the Audit and Risk Management Committee for their review.

For the financial year under review, the total costs incurred by the Group for maintaining the internal audit functions are RM1,300,000.



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Preamble

Pursuant to paragraph 15.26(b) of the Bursa Malaysia Securities Berhad’s Listing Requirements, the Board is required to include in its Annual Report a statement on risk management and internal control of the Group. In making this statement on risk management and internal control, it is essential to address the Principles, Recommendation and Commentary in the Malaysian Code on Corporate Governance.

resPonsibility

The Board acknowledges its stewardship responsibility for the Group’s internal control and risk management system to safeguard shareholders’ investment and the Group’s assets as well as for reviewing its adequacy and integrity of the system.

However, it should be noted that such system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement loss and fraud. For the purpose of this statement, the associated company is not dealt with as part of the Group.

internal control systems

The embedded control system is designed to facilitate achievement of the Group’s business objectives. It comprises the following: -

• OrganisationalStructure

The organisational structure has well-defined lines of responsibility, delegation of authority, segregation of duties and information flow to support the Group in achieving its business objectives.

In addition, the committees made up predominantly of non-executive directors such as Audit and Risk Management, Nomination and Remuneration Committees with defined terms of reference and functions, provide the essential support to the Board.

• AuditandRiskManagementCommittee

The Audit and Risk Management Committee convenes regularly to meet its strategic business agenda, thus ensuring that the Board properly apprises and maintains effective supervision over the entire operations.

• ControlActivities

The Group continuously reviews and updates its policies, procedures and standards in accordance with changes in the operating environment.

• BudgetingandMonitoringProcesses

The Group has in place budgeting process for all operating units with periodical monitoring of performance so that major variances are followed-up and management action taken.

• ManagingandMonitoringofCapitalandRevenueExpenditure

The functional limits of authority for revenue and capital expenditure for all operating units serve to facilitate the approval process whilst keeping potential exposure in check.

Detailed justification and approval process for major projects and acquisitions are imposed to ensure congruence with Company’s strategic objectives.

STATEmENT ON rISk mANAGemeNT AND INTerNAL CONTrOL


35

• InformationandCommunicationControls

The Group’s computerized information systems are streamlined to ensure compliance with hardware and software regulations and guidelines for system integrity, effectiveness and efficiency.

• IndependentAuditing

Independent appraisals by internal and external auditors ensure ongoing compliance with policies, procedures, standards and legislations whilst assessing the effectiveness of the Group’s systems of financial, compliance and operational controls.

risk management

The Board acknowledges that risk management is an integral part of the Group business operations. It is an ongoing process which involves different levels of managements to identify, assess, evaluate, monitor and manage and mitigate the risks that may affect the achievement of its business and corporate objectives. Regular management and operational meetings are held to deliberate key risks and the appropriate mitigating controls. This ongoing risk management activities are undertaken at all major subsidiaries of the Group, as well as collectively at the Group level.

The management is responsible for creating risk awareness culture and to build the necessary environment for effective risk management. Significant issues related to internal controls and risk management are highlighted to the Board. If deemed necessary, assistance from external parties shall be consulted on issues in which the Board needs to seek an opinion.

internal aUdit FUnction

An Internal Audit function supports the Audit and Risk Management Committee, and by extension, the Board, by providing reasonable independent assurance on the effectiveness of the Group’s internal control.

In particular, Internal Audit appraises and contributes towards improving the Group’s internal control systems and reports to the Audit and Risk Management Committee on a quarterly basis.

The Internal Audit function adopts the risk-based approach when carrying out its internal audit work plan, which reflects the risk profile of the Group’s major business sectors and is routinely reviewed and approved by the Audit and Risk Management Committee. The scope of the Internal Audit function covers the audit of all business units and operations.

reView oF adeqUacy oF risk management and internal control

The Audit and Risk Management Committee is responsible to review the audit reports from the internal and external auditors and assess the effectiveness of the actions taken by the management on recommendations made by the internal and external auditors for resolving lapses or weaknesses in the controls.

For the financial year ended 28 February 2015, the Board has received assurances from the Executive Director that the Group’s internal controls are adequate and effective.

Based on the internal controls established and maintained by the Group, reviews performed by management and work performed by internal and external auditors, the Board, with concurrence of the Audit and Risk Management Committee, is of the opinion that the Group’s internal controls and risk management are adequate and effective.

reView by external aUditors

The external auditors have reviewed the statement on risk management and internal control as required by paragraph 15.23 of the Listing Requirements of Bursa Malaysia Securities Berhad. Their review was performed in accordance with Recommended Practice Guide 5 issued by the Malaysian Institute of Accountants.

Statement on risk management and Internal Control


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Corporate Social Responsibility (“CSR”) has become an increasingly important subject matter over the years especially since there is greater realisation among corporations that business is more than just profit.

The Board acknowledges the importance of CSR and views CSR as an extension of the Group’s efforts in fostering a strong corporate governance culture. Working towards CSR enables the Group to co-exist with the community and the environment while building a sound business. CSR also enables the Group to be recognised by the community as a responsible corporate citizen that helps to make sustainable growth a reality.

commUnity

The Group plays its role as socially responsible corporate citizen in the community through various activities held with the aim of caring for wellbeing of the society at large. The Group continues to support education and welfare in the local communities.

During the year, the Group had contributed donations to various worthy societies, institutions like Persatuan Orang Buta Malaysia and Mount Miriam Cancer Hospital through the non-profit organisation, Yayasan Harmoni (“YH”). YH also made contributions on behalf of the Group to welfare homes for single mothers, orphans and the less fortunate. Amongst others during the year, the Group had contributed to certain less fortunate individuals who required medical assistance for chronic illnesses and during the month of Ramadhan, cash and goods contribution were given to the poor.

The Group believes that education is a prerequisite for harmonious functioning of any society. Accordingly, the Group has contributed through YH, to schools for the welfare of less fortunate students as well as building funds for school facilities. The Group also continued to contribute to Sumbangan Bantuan Persekolahan, to assist qualified employees in the Group, who have school-going children, with expenses for the new school year.

workPlace & ethical condUct

The Group is committed in its social responsibilities at the workplace via compliance and respect to Human Rights which includes employment of staff under fair and equitable terms as well as offering equal opportunity for career advancement based on performance. Continuous learning and development programmes were carried out throughout the year to equip the staff with relevant skills, knowledge and experience which would enhance the individual staff’s competency and eventually add value to the Group. Upward mobility of staff is encouraged and staff welfare is closely monitored to avoid any violation of Labour or Human Rights.

In addition, health and safety awareness programs and sports activities were held to encourage employees to lead a healthy lifestyle. The Group also organised various gatherings and festive celebrations for its employees.

Employees are introduced to the ethical corporate culture of the Group during employee induction and thereafter, employees are constantly monitored to ensure the culture is upheld in their dealings within the Group and also in their association with customers, distributors, suppliers, governmental and regulatory authorities and other business associates. Any employee may report directly to the Chairman of any ethical misconduct discovered within the Group.

A written code of conduct on ethical standards has been established by the Company to assist the employees in defining ethical standards and conduct at work.

CORPORATE SOCIAL reSpONSIBILITy


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enVironment

During the year, the Group undertook several initiatives in preserving the environment including upgrading its information technology infrastructure on its move to paperless environment, reducing the usage of papers via electronic communication and recycling paper.

marketPlace

The Group ensures that its operations are in line with the best practices guidelines set in Malaysian Code on Corporate Governance. All activities are conducted at arms length and do not favour any single party.

As part of promoting investor relations, the Group maintains an online platform via its website which provides information on the Group encompassing formal announcements, quarterly financial results and updates on the Group’s performance and development with the objective of fostering and maintaining good relations with and providing timely information to various stakeholders of the Group.

The Group will continue to support and encourage all employees and businesses to find ways to help their communities. The Group’s initiatives in supporting CSR are an ongoing commitment towards creation of a competitive nation, yet a moral, ethical, caring and economically just society.

Corporate Social responsibility(cont’d.)


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The directors are required by the Companies Act, 1965 to prepare financial statements which give a true and fair view of the state of affairs of the Group and of the Company at the end of each financial year and of their results and cash flows for the financial year then ended.

In preparing the financial statements, the directors have:-

• Adoptedappropriateaccountingpoliciesandappliedthemconsistently;• Madejudgementsandestimatesthatarereasonable;• Ensuredthatapplicableaccountingstandardshavebeencompliedwith;and• Appliedthegoingconcernbasis.

The directors are responsible for ensuring that the Group and the Company keep proper accounting records, which disclose with reasonable accuracy on the financial position of the Group and of the Company, and which enable them to ensure that the financial statements comply with the provisions of the Companies Act, 1965.

The directors are also responsible for taking reasonable steps to safeguard the assets of the Company and to prevent and detect other irregularities.

STATEmENT Of DIreCTOrS’ reSpONSIBILITyin respect of the Audited financial Statements

FinancialSTATEMENTS

Directors’ report 40

Statement by directors 44

Statutory declaration 44

Independent auditors’ report 45

Income statements 47

Statements of comprehensive income 48

Statements of financial position 49

Statements of changes in equity 52

Statements of cash flows 55

Notes to the financial statements 58

Supplementary information 146


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diRECTORS’ repOrT

The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 28 February 2015.

PrinciPal actiVities The principal activities of the Company are investment holding and the provision of management, financial, technical and other ancillary services.

The principal activities of the subsidiaries are set out in Note 19 to the financial statements.

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

resUlts

group company rm’000 rm’000

Profit net of tax 55,966 77,694

Profit attributable to: Owners of the parent 46,467 77,694 Non-controlling interests 9,499 –

55,966 77,694

There were no material transfers to or from reserves or provisions during the financial year.

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

diVidend

The amounts of dividends paid by the Company since 28 February 2014 were as follows:

rm’000

In respect of the financial year ended 28 February 2015: First interim dividend (single-tier) of 15%, on 253,650,000 ordinary shares, declared on 6 August 2014 and paid on 15 August 2014 38,048 Second interim dividend (single-tier) of 10%, on 253,650,000 ordinary shares, declared on 30 October 2014 and paid on 20 November 2014 25,365 Third interim dividend (single-tier) of 10%, on 253,650,000 ordinary shares, declared on 29 January 2015 and paid on 10 February 2015 25,365

88,778

The directors do not recommend the payment of any final dividend in respect of the financial year ended 28 February 2015.


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directors’ report(cont’d.)

directors

The names of the directors of the Company in office since the date of the last report and at the date of this report are:

Dato’ Sri Adam Sani Bin AbdullahTengku Abdul Rahman Ibni Sultan Haji Ahmad Shah Al-Mustain Billah, DK II, SSAPDato’ Sri Robin Tan Yeong Ching Jeneral Tan Sri Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad (B)Dato’ Shagul Hamid Bin K.R. Williams @ AbdullahDato’ Woo Hon KongTan Thiam Chai Mohd Sharif Bin Haji YusofLee Sze SiangOng Bok Siong

directors’ beneFits

Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salary of a full-time employee of the Company as shown in Note 7 to the financial statements) by reason of a contract made by the Company or a related corporation with any director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest, except as disclosed in Note 39 to the financial statements.

directors’ interests

According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial year in shares in the Company and its related corporations during the financial year were as follows:

<--------- number of ordinary shares of rm1 each ---------> 1 march 28 February 2014 acquired sold 2015the company direct interestOrdinary shares of the Company

Dato’ Sri Adam Sani Bin Abdullah 64,061 – – 64,061

deemed interest Ordinary shares of the Company

Dato’ Sri Adam Sani Bin Abdullah* 127,255,153 3,000,000 – 130,255,153

* Denotes deemed interest through shares held in ultimate holding company, Distinct Continent Sdn. Bhd., by virtue of Section 6A of the Companies Act, 1965.

Dato’ Sri Adam Sani Bin Abdullah by virtue of his interest in shares in Distinct Continent Sdn. Bhd. is deemed interested in the shares in the Company and its related corporations to the extent Distinct Continent Sdn. Bhd. has an interest.

None of the other directors in office at the end of the financial year had any interest in shares in the Company or its related corporations during the financial year.


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other statUtory inFormation

(a) Before the income statements, statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for impairment and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for impairment; and

(ii) to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.

(b) At the date of this report, the directors are not aware of any circumstances which would render:

(i) the amount written off for bad debts or the amount of the allowance for impairment in the financial statements of the Group and of the Company inadequate to any substantial extent; and

(ii) the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.

(e) At the date of this report, there does not exist:

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or

(ii) any contingent liability of the Group or of the Company which has arisen since the end of the financial year.

(f) In the opinion of the directors:

(i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations when they fall due; and

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



43

signiFicant and sUbseqUent eVents

Details of significant and subsequent events are disclosed in Note 45 to the financial statements.

aUditors

The auditors, Ernst & Young, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the directors dated 17 June 2015.

lee sze siang ong bok siong



44

We, Lee Sze Siang and Ong Bok Siong, being two of the directors of Atlan Holdings Bhd., do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 47 to 145 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 28 February 2015 and of their financial performance and cash flows for the year then ended.

The information set out in Note 46 on page 146 to the financial statements have been prepared in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Signed on behalf of the Board in accordance with a resolution of the directors dated 17 June 2015.

Lee Sze Siang Ong Bok Siong

I, Lee Sze Siang, being the director primarily responsible for the financial management of Atlan Holdings Bhd., do solemnly and sincerely declare that the accompanying financial statements set out on pages 47 to 146 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 Lee Sze Siangat Kuala Lumpur in the Federal Territoryon 17 June 2015. Lee Sze Siang

Before me,

haJJah Jamilah ismailNO. W626Commissioner for Oaths

STATEmENT by DIreCTOrSPursuant to Section 169(15) of the Companies Act, 1965

STATUTORy DeCLArATIONPursuant to Section 169(16) of the Companies Act, 1965


45

iNdEPENdENT AuDITOrS’ repOrTto the shareholders of Atlan Holdings bhd.

rePort on the Financial statements

We have audited the financial statements of Atlan Holdings Bhd., which comprise the statements of financial position as at 28 February 2015 of the Group and of the Company, and income statements, 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 47 to 145.

Directors’ responsibility for the financial statements

The directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with 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 determined is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibility

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

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

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

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as at 28 February 2015 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.

rePort on other legal and regUlatory reqUirements

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

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

(b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 19 to the financial statements, being financial statements that have been included in the consolidated financial statements.

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

(d) The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment required to be made under Section 174(3) of the Act.


46

other rePorting resPonsibilities

The supplementary information set out in Note 46 on page 146 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’s Main Market 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

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

Ernst & Young Kua Choo Kai AF: 0039 No. 2030/03/16 (J) Chartered Accountants Chartered Accountant

Kuala Lumpur, Malaysia17 June 2015

independent auditors’ reportto the shareholders of Atlan Holdings bhd. (cont’d.)


47

group company note 2015 2014 2015 2014 rm’000 rm’000 rm’000 rm’000

continuing operationsRevenue 4 730,655 758,353 65,893 111,065Other income 5 22,469 64,564 19,718 90,196Raw materials and consumables used (421,270) (520,488) – –Changes in finished goods (63,253) 26,796 – –Property development costs (2,620) (8,650) – –Employee benefits expense 6 (65,204) (63,889) (254) (199)Depreciation and amortisation (17,557) (13,713) (1) (1)Other operating expenses 8 (93,974) (96,041) (2,526) (18,017)

Operating profit 89,246 146,932 82,830 183,044Share of results of an associate (50) 172 – –Finance costs 9 (6,982) (7,821) (4,490) (4,508)

Profit before tax 82,214 139,283 78,340 178,536Income tax expense 10 (26,248) (32,849) (646) (1,151)

Profit net of tax from continuing operations 55,966 106,434 77,694 177,385discontinued operations Profit net of tax from discontinued operations 11 – 134,608 – –

Profit net of tax 55,966 241,042 77,694 177,385

Profit attributable to: Owners of the parent - Continuing operations 46,467 92,689 77,694 177,385 - Discontinued operations – 113,747 – –

46,467 206,436 77,694 177,385

Non-controlling interests - Continuing operations 9,499 13,745 – – - Discontinued operations – 20,861 – –

9,499 34,606 – –

55,966 241,042 77,694 177,385

basic earnings per share attributable to owners of the parent (sen per share) 12 - Continuing operations 18.32 36.54 - Discontinued operations – 44.84

18.32 81.38

iNCOmE STATemeNTSfor the year ended 28 february 2015

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


48

group company 2015 2014 2015 2014 rm’000 rm’000 rm’000 rm’000

Profit net of tax 55,966 241,042 77,694 177,385Foreign currency translation – (1) – –

Total comprehensive income for the year 55,966 241,041 77,694 177,385

total comprehensive income attributable to:Owners of the parent 46,467 206,435 77,694 177,385Non-controlling interests 9,499 34,606 – –

55,966 241,041 77,694 177,385

STATEmENTS Of COmpreHeNSIve INCOmefor the year ended 28 february 2015



49

STATEmENTS Of fINANCIAL pOSITIONAs at 28 february 2015

group note 2015 2014 rm’000 rm’000

assets

non-current assetsProperty, plant and equipment 14 145,108 140,448Investment properties 15 42,641 53,331Land use rights 16 23,220 23,335Biological assets 17 4,800 4,800Goodwill 18 27,408 27,408Investment in associate 20 505 555Other investments 21 131 132Other receivables 22 – 2Prepayments 23 68,831 78,611Deferred tax assets 24 1,063 670

313,707 329,292

current assetsInventories 25 206,816 274,919Trade and other receivables 22 94,122 130,096Prepayments 23 12,271 11,877Tax recoverable 5,117 6,500Marketable securities 26 79 712Derivative assets 27 168 36Cash and bank balances 28 110,381 130,559

428,954 554,699Assets classified as held for sale 29 – 3,107

428,954 557,806

total assets 742,661 887,098


50

group note 2015 2014 rm’000 rm’000

equity and liabilities

current liabilitiesTrade and other payables 30 115,351 124,806Derivative liabilities 27 – 32Provisions 31 12,540 14,453Employee benefits 32 342 396Dividends payable 205 55,782Tax payable 3,900 10,377Borrowings 33 94,235 56,956

226,573 262,802

net current assets 202,381 295,004

non-current liabilitiesEmployee benefits 32 6,566 6,006Deferred tax liabilities 24 7,347 8,023Borrowings 33 16,858 70,997

30,771 85,026

total liabilities 257,344 347,828

net assets 485,317 539,270

equity attributable to owners of the parentShare capital 35 253,650 253,650Share premium 35 102,878 102,878Currency translation reserve (214) (214)Other reserve 36 (32,567) (28,922)Retained earnings 74,583 116,894

398,330 444,286Non-controlling interests 86,987 94,984

total equity 485,317 539,270

total equity and liabilities 742,661 887,098

statements of financial positionAs at 28 february 2015 (cont’d.)


51

company note 2015 2014 rm’000 rm’000

assets

non-current assetsProperty, plant and equipment 14 1 2Investment in subsidiaries 19 1,020,732 1,028,032Investment in associate 20 437 437

1,021,170 1,028,471

current assetsOther receivables 22 63,153 54,691Prepayments 23 75 75Tax recoverable 2,481 2,481Dividends receivable – 23,565Marketable securities 26 79 712Cash and bank balances 28 9,977 48,997

75,765 130,521

total assets 1,096,935 1,158,992

equity and liabilities

current liabilitiesOther payables 30 177,161 177,058Dividends payable – 50,730Borrowings 33 58,000 –Tax payable 24 370

235,185 228,158

net current liabilities (159,420) (97,637)

non-current liabilityBorrowings 33 – 58,000

Total liabilities 235,185 286,158

Net assets 861,750 872,834

equity attributable to owners of the parentShare capital 35 253,650 253,650Share premium 35 102,878 102,878Retained earnings 37 505,222 516,306

total equity 861,750 872,834

total equity and liabilities 1,096,935 1,158,992


statements of financial positionAs at 28 february 2015 (cont’d.)


52

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53

statements of changes in equityfor the year ended 28 february 2015 (cont’d.)

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<-------- non-distributable --------> equity, share share retained note total capital premium earnings rm’000 rm’000 rm’000 rm’000

company

at 1 march 2014 872,834 253,650 102,878 516,306total comprehensive income 77,694 – – 77,694transactions with owners Dividends on ordinary shares 13 (88,778) – – (88,778)

at 28 February 2015 861,750 253,650 102,878 505,222

at 1 march 2013 860,322 253,650 102,878 503,794total comprehensive income 177,385 – – 177,385transactions with owners Dividends on ordinary shares 13 (164,873) – – (164,873)

at 28 February 2014 872,834 253,650 102,878 516,306


statements of changes in equityfor the year ended 28 february 2015 (cont’d.)


55


operating activities

Profit before tax from continuing operations 82,214 139,283 78,340 178,536Profit before tax from discontinued operations 11 – 152,374 – –

Profit before tax 82,214 291,657 78,340 178,536 Adjustments for: Amortisation of land use rights 438 806 – –Amortisation of other investments 1 1 – –Bad debts written off 56 1 – –Changes in fair value of marketable securities 707 (61) 707 (61)Depreciation 17,119 12,907 1 1Dividend income – – (62,201) (105,527)Employee benefits 790 1,055 – –Gain arising from changes in fair value of biological assets – (380) – –Gain on disposal of: - assets classified as held for sale (450) (183,135) – – - investment properties – (412) – – - marketable securities (21) (375) (21) (375) - property, plant and equipment (535) (12,935) (35) (18) - subsidiary (1,570) – (940) –Impairment loss on: - investment in subsidiaries – – – 13,369 - marketable securities – 3 – – - receivables 17 825 – 2,826Interest expense 6,982 8,312 4,490 4,508Interest income (5,302) (8,585) (3,692) (5,538)Inventories written back – (2,510) – –Inventories written down 432 348 – –Inventories written off 210 106 – –Investment properties written off – 503 – –Property, plant and equipment written off 209 4,197 – –Reversal of impairment loss on: - land use rights (323) (153) – – - property, plant and equipment (5,862) (10,890) – – - subsidiary – – (18,152) – - receivables (964) (43) – (88,929)

Balance carried forward 94,148 101,242 (1,503) (1,208)

STATEmENTS Of CASH fLOwSfor the year ended 28 february 2015


56


operating activities (cont’d.)

Balance brought forward 94,148 101,242 (1,503) (1,208)Reversal of provisions (547) (733) – –Share of results of an associate 50 (172) – –Unrealised (gain)/loss on foreign exchange - net (320) 2,500 (79) (178)Waiver of debts 132 – 132 (590)

Operating cash flows before changes in working capital 93,463 102,837 (1,450) (1,976)Changes in working capital: Decrease/(increase) in inventories 67,457 (17,871) – – Decrease/(increase) in receivables 43,346 (76,549) – (11) (Decrease)/increase in payables (10,699) (19,253) (255) 726

Cash generated from/(used in) operations 193,567 (10,836) (1,705) (1,261)Taxes paid (32,411) (41,666) (992) (1,116)Employee benefits paid (284) (249) – –

Net cash flows generated from/ (used in) operating activities 160,872 (52,751) (2,697) (2,377)

investing activities

Acquisition of: - investment properties (2) (86) – – - land use rights – (2,525) – – - property, plant and equipment (12,368) (14,652) – –Capital repayment by a subsidiary to non-controlling interests – (18,606) – –Dividend received – – 85,766 82,943Interest received 5,302 3,985 3,692 5,538Proceeds from disposal of: - assets classified as held for sale 3,650 252,559 – – - investment properties – 740 – – - marketable securities 26 471 26 471 - property, plant and equipment 1,369 30,058 35 18 - subsidiary 8,240 – 8,240 –Proceeds from exercise of warrants in a subsidiary by non-controlling interests 1 2,206 – –Proceeds from non-controlling interests from partial divestment of interests in subsidiaries – 500 – –

Balance carried forward 6,218 254,650 97,759 88,970

statements of cash flowsfor the year ended 28 february 2015 (cont’d.)


57


investing activities (cont’d.)

Balance brought forward 6,218 254,650 97,759 88,970Repurchase of shares by a subsidiary (4,838) (110) – –

Net cash flows generated from investing activities 1,380 254,540 97,759 88,970

Financing activities

Increase in pledged fixed deposits (360) (3,281) – –Dividends paid to: - non-controlling interests of subsidiaries (18,420) (16,067) – – - ordinary shareholders of the Company (139,508) (114,143) (139,508) (114,143)Interest paid (6,982) (8,318) (4,490) (4,514)Proceeds from borrowings 20,000 2,300 – –Repayment from subsidiaries – – 9,916 47,345Repayment of borrowings (28,767) (48,453) – (15,000)Repayment of obligations under finance leases (761) (1,185) – –

Net cash flows used in financing activities (174,798) (189,147) (134,082) (86,312)

net (decrease)/increase in cash and cash equivalents (12,546) 12,642 (39,020) 281Effectofforeignexchange translation – (1) – –cash and cash equivalents at beginning of financial year 109,691 97,050 48,997 48,716

cash and cash equivalents at end of financial year 28 97,145 109,691 9,977 48,997

statements of cash flowsfor the year ended 28 february 2015 (cont’d.)



58

NOTES TO THe fINANCIAL STATemeNTS28 february 2015

1. corPorate inFormation

The Company is a public limited liability company incorporated and domiciled in Malaysia, and is listed on the Bursa Malaysia Securities Berhad (“Bursa Securities”). The registered office of the Company is located at Level 4, Wisma Atlan, 8 Persiaran Kampung Jawa, 11900 Bayan Lepas, Penang.

The holding company is Distinct Continent Sdn. Bhd., a private limited liability company incorporated in Malaysia.

The principal activities of the Company are investment holding and the provision of management, financial, technical and other ancillary services.

The principal activities of the subsidiaries are set out in Note 19.

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

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 17 June 2015.

2. sUmmary oF signiFicant accoUnting Policies

2.1 basis of preparation

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

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

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


59

Notes to the financial statements28 february 2015 (cont’d.)

2. sUmmary oF signiFicant accoUnting Policies (cont’d.)

2.2 changes in accounting policies

The accounting policies adopted are consistent with those of the previous financial year except as follows:

On 1 March 2014, the Group and the Company adopted the following mandatory new and amended MFRS and IC Interpretations.

description

effective for annual periods beginning

on or after

Amendments to MFRS 132: Offsetting Financial Assets and Financial Liabilities 1 January 2014

Amendments to MFRS 10, MFRS 12 and MFRS 127: Investment Entities 1 January 2014

Amendments to MFRS 136: Recoverable Amount Disclosures for Non-Financial Assets 1 January 2014

Amendments to MFRS 139: Novation of Derivatives and Continuation of Hedge Accounting 1 January 2014

IC Interpretation 21 Levies 1 January 2014

The new and amended MFRSs and IC Interpretation have no material impact to the Group’s and to the Company’s financial statements.

2.3 standards issued but not yet effective

The standards and interpretations that are issued but not yet effective up to the date of issuance of the Group’s and of the Company’s financial statements are disclosed below. The Group and the Company intend to adopt these standards, if applicable, when they become effective.

description

effective for annual periods beginning

on or after

Amendments to MFRS 119: Defined Benefit Plans: Employee Contributions 1 July 2014

Annual Improvements to MFRSs 2010 – 2012 Cycle 1 July 2014

Annual Improvements to MFRSs 2011 – 2013 Cycle 1 July 2014

Annual Improvements to MFRSs 2012 – 2014 Cycle 1 January 2016

Amendments to MFRS 116 and MFRS 138: Clarification of Acceptable Methods of Depreciation and Amortisation 1 January 2016

Amendments to MFRS 116 and MFRS 141: Agriculture: Bearer Plants 1 January 2016

Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture 1 January 2016

Amendments to MFRS 11: Accounting for Acquisitions of Interests in Joint Operations 1 January 2016

Amendments to MFRS 127: Equity Method in Separate Financial Statements 1 January 2016

Amendments to MFRS 101: Disclosure Initiatives 1 January 2016

Amendments to MFRS 10, MFRS 12 and MFRS 128: Investment Entities: Applying the Consolidation Exception 1 January 2016

MFRS 14 Regulatory Deferral Accounts 1 January 2016

MFRS 15 Revenue from Contracts with Customers 1 January 2017

MFRS 9 Financial Instruments 1 January 2018


60



2.3 standards issued but not yet effective (cont’d.)

The Directors expect that the adoption of the standards and interpretations above will have no material impact on the financial statements in the period of initial application, except as disclosed below:

amendments to mFrs 116 and mFrs 141: agriculture: bearer Plants

The amendments change the accounting requirements for biological assets that meet the definition of bearer plants. Under the amendments, biological assets that meet the definition of bearer plants will no longer be within the scope of MFRS 141. Instead, MFRS 116 will apply. After initial recognition, bearer plants will be measured under MFRS 116 at accumulated cost (before maturity) and using either the cost model or revaluation model (after maturity). The amendments also require that produce that grows on bearer plants will remain in the scope of MFRS 141 and are measured at fair value less costs to sell.

The amendments are effective for annual periods beginning on or after 1 January 2016 and are to be applied retrospectively, with early adoption permitted. The Directors anticipate that the application of these amendments will have a material impact on the amounts reported and disclosures made in the Group’s financial statements. The Group is currently assessing the impact of these amendments and plans to adopt the new standard on the required effective date.

mFrs 15 revenue from contracts with customers

MFRS 15 establishes a new five-step model that will apply to revenue arising from contracts with customers. MFRS 15 will supersede the current revenue recognition guidance including MFR 118 Revenue, MFRS 111 Construction Contracts and the related interpretations when it becomes effective.

The core principle of MFRS 15 is that an entity should recognise revenue which depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Under MFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when “control” of the goods or services underlying the particular performance obligation is transferred to the customer.

Either a full or modified retrospective application is required for annual periods beginning on or after 1 January 2017 with early adoption permitted. The Directors anticipate that the application of MFRS 15 will have a material impact on the amounts reported and disclosures made in the Group’s and the Company’s financial statements. The Group and the Company are currently assessing the impact of MFRS 15 and plans to adopt the new standard on the required effective date.

mFrs 9 Financial instruments

In November 2014, MASB issued the final version of MFRS 9 Financial Instruments which reflects all phases of the financial instruments project and replaces MFRS 139 Financial Instruments: Recognition and Measurement and all previous versions of MFRS 9. The standard introduces new requirements for classification and measurement, impairment and hedge accounting. MFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted. Retrospective application is required, but comparative information is not compulsory. The adoption of MFRS 9 will have an effect on the classification and measurement of the Group’s financial assets, but no impact on the classification and measurement of the Group’s financial liabilities.


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2.4 basis of consolidation

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

The Company controls an investee, if and only if, the Company has all the following:

(i) Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);

(ii) Exposure, or rights, to variable returns from its investment with the investee; and (iii) The ability to use its power over the investee to affect its returns.

Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

(i) The contractual arrangement with the other vote holders of the investee;

(ii) Rights arising from other contractual arrangements; and

(iii) The Group’s voting rights and potential voting rights.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full except for unrealised losses, which are not eliminated when there are indications of impairment.

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

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets and liabilities of the subsidiary and any non-controlling interest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has been recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss or where applicable, transferred directly to retained earnings. The fair value of any investment retained in the former subsidiary at the date control is lost is regarded as the cost on initial recognition of the investment.

business combinations

Acquisitions of subsidiaries are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interests in the acquiree. The Group elects on a transaction-by-transaction basis whether to measure the non-controlling interests in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Transaction costs incurred are expensed and included in profit or loss.


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2.4 basis of consolidation (cont’d.)

business combinations (cont’d.)

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes in the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognised in accordance with MFRS 139 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it will not be remeasured. Subsequent settlement is accounted for within equity. In instances where the contingent consideration does not fall within the scope of MFRS 139, it is measured in accordance with the appropriate MFRS.

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

If the business combination is achieved in stages, any previously held equity interest is re-measured at its acquisition date fair value and any resulting gain or loss is recognised in profit or loss. It is then considered in the determination of goodwill.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss. The accounting policy for goodwill is set out in Note 2.9.

2.5 transactions with non-controlling interests

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

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

Total comprehensive income within a subsidiary is attributed to the non-controlling interest even if it results in a deficit balance.

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

- derecognises the assets (including goodwill) and liabilities of the subsidiary; - derecognises the carrying amount of any non-controlling interest; - derecognises the cumulative translation differences recorded in equity; - recognises the fair value of the consideration received; - recognises the fair value of any investment retained; - recognises any surplus or deficit in profit or loss; and- reclassifies the parent’s share of components previously recognised in other comprehensive

income to profit or loss or retained earnings, as appropriate.


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2.6 Foreign currency

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

(a) transactions and balances Transactions in foreign currencies are measured in the respective functional currencies

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

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

(b) consolidated financial statements

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

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

2.7 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and to the Company and the cost of the item can be measured reliably.

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


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

Freehold land is stated at cost less accumulated impairment losses, if any. Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:

Buildings over 26 to 50 yearsLeasehold land over 99 yearsGolf course over 60 yearsMotor vehicles 14.3% - 20%Office equipment, furniture and fittings 5% - 33.3%Plant and machinery 10% - 33.3%Other assets 5% - 20%

Buildings situated on leased land are amortised over the unexpired term of leases.

Capital work-in-progress is not depreciated as these assets are not yet available for use.

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

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

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

2.8 investment properties

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are carried at cost less accumulated depreciation and impairment losses, if any.

Investment properties are depreciated over the period of the lease of 36.5 to 50 years.

Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on the retirement or disposal of an investment property is recognised in profit or loss in the year of retirement or disposal.

2.9 goodwill

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

For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the synergies of the combination.

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


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2.9 goodwill (cont’d.)

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.

2.10 land use rights

Land use rights are initially measured at cost. Following initial recognition, land use rights are measured at cost less accumulated amortisation and accumulated impairment losses, if any. The land use rights are amortised on a straight-line basis over the respective lease terms of 37 to 99 years.

2.11 impairment of non-financial assets

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

An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units (“CGU”)).

In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

Impairment losses are recognised in profit or loss.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss.

2.12 subsidiaries

A subsidiary is an entity over which the Group has all the following:

(i) Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);

(ii) Exposure, or rights, to variable returns from its investment with the investee; and

(iii) The ability to use its power over the investee to affect its returns.

In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.


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2.13 investments in associates

An associate is an entity in which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

On acquisition of an investment in associate, any excess of the cost of investment over the Group’s share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill and included in the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities of the investee over the cost of investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group’s share of the associate’s profit or loss for the period in which the investment is acquired.

An associate is equity accounted for from the date on which the investee becomes an associate.

Under the equity method, on initial recognition the investment in an associate is recognised at cost, and the carrying amount is increased or decreased to recognise the Group’s share of the profit or loss and other comprehensive income of the associate after the date of acquisition. When the Group’s share of losses in an associate equal or exceeds its interest in the associate, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

Profits and losses resulting from upstream and downstream transactions between the Group and its associate are recognised in the Group’s financial statements only to the extent of unrelated investors’ interests in the associate. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred.

The most recent available audited financial statements of the associate is used by the Group in applying the equity method. Where the dates of the audited financial statements used are not coterminous with those of the Group, the share of results is arrived at from the last audited financial statements available and management financial statements to the end of the accounting period. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

After application of the equity method, the Group applies MFRS 139 Financial Instruments: Recognition and Measurement to determine whether it is necessary to recognise any additional impairment loss with respect to its net investment in the associate. When necessary, the entire carrying amount of the investment is tested for impairment in accordance with MFRS 136 Impairment of Assets as a single asset, by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss is recognised in profit or loss. Reversal of an impairment loss is recognised to the extent that the recoverable amount of the investment subsequently increases.

In the Company’s separate financial statements, investment in associate is accounted for at cost less impairment losses, if any. On disposal of such investment, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.

2.14 Financial assets

Financial assets are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument.

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

The Group and the Company determine the classification of their financial assets at initial recognition, and the categories include financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets.


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2.14 Financial assets (cont’d.)

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

Financial assets are classified as financial assets at fair value through profit or loss if they are held for trading or are designated as such upon initial recognition. Financial assets held for trading are derivatives (including separated embedded derivatives) or financial assets acquired principally for the purpose of selling in the near term.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss do not include exchange differences, interest and dividend income. Exchange differences, interest and dividend income on financial assets at fair value through profit or loss are recognised separately in profit or loss as part of other losses or other income.

Financial assets at fair value through profit or loss could be presented as current or non-current. Financial assets that are held primarily for trading purposes are presented as current whereas financial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

(b) loans and receivables

Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the reporting date which are classified as non-current.

(c) held-to-maturity investments

Financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Group has the positive intention and ability to hold the investment to maturity.

Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the held-to-maturity investments are derecognised or impaired, and through the amortisation process.

Held-to-maturity investments are classified as non-current assets, except for those having

maturity within 12 months after the reporting date which are classified as current.

(d) available-for-sale financial assets

Available-for-sale financial assets are financial assets that are designated as available for sale or are not classified in any of the three preceding categories.


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2.14 Financial assets (cont’d.)

(d) available-for-sale financial assets (cont’d.)

After initial recognition, available-for-sale financial assets are measured at fair value. Any gains or losses from changes in fair value of the financial assets are recognised in other comprehensive income, except that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Interest income calculated using the effective interest method is recognised in profit or loss. Dividends on an available-for-sale equity instrument are recognised in profit or loss when the Group’s and the Company’s right to receive payment is established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss, if any.

Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting date.

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

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

2.15 impairment of financial assets

The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired.

(a) trade and other receivables and other financial assets carried at amortised cost

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade and other receivables, where the carrying amount is reduced through the use of an allowance account. When a trade or other receivable becomes uncollectible, it is written off against the allowance account.


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2.15 impairment of financial assets (cont’d.)

(a) trade and other receivables and other financial assets carried at amortised cost (cont’d.)

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

(b) available-for-sale financial assets

Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor, and the disappearance of an active trading market are considerations to determine whether there is objective evidence that investment securities classified as available-for-sale financial assets are impaired.

If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to profit or loss.

Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the subsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive income. For available-for-sale debt investments, impairment losses are subsequently reversed in profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss in profit or loss.

2.16 cash and cash equivalents

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

For the purpose of the statements of cash flows, cash and cash equivalents consist of cash and bank balances as defined above, net of outstanding bank overdrafts and deposits pledged with licensed banks.

2.17 inventories

(a) trading inventories

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

(b) manufacturing inventories

Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the inventories to their present location and condition are accounted for as follows:

(i) Raw materials: purchase costs on a first-in first-out basis.(ii) Finished goods and work-in-progress: costs of direct materials and labour and a

proportion of manufacturing overheads based on normal operating capacity.


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2.17 inventories (cont’d.)

(c) inventory property

Inventory property cost includes freehold land, amounts paid to contractors for construction, borrowing costs, planning and design costs, costs of site preparation, professional fees for legal services, property transfer taxes, construction overheads and other related costs.

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

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

2.18 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.

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

2.19 Financial liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability.

Financial liabilities, within the scope of MFRS 139, are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.

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

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities held for trading include derivatives entered into by the Group and by the Company that do not meet the hedge accounting criteria. Derivative liabilities are initially measured at fair value and subsequently stated at fair value, with any resultant gains or losses recognised in profit or loss. Net gains or losses on derivatives include exchange differences.

The Group and the Company have not designated any financial liabilities as at fair value through profit or loss.

(b) other financial liabilities

The Group’s and the Company’s other financial liabilities include trade payables, other payables and loans and borrowings.


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2.19 Financial liabilities (cont’d.)

(b) other financial liabilities (cont’d.)

Trade and other payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.

Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Group and the Company have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

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

2.20 Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due.

Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs. Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or loss over the period of the guarantee. If the debtors fails to make payment relating to financial guarantee contract when it is due and the Group, as the issuer, is required to reimburse the holder for the associated loss, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially recognised less cumulative amortisation.

2.21 borrowing costs

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale.

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

2.22 employee benefits

(a) short term benefits

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


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2.22 employee benefits (cont’d.)

(b) defined contribution plans

Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities or funds and will have no legal or constructive obligations to pay further contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years. Such contributions are recognised as expense in the period in which the related services is performed. As required by law, companies in Malaysia make such contributions to the Employees Provident Fund (“EPF”). Some of the Group’s foreign subsidiaries also make contributions to their respective countries’ statutory pension schemes.

(c) termination benefits

Termination benefits are payable when employment is terminated before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group and the Company recognise termination benefits when they are demonstrably committed to either terminate the employment of current employees according to a detailed plan without possibility of withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary redundancy. In the case of an offer made to encourage voluntary redundancy, the measurement of termination benefits is based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after reporting date are discounted to present value.

(d) defined benefit plans

The Group operates an unfunded, defined benefit plan for its eligible employees. The Group’s net obligation in respect of defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in return for their services in the current and prior periods and that benefit is discounted to determine the present value. The discount rate is the market yield at the reporting date on high quality corporate bonds or government bonds. The calculation is performed by an actuary using the projected unit credit method.

Re-measurements, comprising actuarial gains and losses, are recognised immediately in the statement of financial position with a corresponding debit or credit to retained earnings through other comprehensive income in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.

Past service costs are recognised in profit or loss on the earlier of:- the date of the plan amendment or curtailment; and- the date that the Group recognises restructuring-related costs.

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset.

The Group recognises the following changes in the net defined benefit obligation under ‘employee benefits expense’ in the income statement:- service costs comprising current service costs, past-service costs, gains and losses

on curtailments, and non-routine settlements; and- net interest expense or income.


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2.23 leases

(a) as lessee

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

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

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

(b) 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 basis as rental income. The accounting policy for rental income is set out in Note 2.25(f).

2.24 asset held for sale and discontinued operation

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

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

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

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


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2.25 revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable.

(a) sale of goods

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

(b) dividend income

Dividend income is recognised when the right to receive payment is established.

(c) rental of hotel rooms and other services

Revenue from rental of hotel rooms and other related services are recognised as and when the services are rendered.

(d) management income

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

(e) interest income

Interest income is recognised using the effective interest method.

(f) rental, parking and related services

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

Parking and related services are recognised net of discounts, if any, as and when the services are rendered.

(g) sale of inventory property

A property is regarded as sold when the significant risks and rewards have been transferred to the buyer, which is normally on unconditional exchange of contracts. For conditional exchanges, sales are recognised only when all the significant conditions are satisfied.

(h) sale of oil palm fresh fruit bunches

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


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2.26 Incometaxes

(a) Currenttax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity.

(b) Deferredtax

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

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

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

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

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

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

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

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

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


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2.26 Incometaxes(cont’d.)

(b) Deferredtax(cont’d.)

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

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

(c) Salestax

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

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

- receivables and payables that are stated with the amount of sales tax included.

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

2.27 biological assets

Biological assets, which comprise mature and immature oil palm plantations, are measured on initial recognition and at the end of each reporting period at fair value less estimated point-of-sale costs, with any resultant gain or loss recognised in profit or loss.

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

2.28 segment reporting

For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 43, including the factors used to identify the reportable segments and the measurement basis of segment information.

2.29 Sharecapitalandshareissuanceexpenses

An equity instrument is any contract that evidences a residual interest in the assets of the Group and of the Company after deducting all of its liabilities. Ordinary shares are equity instruments.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.


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2.30 treasury shares

When shares of the Company, that have not been cancelled, recognised as equity are reacquired, the amount of consideration paid is recognised directly in equity. Reacquired shares are classified as treasury shares and presented as a deduction from total equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of treasury shares. When treasury shares are reissued by resale, the difference between the sales consideration and the carrying amount is recognised in equity.

2.31 contingencies A contingent liability or asset is a possible obligation or asset that arises from past events and

whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group and of the Company.

Contingent liabilities and assets are not recognised in the statements of financial position of the Group and of the Company.

2.32 Fair value measurement

The Group and the Company measure financial instruments, such as, derivatives, and non-financial assets such as properties, at fair value at each reporting date. Also, fair values of financial instruments measured at amortised cost are disclosed in Note 40.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

- in the principal market for the asset or liability; or - in the absence of a principal market, in the most advantageous market for the asset or

liability.

The principal or the most advantageous market must be accessible to by the Group and by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group and the Company use valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

- Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities;

- Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable;

- Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.


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2.32 Fair value measurement (cont’d.)

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group and the Company determine whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The Group and the Company determine the policies and procedures for recurring fair value measurement, such as properties and unquoted available-for-sale (“AFS”) financial assets.

External valuers may be involved for valuation of significant assets, such as properties and AFS financial assets. Involvement of external valuers is decided upon annually by the Group and by the Company. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained.

At each reporting date, the Group and the Company analyse the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Group’s and the Company’s accounting policies. For this analysis, the Group and the Company verify the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents.

The Group and the Company, in conjunction with the Group’s and the Company’s external valuers, also compare the changes in the fair value of each asset and liability with relevant external sources, where practical, to determine whether the change is reasonable.

For the purpose of fair value disclosures, the Group and the Company have determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

2.33 current and non-current classification

The Group and the Company present assets and liabilities in statements of financial position based on current and non-current classification.

An asset is classified as current when it is:- expected to be realised or intended to sold or consumed in normal operating cycle;- held primarily for the purpose of trading;- expected to be realised within 12 months after the reporting period; or- cash and cash equivalents unless restricted from being exchanged or used to settle a

liability for at least 12 months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current when:- it is expected to be settled in normal operating cycle;- it is held primarily for the purpose of trading;- it is due to be settled within 12 months after the reporting period; or- there is no unconditional right to defer the settlement of the liability for at least 12 months

after the reporting period.

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities, respectively.


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3. signiFicant accoUnting JUdgements and estimates

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

3.1 Judgements made in applying accounting policies

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

(a) classification between investment properties and property, plant and equipment

The Group has developed certain criteria based on MFRS 140 in making judgement whether a property qualified as an investment property. Investment property is a property held to earn rentals or for capital appreciation or both.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. If these portions could be sold separately (or leased out separately under a finance lease), the Group would account for the portions separately. If the portions could not be sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes. Judgement is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as investment property.

One of the buildings of the Group is being substantially let out to earn rental income. Accordingly, this property is classified as investment property.

(b) impairment of financial assets

The Group and the Company follow the guidance of MFRS 139 in determining when a financial asset is considered impaired. This determination requires significant judgement. The Group and the Company evaluate, among other factors, the duration and extent to which the fair value of a financial asset is less than its cost; and the financial health of and the near-term business outlook of the issuer of the instrument, including factors such as industry performance, changes in technology and operational and financing cash flows.

(c) control over certain subsidiaries

As at 28 February 2015, the proportion of equity interest of the Group is disclosed in note 19(a).

Pursuant to the shareholders agreements, the Group is responsible for the management, business direction and strategies of each of the 5 companies as shown in note 19(a). The Group assessed that it has retained control over the said 5 companies during the financial year through stipulations in the shareholders agreements.


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3. signiFicant accoUnting JUdgements and estimates (cont’d.)

3.2 key sources of estimation uncertainty

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

(a) impairment of goodwill

Goodwill is tested for impairment annually and at other times when such indicators exist. This requires an estimation of the value in use of the cash-generating units to which goodwill is allocated.

When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows. Further details of the carrying value, the key assumptions applied in the impairment assessment of goodwill and sensitivity analysis to changes in the assumptions are given in Note 18. The carrying amount of the Group’s goodwill is disclosed in Note 18.

(b) impairment of receivables

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

Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of the Group’s and the Company’s receivables at the reporting date is disclosed in Note 22.

(c) retirement benefit obligations

The Group has contracted an actuary to determine the Group’s obligations in respect of the defined benefit plan of the Group. The estimate of the obligations is dependent on the assumptions of the discount rate, future salary increases and price inflation. Any change in these assumptions will affect the estimates.

(d) Provisions

The provisions are determined based on the management’s best estimates after considering the probable outflow of resources embodying economic benefits that will be required to settle the obligation.

(e) Useful lives of plant and equipment

The cost of plant and equipment is depreciated on a straight-line basis over the plant and equipment’s estimated useful lives. Management estimates the useful lives of these plant and equipment (excludes freehold land, leasehold land, golf course and buildings) to be within 3 to 20 years. The carrying amount of the Group’s plant and equipment at 28 February 2015 was RM29,220,000 (2014: RM28,121,000). Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.


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3. signiFicant accoUnting JUdgements and estimates (cont’d.)

3.2 key sources of estimation uncertainty (cont’d.)

(f) Deferredtaxassets

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

The carrying amount of recognised and unrecognised tax losses and capital allowances of the Group and of the Company is disclosed in Note 24.

(g) biological assets

The Group’s biological assets are stated at fair value less point-of-sale costs. This is estimated by reference to an independent valuer’s assessment of the fair value of the biological assets. Changes in the conditions of the biological assets could impact the fair value of the assets. The carrying amount of the Group’s biological assets is disclosed in Note 17.

(h) impairment loss on investments in subsidiaries

The Company has subsidiaries which are principally involved in trading of duty free goods and non-dutiable merchandise. The Company carried out the impairment test based on the estimation of the higher of the value-in-use or the fair value less cost to sell of the CGU to which the investment in subsidiaries belong to. Estimating the recoverable amount requires the Company to make an estimate of the expected future cash flows from the CGU and also to determine a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount for investment in subsidiaries is disclosed in Note 19.

4. reVenUe


Sale of goods 691,528 707,482 – –Gross dividends: - subsidiaries – – 62,201 105,527Rental of hotel rooms and other services 13,617 14,566 – –Management income 600 490 – –Interest income: - subsidiaries – – 3,000 3,696 - fixed deposits 2,242 3,675 692 1,842Rental, parking and related services 17,921 16,735 – –Sale of inventory property 3,723 14,022 – –Sale of oil palm fresh fruit bunches 962 1,196 – –Service charge for upkeep of properties 62 187 – –

730,655 758,353 65,893 111,065


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5. other income

Included in other income are as follows:


Changes in fair value of marketable securities – 61 – 61Gain arising from changes in fair value of biological assets – 380 – –Gain on disposal of: - assets classified as held for sale 450 23,461 – – - investment properties – 412 – – - marketable securities 21 375 21 375 - property, plant and equipment 535 12,935 35 18 - subsidiary 1,570 – 940 –Gain on foreign exchange: - unrealised 1,445 – 79 178 - realised 624 3,011 – –Inventories written back* – 2,510 – –Interest income from a third party 3,060 4,600 – –Rental income: - advertisement space 3,732 4,149 – – - property, plant and equipment and land use rights 609 642 – – - others – 20 – –Reversal of impairment loss on: - land use rights 323 153 – – - property, plant and equipment 5,862 10,890 – – - receivables (third parties) 964 43 – – - receivables (subsidiaries) – – 18,152 88,929Reversal of provisions (Note 31) 547 733 – –Waiver of debts ** – – – 590

* The write back of inventories was made when the related inventories were sold above their carrying amounts.

** This relates to a waiver of debts from a subsidiary.

6. emPloyee beneFits exPense


Wages and salaries 54,881 53,829 253 198Social security contribution 535 561 – –Contribution to defined contribution plan 5,702 5,598 – –Increase in liability for defined benefit plan (Note 32(c)) 790 1,055 – –Other benefits 3,296 2,846 1 1

65,204 63,889 254 199

Included in employee benefits expense of the Group are executive directors’ remuneration amounting to RM722,000 (2014: RM1,276,000).


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7. directors’ remUneration

The details of remuneration receivable by directors of the Company during the year are as follows:


Executive:Salaries and other emoluments 644 1,133 – –Defined contribution plan 78 143 – –

Total executive directors’ remuneration 722 1,276 – –

Non-executive: Salaries and other emoluments 1,220 480 – –Defined contribution plan 147 58 – –Fees 353 275 253 198

Total non-executive directors’ remuneration 1,720 813 253 198

Total directors’ remuneration 2,442 2,089 253 198

Total directors’ remuneration (excluding fees) 2,089 1,814 – –

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

number of directors 2015 2014

Executive directors: RM550,001 – RM600,000 – 1 RM700,001 – RM750,000 1 1Non-executive directors: Below RM50,000 7 7 RM100,001 – RM150,000 1 1 RM500,001 – RM550,000 – 1 RM1,350,001 – RM1,400,000 1 –

An executive director of the Company was re-designated to be a non-executive director of the Company in the prior financial year. The total number of directors as at 28 February 2015 is 10 (2014: 11).


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8. other oPerating exPenses

Included in other operating expenses are as follows:


Amortisation of other investments 1 1 – –Auditor’s remuneration: - statutory audit 1,031 1,007 70 64Bad debts written off 56 1 – –Changes in fair value of marketable securities 707 – 707 –Impairment loss on: - investment in subsidiaries – – – 13,369 - marketable securities – 3 – –Impairment loss on receivables: - third parties 17 825 – – - subsidiaries – – – 2,826Inventories written down 432 348 – –Inventories written off 210 106 – –Investment properties written off – 503 – –Lease of land 216 216 – –Legal and professional fees 2,258 4,639 285 376Waiver of debt 132 – 132 –Loss on foreign exchange: - realised 147 – – – - unrealised 1,125 2,500 – –Management fee charged by a subsidiary – – 630 800Property, plant and equipment written off 209 2,314 – –Rental expense 37,653 33,195 – –

9. Finance costs


Interest expense on: - bankers’ acceptance 655 347 – –- bank overdrafts 249 285 – –- obligations under finance leases 81 112 – –- USD trade loans 264 102 – –- term loans 5,716 6,378 4,490 4,508- letter of credit 17 597 – –

6,982 7,821 4,490 4,508


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10. income tax exPense

Major components of income tax expense

The major components of income tax expense for the financial years ended 28 February are as follows:


Current income tax- Malaysian income tax 24,535 27,171 725 1,222- Under/(over)provision in respect of previous years 771 (406) (79) (71)

25,306 26,765 646 1,151

Deferred income tax- Origination and reversal of temporary differences (925) 5,105 – –- (Over)/under provision in respect of previous years (132) 65 – –- Relating to reduction in Malaysian income tax rate (12) – – –

(1,069) 5,170 – –

Real property gains tax 2,011 914 – –

Income tax expense attributable to continuing operations 26,248 32,849 646 1,151Income tax expense attributable to discontinued operations (Note 11) – 17,766 – –

Income tax expense recognised in profit or loss 26,248 50,615 646 1,151


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10. income tax exPense (cont’d.)

Reconciliation between tax expense and accounting profit

Domestic current income tax is calculated at the Malaysian statutory tax rate of 25% (2014: 25%) of the estimated assessable profit for the year.

The reconciliation between tax expense and the product of accounting profit multiplied by the applicable corporate tax rate for the financial years ended 28 February are as follows:


Profit before tax from continuing operations 82,214 139,283 78,340 178,536Profit before tax from discontinued operations (Note 11) – 152,374 – –

Accounting profit before tax 82,214 291,657 78,340 178,536

Taxation at statutory rate 20,553 72,914 19,585 44,634Effect of different tax rates in other country 169 337 – –Effect of reduction in tax rate (1) – – –Effect of expenses not deductible for tax purposes 7,592 7,546 1,608 5,350Effect of income not subject to taxation (4,191) (40,974) (20,468) (48,762)Utilisation of previously unrecognised deferred tax assets (782) (2,534) – –Deferred tax assets not recognised during the year 258 1 – –Reversal of deferred tax assets during the year – 5,390 – –Real property gains tax 2,011 8,318 – –Share of tax of an associate – 4 – –(Over)/under provision of deferred tax in previous years (132) 22 – –Under/(over) provision of income tax in respect of previous years 771 (409) (79) (71)

Income tax expense recognised in profit and loss 26,248 50,615 646 1,151

The Group has tax savings from the following:

group 2015 2014 rm’000 rm’000 Utilisation of previously unrecognised tax losses 455 544Utilisation of previously unabsorbed capital allowances, unutilised reinvestment allowances and unrecognised temporary differences 327 1,990

782 2,534


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11. discontinUed oPerations

On 10 April 2012, Darul Metro Sdn. Bhd. and Kelana Megah Sdn. Bhd., subsidiaries of the Company, entered into sale and purchase agreements with Berjaya Waterfront Sdn. Bhd. (formerly known as Pesaka Ikhlas (M) Sdn. Bhd.) (“Berjaya Waterfront”) in respect of the following:

i) The sale of Darul Metro Sdn. Bhd.’s (“DMSB”) legal and beneficial interests over the remaining lease in six parcels at land located in The Zon Johor Bahru at Stulang Laut, Johor Bahru (the “Duty Free Zone”) to Berjaya Waterfront for a consideration of RM325,000,000 (“DMSB Agreement”); and

ii) The sale of Kelana Megah Sdn. Bhd.’s intended lease interests in the land parcel bearing lot number PTB 20379 to Berjaya Waterfront for a consideration of RM27,990,000 (“KMSB Agreement”).

(collectively, the “Proposed Disposals”)

On 15 March 2013, DMSB Agreement was completed and a net gain after tax of RM115,700,000 recognised in the profit from discontinued operations for the year ended 28 February 2014.

Upon completion of DMSB Agreement, Selasih Ekslusif Sdn. Bhd. (“Selasih”), a subsidiary of the Company, commenced a 25-year tenancy over certain premises within the Duty Free Zone (“Selasih Tenancy Agreement”). Pursuant thereto, Selasih shall also retain completely and exclusively within the Duty Free Zone, the entire supply chain of its duty free business of importing, wholesaling and retailing and goodwill associated thereto in respect of the import, supply and sale within the Duty Free Zone of liquor, spirits, beer, chocolate, tobacco products, perfumery and cosmetics for a period of 25 years from the date of the commencement of the Selasih Tenancy Agreement. There was also a prepaid rental made by Selasih of RM88,000,000, representing 10 years rental paid in advance commencing from 15 March 2013.

Income statements disclosures

The results of the discontinued operations for the years ended 28 February are as follows:

group 2015 2014 rm’000 rm’000

Revenue – 2,335Expenses – (9,758)Gain on disposal of assets classified as held for sale – 159,674Other income – 614

Operating profit – 152,865Finance costs – (491)

Profit before tax from discontinued operations (Note 10) – 152,374Taxation related to profit from ordinary activities of the discontinued operations (Note 10) – (17,766)

Profit net of tax from discontinued operations – 134,608


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11. discontinUed oPerations (cont’d.)

Income statements disclosures (cont’d.)

The following items have been included in arriving at profit before tax from discontinued operations:

group 2015 2014 rm’000 rm’000

Auditor’s remuneration - statutory audit – 56Employee benefits expense - wages and salaries – 829 - social security contribution – 10 - contribution to defined contribution plan – 75 - other benefits – 3,580Interest income – (123)Gain on disposal of assets classified as held for sale – (159,674)Property, plant and equipment written off – 1,883Rental income: - advertisement space – (12) - property, plant and equipment and land use rights – (9)

Major components of income tax expense related to profit from discontinued operations

The major components of income tax expense related to profit from discontinued operations for the financial years ended 28 February are as follows:

group 2015 2014 rm’000 rm’000Current income tax- Malaysian income tax – 10,408- Over provision in respect of previous years – (3)

– 10,405

Real property gains tax – 7,404

Deferred income tax - Under provision in respect of previous years – (43)

Income tax expense attributable to discontinued operations – 17,766

Statement of cash flows disclosures

The cash flows attributable to the discontinued operations are as follows:

group 2015 2014 rm’000 rm’000 Operating activities 32,500 (22,298)Investing activities – 212,500

Net cash inflows 32,500 190,202

Included in the net cash generated from operating activities are partial collections of the unpaid balance of the consideration from the disposal.


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12. earnings Per share

(a) Continuing operations Basic earnings per share amounts are calculated by dividing profit net of tax from continuing

operations attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the financial year.

The Company does not have any diluted earnings per share.

The following reflect the profit and share data used in the computation of basic earnings per share for the years ended 28 February:

group 2015 2014 rm’000 rm’000

Profit net of tax attributable to owners of the parent 46,467 206,436Less: Profit net of tax from discontinued operations attributable to owners of the parent – (113,747)

Profit net of tax from continuing operations attributable to owners of the parent 46,467 92,689

group 2015 2014 number number of shares of shares ‘000 ‘000

Weighted average number of ordinary shares for basic earnings per share computation* 253,650 253,650

* The weighted average number of shares takes into account the weighted average effect of changes in treasury shares transactions during the year, if any.

(b) Discontinued operations

The basic earnings per share from discontinued operations are calculated by dividing profit net of tax from discontinued operations attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the financial year. The profit and share data are presented in the tables in Note 12(a).

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


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13. diVidends

group and company 2015 2014 rm’000 rm’000 recognised during the financial year:

Dividends on ordinary shares:

In respect of the financial year ended 28 February 2014: - First interim single-tier dividend of 10% – 25,365 - Special interim single-tier dividend of 10% (tranche 1) – 25,365 - Second interim single-tier dividend of 10% – 25,365 - Special interim single-tier dividend of 15% (tranche 2) – 38,048 - Third interim single-tier dividend of 5% – 12,682 - Special interim single-tier dividend of 15% (tranche 3) – 38,048

In respect of the financial year ended 28 February 2015: - First interim single-tier dividend of 15% 38,048 – - Second interim single-tier dividend of 10% 25,365 – - Third interim single-tier dividend of 10% 25,365 –

88,778 164,873

14. ProPerty, Plant and eqUiPment

office capital equipment, land and golf work-in- motor furniture Plant and other buildings* course progress vehicles and fittings machinery assets total rm’000 rm’000 rm’000 rm’000 rm’000 rm’000 rm’000 rm’000

group

at 28 February 2015

cost

At 1 March 2014 169,891 44,648 4,672 8,823 44,755 115,308 2,518 390,615Additions 1,301 – 6,802 1,099 1,560 2,254 12 13,028Disposals (59) – (824) (429) (583) (19) – (1,914)Write-offs (1,140) – – (277) (512) (9,738) (6) (11,673)Reclassification 1,296 – (5,633) – – 4,337 – –

At 28 February 2015 171,289 44,648 5,017 9,216 45,220 112,142 2,524 390,056


91


14. ProPerty, Plant and eqUiPment (cont’d.)


accumulated depreciation and impairment losses

At 1 March 2014 85,506 16,706 – 6,395 37,600 103,321 639 250,167Depreciation charge for the year 4,260 628 – 903 1,801 5,389 206 13,187Impairment loss reversed^^ (75) (5,787) – – – – – (5,862)Disposals (59) – – (429) (581) (11) – (1,080)Write-offs (1,130) – – (135) (490) (9,703) (6) (11,464)

At 28 February 2015 88,502 11,547 – 6,734 38,330 98,996 839 244,948

Analysed as: Accumulated depreciation 48,791 9,807 – 6,734 38,330 98,996 839 203,497Accumulated impairment losses 39,711 1,740 – – – – – 41,451

88,502 11,547 – 6,734 38,330 98,996 839 244,948

Net carrying amount 82,787 33,101 5,017 2,482 6,890 13,146 1,685 145,108

at 28 February 2014

cost

At 1 March 2013 250,721 44,648 11,235 9,528 51,200 137,447 790 505,569Additions 2,346 – 5,944 466 3,060 3,020 196 15,032Disposals (23,372) – – (1,171) (274) (10,889) (5) (35,711)Write-offs (321) – – – (9,979) (18,333) (34) (28,667)Reclassification 6,125 – (12,507) – 748 4,063 1,571 –Reclassified to investment properties (Note 15) (61,908) – – – – – – (61,908)Transfer to assets classified as held for sale (Note 29) (3,700) – – – – – – (3,700)

At 28 February 2014 169,891 44,648 4,672 8,823 44,755 115,308 2,518 390,615


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At 1 March 2013 158,478 16,977 – 6,537 43,897 127,082 654 353,625Depreciation charge for the year 4,667 615 – 864 2,107 5,148 42 13,443Impairment loss reversed^ (73) (886) – – – – – (959)Impairment loss reversed^^ (9,931) – – – – – – (9,931)Disposals (4,532) – – (1,006) (2,351) (10,694) (5) (18,588)Write-offs (150) – – – (6,033) (18,254) (33) (24,470)Adjustment^^^ (4,343) – – – – – – (4,343)Reclassification – – – – (20) 39 (19) –Reclassified to investment properties (Note 15) (57,737) – – – – – – (57,737)Transfer to assets classified as held for sale (Note 29) (873) – – – – – – (873)

At 28 February 2014 85,506 16,706 – 6,395 37,600 103,321 639 250,167

Analysed as: Accumulated depreciation 45,720 9,179 – 6,395 37,600 103,321 639 202,854Accumulated impairment losses 39,786 7,527 – – – – – 47,313

85,506 16,706 – 6,395 37,600 103,321 639 250,167

net carrying amount 84,385 27,942 4,672 2,428 7,155 11,987 1,879 140,448


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* land and buildings

long term leasehold Freehold buildings land land total rm’000 rm’000 rm’000 rm’000

group

at 28 February 2015

cost

At 1 March 2014 158,694 1,803 9,394 169,891Additions 1,301 – – 1,301Disposals (59) – – (59)Write-offs (1,140) – – (1,140)Reclassification 1,296 – – 1,296

At 28 February 2015 160,092 1,803 9,394 171,289


At 1 March 2014 85,140 366 – 85,506Depreciation charge for the year 4,228 32 – 4,260Impairment loss reversed^^ (75) – – (75)Disposals (59) – – (59)Write-offs (1,130) – – (1,130)

At 28 February 2015 88,104 398 – 88,502

Analysed as:Accumulated depreciation 48,532 259 – 48,791Accumulated impairment losses 39,572 139 – 39,711

88,104 398 – 88,502

net carrying amount 71,988 1,405 9,394 82,787


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* land and buildings (cont’d.)

long term leasehold Freehold buildings land land total rm’000 rm’000 rm’000 rm’000

group

at 28 February 2014

cost

At 1 March 2013 226,458 5,503 18,760 250,721Additions 2,346 – – 2,346Disposals (14,006) – (9,366) (23,372)Write-offs (321) – – (321)Reclassification 6,125 – – 6,125Reclassified to investment properties (Note 15) (61,908) – – (61,908)Transfer to assets classified as held for sale (Note 29) – (3,700) – (3,700)

At 28 February 2014 158,694 1,803 9,394 169,891


At 1 March 2013 152,515 2,963 3,000 158,478Depreciation charge for the year 4,623 44 – 4,667Impairment loss reversed^ (73) – – (73)Impairment loss reversed^^ (5,163) (1,768) (3,000) (9,931)Disposals (4,532) – – (4,532)Write-offs (150) – – (150)Adjustment^^^ (4,343) – – (4,343)Reclassified to investment properties (Note 15) (57,737) – – (57,737)Transfer to assets classified as held for sale (Note 29) – (873) – (873)

At 28 February 2014 85,140 366 – 85,506

Analysed as:Accumulated depreciation 45,493 227 – 45,720Accumulated impairment losses 39,647 139 – 39,786

85,140 366 – 85,506

net carrying amount 73,554 1,437 9,394 84,385


95



office equipment, furniture motor and fittings vehicles total company rm’000 rm’000 rm’000

at 28 February 2015

cost

At 1 March 2014 73 423 496Disposals – (240) (240)

At 28 February 2015 73 183 256

accumulated depreciation

At 1 March 2014 71 423 494Depreciation charge for the year 1 – 1Disposals – (240) (240)

At 28 February 2015 72 183 255

net carrying amount 1 – 1

at 28 February 2014

cost

At 1 March 2013 73 467 540Disposals – (44) (44)

At 28 February 2014 73 423 496

accumulated depreciation

At 1 March 2013 70 467 537Depreciation charge for the year 1 – 1Disposals – (44) (44)

At 28 February 2014 71 423 494

net carrying amount 2 – 2

^ reversal of impairment loss has been made to increase the carrying value of the golf course to its estimated recoverable amount based on indicative valuations provided by an independent firm of valuers.

^^ reversal of impairment loss has been made to increase the carrying value of the land and buildings to its recoverable amount based on consideration in sale and purchase agreements.

^^^ adjustment was made to reverse depreciation which was inadvertently overcharged in prior years.


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(a) During the financial year, the Group acquired property, plant and equipment with an aggregate cost of RM660,000 (2014: RM380,000) by means of finance leases. The outflow on acquisition of property, plant and equipment amounted to RM12,368,000 (2014: RM14,652,000).

The carrying amount of property, plant and equipment held under finance leases as at reporting date are as follows:

group 2015 2014 rm’000 rm’000

Motor vehicles 1,723 1,558Plant and machinery 431 580

2,154 2,138

(b) The net carrying amounts of property, plant and equipment pledged as securities for borrowings (Note 33) are as follows:

group 2015 2014 rm’000 rm’000

Freehold land 9,394 9,394Leasehold land 1,405 1,437Buildings 47,885 50,472

58,684 61,303

(c) Included in the plant and machinery of the Group are staff costs capitalised amounting to RM372,000 (2014: RM351,000).


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15. inVestment ProPerties

group 2015 2014 rm’000 rm’000

cost

At beginning of the year 195,421 134,875Additions 2 86Disposals (7,151) (382)Write-offs – (732)Reclassified from property, plant and equipment (Note 14) – 61,908Transfer to assets classified as held for sale (Note 29) – (334)

At end of the year 188,272 195,421


At beginning of the year 142,090 80,883Depreciation charge for the year 3,932 3,807Disposals (391) (54)Write-offs – (229)Reclassified from property, plant and equipment (Note 14) – 57,737Transfer to assets classified as held for sale (Note 29) – (54)


Analysed as:Accumulated depreciation 47,866 44,325Accumulated impairment losses 97,765 97,765

145,631 142,090

net carrying amount 42,641 53,331

Fair value 100,900 113,003

Direct operating expenses arising from income generating investment properties included in income statements 4,450 4,458

The fair value of the investment properties was based on a valuation by an independent qualified valuer. Valuation was based on current prices in an active market for certain properties and where appropriate, the investment method reflecting receipt of contractual rentals, expected future market rentals, current market yields, void periods, maintenance requirements and approximate capitalisation rates is used.

Investment properties with net carrying amount of RM42,641,000 (2014: RM46,453,000) is situated on a land owned by a third party with whom the Group has an operating lease arrangement as disclosed in Note 38(b).

Investment properties with a net carrying amount of RM42,641,000 (2014: RM46,453,000) are pledged as securities for borrowings (Note 33).


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15. inVestment ProPerties (cont’d.)

A quantitative sensitivity analysis of the change in the yield rate as at 28 February 2015 is shown below:

description Fair valuerm’000

Valuation techniques

Unobservable inputs

range sensitivity of the input to fair value

Buildings 100,900 Investment method

Yield adjustments based on management’s assumptions*

6.5% 0.5% increase or decrease in the yield rate would result in decrease or increase in fair value by approximately RM8 million.

* The yield adjustments are made for any difference in the nature, location or condition of the specific property.

16. land Use rights

group 2015 2014 rm’000 rm’000

cost At beginning of the year 34,171 31,646Additions – 2,525


accumulated amortisation and impairment losses At beginning of the year 10,836 10,183Amortisation for the year 438 806Reversal of impairment losses (323) (153)


Analysed as: Accumulated amortisation 10,391 9,953Accumulated impairment losses 560 883

10,951 10,836

net carrying amount 23,220 23,335

Amount to be amortised: - Not later than 1 year 438 455 - Later than 1 year but not later than 5 years 1,752 1,819 - Later than 5 years 21,030 21,061

23,220 23,335


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17. biological assets

group 2015 2014 rm’000 rm’000

at fair value

At beginning of the year 4,800 4,420Gain arising from changes in fair value – 380


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

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

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

(b) discount rate per annum of 12.0% (2014: 12.0%). Such a discount rate represents the asset specific rate for the Group’s oil palm plantation operations which is applied in the discounted future cash flows calculation;

(c) average selling price of CPO at RM2,400 to RM2,500 (2014: RM2,500) per tonne;

(d) average selling price of palm kernel of RM1,500 (2014: RM1,250) per tonne; and

(e) average yield is 17.2 (2014: 20.6) tonnes of FFB per hectare over the average life of 25 years.

With regard to the assumptions made in determining the fair values of the oil palm plantations, the management believes that any reasonable change in any of the above significant assumptions would not cause the fair value of the oil palm plantations to be materially different.

During the financial year, the Group’s oil palm plantations produced approximately 2,100 tonnes (2014: 2,700 tonnes) of FFB. The selling prices per tonne for those FFB ranged between RM1,300 to RM2,900 (2014: RM1,300 to RM2,900).

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

group 2015 2014 hectares hectares

Planted area:

Mature 130.3 130.3Immature 36.8 36.8

167.1 167.1


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18. goodwill

group 2015 2014 rm’000 rm’000

cost At beginning of year and at end of year 27,408 27,408

impairment tests for goodwill

(a) allocation of goodwill

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

group 2015 2014 rm’000 rm’000

Trading of duty free goods and non-dutiable merchandise 27,408 27,408

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

The recoverable amount of the CGU is determined based on value-in-use calculations using cash flow projections based on financial forecasts with key assumptions approved by management covering a 5-year period with a growth rate of approximately 5%. The forecasted growth rate used to extrapolate cash flow beyond the 5-year period is 1% (2014: 1%).

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

(i) Budgeted gross margin

The basis used to determine the value assigned to the budgeted gross margin is the average gross margin achieved in the year immediately before the budgeted year, increased for expected efficiency improvements. The budgeted gross margins for trading of duty free goods and non-dutiable merchandise segment are in the range of 7% to 26% (2014: 10% to 24%).

(ii) Selling price

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

(iii) Discount rate

The discount rate applied to the cash flow projections of 7.6% (2014: 6.4%) is based on the weighted average cost of capital of a subsidiary, Duty Free International Limited Group.

(c) sensitivity to changes in assumptions

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


101


19. inVestment in sUbsidiaries

company 2015 2014 rm’000 rm’000

Quoted equity instruments, at cost Outside Malaysia 784,367 784,367Unquoted shares, at cost 274,045 281,345

1,058,412 1,065,712Less: Accumulated impairment losses (37,680) (37,680)

1,020,732 1,028,032

Market value of quoted equity instruments: Outside Malaysia 708,600 714,264

During the financial year, the management conducted a review of the recoverable amount of its quoted investment in a subsidiary of which its cost of investments exceeded its market value. The recoverable amount which was based on the value-in-use calculation using cash flow projections based on the financial budgets approved by management covering a five-year period is higher than the cost of investments.

(a) Details of the subsidiaries, which were incorporated in Malaysia (unless otherwise indicated), as at 28 February 2015, are as follows:

Proportion ofname of company ownership interest in ordinary shares 2015 2014 Principal activities % %

Arah Induk Sdn. Bhd. 100 100 Dormant

Atlan Properties Sdn. Bhd. 100 100 Investment holding

Atlan Technology Sdn. Bhd. 100 100 Dormant

Atlan Orient Sdn. Bhd. 100 100 Dormant

Principal Assets Pte. Ltd. – 100 Dormant (Incorporated in Federal Territory of Labuan)*

Seven Wonders Of The World Sdn. Bhd. – 100 Dormant

Naluri Properties Sdn. Bhd. 100 100 Property investment, general construction and apartment hotel business

Duty Free International Limited 82 82 Investment holding (“DFI”) (Incorporated in Singapore)+^


102


19. inVestment in sUbsidiaries (cont’d.)

(a) Details of the subsidiaries, which were incorporated in Malaysia (unless otherwise indicated), as at 28 February 2015, are as follows: (cont’d.)


United Industries Holdings Sdn. Bhd. (“UIH”) 100 100 Investment holding

MHS Land Sdn. Bhd. (liquidated) – 51 Investment holding

Zon Hospitality Services Sdn. Bhd. 100 100 Dormant

Blossom Time Sdn. Bhd. 100 100 Property development

Timeless Image Sdn. Bhd. 100 100 Investment holding

International Aviation Consultants Sdn. Bhd. 100 100 Dormant

RZ Equities Sdn. Bhd. 100 100 Dormant

Trifiniti Networks Sdn. Bhd. 100 100 Dormant

Atlan Assets Sdn. Bhd. 100 100 Dormant

Atlan Management Sdn. Bhd. 100 100 Providing various administration, advisory, management, planning, functions and assistance to its holding company and related companies

Atlan Development Sdn. Bhd. 100 100 Dormant

Atlan Capital Sdn. Bhd. 100 100 Dormant

Ocean Pride Sdn. Bhd. 100 100 Dormant

Tegapasti Sdn. Bhd. 100 100 Dormant

Belia Karisma Sdn. Bhd. 100 100 Dormant

Radiant Ranch Sdn. Bhd. 100 100 Dormant

Gardenia Success Sdn. Bhd. 100 100 Dormant

Tropika Ferringhi Management Sdn. Bhd. 100 100 Property management


103





held through atlan Properties sdn. bhd.

Naluri Corporation Sdn. Bhd. 100 100 Dormant

held through belia karisma sdn. bhd. and atlan assets sdn. bhd.

Naluri International Limited 100 100 Investment holding(Incorporated in Hong Kong)#

held through naluri international limited

TRIM Capital Management (M) Sdn. Bhd. 100 100 Dormant

held through dFi

DFZ Capital Berhad (“DFZ”) 82 82 Investment holding

Darul Metro Sdn. Bhd. 82 82 Dormant

Orchard Boulevard Sdn. Bhd. 82 82 Investment holding and resort development

held through dFZ

DFZ Trading Sdn. Bhd. 82 82 Investment holding and management services

Selasih Ekslusif Sdn. Bhd. 82 82 Retailer of duty free and non-dutiable merchandise

Winner Prompt Sdn. Bhd. 82 82 Licensed distributor and wholesaler of duty free merchandise

Emas Kerajang Sdn. Bhd.@ 57 57 Retailer of duty free and non-dutiable merchandise

Seruntun Maju Sdn. Bhd.@ 57 57 Retailer of duty free and non-dutiable merchandise


104





held through orchard boulevard sdn. bhd.

Gold Vale Development Sdn. Bhd. 82 82 Dormant

Kelana Megah Sdn. Bhd. 82 82 Dormant

Cergasjaya Properties Sdn. Bhd. 82 82 Resort development, properties management and cultivation of oil palm

Black Forest Golf And Country 82 82 Dormant Club Sdn. Bhd.

Binamold Sdn. Bhd. 82 82 Property investment

Tenggara Senandung Sdn. Bhd. 82 82 Dormant

DFZ Asia Sdn. Bhd. 82 82 Investment holding

Media Zone Sdn. Bhd. 82 82 Dormant

DFZ Tours & Travel Sdn. Bhd. 82 82 Dormant

First Influx Sdn. Bhd. 82 82 Dormant

Front Top (M) Sdn. Bhd. 82 82 Dormant

PT DFZ Indon 81 81 Dormant (Incorporated in Republic of Indonesia)#

held through dFZ trading sdn. bhd.

Cergasjaya Sdn. Bhd. 82 82 Wholesaler and retailer of duty free and non-dutiable merchandise

Melaka Duty Free Sdn. Bhd. 42 42 Retailer of duty free and non-dutiable merchandise

DFZ Duty Free Supplies Sdn. Bhd. 82 82 Wholesaler and distributor of duty free and non-dutiable merchandise

Jasa Duty Free Sdn. Bhd. 82 82 Retailer of duty free and non-dutiable merchandise

DFZ Emporium Sdn. Bhd.@ 24 24 Retailer of duty free and non-dutiable merchandise


105





held through dFZ trading sdn. bhd. (cont’d.)

DFZ (M) Sdn. Bhd.@ 57 57 Retailer of duty free and non-dutiable merchandise

Wealthouse Sdn. Bhd.@ 23 23 Retailer of duty free and non-dutiable merchandise

Jelita Duty Free Supplies Sdn. Bhd. 82 82 Wholesaler and distributor of duty free and non-dutiable merchandise

DFZ Duty Free (Langkawi) Sdn. Bhd. 82 82 Retailer of duty free and non-dutiable merchandise

Zon Emporium Sdn. Bhd. 82 82 Retailer of duty free and non-dutiable merchandise DFZ Utara Sdn. Bhd. 82 82 Dormant

held through dFZ asia sdn. bhd.

PT DFZ Indon 1 1 Dormant (Incorporated in Republic of Indonesia)#

held through Uih

United Industries Sdn. Bhd. 100 100 Manufacturing and marketing of exhaust systems and other automotive component parts

United Sanoh Industries Sdn. Bhd. 70 70 Manufacturing and distribution of brake, fuel and clutch tubings and other automotive component parts


106





held through United industries sdn. bhd.

UEW Plastic Industries Sdn. Bhd. 100 100 Dormant

Freighter Industries (M) Sdn. Bhd. 100 100 Dormant

Danco Marketing Sdn. Bhd. 100 100 Dormant

held through Uih and United industries sdn. bhd.

United Vehicles Industries Sdn. Bhd. 100 100 Manufacturing and marketing of fuel tanks, other automotive component parts and wheelbarrows

United Filter Sdn. Bhd. 97 97 Dormant

held through United Vehicles industries sdn. bhd.

Kadar Prisma Sdn. Bhd. 100 100 Dormant

UVI Advance Technology Sdn. Bhd. 100 100 Dormant

* Based on unaudited financial statements+ A corporation listed on Singapore Stock Exchange (“SGX-ST”)^ Audited by member firm of Ernst & Young Global in Singapore# Audited by a firm other than Ernst & Young

@ During the financial year, the terms of non-voting Convertible Redeemable Preference Shares were changed, which led to the increase in effective ownership interest held as shown below:

total effective ownership interest held

name of company 2015 2014 % %

Emas Kerajang Sdn. Bhd. 82.29 79.30 Seruntun Maju Sdn. Bhd. 82.29 79.30 DFZ Emporium Sdn. Bhd. 82.29 76.00 DFZ (M) Sdn. Bhd. 82.29 79.30 Wealthouse Sdn. Bhd. 82.29 76.40


107




In conjunction with this change, the consideration receivable from the non-controlling interests was assessed to be effectively settled and the net impact was reflected as follows:

2015 rm’000 Reduction in non-controlling interests 3,064Consideration receivable effectively settled (2,732)

Premium received in transaction with non-controlling interests 332

The Group assessed that these investees are subsidiaries as control was retained by the Group through stipulations in the shareholders agreements, signed by the Group and the non-controlling interests.

(b) Disposal of a subsidiary

On 17 September 2014, the Group entered into a sale agreement to dispose of 100% of its interest in its wholly-owned subsidiary, Seven Wonders Of The World Sdn Bhd., for RM8,240,000. The disposal consideration was fully settled in cash. The disposal was completed on 30 November 2014, on which date control of Seven Wonders Of The World Sdn. Bhd. passed to the acquirer.

The value of assets and liabilities of Seven Wonders Of The World Sdn. Bhd. recorded in the consolidated financial statements as at 17 September 2014, and the effects of the disposal were:

2015 rm’000 Investment properties 6,760Trade and other receivables 48

6,808Trade and other payables (138)

Carrying value of net assets 6,670

Cash consideration / Net cash inflow on disposal of a subsidiary 8,240

Gain on disposal:

2015 rm’000 Cash received 8,240Net assets derecognised (6,670)

Gain on disposal 1,570


108



(c) Subsidiaries with material non-controlling interests

The Group regards DFI and its subsidiaries (“DFI Group”) and United Sanoh Industries Sdn. Bhd. (“USISB”) as subsidiaries which have non-controlling interests that are material to the Group. The equity interest held by non-controlling interests are as follows:

dFi group Usisb 2015 2014 2015 2014 % % % % Equity interest held by non-controlling interests 18 18 30 30

The summarised financial information of DFI Group and USISB is set out below. The information presented below is based on the amounts before inter-company elimination.

(i) Summarised statements of financial position

dFi group Usisb 2015 2014 2015 2014

rm’000 rm’000 rm’000 rm’000 Non-current assets 198,449 200,055 7,590 5,997Current assets 324,099 406,691 34,891 30,764

Total assets 522,548 606,746 42,481 36,761

Current liabilities 109,497 173,125 17,589 13,831Non-current liabilities 21,337 17,981 1,116 1,452

Total liabilities 130,834 191,106 18,705 15,283

Net assets 391,714 415,640 23,776 21,478

Equity attributable to owners of the company 322,330 340,118 16,643 15,035Non-controlling interests 69,384 75,522 7,133 6,443

391,714 415,640 23,776 21,478


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(c) Subsidiaries with material non-controlling interests (cont’d.)

(ii) Summarised statements of comprehensive income

dFi group Usisb 2015 2014 2015 2014

rm’000 rm’000 rm’000 rm’000 Revenue 561,006 569,101 56,915 52,567

Profit for the year 55,431 168,142 5,827 12,908

Profit attributable to: Owners of the company 45,255 137,486 4,079 9,036 Non-controlling interests 10,176 30,656 1,748 3,872

55,431 168,142 5,827 12,908Foreign currency translation – (2) – –

Total comprehensive income for the year 55,431 168,140 5,827 12,908

Total comprehensive income attributable to:

Owners of the company 45,255 137,484 4,079 9,036Non-controlling interests 10,176 30,656 1,748 3,872

55,431 168,140 5,827 12,908

Dividends paid to non-controlling interests 12,822 17,976 750 5,906

(iii) Summarised statements of cash flows

dFi group Usisb 2015 2014 2015 2014

rm’000 rm’000 rm’000 rm’000

Net cash generated from/ (used in): - Operating activities 109,388 (88,769) 5,246 5,363 - Investing activities 34,395 205,628 (3,595) 10,169 - Financing activities (114,518) (100,821) (4,414) (9,950)

Net increase/(decrease) in cash and cash equivalents 29,265 16,038 (2,763) 5,582Effects of foreign exchange translation 117 235 - -Cash and cash equivalents at beginning of the year 36,457 20,184 11,140 5,558

Cash and cash equivalents at end of the year 65,839 36,457 8,377 11,140


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(d) Impairment loss recognised

The management of the Company has carried out a review of the recoverable amount of its investments in subsidiaries. The review has led to the retention of the impairment loss of RM37,680,000 recognised in the prior years’ profit or loss. The recoverable amount was based on the value-in-use calculation using cash flow projections based on the financial budgets approved by management covering a five-year period.

20. inVestment in associate


Unquoted shares in Malaysia, at cost 437 437 437 437Shares of post acquisition results 68 118 – –

505 555 437 437

Represented by: Share of net assets of associate 505 555 437 437

The particulars of the associate, which is incorporated in Malaysia, are as follows:

Proportion ofname of company ownership interest 2015 2014 Principal activities % % Scandinavian Avionics (Malaysia) 25 25 Sale of aviation related Sdn. Bhd.# electrical instruments and the provision of avionics support services

# Audited by a firm other than Ernst & Young

The financial year end of the associate is 31 December. The results of the associate is accounted for in the Group’s financial statements under the equity method, based on the most recently available audited financial statements and the unaudited management financial statements of the associate made up to period ended 28 February.

The associate requires the parent’s consent to distribute its profits. The parent does not foresee giving such consent at the reporting date.

The associate had no contingent liabilities or capital commitments as at 28 February 2015 or 2014.

The summarised financial information of the associate is set out below and represents the amounts in the financial statements of the associate and not the Group’s share of those amounts.


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20. inVestment in associate (cont’d.)

(a) Summarised statements of financial position

group 2015 2014 rm’000 rm’000

Non-current assets 394 353Current assets 3,542 2,601

Total assets 3,936 2,954

Current liabilities, representing total liabilities 1,915 732

Net assets 2,021 2,222

(b) Summarised statements of comprehensive income

group 2015 2014 rm’000 rm’000

Revenue 5,853 7,576(Loss)/profit before tax (201) 676(Loss)/profit net of tax, representing total comprehensive (loss)/income (201) 690

(c) Reconciliation of the summarised financial information presented above to the carrying amount of the Group’s interest in the associate

group 2015 2014 rm’000 rm’000

Net assets at beginning of the year 2,222 1,532(Loss)/profit net of tax (201) 690

Net assets at end of the year 2,021 2,222

Interest in the associate 25% 25%

Carrying value of Group’s interest in the associate 505 555


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21. other inVestments

group 2015 2014 rm’000 rm’000

Unquoted shares at cost - in Malaysia 21 21 - outside Malaysia 3,688 3,688

3,709 3,709Less: Accumulated impairment losses (3,688) (3,688)

21 21Corporate golf club and vacation club memberships 125 125Less: Accumulated amortisation (15) (14)

131 132

22. trade and other receiVables


currenttrade receivablesThird parties 36,609 37,270 – –Less: Allowance for impairment (525) (1,482) – –

Trade receivables, net 36,084 35,788 – –

other receivablesDue from subsidiaries – – 110,123 119,813Less: Allowance for impairment – – (46,973) (65,125)

– – 63,150 54,688

Deposits 3,904 3,041 3 3Staff loans 4 9 – –Due from Berjaya Waterfront 47,844 84,600 – –Sundry receivables 6,842 7,214 – –

58,594 94,864 3 3

Less: Allowance for impairment (556) (556) – –

Other receivables, net 58,038 94,308 3 3

Total current trade and other receivables, net 94,122 130,096 63,153 54,691


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22. trade and other receiVables (cont’d.)


non-currentother receivablesStaff loans – 2 – –

Total trade and other receivables (current and non-current) 94,122 130,098 63,153 54,691Add: Cash and bank balances (Note 28) 110,381 130,559 9,977 48,997

Total loans and receivables 204,503 260,657 73,130 103,688

Trade receivables

Trade receivables are non-interest bearing and are generally on 14 to 120 days’ (2014: 14 to 120 days’) terms. Other credit terms are assessed and approved on a case-by-case basis. Trade receivables are recognised at their original invoice amounts which represent their fair values on initial recognition.

Due from subsidiaries

The amounts owing from subsidiaries are unsecured and are recoverable on demand. The interest bearing and non-interest bearing amounts are as follows:

company 2015 2014 rm’000 rm’000 Interest bearing 60,537 54,237Non-interest bearing 2,613 451

Total 63,150 54,688

The effective interest is 5.0% (2014: 5.0%) per annum.

Staff loans

Staff loans are unsecured and bear interest at 2.0% (2014: 2.0%) per annum. Non-current amounts have an average maturity of 1.0 year (2014: 1.0 year).

Due from Berjaya Waterfront

The amount due from Berjaya Waterfront relates to the sale consideration of DMSB Agreement as disclosed in Note 11 and is subject to interest at 6% per annum.

In April 2015, DMSB received RM2.5 million, being partial payment of the sum of RM47.5 million deferred consideration and RM0.7 million accrued interest up to 15 April 2015. Both parties have mutually agreed that Berjaya Waterfront shall pay the remaining deferred consideration of RM45.0 million together with the interest thereon at the rate of 6% per annum on or before 15 July 2015.


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Ageing analysis of trade receivables

The ageing analysis of the Group’s trade receivables is as follows:

group 2015 2014 rm’000 rm’000 Neither past due nor impaired 26,996 25,092

1 to 30 days past due not impaired 7,605 6,63731 to 60 days past due not impaired 563 1,00661 to 90 days past due not impaired 324 2,69491 to 120 days past due not impaired 525 352More than 120 days past due not impaired 71 7

Past due but not impaired 9,088 10,696Impaired 525 1,482

36,609 37,270

Receivables that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group.

None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year.

Trade receivables that are past due but not impaired

The Group has trade receivables amounting to RM9,088,000 (2014: RM10,696,000) that are past due at the reporting date but not impaired. Although these balances are unsecured in nature, they are mostly due from creditworthy debtors.

None of the Group’s trade receivables that are past due but not impaired have been renegotiated during the financial year.

Trade receivables that are impaired

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

group 2015 2014 rm’000 rm’000

individually impairedTrade receivables - nominal amounts 525 1,482Less: Allowance for impairment (525) (1,482)

– –


115



Movement in allowance accounts:

group 2015 2014 rm’000 rm’000 At beginning of the year 1,482 786Charge for the year 17 816Written off (10) (77)Reversal of impairment losses (964) (43)

At end of the year 525 1,482

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

Management conducts periodic assessment on its trade receivable balances on account-by-account basis. Hence, all impairment losses are provided for specific trade receivable balances. Management is of the opinion that there are no further factors that warrants the consideration of additional impairment losses on a collective basis.

Other receivables that are impaired

Other receivables that are impaired at the reporting date and the movement of the allowance accounts used to record the impairment are as follows:

group 2015 2014 rm’000 rm’000

individually impaired Sundry receivables - nominal amounts 556 556Less: Allowance for impairment (556) (556)

– –

company 2015 2014 rm’000 rm’000

individually not impaired Due from subsidiaries 44,996 50,399individually impaired Due from subsidiaries - nominal amounts 65,127 69,414

110,123 119,813Less: Allowance for impairment (46,973) (65,125)

63,150 54,688


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Movement in allowance accounts:


At beginning of the year 556 547 65,125 168,772Charge for the year – 9 – 2,826Reversal* – – (18,152) (88,929)Written off – – – (17,544)

At end of the year 556 556 46,973 65,125

* The impairment loss on the amounts due from subsidiaries was reversed during the financial year as the subsidiaries were able to repay their obligations.

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

Management conducts periodic assessment on its sundry receivable balances on account-by-account basis. Hence, all impairment losses are provided for specific sundry receivable balances. Management is of the opinion that there are no further factors that warrants the consideration of additional impairment losses on a collective basis.

23. PrePayments


currentPrepaid rental 9,980 9,875 – –Prepaid other operating expenses 2,291 2,002 75 75

12,271 11,877 75 75

non-currentPrepaid rental 68,831 78,611 – –

total prepayments 81,102 90,488 75 75

Amount to be charged out to income statement: - Not later than 1 year 12,271 11,877 75 75 - Later than 1 year but not later than 5 years 39,122 39,122 – – - Later than 5 years 29,709 39,489 – –

81,102 90,488 75 75

Included in the prepaid rental is the balance rental paid in advance by the Group to Berjaya Waterfront amounting to RM70,767,000 (2014: RM79,567,000) as disclosed in Note 11.


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24. deFerred tax

group 2015 2014 rm’000 rm’000

At beginning of the year 7,353 2,226Recognised in profit or loss (1,069) 5,127


Presented after appropriate offsetting as follows:

Deferred tax assets (1,063) (670)Deferred tax liabilities 7,347 8,023

6,284 7,353

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

DeferredtaxliabilitiesoftheGroup:

Property, plant and equipment rm’000

1 March 2013 9,669Recognised in income statement (781)

At 28 February 2014 8,888Set-off against deferred tax assets (865)

8,023

1 March 2014 8,888Recognised in income statement (917)

At 28 February 2015 7,971Set-off against deferred tax assets (624)

7,347


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24. deFerred tax (cont’d.)

DeferredtaxassetsoftheGroup:

Unutilisedtax losses and unabsorbed capital allowances others total rm’000 rm’000 rm’000

1 March 2013 (5,572) (1,871) (7,443)Recognised in income statement 5,373 535 5,908

At 28 February 2014 (199) (1,336) (1,535)Set-off against deferred tax liabilities 865

(670)

1 March 2014 (199) (1,336) (1,535)Recognised in income statement 7 (159) (152)

At 28 February 2015 (192) (1,495) (1,687)Set-off against deferred tax liabilities 624

(1,063)

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


Unabsorbed capital allowances 5,433 5,733 818 818Unabsorbed reinvestment allowances 16,169 16,542 – –Unutilised tax losses 232,205 233,330 – –Other deductible temporary differences 7,464 7,762 – –

261,271 263,367 818 818

Deferred tax assets have not been recognised in respect of these items as they may not be used to offset taxable profits of other subsidiaries in the Group and they have been risen in subsidiaries that have insufficient profits to fully utilise these unabsorbed capital allowances, unabsorbed reinvestment allowances, unutilised tax losses and other deductible temporary differences in the foreseeable future.

The deferred tax assets attributable to unabsorbed capital allowances, unabsorbed reinvestment allowances and unutilised tax losses are available for offsetting against future taxable profits subject to no substantial change in shareholdings under the Income Tax Act, 1967 and guidelines issued by the tax authority.


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25. inVentories

group 2015 2014 rm’000 rm’000

costFood and beverages 2 –Raw materials 17,603 15,009Work in progress 3,370 3,028Trading goods 170,612 238,261Finished goods 1,184 2,031Inventory property 13,665 16,262Consumables 380 328

206,816 274,919

During the year, the amount of inventories recognised as an expense in the income statement was RM486,143,000 (2014: RM502,342,000).

26. marketable secUrities

group and company 2015 2014 market value market value carrying of quoted carrying of quoted amount investments amount investments rm’000 rm’000 rm’000 rm’000

Held for trading investmentsEquity instruments - quoted outside Malaysia 79 79 712 712

Changes in fair value

During the financial year, the Group and the Company have recognised an decrease in fair value amounting to RM707,000 (2014: increase of RM61,000) and RM707,000 (2014: increase of RM61,000), respectively with regards to the equity instruments.

27. deriVatiVe assets and liabilities

nominal amount assets liabilities group rm’000 rm’000 rm’000

at 28 February 2015

Forward foreign exchange contracts 14,016 168 –

at 28 February 2014

Forward foreign exchange contracts 16,064 36 (32)

The Group uses forward foreign currency contracts to manage some of its transaction exposure. These contracts are not designated as cash flow or fair value hedges and are entered into for periods consistent with currency translation exposure and fair value changes exposure. Such derivatives do not qualify for hedge accounting. The derivatives represent total financial assets and liabilities at fair value through profit or loss, classified held for trading.


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28. cash and bank balances


Cash on hand and at banks 48,236 54,606 2,908 25,945Deposits with licensed banks 62,145 75,953 7,069 23,052

110,381 130,559 9,977 48,997

Cash at banks earns interest at floating rates based on daily bank deposit rates. Deposits with licensed banks are made for varying periods of between one day and one year depending on the immediate cash requirements of the Group and of the Company, and earn interest at the respective deposit rates. The effective interest rates for the Group and the Company were 2.00% to 5.02% (2014: 2.00% to 5.40% per annum) and 2.75% to 3.50% (2014: 2.75% to 3.35% per annum), respectively.

Deposits with licensed banks of the Group amounting to RM13,216,000 (2014: RM12,856,000) are pledged to banks for credit facilities granted to certain subsidiaries as disclosed in Note 33.

For the purpose of the statements of cash flows, cash and cash equivalents comprise the following as at the reporting date:


Cash on hand and at banks 48,236 54,606 2,908 25,945Deposits with licensed banks 62,145 75,953 7,069 23,052

110,381 130,559 9,977 48,997Deposits pledged with licensed banks (13,216) (12,856) – –Bank overdrafts (Note 33) (20) (8,012) – –

Cash and cash equivalents 97,145 109,691 9,977 48,997

29. assets classiFied as held For sale

group note 2015 2014 rm’000 rm’000

Property, plant and equipment 14, 29(a) – 2,827Investment properties 15, 29(b) – 280

– 3,107

(a) Kadar Prisma Sdn. Bhd. (“KPSB”), a wholly-owned subsidiary of UIH, owns a piece of vacant land in Bandar Hulu Bernam, Selangor. In the previous financial year, management was in negotiation to dispose of this vacant land. As at 28 February 2014, management assessed that the disposal was highly probable and the carrying amount of the said vacant land of RM2.8 million was reclassified from property, plant and equipment to assets held for sale. On 7 May 2014, KPSB entered into a conditional sale and purchase agreement with a third party to dispose the said vacant land for a cash consideration of RM3 million.

(b) On 29 December 2013, Blossom Time Sdn. Bhd, a wholly-owned subsidiary of the Company, has entered into a sale and purchase agreement with a third party to dispose of its remaining investment properties located at Batu Ferringhi, Penang for a total cash consideration of RM650,000. The disposal was completed on 2 April 2014.


121


30. trade and other Payables


trade payablesThird parties 82,926 87,968 – –Retention sums 18 319 – –

82,944 88,287 – –

other payablesDue to subsidiaries – – 176,113 175,755Sundry payables 8,269 10,685 1,048 1,303Accruals 16,785 16,512 – –Deposits payable 4,892 5,349 – –Rental payable 1,664 3,014 – –Royalty payable 28 190 – –Deposits received for proposed disposals 560 560 – –Contribution cost payable 209 209 – –

32,407 36,519 177,161 177,058

Total trade and other payables 115,351 124,806 177,161 177,058Add: Borrowings (Note 33) 111,093 127,953 58,000 58,000

Total financial liabilities carried at amortised cost 226,444 252,759 235,161 235,058

Trade payables

The amounts are non-interest bearing. The credit terms of trade payables normally range from 30 to 120 days (2014: 30 to 120 days).

Due to subsidiaries

The amount due to subsidiaries are unsecured, non-interest bearing and are repayable on demand.

Sundry payables

The amounts are non-interest bearing. Sundry payables are normally settled on an average term of 30 to 120 days (2014: 30 to 120 days).

31. ProVisions

group 2015 2014 rm’000 rm’000

Provision for guarantees 12,540 13,906Provision for liquidated ascertained damages – 547

12,540 14,453


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31. ProVisions (cont’d.)

The movement of provisions is as follows:

Provision for liquidated Provision for Provision for ascertained litigation guarantees damages total rm’000 rm’000 rm’000 rm’000

group

At 1 March 2013 2,050 12,591 547 15,188Unrealised foreign exchange difference – 1,315 – 1,315Utilised (1,317) – – (1,317)Reversal (Note 5) (733) – – (733)

At 28 February 2014 and 1 March 2014 – 13,906 547 14,453Unrealised foreign exchange difference – (1,366) – (1,366)Reversal (Note 5) – – (547) (547)

At 28 February 2015 – 12,540 – 12,540

(a) Provision for guarantees

These guarantees are denominated in Deutschemark which are equivalent to Euro 3.1 million in respect of the Group for credit facilities granted by a financial institution to ACL Advanced Cargo Logistic GmbH, a former subsidiary company, now an investment company of the Group.

(b) Provision for liquidated ascertained damages

Provision for liquidated ascertained damages is in respect of projects undertaken by a subsidiary. The provision is recognised for expected liquidated ascertained damages claims based on the terms of the applicable sale and purchase agreements. The reversal of provision for liquidated ascertained damages was made during the year as the potential claim is time-barred.

32. emPloyee beneFits

The Group’s defined benefit plan is unfunded and it provides retirement benefits for employees upon retirement on the account of medical grounds and for employees who pass away while under employment. The retirement benefits are only applicable to employees who are in the National Union of Transport Equipment and Allied Industries Workers.

Under the plan, eligible employees are entitled to retirement benefits of one, two, three and four weeks’ of last drawn salary based on the length of service upon the age of 60. Eligible employees also have the option to retire at the age of 50.

The last actuarial valuation report dated 16 June 2015 was carried out by an independent valuer of the Fellow of the Institute of Actuaries.


123


32. emPloyee beneFits (cont’d.)

(a) The amounts recognised in the statements of financial position are determined as follows:

2015 2014 rm’000 rm’000

group

Present value of unfunded defined benefit obligations 6,908 6,402

analysed as:Current 342 396

Non-current: Later than 1 year but not later than 2 years 302 283Later than 2 years but not later than 5 years 1,015 994Later than 5 years 5,249 4,729

6,566 6,006

Total employee benefits 6,908 6,402

(b) Movement in the net liability recognised in the statements of financial position:

group 2015 2014 rm’000 rm’000

At beginning of the year, previously stated 6,402 3,487Effects of adoption of amendments to MFRS 119 – 2,109

At beginning of the year, restated 6,402 5,596Re-measurement gain – –Expense recognised in the income statement 790 1,055Benefits paid (284) (249)


(c) The amounts recognised in the income statements:

group 2015 2014 rm’000 rm’000

Current service cost 451 740Interest on obligation 339 315

Total, included in employee benefits expense (Note 6) 790 1,055

(d) Principal actuarial assumptions used at the reporting date (expressed as weighted averages):

group 2015 2014 % %

Discount rate 5.5 5.2 Future salary increase 5.5 6.0 Price inflation 3.5 3.5


124


32. emPloyee beneFits (cont’d.)

(e) A quantitative sensitivity analysis of the change in the rates as at 28 February 2015 is shown below:

group impact on defined increase/ benefit (decrease) obligation % rm’000

Discount rate 1.0 (666)Future salary increase 1.0 785 Discount rate (1.0) 793Future salary increase (1.0) (672)

(f) The expected benefit payments in future years are as follows:

group 2015 2014 rm’000 rm’000

Not later than 1 year 15 396Later than 1 year and not later than 5 years 222 1,754Later than 5 years and not later than 10 years 2,427 3,484

2,664 5,634

(g) The duration of the defined benefit plan obligation as at 28 February 2015 is between 12.1 and 17.6 years (2014: between 8.2 and 14.7 years).

33. borrowings

group company 2015 2014 2015 2014 maturity rm’000 rm’000 rm’000 rm’000

current Secured: Obligations under finance leases 2016 672 634 – – Bankers’ acceptance 2016 11,237 10,163 – – Bank overdrafts (Note 28) On demand 20 8,012 – – USD trade loans 2016 16,689 13,613 – – Term loans - syndicated term loans 2016 58,000 – 58,000 – - loan at effective cost of funds + 1.50% per annum 2016 4,000 8,000 – – - SGD bank loan at SIBOR + 2.50% per annum 2016 3,595 16,300 – – Interest payable 2016 22 234 – –

94,235 56,956 58,000 –


125


33. borrowings (cont’d.)

group company 2015 2014 2015 2014 maturity rm’000 rm’000 rm’000 rm’000

Non-current Secured: Obligations under finance 2017 - leases 2019 858 997 – – Term loans - syndicated term loans 2016 – 58,000 – 58,000 - loan at effective cost of 2017 - funds + 1.50% per annum 2019 16,000 12,000 – –

16,858 70,997 – 58,000

Total borrowings 111,093 127,953 58,000 58,000

total borrowings Obligations under finance leases (Note 34) 1,530 1,631 – – Bankers’ acceptance 11,237 10,163 – – Bank overdrafts 20 8,012 – – USD trade loans 16,689 13,613 – – Term loans 81,595 94,300 58,000 58,000

111,071 127,719 58,000 58,000 Interest payable 22 234 – –

Total borrowings 111,093 127,953 58,000 58,000

maturity of borrowings (excludingobligations under finance leases) Not later than 1 year 93,564 56,322 58,000 – Later than 1 year and not later than 5 years 16,000 70,000 – 58,000

109,564 126,322 58,000 58,000

The borrowings are secured by way of:

- fixed charges on certain properties of the Group with a net carrying amount of RM101,325,000 (2014: RM107,756,000);

- deposits with licensed banks of the Group amounting to RM13,216,000 (2014: RM12,856,000);- fixed and floating charges over all present and future assets of certain subsidiaries; and- corporate guarantees by the Company and by certain subsidiaries of the Group.

Obligations under finance leases

These obligations are secured by a charge over the leased assets (Note 14). The discount rate implicit in the leases of the Group is from 2.5% to 3.5% (2014: 2.50% to 3.88%) per annum.

Bankers’ acceptance

Bankers’ acceptances bear weighted average effective interest rate of 3.86% to 4.05% (2014: 3.86%) per annum.

Bank overdrafts

Bank overdrafts bear interest at BFR + 1% and BLR + 1.25% (2014: BLR + 1.25%) per annum.


126


33. borrowings (cont’d.) The borrowings are secured by way of (cont’d):

USD trade loans

The average interest rate for the loans ranged from 1.64% to 1.65% (2014: 2.30% to 2.40%) per annum.

Loan at effective cost of funds + 1.50% per annum

This callable loan is secured by a corporate guarantee from a subsidiary of RM20,000,000 and is repayable in 20 quarterly repayments commencing March 2015. The average interest rate for the loan is 5.58% (2014: 4.97%) per annum.

SGD bank loan at SIBOR + 2.50% per annum

This loan is secured by a corporate guarantee from the Company. This loan is repayable over 3 years commencing September 2012. The loan is callable at the option of the bank during the term of the loan.

Syndicated term loans

Syndicated term loans consists of bank facilities from three financial institutions as detailed below:

- Term loan facility at BLR + 1% per annum;- Ijarah Facility I at BFR +1% per annum;- Ijarah Facility II at BFR +1% per annum.

The syndicated term loans are secured by certain investment properties of the Group.

34. obligations Under Finance leases

group 2015 2014 rm’000 rm’000 Future minimum lease payments: Not later than 1 year 736 705Later than 1 year and not later than 5 years 925 1,051

Total future minimum lease payments 1,661 1,756Less: Future finance charges (131) (125)

Present value of finance lease liabilities (Note 33) 1,530 1,631

analysis of present value of finance lease liabilities:

Not later than 1 year 672 634Later than 1 year and not later than 5 years 858 997

1,530 1,631Less: Amount due within 12 months (672) (634)

Amount due after 12 months 858 997


127


35. share caPital and share PremiUm

number of <------------------------- amount -------------------------> ordinary share of rm1 each share share total share capital capital capital (issued and (issued and share and share fully paid) fully paid) premium premium ‘000 rm’000 rm’000 rm’000

group and company

At 28 February 2014 and 2015 253,650 253,650 102,878 356,528

group and company number of shares of rm 1 each amount 2015 2014 2015 2014 ‘000 ‘000 rm’000 rm’000

authorised:Ordinary shares 900,000 900,000 900,000 900,000Preference shares 100,000 100,000 100,000 100,000

1,000,000 1,000,000 1,000,000 1,000,000

share capital

The holders of ordinary shares (except treasury shares) are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions and rank equally with regard to the Company residual assets.

36. other reserVe

Other reserve arises from changes in the Group’s equity interest in subsidiaries.

group note 2015 2014 rm’000 rm’000

At beginning of the year (28,922) (31,014)Transactions with Non- Controlling Interest 332 –Changes of equity interest in subsidiaries:

- Accretion of equity interest in a subsidiary 36(a) (3,979) (72) - Dilution of equity interest in a subsidiary 36(b) 2 1,761 - Dilution of equity interest in subsidiaries 36(c) – 403

(3,977) 2,092

At end of the year (32,567) (28,922)


128


36. other reserVe (cont’d.)

Other reserve arises from changes in the Group’s equity interest in subsidiaries (cont’d).

(a) The accretion of equity interest in a subsidiary was due to the share buyback exercise by DFI which commenced on 12 December 2012. Up to 28 February 2014, DFI had repurchased 11,693,000 of its ordinary shares from the open market for a total cash consideration of RM11,590,000 (including transaction costs). During the current financial year ended 28 February 2015, DFI had repurchased 6,198,000 of its ordinary shares from the open market for a total cash consideration of RM4,800,000 (including transaction costs). The shares were bought with internally generated funds and all repurchased shares were cancelled immediately upon purchase.

(b) The dilution of equity interest in a subsidiary was due to the issuance of additional DFI shares to the non-controlling interests.

(c) The dilution of equity interest in subsidiaries was due to the Group disposing part of its equity interest in the subsidiaries as mentioned in Note 19(a).

With the transactions above, the Company’s holding in DFI had diluted from 82.00% as at 28 February 2013 to 81.83% as at 28 February 2014, while as at 28 February 2015, the Company’s holding in DFI had increased to 82.29%.

37. retained earnings

The Company may distribute dividends out of its entire retained earnings as at 28 February 2015 under the single tier system.

38. commitments

(a) capital commitments

group 2015 2014 rm’000 rm’000

Capital expenditure Approved and contracted for: Property, plant and equipment 2,911 4,762 Approved but not contracted for: Property, plant and equipment 12,611 10,139

15,522 14,901


129


38. commitments (cont’d.)

(b) non-cancellable operating lease commitments – as lessee

Future minimum rentals payable under non-cancellable operating leases (excluding land use rights) at the reporting date are as follows:

group 2015 2014 rm’000 rm’000 Not later than 1 year 216 216 Later than 1 year but not later than 5 years 864 864 Later than 5 years* 164,960 165,176

166,040 166,256

Operating lease commitments represent rentals payable by the Group for use of land and buildings.

Included in operating lease commitments are commitments in respect of a non-cancellable operating lease expiring in 2038 for a piece of property in a subsidiary, Naluri Properties Sdn. Bhd. (“NPSB”). NPSB has an option to renew the lease for another 30 years after the expiry of the lease. Should the lease be renewed, the additional lease payments for the renewal period, which is not included in the above would amount to RM7.2 million.

* This includes non-cancellable operating lease commitment of RM161 million by a subsidiary, Selasih, as mentioned in Note 11.

39. related Party disclosUres

(a) significant transactions

(i) In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between the Group, the Company and related parties took place at terms agreed between the parties during the financial year:


Dividend income from subsidiaries – – 62,201 105,527 Donation to Yayasan Harmoni* (2,400) (2,000) (400) (300) Interest income from subsidiaries – – 3,000 3,696 Management fee charged by a subsidiary – – (630) (800)

* Dato’ Sri Adam Sani Bin Abdullah is the founder and executive chairman of Yayasan Harmoni, a non-profitable non-government organisation.


130


39. related Party disclosUres (cont’d.)

(b) Compensation of key management personnel

The remuneration of certain directors and other members of key management during the year were as follows:

group 2015 2014 rm’000 rm’000

Short-term employee benefits 4,908 6,761Defined contribution plan 606 703

5,514 7,464

Included in short-term employee benefits in the previous financial year is the payment of gratuity of RM802,000 to certain long service employees who had left the Group.

Included in the remuneration of total key management personnel are:

group 2015 2014 rm’000 rm’000 Directors’ remuneration (excluding fees) 2,089 1,814

40. Fair ValUe oF assets and liabilities

(a) Fair value hierarchy

The Group classifies fair value measurement using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

- Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

- Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

- Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).


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40. Fair ValUe oF assets and liabilities (cont’d.)

(b) assets and liabilities measured at fair value

The following table shows an analysis of each class of assets and liabilities measured at fair value by level of fair value hierarchy:

level 1 level 2 level 3 total rm’000 rm’000 rm’000 rm’000

group

at 28 February 2015

Financial assets:Marketable securities 79 – – 79Derivatives- Forward foreign exchange contracts – 168 – 168

non-financial assets:Biological assets – – 4,800 4,800

Financial liabilities:Derivatives- Forward foreign exchange contracts – – – –

at 28 February 2014

Financial assets:Marketable securities 712 – – 712Derivatives- Forward foreign exchange contracts – 36 – 36

non-financial assets:Biological assets – – 4,800 4,800

Financial liabilities:Derivatives- Forward foreign exchange contracts – (32) – (32)

company

at 28 February 2015

Financial assets:Marketable securities 79 - - 79

at 28 February 2014

Financial assets:Marketable securities 712 - - 712


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40. Fair ValUe oF assets and liabilities (cont’d.)

(c) level 1 fair value measurements

Marketable securities (Note 26): Fair value is determined directly by reference to their published market bid price at the reporting date (Level 1).

(d) level 2 fair value measurements

Derivatives (Note 27): Forward currency contracts are valued using a valuation technique with market observable inputs (Level 2). The most frequently applied valuation techniques include forward pricing models, using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates and interest rate curves.

(e) level 3 fair value measurements

Biological assets: The valuation of biological assets are based on the discounted future cash flows of the underlying plantations. The significant assumptions made in determining the fair values of the biological assets are disclosed in Note 17.

(f) Fair value of financial instruments by classes that are not carried at fair value and whose carryingamountsarenotreasonableapproximationoffairvalue

2015 2014 carrying Fair carrying Fair amount value amount value rm’000 rm’000 rm’000 rm’000

group

Obligations under finance leases (Note 34) 1,661 1,628 1,756 1,636

41. Financial risk management obJectiVes and Policies

The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, interest rate risk, foreign currency risk and market price risk.

The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are executed by the Group and by the Company. 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 Group and the Company do not apply hedge accounting.

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.


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41. Financial risk management obJectiVes and Policies (cont’d.)

(a) credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s credit risk is primarily attributable to trade receivables.

The credit risk of the Group’s other financial assets, which comprise cash and cash equivalents, arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these financial assets.

The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an on-going basis with the result that the Group’s exposure to bad debts is not significant. Since the Group trades only with recognised and creditworthy third parties, there is no requirement for collateral.

The Group does not have any significant exposure to any individual customer or counterparty nor does it have any major concentration of credit risk related to any financial assets.

Exposure to credit risk

At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by:

- The carrying amount of each class of financial assets recognised in the statements of financial position.

- Nominal amount of RM82,935,000 (2014: RM82,935,000) relating to corporate guarantees provided by the Company for banking facilities to certain subsidiaries.

Credit risk concentration profile

The Group determines concentrations of credit risk by monitoring the industry sector profile of its trade receivables on an on-going basis. The credit risk concentration profile of the Group’s trade receivables at the reporting date are as follows:

group 2015 2014 rm’000 % of total rm’000 % of total

by business segments:

Property and hospitality 557 2% 496 1%Trading of duty free goods and non-dutiable merchandise 8,799 24% 9,584 27%Automotive 26,728 74% 25,708 72%

36,084 100% 35,788 100%

Financial assets that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment record with the Group. Cash and cash equivalents and derivatives that are neither past due nor impaired are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default.


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(a) credit risk (cont’d.)

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 22.

(b) liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that refinancing, repayment and funding needs are met. As part of its overall liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group strives to maintain available banking facilities at a reasonable level to its overall debt position. As far as possible, the Group raises committed funding from both capital markets and financial institutions and balances its portfolio with some short term funding so as to achieve overall cost effectiveness.

analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group’s and of the Company’s financial assets and liabilities at the reporting date based on contractual undiscounted repayment obligations.

<----------------------------- 2015 ------------------------------> on demand or within one to one year five years total rm’000 rm’000 rm’000

group

Financial assets:Trade and other receivables 94,122 – 94,122Cash and bank balances 110,381 – 110,381Derivatives - gross payments (14,016) – (14,016) - gross receipts 14,184 – 14,184

Total undiscounted financial assets 204,671 – 204,671

Financial liabilities:Trade and other payables 115,351 – 115,351Borrowings 99,595 18,575 118,170

Total undiscounted financial liabilities 214,946 18,575 233,521

Total net undiscounted financial liabilities (10,275) (18,575) (28,850)


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(b) liquidity risk (cont’d.)

analysis of financial instruments by remaining contractual maturities (cont’d.)


company

Financial assets:Other receivables 63,153 – 63,153Cash and bank balances 9,977 – 9,977


Financial liabilities:Other payables 177,161 – 177,161Borrowings 62,553 – 62,553

Total undiscounted financial liabilities 239,714 – 239,714

Total net undiscounted financial liabilities (166,584) – (166,584)


group

Financial assets:Trade and other receivables 130,096 2 130,098Cash and bank balances 130,559 – 130,559Derivatives- gross payments (10,830) – (10,830)- gross receipts 10,866 – 10,866

Total undiscounted financial assets 260,691 2 260,693

Financial liabilities:Trade and other payables 124,806 – 124,806Borrowings 57,922 80,463 138,385Derivatives- gross payments 5,234 – 5,234- gross receipts (5,202) – (5,202)


Total net undiscounted financial assets/ (liabilities) 77,931 (80,461) (2,530)


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(b) liquidity risk (cont’d.)

analysis of financial instruments by remaining contractual maturities (cont’d.)


company

Financial assets:Other receivables 54,691 – 54,691Cash and bank balances 48,997 – 48,997


Financial liabilities:Other payables 177,058 – 177,058Borrowings – 66,816 66,816


Total net undiscounted financial liabilities (73,370) (66,816) (140,186)

(c) interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and of the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group’s and the Company’s exposure to interest rate risk arises primarily from interest-bearing borrowings. Borrowings at floating rates expose the Group to cash flow interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk.

The Group manages its interest rate exposure by maintaining a mix of fixed and floating rate

borrowings.

Sensitivity analysis for interest rate risk

The table below demonstrates the sensitivity to a reasonably possible change in interest rates with all other variables held constant, of the Group’s and of the Company’s profit net of tax (mainly through the impact on interest expense on floating rate loans and borrowings). The assumed movement in the basis points for interest rate sensitivity analysis is based on the currently observable market environment.


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(c) interest rate risk (cont’d.)

increase/ (decrease) effect on in basis profit net points oftax rm’000

group

28 February 2015Ringgit Malaysia +10 (41)Singapore Dollar +10 (3)United States Dollar +10 (13)

Ringgit Malaysia -10 41Singapore Dollar -10 3United States Dollar -10 13

28 February 2014Ringgit Malaysia +10 (44)Singapore Dollar +10 (12)United States Dollar +10 (10) Ringgit Malaysia -10 44Singapore Dollar -10 12United States Dollar -10 10

company

28 February 2015Ringgit Malaysia +10 (44)

Ringgit Malaysia -10 44

28 February 2014Ringgit Malaysia +10 (44)

Ringgit Malaysia -10 44

(d) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group has transactional currency exposures arising from sales or purchases that are denominated in a currency other than the functional currency of the operations to which they relate, primarily United States Dollar (“USD”), Singapore Dollar (“SGD”), Thai Baht (“THB”) and Japanese Yen (“JPY”). The foreign currencies in which these transactions are denominated are mainly USD and JPY. Approximately 55% (2014: 54%) of the Group’s purchases are denominated in foreign currencies. Foreign currency exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level.

At the reporting date, the Group has short term borrowings of RM3,595,000 (2014: RM16,300,000) which are denominated in SGD and RM16,689,000 (2014: RM13,613,000) which are denominated in USD.


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(d) Foreign currency risk (cont’d.)

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible change in the USD, SGD, THB and JPY exchange rates against the respective functional currencies of the Group entities, with all other variables held constant.

group 2015 2014 rm’000 rm’000 USD/RM - strengthened 3% (2014: 3%) (385) (777) - weakened 3% (2014: 3%) 385 777

SGD/RM - strengthened 3% (2014: 3%) (61) (423) - weakened 3% (2014: 3%) 61 423 THB/RM - strengthened 3% (2014: 3%) (9) (7) - weakened 3% (2014: 3%) 9 7

JPY/RM - strengthened 3% (2014: 3%) (225) (242) - weakened 3% (2014: 3%) 225 242

(e) market price risk

Market price risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in market prices (other than interest or exchange rates).

The Group does not have exposure to commodity price risk.

42. caPital management

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the year under review.

The Group monitors capital using a gearing ratio, which is total external debt divided by total capital.

The Group ensures that the gearing ratio shall not be more than 1.5 times to comply with covenants from its borrowings.

The Group includes within total external debt, all financial borrowings of the Group. Total external debt due and payable within 12 months consists of bankers’ acceptances, bank overdrafts, interest payable and current portion of obligations under finance leases. Capital includes equity attributable to owners of the parent and non-controlling interests.


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42. caPital management (cont’d.)


Borrowings (non-current) 16,858 70,997 – 58,000Borrowings (current excluding term loans, i.e. due and payable within 12 months) 28,640 32,656 – –Borrowings (current - term loans) 65,595 24,300 58,000 –

Total external debt 111,093 127,953 58,000 58,000

Total equity 485,317 539,270 861,750 872,834

Gearing ratio (times) 0.23 0.24 0.07 0.07

43. segment inFormation

(a) reporting format

The primary segment reporting format is determined to be business segments as the Group’s risks and rates of return are affected predominantly by differences in the products and services. The activities of the Group are carried out mainly in Malaysia and as such, segmental reporting by geographical locations is not presented. The operating businesses are organised and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.

(b) business segments

The Group comprises the following main business segments:

(i) Investment holding;

(ii) Property and hospitality;

(iii) Trading of duty free goods and non-dutiable merchandise; and

(iv) Automotive.

Other business segments mainly consist of provision of corporate services, dormant and inactive companies, none of which are of a sufficient size to be reported separately.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing (including finance costs) and income taxes are managed on a group basis and are not allocated to operating segments.

(c) allocation basis and transfer pricing

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

The directors are of the opinion that transfer prices between business segments are based on negotiated prices. Segment revenue, expenses and results include transfers between business segments. These transfers are eliminated on consolidation.


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43. segment inFormation (cont’d.)

year 2015 trading of duty free Per Property goods and adjustments consolidated investment and non-dutiable and financial holding hospitality merchandise automotive others eliminations statements rm’000 rm’000 rm’000 rm’000 rm’000 rm’000 note rm’000

revenue:External customers 4,807 32,031 559,441 134,273 103 – A 730,655Inter-segment 135,568 3,599 3 – 6,887 (146,057) B –

Total revenue 140,375 35,630 559,444 134,273 6,990 (146,057) 730,655

results:Depreciation (2) (7,542) (3,585) (5,786) (204) – (17,119)Amortisation of land use rights – (438) – – – – (438)Gain on disposal of assets classified as held for sale – 371 – 79 – – A 450Gain on sale of subsidiary 2,570 – – – – (1,000) 1,570Reversal of impairment loss on land use rights – 323 – – – – 323Reversal of impairment loss on property, plant and equipment – 5,862 – – – – 5,862Reversal of provisions – 547 – – – – 547Share of results of an associate (50) – – – – – (50)Other non-cash expenses (839) (30) (445) (449) – – A, C (1,763)Segment profit/(loss) 70,077 10,293 76,412 9,464 (277) (83,755) A, D 82,214

assets:Investment in associate 505 – – – – – 505Additions to non-current assets 137 565 6,903 5,395 30 – E 13,030Segment assets 13,353 186,183 417,373 117,849 1,673 6,230 F 742,661

liabilities:Segment liabilities 6,327 9,015 95,971 43,793 13,446 88,792 G 257,344


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year 2014 trading (discontinued of duty free operations) Per Property goods and Property adjustments consolidated investment and non-dutiable and and financial holding hospitality merchandise automotive others hospitality eliminations statements rm’000 rm’000 rm’000 rm’000 rm’000 rm’000 rm’000 note rm’000

revenue:External customers 3,184 45,505 565,160 144,485 19 2,335 (2,335) A 758,353Inter-segment 252,794 846 8 – 8,497 198 (262,343) B –

Total revenue 255,978 46,351 565,168 144,485 8,516 2,533 (264,678) 758,353

results:Depreciation (3) (2,825) (3,688) (5,652) (739) – – (12,907)Amortisation of land use rights – – – – (806) – – (806)Gain arising from changes in fair value of biological assets – – – – 380 – – 380Gain on disposal of assets classified as held for sale – – – 6,257 17,204 159,674 (159,674) A 23,461Reversal of impairment loss on land use rights – – – – 153 – – 153Reversal of impairment loss on property, plant and equipment – – – 9,931 959 – – 10,890Reversal of provisions 733 – – – – – – 733Share of results of an associate 172 – – – – – – 172Other non-cash expenses 61 (62) (2,611) (785) (136) (1,883) 1,883 A, C (3,533)Segment profit/(loss) 164,368 19,369 83,712 34,293 13,328 152,865 (328,652) A, D 139,283

assets: Investment in associate 555 – – – – – – 555Additions to non-current assets 2,157 1,731 6,903 6,790 62 – – E 17,643Segment assets 98,843 184,813 467,438 118,942 9,337 – 7,725 F 887,098

liabilities:Segment liabilities 79,451 7,241 105,579 43,568 15,589 – 96,400 G 347,828


142



A The amounts relating to the property and hospitality segment has been excluded to arrive at amounts shown in profit or loss as they are presented separately in the income statement within one line item, “profit net of tax from discontinued operations”.

B Inter-segment revenues are eliminated on consolidation.

C Other material non-cash expenses/(income) consist of the following items as presented in the respective notes to the financial statements:

note 2015 2014 rm’000 rm’000

Continuing operations Bad debts written off 8 56 1Changes in fair value of marketable securities 5, 8 707 (61)Impairment loss on receivables 8 17 825Inventories written down 8 432 348Inventories written off 8 210 106Property, plant and equipment written off 8 209 2,314Waiver of debts 8 132 –

1,763 3,533

Discontinued operations Property, plant and equipment written off 11 – 1,883

D The following items are deducted from/(added to) segment profit to arrive at “Profit before tax from continuing operations” presented in the consolidated income statement:

2015 2014 rm’000 rm’000

Segment results of discontinued operations – 152,865Inter-segment transactions 76,723 168,138Share of results of an associate 50 (172)Finance costs 6,982 7,821

83,755 328,652

E Additions to non-current assets consist of:

2015 2014 rm’000 rm’000

Property, plant and equipment 13,027 15,032Investment properties 3 86Land use rights – 2,525

13,030 17,643


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F The following items are added to segment assets to arrive at total assets reported in the consolidated statement of financial position:

2015 2014 rm’000 rm’000

Investment in associate 505 555Deferred tax assets 608 670Tax recoverable 5,117 6,500

6,230 7,725

G The following items are added to segment liabilities to arrive at total liabilities reported in the consolidated statement of financial position:

2015 2014 rm’000 rm’000

Deferred tax liabilities 6,892 8,023Tax payable 3,900 10,377Borrowings 78,000 78,000

88,792 96,400

44. material litigations

(a) writ of summons and statement of claim by shahidan bin shafie (“shahidan”)

Shahidan, a shareholder of Naluri Corporation Sdn. Bhd. , had commenced legal proceedings at the High Court against the Company and Atlan Properties Sdn. Bhd. (“APSB”) on 26 May 2004, seeking inter alia an order that the Company and APSB jointly and severally make a mandatory take-over offer to all shareholders of Naluri (except Pengurusan Danaharta Nasional Berhad, Danaharta Urus Sdn. Bhd. and Danaharta Managers Sdn. Bhd. (collectively “Danaharta”)) at an offer price of RM1.98 per ordinary share of Naluri, and for damages be assessed.

Shahidan had also applied to the High Court via an interlocutory application to adduce further evidence at the hearing of the Company’s and APSB’s aforesaid appeal to the High Court Judge. On 1 October 2009, the High Court allowed this application with costs in the said appeal.

The Company and APSB had applied to strike out the suit but these applications were dismissed by the Senior Assistant Registrar of the High Court on 8 September 2004. The Company and APSB have appealed to the High Court Judge against the Senior Assistant Registrar’s dismissal of the striking out applications. These appeals against the dismissal of the striking out application were dismissed by the High Court Judge on 11 March 2010 with costs in cause (“Dismissal”). A further appeal against the Dismissal had been filed to the Court of Appeal by APSB on 29 March 2010 and the Company on 8 April 2010, respectively. The appeal fixed for hearing in the Court of Appeal on 26 June 2012 had been adjourned to 27 June 2012. On 27 June 2012, the appeals were withdrawn without order as to costs in view that the suit had proceeded to full trial.

Shahidan had written to the High Court Judge on 2 September 2010 for an adjournment of the trial fixed on 11 to 13 October 2010. Trial had proceeded from 28 May 2012 to 30 May 2012. Upon submission by parties, the Court had fixed 21 June 2012 and 29 June 2012 for clarification. The Court has on 5 July 2012 dismissed the Shahidan’s claim with costs.

Shahidan had on 27 July 2012 filed a Notice of Appeal to the Court of Appeal appealing against the dismissal of his claim by the High Court on 5 July 2012. The Court of Appeal had on 1 April 2015 heard the preliminary issue whether the appeal is academic as Naluri has been delisted. The Court of Appeal held that the appeal is not academic and fixed the appeal proper for hearing on 2 July 2015.


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44. material litigations (cont’d.)

(b) arbitration proceedings by mancon berhad (“mb”) on behalf of nilai barisan sdn. bhd. (“nbsb”)

MB, on behalf of NBSB, had commenced arbitration proceedings against Kelana Megah Sdn. Bhd. (“KMSB”) on 24 May 1999 in relation to NBSB’s engagement as a sub-contractor nominated by KMSB for the supply, installation, testing and commissioning of air-conditioning and mechanical ventilation works in the construction of the Johor Bahru Duty Free Complex. The sum claimed by MB is approximately RM2,468,000. KMSB has counter-claimed that it incurred loss/damage in the sum of approximately RM1,909,000 in rectifying defective and/or incomplete works of NBSB.

KMSB’s solicitors informed the Arbitrator on 21 January 2002 that NBSB had been wound up on 8 August 2000. In view that NBSB had been wound up, parties were not able to resume the arbitration proceedings and the same is currently in abeyance.

KMSB’s solicitors had issued numerous letters to the Arbitrator to seek the Arbitrator’s instructions on the arbitration proceedings and/or instructions that the arbitration proceedings be closed. KMSB’s solicitors had also written to the liquidator of NBSB to request that the liquidator decides either if NBSB wishes to continue with the arbitration proceedings or to withdraw the claims against KMSB. The Arbitrator had on 2 September 2013 written to the liquidator of NBSB giving notice that the Arbitrator will proceed with the arbitration and make an award in the event that the liquidator fails to respond within 30 days from the date of the Arbitrator’s letter whether NBSB wishes to continue with the arbitration proceedings. The liquidator of NBSB has responded vide its letter dated 5 May 2014 that there has been no response from the shareholders of NBSB to the liquidator’s letter dated 28 October 2013 and as such, the liquidator is of the opinion that NBSB has no interest to continue with the arbitration. Subsequent thereto, KMSB’s solicitor had on 12 May 2014 written to the Arbitrator requesting that the arbitration proceedings be dismissed.

The Arbitrator had on 27 January 2015 issued a letter to the Penang Insolvency Office as well as to KMSB’s solicitor pertaining to KMSB’s request for a dismissal of the arbitration proceedings vide its letter dated 12 May 2014 and sought both parties’ agreement for a dismissal. The Arbitrator is in the process of terminating the arbitration proceedings. KMSB’s solicitor is of the opinion that it is highly unlikely that the arbitration proceedings will proceed any further. Accordingly, the Company regards the above mentioned legal case as closed.

(c) writ of summons and statement of claim by lh technology sdn. bhd. (“lht”)

LHT had commenced legal proceedings at the High Court against KMSB on 30 December 1999, claiming a sum of RM1,026,000 in relation to LHT’s engagement as a sub-contractor for the design, supply and installation of curtain walling, frameless glass panel, shopfront, balustrading, aluminium and glazing works in the construction of the Johor Bahru Duty Free Complex.

On 26 June 2000, the Senior Assistant Registrar of the High Court allowed LHT’s application for a summary judgement against KMSB. KMSB appealed to the High Court Judge against the said summary judgement, and this appeal was allowed. LHT then appealed to the Court of Appeal against the decision of the High Court Judge.

On 28 July 2008, LHT’s appeal was dismissed with no order as to costs by the Court of Appeal. KMSB’s solicitor has informed the High Court of the said dismissal of the LHT’s appeal, and requested the High Court to fix a mention date for the suit.

KMSB’s solicitors had on 4 July 2013 written to the Court to conduct a file search to determine the status of the file. The Court had reverted on 23 July 2013 informing that the file for this matter could not be found.

On 22 April 2015, the liquidator advised that LHT had been wound up. A search conducted by KMSB’s solicitor with the Companies Commission of Malaysia (“CCM”) on 22 April 2015 shows the status of LHT as “Dissolved”. KMSB’s solicitor is of the opinion that since LHT has been wound up, it cannot sue or be sued. Accordingly, the Company regards the above mentioned legal case as closed.


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45. signiFicant and sUbseqUent eVents

(a) On 15 March 2013, DMSB Agreement was completed. However, the conditions precedent as stipulated in the KMSB Agreement has yet to be fulfilled.

(b) On 17 June 2014, on behalf of the Board of the Company, Affin Hwang Investment Bank Berhad (“Affin Hwang IB”) (formerly known as HwangDBS Investment Bank Berhad) announced that the Company proposed to undertake a private placement of up to 38,047,500 new ordinary shares of RM1.00 each in the Company (“Placement Shares”) not exceeding 15% of the existing issued and paid-up share capital of the Company (“Proposed Placement”).

The Placement Shares are intended to be placed out to third party investors to be identified at a later stage, where such investors shall be persons who qualify under Schedules 6 and 7 of the Capital Markets and Services Act, 2007 (“CMSA”).

On 26 June 2014, on behalf of the Board of the Company, Affin Hwang IB announced that Bursa Securities had approved the listing of and quotation for the Placement Shares to be issued pursuant to the Proposed Placement subject to certain conditions set by Bursa Securities.

The Company had at its Extraordinary General Meeting held on 22 July 2014 obtained the approval from the shareholders to undertake a private placement of up to 38,047,500 new ordinary shares of RM1.00 each in the Company not exceeding 15% of the existing issued and paid-up share capital of the Company (“Placement”).

On 11 December 2014, an application was submitted to Bursa Securities for an extension of time of 6 months from 26 December 2014, being the deadline for the implementation of the Placement, to 26 June 2015 for the completion of the Placement. On 26 December 2014, Bursa Securities approved the said application.

The public shareholding spread of the Company as at 15 December 2014 was 14.29%. Accordingly, as the Company would need more time to complete the Placement process, Bursa Securities has, vide its letter dated 30 December 2014, granted the Company a further extension of time until 26 June 2015 to comply with the public shareholding spread requirement.


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46. sUPPlementary inFormation

The breakdown of the retained earnings of the Group and of the Company as at 28 February 2015 into realised and unrealised profits is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.


Total retained earnings/ (accumulated losses) - realised 332,235 358,796 505,222 516,306 - unrealised (24,724) (28,532) – –

Total share of retained earnings/ (accumulated losses) from associate - realised 68 118 – –

307,579 330,382 505,222 516,306Add: Consolidation adjustments (232,996) (213,488) – –

Total retained earnings as per financial statements 74,583 116,894 505,222 516,306


147

Directors’ Direct and Deemed Interests in the Company and/or its subsidiary companies

According to the Register of Directors’ Shareholdings required to be kept under Section 134 of the Companies Act, 1965 the Directors’ interests in the Company and its subsidiaries are as follows:-

direct interest deemed interest no. of ordinary no. of ordinaryname shares % shares %

Dato’ Sri Adam Sani Bin Abdullah 64,061 0.03 130,255,153 (1) 51.35

Notes:-

(a) Dato’ Sri Adam Sani Bin Abdullah is deemed to have an interest in the shares of all the subsidiaries by virtue of his interest in the shares in the Company.

(b) Other than disclosed above, none of the other Directors had any interest in shares in the Company or its subsidiaries.

(c) (1) Deemed interested through Distinct Continent Sdn. Bhd. and Alpretz Capital Sdn. Bhd.

list oF sUbstantial shareholders as at 29 may 2015(As shown in the Register of Substantial Shareholders)

direct interest deemed interest no. of ordinary no. of ordinaryname of substantial shareholders shares % shares %

Distinct Continent Sdn. Bhd. 83,220,340 32.81 47,034,813 (1) 18.54Alpretz Capital Sdn. Bhd. 47,034,813 18.54 – –Dato’ Sri Adam Sani Bin Abdullah 64,061 0.03 130,255,153 (2) 51.35Sebastian Paul Lim Chin Foo – – 130,255,153 (2) 51.35Seymour Pacific Limited 13,266,938 5.23 – –Dato’ Choo Yeow Ming 1,080,000 0.43 13,266,938 (3) 5.23Berjaya Corporation Berhad 60,600,000 23.89 6,110,000 (4) 2.41Tan Sri Dato’ Seri Vincent Tan Chee Yioun – – 66,910,000 (5) 26.38

notes:-

(1) Deemed interested by virtue of Alpretz Capital Sdn. Bhd. being a Wholly Owned Subsidiary of Distinct Continent Sdn Bhd.

(2) Deemed interested through Distinct Continent Sdn. Bhd. and Alpretz Capital Sdn. Bhd. by virtue of Section 6A of the Companies Act 1965

(3) Deemed interested through Seymour Pacific Limited by virtue of Section 6A of the Companies Act 1965

(4) Deemed interested by virtue of its interest in Inter-Pacific Capital Sdn Bhd and Berjaya Philippines Inc. (5) Deemed interested by virtue of his interest in Berjaya Corporation Berhad and its related corporation

ANALySiS Of SHAreHOLDINGSAs at 29 may 2015


148

analysis oF shareholdings as at 29 may 2015

Class of Shares : Ordinary Shares of RM1.00 each fully paid

Voting Rights : One (1) vote per Ordinary share

distribUtion oF shareholdings As at 29 May 2015

size of shareholdings no. of % of no. of % of issued shareholders shareholders shares share capital

Less than 100 158 14.85 4,923 0.00100 – 1,000 325 30.55 90,302 0.041,001 – 10,000 404 37.97 1,366,230 0.5410,001 – 100,000 122 11.47 3,859,700 1.52100,001 to less than 5% of issued shares 49 4.60 79,056,691 31.175% and above of issued shares 6 0.56 169,272,563 66.73

total 1,064 100.00 253,650,409 100.00

thirty (30) largest shareholders as at 29 may 2015

name of shareholdersno. of

shares held %

1. ABB Nominee (Tempatan) Sdn. Bhd.- Pledged Securities Account for Distinct Continent Sdn. Bhd.

(Adam Sani)

56,337,750 22.21

2. Berjaya Corporation Berhad 38,600,000 15.22

3. ABB Nominee (Tempatan) Sdn. Bhd.- Pledged Securities Account for Alpretz Capital Sdn. Bhd.

22,270,500

8.78

4. Amsec Nominees (Tempatan) Sdn. Bhd.- Pledged Securities Account – Ambank (M) Berhad for Berjaya Corporation Berhad

20,000,000

7.88

5. Alpretz Capital Sdn. Bhd. 16,764,313 6.61

6. RHB Nominees (Tempatan) Sdn. Bhd.- Bank of China (Malaysia) Berhad Pledged Securities Account for

Distinct Continent Sdn. Bhd.

15,300,000 6.03

7. RHB Nominees (Tempatan) Sdn. Bhd.- Bank of China (Malaysia) Berhad Pledged Securities Account for

Distinct Continent Sdn. Bhd. (OKB)

11,552,367 4.55

8. Kenanga Nominees (Tempatan) Sdn. Bhd.- Pledged Securities Account for Alpretz Capital Sdn. Bhd.

8,000,000 3.15

9. HSBC Nominees (Asing) Sdn Bhd- AA Noms SG for Asia-Pacific Strategic Investments Limited

7,420,000 2.93

10. HSBC Nominees (Asing) Sdn Bhd- AA Noms SG for Seymour Pacific Limited

6,846,238 2.70

11. Lembaga Tabung Angkatan Tentera 5,670,833 2.24

Analysis of ShareholdingsAs at 29 may 2015 (cont’d.)


149

thirty (30) largest shareholders as at 29 may 2015 (cont’d.)

name of shareholdersno. of

shares held %

12. Inter-Pacific Equity Nominees (Asing) Sdn. Bhd.- Berjaya Philippines Inc.

5,100,000 2.01

13. Cartaban Nominees (Asing) Sdn. Bhd.- Exempt an for Credit Agricole (Suisse) SA, Singapore Branch (Trust Account)

4,100,000 1.62

14. Phoon Ching Heong 3,995,554 1.58

15. Khoo Chun Keong 2,345,810 0.92

16. MIDF Amanah Investment Nominees (Tempatan)Sdn. Bhd.- Pledged Securities Account for Berjaya Corporation Berhad

2,000,000 0.79

17. CIMSEC Nominees (Asing) Sdn. Bhd.- CIMB Bank for Chew Soo Lin (M78022)

1,800,000 0.71

18. UOB Kay Hian Nominees (Asing) Sdn. Bhd.- Pledged Securities Account for Chew Soo Lin

1,502,132 0.59

19. Citigroup Nominees (Tempatan) Sdn. Bhd.- UBS AG Singapore for Siow Yoon Keong

1,428,288 0.56

20. HLB Nominees (Asing) Sdn. Bhd.Southern Dynamic Consultants Limited (CSD SIN/SDCL)

1,414,475 0.56

21. Syed Sirajuddin Putra Jamalullail 1,350,041 0.53

22. HSBC Nominees (Asing) Sdn. Bhd.- AA Noms SG for Zheng Ling

1,306,375 0.52

23. E-Fos Sdn. Bhd. 1,267,875 0.50

24. Maybank Nominees (Tempatan) Sdn. Bhd.- Pledged Securities Account for Stuart Saw Teik Siew

1,188,155 0.47

25. Inter-Pacific Equity Nominees (Tempatan) Sdn. Bhd.- Inter-Pacific Capital Sdn. Bhd.

1,010,000 0.40

26. Muhammad Adib Bin Khalid 1,000,000 0.39

27. CIMSEC Nominees (Tempatan) Sdn. Bhd.- CIMB Bank for Choo Yeow Ming

770,000 0.30

28. Wong Kam Fuat 746,509 0.29

29. Chee Mong Eng 689,062 0.27

30. Chew Soo Lin 540,834 0.21

Analysis of ShareholdingsAs at 29 may 2015 (cont’d,)


150

LiST Of prOperTIeSfor financial year ended 28 february 2015

location description ExistingUsetenure /ExpiryDate

age ofbuilding

yearsApproxAreas

sq metre

net book Value

as at 28 February

2015rm’mil

date ofacquisition

1 Lot No. 1,Section 63, Town of Kuala Lumpur, Wilayah Persekutuan

Office building,hotel apartment building and building under construction

Registered office, office block for rent and hotel apartments for letting

Leasehold (60 years - expiring2038) renewable for a further 30 years

Office building

(30),Hotel

apartment (19)

18,701.20 70.24 1974

2 Lot PT 482 HS(M) 19/1981, Mukim Sungai Laka, Daerah Kubang Pasu, Kedah Darul Aman

Double storey shophouse

Staff quarters Leasehold (99 years - expiring2080)

28 297.00 0.10 1987

3 Lot 2224 HS(M) 1/1987, PT 1443, Bukit Kayu Hitam, Mukim Sungai Laka, Daerah Kubang Pasu, Kedah Darul Aman

A single storey warehouse annexed to a double storey shopping complex and 30 units of single storey lock-up shops and ancillary building

Duty Free shopping complex and warehouse

Leasehold (60 years - expiring2072)

27 20,234.00 3.20 1987

4 Lot 127-142 &169-174, PT 1889-1904 & 1931-1936, HS(M) 135/1989- 150/1989 & 177/1989- 82/1989, Bandar Baru Laka Temin, Mukim Sungai Laka, Daerah Kubang Pasu, Kedah Darul Aman

22 units single storey terrace house

Staff quarters Leasehold (99 years - expiring2088)

22 3,216.00 0.39 1996

5 Lot 475, Seksyen 1, Bandar Batu Ferringhi, Daerah Timur Laut, Pulau Pinang Darul Mutiara

Vacant land Vacant land Freehold N/A 2,346.00 – 2003

6 Lot 3688, 3689& PT 2209, Bukit Kayu Hitam, Mukim Sungai Laka, Daerah Kubang Pasu, Kedah Darul Aman

Vacant land, part of which is Golf and Country Club

Rented out and partly vacant

Leasehold (60 years - expiring2053 and 2057)

17 3,127,220.00 43.47 1993 & 1997


151

List of propertiesfor financial year ended 28 february 2015 (cont’d,)


age ofbuilding

yearsApproxAreas

sq metre

net book Value

as at 28 February

2015rm’mil

date ofacquisition

7 Lot 44 Premises No. 42/1/2&3, Kompleks Munshi Abdullah, Jalan Munshi Abdullah, 75100 MelakaDarul Azim

4 & 1/2 storey shophouse

Business and office premises


30 130.00 0.42 1992

8 Lot 4720,Mukim Titi Tinggi, 2 Jalan Baru Sadao, 02100 Padang Besar, Perlis Darul Sunnah

Store Store Leasehold (60 years - expiring2054)

21 9,474.00

11.65

1994

9 Lot 3548, Mukim Titi Tinggi, 2 Jalan Baru Sadao, 02100 Padang Besar, Perlis Darul Sunnah

Warehouse annexed to a single storey shopping complex

Duty Free Complex andwarehouse


23 14,658.00 1990

10 Lot 2063, Mukim Titi Tinggi, Padang Besar, 30 Bangunan PKENPs, Jalan Besar, 02100 Padang Besar, Perlis Darul Sunnah

Shop Shop Freehold 28 223.00 0.19 1990

11 Shop LotNos 47 & 48, Mukim Titi Tinggi, Padang Besar, 3D & 4D Kompleks Arked Niaga PKENPs, 02100 Padang Besar, Perlis Darul Sunnah

Shop Shop Leasehold (99 years - expiring2090)

25 58.00 0.24 1990

12 PN 108045,Lot 4858, Mukim Pengkalan Hulu, District of Hulu Perak, Perak Darul Ridzuan

Duty Free Complex

Duty Free Complex


25 10,116.00 9.32 1990

13 Lot No. 5017, Mukim Kapar, District of Klang, Selangor Darul Ehsan

Industrial premises

Factories, office and ancillary buildings

Freehold 11 - 30 12,140.55 11.69 1982


152

List of propertiesfor financial year ended 28 february 2015 (cont’d,)


age ofbuilding

years

Approxareas

sq metre

net book Value

as at 28 February

2015rm’mil

date of acquisition

14 Lot No PT 54753, Mukim Kapar, District of Klang, Selangor Darul Ehsan

Industrial premises

Factory, office and warehouse

Freehold 12 - 37 24,281.00 16.55 1979

15 Lot no PT 6731, Kawasan Perindustrian Berat Gurun, Mukim Gurun, District of Kuala Muda, Kedah Darul Aman

Industrial premises

Vacant Leasehold (60 years)

8 43,541.33 2.84 2005

16 8 PersiaranKampung Jawa, No Hakmilik 6711,Lot 9891, Mukim 12, Daerah Barat Daya, Pulau Pinang Darul Mutiara

Factory land and building

Business and office premises

Leasehold (99 years expiring2113)

18 4,355.00

5.54

2002

17 Pajakan NegeriNo 3839, Lot no 11618, Mukim 12, Daerah Barat Daya, Pulau Pinang Darul Mutiara

Factory land Business and office premises

Leasehold (99 years expiring2111)

N/A 1,106.00 2001


153

NOTICE IS HEREBY GIVEN THAT the Twenty-Sixth Annual General Meeting of Atlan Holdings Bhd. will be held at the Meeting Room, Wisma Atlan, 8 Persiaran Kampung Jawa, 11900 Bayan Lepas, Penang on Tuesday, 28 July 2015 at 11.30 a.m. for the following purposes:-

agenda

As Ordinary Business:

1. To receive the Audited Financial Statements for the financial year ended 28 February 2015 together with the Directors’ and Auditors’ Report thereon. resolution 1

2. To approve the payment of Directors’ fees of RM253,000 for the financial year ended 28 February 2015. resolution 2

3. To re-elect the following Directors who retire in accordance with Article 78 of the Company’s Articles of Association and being eligible, have offered themselves for re-election :-

a) Yang Amat Mulia Tengku Abdul Rahman Ibni Sultan Haji Ahmad Shah Al-Mustain Billah, DK II., SSAP;

b) Dato’ Woo Hon Kong; andc) Mr. Lee Sze Siang

resolution 3

resolution 4resolution 5

4. To consider and if thought fit, to pass the following resolution pursuant to Section 129(6) of the Companies Act, 1965 as an ordinary resolution:-

“That En. Mohd Sharif Bin Hj Yusof, retiring in accordance with Section 129 of the Companies Act, 1965, be and is hereby re-appointed as Director of the Company and to hold office until the conclusion of the next Annual General Meeting of the Company.” resolution 6

5. To re-appoint Messrs. Ernst & Young as Auditors of the Company for the ensuing year and to authorise the Directors to fix their remuneration. resolution 7

as special business:

6. To consider and if thought fit, to pass the following Ordinary Resolutions :-

i) ordinary resolution Authority to issue and allot shares pursuant to Section 132D of the Companies

Act, 1965 (“Proposed Authority to issue Shares”)

“THAT subject to Section 132D of the Companies Act, 1965, the Articles of Association of the Company and approvals of the relevant governmental or regulatory authorities, the Directors be and are hereby empowered to issue and allot shares in the capital of the Company, at any time to such persons and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceed ten per centum (10%) of the issued and paid-up share capital of the Company (excluding treasury shares, if any) for the time being and the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad;

AND THAT such authority shall commence immediately upon the passing of this resolution and continue to be in force until the conclusion of the next Annual General Meeting of the Company.” resolution 8

NOTiCE Of ANNuAL GeNerAL meeTING


154

ii) ordinary resolution Mandate for Yang Amat Mulia Tengku Abdul Rahman Ibni Sultan Haji Ahmad

Shah Al-Mustain Billah, DK II., SSAP who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to continue to act as an Independent Non-Executive Director of the Company

“THAT subject to the passing of the Resolution 3, approval be and is hereby given to Yang Amat Mulia Tengku Abdul Rahman Ibni Sultan Haji Ahmad Shah Al-Mustain Billah, DK II, SSAP, who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to continue to act as an Independent Non-Executive Director of the Company in compliance with the recommendation of Malaysian Code on Corporate Governance 2012.” resolution 9

iii) ordinary resolution Mandate for Dato’ Shagul Hamid Bin K.R. Williams @ Abdullah, who has served

as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to continue to act as an Independent Non-Executive Director of the Company

“THAT approval be and is hereby given to Dato’ Shagul Hamid Bin K.R. Williams @ Abdullah, who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to continue to act as an Independent Non-Executive Director of the Company in compliance with the recommendation of Malaysian Code on Corporate Governance 2012.” resolution 10

7. To transact any other business of which due notice shall have been given in accordance with the Companies Act, 1965 and the Company’s Articles of Association.

By Order of the Board,

chUa siew chUan (maicsa 0777689)thUm sook FUn (mia 24701)Company Secretaries

Date : 6 July 2015

Notice of Annual General meeting(cont’d.)


155


exPlanatory notes to sPecial bUsiness

resolution 8 - Proposed authority to issue shares

The proposed Resolution 8 is primarily to seek for the renewal of a general mandate to give flexibility to the Board of Directors to issue and allot shares up to 10% of the issued share capital (excluding treasury shares) of the Company for the time being, at any time in their absolute discretion without convening a general meeting (hereinafter referred to as the “General Mandate”).

The Company has been granted a general mandate by its shareholders at the last Annual General Meeting (“AGM”) held on 22 July 2014 (hereinafter referred to as the “Previous Mandate”) and it will lapse at the conclusion of the Twenty-Sixth Annual General Meeting.

As at the date of this Notice, the Previous Mandate granted by the shareholders had not been utilized and hence, no proceed was raised therefrom.

The purpose to seek the General Mandate is to enable the Directors to issue and allot shares at any time to such persons in their absolute discretion without convening a general meeting as it would be both time-consuming and costly to organize a general meeting. This General Mandate, unless revoked or varied by the Company in a general meeting, will expire at the conclusion of the next AGM of the Company.

The General Mandate will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for purpose of funding future investment project(s), acquisitions, working capital and/or settlement of banking facilities.

resolution 9 - mandate for yang amat mulia tengku abdul rahman ibni sultan haji ahmad shah al-MustainBillah,DKII,SSAPtocontinuetoactasIndependentNon-ExecutiveDirector

Both the Nomination Committee and the Board have assessed the independence of Yang Amat Mulia Tengku Abdul Rahman Ibni Sultan Haji Ahmad Shah Al-Mustain Billah, DKII, SSAP, who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, and recommended him to continue to serve as an Independent Non-Executive Director of the Company based on the following justifications:-

a) He has fulfilled the criteria under the definition of Independent Director as stated in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, and thus, he will be able to function as check and balance, provides a broader view and brings an element of objectivity to the Board.

b) He remains objective and independent in expressing his view and in participating in deliberation and decision making of the Board and Board Committees.

c) He continues to demonstrate conduct and behaviour that are essential indicators as independence.d) He has vast experience in a diverse range of businesses and therefore would be able to provide

constructive opinion.

resolution 10 - mandate for dato’ shagul hamid bin k.r. williams @ abdullah to continue to act as IndependentNon-ExecutiveDirector

Both the Nomination Committee and the Board have assessed the independence of Dato’ Shagul Hamid Bin K.R. Williams @ Abdullah, who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, and recommended him to continue to serve as an Independent Non-Executive Director of the Company based on the following justifications:-

a) He fulfilled the criteria under the definition of Independent Director as stated in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, and thus, he will be able to function as check and balance, provide a broader view and brings an element of objectivity to the Board.

b) He remains objective and independent in expressing his view and in participating in deliberation and decision making of the Board and Board Committees.

c) He continues to demonstrate conduct and behaviour that are essential indicators as independence.d) He has vast experience in a diverse range of businesses and therefore would be able to provide

constructive opinion.


156

notes:-

1. A member entitled to attend and vote at the Meeting is entitled to appoint more than one (1) proxy to attend and vote in his or her stead. Where a member appoints two or more proxies, the appointments shall be invalid unless he or she specifies the proportions of his or her shareholdings to be represented by each proxy.

2. A proxy may but need not to be a member of the Company and the provisions of Section 149 (1)(b) of the Companies Act, 1965 shall not apply to the Company. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the Meeting shall have the same rights as the member to speak at the Meeting.

3. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney

duly authorised in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer or attorney duly authorised.

4. Where a member of the Company is an exempt authorised nominee as defined under the Securities

Industry (Central Depositories) Act 1991 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.

5. The instrument appointing a proxy must be deposited at the Company’s registered office at Level 4, Wisma Atlan, 8, Persiaran Kampung Jawa, 11900 Bayan Lepas, Penang, not less than 48 hours before the time for holding the meeting or any adjournment thereof.

6. For the purpose of determining who shall be entitled to attend, speak and vote at this meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to make available to the Company pursuant to Article 56(b) of the Articles of Association of the Company and Paragraph 7.16 (2) of the Listing Requirements, a Record of Depositors as at 21 July 2015 (“General Meeting Record of Depositors”) and a Depositor whose name appears on such Record of Depositors shall be entitled to attend, speak and vote at the meeting or appoint proxy to attend, speak and vote in his/her stead.

statement accomPanying notice oF annUal general meeting(Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Securities)

As at date of this notice, there are no individuals who are standing for election as Directors (excluding the above Directors who are standing for re-election) at this forthcoming Annual General Meeting.


I/We ____________________________________________ NRIC No./Company No. _________________________ (full name in block letters)

of _________________________________________________________________________________________________ (full address)

being a member of atlan holdings bhd (173250-w) hereby appoint _____________________________

________________________________________________ of ________________________________________________

or failing him, _______________________________________ of ___________________________________________or failing *him/her, the Chairman of the meeting as *my/our proxy to vote for *me/us on *my/our behalf at the Twenty-Sixth Annual General Meeting of the Company to be held at the Meeting Room, Wisma Atlan, 8 Persiaran Kampung Jawa, 11900 Bayan Lepas, Penang on Tuesday, 28 July 2015 at 11.30 a.m. and at any adjournment thereof.

Please indicate your vote by a (X) in the respective box of each resolution. If no specific direction as to voting is given, the proxy will vote or abstain from voting on the resolutions at his/her discretion.

no. resolutions For againstas ordinary bUsiness:Resolution 1 To receive the Audited Financial Statements for the financial year

ended 28 February 2015 together with the Directors’ and Auditors’ Report thereon.

Resolution 2 To approve the payment of Directors’ fees of RM253,000.Resolution 3 To re-elect Yang Amat Mulia Tengku Abdul Rahman Ibni Sultan Haji

Ahmad Shah Al-Mustain Billah, DK II., SSAP as Director of the Company. Resolution 4 To re-elect Dato’ Woo Hon Kong as Director of the Company.Resolution 5 To re-elect Mr. Lee Sze Siang as Director of the Company.Resolution 6 To re-appoint En. Mohd Sharif Bin Hj Yusof as Director of the Company.Resolution 7 To re-appoint Messrs Ernst & Young as Auditors of the Company.as sPecial bUsiness:Resolution 8 To approve the Proposed Authority to Issue Shares.Resolution 9 Mandate for Yang Amat Mulia Tengku Abdul Rahman Ibni Sultan Haji

Ahmad Shah Al-Mustain Billah, DK II., SSAP to continue to act as an Independent Non-Executive Director of the Company.

Resolution 10 Mandate for Dato’ Shagul Hamid Bin K.R. Williams @ Abdullah to continue to act as an Independent Non-Executive Director of the Company.

* Strike out whichever not applicablenote: Please note that the short descriptions given above of the Resolutions to be passed do not in any way whatsoever reflect the intent and purpose of the Resolutions. The short descriptions have been inserted for convenience only. Shareholders are encouraged to refer to the Notice of Annual General Meeting for the full purpose and intent of the Resolutions to be passed.

As witness *my/our hand(s) this _____________ day of _____________________, 2015.

__________________________________Signature of Shareholder(s)

No. of Shares Held

Notes:-1. A member entitled to attend and vote at the Meeting is entitled to appoint more than one (1) proxy to attend and vote

in his or her stead. Where a member appoints two or more proxies, the appointments shall be invalid unless he or she specifies the proportions of his or her shareholdings to be represented by each proxy.

2. A proxy may but need not to be a member of the Company and the provisions of Section 149 (1)(b) of the Companies Act, 1965 shall not apply to the Company. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at the Meeting shall have the same rights as the member to speak at the Meeting.

3. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer or attorney duly authorised.

4. Where a member of the Company is an exempt authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991 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.

5. The instrument appointing a proxy must be deposited at the Company’s registered office at Level 4, Wisma Atlan, 8, Persiaran Kampung Jawa, 11900 Bayan Lepas, Penang, not less than 48 hours before the time for holding the meeting or any adjournment thereof.

6. For the purpose of determining who shall be entitled to attend, speak and vote at this meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to make available to the Company pursuant to Article 56(b) of the Articles of Association of the Company and Paragraph 7.16 (2) of the Listing Requirements, a Record of Depositors as at 21 July 2015 (“General Meeting Record of Depositors”) and a Depositor whose name appears on such Record of Depositors shall be entitled to attend, speak and vote at the meeting or appoint proxy to attend, speak and vote in his/her stead.

7. Any alteration in this form must be initialed.

Proxy Form

COMMONSEAL

✄

Fold this flap for sealing

Then fold here

1st fold here

THE COMPANY SECRETARIESatlan holdings bhd

(Company No.: 173250-W)Level 4, Wisma Atlan

8 Persiaran Kampung Jawa11900 Bayan LepasPenang, Malaysia

AFFIXPOSTAGE

STAMP

Correspondence address :

17th Floor, Menara Atlan161B, Jalan Ampang50450 Kuala Lumpur

Tel : 603 2179 2000Fax : 603 2179 2390

www.atlan.com.my

ATLAN

HO

LDIN

GS B

HD

(173250-W) A

NN

UA

L REPORT 2015 LA

PORA

N TA

HU

NA

N

annual report

2015laporan tahunan

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