BONIA-AnnualReport2009 (2.5MB)

Annual Report 2009
Contents
02 05 06 14 28 32 35 37 38 44 48 corporate information corporate structure profile of directors statement on corporate governance audit committee report additional compliance information statement on internal control directors responsibility statement chairmans statement penyata pengerusi 50 53 54 57 131 133 135 137 corporate social responsibility five-year group financial highlights event highlights financial statements analysis of shareholdings list of properties notice of annual general meeting statement accompanying the notice of annual general meeting proxy form
BONIA CORPORATION BERHAD (223934-T) Annual Report 2009
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CoRpoRAte InfoRmAtIon
BOARD OF DIRECTORS Chiang Sang Sem
(Group Executive Chairman cum Chief Executive Officer)
AUDIT COMMITTEE DaTuK ng Peng hong @ ng Peng haY

(Chairman)
COMPANY SECRETARIES Ting oi Ling Teoh KoK Jong AUDITORS BDO Binder Chartered Accountants REGISTERED OFFICE Level 18 The Gardens North Tower Mid Valley City Lingkaran Syed Putra 59200 Kuala Lumpur Tel : (6)03 2264 8888 Fax : (6)03 2282 2733 SHARE REGISTRAR Bina Management (M) Sdn Bhd Lot 10, The Highway Centre Jalan 51/205 46050 Petaling Jaya Selangor Darul Ehsan Tel : (6)03 7784 3922 Fax : (6)03 7784 1988 STOCK EXCHANGE LISTING Main Market of Bursa Malaysia Securities Berhad WEBSITE ADDRESS www.bonia.com
Chiang Fong Yee

(Alternate Director to Mr Chiang Sang Sem)
Chong Chin LooK

(Member) (Resigned on 30 January 2009)
Chiang heng Kieng

(Group Managing Director)
Chong Sai Sin

(Member)
Chiang Sang Bon

(Group Executive Director)
(Appointed on 30 January 2009) Lim Fong Boon
Chong Chin LooK

(Group Finance Director)
(Member)
Chiang Fong TaT

(Group Executive Director)
NOMINATION COMMITTEE DaTuK ng Peng hong @ ng Peng haY

(Chairman)
DaTuK ng Peng hong @ ng Peng haY

(Independent Non-Executive Director)
Lim Fong Boon

(Member)
DaTuK niK huSSain Bin niK aLi

(Independent Non-Executive Director) (Resigned on 30 January 2009)
Chiang heng Kieng

(Member) (Resigned on 25 August 2009)
DaTo ShahBuDin Bin imam mohamaD

(Non-Independent Non-Executive Director)
Chong Sai Sin

(Member)
(Appointed on 25 August 2009) REMUNERATION COMMITTEE DaTo ShahBuDin Bin imam mohamaD
(Chairman)
Lim Fong Boon

Chong Sai Sin

(Appointed on 30 January 2009)
DaTuK ng Peng hong @ ng Peng haY

(Member)
Lim Fong Boon

(Member)
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CoRpoRAte stRuCtuRe
RETAILING
100% Armani Context Sdn Bhd 100% Banyan Sutera Sdn Bhd 100% CB Marketing Sdn Bhd
100% New Series Sdn Bhd
Interior design, advertising and promotion
Marketing and distribution of mens apparel
60%
100% Scarpa Marketing Sdn Bhd
Marketing and distribution of fashionable leather goods
Mcore Sdn Bhd
Marketing and distribution of fashionable goods
Wholesaling, retailing and marketing of fashionable footwear
100% Apex Marble Sdn Bhd

Marketing and distribution of fashionable goods
Designing, promoting and marketing of fashionable leather goods
100% SBL Marketing Sdn Bhd
100% CB Franchising Sdn Bhd 100% CRL Marketing Sdn Bhd
MANUFACTURING
Franchising of leather goods and apparels
100% SBFW Marketing Sdn Bhd
100% Long Bow Manufacturing Sdn Bhd

Manufacturing and marketing of leather goods
Designing, promoting and marketing of fashionable ladies footwear
100% SB Boutique Sdn Bhd 100% Active World Pte Ltd
100% CRF Marketing Sdn Bhd
Franchising of leather goods & apparel
PROPERTY DEVELOPMENT
100% BCB Properties Sdn Bhd
Property development
100% CR Boutique Sdn Bhd
Wholesaling and retailing of fashionable leather goods and apparels
70% 40%
Property development
Pasti Anggun Sdn Bhd Makabumi Sdn Bhd
Franchising of leather goods & apparel
100% Jetbest Enterprise Pte Ltd
100% Daily Frontier Sdn Bhd
Wholesaling, retailing, importing and exporting of leather goods and accessories
Dormant
Marketing, distribution and export of fashionable goods and accessories
100% SBLS Pte Ltd
100% De Marts Marketing Sdn Bhd

Wholesaling, retailing and marketing of fashionable footwear, carrywear and accessories
PROPERTY INVESTMENT
100% CB Holdings (Malaysia) Sdn Bhd 100% Luxury Parade Sdn Bhd
Property investment
Property investment and management services
100% Dominion Directions Sdn Bhd
100% SCRL Pte Ltd
Marketing and distribution of mens apparel and accessories
Wholesaling, retailing and marketing of fashionable footwear, carrywear and accessories
100% Ataly Industries Sdn Bhd

Property investment
100% SB Directions Sdn Bhd

Marketing and distribution of fashionable accessories
100% Kin Sheng Group Limited

Investment holdings
100% Galaxy Hallmark Sdn Bhd

Marketing and distribution of mens apparel and accessories
100% Bonia (Shanghai) Commerce Limited
70%
VR Directions Sdn Bhd
Retailing, marketing, promoting, designing, import and export of fashionable leather goods, apparels and accessories
Marketing and distribution of mens apparel and accessories, and ladies apparel
100% Guangzhou Jia Li Bao Leather Fashion Co Ltd
100% Eclat World Sdn Bhd
Designing, promoting and marketing of fashionable mens footwear
Retailing, marketing, promoting, designing, import and export of fashionable leather goods, apparels and accessories
100% Future Classic Sdn Bhd
100% Guangzhou Bonia Fashions Co Limited
Manufacturing, marketing, retailing of fashionable leather goods, apparels and accessories
100% Mcolours & Design Sdn Bhd
Product design, research and development
100% Kin Sheng International Trading Co Ltd
General trading and marketing of fashionable goods
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pRofIle of DIReCtoRs
MR CHIANG SANG SEM aged 56, Malaysian He is the founder of BONIA. He was appointed to the Board on 16 June 1994 as Executive Chairman of the Company and holds the post of Executive Chairman in several subsidiary and related companies of the Company. He is now the Group Executive Chairman cum Chief Executive Officer of the Group. His involvement in the leather industry spans a period of over 35 years. He possesses in-depth knowledge, skills and expertise in all aspects of the leatherwear trade. He is responsible for the overall business development and formulating the Groups strategic plans and policies. To ensure that the Group is very much in line with the trend of the fashion and technological changes in the leatherwear and fashion accessories industry, he travels extensively to Italy, France, Germany, Japan, Hong Kong, Taiwan, China, Bangkok, Vietnam and Indonesia. He does not have any other directorships of public companies. His brothers, Chiang Sang Bon, Chiang Heng Kieng and his sons, Chiang Fong Yee and Chiang Fong Tat, are also members of the Board.
MR CHIANG FONG YEE aged 32, Malaysian He was appointed to the Board on 18 February 2004 as Alternate Director to Mr Chiang Sang Sem. He obtained his Bachelor Degree in Marketing and Statistic from Middlesex University in the United Kingdom in 1999. He joined the Group in February 2000 as Marketing Executive and subsequently he was promoted to the position of Assistant Business Development Manager of leatherwear division in October 2002. He is responsible for the development of product sourcing, research and development, planning, implementation of the marketing strategy and product distribution functions of the leatherwear division. He currently holds directorships in several subsidiaries of the Company. He does not have any other directorships of public companies. His father, Chiang Sang Sem, his uncles, Chiang Sang Bon, Chiang Heng Kieng and his brother, Chiang Fong Tat, are also members of the Board.
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(contd)
MR CHIANG HENG KIENG aged 47, Malaysian He was appointed to the Board on 16 June 1994 and is the Group Managing Director of the Company and of its several other subsidiary and related companies. He is extensively and directly involved in day-to-day management, decisionmaking and operations of the Group. He is responsible for the development and implementation of the marketing strategy and product distribution functions of the Group. He is the immediate Past President of the Malaysian Retailer-Chains Association. He does not have any other directorships of public companies. His brothers, Chiang Sang Sem, Chiang Sang Bon and his nephews, Chiang Fong Yee and Chiang Fong Tat, are also members of the Board.
MR CHIANG SANG BON aged 54, Malaysian He was appointed to the Board on 16 June 1994 and is the Group Executive Director of the Company. He started his career with a leather manufacturer in Singapore in 1974. Todate, he has gained over 35 years vast experience in technical skills in manufacturing of leatherwear. In his current capacity, he is responsible for the overall factory and production operations. He is also in-charge of product quality control. He also holds directorships in several subsidiaries of the Company. He does not have any other directorships of public companies. His brothers, Chiang Sang Sem, Chiang Heng Kieng and his nephews, Chiang Fong Yee and Chiang Fong Tat, are also members of the Board.
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(contd)
MR CHONG CHIN LOOK aged 46, Malaysian He was appointed to the Board on 20 June 1994. He is the Group Finance Director of the Company and holds a position of Financial Controller of the Group since 1992. He is responsible for the overall financial and corporate functions of the Group. He graduated with a Bachelor of Economics degree with a major in Business Administration from the University of Malaya in 1987. He is also a member of The Malaysian Institute of Certified Public Accountants (MICPA) and a Chartered Accountant with the Malaysian Institute of Accountants (MIA). Prior to his current position, he was attached to KPMG Peat Marwick, an international firm of Chartered Accountants, where he gained four and a half years experience in auditing, accounting, taxation and management consultancy. He currently holds directorships in several subsidiaries of the Company. He does not have any other directorships of public companies.
He currently holds directorships in several subsidiaries of the Company. He does not have any other directorships of public companies. His father, Chiang Sang Sem, his uncles, Chiang Sang Bon, Chiang Heng Kieng and his brother, Chiang Fong Yee, are also members of the Board.
DATUK NG PENG HONG @ NG PENG HAY D.M.S.M., D.S.M., P.J.K., aged 57, Malaysian He was appointed to the Board on 20 June 1994. He is an Independent Non-Executive Director, the Chairman of the Audit Committee, Nomination Committee, and a member of the Remuneration Committee of the Company. He was the State Assemblyman for Tengkera Constituency of Barisan Nasional between 1982 and 1986. He then served as a Senator in the Malaysian Parliament from 1987 to 1993. His first involvement in social activities was upon completing his secondary education. He has been appointed as the Investment Coordinator by the Malacca State Development Corporation to handle direct investments in the State of Melaka since 1988. Together with his teams of officials and his excellent public relations, he has helped in attracting numerous Taiwanese, Singaporean and Chinese investors into the State of Melaka. In recognition of his efforts and dedication, he was conferred the Darjah Mulia Seri Melaka by his Excellency, the Governor of Melaka in 1992. On 17 July 1999, the Taiwanese Government awarded him the Economics Medal. He is the Chairman of MCA, 7th Branch Melaka since 1982. He also appointed as Vice Chairman of Malacca State Malaysia Crime Prevention Foundation (MCPF) since year 1997 and as Exco Member of
MR CHIANG FONG TAT aged 31, Malaysian He was appointed to the Board on 30 August 2004. He is the Group Executive Director of the Company. He graduated with a Bachelor (Hons) Degree in Marketing and Management from Middlesex University in the United Kingdom in 2000 and thereafter joined the Group in July 2000 as Marketing Executive. He was subsequently promoted to the position of Brand Manager in menswear and accessories division in October 2002. He is now responsible for the development of product sourcing, research and development, planning, implementation of the marketing strategy and product distribution functions of the leatherwear and footwear divisions.
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(contd)
Malaysia Crime Prevention Foundation. He is also a Committee Member of Malacca States Inspectorate of National Services Training Council. He also holds directorships in Farms Best Berhad, Komarkcorp Berhad, Ta Win Holdings Berhad and Chairman of Wellcall Holdings Berhad.
MR LIM FONG BOON aged 60, Malaysian He was appointed to the Board on 20 June 1994. He is an Independent NonExecutive Director and a member of the Audit Committee, Nomination Committee, and Remuneration Committee of the Company. He was a district councilor of Tanjung Malim since 1987, the Managing Partner of Hin Lee Goldsmith since 1978 and also the Managing Director of Tanma Holdings Sdn Bhd, a property investment holding company since 1980. He does not have any other directorships of public companies.
LLTC, a firm of Chartered Accountants. He is also a member of the Malaysian Institute of Accountants (MIA), the Malaysian Institute of Certified Public Accountants (MICPA), Institute of Internal Auditors Malaysia (IIAM), Chartered Tax Institute of Malaysia (CTIM) and Financial Planning Association of Malaysia (FPAM). He signed up as an article student in MICPA and started audit experience in Kassim Chan & Co since 1987. He joined BDO Binder in 1993 after completed the articleship. He accumulated more than 7 years experience in 2 established audit firms before joining commercial organisations as an Accountant, Corporate Finance Manager and Financial Controller from 1995 to 2002. He joined LLTC as an audit principal and admitted as a Partner in 2005. He has more than 20 years in the commercial organisations and accounting practice and gained good exposure in the Corporate Finance, Due Diligence Review, Listing Exercise, Auditing, Taxation and Accounting. He does not have any other directorships of public listed companies.
DATO SHAHBUDIN BIN IMAM MOHAMAD D.S.A.P., D.I.M.P., S.A.P., J.S.M., P.J.K., aged 67, Malaysian He was appointed to the Board on 1 March 1998. He is a Non-Independent Non-Executive Director and the Chairman of the Remuneration Committee of the Company. He is the representative of Permodalan Nasional Berhad (PNB) on the Board of Directors of the Company. He has served in the government service in various capacities for some 31 years. His last post with the Government was from 1996 to 1997 as the Deputy Secretary General (Operation), Ministry of Finance prior to his retirement in 1997. He also serves as Director in MWE Holdings Berhad.
MR CHONG SAI SIN aged 42, Malaysian He was appointed to the Board on 30 January 2009. He is an Independent Non-Executive Director and a member of the Audit Committee and Nomination Committee of the Company. He is a Chartered Accountant, an Approved Company Auditor, an Approved Tax Agent and a Partner in
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(contd)
Notes: 1. Save as disclosed above, none of the directors have: (a) any family relationship with any Directors and/or substantial shareholders of the Company, (b) any conflict of interest with the Company, (c) any conviction for offences (other than traffic offences) within the past ten (10) years. 2. The respective Directors interests in the Company are detailed in pages 59 and 131 of the Annual Report. There were four (4) Board Meetings held during the financial year ended 30 June 2009. The details of attendance of the Directors are as follows:
##
4.
The Date, Time and Place of the Board Meetings held: Date (i) (ii) (iii) (iv) 25 August 2008, Monday # 24 November 2008, Monday ## 27 February 2009, Friday # 28 May 2009, Thursday # Time 11.00 a.m. 11.00 a.m. 11.00 a.m. 11.00 a.m.
Place
#
3.
The Boardroom Bonia Headquarters 4th Floor, No. 62, Jalan Kilang Midah Taman Midah, Cheras 56000 Kuala Lumpur Langkawi Room Bukit Jalil Golf & Country Resort Jalan 3/155B, Bukit Jalil 57000 Kuala Lumpur
Name Chiang Sang Sem Chiang Fong Yee
Attendance 3 out of 4 4 out of 4 4 out of 4 4 out of 4 4 out of 4 3 out of 4 2 out of 4 4 out of 4 4 out of 4 4 out of 4 2 out of 4
(Alternate Director to Mr Chiang Sang Sem)
Chiang Heng Kieng Chiang Sang Bon Chong Chin Look Chiang Fong Tat Datuk Nik Hussain Bin Nik Ali * Datuk Ng Peng Hong @ Ng Peng Hay Dato Shahbudin Bin Imam Mohamad Lim Fong Boon Chong Sai Sin ** * ** resigned on 30 January 2009 appointed on 30 January 2009
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stAtement on CoRpoRAte GoveRnAnCe
the Board of Bonia Corporation Berhad, in recognising the importance of corporate governance, is committed to ensure that the Companys business and operations are in line with the principles and best practice advocated by the malaysia Code on Corporate Governance.
The following paragraphs set out the Companys application of the principles and best practices of the Revised Malaysian Code on Corporate Governance (the Code). THE BOARD OF DIRECTORS The Group acknowledges the pivotal role played by the Board of Directors to lead and control the Company with the ultimate objective of realising long-term shareholder value. To fulfill this role, the Board has established various processes and committees to assist the Board in discharging these responsibilities. Among others, the setting of Companys strategies and directions, shareholders and investors relationship, annual budget, significant financial matters, and the internal control including risk assessment are within the responsibilities of the Board of Directors. The Board meets at least four (4) times a year, with additional meetings convened as and when necessary. There were four (4) Board meetings held during the financial year ended 30 June 2009. The details of attendance of the Directors at the Board Meetings are set out on page 13. Board Balance The Board of Directors consists of nine (9) directors and one (1) alternate director; comprising five (5) Executive Directors, three (3) Independent Non-Executive Directors and one (1) Non-Independent Non-Executive Director. The Board therefore complies with Paragraphs 1.01 and 15.02 of the Bursa Securitiess Main Market Listing Requirements which requires that at least two (2) directors or one-third (1/3) of the Board members whichever is the higher, are Independent Directors. A brief profile of each Director is presented on pages 6 and 13.
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(contd)
The Company is led by an experienced Board under a Chairman who is a Group Executive Director cum Chief Executive Officer. The roles of the Group Executive Chairman cum Chief Executive Officer and the Group Managing Director are separated and each has a clearly accepted division of responsibilities to ensure balance of power and authority. The Board has within it, professionals drawn from varied backgrounds, bringing in-depth and diversity in experience, expertise and perspectives to the Groups business operations. The Board is ensured of a balance and independent view at all Board deliberations largely due to the presence of its Independent Non-Executive Directors whom are independent from the Management and major shareholders of the Company. The Independent Non-Executive Directors are also free from any business dealing and other relationships that could materially interfere with the exercise of their independent judgement. Together with the Executive Directors who have intimate knowledge of the Groups businesses, the Board is constituted of individuals who are committed to business integrity and professionalism in all their activities. Supply of Information The Directors are provided with relevant agenda and timely information, such as quarterly financial results, progress report of the Groups businesses, corporate developments, regulatory and audit reports to enable them to discharge their duties and responsibilities effectively. All Directors have full access to the advice and services of the Company Secretaries, the internal and external auditors and other independent professionals in carrying out their duties. Board Committees To assist the Board in discharging its duties, various Board Committees were established. The functions and terms of reference of the Board Committees are clearly defined and where applicable, comply with the recommendations of the Code. (i) Audit Committee The objective of the Audit Committee is to assist the Board to review the adequacy and integrity of internal control system and management information system of the Group and the Company. The composition terms of reference and summary of activities of the Audit Committee are set out on pages 28 to 30.
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(contd)
(ii) Nomination Committee The Nomination Committee currently comprises the following members: Name of members Datuk Ng Peng Hong @ Ng Peng Hay Chiang Heng Kieng * Lim Fong Boon Chong Sai Sin ** * ** resigned on 25 August 2009 appointed on 25 August 2009 Designation Non-Executive Director (Chairman) Group Managing Director Non-Executive Director Non-Executive Director Attendance 2 out of 2 2 out of 2 2 out of 2 -
The responsibilities of the Nomination Committee are to identify skill and expertise that are relevant to the effective functioning of the Board, to review the Board structure, size and composition, to select and propose suitable candidates for appointment to the Board. The Nomination Committee also assesses the contribution and performance of each individual Director and recommends to the Board to fill the seat in the respective Committees. Besides, the Nomination Committee also annually review its required mix of skills and experience and other qualities, including core competencies which NonExecutive Directors should bring to the Board. (iii) Remuneration Committee The Remuneration Committee currently comprises the following members: Name of members Dato Shahbudin Bin Imam Mohamad Datuk Ng Peng Hong @ Ng Peng Hay Lim Fong Boon Designation Non-Executive Director (Chairman) Non-Executive Director Non-Executive Director Attendance 1 out of 1 1 out of 1 1 out of 1
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(contd)
The Remuneration Committee is responsible for considering and recommending the following matters to the Board for its approval: Revision of fees payable to the Board of Directors; Reimbursement of expenses incurred in attending the Board and its Committee Meeting; Develop a remuneration policy based on performance to attract and retain high caliber and experience directors to successfully manage the business of the Group and of the Company.
to be held following their appointments. The Articles also require that one-third (1/3) of the Directors including the Managing Director, if any, to retire by rotation and seek re-election at each AGM and that each Director shall submit himself for re-election at least once in every three (3) years. Directors over seventy (70) years of age are required to submit themselves for re-appointment by the shareholders annually in accordance with Section 129(6) of the Companies Act, 1965. Directors Training All members of the Board have attended the Mandatory Accreditation Training Programme (MAP) prescribed by Bursa Malaysia Training Sdn Bhd, the training and education arm of Bursa Malaysia. In order to ensure that the Directors are competent in carrying out their expected roles and responsibilities, directors are encouraged and required to attend continuous education programmes and seminars to keep abreast with developments in the market place. All executive directors and other members in the senior management attended a 2-days 1 Bonia Management Camp entitled Transformational Leadership conducted by Quest Learning, an expert specialised in organisational development and customised training programme in early September 2009. All non-executive directors have attended seminar with topic related to Corporate Governance during the period under review.
Appointment to the Board The Nomination Committee is responsible for making recommendation for appointment to the Board. Upon appointment, the Director will undergo an orientation and familiarisation programme, including visits to the Groups businesses and meetings with senior management as appropriate, to facilitate their understanding of the Groups businesses. Training sessions have been held for Directors of the Group to keep them abreast of current and regulatory issues. Re-election of Directors Any Director appointed during the year is required under the Companys Articles of Association, to retire and seek re-election by the shareholders at the next Annual General Meeting (AGM)
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(contd)
There is a familiarisation programme for all Board members including, where appropriate, visits to the Groups business and meetings with senior management to facilitate their understanding of the Groups businesses and operations. Directors Remuneration The Code states that Directors remuneration should be of a sufficient level to attract and retain high calibre Directors to successfully run the Group. For Non-Executive Directors, their remuneration should reflect their respective levels of experience, expertise and responsibilities. Non-Executive Directors are paid attendance allowance for each Board and/or Audit Committee Meeting they attended. Directors fees are paid to Executive and Non-Executive Directors upon approval granted by the shareholders at the Annual General Meeting. Executive Directors are not paid attendance allowance. The aggregate remuneration of the Directors is categorised into appropriate components: Other Emoluments RM000 397 * -
Category Executive Directors * Non-Executive Directors
Fees RM000 377 * 144
Salaries RM000 1,404 * -
Bonuses RM000 1,254 * -
Total RM000 3,432 * 144
* inclusive of remuneration paid by the subsidiary companies The number of Directors whose total remuneration falls within the following bands: Range of Remuneration Below RM50,000 RM150,001 to RM200,000 RM450,001 to RM500,000 RM500,001 to RM550,000 RM700,001 to RM750,000 RM1,500,001 to RM1,550,000 Executive Director 1 1 1 1 1 Non-Executive Director 4
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(contd)
RELATIONSHIP WITH SHAREHOLDERS Dialogue between the Company and Investors The Company recognises the importance of keeping shareholders and investors informed of the Groups business and corporate developments. Such information is disseminated through press releases, press conferences, the Companys annual reports, circulars to shareholders, quarterly financial results and various announcements made from time to time. The Group has established a website at www.bonia.com which shareholders and members of the public can access for pertinent and updated information of the Group. Alternatively the Groups latest announcement can be obtained through the Bursa Malaysia Securities Berhads website at www.bursamalaysia.com. The Annual General Meeting (AGM) remains the principal forum for dialogue with shareholders. It is a crucial mechanism in shareholders communication for the Company. At the Companys AGM, the shareholders have direct access to the Board and are given the opportunity to ask questions during the open question and answer session prior to the motion moving for the Companys and the Groups Audited Financial Statements and Directors Report for the financial year. The shareholders are encouraged to ask questions both about the resolutions being proposed or about the Groups operations in general. ACCOUNTABILITY AND AUDIT Financial Reporting The Board aims to provide and present a balanced and meaningful assessment of the Groups financial performance and prospects, primarily through the financial statements and the Chairmans Statement in the Annual Report and quarterly financial statements. The Groups quarterly, half yearly and annual financial results announcements which are released to the shareholders within the stipulated time frame reinforce the Boards commitment to ensure accurate and timely dissemination of financial and corporate announcements for greater accountability and transparency. The Directors consider that in preparing the financial statements, the Group has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgements and estimates. All accounting standards which the Board considers to be applicable have been followed, subject to any explanations and material departures disclosed in the notes to the financial statements. The Directors Responsibility Statement made pursuant to Paragraph 15.26(a) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad is set out on page 37.
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(contd)
Internal Control The Board acknowledges their responsibilities for the Groups system of internal controls covering not only financial controls but also operational and compliance controls as well as risk management. A Statement on Internal Control of the Group is set out on pages 35 to 36. Relationship with the Auditors The Board, via the Audit Committee, has established a transparent and appropriate relationship with the Groups auditors. In the course of audit of the Groups operations, the auditors highlighted to the Audit Committee and the Board, matters that need the Boards attention. The appointment of the external auditors is subject to the approval of the shareholders at the Annual General Meeting. A summary of the activities of the Audit Committee during the year as well as the role of the Audit Committee in relation to the external auditors and internal auditors are set out in the Audit Committee Report on pages 28 to 30.
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AuDIt CommIttee RepoRt

The Board of Directors of Bonia Corporation Berhad is pleased to present the Report of the Audit Committee for the financial year ended 30 June 2009. MEMBERS AND MEETINGS The composition of the Audit Committee is as listed below. There were four (4) Audit Committee Meetings held during the financial year ended 30 June 2009. The details of attendance of the Audit Committee members are as follows: Name Datuk Ng Peng Hong @ Ng Peng Hay Status of directorship Independent Non-Executive Director (Chairman) Independent Non-Executive Director Group Finance Director (A member of the Malaysian Institute of Accountants) Independent Non-Executive Director (A member of the Malaysian Institute of Accountants) Independent Yes Attendance 4 out of 4
Lim Fong Boon Chong Chin Look *
Yes No
4 out of 4 2 out of 4
Chong Sai Sin **
Yes
2 out of 4
* **
resigned on 30 January 2009 appointed on 30 January 2009
The Date and Time and Place of the Audit Committee Meetings held: Date 25 August 2008, Monday * 24 November 2008, Monday ** 27 February 2009, Friday * 28 May 2009, Thursday * * ** Time 10.00 a.m. 10.00 a.m. 10.00 a.m. 10.00 a.m.
The Boardroom, Bonia Headquarters, 4th Floor, No. 62, Jalan Kilang Midah, Taman Midah, Cheras, 56000 Kuala Lumpur Langkawi Room, Bukit Jalil Golf & Country Resort, Jalan 3/155B, Bukit Jalil, 57000 Kuala Lumpur
The Group Executive Chairman cum Chief Executive Officer, the Group Managing Director, the Group Executive Directors, any other Board members, managers or any other senior executives may attend the meetings upon the invitation by the Committee. The Committee shall at least meet with the external auditors once a year. TERMS OF REFERENCE Membership The Audit Committee shall be appointed by the Board from amongst the Directors and shall consist of not less than three (3) members, all of whom shall be Non-Executive Directors, with a majority being Independent Directors and at least one (1) member of the Committee must be a member of the Malaysian Institute of Accountants or possess such other qualifications and/or experience as approved by Bursa Malaysia Securities Berhad. Review of membership is undertaken once every three (3) years. This review pertains to the term of office and performance of the members.
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(contd)
Quorum The quorum shall be two (2) and all must be Independent Directors. Reporting Procedures The Chairman of the Committee shall be an Independent Director appointed by the Board. He shall report on each meeting of the Committee to the Board. The Company Secretary shall be responsible for drawing up the agenda and circulating it, supported by explanatory documentation to the Committee members prior to each meeting. The Secretaries shall also be responsible for keeping minutes of meetings of the Committee and circulating them to the Committee members and to the other members of the Board. Frequency of Meetings Meetings shall be held not less than four (4) times a year. The presence of external auditors will be requested if required and the external auditors may also request a meeting if they consider it is necessary. Authority The Committee is authorised by the Board to investigate any activity within its terms of reference and shall have full and unrestricted access to both the internal and external auditors and to all employees of the Group. The Committee is also authorised to obtain external legal advice or other independent professional advice as necessary. Functions The functions of the Committee shall be: a) to review with the external auditors: the audit plan; the evaluation of the system of internal accounting controls; the scope and results of audit procedures; the audit report; the assistance given by the Groups and the Companys officers to the auditors; the annual financial statements of the Group and the Company and thereafter to submit them to the Board of Directors of the Company; any related party transactions that may arise within the Company or the Group; to consider and recommend to the Board the nomination of external auditors; to review the internal audit plan, consider significant finding and managements response and report to the Board together with such other functions as may be agreed to by the Committee and the Board; assess the performance of the internal auditors and determine and approve the fees and annual increment of the internal auditors; to review the quarterly, half yearly and annual financial statements of the Group and the Company before submission to the Board, focusing particularly on: public announcement of results and dividend payment; any changes in accounting policies and practices; significant adjustments resulting from audit; the going concern assumptions; compliance with applicable approved accounting standards and regulatory requirements; to carry out such other responsibilities, functions or assignments as may be defined jointly by the Committee and the Board of Directors from time to time;
b) c)
d)
e) f)
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(contd)
g)
in compliance with Paragraph 15.16 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (Listing Requirements), where the Committee is of the view that a matter reported by it to the Board has not been satisfactory resolved resulting in a breach of the Listing Requirements, the Committee must promptly report such matter to the Bursa Malaysia Securities Berhad.
(b) reviewed the audit plan, audit strategy and scope of work presented by the external auditors prior to commencement of annual audit; (c) reviewed with the external auditors the results of audit, their audit report and management letter and managements response; (d) reviewed and approved the Audit Committee Report for the financial year ended 30 June 2009 to be presented in the Annual Report by the Board; (e) reviewed the internal audit reports presented and considered the major findings of internal audit in the Groups operating subsidiaries and associated companies through the review of internal audit report tabled and management responses thereto and ensuring significant findings are adequately addressed by the management; (f) reported to the Board on its activities and significant findings and results;
INTERNAL AUDIT FUNCTION The Groups internal audit function is carried out by a third party professional firm, which is independent of the activities and operations of the Group. During the financial year, an audit fee of RM43,000 was paid to the internal auditors to undertake the audit and risk assessment of the Groups operating units; reviewing the units compliance to internal control procedures; highlighting weaknesses and making appropriate recommendations for improvement to ensure a sound system of internal controls. The internal auditors report will then be presented to the Audit Committee on a quarterly basis. ACTIVITIES OF THE COMMITTEE During the financial year, the Audit Committee has: (a) reviewed the unaudited quarterly and year-end financial statements before recommending to the Board for consideration and approval, and release to Bursa Malaysia Securities Berhad;
(g) To review any related party transactions and conflict of interest situation that may arise within the Group including any transaction, procedure or course of conduct that raises questions of Management integrity.
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32
ADDItIonAl ComplIAnCe InfoRmAtIon

Utilisation of Proceeds The were no fund raising exercises implemented during the financial year. Share Buybacks During the financial year, there were no share buybacks by the Company. Options, Warrants or Convertible Securities There were no other exercise of options, warrants or convertible securities during the financial year ended 30 June 2009. American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programme During the financial year, the Company did not sponsor any ADR or GDR programme. Imposition of Sanctions/Penalties There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management by the relevant regulatory bodies. Non-audit Fees During the financial year, there were non-audit fees of RM27,400 paid to the external auditors in relation to review of the Companys
pursuant to paragraph 9.25 of the main market listing Requirements of Bursa malaysia securities Berhad
statement of internal control and subsidiarys gross sales statements to landlords. Variation in Results During the financial year, there were no variance of results which differ by 10% or more from any profit estimate/forecast/projection/ unaudited results announced. Profit Guarantees During the financial year, there were no profit guarantees given by the Company. Material Contracts During the financial year, there were no material contracts on the Company and its subsidiaries involving Directors and major shareholders interests. Contract Relating to Loans There were no contracts relating to loans by the Company. Revaluation of Landed Properties The Company does not have a revaluation policy on landed properties. However, fair value accounting is applied for certain properties classified under the Groups Investment Properties.
Recurrent Related Parties Transactions (RRPT) of Revenue or Trading Nature The aggregate value of the recurrent related party transactions conducted between the Companys subsidiaries with the related parties during the financial year is as follows: Interested parties and Amount Companies within nature of transacted No. Transacting parties the Group Nature of transactions relationship RM000 1 2 3 4 Cassardi International Co Ltd BBA International Co Ltd PT Super Prima Bonia International Holdings Pte Ltd Apex Marble Sdn Bhd VR Directions Sdn Bhd Eclat World Sdn Bhd Daily Frontier Sdn Bhd Banyan Sutera Sdn Bhd Daily Frontier Sdn Bhd CB Marketing Sdn Bhd Mcore Sdn Bhd Banyan Sutera Sdn Bhd Kin Sheng International Trading Co Ltd Guangzhou Jia Li Bao Leather Fashion Co Ltd Active World Pte Ltd Bonia (Shanghai) Commerce Ltd Active World Pte Ltd Purchase of mens apparels Payment of Valentino Rudy trademark royalty Sales of fashionable goods Sales of fashionable goods Payment of permitted reimbursable expenses Payment of Bonia, Bonia Uomo, Carlo Rino and Sembonia trademarks royalties Note 1 1,051
Note 2 Note 3
1,379 4,194
Note 4
1,398
Long Bow Manufacturing (S) Pte Ltd
Payment of office rental
Note 5
200
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ADDItIonAl ComplIAnCe InfoRmAtIon
pursuant to paragraph 9.25 of the main market listing Requirements of Bursa malaysia securities Berhad (contd)
Notes: 1. Siriwan Boonnamsap is a director of Cassardi International Co Ltd (Cassardi) and a major shareholder of Apex Marble Sdn Bhd holding 30% equity interest. Sirinee Chantranakarach and Petcharat Boonnamsap, being the sister and daughter of Siriwan Boonnamsap, are major shareholders of Cassardi, holding 17% and 15% equity interest respectively. Suchart Chantranakarach, Patcharawan Boonnamsap, Petcharat Boonnamsap, Yaowanuch Boonnamsap and Yaowaluck Boonnamsap, being the brother and daughters of Siriwan Boonnamsap, are directors of Cassardi. Boonnam Boonnamsap, being the spouse of Siriwan Boonnamsap is a director of Cassardi and a major shareholder of VR Directions Sdn Bhd holding 15% equity interest. On 1 June 2009, Siriwan Boonnamsap had ceased to be a shareholder of Apex Marble Sdn Bhd. Boonnam Boonnamsap is a director and major shareholder of Moda Europa Co Ltd (Moda Europa) and Namjing Co Ltd (Namjing) holding 70% and 50% equity interest in Moda Europa and Namjing respectively. Moda Europa and Namjing hold 25% each in BBA International Co Ltd, which is 49% owned company of Bonia. Junto Sunarso is a director and major shareholder of Banyan Sutera Sdn Bhd holding 10% equity interest. Juliana Onggowarsih, being the spouse of Junto Sunarso, is a major shareholder of PT Super Prima holding 51% equity interest. Harjanto Sunarso, being the son of Junto Sunarso and Juliana Onggowarsih, is a director and major shareholder of PT Super Prima holding 49% equity interest. On 4 May 2009, Junto Sunarso had ceased to be a director and shareholder of Banyan Sutera Sdn Bhd. Mr Chiang Sang Sem is a director and major shareholder of Bonia International Holdings Pte Ltd holding 60% equity interest. He is also the major shareholder and director of the Company. Mr Chiang Sang Sem is a director and major shareholder of Long Bow Manufacturing (S) Pte Ltd holding 83.92% equity interest. His brother, Mr Chiang Boon Tian is also a director and shareholder of Long Bow Manufacturing (S) Pte Ltd holding 13.58% equity interest. Mr Chiang Sang Sem is also the major shareholder and director of the Company.
2.
3.
4. 5.
The above recurrent related parties transactions of revenue or trading nature do not require the mandate of shareholders by virtue of: a) b) c) The transacted parties for Item 1 and 3 fall within the interpretation of Paragraph 10.08(9); the transacted parties for Item 2 fall within the interpretation of Paragraph 10.08(11)(n); and the amount transacted for Item 4 and 5 fall within the interpretation of Paragraph 10.09 (1)(a) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.
Save as disclosed above, there were no recurrent related party transactions of revenue or trading nature during the financial year under review Share option offered to and exercised by Non-Executive Directors There were no share options offered to and exercised by Non-Executive Directors under the Company Executives Share Option Scheme (ESOS) during the financial year under review.
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stAtement on InteRnAl ContRol

INTRODUCTION Paragraph 15.26(b) of the Bursa Malaysia Securities Berhad Main Market Listing Requirements requires the Board to include in its Company Annual Report a statement about the state of its internal control. The revised Malaysian Code on Corporate Governance requires all listed companies to maintain a sound system of internal control to safeguard shareholders investment and the companys assets. Accordingly, the Board is therefore pleased to provide the Statement on Internal Control (Statement) that was prepared in accordance with the Guidance for Directors of Public Listed Company issued by Bursa Malaysia Securities Berhad which outlines the processes the Board have adopted in reviewing the adequacy and integrity of the system of internal control of the Group. RESPONSIBILITY The Board of Directors acknowledges its overall responsibility for maintaining a sound system of internal controls for the Group and for reviewing its effectiveness and adequacy. Whilst the role of the management is to implement the Boards policies on risk and control. The system of internal control 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 or loss. The Board confirms that there is a continuous process in place to identify, evaluate and manage the significant risks that may affect the achievement of business objectives. The process which has been instituted throughout the Group is updated and reviewed from time to time to suit the changes in the business environment and this on-going process has been in place for the whole financial year under review and up to the date of adoption of this Annual Report.
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stAtement on InteRnAl ContRol

(contd)
INTERNAL CONTROL PROCESSES AND RISK MANAGEMENT FRAMEWORK The key elements of the Groups internal control processes and risk management framework are described below: There is an organisation structure with clearly defined lines of responsibility, limits of authority and accountability aligned to business and operations requirements which support the maintenance of a strong control environment. It has extended the responsibilities of the Audit Committee to include the assessment of internal controls, through the Internal Audit function. There is a clearly defined delegation of responsibilities to the Audit Committee and the management of operating units who ensure that appropriate risk management and control procedures are in place. The Groups management operates a risk management framework that identifies the key risks by line of business and key functional activities. There is a clearly defined framework for investment appraisal covering the acquisition or disposal of any business, application of capital expenditure and approval on borrowing. Post implementation reviews are conducted and reported to the Board. The annual plans and budgets are submitted to the Board for approval. The actual performances would be reviewed against the targeted results on a quarterly basis allowing timely response and corrective action to be taken to mitigate risks. Comprehensive management accounts and reports are prepared monthly for effective monitoring and decision-making. Regular scheduled management meetings are held and attended by all Executive Directors and management to discuss and report on operational performance, business strategy, key operating statistics, legal and regulatory matters of each business unit where plans and targets are established for business planning and budgeting process. The Critical Success Factors (CSF) Committee is established as part of the stewardship team to conduct study on various business processes and functions to identify key elements that are vital to achieve companys mission and goals. Periodical internal audit has been carried out by an independent professional firm to oversee compliance with operating procedures and corporate governances, to review of the business process and effectiveness of groups internal control; and to highlight significant risks and non-compliances impacting the group. The Audit Committee reviews and holds meetings on internal audit issues identified by the internal auditors, and devises action plan to rectify the weaknesses.
REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS The external auditors have reviewed this Statement on Internal Control for the inclusion in the annual report for the financial year ended 30 June 2009. The external auditors conducted the review in accordance with the Recommended Practice Guide 5: Guidance for Auditors on the Review of Directors Statement on Internal Control (RPG 5) issued by the Malaysian Institute of Accountants. The review has been conducted to assess whether the Statement on Internal Control is both supported by the documentation prepared by or for the Directors and appropriately reflects the processes the Directors had adopted in reviewing the adequacy and integrity of the system of internal controls for the Group. RPG 5 does not require the external auditors to consider whether the Directors Statement on Internal Control covers all risks and controls, or to form an opinion on the effectiveness of the Groups risk and control procedures. RPG 5 also does not require the external auditors to consider whether the processes described to deal with material internal control aspects of any significant matters disclosed in the annual report will, in fact, mitigate the risks identified or remedy the potential problems. Based on their review, the external auditors have reported to the Board that nothing had come to their attention that caused them to believe that the Statement on Internal Control is inconsistent with their understanding of the process the Board has adopted in the review of the adequacy and integrity of internal control of the Group.
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DIReCtoRs ResponsIBIlIty stAtement

The Directors are required by the Companies Act, 1965 (the Act) to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Group and of the Company and their results and cash flows for the financial year. As required by the Act and the Listing Requirements of Bursa Malaysia Securities Berhad, the financial statements have been prepared in accordance with the applicable approved accounting standards in Malaysia and the provisions of the Act. In preparing the financial statements for the financial year ended 30 June 2009, the Directors have: selected suitable accounting policies and then applied them consistently; made judgements and estimates that are reasonable and prudent; ensured that applicable accounting standard have been followed, subject to any material departures disclosed and explained in the financial statements; prepare the financial statements on a going-concern basis.
The Directors are responsible for ensuring that the Group and the Company keep proper accounting records which disclose with reasonable accuracy at any time the financial position of the Group and of the Company and to enable them to ensure that the financial statements comply with the Act. The Directors have a general responsibility for taking such steps that are reasonably available to them to safeguard the assets of the Group and of the Company and to prevent and detect fraud and other irregularities.
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ChAIRmAns stAtement
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ChAIRmAns stAtement
(contd)
on behalf of the Board of Directors, I am pleased to present the Annual Report and Audited financial statement of Bonia Corporation Berhad and its Group of Companies for the financial year ended 30 June 2009.
FINANCIAL PERFORMANCE The Group achieved a revenue of RM314.9 million for the financial year 2009, a marginal growth of 5% as compared to RM300.2 million for the corresponding financial year in 2008. The revenue growth was mainly driven by the increase in domestic boutique sales during the financial year under review. Overseas sales dropped marginally by 3% as compared to the same period last year due to the uncertainties in the global economy. Nevertheless, the Group continues to embark on a process of upgrading its chain of boutiques and the opening of new boutiques at strategic locations to boost its domestic sales. The Groups gross profit margin fell by 3% as compared to the previous financial year due to higher customer discounts given during the sales period. The profit before tax decreased to RM29.5 million from RM38.3 million in the previous year, due partly to an increase in operating costs such as advertising expenses, boutiques rentals, staff costs, new store expansion and a one-time provision for impairment loss amounting to RM3.0 million. The impairment loss arose from an investment in unquoted subordinated bonds in relation to the RM30.0 million Term Loan or CLO (Collateralised Loan Obligation) Programme taken by the Company in year 2004. The RM30.0 million Term Loan under the CLO Programme was repaid earlier before the due date which resulted in an interest saving of RM0.2 million to the Group. The sustained positive contribution in our financial performance has also resulted in a marked reduction in the Groups net gearing position, which fell from 35% at the end of June 2006 to a net cash position of RM5.2 million as at 30 June 2009. This augurs well for the Group, providing it with a firm footing to expand further and to weather any uncertainties in the near future. ECONOMIC REVIEW Malaysia was not spared the brunt of the global economic downturn towards the end of 2008. The countrys GDP growth flirted close to negative territory in the fourth quarter of 2008 by registering only a 0.1% growth. A sharper drop was recorded in the first quarter of 2009 with the economy contracting by 6.2%. This was due largely to a considerable drop in external demand and exports as advanced countries grappled with a deepening recession. Nevertheless, the countrys economy managed to contract at a slower pace of 3.9% in the second quarter of 2009, underpinned by strengthening domestic demand. Domestic demand contracted 2.8% and 2.9% in the fourth quarter of 2008 and the first quarter of 2009 respectively. However, the pace of contraction slowed to 2.3% in the second quarter of 2009 following an expansion in public sector spending and private consumption. Private consumption recorded a positive growth of 0.5% as stabilisation in labour market conditions and lower price levels provided further support to consumer spending. Another factor was the positive impact of the Governments RM67 billion stimulus packages announced in November 2008 and March 2009 respectively. Overall, the services sector grew by 1.6% during the second quarter of 2009, an improvement from the marginal contraction of 0.2% recorded in the first quarter. Growth was mainly supported by the expansion in the finance and insurance sectors, the turnaround in both wholesale and retail trade, and the real estate and business services sub-sectors. The wholesale and retail trade sub-sector turned around to register a growth of 0.4%, reflecting improved consumption activity.
40
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ChAIRmAns stAtement
(contd)
OPERATIONAL REVIEW Retailing The financial year ended 30 June 2009 was our most challenging year in the overseas markets. We have consolidated and reassessed our business strategies and the use of our resources in countries like Indonesia, Thailand and Hong Kong. For Indonesia, we have appointed a new dealer to undertake the operations and marketing aspect of the Indonesia market. In Thailand, we have divested our 49% shareholding in BBA International Co Ltd to the existing major shareholder, where they will continue to market our products in the territory. In Hong Kong, we have also appointed a dealer to undertake the distribution of our products in department stores to reduce our operating costs and the support needed. Nevertheless, we continue to operate the Hong Kong International Airport boutiques in order to continue our branding strategy in that territory. To adapt to the difficult operating conditions, we have also, during the financial year under review, introduced more affordable and value-for-money brands and products in our stable, namely the Valentino Rudy, CR2, and CR Xchanges carry wear and ladies footwear range. We foresee that with the current retail slowdown and uncertainties, these categories of more affordable products will be well acceptable by valueconscious consumers. Since November 2008, the Group has also started manufacturing bags and wallets at its plant in China under wholly-owned subsidiary, Guangzhou Bonia Fashions Co Limited, to cater for the domestic China market as well as to export to Malaysia. On the local front, we continue cautiously to expand the number of point of sales to cater for the generic growth required as we are of the view that the home base still has capacity for growth.
CORPORATE DEVELOPMENTS As part of the plan to rationalise the Group business structure in China and Hong Kong, the Company had, on 23 December 2008 through its wholly-owned subsidiary company, Kin Sheng Group Limited, acquired the entire interest in Guangzhou Jia Li Bao Leather Fashion Co Ltd for a total cash consideration of USD650,000 from Active World Pte Ltd, another whollyowned subsidiary of the Company. Subsequently, on 6 April 2009, the Company transferred its entire equity interest in Kin Sheng International Trading Co Ltd to Kin Sheng Group Limited for a total cash consideration of HKD10,000. With the completion of the above, all operating subsidiaries in China and Hong Kong are now grouped under Kin Sheng Group Limited in Hong Kong. During the year under review, the Companys wholly-owned subsidiary company, Active World Pte Ltd incorporated two wholly-owned subsidiary companies known as SCRL Pte Ltd and SBLS Pte Ltd on 3 March 2009 and 16 March 2009 respectively. The intended principal activities of these newly incorporated subsidiary companies, with an issued and paid-up capital of SGD1 each, are wholesaling, retailing and marketing of fashionable footwear, carry wear and accessories. On 17 June 2009, the Company also incorporated a whollyowned subsidiary company in Malaysia known as SCARPA
42
ChAIRmAns stAtement
(contd)
Marketing Sdn Bhd with an authorised and paid-up share capital of RM100,000 and RM100 respectively. Its intended principal activities are wholesaling, retailing and marketing of fashionable footwear. On 4 May 2009, the Company acquired the remaining 100,000 ordinary shares of RM1 each representing 10% of the equity interest in Banyan Sutera Sdn Bhd from the minority shareholder, Mr Jonto Surnaso, for a total cash consideration of RM1, making it a wholly-owned subsidiary of the Company. Mcore Sdn Bhd, a 60% owned subsidiary of the Company, had on 1 June 2009 acquired 150,000 ordinary shares or 30% of the equity interest in Apex Marble Sdn Bhd from Mrs Siriwan Boonnamsap for a total cash consideration of RM1. Subsequently, on 30 July 2009, Mcore Sdn Bhd acquired the remaining 10% comprising 50,000 ordinary shares in Apex Marble Sdn Bhd from Mr Lee Poh Seong for a total cash consideration of RM1. Upon completion of these acquisitions, Apex Marble Sdn Bhd has become a wholly-owned subsidiary company of Mcore Sdn Bhd. On 6 August 2009, the Company disposed of 24,500 ordinary shares of THB100 each representing 49% of the equity interest in BBA International Co Ltd, Thailand, an associate company of the Company, to Miss Napa Chin-Isarayos and Miss Yaowannooj Boonnamsap for a total cash consideration of THB1,236,139. FUTURE PROSPECTS Against the backdrop of the uncertain economic outlook, the Groups prospects for the coming year are expected to be challenging. In view of this situation, it is imperative for the Group to strive for continuous improvement to further increase operational efficiency whilst positioning our businesses and brands for opportunistic growth and recognition.
On this note and barring unforeseen circumstances, the Board of Directors is of the view that the Groups earnings will be affected by the ongoing economic storm. DIVIDEND The Board of Directors is pleased to recommend a first and final dividend of 5% or 2.5 sen gross per share less income tax of 25% and a special dividend of 3% or 1.5 sen per share less income tax of 25% for the financial year ended 30 June 2009. ACKNOWLEDGEMENTS On behalf of the Board of Directors, I would like to record our appreciation to Datuk Nik Hussain Bin Nik Ali who has resigned as a director of the Board during the course of the year. His service, experience and expertise were indeed highly valued by the Board. We are also pleased to welcome Mr Chong Sai Sin as our new independent and non-executive director of the Board. I also wish to put on record my sincere thanks to my fellow directors for their counsel and support. I would like to express my utmost and sincere appreciation and gratitude to the management and staff for their conscientious efforts, commitment and dedication to achieve where we are now. We are also grateful to our valued customers, partners, shareholders, business associates, government authorities and financiers for their continued support and confidence in the Group.
CHIANG SANG SEM Group Executive Chairman 28 September 2009
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Bagi pihak lembaga pengarah, saya dengan sukacitanya membentangkan laporan tahunan dan penyata Kewangan Beraudit Bonia Corporation Berhad dan syarikat Kumpulan bagi tahun kewangan berakhir 30 Jun 2009.
PRESTASI KEWANGAN Bagi tahun kewangan berakhir 2009, Kumpulan mencatat perolehan sebanyak RM314.9 juta, iaitu peningkatan margin sebanyak 5% berbanding RM300.2 juta pada tahun kewangan 2008. Hasil jualan di luar negara menyusut sedikit sebanyak 3% berbanding tempoh yang sama pada tahun lalu berikutan keadaan ekonomi global yang tidak menentu. Walaubagaimanapun, Kumpulan meneruskan proses menaikkan taraf rangkaian butik-butiknya dan membuka butik-butik baru di lokasi strategik bagi meningkatkan hasil jualan domestik. Keuntungan margin kasar Kumpulan menyusut sebanyak 3% berbanding tahun kewangan sebelumnya berikutan diskaundiskaun yang lebih tinggi diberikan kepada pelanggan sewaktu tempoh jualan. Keuntungan sebelum cukai menurun daripada RM38.3 juta kepada RM29.5 juta pada tahun sebelumnya, sebahagiannya disebabkan oleh peningkatan dalam kos operasi seperti perbelanjaan pengiklanan, penyewaan butikbutik, kos untuk pekerja, pembangunan setor-setor baru dan satu kali peruntukan untuk kerugian sebanyak RM3.0 juta. Kerugian ini disebabkan oleh pelaburan dalam bon-bon subordinat yang tidak tersenarai yang berkaitan dengan program Pinjaman Bertempoh atau CLO (Pinjaman Obligasi Kolateral) berjumlah RM30 juta yang diambil oleh Syarikat pada tahun 2004. Pinjaman Bertempoh RM30 juta dibawah Program CLO tersebut telah dilangsaikan terdahulu sebelum tamat tempoh dan ini telah menghasilkan faedah simpanan sebanyak RM0.2 juta kepada Kumpulan. Sumbangan positif yang berterusan kepada prestasi kewangan kami telah menyumbang kepada penurunan yang ketara dalam kedudukan gearing bersih Kumpulan, yang turun dari 35% pada akhir bulan Jun 2006 ke kedudukan tunai bersih sebanyak RM5.2 juta pada 30 Jun 2009. Ini merupakan petanda baik bagi Kumpulan dimana ia akan menyediakan landasan yang kukuh untuk terus berkembang dan berhadapan dengan sebarang kemungkinan di masa depan. LAPORAN EKONOMI Malaysia tidak terkecuali dalam menghadapi kegawatan ekonomi global menjelang akhir tahun 2008. Pertumbuhan Keluaran Negara Kasar (KNK) menghampiri angka negatif pada suku keempat tahun 2008 dengan mencatatkan hanya 0.1% pertumbuhan. Penurunan yang tinggi dicatatkan pada suku pertama tahun 2009 yang menyaksikan ekonomi menguncup sebanyak 6.2%. Ini terutamanya disebabkan oleh kejatuhan dalam permintaan luar dan ekspot di mana negara-negara maju bergelut dengan kemelesetan ekonomi yang meruncing. Walaubagaimanapun, ekonomi negara telah menguncup pada kadar perlahan iaitu sebanyak 3.9% pada suku kedua tahun 2009 yang disokong oleh pengukuhan dalam permintaan domestik. Permintaan domestik masing-masing turun sebanyak 2.8% dan 2.9% pada suku keempat tahun 2008 dan suku pertama tahun 2009. Namun, kadar penurunan menjadi perlahan ke 2.3% pada suku kedua tahun 2009 berikutan peningkatan
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dalam perbelanjaan sektor awam dan penggunaan sektor swasta. Penggunaan sektor swasta mencatat pertumbuhan positif sebanyak 0.5% berikutan kestabilan dalam keadaan pasaran kerja dan paras harga yang rendah dapat menyokong perbelanjaan pengguna. Faktor lain adalah kesan positif daripada pakej ransangan ekonomi oleh Kerajaan sebanyak RM67 bilion yang diumumkan pada November 2008 dan Mac 2009. Secara keseluruhannya, sektor perkhidmatan meningkat sebanyak 1.6% pada suku kedua tahun 2009, bertambah baik dari penurunan marginal sebanyak 0.2% yang dicatatkan pada suku pertama. Pertumbuhan terutamanya disokong oleh perkembangan dalam sektorsektor kewangan dan insuran, pemulihan dalam sub-sektor jualan borong dan perniagaan runcit, dan hartanah dan perkhidmatan perniagaan. Sub-sektor jualan borong dan perniagaan runcit mencatatkan pertumbuhan sebanyak 0.4%, mencerminkan pemulihan dalam aktiviti penggunaan. LAPORAN OPERASI Peruncitan Tahun kewangan berakhir 30 Jun 2009 merupakan tahun yang paling mencabar bagi pasaran luar negara kami. Kami telah menggabungkan dan menilai semula strategi perniagaan kami dan menggunakan sumber-sumber kami di negara-negara seperti Indonesia, Thailand dan Hong Kong. Di Indonesia, kami telah melantik ejen baru untuk mengendalikan operasi dan aspek pemasaran bagi pasaran Indonesia. Di Thailand, kami telah menjual 49% pegangan di dalam BBA International Co Ltd kepada pemegang saham terbesar sedia ada, yang akan terus memasarkan produk-produk kami di wilayah tersebut. Di Hong Kong, kami telah melantik ejen untuk mengendalikan pengedaran produk-produk kami di gedunggedung perniagaan untuk mengurangkan kos operasi kami dan sokongan yang diperlukan. Walaubagaimanapun, kami terus menjalankan operasi butik-butik kami di Lapanganterbang Antarabangsa Hong Kong bagi meneruskan strategi jenama kami di wilayah tersebut. Bagi menyesuaikan diri dengan keadaan yang sukar dalam beroperasi, pada tahun kewangan yang ditinjau, kami telah menyemak semula, memperkenalkan lebih banyak jenamajenama dan produk-produk yang mampu dibeli dan mempunyai nilai tambah dalam rangkaian produk kami, iaitu beg-beg dan kasut-kasut wanita jenama Valentino Rudy, CR2 dan CR Xchange. Kami menjangka dalam keadaan pasaran runcit yang perlahan dan tidak menentu, kategori-kategori produk yang mampu dimiliki ini akan mendapat sambutan yang baik daripada pelanggan-pelanggan kami yang mementingkan nilai. Sejak November 2008, Kumpulan sudah memulakan pengilangan beg-beg dan dompet-dompet di kilangnya di China di bawah anak-syarikat milik penuh, Guangzhou Bonia Fashions Co Limited, sebagai memenuhi permintaan pasaran domestik China dan juga untuk ekspot ke Malaysia. Bagi pasaran tempatan, kami tetap berhati-hati dalam menambah bilangan premis-premis jualan kami sebagai memenuhi pertumbuhan generik dalam permintaan kerana kami berpendapat pasaran tempatan masih mampu berkembang. PERKEMBANGAN KORPORAT Sebagai sebahagian daripada pelan merasionalisasi struktur perniagaan Kumpulan di China dan Hong Kong, pada 23 Disember 2008, Syarikat melalui anak-syarikat milik penuh, Kin Sheng Group Limited, membeli keseluruhan pegangan di dalam Guangzhou Jia Li Bao Leather Fashion Co Ltd pada jumlah pertimbangan tunai USD650,000 daripada Active World Pte Ltd, satu lagi anak syarikat milik penuh Syarikat. Kemudian pada 6 April 2009, Syarikat memindahkan keseluruhan pegangan ekuitinya dalam Kin Sheng International Trading Co Ltd kepada Kin Sheng Group Limited pada jumlah pertimbangan tunai HK10,000. Dengan selesainya pelan di atas, semua anak-anak syarikat yang beroperasi di China dan Hong Kong sekarang akan di kumpulkan di bawah Kin Sheng Group Limited di Hong Kong.
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penyAtA penGeRusI
(samb)
Pada tahun dalam tinjauan, anak syarikat milik penuh Syarikat, Active World Pte Ltd menubuhkan dua buah anak syarikat milik penuh yang dikenali sebagai SCRL Pte Ltd dan SBL Pte Ltd masing-masing pada 3 Mac 2009 dan 16 Mac 2009. Aktivitiaktiviti utama yang dirancang untuk dua buah anak syarikat yang baru ditubuhkan ini, dengan modal terbitan dan berbayar sebanyak SGD1 setiap satu ialah jualan borong, jualan runcit dan memasarkan kasut berjenama, beg-beg dan aksesori. Pada 17 Jun 2009, Syarikat juga menubuhkan sebuah anak syarikat milik penuh di Malaysia yang dikenali sebagai SCARPA Marketing Sdn Bhd dengan modal yang dibenarkan dan berbayar masing-masing sebanyak RM100,000 dan RM100. Aktiviti-aktiviti utama yang dirancang ialah jualan borong, jualan runcit dan memasarkan kasut berjenama. Pada 4 Mei 2009, Syarikat membeli baki 100,000 saham biasa bernilai RM1 setiap satu mewakili 10% faedah ekuiti dalam Banyan Sutera Sdn Bhd daripada pemegang saham minoriti, Mr Jonto Sunarso, pada jumlah pertimbangan tunai RM1, lalu menjadikan ia sebuah anak syarikat milik penuh. Mcore Sdn Bhd, yang dimiliki 60% oleh Syarikat, telah pada 1 Jun 2009, membeli 150,000 saham biasa atau 30% faedah ekuiti dalam Apex Marble Sdn Bhd daripada Mrs Siriwan Boonnamsap pada jumlah pertimbangan tunai RM1. Kemudian, pada 30 Julai 2009, Mcore Sdn Bhd membeli baki 10% yang mewakili 50,000 saham biasa dalam Apex Marble Sdn Bhd daripada Mr Lee Poh Seong pada pertimbangan tunai RM1. Dengan selesainya pembelian tersebut, Apex Marble Sdn telah menjadi sebuah anak syarikat milik penuh Mcore Sdn Bhd. Pada 6 Ogos 2009, Syarikat melupuskan 24,500 saham biasa berharga THB100 setiap satu yang mewakili 49% faedah ekuiti dalam BBA International Co Ltd, Thailand, sebuah syarikat bersekutu, kepada Miss Napa Chin-Isaravos dan Miss Yaowannooi Boonnamsap pada jumlah pertimbangan tunai THB1,236,139. PROSPEK MASA DEPAN Berlatarbelakangkan suasana ekonomi yang tidak menentu, prospek Kumpulan pada tahun yang akan datang adalah dijangka mencabar. Oleh yang demikian, adalah amat penting bagi Kumpulan untuk terus berusaha memperbaiki dan mempertingkatkan kecekapan operasi dalam mengukuhkan kedudukan perniagaan dan jenama-jenamanya di pasaran bagi mendapatkan peluang-peluang baru untuk terus berkembang serta diiktiraf. Oleh yang demikian, sekiranya tiada aral melintang, Lembaga Pengarah berpendapat bahawa pendapatan Kumpulan akan terjejas disebabkan oleh kegawatan ekonomi yang berterusan.
DIVIDEN Lembaga Pengarah dengan sukacitanya mengesyorkan dividen pertama dan akhir kasar sebanyak 5% atau 2.5 sen sesaham ditolak cukai pendapatan 25% dan dividen khas 3% atau 1.5 sen sesaham ditolak cukai pendapatan 25% untuk tahun kewangan berakhir 30 Jun 2009. PENGHARGAAN Bagi pihak Lembaga Pengarah, saya ingin merakamkan perhargaan kepada Datuk Nik Hussain Bin Nik Ali yang telah meletak jawatan sebagai pengarah pada tahun dalam tinjauan. Perkhidmatan, pengalaman dan kemahiran beliau adalah amat disanjung tinggi oleh Lembaga Pengarah. Kami juga mengalualukan kedatangan Mr Chong Sai Sin sebagai pengarah bebas dan bukan eksekutif yang baru di dalam Lembaga Pengarah. Saya juga ingin merakamkan ucapan terima kasih kepada rakan-rakan saya di dalam Lembaga Pengarah di atas segala sokongan dan nasihat mereka selama ini. Saya juga ingin merakamkan setinggi-tinggi penghargaan dan terima kasih kepada pihak pengurusan dan kakitangan di atas segala usaha dan kerjasama, pengorbanan dan dedikasi mereka dalam mencapai kejayaan yang kita kecapi hari ini. Kami juga berterima kasih kepada pelanggan kami yang dihargai, rakan-rakan kongsi, pemegang-pemegang saham, sekutu-sekutu perniagaan, pihak berkuasa kerajaan dan institusi-institusi kewangan di atas sokongan yang berterusan dan kepercayaan mereka terhadap Kumpulan.
CHIANG SANG SEM Pengerusi Eksekutif Kumpulan 28 September 2009
48
Bonia Corporation Berhad2009 630
200931490 3205% 3% 3%38302950 300 20043000 (Clo)Clo 3000 20 20066 35%2009630520
2009630 49% BBA International Co ltd valentino RudyCR2CR Xchange 200811
2008 40.1% 20096.2% 23.9% 200820092.8%2.9% 2 2.3% 0.5% 20081120093670 20091.6% 0.2% 0.4%
20081223Kin sheng Group limited 65Active World pte ltd 200946 Kin sheng International trading Co ltd1 Kin sheng Group limited Kin sheng Group limited Active World pte ltd20093 3316sCRl pte ltd sBls pte ltd1 2009617 10100sCARpA marketing sdn Bhd
49
()
2009541mr Jonto surnaso Banyan sutera sdn Bhd 10110% Banyan sutera 60%mcore sdn Bhd2009611 mrs siriwan BoonnamsapApex marble sdn Bhd 15 30%mcore sdn Bhd2009 7301mr lee poh seongApex marble sdn Bhd 10%5Apex marble sdn Bhdmcore sdn Bhd 2009 8 6 123 6139 BBA International Co ltd24500100 49%miss napa Chin-Isarayosmiss yaowannooj Boonnamsap
2009630 5%2.525%3% 1.525%
Datuk nik hussain Bin nik Ali mr Chong sai sin
2009928
50
CoRpoRAte soCIAl ResponsIBIlIty

the Group is committed to managing our business in a socially responsible manner which is aligned with the groups business strategy. our position as one of the leaders in manufacturing and distributing leather goods, apparel and accessories brings with it many responsibilities. We recognise that it is equally important to measure the impact of our activities on our customers, employees, shareholders, communities and the environment. In particular, we are committed to ensuring that the Group engages with and makes a positive contribution to the local communities. We believe that a firm commitment to Corporate social Responsibility (CsR) activities forms the basis of good corporate citizenry and promotes good corporate governance. As a commitment to CsR, the Group has been involved in various activities during the financial year.
THE WORKPLACE The Group believes that people are the most important asset in helping us attain our objectives. Our workforce is constantly growing to meet the demands of our rapid progress. Therefore, training programmes and specialised courses to upgrade employee skill sets and competence are conducted regularly in view of helping the workforce achieve their fullest potential. Apart from organising in-house training activities, our employees are encouraged to attend external courses sponsored by the Group. The Group also promotes staff appreciation and recognition efforts such as long service awards, annual dinners, birthday celebrations, festive gatherings and family events. The Group also provides its employees in the manufacturing division with quality facilities and amenities. As at 30 June 2009, the Group employee strength is 1,389, which is a 13% growth compared to 1,234 employees in the last financial year.
THE COMMUNITY The Group has made the following contributions to the community: Financial assistance to non-profitable organisations with the purpose of providing aid and disaster relief to the underprivileged; Educational assistance consisting of subsidies and donations to deserving students and schools; Provided the means for social and sporting activities which enrich the community and serve to promote family values and national unity.
51
CoRpoRAte soCIAl ResponsIBIlIty

(contd)
THE MARKETPLACE During the year under review, the Group made various monetary donations to the following organizations: Yayasan Harapan Kanak-Kanak Malaysia; Persatuan Isteri-Isteri Wakil Rakyat Pahang (TERATAI); Assunta Children Society (Charity Fund); Lion-Parkson Foundation (Charity Show); Pusat Hemodialisis Mawar, Gemas branch; Persatuan Buddhist Malaysia Bahagian Kuala Lumpur/ Selangor; Chempaka Welfare Home (Musical Charity Concert); Persatuan SLE Malaysia; Yayasan Latihan Insan Istimewa Ipoh; Malaysia Mental Health Association; The International Nature Loving Association; Tabung Pembinaan Tokong Sam Wei Keong Melaka; and Parent-Teacher Associations of several schools. The Group has built a reputation as a manufacturer and distributor of quality products and customer services. In view of our commitment to providing only the best to our customers, quality remains the main emphasis of all our production and management systems, and stringent control systems are carried out right from the initial raw material stage to the final stage before finished goods are delivered. THE ENVIRONMENT The Group believes it has a part to play in contributing towards a greener environment, no matter how small each step may be. Through various efforts, the Group has implemented key measures such as maintaining air-conditioning on a need-touse basis, switching off non-essential lighting and equipment during non-operating hours, initiatives among staff to create awareness towards the recycling of waste materials, and continuous improvements in our manufacturing process.
52
53
fIve-yeAR GRoup fInAnCIAl hIGhlIGhts
Revenue
RM000
Profit before Tax

RM000
Profit after Tax and Minority Interests

RM000
192,037
221,372
246,346
300,189
314,891
14,376
21,494
37,112
38,334
29,515
13,831
28,203
27,948
05
06
07
08
09
05
06
07
08
09
05
06
07
08
09
Total Shareholders Equity

RM000
Net Basic EPS

Sen
Gross Dividend
%
136,734
164,095
177,477
76,328
90,075
10.6
16.0
14.1
10.2
10.0
10.0
10.0
6.6
6.0
05
06
07
08
09
05
06
07
08
09
05
06
07
08
09
30 June 2005 Revenue (RM000) Profit before Tax (RM000) Profit after Tax and Minority Interests (RM000) Total Shareholders Equity (RM000) Net Basic EPS (sen) * Gross Dividend (%) 192,037 14,376 8,095 76,328 6.6 10.0
30 June 2006 221,372 21,494 13,831 90,075 10.6 10.0
30 June 2007 246,346 37,112 28,203 136,734 16.0 6.0
30 June 2008 300,189 38,334 27,948 164,095 14.1 10.0
30 June 2009 314,891 29,515 20,607 177,477 10.2 8.0
* Comparitive EPS has been restated to take into account the effect of the bonus issue and subdivision of ordinary share of RM1.00 each into RM0.50 each on 23 April 2007.
8.0
20,607
8,095
54
event hIGhlIGhts
Bonia 8th Challenge Trophy Golf Tournament On 19th November 2008, Bonia held the 8th Challenge Trophy golf tournament at the Mines Resort and Golf Club. The objective of this tournament was to bring friends and business partners of Bonia Corporation Berhad together to participate in a fun and healthy competition. The tournament received an overwhelming response from many participants, which included dealers, suppliers, and shopping mall operators. BONIA Grand Product Exhibition 08 Cool Blues Meet Sultry Browns BONIA debuted its 2009 collection themed Cool Blues Meet Sultry Browns in a star-studded gala event at the Pavilion Kuala Lumpur in November, 2008. Inspired by the juxtaposition of the seven seas against the dunes of the desert - the collection featured over 100 new designs which were showcased by International Superstar Kelly Chen from Hong Kong, Ming Dao & Bianca Bai Xin Hui from Taiwan, as well as local celebrities Noryn Aziz, Adi Putra and Rynn Lim. The Cool Blues Meet Sultry Browns collection featured BONIAs signature standards of quality in craftsmanship, with products made from the finest leathers and materials, including enhanced textures such as the croco-embossed collection and the ever-elegant Cristallo range of ladies footwear adorned with genuine Swarovski crystals.
Singapore Prestige Brand Award BONIA, Heritage Brand Winner BONIA proudly received the Heritage Brand award at the annual Singapore Prestige Brand Awards 2008 (SPBA). The award was a tribute by the SPBA to time-honoured home-grown brands that have embraced exceptional brand practices over a period exceeding 30 years. With the increasing number of home-grown brands becoming established household names, achieving this esteemed mark of success is certainly a significant milestone for BONIA and one that endorses the efforts of the brand in the last 34 years. Jointly organised by the Association of Small and Medium Enterprises and Lianhe Zaobao, the Singapore Prestige Brand Award (SPBA) recognises and honours brands that have developed and managed their brands effectively through various branding initiatives.
SEMBONIA, the gold sponsor of Miss Tourism International 08 In December 2008, SEMBONIA played host to the Miss Tourism International Pageant 2008 at an event themed, The Glitzy Evening at MidValley Megamall, where pageant finalists modelled some of SEMBONIAs finest products under the various fashion parades covering Casual wear Executive wear, and Black Cocktail outfits. As a Gold Sponsor, SEMBONIA also sponsored a prize under the special title, Miss Gorgeous. Sponsorship of this pageant was one of the many social activities under SEMBONIAs brand-building programme.
55
event hIGhlIGhts
(contd)
Travel in style BONIA launches Lusso Premio collection In the first quarter of 2009, BONIA launched Lusso Premio, a collection of high-end travel products for the savvy traveller, combining elegant style with innovative functionality. Apart from the distinctive BONIA monogramme, the collection is manufactured with the latest in technology, paying particular attention to quality and durability. With a tough Acrylonitrile Butadiene Styrene (ABS) exterior, renowned for its strength, rigidity, lightness and resistance to harsh weather and heat, the frequent traveller will enjoy peace of mind, and confidence in the durability of the Lusso Premio range. The Lusso Premio collection features three different monogramme options: Marchio Nero, the bold monogramme in black; Marchio Equestre, with equestrian-inspired motifs in white and graphite; and Marchio Classico, the classic BONIA monogramme in sable and ebony. Available in two sizes (20 and 25), and weighing 4.2kg and 5.5kg respectively, the Lusso Premio range of bags are mounted on wheels, and come with a retractable handle for an easy pull. All bags are also equipped with a 3-digit combination lock and key. The Lusso Premio collection is available at all BONIA boutiques throughout the country.
Donation to Malaysia Ladies Amateur Open Championship 09 The Group was proud to support the 26th Malaysian Ladies Amateur Open Championship 2009, which was held at the Mines Resort & Golf Club from August 4th to 6th, 2009. The Open Championship was organized by the Malaysian Ladies Golf Association (MALGA), an organization catering to the interest of womens golf in Malaysia and fronted by YAM Tunku Puteri Tunku Dato Seri Jawahir bt Almarhum Tuanku Jaafar. Bonia Corporation Berhad donated RM50,000 to MALGA, which will help in developing ladies golf in the country, in particular organizing more amateur and professional ladies tournaments, whilst promoting representative matches against other nations in the efforts to raise the competitiveness of Malaysian ladies golf players.
New BONIA boutique in Kuala Lumpur International Airport (KLIA) In May 2009, Bonia Corporation Berhad launched a new BONIA travel retail outlet in the satellite building of the Kuala Lumpur International Airport (KLIA). The 1,281 square-foot boutique is the largest BONIA Duty-Free outlet to date, and features handbags, small leather goods, mens and womens footwear, as well as mens apparel. This also marks the second BONIA outlet in KLIA, and the sixth in Asia. The latest BONIA boutique features the high-end range of product offerings from the brand, including the Cool Blues Meet Sultry Browns 2009 Collection, launched in November 2008. BONIA travel retail outlets are currently located at major airports in the region including the Kuala Lumpur International Airport, Hong Kong International Airport, Changi International Airport in Singapore, Kota Kinabalu International Airport in East Malaysia, and the Sultan Ismail International Airport in Senai.
56
event hIGhlIGhts
(contd)
SEMBONIA new boutique at KLIA Satellite building In August 2009, the Group launched a new SEMBONIA boutique at the Kuala Lumpur International Airport (KLIA) Satellite Building. The boutique, measuring at 530 square-foot, is the second outlet to be opened in the airport and is part of KLIAs revamp of the Satellite Building. In addition to the newly launched boutique, SEMBONIA outlets are also located at the Low Cost-Carrier Terminal (LCCT), MidValley KL, Pavilion KL, Berjaya Times Square, BB Plaza, Alamanda Shopping Centre, Mahkota Parade Melaka, City Square Johor Bahru, Gurney Plaza, Complex Jetty Point Langkawi and East Coast Mall Kuantan.
BONIA launches charity initiative in conjunction with the opening of their largest boutique in Malaysia On 29th August 2009, the Group launched a charity initiative in conjunction with the grand opening of their latest and largest BONIA boutique in KL Sogo Shopping Centre. The charity initiative saw Bonia Corporation Berhad collaborating with Sogo (KL) Sdn Bhd (KL Sogo) to donate RM100,000 to Yayasan Harapan Kanak-Kanak Malaysia (Malaysian Children Hope Foundation), a foundation focusing on the welfare and development of orphan children, whose patron is Malaysias First Lady, Yang Amat Berbahagia Datin Paduka Seri Dr Rosmah Mansor. At the launch event, the Group also announced the appointment of their charity initiative ambassador, Malaysian celebrity and new mother, Erra Fazira, who presented the cheque to Yayasan Harapan Kanak-Kanak Malaysia representatives, YBhg Datuk Atikah Adom and YBhg Dato V. Sivaparanjothi, who are both members of the Foundations advisory board. Bonia Corporation Berhad and KL Sogo equally contributed RM50,000 each to the foundation.
The grand opening and launch event was attended by BONIA top spenders, who were treated to a fashion show featuring BONIAs latest Cool Blues Meet Sultry Browns collection. A highlight of the event was an exclusive cross by Suria FM Wheels crew, where guests and public alike went home with exciting BONIA goodie bags and had the chance to meet BONIAs Charity Initiative Ambassador, Erra Fazira. The newest BONIA boutique is the 26th located in Malaysia, and the biggest with 4900 sq ft. Family Day Sale in Kuantan with Ramadhan contribution to TERATAI On 8th September 2009, the Group launched the BONIA Family Day Sale in Kuantans East Coast Mall. In keeping with the month of Ramadhan, a donation was presented to the Persatuan Isteri-Isteri Wakil Rakyat Pahang (TERATAI). On hand to receive the cheque which amounted to RM20,000, was the events Guest of Honour, YA Bhg Datin Seri Junaini Kassim, wife of Pahangs Chief Minister Datuk Seri Adnan Yaakob who is a patron of TERATAI. BONIA Family Day Sale was held from 8-19 September, with fabulous offered on handbags, shoes, menswear as well as other leather accessories.
57
Financial StatementS
directors report statement by directors statutory declaration independent auditors report balance sheets income statements statements of changes in equity cash flow statements notes to the financial statements 58 62 62 63 65 67 68 70 72
58
DirectorS report
The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 30 June 2009. PRINCIPAL ACTIVITIES The Company is principally an investment holding and management company. The principal activities of the subsidiaries are set out in Note 11 to the financial statements. There have been no significant changes in the nature of these activities during the financial year. RESULTS Group RM000 Profit for the financial year attributable to: Equity holders of the Company Minority interests 20,607 455 21,062 DIVIDENDS Since the end of the previous financial year, a first and final dividend of 5% or 2.5 sen per share, less tax of 25%, and a special dividend of 5% or 2.5 sen per share, less tax of 25%, amounting to RM3,779,472 each respectively in respect of the financial year ended 30 June 2008 were paid on 2 January 2009. The Directors propose a first and final dividend of 5% or 2.5 sen per share, less tax of 25%, amounting to RM3,779,472 and a special dividend of 3% or 1.5 sen per share, less tax of 25%, amounting to RM2,267,683 in respect of the financial year ended 30 June 2009, subject to the approval of members at the forthcoming Annual General Meeting. RESERVES AND PROVISIONS There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements. OPTIONS GRANTED OVER UNISSUED SHARES No options were granted to any person to take up unissued shares of the Company during the financial year. ISSUE OF SHARES AND DEBENTURES The Company has not issued any new shares or debentures during the financial year. DIRECTORS The Directors who have held for office since the date of the last report are: Chiang Sang Sem (Group Executive Chairman cum Chief Executive Officer) Chiang Fong Yee (Alternate Director to Mr Chiang Sang Sem) Chiang Heng Kieng (Group Managing Director) Chiang Sang Bon (Group Executive Director) Company RM000 3,793 3,793
59
DirectorS report
(contd)
DIRECTORS (contd) Chiang Fong Tat (Group Executive Director) Chong Chin Look (Group Finance Director) Datuk Ng Peng Hong @ Ng Peng Hay (Independent Non-Executive Director) Dato Shahbudin Bin Imam Mohamad (Non-Independent Non-Executive Director) Lim Fong Boon (Independent Non-Executive Director) Chong Sai Sin (Independent Non-Executive Director) (appointed on 30 January 2009) Datuk Nik Hussain Bin Nik Ali (Independent Non-Executive Director) (resigned on 30 January 2009) DIRECTORS INTERESTS The Directors holding office at the end of the financial year and their beneficial interests in the ordinary shares of the Company and of its related corporations during the financial year ended 30 June 2009, as recorded in the Register of Directors Shareholdings kept by the Company under Section 134 of the Companies Act, 1965, were as follows: Number of ordinary shares of RM0.50 each Balance Balance as at as at 1.7.2008 Bought Sold 30.6.2009 Shares in the Company Direct interests Chiang Sang Sem Chiang Fong Yee Chiang Sang Bon Chong Chin Look Chiang Fong Tat Indirect interests Chiang Sang Sem Chiang Fong Yee Chiang Heng Kieng Chiang Sang Bon Chiang Fong Tat 60,909,226 10,000 69,000 59,000 35,000 1,200,000 (10,000) 62,109,226 10,000 69,000 59,000 25,000 2,367,000 856,300 305,000 615,000 599,000 (115,000) 2,367,000 856,300 305,000 500,000 599,000
By virtue of his interest in the ordinary shares of the Company, Chiang Sang Sem is also deemed to be interested in ordinary shares of all the subsidiaries to the extent the Company has an interest. None of the other Directors holding office at the end of the financial year held any interest in ordinary shares of the Company or of its related corporations during the financial year. DIRECTORS BENEFITS Since the end of the previous financial year, none of the Directors have received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by the Directors as disclosed in the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest except for any benefit which may be deemed to have derived by virtue of the remuneration received and receivable by certain Directors from the related corporations in their capacity as Directors of those related corporations. There were no arrangements during and at the end of the financial year, to which the Company is a party, which had the object of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.
60
DirectorS report
(contd)
OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY (I) AS AT THE END OF THE FINANCIAL YEAR (a) Before the income statements and balance sheets 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 provision for doubtful debts and have satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and to ensure that any current assets other than debts, which were unlikely to realise their book values in the ordinary course of business had been written down to their estimated realisable values.
(ii)
(b) In the opinion of the Directors, the results of the operations of the Group and of the Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature except for: (i) (ii) the effects arising from the impairment on investments in subsidiaries resulting in a decrease in the Companys profit for the financial year by RM5,700,000 as disclosed in Note 11 to the financial statements; and the effects arising from the impairment on investment in subordinated bonds resulting in a decrease in the Groups and Companys profit for the financial year by RM3,000,000 as disclosed in Note 13 to the financial statements.
(II) FROM THE END OF THE FINANCIAL YEAR TO THE DATE OF THIS REPORT (c) The Directors are not aware of any circumstances: (i) (ii) which would render the amounts written off for bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any material extent; and which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; and
(iii) 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) In the opinion of the Directors: (i) (ii) there has not arisen any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made; and 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 as and when they fall due.
(III) AS AT THE DATE OF THIS REPORT (e) There are no charges on the assets of the Group and of the Company which have arisen since the end of the financial year to secure the liabilities of any other person. (f) There are no contingent liabilities of the Group and of the Company which have arisen since the end of the financial year.
(g) The Directors are not aware of any circumstances not otherwise dealt with in the report or financial statements which would render any amount stated in the financial statements of the Group and of the Company misleading.
61
DirectorS report
(contd)
SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (a) On 21 July 2008, Kin Sheng Group Limited (KSG), a wholly-owned subsidiary of the Company, had incorporated a whollyowned subsidiary in China, which is known as Guangzhou Bonia Fashions Co Ltd. (b) On 23 December 2008, KSG had acquired the entire 100% equity interest in Guangzhou Jia Li Bao Leather Fashion Co Ltd for a total cash consideration of USD650,000 from Active World Pte Ltd, another wholly-owned subsidiary of the Company. (c) On 3 March 2009, Active World Pte Ltd, a wholly-owned subsidiary of the Company, had incorporated a wholly-owned subsidiary in Singapore which is known as SCRL Pte Ltd. (d) On 16 March 2009, Active World Pte Ltd, a wholly-owned subsidiary of the Company, had incorporated a wholly-owned subsidiary in Singapore which is known as SBLS Pte Ltd. (e) On 6 April 2009, the Company had transferred its entire 100% equity interest in Kin Sheng International Trading Co Ltd to KSG for a total cash consideration of HKD10,000. (f) On 4 May 2009, the Company had acquired 100,000 ordinary shares of RM1.00 each representing 10% equity interest in Banyan Sutera Sdn Bhd (BSSB) from a minority shareholder, for a total cash consideration of RM1.00 only. Subsequent to the acquisition, the Company is now holding 100% equity interest in BSSB.
(g) On 1 June 2009, Mcore Sdn Bhd, a 60% owned subsidiary of the Company, had acquired 150,000 ordinary shares of RM1.00 each representing 30% equity interest in Apex Marble Sdn Bhd (AMSB) from a minority shareholder, for a total cash consideration of RM1.00 only. Subsequent to the acquisition, Mcore Sdn Bhd is now holding 90% equity interest in AMSB. (h) On 17 June 2009, the Company had incorporated a wholly-owned subsidiary in Malaysia which is known as SCARPA Marketing Sdn Bhd. SIGNIFICANT EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE (a) On 30 July 2009, Mcore Sdn Bhd, a 60% owned subsidiary of the Company, had acquired additional 50,000 ordinary shares of RM1.00 each representing 10% equity interest in Apex Marble Sdn Bhd (AMSB) from a minority shareholder, for a total cash consideration of RM1.00 only. Subsequent to the acquisition, AMSB becomes a wholly-owned subsidiary of Mcore Sdn Bhd. (b) On 6 August 2009, the Company disposed off 24,500 ordinary shares of THB100 each representing 49% equity interest in BBA International Co Ltd, an associate of the Company, for a total cash consideration of THB1,236,139 only. AUDITORS The auditors, BDO Binder, have expressed their willingness to continue in office. Signed on behalf of the Board in accordance with a resolution of the Directors.
................................................ Chiang Sang Sem Group Executive Chairman cum Chief Executive Officer Kuala Lumpur 28 September 2009
................................................ Chiang Heng Kieng Group Managing Director
62
Statement BY DirectorS
In the opinion of the Directors, the financial statements set out on pages 65 to 130 have been drawn up in accordance with applicable approved Financial Reporting Standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the state of affairs of the Group and of the Company as at 30 June 2009 and of the results of the operations of the Group and of the Company and of the cash flows of the Group and of the Company for the financial year then ended. On behalf of the Board,
..................................................... Chiang Sang Sem Group Executive Chairman cum Chief Executive Officer Kuala Lumpur 28 September 2009
..................................................... Chiang Heng Kieng Group Managing Director
StatUtorY Declaration
I, Chong Chin Look, being the Group Finance Director primarily responsible for the financial management of Bonia Corporation Berhad, do solemnly and sincerely declare that the financial statements set out on pages 65 to 130 are, to the best of my knowledge and belief, 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 at Kuala Lumpur this 28 September 2009 Before me: S. IDERAJU (No. W451) Commissioner for Oaths Kuala Lumpur ) ) ) )
Chong Chin Look
63
inDepenDent aUDitorS report
to the members of Bonia Corporation Berhad
Report on the Financial Statements We have audited the financial statements of Bonia Corporation Berhad, which comprise the balance sheets as at 30 June 2009 of the Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 65 to 130. Directors Responsibility for the Financial Statements The Directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with applicable approved Financial Reporting Standards in Malaysia and the provisions of the Companies Act, 1965. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on 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 Companys preparation and fair presentation of the financial statements 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 Companys 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 have been properly drawn up in accordance with applicable approved Financial Reporting Standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the state of affairs of the Group and of the Company as at 30 June 2009 and of the results of the operations of the Group and of the Company and of the cash flows of the Group and of the Company for the financial year then ended.
64
inDepenDent aUDitorS report
to the members of Bonia Corporation Berhad (contd)
Report on Other Legal and Regulatory Requirements In accordance with the requirements of the Companies Act, 1965, 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 11 to the financial statements. (c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Companys financial statements are in form and content appropriate and proper for the purpose of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes. (d) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act. 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 and for no other purpose. We do not assume responsibility to any other person for the content of this report.
BDO Binder AF: 0206 Chartered Accountants Kuala Lumpur 28 September 2009
Hiew Kim Loong 2858/08/10 (J) Partner
65
Balance SheetS
as at 30 June 2009
Group Note ASSETS Non-current assets Property, plant and equipment Investment properties Prepaid lease payments for land Intangible assets Investments in subsidiaries Investments in associates Other investments Deferred tax assets Current assets Inventories Trade and other receivables Current tax assets Other investments Cash and cash equivalents Non-current asset classified as held for sale 15 16 13 17 18 60,685 48,821 2,555 44,138 156,199 156,199 TOTAL ASSETS 244,762 58,623 54,684 2,119 3,000 67,997 186,423 4,400 190,823 265,369 7 8 9 10 11 12 13 14 69,309 12,127 219 4,878 73 596 1,361 88,563 56,860 9,857 606 4,878 225 590 1,530 74,546 2009 RM000 2008 RM000
Company 2009 2008 RM000 RM000
18,310 64,246 236 82,792 29,919 1,177 64 31,160 31,160 113,952
18,047 55,438 236 73,721 43,893 1,290 3,000 25,222 73,405 73,405 147,126
66
Balance SheetS
as at 30 June 2009 (contd)
Group Note EQUITY AND LIABILITIES Equity attributable to equity holders of the Company Share capital Reserves Minority interests TOTAL EQUITY LIABILITIES Non-current liabilities Borrowings Deferred tax liabilities Current liabilities Trade and other payables Borrowings Current tax payables 24 21 22,964 23,375 2,063 48,402 TOTAL LIABILITIES TOTAL EQUITY AND LIABILITIES 64,213 244,762 27,676 58,886 3,420 89,982 98,581 265,369 21 14 15,576 235 15,811 8,283 316 8,599 19 20 100,786 76,691 177,477 3,072 180,549 100,786 63,309 164,095 2,693 166,788 2009 RM000 2008 RM000
Company 2009 2008 RM000 RM000
100,786 10,879 111,665 111,665
100,786 14,644 115,430 115,430
398 24 422 1,499 366 1,865 2,287 113,952
696 9 705 648 30,343 30,991 31,696 147,126
The accompanying notes form an integral part of the financial statements.
67
income StatementS
for the financial year ended 30 June 2009
Group Note Revenue Cost of sales Gross profit Other operating income Selling and distribution expenses General and administrative expenses Finance costs Share of (loss)/profit of associates Profit before tax Tax expense Profit for the financial year Attributable to: Equity holders of the Company Minority interests 27 28 2009 RM000 314,891 (135,763) 179,128 6,268 (87,235) (63,244) (5,250) (152) 29,515 (8,453) 21,062 20,607 455 21,062 Basic earnings per ordinary share attributable to equity holders of the Company (sen) 2008 RM000 300,189 (120,427) 179,762 4,038 (85,191) (55,263) (5,051) 39 38,334 (10,111) 28,223 27,948 275 28,223
Company 2009 2008 RM000 RM000 22,134 22,134 2,888 (15,373) (1,999) 7,650 (3,857) 3,793 3,793 3,793 36,047 36,047 1,882 (13,101) (2,426) 22,402 (8,281) 14,121 14,121 14,121
29 30 31
32
10.22
14.10
68
StatementS oF chanGeS in eQUitY

GROUP Balance as at 30 June 2007 Foreign currency translation gains Gain recognised directly in equity Profit for the financial year Total recognised income and expenses for the financial year Issue of ordinary shares pursuant to the exercise of Warrants Transfer upon expiry of Warrants exercise period Dividends Balance as at 30 June 2008 Foreign currency translation gains Gain recognised directly in equity Profit for the financial year Total recognised income and expenses for the financial year Additional acquisition of shares from a minority shareholder Dividends Balance as at 30 June 2009
Note
Attributable to equity holders of the Group Non-distributable Exchange Distributable Share Share translation Other Retained capital premium reserve reserves earnings Total RM000 RM000 RM000 RM000 RM000 RM000 97,922 285 1,347 882 882 195 36,985 27,948 136,734 882 882 27,948
Minority Total interests equity RM000 RM000 2,440 275 139,174 882 882 28,223
19 33 2,864 100,786 -
191 476 -
882 2,229 333 333 -
(191) (4) -
27,948 4 (4,333) 60,604 20,607
28,830 2,864 (4,333) 164,095 333 333 20,607
275 (22) 2,693 455
29,105 2,864 (4,355) 166,788 333 333 21,062
100,786
476
333 2,562
20,607 (7,558) 73,653
20,940 (7,558) 177,477
455 (53) (23) 3,072
21,395 (53) (7,581) 180,549
33
69
for the financial year ended 30 June 2009 (contd)
StatementS oF chanGeS in eQUitY
Note COMPANY Balance as at 30 June 2007 Issue of shares pursuant to the exercise of Warrants Transfer upon expiry of Warrants exercise period Profit for the financial year Dividends Balance as at 30 June 2008 Profit for the financial year Dividends Balance as at 30 June 2009 33 33 19
Share capital RM000
Non-distributable Share Other premium reserves RM000 RM000
Distributable Retained earnings RM000
Total RM000
97,922 2,864 100,786 100,786
285 191 476 476
195 (191) (4) -
4,376 4 14,121 (4,333) 14,168 3,793 (7,558) 10,403
102,778 2,864 14,121 (4,333) 115,430 3,793 (7,558) 111,665
70
caSh FloW StatementS

Group Note CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments for: Allowance for doubtful debts Allowance for doubtful debts no longer required Amortisation of prepaid lease payments for land Amortisation of trademarks Bad debts written off Depreciation of property, plant and equipment Dividend income Fair value adjustments on investment properties Gain on disposal of prepaid lease payments for land Gain on disposal of property, plant and equipment Impairment loss on investments in subsidiaries Impairment loss on subordinated bonds Interest expense Interest income Inventories written off Loss on disposal of a subsidiary Profit received from fund trust accounts Property, plant and equipment written off Reversal of impairment loss on prepaid lease payments for land Reversal of impairment loss on property, plant and equipment Share of loss/(profit) of an associate Unrealised (gain)/loss on foreign currency translations Operating profit/(loss) before changes in working capital Increase in inventories Decrease in trade and other receivables (Decrease)/Increase in trade and other payables Cash generated from/(used in) operations Tax paid Tax refunded Net cash from/(used in) operating activities 153 (180) 7 6 12,958 (184) (59) (282) 3,000 3,830 (366) 187 (837) 300 (41) 152 (103) 48,056 (2,105) 6,212 (4,382) 47,781 (12,390) 2,232 37,623 1,786 7 2 10,418 (526) (489) 3,923 (303) 265 (774) 571 (4) (61) (39) 305 53,415 (23,616) 1,588 6,503 37,890 (14,887) 1,933 24,936 29,515 38,334 2009 RM000 2008 RM000
Company 2009 2008 RM000 RM000
7,650
22,402
9 10 7 8
13 29 15 7 9 7
2 (1,172) 1,066 (20,045) 5,700 3,000 1,977 (452) 3 (443) (720) (3,434) 138 574 (2,722) 1,283 (1,439)
9,227 816 (33,825) 2,416 (1,452) (430) 112 (734) 164 83 (487) 1,402 915
71
caSh FloW StatementS
Group Note CASH FLOWS FROM INVESTING ACTIVITIES Interest received Dividend received (Decrease)/Increase in fixed deposits pledged to licensed banks Acquisition of additional shares in subsidiaries Additional acquisition of share from a minority shareholder Proceed from disposal of a subsidiary Proceed from disposal of non-current asset classified as held for sale Proceeds from disposal of prepaid lease payments for land Proceeds from disposal of property, plant and equipment Profit received from trust fund accounts Purchase of investment properties Purchase of property, plant and equipment Payment for trademarks Repayments from/(Advances to) subsidiaries Advances to an associate Net cash (used in)/from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Interest paid (Repayments to)/Advances from subsidiaries Dividends paid to shareholders Dividends paid to minority shareholders Drawdowns of term loans Proceeds from issue of shares pursuant to exercise of Warrants Repayments of hire-purchase and lease creditors Repayments of term loans Net financing/(repayments) of trust receipts Net (repayments)/financing of bankers acceptances Net cash used in financing activities NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS EFFECT OF EXCHANGE RATE CHANGES CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 17(e) (3,830) (7,558) (23) 114 19 (966) (30,939) 178 (7,113) (50,137) (25,256) (45) 64,642 39,341 (3,923) (4,333) (22) 2,864 (793) (396) (1,273) 2,552 (5,324) 1,607 534 62,501 64,642 366 (31) (53) 3,960 439 990 837 (2,086) (17,162) (2) (12,742) 303 272 1,582 774 (1,373) (19,557) (4) (2) (18,005) 2009 RM000 2008 RM000
Company 2009 2008 RM000 RM000
452 15,034 5 443 (1,129) 1,288 (2) 16,091
1,452 25,031 (3,400) 430 (291) (13,368) (2) 9,852
8 7(a)
(1,977) (7,558) (285) (30,000) (39,820) (25,168) 25,164 (4)
(2,416) (7,634) (4,333) 2,864 (194) (11,713) (946) 26,110 25,164
72
noteS to the Financial StatementS

1.
CORPORATE INFORMATION The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad. The registered office of the Company is located at Level 18, The Gardens, North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur. The principal place of business of the Company is located at No. 62, Jalan Kilang Midah, Taman Midah, Cheras, 56000 Kuala Lumpur. The financial statements are presented in Ringgit Malaysia (RM), which is also the Companys functional currency. All financial information presented in RM has been rounded to the nearest thousand, unless otherwise stated. The financial statements were authorised for issue in accordance with a resolution by the Board of Directors on 28 September 2009.
2.
PRINCIPAL ACTIVITIES The Company is principally an investment holding and management company. The principal activities of the subsidiaries are set out in Note 11 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.
3.
BASIS OF PREPARATION The financial statements of the Group and of the Company have been prepared in accordance with applicable approved Financial Reporting Standards (FRSs) in Malaysia and the provisions of the Companies Act, 1965.
4.
SIGNIFICANT ACCOUNTING POLICIES 4.1 Basis of accounting The financial statements of the Group and of the Company have been prepared under the historical cost convention except as otherwise stated in the financial statements. The preparation of financial statements requires the Directors to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities. In addition, the Directors are also required to exercise their judgement in the process of applying the Groups accounting policies. The areas involving such judgements, estimates and assumptions are disclosed in Note 6 to the financial statements. Although these estimates and assumptions are based on the Directors best knowledge of events and actions, actual results could differ from those estimates. 4.2 Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and all of its subsidiaries made up to the end of the financial year using the purchase method of accounting. Under the purchase method of accounting, the cost of business combination is measured at the aggregate of fair values at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued plus any costs directly attributable to the business combination.
73
4.
SIGNIFICANT ACCOUNTING POLICIES (contd) 4.2 Basis of consolidation (contd) At the acquisition date, the cost of business combination is allocated to identifiable assets acquired, liabilities assumed and contingent liabilities in the business combination which are measured initially at their fair values at the acquisition date. The excess of the cost of business combination over the Groups interest in the net fair value of the identifiable assets, liabilities and contingent liabilities is recognised as goodwill (see Note 4.7(a) to the financial statements on goodwill). If the cost of business combination is less than the interest in the net fair value of the identifiable assets, liabilities and contingent liabilities, the Group will: (a) reassess the identification and measurement of the acquirees identifiable assets, liabilities and contingent liabilities and the measurement of the cost of the combination; and (b) recognise immediately in the consolidated income statements any excess remaining after that reassessment. When a business combination includes more than one exchange transaction, any adjustment to the fair values of the subsidiarys identifiable assets, liabilities and contingent liabilities relating to previously held interests of the Group is accounted for as a revaluation. Subsidiaries are consolidated from the acquisition date, which is the date on which the Group effectively obtains control, until the date on which the Group ceases to control the subsidiaries. Control exists when the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the existence and effect of potential voting rights that are currently convertible or exercisable are taken into consideration. Intragroup balances, transactions and unrealised gains and losses on intragroup transactions are eliminated in full. Intragroup losses may indicate an impairment that requires recognition in the consolidated financial statements. If a subsidiary uses accounting policies other than those adopted in the consolidated financial statements for like transactions and events in similar circumstances, appropriate adjustments are made to its financial statements in preparing the consolidated financial statements. The gain or loss on disposal of a subsidiary, which is the difference between the net disposal proceeds and the Groups share of its net assets as of the date of disposal including the carrying amount of goodwill and the cumulative amount of any exchange differences that relate to the subsidiary, is recognised in the consolidated income statements. Minority interest is that portion of the profit or loss and net assets of a subsidiary attributable to equity interests that are not owned, directly or indirectly through subsidiaries, by the Group. It is measured at the minoritys share of the fair value of the subsidiaries identifiable assets and liabilities at the acquisition date and the minoritys share of changes in the subsidiaries equity since that date. Where losses applicable to the minority in a subsidiary exceed the minority interest in the equity of that subsidiary, the excess and any further losses applicable to the minority are allocated against the Groups interest except to the extent that the minority has a binding obligation and is able to make additional investment to cover the losses. If the subsidiary subsequently reports profits, such profits are allocated to the Groups interest until the minoritys share of losses previously absorbed by the Group has been recovered. Minority interest is presented in the consolidated balance sheets within equity and is presented in the consolidated statements of changes in equity separately from equity attributable to equity holders of the Company. Minority interest in the results of the Group is presented in the consolidated income statements as an allocation of the total profit or loss for the financial year between minority interest and equity holders of the Company. Transactions with minority interest are treated as transactions with parties external to the Group. Disposals to minority interest result in gains and losses for the Group that are recorded in the income statements. Purchases from minority interest result in goodwill, being the difference between any consideration paid and the relevant share acquired of the carrying amount of net assets of the subsidiary.
74

4.
SIGNIFICANT ACCOUNTING POLICIES (contd) 4.3 Property, plant and equipment and depreciation All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that is directly attributable to the acquisition of the asset. Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in the income statements as incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Group is obligated to incur when the asset is acquired, if applicable. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the asset and which has different useful life, is depreciated separately. After initial recognition, property, plant and equipment, except for freehold land and properties under construction, are stated at cost less any accumulated depreciation and any accumulated impairment losses. Freehold land is not depreciated. Properties under construction are not depreciated until such time when the asset is available for use. Depreciation on other property, plant and equipment is calculated to write off the cost of the assets to their estimated residual value on a straight-line basis over their estimated useful lives. The principal annual depreciation rates are as follows: Buildings Plant and machinery Furniture, fittings and counter fixtures Office equipment Renovation Electrical installations Motor vehicles 2% 15% - 20% 10% - 33% 10% - 50% 10% - 33% 10% - 15% 20%
At each balance sheet date, the carrying amount of an item of property, plant and equipment is assessed for impairment when events or changes in circumstances indicate that its carrying amount may not be recoverable. A write down is made if the carrying amount exceeds the recoverable amount (see Note 4.8 to the financial statements on impairment of assets). The residual values, useful lives and depreciation method are reviewed at each financial year end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment. If expectations differ from previous estimates, the changes are accounted for as a change in an accounting estimate. The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any, and the carrying amount is included in the income statements.
75
4.
SIGNIFICANT ACCOUNTING POLICIES (contd) 4.4 Leases and hire-purchase
4.4.1 Finance leases and hire-purchase Assets acquired under finance leases and hire-purchase which transfer substantially all the risks and rewards of ownership to the Group are recognised initially at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease. The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the leases, if this is practicable to determine; if not, the Groups incremental borrowing rate is used. Any initial direct costs incurred by the Group are added to the amount recognised as an asset. The assets are capitalised as property, plant and equipment and the corresponding obligations are treated as liabilities. The property, plant and equipment capitalised are depreciated on the same basis as owned assets. The minimum lease payments are apportioned between the finance charges and the reduction of the outstanding liability. The finance charges are recognised in the income statements over the period of the lease term so as to produce a constant periodic rate of interest on the remaining lease and hire-purchase liabilities. 4.4.2 Operating leases A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership. Lease payments under operating leases are recognised as an expense on a straight-line basis over the lease term. 4.4.3 Leases of land and buildings For leases of land and buildings, the land and buildings elements are considered separately for the purpose of lease classification and these leases are classified as operating or finance leases in the same way as leases of other assets. The minimum lease payments including any lump-sum upfront payments made to acquire the interest in the land and buildings are allocated between the land and the buildings elements in proportion to the relative fair values of the leasehold interests in the land element and the buildings element of the lease at the inception of the lease. Leasehold land that normally has an indefinite economic life and where the lease does not transfer substantially all the risk and rewards incidental to ownership is treated as an operating lease. The lump-sum upfront payments made on entering into or acquiring leasehold land are accounted for as prepaid lease payments and are amortised over the lease term on a straight-line basis. The buildings element is classified as a finance or operating lease in accordance with Note 4.4.1 or Note 4.4.2 to the financial statements. If the lease payment cannot be allocated reliably between these two elements, the entire lease is classified as a finance lease, unless it is clear that both elements are operating leases, in which case the entire lease is classified as an operating lease. For a lease of land and buildings in which the amount that would initially be recognised for the land element is immaterial, the land and buildings are treated as a single unit for the purpose of lease classification and is accordingly classified as a finance or operating lease. In such a case, the economic life of the buildings is regarded as the economic life of the entire leased asset. 4.5 Investment properties Investment properties are properties which are held to earn rentals yields or for capital appreciation or for both and are not occupied by the Group. Investment properties are initially measured at cost, which includes transaction costs. After initial recognition, investment properties of the Group are carried at fair value. The fair value of investment properties are the prices at which the properties could be exchanged between knowledgeable, willing parties in an arms length transaction. The fair value of investment properties reflect market conditions at the balance sheet date, without any deduction for transaction costs that may be incurred on sale or other disposal.
76

4.
SIGNIFICANT ACCOUNTING POLICIES (contd) 4.5 Investment properties (contd) Fair values of investment properties are arrived at by reference to market evidence of transaction prices for similar properties. It is performed by registered independent valuers with appropriate recognised professional qualification and has recent experience in the location and category of the investment properties being valued. A gain or loss arising from a change in the fair value of investment properties is recognised in the income statements for the period in which it arises. Investment properties are derecognised when either they have been disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The gains or losses arising from the retirement or disposal of investment property is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the asset and is recognised in the income statements in the period of the retirement or disposal. 4.6 Investments (i) Subsidiaries A subsidiary is an entity in which the Group and the Company have power to control the financial and operating policies so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group and the Company have such power over another entity. An investment in subsidiary, which is eliminated on consolidation, is stated in the Companys separate financial statements at cost less impairment losses, if any. On disposal of such an investment, the difference between the net disposal proceeds and its carrying amount is included in the income statements. (ii) Associates An associate is an entity over which the Group and the Company have significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. In the Companys separate financial statements, an investment in associate is stated at cost less impairment losses, if any. An investment in associate is accounted for in the consolidated financial statements using the equity method of accounting. The investment in associate in the consolidated balance sheets is initially recognised at cost and adjusted thereafter for the post acquisition change in the Groups share of net assets of the investment. The interest in the associate is the carrying amount of the investment in the associate under the equity method together with any long-term interest that, in substance, form part of the Groups net interest in the associate. The Groups share of the profit or loss of the associate during the financial year is included in the consolidated financial statements, after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. Distributions received from the associate reduce the carrying amount of the investment. Adjustments to the carrying amount may also be necessary for changes in the Groups proportionate interest in the associate arising from changes in the associates equity that have not been recognised in the associates profit or loss. Such changes include those arising from the revaluation of property, plant and equipment and from foreign exchange translation differences. The Groups share of those changes is recognised directly in equity of the Group. Unrealised gains and losses on transactions between the Group and the associate are eliminated to the extent of the Groups interest in the associate.
77
4.
SIGNIFICANT ACCOUNTING POLICIES (contd) 4.6 Investments (contd) (ii) Associates (contd) When the Groups share of losses in the associate equal to or exceeds its interest in the associate, the carrying amount of that interest is reduced to nil and the Group does not recognise further losses unless it has incurred legal or constructive obligations or made payments on its behalf. The most recent available financial statements of the associates are used by the Group in applying the equity method. Where the reporting dates of the financial statements are not coterminous, the share of results is arrived at using the latest audited financial statements for which the difference in reporting dates is not more than three (3) months. Adjustments are made for the effects of any significant transactions or events that occur between the intervening period. Upon disposal of such investment, the difference between the net disposal proceeds and its carrying amount is included in the income statements. (iii) Other investments Investments, other than investments in subsidiaries, associates and investment properties, are stated at cost and an allowance for diminution in value is made where, in the opinion of the Directors, there is a decline other than temporary in the value of such investments. Where there has been a decline other than temporary in the value of an investment, such a decline is recognised as an expense in the period in which the decline is identified. Upon disposal of such investment, the difference between net disposal proceeds and its carrying amount is recognised in the income statements. 4.7 Intangible assets (a) Goodwill Goodwill acquired in a business combination is recognised as an asset at the acquisition date and is initially measured at cost being the excess of the cost of business combination over the Groups interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. After initial recognition, goodwill is measured at cost less accumulated impairment losses, if any. Goodwill is not amortised but instead tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount may be impaired. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill arising on acquisition of an associate is the excess of cost of investment over the Groups share of the net fair value of net assets of the associates identifiable assets, liabilities and contingent liabilities at the date of acquisition. Goodwill relating to the associate is included in the carrying amount of the investment and is not amortised. The excess of the Groups share of the net fair value of the associates identifiable assets, liabilities and contingent liabilities over the cost of investment is included as income in the determination of the Groups share of the associates profit or loss in the period in which the investment is acquired. (b) Other intangible assets Other intangible assets are recognised only when the identifiability, control and future economic benefit probability criteria are met. The Group recognises at the acquisition date separately from goodwill, an intangible asset of the acquiree if the fair value can be measured reliably, irrespective of whether the asset had been recognised by the acquiree before the business combination.
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4.
SIGNIFICANT ACCOUNTING POLICIES (contd) 4.7 Intangible assets (contd) (b) Other intangible assets (contd) Intangible assets are initially measured at cost. The cost of intangible assets acquired in a business combination is its fair values as at the date of acquisition. After initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite useful lives are amortised on a straight-line basis over the estimated economic useful lives and are assessed for any indication that the asset may be impaired. If any such indication exists, the entity shall estimate the recoverable amount of the asset. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year end. The amortisation expense on intangible assets with finite useful lives is recognised in the income statements and is included within the general and administrative expenses line item. An intangible asset has an indefinite useful life when based on the analysis of all the relevant factors; there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows to the Group. Intangible assets with indefinite useful lives are tested for impairment annually and wherever there is an indication that the carrying amount may be impaired. Such intangible assets are not amortised. Their useful lives are reviewed each period to determine whether events and circumstances continue to support the indefinite useful life assessment for the asset. If they do not, the change in the useful life assessment for indefinite to finite is accounted for as a change in accounting estimate in accordance with FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors. Expenditure on internally developed products is recognised as an intangible asset if the Group can demonstrate that it is technically feasible to develop the product for it to be sold, that adequate resources are available to complete the development and that there is an intention to complete and sell the product. The Group must also demonstrate that it is able to sell the product to generate future economic benefits and that the expenditure on the project can be measured reliably. Expenditure on an intangible item that are initially recognised as an expense are not recognised as part of the cost of an intangible asset at a later date. An intangible asset is derecognised on disposal or when no future economic benefits are expected from its use. The gain or loss arising from the derecognition determined as the difference between the net disposal proceeds, if any, and the carrying amount of the asset is recognised in the income statements when the asset is derecognised. Trademarks Trademarks acquired have finite useful lives and are carried at cost less any accumulated amortisation and any accumulated impairment losses. Amortisation is calculated using the straight-line method to allocate the cost of trademarks over their estimated useful lives of 7 years. Cost of renewing trademarks is recognised in the income statements as incurred. 4.8 Impairment of assets The carrying amounts of assets, except for financial assets (excluding investments in subsidiaries and associates), inventories, deferred tax assets, investment properties measured at fair value and non-current assets held for sale, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the assets recoverable amount is estimated. Goodwill and intangible assets that have an indefinite useful life are tested annually for impairment or more frequently if events or changes in circumstances indicate that the goodwill or intangible asset might be impaired.
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SIGNIFICANT ACCOUNTING POLICIES (contd) 4.8 Impairment of assets (contd) The recoverable amount of an asset is estimated for an individual asset. Where it is not possible to estimate the recoverable amount of the individual asset, the impairment test is carried out on the cash generating unit (CGU) to which the asset belongs. Goodwill acquired in a business combination is from the acquisition date, allocated to each of the Groups CGU or groups of CGU that are expected to benefit from the synergies of the combination giving rise to the goodwill irrespective of whether other assets or liabilities of the acquiree are assigned to those units or groups of units. The recoverable amount of an asset or CGU is the higher of its fair value less cost to sell and its value in use. In estimating the value in use, the estimated future cash inflows and outflows to be derived from continuing use of the asset and from its ultimate disposal 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 for which the future cash flow estimates have not been adjusted. An impairment loss is recognised in the income statements when the carrying amount of the asset or the CGU, including the goodwill or intangible asset, exceeds the recoverable amount of the asset or the CGU. The total impairment loss is allocated, first, to reduce the carrying amount of any goodwill allocated to the CGU and then to the other assets of the CGU on a pro-rata basis of the carrying amount of each asset in the CGU. The impairment loss is recognised in the income statements immediately. An impairment loss on goodwill is not reversed in subsequent periods. An impairment loss for other assets is reversed if, and only if, there has been a change in the estimates used to determine the assets recoverable amount since the last impairment loss was recognised. An impairment loss is reversed only to the extent that the assets carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Such reversals are recognised as income immediately in the income statements. 4.9 Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method. The cost of consumables and raw materials comprises all costs of purchase plus the cost of bringing the inventories to their present location and condition. The cost of workin-progress and finished goods includes the cost of raw materials, direct labour, other direct cost and a proportion of production overheads based on normal operating capacity of the production facilities. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. 4.10 Financial instruments A financial instrument is any contract that gives rise to a financial asset of one enterprise and a financial liability or equity instrument of another enterprise. A financial asset is any asset that is cash, an equity instrument of another enterprise, a contractual right to receive cash or another financial asset from another enterprise, or a contractual right to exchange financial assets or financial liabilities with another enterprise under conditions that are potentially favourable to the Group. A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another enterprise, or a contractual obligation to exchange financial assets or financial liabilities with another enterprise under conditions that are potentially unfavourable to the Group.
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SIGNIFICANT ACCOUNTING POLICIES (contd) 4.10 Financial instruments (contd)
4.10.1 Financial instruments recognised on the balance sheets Financial instruments are recognised on the balance sheets when the Group has become a party to the contractual provisions of the instrument. Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends and losses and gains relating to a financial instrument or a component that is a financial liability shall be recognised as income or expense in the income statements. Distributions to holders of an equity instrument are debited directly to equity, net of any related tax effect. Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle on a net basis or to realise the asset and settle the liability simultaneously. (a) Receivables Trade and other receivables, including amounts owing by associates and related parties, are classified as loans and receivables under FRS 132 Financial Instruments: Disclosure and Presentation. Receivables are carried at anticipated realisable value. Known bad debts are written off and specific allowance is made for debts considered to be doubtful of collection. Receivables are not held for trading purposes. (b) Cash and cash equivalents Cash and cash equivalents include cash and bank balances, bank overdrafts, short term placements with licensed banks, placements with licensed banks, deposits and other short term highly liquid investments with original maturities of three (3) months or less, which are readily convertible to cash and are subject to insignificant risk of changes in value. (c) Payables Liabilities for trade and other amounts payable, including amounts owing to related parties, are initially recognised at fair value of the consideration to be paid in the future for goods and services received. (d) Interest bearing loans and borrowings All loans and borrowings are recognised at the amount of proceeds received less directly attributable transaction costs. (e) Equity instruments Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value of shares issued, if any, are accounted for as share premium. Both ordinary shares and share premium are classified as equity. Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax benefit. Otherwise, they are charged to the income statements. Dividends to shareholders are recognised in equity in the period in which they are declared. If the Company reacquires its own equity instrument, the consideration paid, including any attributable transaction costs is deducted from equity as treasury shares until they are cancelled. No gain or loss is recognised in the income statements on the purchase, sale, issue or cancellation of the Companys own equity instruments. Where such shares are issued by resale, the difference between the sales consideration and the carrying amount is shown as a movement in equity.
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SIGNIFICANT ACCOUNTING POLICIES (contd) 4.10 Financial instruments (contd)
4.10.2 Financial instruments not recognised on the balance sheets Foreign currency forward contracts Foreign currency forward contracts are used to hedge foreign exposures as a result of receipts and payments in foreign currency. Any gains or losses arising from contracts entered into as hedges of anticipated future transactions are deferred until the dates of such transactions at which time they are included in the measurement of such transactions. All other gains or losses relating to hedged instruments are recognised in the income statements in the same period as the exchange differences on the underlying hedged items. 4.11 Borrowing costs All borrowing costs are recognised in the income statements in the period in which they are incurred. 4.12 Income taxes Income taxes include all domestic and foreign taxes on taxable profit. Income taxes also include other taxes such as withholding taxes which are payable by foreign subsidiaries on distributions to the Group and Company. Taxes in the income statement comprise current tax and deferred tax. (a) Current tax Current tax is the amount of income taxes payable or receivable in respect of the taxable profit or loss for a period. Current tax for the current and prior periods is 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 have been enacted or substantively enacted at the balance sheet date. (b) Deferred tax Deferred tax is recognised in full using the liability method on temporary differences arising between the carrying amount of an asset or liability in the balance sheet and its tax base. Deferred tax is recognised for all temporary differences, unless the deferred tax arises from goodwill or the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of transaction, affects neither accounting profit nor taxable profit. A deferred tax asset is recognised only to the extent that it is probable that taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amount of a deferred tax asset is reviewed at each balance sheet date. If it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised, the carrying amount of the deferred tax asset will be reduced accordingly. When it becomes probable that sufficient taxable profit will be available, such reductions will be reversed to the extent of the taxable profits. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same taxation authority. Deferred tax will be recognised as income or expense and included in the income statements for the period unless the tax relates to items that are credited or charged, in the same or a different period, directly to equity, in which case the deferred tax will be charged or credited directly to equity.
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SIGNIFICANT ACCOUNTING POLICIES (contd) 4.12 Income taxes (contd) (b) Deferred tax (contd) 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 balance sheet date. 4.13 Contingent liabilities A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Group does not recognise a contingent liability but discloses its existence in the financial statements. In the acquisition of subsidiaries by the Group under business combinations, contingent liabilities assumed are measured initially at their fair value at the acquisition date, irrespective of the extent of any minority interest. 4.14 Employee benefits
4.14.1 Short term employee benefits Wages, salaries, social security contributions, paid annual leave, paid sick leave, bonuses and non-monetary benefits are recognised as an expense in the financial year when employees have rendered their services to the Group and the Company. Short term accumulating compensated absences such as paid annual leave are recognised as an expense when employees render services that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur. Bonuses are recognised as an expense when there is a present, legal or constructive obligation to make such payments, as a result of past events and when a reliable estimate can be made of the amount of the obligation. 4.14.2 Defined contribution plans The Company and its subsidiaries incorporated in Malaysia make contributions to a statutory provident fund and foreign subsidiaries make contributions to their respective countries statutory pension schemes. The contributions are recognised as a liability after deducting any contribution already paid and as an expense in the period in which the employees render their services. 4.15 Foreign currencies
4.15.1 Functional and presentation currency Items included in the financial statements of each of the Groups entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in Ringgit Malaysia, which is the Companys functional and presentation currency.
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SIGNIFICANT ACCOUNTING POLICIES (contd) 4.15 Foreign currencies (contd)
4.15.2 Foreign currency transactions and balances Transactions in foreign currencies are converted into Ringgit Malaysia at rates of exchange ruling at the transaction dates. Monetary assets and liabilities in foreign currencies at the balance sheet date are translated into Ringgit Malaysia at rates of exchange ruling at that date unless hedged by forward foreign exchange contracts, in which case the rates specified in such forward contracts are used. All exchange differences arising from the settlement of foreign currency transactions and from the translation of foreign currency monetary assets and liabilities are included in the income statements in the period in which they arise. Non-monetary items initially denominated in foreign currencies, which are carried at historical cost are translated using the historical rate as of the date of acquisition, and non-monetary items which are carried at fair value are translated using the exchange rate that existed when the values were determined for presentation currency purposes. 4.15.3 Foreign operations Financial statements of foreign operations are translated at financial year end exchange rates with respect to the assets and liabilities, and at exchange rates at the dates of the transactions with respect to the income statements. All resulting translation differences are recognised as a separate component of equity. In the consolidated financial statements, exchange differences arising from the translation of net investment in foreign operations are taken to equity. When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognised in the income statements as part of the gain or loss on disposal. Exchange differences arising on a monetary item that forms part of the net investment of the Company in a foreign operation shall be recognised in the income statements in the separate financial statements of the Company or the foreign operation, as appropriate. In the consolidated financial statements, such exchange differences shall be recognised initially as a separate component of equity and recognised in the income statements upon disposal of the net investment. Goodwill and fair value adjustments to the assets and liabilities arising from the acquisition of a foreign operation are treated as assets and liabilities of the acquired entity and translated at the exchange rate ruling at the balance sheet date. 4.16 Revenue recognition Revenue is measured at the fair value of the consideration received or receivable net of discounts and rebates. Revenue is recognised to the extent that it is probable that the economic benefits associated with the transaction will flow to the Group, and the amount of revenue and the cost incurred or to be incurred in respect of the transaction can be reliably measured and specific recognition criteria have been met for each of the Groups activities as follows: (a) Sales of goods Revenue from sale of goods is recognised when significant risk and rewards of ownership of the goods has been transferred to the customer and where the Group retains neither continuing managerial involvement over the goods, which coincides with the delivery of goods and acceptance by customers. (b) Dividend income Dividend income is recognised when the rights to receive payment is established. (c) Interest income Interest income is recognised as it accrues, using the effective interest method unless collectibility is in doubt.
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SIGNIFICANT ACCOUNTING POLICIES (contd) 4.16 Revenue recognition (contd) (d) Rental income Rental income is recognised on an accrual basis unless collectibility is in doubt. 4.17 Non-current assets (or disposal group) held for sale Non-current assets (or disposal group) are classified as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. For this to be the case, the assets (or disposal group) must be available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (or disposal group) and its sale must be highly probable. The sale is expected to qualify for recognition as a completed sale within one (1) year from the date of classification. However, an extension of the period required to complete the sale does not preclude the assets (or disposal group) from being classified as held for sale if the delay is caused by events or circumstances beyond the control of the Group and there is sufficient evidence that the Group remains committed to its plan to sell the assets (or disposal group). Immediately before the initial classification as held for sale, the carrying amounts of the non-current assets (or all the assets and liabilities in a disposal group) are measured in accordance with applicable FRSs. On initial classification as held for sale, non-current assets or disposal group (other than investment properties, deferred tax assets, employee benefits assets, and financial assets carried at fair value) are measured at the lower of carrying amount immediately before the initial classification as held for sale and fair value less costs to sell. Any differences are recognised in the income statements as impairment loss. Non-current assets (or disposal group) held for sale are classified as current assets on the face of the balance sheets and are stated at the lower of carrying amount immediately before initial classification and fair value less costs to sell and are not depreciated. Any cumulative income or expense recognised directly in equity relating to the non-current assets (or disposal group) classified as held for sale is presented separately. If the Group has classified an asset (or disposal group) as held for sale but subsequently the criteria for classification is no longer met, the Group ceases to classify the asset (or disposal group) as held for sale. The Group measures a non-current asset that ceases to be classified as held for sale (or ceases to be included in a disposal group classified as held for sale) at the lower of: (a) its carrying amount before the asset (or disposal group) was classified as held for sale, adjusted for any depreciation, amortisation or revaluations that would have been recognised had the asset (or disposal group) not been classified as held for sale; and (b) its recoverable amount at the date of the subsequent decision not to sell. 4.18 Segment reporting Segment reporting is presented for enhanced assessment of the Groups risks and returns. Business segments provide products or services that are subject to risks and returns that are different from those of other business segments. Geographical segments provide products or services within a particular economic environment that is subject to risks and returns that are different from those components operating in other economic environments. Segment revenue, expense, assets and liabilities are those amounts resulting from the operating activities of a segment that are directly attributable to the segment and the relevant portion that can be allocated on a reasonable basis to the segment. Segment revenue, expense, assets and liabilities are determined before intragroup balances and intragroup transactions are eliminated as part of the consolidation process, except to the extent that such intragroup balances and transactions are between Group enterprises within a single element.
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ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs 5.1 New FRSs and amendments to FRSs not adopted (a) FRS 8 Operating Segments and the consequential amendments resulting from FRS 8 are mandatory for annual financial periods beginning on or after 1 July 2009. FRS 8 sets out the requirements for disclosure of information on an entitys operating segments, products and services, the geographical areas in which it operates and its customers. The requirements of this Standard are based on the information about the components of the entity that management uses to make decisions about operating matters. This Standard requires identification of operating segments on the basis of internal reports that are regularly reviewed by the entitys chief operating decision maker in order to allocate resources to the segment and assess its performance. This Standard also requires the amount reported for each operating segment item to be the measure reported to the chief operating decision maker for the purposes of allocating resources to the segment and assessing its performance. Segment information for prior years that is reported as comparative information for the initial year of application would be restated to conform to the requirements of this Standard. The Group does not expect any material impact on the financial statements arising from the adoption of this Standard. (b) FRS 4 Insurance Contracts and the consequential amendments resulting from FRS 4 are mandatory for annual financial periods beginning on or after 1 January 2010. FRS 4 replaces the existing FRS 2022004 General Insurance Business and FRS 2032004 Life Insurance Business. FRS 4 is not relevant to the Groups operations. (c) FRS 7 Financial Instruments: Disclosures and the consequential amendments resulting from FRS 7 are mandatory for annual financial periods beginning on or after 1 January 2010. FRS 7 replaces the disclosure requirements of the existing FRS 132 Financial Instruments: Disclosure and Presentation. This Standard applies to all risks arising from a wide array of financial instruments and requires the disclosure of the significance of financial instruments for an entitys financial position and performance. By virtue of the exemption provided under paragraph 44AB of FRS 7, the impact of applying FRS 7 on the financial statements upon first adoption of the FRS as required by paragraph 30(b) of FRS 108 is not disclosed. (d) FRS 123 Borrowing Costs and the consequential amendments resulting from FRS 123 are mandatory for annual financial periods beginning on or after 1 January 2010. This Standard removes the option of immediately recognising as an expense borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset. However, capitalisation of borrowing costs is not required for assets measured at fair value, and inventories that are manufactured or produced in large quantities on a repetitive basis, even if they take a substantial period of time to get ready for use or sale. The Group does not expect any material impact on the financial statements arising from the adoption of this Standard. (e) FRS 139 Financial Instruments: Recognition and Measurement and the consequential amendments resulting from FRS 139 are mandatory for annual financial periods beginning on or after 1 January 2010. This Standard establishes the principles for the recognition and measurement of financial assets and financial liabilities including circumstances under which hedge accounting is permitted. By virtue of the exemption provided under paragraph 103AB of FRS 139, the impact of applying FRS 139 on the financial statements upon first adoption of the FRS as required by paragraph 30(b) of FRS 108 is not disclosed.
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ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs (contd) 5.1 New FRSs and amendments to FRSs not adopted (contd) (f) Amendments to FRS 1 First-time Adoption of Financial Reporting Standards and FRS 127 Consolidated and Separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate is mandatory for annual financial periods beginning on or after 1 January 2010. These amendments allow first-time adopters to use a deemed cost of either fair value or the carrying amount under previous accounting practice to measure the initial cost of investments in subsidiaries, jointly controlled entities and associates in the separate financial statements. The cost method of accounting for an investment has also been removed pursuant to these amendments. The Group does not expect any material impact on the financial statements arising from the adoption of this Standard. (g) Amendments to FRS 2 Share-based Payment: Vesting Conditions and Cancellations are mandatory for annual financial periods beginning on or after 1 January 2010. These amendments clarify that vesting conditions comprise service conditions and performance conditions only. Cancellations by parties other than the Group are accounted for in the same manner as cancellations by the Group itself and features of a share-based payment that are non-vesting conditions are included in the grant date fair value of the share-based payment. The Group does not expect any material impact on the financial statements arising from the adoption of these amendments. (h) FRS 101 Presentation of Financial Statements is mandatory for annual financial periods beginning on or after 1 January 2010. FRS 101 sets out the overall requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their content. This Standard introduces the titles statement of financial position and statement of cash flows to replace the current titles balance sheet and cash flow statement respectively. A new statement known as the statement of comprehensive income is also introduced in this Standard whereby all non-owner changes in equity are required to be presented in either one statement of comprehensive income or in two statements (i.e. a separate income statement and a statement of comprehensive income). Components of comprehensive income are not permitted to be presented in the statement of changes in equity. This Standard also introduces a new requirement to present a statement of financial position as at the beginning of the earliest comparative period if there are applications of retrospective restatements that are defined in FRS 108, or when there are reclassifications of items in the financial statements. Additionally, FRS 101 requires the disclosure of reclassification adjustments and income tax relating to each component of other comprehensive income, and the presentation of dividends recognised as distributions to owners together with the related amounts per share in the statement of changes in equity or in the notes to the financial statements. This Standard introduces a new requirement to disclose information on the objectives, policies and processes for managing capital based on information provided internally to key management personnel as defined in FRS 124 Related Party Disclosures. Additional disclosures are also required for puttable financial instruments classified as equity instruments. Apart from the new presentation and disclosure requirements described, the Group does not expect any other impact on the consolidated financial statements arising from the adoption of this Standard.
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ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs (contd) 5.1 New FRSs and amendments to FRSs not adopted (contd) (i) Amendments to FRS 139, FRS 7 and IC Interpretation 9 are mandatory for annual financial periods beginning on or after 1 January 2010. These amendments permit reclassifications of non-derivative financial assets (other than those designated at fair value through profit or loss upon initial recognition) out of the fair value through profit or loss category in rare circumstances. Reclassifications from the available-for-sale category to the loans and receivables category are also permitted provided there is intention and ability to hold that financial asset for the foreseeable future. All of these reclassifications shall be subjected to subsequent reassessments of embedded derivatives. These amendments also clarifies the designation of one-sided risk in eligible hedged items and streamlines the terms used throughout the Standards in accordance with the changes resulting from FRS 101. By virtue of the exemptions provided under paragraphs 103AB of FRS 139 and 44AB of FRS 7, the impact of applying these amendments on the consolidated financial statements upon first adoption of the FRS 139 and FRS 7 respectively as required by paragraph 30(b) of FRS 108 are not disclosed. However, the Group does not expect any material impact on the consolidated financial statements arising from the adoption of the amendment to IC Interpretation 9. (j) Amendments to FRS 132 Financial Instruments: Presentation is mandatory for annual financial periods beginning on or after 1 January 2010. These amendments require certain puttable financial instruments, and financial instruments that impose an obligation to deliver to counterparties a pro rata share of the net assets of the entity only on liquidation to be classified as equity. Puttable financial instruments are defined as financial instruments that give the holder the right to put the instrument back to the issuer for cash, or another financial asset, or are automatically put back to the issuer upon occurrence of an uncertain future event or the death or retirement of the instrument holder. Presently, the Group does not expect any material impact on the consolidated financial statements arising from the adoption of this Standard. However, the Group is in the process of assessing the impact of this Standard in conjunction with the implementation of FRS 139 and would only be able to provide further information in the interim financial statements followed by the next annual financial statements. (k) Improvements to FRSs (2009) are mandatory for annual financial periods beginning on or after 1 January 2010. Amendment to FRS 5 Non-current Assets Held for Sale and Discontinued Operations clarifies that the disclosure requirements of this FRS specifically apply to non-current assets (or disposal groups) classified as held for sale or discontinued operations. The Group does not expect any material impact on the consolidated financial statements arising from the adoption of this amendment. Amendment to FRS 8 Operating Segments clarifies the consistency of disclosure requirement for information about profit or loss, assets and liabilities. The Group does not expect any material impact on the consolidated financial statements arising from the adoption of this amendment. Amendment to FRS 107 Statement of Cash Flows clarifies the classification of cash flows arising from operating activities and investing activities. Cash payments to manufacture or acquire assets held for rental to others and subsequently held for sale, and the related cash receipts, shall be classified as cash flows from operating activities. Expenditures that result in a recognised asset in the statement of financial position are eligible for classification as cash flows from investing activities. The Group does not expect any material impact on the consolidated financial statements arising from the adoption of this amendment.
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ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs (contd) 5.1 New FRSs and amendments to FRSs not adopted (contd) (k) Improvements to FRSs (2009) are mandatory for annual financial periods beginning on or after 1 January 2010. (contd) Amendment to FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors clarifies that only Implementation Guidance issued by the Malaysian Accounting Standards Board that are integral parts of FRSs is mandatory. The Group does not expect any material impact on the consolidated financial statements arising from the adoption of this amendment. Amendment to FRS 110 Events after the Reporting Period clarifies the rationale for not recognising dividends declared after the reporting date but before the financial statements are authorised for issue. The Group does not expect any material impact on the consolidated financial statements arising from the adoption of this amendment. Amendment to FRS 116 Property, Plant and Equipment removes the definition pertaining the applicability of this Standard to property that is being constructed or developed for future use as investment property but has yet to satisfy the definition of investment property in FRS 140 Investment Property. This amendment also replaces the term net selling price with fair value less costs to sell, and clarifies that proceeds arising from routine sale of items of property, plant and equipment shall be recognised as revenue in accordance with FRS 118 Revenue rather than FRS 5. The Group does not expect any material impact on the consolidated financial statements arising from the adoption of this amendment. Amendment to FRS 117 Leases removes the classification of leases of land and of buildings, and instead, requires assessment of classification based on the risks and rewards of the lease itself. The reassessment of land elements of unexpired leases shall be made prospectively in accordance with FRS 108. As at the reporting date, the Group has carrying amount of prepaid lease payments for land of RM219,000 (see Note 9 to the financial statements). The Group expects to reclassify the prepaid lease payments for land as land held in accordance with FRS 116 upon adoption of this amendment and shall present a statement of financial position as at the beginning of the earliest comparative period in accordance with FRS 101. Amendment to FRS 118 Revenue clarifies reference made on the term transaction costs to the definition in FRS 139. The Group does not expect any material impact on the consolidated financial statements arising from the adoption of this amendment. Amendment to FRS 119 Employee Benefits clarifies the definitions in the Standard by consistently applying settlement dates within twelve (12) months in the distinction between short-term employee benefits and other long-term employee benefits. This amendment also provides additional explanations on negative past service cost and curtailments. The Group does not expect any material impact on the consolidated financial statements arising from the adoption of this amendment. Amendment to FRS 120 Accounting for Government Grants and Disclosure of Government Assistance streamlines the terms used in the Standard in accordance with the new terms used in FRS 101. This amendment is not relevant to the Groups operations. Amendment to FRS 123 Borrowing Costs clarifies that interest expense calculated using the effective interest rate method described in FRS 139 qualifies for recognition as borrowing costs. The Group does not expect any material impact on the consolidated financial statements arising from the adoption of this amendment. Amendment to FRS 127 Consolidated and Separate Financial Statements clarifies that investments measured at cost shall be accounted for in accordance with FRS 5 when they are held for sale in accordance with FRS 5. The Group does not expect any material impact on the consolidated financial statements arising from the adoption of this amendment.
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5.
ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs (contd) 5.1 New FRSs and amendments to FRSs not adopted (contd) (k) Improvements to FRSs (2009) are mandatory for annual financial periods beginning on or after 1 January 2010. (contd) Amendment to FRS 128 Investments in Associates clarifies that investments in associates held by venture capital organisations, or mutual funds, unit trusts and similar entities shall make disclosures on the nature and extent of any significant restrictions on the ability of associates to transfer funds to the investor in the form of cash dividends, or repayment of loans or advances. This amendment also clarifies that impairment loss recognised in accordance with FRS 136 Impairment of Assets shall not be allocated to any asset, including goodwill, that forms the carrying amount of the investment. Accordingly, any reversal of that impairment loss shall be recognised in accordance with FRS 136. The Group does not expect any material impact on the consolidated financial statements arising from the adoption of this amendment. Amendment to FRS 129 Financial Reporting in Hyperinflationary Economies streamlines the terms used in the Standard in accordance with the new terms used in FRS 101. This amendment also clarifies that assets and liabilities that are measured at fair value are exempted from the requirement to apply historical cost basis of accounting. This amendment is not relevant to the Groups operations. Amendment to FRS 131 Interests in Joint Ventures clarifies that venturers interests in jointly controlled entities held by venture capital organisations, or mutual funds, unit trusts and similar entities shall make disclosures on related capital commitments. This amendment also clarifies that a listing and description of interests in significant joint ventures and the proportion of ownership interest held in jointly controlled entities shall be made. This amendment is not relevant to the Groups operations. Amendment to FRS 134 Interim Financial Reporting clarifies the need to present basic and diluted earnings per share for an interim period when the entity is within the scope of FRS 133 Earnings Per Share. The Group does not expect any material impact on the consolidated financial statements arising from the adoption of this amendment. Amendment to FRS 136 Impairment of Assets clarifies the determination of allocation of goodwill to each cashgenerating unit whereby each unit shall not be larger than an operating segment as defined in FRS 8 before aggregation. This amendment also requires additional disclosures if the fair value less costs to sell is determined using discounted cash flow projections. Presently, the Group does not expect any material impact on the consolidated financial statements arising from the adoption of this amendment. However, the Group is in the process of assessing the impact of this Standard in conjunction with the implementation of FRS 8 and would only be able to provide further information in the interim financial statements followed by the next annual financial statements. Amendment to FRS 138 Intangible Assets clarifies the examples provided in the Standard in measuring the fair value of an intangible asset acquired in a business combination. This amendment also removes the statement on the rarity of situations whereby the application of the amortisation method for intangible assets results in a lower amount of accumulated amortisation than under the straight-line method. The Group does not expect any material impact on the consolidated financial statements arising from the adoption of this amendment. Amendment to FRS 140 Investment Properties clarifies that properties that are being constructed or developed for future use as investment property are within the definition of investment property. This amendment further clarifies that if the fair value of such properties cannot be reliably determinable but it is expected that the fair value would be readily determinable when construction is completed, the properties shall be measured at cost until either its fair value becomes reliably determinable or construction is completed, whichever is earlier. The Group does not expect any material impact on the consolidated financial statements arising from the adoption of this amendment. (l) IC Interpretation 9 Reassessment of Embedded Derivatives is mandatory for annual financial periods beginning on or after 1 January 2010. This Interpretation prohibits the subsequent reassessment of embedded derivatives unless there is a change in the terms of the host contract that significantly modifies the cash flows that would otherwise be required by the host contract. The Group does not expect any material impact on the financial statements arising from the adoption of this Interpretation.
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5.
ADOPTION OF NEW FRSs AND AMENDMENTS TO FRSs (contd) 5.1 New FRSs and amendments to FRSs not adopted (contd) (m) IC Interpretation 10 Interim Financial Reporting and Impairment is mandatory for annual financial periods beginning on or after 1 January 2010. This Interpretation prohibits the reversal of an impairment loss recognised in a previous interim period in respect of goodwill or an investment in either an equity instrument or a financial asset carried at cost. The Group does not expect any material impact on the financial statements arising from the adoption of this Interpretation. (n) IC Interpretation 11 FRS 2- Group and Treasury Share Transactions is mandatory for annual periods beginning on or after 1 January 2010. This Interpretation requires share-based payment transactions in which the Company receives services from employees as consideration for its own equity instruments to be accounted for as equity-settled, regardless of the manner of satisfying the obligations to the employees. If the Company grants rights to its equity instruments to the employees of its subsidiaries, this Interpretation requires the Company to recognise the equity reserve for the obligation to deliver the equity instruments when needed whilst the subsidiaries shall recognise the remuneration expense for the services received from employees. If the subsidiaries grant rights to equity instruments of the Company to its employees, this Interpretation requires the Company to account for the transaction as cash-settled, regardless of the manner the subsidiaries obtain the equity instruments to satisfy its obligations. The Group does not expect any material impact on the financial statements arising from the adoption of this Interpretation. (o) IC Interpretations which are mandatory for annual financial periods beginning on or after 1 January 2010: IC Interpretation 13 IC Interpretation 14 Customer Loyalty Programmes FRS 119 - The Limit of a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
The above IC Interpretations are not relevant to the Groups operations. 6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Groups and the Companys accounting policies, reported amounts of assets, liabilities, income and expenses, and disclosures made. They are assessed on an ongoing basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances. 6.1 Critical judgements made in applying accounting policies The followings are judgements made by management in the process of applying the Groups accounting policies that 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 FRS 140 in making judgement whether a property qualifies 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.
91
6.
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (contd) 6.1 Critical judgements made in applying accounting policies (contd) (a) Classification between investment properties and property, plant and equipment (contd) 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. (b) Contingent liabilities The determination of treatment of contingent liabilities is based on managements view of the expected outcome of the contingencies for matters in the ordinary course of business. 6.2 Key sources of estimation uncertainty The following are key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year: (a) Impairment of goodwill on consolidation The Group determines whether goodwill on consolidation is impaired at least on an annual basis. This requires an estimation of the value-in-use of the subsidiaries to which goodwill is allocated. Estimating a value-in-use amount requires management to make an estimate of the expected future cash flows from the subsidiaries and also to choose a suitable discount rate in order to calculate the present value of those cash flows. Further details are disclosed in Note 10 (a) to the financial statements. (b) Taxation (i) Deferred tax assets Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent that it is probable that taxable profit will be available against which the tax 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. (ii) Income taxes Significant judgement is required in determining the capital allowances, deductibility of certain expenses and taxability of certain income during the estimation of the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group and the Company recognise tax liabilities based on estimates of whether additional taxes will be due. Where the final tax outcome is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. (c) Depreciation of property, plant and machinery The cost of property, plant and machinery is depreciated on a straight-line basis over the assets useful lives. Management estimates the useful lives of these property, plant and machinery as disclosed in Note 4.3 to the financial statements. These are common life expectancies applied in the industry which the Group operates. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, and therefore future depreciation charges could be revised.
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6.
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (contd) 6.2 Key sources of estimation uncertainty (contd) (d) Allowance for doubtful debts The Group makes allowance for doubtful debts based on an assessment of the recoverability of receivables. Allowances are applied to receivables where events or changes in circumstances indicate that the carrying amounts may not be recoverable. The management specifically analyses historical bad debt, customer concentration, customer creditworthiness, current economic trends and changes in customer payment terms when making a judgement to evaluate the adequacy of allowance for doubtful debts. Where expectations differ from the original estimates, the differences will impact the carrying amount of receivables. (e) Write down for obsolete or slow moving inventories The Group writes down its obsolete or slow moving inventories based on an assessment of their estimated net selling price. Inventories are written down when events or changes in circumstances indicate that the carrying amounts may not be recoverable. The management specifically analyses fashion pattern, current economic trends and changes in customer preference when making a judgement to evaluate the adequacy of the write down for obsolete or slow moving inventories. Where expectations differ from the original estimates, the differences will impact the carrying amount of inventories. (f) Fair values of borrowings The fair values of borrowings are estimated by discounting future contractual cash flows at the current market interest rates available to the Group for similar financial instruments. It is assumed that the effective interest rates approximate the current market interest rates available to the Group based on its size and its business risk.
7.
PROPERTY, PLANT AND EQUIPMENT

Group Balance as at 1.7.2008 RM000 Written off RM000 Reclassifications RM000 Depreciation charge for the year RM000 Reversal of impairment Translation for the year adjustments RM000 RM000 Balance as at 30.6.2009 RM000
Additions Disposals RM000 RM000
Carrying amount Freehold land Buildings on freehold land Buildings on long term leasehold land Plant and machinery Plant and machinery under hire-purchase and lease Furniture, fittings and counter fixtures Office equipment Renovation Electrical installations Motor vehicles Motor vehicles under hire-purchase and lease Properties under construction 3,002 22,929 5,628 597 609 11 124 (545) (127) 9,902 (747) (135) (168) 41 26 2 3,002 32,719 4,875 553
74 13,546 2,835 1,822 428 508
7,871 1,414 2,446 387 2,026
(135) (8) (10)
(106) (23) (11) (9) -
232
(25) (7,733) (1,274) (1,286) (141) (360)
67 15 7 38
49 13,510 2,959 2,978 665 2,434
2,857 2,634 56,860
242 11,245 26,375
(171) (869)
(24) (300)
(232) (9,902) -
(1,089) (12,958)
41
5 160
1,612 3,953 69,309
93
7.
PROPERTY, PLANT AND EQUIPMENT (contd) Group Cost RM000 Freehold land Buildings on freehold land Buildings on long term leasehold land Plant and machinery Plant and machinery under hire-purchase and lease Furniture, fittings and counter fixtures Office equipment Renovation Electrical installations Motor vehicles Motor vehicles under hire-purchase and lease Properties under construction 3,002 37,685 8,309 2,432 123 35,221 10,796 6,687 1,071 4,126 4,197 4,232 117,881
Group Balance as at 1.7.2007 RM000
At 30.6.2009 Accumulated Accumulated depreciation impairment RM000 RM000 (4,690) (1,469) (1,879) (74) (21,711) (7,837) (3,709) (406) (1,692) (2,585) (46,052)
Depreciation charge for the year RM000
Carrying amount RM000 3,002 32,719 4,875 553 49 13,510 2,959 2,978 665 2,434 1,612 3,953 69,309
Balance as at 30.6.2008 RM000
(276) (1,965) (279) (2,520)
Additions Disposals RM000 RM000
Written off RM000
Reclassifications RM000
Reversal of impairment Translation for the year adjustments RM000 RM000
Carrying amount Freehold land Buildings on freehold land Buildings on long term leasehold land Plant and machinery Plant and machinery under hire-purchase and lease Furniture, fittings and counter fixtures Office equipment Renovation Electrical installations Motor vehicles Motor vehicles under hire-purchase and lease Properties under construction 3,002 23,764 4,342 477 420 1,996 367 (420) (617) (275) (11) (74) (686) (143) (173) 61 126 3,002 22,929 5,628 597
9,488 2,825 1,174 333 21
10,140 1,343 1,810 190 483
(17) (16) (3) -
(162) (8) (115) -
74 343 (339) (7) 3 56
(6,224) (971) (1,019) (98) (46)
(22) 1 (18) (6)
74 13,546 2,835 1,822 428 508
2,640 48,066
1,302 2,634 20,685
(20) (1,093)
(571)
(56) -
(1,058) (10,418)
61
49 130
2,857 2,634 56,860
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7.
PROPERTY, PLANT AND EQUIPMENT (contd) Group Cost RM000 Freehold land Buildings on freehold land Buildings on long term leasehold land Plant and machinery Plant and machinery under hire-purchase and lease Furniture, fittings and counter fixtures Office equipment Renovation Electrical installations Motor vehicles Motor vehicles under hire-purchase and lease Properties under construction 3,002 27,148 9,028 2,308 123 31,205 9,565 4,406 717 1,904 5,698 2,913 98,017 Company Balance as at 1.7.2008 RM000 At 30.6.2008 Accumulated Accumulated depreciation impairment RM000 RM000 (3,943) (1,394) (1,711) (49) (17,659) (6,730) (2,584) (289) (1,396) (2,841) (38,596) (276) (2,006) (279) (2,561) Depreciation charge for the year RM000 Carrying amount RM000 3,002 22,929 5,628 597 74 13,546 2,835 1,822 428 508 2,857 2,634 56,860 Balance as at 30.6.2009 RM000
Additions RM000
Carrying amount Freehold land Buildings on freehold land Furniture, fixtures and fittings Office equipment Renovation Electrical installations Motor vehicles Motor vehicles under hire-purchase 2,530 13,865 124 95 230 45 5 1,153 18,047 30 154 1,145 1,329 (341) (36) (30) (123) (11) (173) (352) (1,066) At 30.6.2009 Accumulated depreciation RM000 (3,556) (263) (119) (519) (41) (174) (957) (5,629) 2,530 13,524 88 95 261 34 977 801 18,310
Cost RM000 Freehold land Buildings on freehold land Furniture, fixtures and fittings Office equipment Renovation Electrical installations Motor vehicles Motor vehicles under hire-purchase 2,530 17,080 351 214 780 75 1,151 1,758 23,939
Carrying amount RM000 2,530 13,524 88 95 261 34 977 801 18,310
95
7.
PROPERTY, PLANT AND EQUIPMENT (contd) Company Balance as at 1.7.2007 RM000 Depreciation charge for the year RM000 Balance as at 30.6.2008 RM000
Additions RM000
Carrying amount Freehold land Buildings on freehold land Furniture, fixtures and fittings Office equipment Renovation Electrical installations Motor vehicles Motor vehicles under hire-purchase 2,530 14,207 160 80 320 56 549 17,902 36 63 6 856 961 (342) (36) (21) (153) (11) (1) (252) (816) At 30.6.2008 Accumulated depreciation RM000 (3,215) (227) (89) (396) (30) (1) (605) (4,563) 2,530 13,865 124 95 230 45 5 1,153 18,047
Cost RM000 Freehold land Buildings on freehold land Furniture, fixtures and fittings Office equipment Renovation Electrical installations Motor vehicles Motor vehicles under hire-purchase 2,530 17,080 351 184 626 75 6 1,758 22,610
Carrying amount RM000 2,530 13,865 124 95 230 45 5 1,153 18,047
(a) During the financial year, the Group and the Company made the following cash payments to purchase property, plant and equipment: Group 2009 RM000 Purchase of property, plant and equipment Financed by hire-purchase and lease arrangements Financed by term loan Transfer from related companies Trade-in value Cash payments on purchase of property, plant and equipment 26,375 (80) (8,972) (161) 17,162 2008 RM000 20,685 (1,128) 19,557 Company 2009 2008 RM000 RM000 1,329 (200) 1,129 961 (670) 291
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7.
PROPERTY, PLANT AND EQUIPMENT (contd) (b) As at financial year end, the carrying amount of property, plant and equipment under hire-purchase and lease arrangements of the Group and of the Company are as follows: Group 2009 RM000 Plant and machinery Motor vehicles 49 1,612 1,661 2008 RM000 74 2,857 2,931 Company 2009 2008 RM000 RM000 801 801 1,153 1,153
Details of the terms and conditions of the hire-purchase and lease arrangements are disclosed in Notes 22 and 37 to the financial statements respectively. (c) Net book value of property, plant and equipment pledged as securities for banking facilities granted to the Group and to the Company are as follows: Group Company 2009 2008 2009 2008 RM000 RM000 RM000 RM000 Freehold land Buildings on freehold land Buildings on long term leasehold leasehold land 3,002 32,645 3,119 38,766 8. INVESTMENT PROPERTIES Group Balance as at 1.7.2008 RM000 Fair value adjustment RM000 Balance as at 30.6.2009 RM000 3,002 22,724 3,770 29,496 2,530 13,524 16,054 2,530 13,865 16,395
Additions RM000
Fair value Freehold land, shoplots and clubhouse Long term leasehold land and shoplots 6,371 3,486 9,857 Group Balance as at 1.7.2007 RM000 6 2,080 2,086 184 184 6,377 5,750 12,127 Balance as at 30.6.2008 RM000
Additions RM000
Fair value adjustment RM000
Fair value Freehold land, shoplots and clubhouse Long term leasehold land and shoplots 4,498 3,460 7,958 1,373 1,373 500 26 526 6,371 3,486 9,857
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8.
INVESTMENT PROPERTIES (contd) The fair value of the investment properties of the Group was recommended by the Directors as at year end based on an indicative market value carried out by an independent professional valuer on an open market value basis. Investment properties of the Group with an aggregate carrying amount of RM12,127,000 (2008: RM9,857,000) are charged to a financial institution for banking facilities granted to a subsidiary. Rental income of the Group derived from the investment properties amounted to RM381,000 (2008: RM454,000). Direct operating expenses arising from investment properties generating rental income during the financial year are as follows: 2009 RM000 Repairs and maintenance Quit rent and assessment 19 38 Group 2008 RM000 15 31
9.
PREPAID LEASE PAYMENTS FOR LAND Group Balance as at 1.7.2008 RM000 Amortisation charge for the year RM000 Balance as at 30.6.2009 RM000
Disposal RM000
Carrying amount Long term leasehold land 606 (380) (7) At 30.6.2009 Accumulated depreciation RM000 (58) Reversal of impairment for the year RM000 219
Cost RM000 Long term leasehold land 277
Carrying amount RM000 219
Group
Amortisation charge for the year RM000
Carrying amount Long term leasehold land 609 (7) 4 606
Cost RM000 Long term leasehold land 714
At 30.6.2008 Accumulated Accumulated amortisation impairment RM000 RM000 (73) (35)
Carrying amount RM000 606
The long term leasehold land has been charged to a financial institution for banking facilities granted to the Group.
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10. INTANGIBLE ASSETS Group Balance as at 1.7.2008 RM000 Amortisation charge for the year RM000 Balance as at 30.6.2009 RM000
Additions RM000
Carrying amount Goodwill Trademarks 4,871 7 4,878 4,871 7 4,878
Cost RM000 Goodwill Trademarks 10,612 1,020 11,632 Group Balance as at 1.7.2007 RM000
At 30.6.2009 Accumulated Accumulated amortisation impairment RM000 RM000 (1,013) (1,013) (5,741) (5,741) Amortisation charge for the year RM000
Carrying amount RM000 4,871 7 4,878 Balance as at 30.6.2008 RM000
Additions RM000
Carrying amount Goodwill Trademarks 4,871 5 4,876 4 4 (2) (2) 4,871 7 4,878
Cost RM000 Goodwill Trademarks 10,612 1,020 11,632
At 30.6.2008 Accumulated Accumulated amortisation impairment RM000 RM000 (1,013) (1,013) (5,741) (5,741)
Carrying amount RM000 4,871 7 4,878
(a) Goodwill is tested for impairment on an annual basis by comparing the carrying amount with the recoverable amount. As the Directors are of the opinion that all the cash generating units (CGU) are held on a long-term basis, the value-inuse would best reflect its recoverable amount. The value-in-use is determined by discounting future cash flows over a three-year period. The future cash flows are based on managements business plan, which is the best estimate of future performance. The ability to achieve the business plan targets is a key assumption in determining the recoverable amount for each CGU.
99
10. INTANGIBLE ASSETS (contd) There remains a risk that the ability to achieve managements business plan will be adversely affected due to unforeseen changes in the respective economies in which the CGUs operate and/or global economic conditions. Hence, in computing the value-in-use for each CGU, the management has applied a discount rate of 5% per annum and growth rates of 5% to 15% per annum depending on the products, markets and business plan of the subsidiaries. The following describes each key assumption on which the management has based its cash flow projections for the purposes of the impairment test for goodwill: (i) (ii) The discount rate was estimated based on the Groups weighted average cost of capital. Growth rate used has been based on historical trend of each segment taking into account industry outlook for that segment.
(iii) The profit margin applied to the projections are based on the historical profit margin trend for the individual CGU. With regard to the assessment of value-in-use of the goodwill, the management believes that no reasonably possible change in any of the above key assumptions would cause the carrying values of the CGU to materially exceed their recoverable amounts. (b) Trademarks represent the registration cost of Bonia, Sembonia and Carlo Rino brands. 11. INVESTMENTS IN SUBSIDIARIES Company 2009 2008 RM000 RM000 Unquoted shares - at cost Less: Impairment losses 70,796 (6,550) 64,246 56,288 (850) 55,438
An impairment loss on investments in subsidiaries amounting RM5,700,000 have been recognised during the financial year due to declining business operations and the net tangible assets of these subsidiaries are lower than the cost of investments. The details of the subsidiaries are as follows: Country of incorporation Interest in equity held 2009 2008 % %
Name of company
Principal activities
Subsidiaries of Bonia Corporation Berhad CB Marketing Sdn Bhd Malaysia 100 100 Designing, promoting and marketing of fashionable leather goods Property investment and management services Property investment Property investment
CB Holdings (Malaysia) Sdn Bhd Ataly Industries Sdn Bhd Luxury Parade Sdn Bhd
Malaysia Malaysia Malaysia
100 100 100
100 100 100
100

11. INVESTMENTS IN SUBSIDIARIES (contd) Country of incorporation Interest in equity held 2009 2008 % %
Name of company
Subsidiaries of Bonia Corporation Berhad (contd) Eclat World Sdn Bhd Malaysia 100 100 Designing, promoting and marketing of fashionable mens footwear Franchising of leather goods and apparels Property development Property development Manufacturing and marketing of leather goods Designing, promoting and marketing of fashionable ladies footwear Marketing and distribution of fashionable leather goods Designing, promoting and marketing of fashionable leather goods Marketing, distribution and export of fashionable goods and accessories Interior design, advertising and promotion General trading and marketing of fashionable goods Marketing and distribution of fashionable goods Wholesaling and retailing of fashionable leather goods and apparels Investment holding Marketing and distribution of mens apparel and accessories
CB Franchising Sdn Bhd BCB Properties Sdn Bhd Pasti Anggun Sdn Bhd Long Bow Manufacturing Sdn Bhd De Marts Marketing Sdn Bhd
Malaysia Malaysia Malaysia Malaysia Malaysia
100 100 70 100 100
100 100 70 100 100
Mcore Sdn Bhd Future Classic Sdn Bhd
Malaysia Malaysia
60 100
60 100
Daily Frontier Sdn Bhd
Malaysia
100
100
Armani Context Sdn Bhd ^* Kin Sheng International Trading Co Limited Banyan Sutera Sdn Bhd * Active World Pte Ltd
Malaysia Hong Kong Malaysia Singapore
100 100 100
100 100 90 100
*# Kin Sheng Group Limited Dominion Directions Sdn Bhd
Hong Kong Malaysia
100 100
100 100
101
Name of company
Subsidiaries of Bonia Corporation Berhad (contd) SBFW Marketing Sdn Bhd Malaysia 100 100 Designing, promoting and marketing of fashionable ladies footwear Designing, promoting and marketing of fashionable leather goods Franchising of leather goods and apparels Designing, promoting and marketing of fashionable ladies footwear Designing, promoting and marketing of fashionable leather goods Franchising of leather goods and apparels Marketing and distribution of mens apparels Product design, research and development Wholesaling, retailing and marketing of fashionable footwear
SBL Marketing Sdn Bhd
Malaysia
100
100
CR Boutique Sdn Bhd CRF Marketing Sdn Bhd
Malaysia Malaysia
100 100
100 100
CRL Marketing Sdn Bhd
Malaysia
100
100
SB Boutique Sdn Bhd New Series Sdn Bhd Mcolours & Design Sdn Bhd ** SCARPA Marketing Sdn Bhd
Malaysia Malaysia Malaysia Malaysia
100 100 100 100
100 100 100 -
Subsidiaries of Dominion Directions Sdn Bhd VR Directions Sdn Bhd Malaysia 70 70 Marketing and distribution of mens apparel and accessories, and ladies apparel Marketing and distribution of fashionable accessories Marketing and distribution of mens apparels and accessories
SB Directions Sdn Bhd . Galaxy Hallmark Sdn Bhd
Malaysia Malaysia
100 100
100 100
Subsidiary of Mcore Sdn Bhd Apex Marble Sdn Bhd Malaysia 90 60 Marketing and distribution of fashionable goods
102

Name of company Subsidiaries of ActiveWorld Pte Ltd * Jetbest Enterprise Pte Ltd
Singapore
100
100
Wholesaling, retailing, importing and exporting of leather goods and accessories Wholesaling, retailing, importing and exporting of leather goods and accessories Wholesaling, retailing and marketing of fashionable footwear, carrywear and accessories Wholesaling, retailing and marketing of fashionable footwear, carrywear and accessories
^* Guangzhou Jia Li Bao Leather Fashion Co Ltd * SCRL Pte Ltd
China
100
Singapore
100
* SBLS Pte Ltd
Singapore
100
Subsidiaries of Kin Sheng Group Limited *# Bonia (Shanghai) Commerce Limited China 100 100 Retailing, marketing, promoting, designing, importing and exporting of leather goods, apparels and accessories Wholesaling, retailing, importing and exporting of leather goods and accessories Manufacturing, marketing, retailing of fashionable leather goods, apparels and accessories General trading and marketing of fashionable goods
^* Guangzhou Jia Li Bao Leather Fashion Co Ltd * Guangzhou Bonia Fashions China Co Ltd
China
100
China
100
^*# Kin Sheng International Trading Co Limited ^ * # **
Hong Kong
100
Due to internal group reorganisation. Subsidiaries not audited by BDO Binder. Subsidiaries audited by BDO Member Firms. No auditors report on the financial statements of this subsidiary was issued as it was newly incorporated during the financial year.
During the financial year: (i) Kin Sheng Group Limited (KSG), a wholly-owned subsidiary of the Company, had incorporated a wholly-owned subsidiary in China known as Guangzhou Bonia Fashions China Co Ltd. The incorporation of the subsidiary does not have any material impact to the Group financial statements. KSG had acquired the equity interest in Guangzhou Jia Li Bao Leather Fashion Co Ltd (GJLBLF) for a total cash consideration of USD650,000 from Active World Pte Ltd, another wholly-owned subsidiary of the Company. The acquisition of GJLBLF does not have any material impact to the Group financial statements.
(ii)
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11. INVESTMENTS IN SUBSIDIARIES (contd) During the financial year: (contd) (iii) Active World Pte Ltd, a wholly-owned subsidiary, had incorporated two wholly-owned subsidiaries in Singapore known as SCRL Pte Ltd and SBLS Pte Ltd. The incorporation of the subsidiaries does not have any material impact to the Group financial statements. (iv) the Company had transferred its entire equity interest in Kin Sheng International Trading Co Ltd (KSIT) to KSG for a total cash consideration of HKD10,000. (v) the Company had acquired entire equity interest in Banyan Sutera Sdn Bhd from minority shareholders for a total cash consideration of RM1.00. (vi) a wholly-owned subsidiary, Mcore Sdn Bhd, had acquired 150,000 ordinary shares of RM1.00 each representing 30% equity interest in Apex Marble Sdn Bhd from a minority shareholder for a total cash consideration of RM1.00. (vii) the Company incorporated a wholly-owned subsidiary in Malaysia known as SCARPA Marketing Sdn Bhd. The incorporation of the subsidiary does not have any material impact to the Group financial statements. (viii) the Company further subscribed 1,500,001 and 1,500,001 newly issued shares of RM1.00 each at par in Long Bow Manufacturing Sdn Bhd and Banyan Sutera Sdn Bhd respectively. (ix) the Company further subscribed 2,150,001 newly issued shares of RM1.00 each at par in CB Holdings (Malaysia) Sdn Bhd. (x) the Company further subscribed 2,250,001 newly issued shares of RM1.00 each at par in Eclat World Sdn Bhd. (xi) the Company further subscribed 2,400,001 newly issued shares of RM1.00 each at par in Armani Context Sdn Bhd. (xii) the Company further subscribed 9,999,999 newly issued shares of HKD1.00 each at par in KSG. In the previous financial year: (i) the Company incorporated a wholly-owned subsidiary, Kin Sheng Group Limited (KSGL) in Hong Kong, with a registered share capital of HKD10,000,000 comprising 10,000,000 ordinary shares of HKD1.00 each, of which one (1) share has been issued and fully paid-up. The incorporation of the subsidiary does not have any material impact to the Group financial statements. a wholly-owned subsidiary, KSGL had incorporated a wholly-owned subsidiary in the Peoples Republic of China known as Bonia (Shanghai) Commerce Limited, with an authorised share capital of RMB5,000,000 of which RMB4,983,588 have been paid-up as at year end. The incorporation of the subsidiary does not have any material impact to the Group financial statements.
(ii)
(iii) the Company further subscribed 400,000 newly issued ordinary shares of RM1.00 each at par in each of the following respective companies: (a) (b) (c) (d) (e) (f) SBL Marketing Sdn Bhd SB Boutique Sdn Bhd SBFW Marketing Sdn Bhd CRF Marketing Sdn Bhd CRL Marketing Sdn Bhd CR Boutique Sdn Bhd
(iv) the Company further subscribed 500,000 newly issued ordinary shares of RM1.00 each at par in Banyan Sutera Sdn Bhd. (v) the Company further subscribed 499,998 newly issued ordinary shares of RM1.00 each at par in New Series Sdn Bhd.
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12. INVESTMENTS IN ASSOCIATES Group 2009 RM000 Unquoted equity shares, at cost Share of post acquisition reserves, net of dividends received 236 (163) 73 The details of the associates are as follows: Interest in equity held by the Company 2009 2008 % % 40 49 40 49 2008 RM000 236 (11) 225 Company 2009 2008 RM000 RM000 236 236 236 236
Name of company Makabumi Sdn Bhd BBA International Co Ltd
Country of incorporation Malaysia Thailand
Principal activities Dormant Marketing and distribution of fashionable leather goods
The financial statements of the above associates are coterminous with those of the Group, except for BBA International Co Ltd which has a financial year end of 30 September 2009. In applying the equity method of accounting, the unaudited financial statements of BBA International Co Ltd for the twelve (12) months ended 30 June 2009 have been used. The summarised financial information of the associates are as follows: 2009 RM000 Assets and liabilities Current assets Non-current assets Total assets Current liabilities Current liabilities Total liabilities Results Revenue (Loss)/Profit for the year 1,689 (309) 2,259 79 883 883 2,033 2,033 1,350 37 1,387 2,790 40 2,830 2008 RM000
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13. OTHER INVESTMENTS Group 2009 RM000 At cost Unquoted: Non-current assets Club memberships Current assets Subordinated bonds Less: Impairment loss 3,000 (3,000) 596 3,000 3,000 3,590 3,000 (3,000) 3,000 3,000 3,000 596 590 2008 RM000 Company 2009 2008 RM000 RM000
The investment in unquoted subordinated bonds is in relation to the term loan VI as disclosed in Note 23 to the financial statements. It is required to be held until the maturity of the said term loan. As at financial year end, an impairment loss on unquoted subordinated bonds of RM3,000,000 has been recognised due to the default by obligors in the Primary Collateralised Loan Obligations Transactions. The Directors have reviewed the recoverability of these unquoted subordinated bonds and are doubtful of its recoverability. 14. DEFERRED TAX (a) The deferred tax assets and liabilities are made up of the following: Group 2009 RM000 Balance as at 1 July 2008/2007 Recognised in the income statement (Note 31) Balance as at 30 June 2009/2008 Presented after appropriate offsetting as follows: Group 2009 RM000 Deferred tax assets, net Deferred tax liabilities, net (1,361) 235 (1,126) 2008 RM000 (1,530) 316 (1,214) Company 2009 2008 RM000 RM000 24 24 9 9 (1,214) 88 (1,126) 2008 RM000 (739) (475) (1,214) Company 2009 2008 RM000 RM000 9 15 24 8 1 9
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14. DEFERRED TAX (contd) (b) The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows: Deferred tax liabilities of the Group Property, plant and equipment RM000 At 1 July 2008 Recognised in the income statement At 30 June 2009 At 1 July 2007 Recognised in the income statement At 30 June 2008 Deferred tax assets of the Group Unused tax losses and unabsorbed capital allowances RM000 At 1 July 2008 Recognised in the income statement At 30 June 2009 At 1 July 2007 Recognised in the income statement At 30 June 2008 Deferred tax liabilities of the Company Other deductible temporary differences RM000 At 1 July 2008 Recognised in the income statement At 30 June 2009 At 1 July 2007 Recognised in the income statement At 30 June 2008 9 15 24 13 (4) 9 236 (3) 233 229 7 236 Other deductible temporary differences RM000 1,432 (177) 1,255 865 567 1,432 454 (92) 362 355 99 454 Offsetting RM000 (138) 11 (127) (114) (24) (138) Total RM000 316 (81) 235 241 75 316
Offsetting RM000 (138) 11 (127) (114) (24) (138)
Total RM000 1,530 (169) 1,361 980 550 1,530
Total RM000 9 15 24 13 (4) 9
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14. DEFERRED TAX (contd) (b) The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows: (contd) Deferred tax assets of the Company Other deductible temporary differences RM000 At 1 July 2007 Recognised in the income statement At 30 June 2008 5 (5) -
Total RM000 5 (5) -
(c) The amount of temporary differences for which no deferred tax assets have been recognised in the balance sheet are as follows: Group 2009 RM000 Unused tax losses Unabsorbed capital allowances Other deductible temporary differences 7,497 114 507 8,118 2008 RM000 5,307 827 247 6,381
Deferred tax assets of certain subsidiaries have not been recognised in respect of these items as it is not probable that taxable profit of the subsidiaries will be available against which the deductible temporary differences can be utilised. 15. INVENTORIES Group 2009 RM000 At cost Raw materials Work-in-progress Finished goods Consumables 3,885 989 55,661 150 60,685 The inventories of the Group is net of inventories written off of RM187,000 (2008: RM265,000). 3,197 685 54,605 136 58,623 2008 RM000
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16. TRADE AND OTHER RECEIVABLES Group 2009 RM000 Trade receivables Third parties Less: Allowance for doubtful debts Other receivables, deposits and prepayments Amounts owing by subsidiaries Amount owing by an associate Other receivables Deposits Prepayments Less: Allowance for doubtful debts 36,263 (211) 36,052 192 2,113 10,583 3,934 16,822 (4,053) 12,769 48,821 2008 RM000 41,983 (1,215) 40,768 190 3,419 10,007 4,541 18,157 (4,241) 13,916 54,684 Company 2009 2008 RM000 RM000 40,991 192 10 41,193 (11,274) 29,919 29,919 55,999 190 10 138 56,337 (12,444) 43,893 43,893
(a) Trade receivables are non-interest bearing and the normal trade credit terms granted by the Group and by the Company range from 30 to 120 days. (b) The allowance for doubtful debts for trade receivables of the Group is net of bad debts written off of RM1,136,000 (2008: Nil). (c) The amounts owing by subsidiaries are unsecured, interest-free and payable upon demand. In the previous financial year, the advances from the Company to subsidiaries amounting to RM18,193,421 bore interest at 7.25% per annum. (d) The amount owing by an associate is unsecured, interest-free and payable upon demand. (e) The allowance for doubtful debts for other receivables, deposits and prepayments of the Group is net of bad debts written off of RM29,000 (2008: RM60,000). (f) Included in the deposits of the Group is a deposit of RM3,500,000 (2008: RM3,500,000) paid to a third party pursuant to a joint venture agreement entered between a subsidiary and a third party.
(g) Information on the financial risk of trade and other receivables is disclosed in Note 37 to the financial statements. (h) The currency exposure profile of receivables are as follows: Group 2009 RM000 Ringgit Malaysia Brunei Dollar Chinese Renminbi European Euro Hong Kong Dollar Singapore Dollar US Dollar 32,500 46 2,118 428 422 10,663 2,644 48,821 2008 RM000 38,299 9 599 338 601 10,356 4,482 54,684 Company 2009 2008 RM000 RM000 21,763 8,156 29,919 40,828 3,065 43,893
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17. CASH AND CASH EQUIVALENTS Group 2009 RM000 Cash in hand and at banks Fixed deposits with licensed banks Short term placements with licensed banks Placements with licensed banks 11,169 5,944 13,430 13,595 44,138 2008 RM000 16,902 4,105 6,700 40,290 67,997 Company 2009 2008 RM000 RM000 64 64 21 25,201 25,222
(a) Included in the fixed deposits with licensed banks of the Group is an amount of RM1,203,000 (2008: RM1,172,000) pledged to licensed banks as securities for banking facilities granted to certain subsidiaries. (b) Placements with licensed banks represent monies deposit into the fixed income fund which is not restricted to fixed maturity date. (c) Information on financial risks of cash and cash equivalents is disclosed in Note 37 to the financial statements. (d) The currency exposure profile of cash and cash equivalents are as follows: Group 2009 RM000 Ringgit Malaysia Chinese Renminbi Hong Kong Dollar Singapore Dollar US Dollar Others 31,183 1,274 583 9,280 1,753 65 44,138 2008 RM000 54,217 2,538 793 10,293 40 116 67,997 Company 2009 2008 RM000 RM000 64 64 25,222 25,222
(e) For the purpose of cash flow statements, cash and cash equivalents comprise the following as at the balance sheet date: Group 2009 RM000 Cash and bank balances Fixed deposits with licensed banks Short term placements with licensed banks Placements with licensed banks Less: Bank overdrafts included in bank borrowings (Note 21) Less: Fixed deposits pledged to licensed banks 11,169 5,944 13,430 13,595 (3,594) 40,544 (1,203) 39,341 2008 RM000 16,902 4,105 6,700 40,290 (2,183) 65,814 (1,172) 64,642 Company 2009 2008 RM000 RM000 64 (68) (4) (4) 21 25,201 (58) 25,164 25,164
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18. NON-CURRENT ASSET CLASSIFIED AS HELD FOR SALE Group 2009 RM000 Freehold land 2008 RM000 4,400
In the previous financial years, a subsidiary, Pasti Anggun Sdn. Bhd. (PASB) had signed a letter of intent to dispose its freehold land to a third party for a cash consideration of RM4,400,000. The disposal was completed during the current financial year. 19. SHARE CAPITAL Group and Company 2009 Number of shares 000 Ordinary shares of RM0.50 each: Authorised Issued and fully paid Balance as at 1 July 2008/2007 Issue of shares arising from the exercise of Warrants 2005/2008 Balance as at 30 June 2009/2008 a) 201,571 201,571 100,786 100,786 195,843 5,728 201,571 97,922 2,864 100,786 500,000 250,000 500,000 250,000 RM000 Number of shares 000 2008 RM000
In the previous financial year, the Company increased its issued and paid up share capital from RM97,921,852 to RM100,785,925 by way of issuance of 5,728,146 new ordinary shares of RM0.50 each for cash at an exercise price of RM0.50 per share, by virtue of the exercise of Warrant 2005/2008.
(b) The holders of the ordinary shares are entitled to receive dividends as and when declared by the Company and are entitled to one vote per share at meetings of the Company. All ordinary shares rank pari passu with regard to the Companys residual assets. Warrant 2005/2008 Pursuant to a deed poll dated 8 March 2005 (Deed Poll), the Company had a renounceable rights issue of 20,933,500 3-year Warrants 2005/2008 (Warrants). The Warrants were granted for listing and quotation with effect from 25 May 2005 and expired on 24 May 2008. Pursuant to a Supplemental Deed Poll dated 8 March 2007, as a result of bonus issue and share split exercises, the Warrants have increased to 30,554,229. In the previous financial year, the numbers of Warrants exercised and unexercised were 5,728,146 and 131,648 respectively. The salient features of the Warrants as per the Deed Poll and the Supplemental Deed Poll are as follows: (a) Each Warrant entitles the registered holders at any time during the exercise period to subscribe for one (1) new ordinary share of RM1.00 each in the Company at an exercise price of RM1.00 per ordinary share before the share split and to subscribe for one (1) new ordinary share of RM0.50 each in the Company at an exercise price of RM0.50 per ordinary share after the share split;
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19. SHARE CAPITAL (contd) Warrant 2005/2008 (contd) (b) The exercise price and the number of Warrants are subject to adjustment in the event of alteration to the share capital of the Company in accordance with the conditions provided in the Deed Poll; (c) The Warrants shall be exercisable at any time within the period commencing from and including the date of issue of the Warrants and ending on the date preceding the third (3rd) anniversary of the date of issuance of the Warrants; and (d) At the expiry of the exercise period, any Warrants which has not been exercised will lapse and cease to be valid for any purposes. 20. RESERVES Group 2009 RM000 Non-distributable Share premium Exchange translation reserve Distributable Retained earnings 476 2,562 3,038 73,653 76,691 (a) Exchange translation reserve The exchange translation reserve is used to record foreign currency exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Groups presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Groups net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation. (b) Retained earnings Effective 1 January 2008, the Company is given the option to make an irrevocable election to move to a single tier system or continue to use its tax credit under Section 108 of the Income Tax Act 1967 for the purpose of dividend distribution until the tax credit is fully utilised or latest by 31 December 2013. The Company has decided not to make this election and has sufficient tax credit under Section 108 of the Income Tax Act, 1967 and balance in the tax exempt account to frank its entire retained profits as at 30 June 2009 as dividends without incurring any additional tax liability. The Company has tax exempt accounts amounting to approximately RM6,403,000 (2008: RM6,403,000) available for distribution of tax exempt dividends. Certain subsidiaries have tax exempt accounts amounting to approximately RM3,417,000 (2008: RM3,159,000) available for distribution of tax exempt dividends out of their respective retained profits. 476 2,229 2,705 60,604 63,309 476 476 10,403 10,879 476 476 14,168 14,644 2008 RM000 Company 2009 2008 RM000 RM000
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21. BORROWINGS Group Note Current liabilities Secured Bank overdrafts Bankers acceptances Hire-purchase and lease creditors Term loans Unsecured Bank overdrafts Bankers acceptances Term loans Trust receipts 3,300 17,121 874 21,295 Total Non-current liabilities Secured Hire-purchase and lease creditors Term loans Total Total borrowings Bank overdrafts Bankers acceptances Hire-purchase and lease creditors Term loans Trust receipts 17 22 23 3,594 17,504 2,001 14,978 874 38,951 2,183 24,247 2,877 36,810 1,052 67,169 68 696 764 58 981 30,000 31,039 22 23 1,277 14,299 15,576 2,007 6,276 8,283 398 398 696 696 23,375 1,528 17,972 30,000 1,052 50,552 58,886 366 30,000 30,000 30,343 294 383 724 679 2,080 655 6,275 870 534 8,334 68 298 366 58 285 343 2009 RM000 2008 RM000 Company 2009 2008 RM000 RM000
22 23
23
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21. BORROWINGS (contd) (a) Certain bank overdrafts and bankers acceptances of the Group and of the Company are secured by first fixed charges over certain freehold and long term leasehold land and buildings of the Company and its subsidiaries as disclosed in Notes 7, 8 and 9 to the financial statements. (b) Trust receipt of the Group is secured by a corporate guarantee from the Company. (c) The currency exposure profile of borrowings are as follows: Group 2009 RM000 Ringgit Malaysia Singapore Dollar 35,838 3,113 38,951 2008 RM000 63,748 3,421 67,169 Company 2009 2008 RM000 RM000 764 764 31,039 31,039
(d) Information on financial risks of borrowings is disclosed in Note 37 to the financial statements. 22. HIRE-PURCHASE AND LEASE CREDITORS Group 2009 RM000 Minimum hire-purchase and lease payments: - not later than one (1) year - later than one (1) year and not later than five (5) years - later than five (5) years Less: Future interest charges Present value of hire-purchase and lease payments Repayable as follows: Current liabilities: - not later than one (1) year Non-current liabilities: - later than one (1) year and not later than five (5) years - later than five (5) years 724 1,277 1,277 2,001 870 1,958 49 2,007 2,877 298 398 398 696 285 696 696 981 817 1,384 2,201 (200) 2,001 2008 RM000 996 2,147 50 3,193 (316) 2,877 Company 2009 2008 RM000 RM000 322 419 741 (45) 696 322 741 1,063 (82) 981
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23. TERM LOANS Group 2009 RM000 Secured Term loan I is repayable by 96 equal monthly installments of RM10,665 each commencing August 2005 Term loan II is repayable as follows: - 12 equal monthly installments of RM48,652 each commencing January 2006 - 12 equal monthly installments of RM50,216 each commencing January 2007 - 12 equal monthly installments of RM52,585 each commencing January 2008 - 108 equal monthly installments of RM54,461 each commencing January 2009 Term loan III is repayable by 300 equal monthly installments of SGD3,286 (RM7,885) each commencing January 2006 Term loan IV is repayable as follows: - 180 equal monthly installments of RM26,307 each commencing October 2009 Term loan V is repayable as follows: - 24 equal monthly installments of RM70,000 each commencing November 2010 - 36 equal monthly installments of RM80,000 each commencing November 2012 - 36 equal monthly installments of RM111,710 each commencing November 2015 508 2008 RM000 Company 2009 2008 RM000 RM000
4,280 1,612
4,661 1,641
3,187
5,899 14,978
6,810
Unsecured Term loan VI is repayable by 1 repayment of RM30,000,000 at the end of 5 years from 3 June 2004 14,978 30,000 36,810 30,000 30,000
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23. TERM LOANS (contd) Group 2009 RM000 Repayable as follows: Current liabilities: - within one (1) year Non-current liabilities: - more than one (1) year and less than five (5) years - more than five (5) years 679 4,262 10,037 14,299 14,978 30,534 6,276 6,276 36,810 30,000 30,000 2008 RM000 Company 2009 2008 RM000 RM000
Term loan I is secured by means of legal charge over long term leasehold land and buildings of a subsidiary and guaranteed by the Company. The term loan I was fully settled during the financial year. Term loans II, III, IV and V are secured by means of legal charge over freehold land and buildings of subsidiaries and guaranteed by the Company. Term loan VI is unsecured and obtained from a financial institution where a condition is imposed on the Company to subscribe for the subordinated bonds issued pursuant to the Primary Collateralised Loan Obligations Transactions and shall be limited to 10% of the principal amount of the term loan (Note 13). The subordinated bonds are unquoted and are to be held until the maturity of the term loan. The term loan VI was fully settled during the financial year. There are no fixed repricing periods for these loans. 24. TRADE AND OTHER PAYABLES Group 2009 RM000 Trade payables Third parties Other payables, deposits and accruals Amounts owing to subsidiaries Other payables Deferred income Deposits Accruals 10,403 3,300 1,070 8,191 12,561 22,964 2008 RM000 12,229 3,434 8 1,238 10,767 15,447 27,676 Company 2009 2008 RM000 RM000 277 176 1,046 1,499 1,499 87 547 14 648 648
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24. TRADE AND OTHER PAYABLES (contd) (a) Trade payables are non-interest bearing and the normal credit terms granted to the Group range from 30 to 90 days. (b) Information on the financial risks of trade and other payables is disclosed in Note 37 to the financial statements. (c) The currency exposure profile of payables are as follows: Group 2009 RM000 Ringgit Malaysia Chinese Renminbi European Euro Hong Kong Dollar Singapore Dollar US Dollar 16,215 974 1 368 5,016 390 22,964 25. COMMITMENTS (a) Operating lease commitments The Group had entered into non-cancellable lease arrangements for boutiques, offices and staff housing, resulting in future rental commitments. The Group has aggregate future minimum lease commitments as at the balance sheet as follows: Group 2009 RM000 Not later than one (1) year Later than one (1) year and not later than five (5) years 15,927 12,797 28,724 2008 RM000 14,367 14,345 28,712 2008 RM000 19,609 926 16 463 6,375 287 27,676 Company 2009 2008 RM000 RM000 1,499 1,499 648 648
Certain lease rental are subject to contingent rental which are determined based on a percentage of sales generated from boutiques. (b) Capital commitments Group 2009 RM000 Approved and contracted for: Property, plant and equipment: - properties under construction - others 2,439 7,242 9,681 12,584 6,226 18,810 2008 RM000
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26. CONTINGENT LIABILITIES Company - Unsecured As at 30 June 2009, the Company has given corporate guarantees amounting to RM122,000,000 (2008: RM123,740,000) to financial institutions for banking facilities granted to and utilised by certain subsidiaries. 2009 RM000 The amount of banking facilities utilised by the subsidiaries as at the financial year end: - secured borrowings - unsecured borrowings 16,535 22,535 39,070 27. REVENUE Group 2009 RM000 Sale of goods Rental income Dividend income from unquoted investments in subsidiaries (gross) 314,510 381 314,891 28. COST OF SALES Group 2009 RM000 Inventories sold 135,763 2008 RM000 120,427 2008 RM000 299,735 454 300,189 Company 2009 2008 RM000 RM000 2,089 20,045 22,134 2,222 33,825 36,047 2008 RM000 13,740 20,494 34,234
29. FINANCE COSTS Group 2009 RM000 Bank charges Credit card charges Genting World Card charges Interest expense on: - bank guarantee - bank overdrafts - bankers acceptances - hire-purchase and lease - term loans - trust receipts - others 926 483 11 24 152 997 138 2,441 69 9 5,250 2008 RM000 731 385 12 289 645 137 2,736 104 12 5,051 Company 2009 2008 RM000 RM000 22 1 1 37 1,938 1,999 10 11 29 2,376 2,426
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30. PROFIT BEFORE TAX Group Note Profit before tax is arrived at after charging: Allowance for doubtful debts: - trade - non trade Amortisation of trademark Amortisation of prepaid lease payments for land Auditors remuneration: - Statutory - Auditors of the ultimate holding company: - current year - under provision in prior years - Other auditors: - current year - under/(over) provision in prior years - Non statutory Bad debts written off Depreciation of property, plant and equipment Directors remuneration: - Fees - payable by the Company - payable by subsidiaries - Emoluments other than fees - payable by the Company - payable by subsidiaries Impairment loss on investment in a subsidiaries Impairment loss on subordinated bonds Inventories written off Lease of office equipment Loss on disposal of a subsidiary Property, plant and equipment written off Realised loss on foreign currency transactions Rental of premises Unrealised loss on foreign currency translation And after crediting: Allowance for doubtful debts no longer required Fair value adjustments on investment properties Gain on disposal of prepaid lease payments for land Gain on disposal of property, plant and equipment Interest income from: - fixed deposits with licensed banks - short term placements with licensed banks - subsidiaries - others Profit received from trust fund accounts Realised gain on foreign currency transactions Rental income 8 180 184 59 282 111 116 139 837 726 50 526 489 105 181 17 774 214 45 1,172 31 302 119 443 102 136 1,316 430 132 21 7 1,786 2 7 2 9,227 2009 RM000 2008 RM000 Company 2009 2008 RM000 RM000
10 9
216 152 5 22 6 12,958 306 215 1,825 1,230 3,000 187 41 300 240 20,156 -
213 16 138 (3) 14 10,418 306 386 73 2,182 265 31 571 186 14,697 305
25 5 1,066 306 1,825 5,700 3,000 3 -
25 4 5 816 306 73 112
13 15 7
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30. PROFIT BEFORE TAX (contd) Group Note And after crediting: (contd) Reversal of impairment losses on prepaid lease payments for land Reversal of impairment losses on property, plant and equipment Unrealised gain on foreign currency translation 31. TAX EXPENSE Group 2009 RM000 Current tax expense based on profit for the financial year: Malaysian income tax Foreign income tax 7,582 482 8,064 Under/(Over) provision in prior years: Malaysian income tax Foreign income tax 292 9 8,365 Deferred tax (Note 14) Relating to origination and reversal of temporary difference Relating to changes in tax rates (Over)/Under provision in prior years 573 (485) 88 8,453 2008 RM000 9,301 1,340 10,641 (109) 54 10,586 (397) 12 (90) (475) 10,111 Company 2009 2008 RM000 RM000 3,937 3,937 (95) 3,842 4 11 15 3,857 8,271 8,271 9 8,280 4 (3) 1 8,281 9 7 41 103 4 61 720 2009 RM000 2008 RM000 Company 2009 2008 RM000 RM000
The Malaysian income tax is calculated at the statutory tax rate of 25% (2008: 26%) of the estimated taxable profits for the fiscal year. The Malaysian statutory tax rate has been reduced to 25% from the previous financial years rate of 26% for the fiscal year of assessment 2008. The computation of deferred tax as at 30 June 2009 has reflected these changes. Tax expense for other taxation authorities are calculated at the rates prevailing in those respective jurisdictions.
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31. TAX EXPENSE (contd) The numerical reconciliation between the tax expense and the product of accounting profit multiplied by the applicable tax rates of the Group and of the Company are as follows: Group 2009 RM000 Profit before tax Tax at Malaysian statutory tax rate of 25% (2008: 26%) Tax effect in respect of: Non-allowable expenses Depreciation on non-qualifying property, plant and equipment Lower tax rates in foreign jurisdiction Deferred tax assets not recognised Non-taxable income Tax incentive and allowances Back claim of capital allowances on qualifying assets Effect of changes in tax rate Reduction in statutory tax rate on the first RM500,000 chargeable income for certain subsidiaries (Over)/Under provision in prior years Tax expense for the financial year Tax savings of the Group are as follows: Group 2009 RM000 Arising from utilisation of previously unrecognised tax losses 141 2008 RM000 107 29,515 7,379 1,888 586 (226) 434 (1,199) (224) (1) 8,637 (184) 8,453 2008 RM000 38,334 9,967 1,438 788 (237) 476 (1,402) (112) (193) (2) (467) 10,256 (145) 10,111 Company 2009 2008 RM000 RM000 7,650 1,913 2,200 232 (404) 3,941 (84) 3,857 22,402 5,824 2,573 183 (112) (193) 8,275 6 8,281
The Group has unused tax losses and unabsorbed capital allowances of approximately RM7,497,000 (2008: RM5,307,000) and RM114,000 (2008: RM827,000) respectively. 32. EARNINGS PER ORDINARY SHARE Basic earnings per ordinary share for the financial year is calculated by dividing the profit for the financial year attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the financial year. 2009 Profit attributable to equity holders of the Company (RM000) Weighted average number of ordinary shares in issue (000) Basic earnings per ordinary share (sen) 20,607 201,571 10.22 2008 27,948 198,278 14.10
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33. DIVIDENDS Group and Company 2009 Gross dividend per share Sen Dividends paid: First and final dividend paid in respect of financial year ended 30 June 2008/2007 Special dividend paid in respect of financial year ended 30 June 2008 2.5 2.5 5.0 3,779 3,779 7,558 3 3 4,333 4,333 Amount of dividend net of tax RM000 Gross dividend per share Sen 2008 Amount of dividend net of tax RM000
A first and final dividend of 5% or 2.5 sen per share, less tax of 25%, amounting to RM3,779,472 and a special dividend of 3% or 1.5 sen per share, less tax of 25%, amounting to RM2,267,683 in respect of the current financial year have been proposed by the Directors after the balance sheet date for shareholders approval at the forthcoming Annual General Meeting. The financial statements for the current financial year do not reflect these proposed dividends. These dividends, if approved by members will be accounted for as an appropriation of retained profits in the financial year ending 30 June 2010. 34. EMPLOYEE BENEFITS Group 2009 RM000 Wages, salaries and bonuses Contributions to defined contribution plan Social security contributions Other benefits 38,595 4,323 449 6,040 49,407 35. RELATED PARTY DISCLOSURES (a) Identities of related parties Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities. The Company has controlling related party relationship with its direct and indirect subsidiaries. Related party Cassardi International Co Ltd . Relationship A company in which a major shareholder of VR Directions Sdn Bhd, a subsidiary, Boonnam Boonnamsap has substantial financial interests. 2008 RM000 37,573 4,118 323 5,839 47,853 Company 2009 2008 RM000 RM000 2,367 273 3 47 2,690 371 27 398
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35. RELATED PARTY DISCLOSURES (contd) (a) Identities of related parties (contd) Related party PT Super Prima Long Bow Manufacturing (S) Pte Ltd Bonia International Holdings Pte Ltd Relationship A company in which a Director of Banyan Sutera Sdn Bhd, a subsidiary, Jonto Sunarso has substantial financial interests. A company in which a Director, who is also a major shareholder of the Company has substantial financial interests. A company in which a Director, who is also a major shareholder of the Company has substantial financial interests.
(b) In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had the following transactions with related parties during the year: Group 2009 RM000 Interest income received/receivable from subsidiaries Rental income received/ receivable from subsidiaries Gross dividends received from subsidiaries Management fees paid/payable to subsidiaries Purchases from Cassardi International Co Ltd Royalty paid/payable to: - Cassardi International Co Ltd - Bonia International Holdings Pte Ltd Payment of permitted reimbursement expenses paid to PT Super Prima Sales of goods to: - PT Super Prima - an associate - BBA International Co Ltd Rental expense paid/payable to Long Bow Manufacturing (S) Pte Ltd 439 612 1,398 1,434 2,760 1,379 200 2008 RM000 412 615 571 2,626 4,908 1,340 116 Company 2009 2008 RM000 RM000 302 2,089 20,045 842 1,316 2,222 33,825 906 -
The related party transactions described above were entered into in the normal course of business and have been established under negotiated and mutually agreed terms. (c) Compensation of key management personnel The remuneration of Directors and other key management personnel during the financial year was as follows: Group 2009 RM000 Short term employee benefits Contributions to defined contribution plans 6,707 732 7,439 2008 RM000 6,593 652 7,245 Company 2009 2008 RM000 RM000 2,175 244 2,419 372 27 399
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36. SEGMENT INFORMATION (a) Reporting format The primary segment reporting format is determined to be business segments as the Groups risks and returns are affected predominantly by differences in the products it produces. Secondary information is reported geographically. (b) Business segments The Groups comprises the following main business segments: (i) Retailing Designing, promoting and marketing of fashionable apparels, footwear, accessories and leather goods. (ii) Manufacturing Manufacturing and marketing of fashionable leather goods. (iii) Investment and property development Investment holding and rental and development of commercial properties. (c) Geographical segments The Group operates mainly in Malaysia and Singapore. In determining the geographical segments of the Group, revenue is based on the geographical location of customers. Total assets and capital expenditure are based on the geographical location of assets. The composition of each geographical segment is as follows: (i) (ii) Malaysia : Manufacturing, designing, promoting and marketing of fashionable apparel, footwear, accessories and leather goods, and development of commercial properties.
Singapore : Designing, promoting and marketing of fashionable apparels, footwear, accessories and leather goods.
(d) Allocation basis and inter-segment 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. Inter-segment pricing is based on negotiated terms with the respective related parties. Segment revenue, expenses and results include transfer between business segments. These inter-segment transactions are eliminated on consolidation.
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36. SEGMENT INFORMATION (contd) The following table provides an analysis of the Groups revenue, results, assets, liabilities and other information by business segment: 2009 Retailing RM000 Revenue External sales Inter-segment sales Total Results Profit from operations Finance costs Share of loss of associates Profit before tax Tax expense Profit for the financial year Other information Segment assets Unallocated asset Total assets Segment liabilities Unallocated liabilities Unallocated corporate borrowings Total liabilities Capital expenditure Depreciation on property, plant and equipment Amortisation of prepaid lease payments for land Non-cash expenses other than depreciation and amortisation 12,123 10,550 231 9,000 603 7 340 5,252 1,805 3,075 31,158 8,075 2,167 (18,436) 178,495 22,552 116,539 (76,813) 314,498 314,498 35,508 Manufacturing RM000 12 15,909 15,921 632 Investment and property development RM000 381 9,937 10,318 (16,070) Consolidation RM000 314,891 314,891 34,917 (5,250) (152) 29,515 (8,453) 21,062 240,773 3,989 244,762 22,964 2,298 38,951 64,213 26,375 12,958 7 3,646
Elimination RM000 (25,846) (25,846) 14,847
125
36. SEGMENT INFORMATION (contd) (d) Allocation basis and inter-segment pricing (contd) 2008 Retailing RM000 Revenue External sales Inter-segment sales Total Results Profit from operations Finance costs Share of results of associates Profit before tax Tax expense Profit for the financial year Other information Segment assets Unallocated assets Total assets Segment liabilities Unallocated liabilities Unallocated corporate borrowings Total liabilities Capital expenditure Depreciation on property, plant and equipment Amortisation of prepaid lease payments on land Amortisation of trademarks Non-cash expenses other than depreciation and amortisation 14,046 8,434 2 29 4,679 412 7 240 2,376 1,572 1,191 50,042 5,691 2,359 (30,416) 178,688 14,711 138,439 (70,343) 299,730 299,730 48,734 Manufacturing RM000 5 16,591 16,596 872 Investment and property development RM000 454 9,537 9,991 (9,480) Consolidation RM000 300,189 300,189 43,346 (5,051) 39 38,334 (10,111) 28,223 261,495 3,874 265,369 27,676 3,736 67,169 98,581 21,101 10,418 7 2 1,460
Elimination RM000 (26,128) (26,128) 3,220
(e) The following table provides an analysis of the Groups revenue, segment assets and capital expenditure by geographical segment: Revenue 2009 2008 RM000 RM000 Malaysia Singapore Others 226,342 55,746 32,803 314,891 204,323 55,764 40,102 300,189 Segment assets 2009 2008 RM000 RM000 188,190 39,842 12,741 240,773 208,903 30,956 21,636 261,495 Capital expenditure 2009 2008 RM000 RM000 22,185 2,501 1,689 26,375 17,267 2,506 1,328 21,101
126

37. FINANCIAL INSTRUMENTS (a) Financial risk management objective and policies The Board of Directors recognises the importance of financial risk management in the overall management of the Groups business. A sound risk management system will not only mitigate financial risk but will be able to create opportunities if risk elements are properly managed. The Groups overall financial risk management objective is to ensure that the Group creates value for its shareholders while minimising potential adverse effects on the performance of the Group. Financial risk management is carried out through risk reviews, internal control systems and adherence to the Groups financial risk management policies, set out as follows: (i) Interest rate risk The Groups income and operating cash flow are substantially independent of changes in market interest rates. Interest rate exposure arises from the Groups borrowings and fixed deposits and is managed through the use of fixed and floating rate debts and deposits. The Group does not use derivative financial instruments to hedge its risk. The following table set out the carrying amounts, the weighted average effective interest rate as at the balance sheet date and the remaining maturities of the Groups and the Companys financial instruments that are exposed to interest rate risk:
Weighted average effective interest rate %
Note Group At 30 June 2009 Fixed rate Fixed deposits with licensed banks Hire-purchase and lease creditors Floating rate Short term placements with licensed banks Placements with licensed banks Bank overdrafts Bankers acceptances Trust receipts Term loans
Within 1 year RM000
1 - 2 years RM000
2 - 3 years 3 - 4 years RM000 RM000
More than 4 - 5 years 5 years Total RM000 RM000 RM000
17 22
0.73 5.24
5,944 (724)
(554)
(438)
(235)
(50)
5,944 (2,001)
17 17 21 21 21 23
1.79 2.14 5.91 4.74 5.71 5.97
13,430 13,595 (3,594) (17,504) (874) (679)
(688)
(1,007)
(1,208)
(1,359)
(10,037)
13,430 13,595 (3,594) (17,504) (874) (14,978)
127
37. FINANCIAL INSTRUMENTS (contd) (a) Financial risk management objective and policies (contd) (i) Interest rate risk (contd)
Weighted average effective interest rate %
Note Group At 30 June 2008 Fixed rate Fixed deposits with licensed banks Hire-purchase and lease creditors Floating rate Short term placements with licensed banks Placements with licensed banks Bank overdrafts Bankers acceptances Trust receipts Term loans Company At 30 June 2009 Fixed rate Hire-purchase and lease creditors Floating rate Bank overdrafts At 30 June 2008 Fixed rate Hire-purchase and lease creditors Floating rate Placements with licensed banks Bank overdrafts Term loan
Within 1 year RM000
1 - 2 years RM000
2 - 3 years 3 - 4 years RM000 RM000
More than 4 - 5 years 5 years Total RM000 RM000 RM000
17 22
2.01 5.04
4,105 (870)
(769)
(487)
(427)
(275)
(49)
4,105 (2,877)
17 17 21 21 21 23
2.58 2.89 8.74 4.05 6.34 7.15
6,700 40,290 (2,183) (24,247) (1,052) (30,534)
(509)
(544)
(581)
(594)
(4,048)
6,700 40,290 (2,183) (24,247) (1,052) (36,810)
22
4.29
(298)
(158)
(142)
(98)
(696)
21
7.05
(68)
(68)
22
4.31
(285)
(298)
(158)
(142)
(98)
(981)
17 21 23
1.71 8.75 7.40
25,201 (58) (30,000)
25,201 (58) (30,000)
128

37. FINANCIAL INSTRUMENTS (contd) (a) Financial risk management objective and policies (contd) (ii) Liquidity risk The Group is actively managing its operating cash flow to ensure all commitments and funding needs are met. As part of the overall liquidity management, it is the Groups policy to ensure continuity in servicing its cash obligations in the future by way of forecasting its cash commitments and to maintain sufficient levels of cash or cash equivalents to meet its working capital requirements. In addition, the Group also maintains available banking facilities sufficient to meet its operational needs. (iii) Credit risk Credit risk, which is the risk of counter parties defaulting, is controlled by the application of credit approvals, credit limits and monitoring procedures. Credit evaluations are performed on all customers requiring credit and strictly limiting the Groups associations to parties with high credit worthiness. Trade receivables are monitored on an ongoing basis to ensure that the Group is exposed to minimal credit risk. The Group has no significant concentration of credit risk as at the balance sheet date. The maximum exposures to credit risk are represented by the carrying amounts of the financial assets in the balance sheets. In respect of the deposits, cash and bank balances placed with major financial institutions in Malaysia and Singapore, the Directors believe that the possibility of non performance by these financial institutions is remote on the basis of their financial strength. (iv) Foreign currency exchange risk The Group is exposed to foreign currency exchange risk as a result of the Groups transactions with foreign trade receivables and trade payables. The Group monitors the movement in foreign currency exchange rates closely to ensure their exposures are minimised. (b) Fair values The carrying amounts of the financial instruments of the Group and of the Company as at balance sheet date approximate their fair values except as set out below: Group Company Carrying Fair Carrying Fair Amount value amount Value Note RM000 RM000 RM000 RM000 At 30 June 2009 Non-current unquoted investments Hire-purchase and lease creditors Term loans At 30 June 2008 Non-current unquoted investments Hire-purchase and lease creditors Term loans # 13 22 23 590 (2,877) (36,810) # (2,761) (37,035) (981) (30,000) (962) (30,253) 13 22 23 596 (2,001) (14,978) # (1,969) (14,287) (696) (667) -
It is not practical to estimate the fair value of the long term unquoted investments because of the lack of quoted market prices and the inability to estimate fair value without incurring excessive costs. The Directors believe that the carrying amount will not be significantly different from the recoverable amount.
129
37. FINANCIAL INSTRUMENTS (contd) (b) Fair values (contd) The following methods and assumptions are used to determine the fair value of financial instruments: (i) (ii) The carrying amounts of the financial assets and liabilities maturing within 12 months approximate their fair values due to the relatively short term maturity of these financial instruments issued. The fair value of borrowings is estimated based on the current market rates offered for loans of the similar nature.
38. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (a) On 21 July 2008, Kin Sheng Group Limited (KSG), a wholly-owned subsidiary of the Company, had incorporated a wholly-owned subsidiary in China, which is known as Guangzhou Bonia Fashions Co Ltd. (b) On 23 December 2008, KSG had acquired the entire 100% equity interest in Guangzhou Jia Li Bao Leather Fashion Co Ltd for a total cash consideration of USD650,000 from Active World Pte Ltd, another wholly-owned subsidiary of the Company. (c) On 3 March 2009, Active World Pte Ltd, a wholly-owned subsidiary of the Company, had incorporated a wholly-owned subsidiary in Singapore which is known as SCRL Pte Ltd. (d) On 16 March 2009, Active World Pte Ltd, a wholly-owned subsidiary of the Company, had incorporated a wholly-owned subsidiary in Singapore which is known as SBLS Pte Ltd. (e) On 6 April 2009, the Company had transferred its entire 100% equity interest in Kin Sheng International Trading Co Ltd to KSG for a total cash consideration of HKD10,000. (f) On 4 May 2009, the Company had acquired 100,000 ordinary shares of RM1.00 each representing 10% equity interest in Banyan Sutera Sdn Bhd (BSSB) from a minority shareholder, for a total cash consideration of RM1.00 only. Subsequent to the acquisition, the Company is now holding 100% equity interest in BSSB.
(g) On 1 June 2009, Mcore Sdn Bhd, a 60% owned subsidiary of the Company, had acquired 150,000 ordinary shares of RM1.00 each representing 30% equity interest in Apex Marble Sdn Bhd (AMSB) from a minority shareholder, for a total cash consideration of RM1.00 only. Subsequent to the acquisition, Mcore Sdn Bhd is now holding 90% equity interest in AMSB. (h) On 17 June 2009, the Company had incorporated a wholly-owned subsidiary in Malaysia which is known as SCARPA Marketing Sdn Bhd.
130

39. SIGNIFICANT EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE (a) On 30 July 2009, Mcore Sdn Bhd, a 60% owned subsidiary of the Company, had acquired additional 50,000 ordinary shares of RM1.00 each representing 10% equity interest in Apex Marble Sdn Bhd (AMSB) from a minority shareholder, for a total cash consideration of RM1.00 only. Subsequent to the acquisition, AMSB becomes a wholly-owned subsidiary of Mcore Sdn Bhd. (b) On 6 August 2009, the Company disposed off 24,500 ordinary shares of THB100 each representing 49% equity interest in BBA International Co Ltd, an associate of the Company, for a total cash consideration of THB1,236,139 only. 40. COMPARATIVE FIGURES Certain comparative figures have been reclassified to conform with the current years presentation. As previously reported RM000
As restated RM000 Income statements Selling and distribution expenses General and administrative expenses 85,191 55,263
74,670 65,784
131
analYSiS oF ShareholDinGS
as at 7 October 2009
ANALYSIS OF SHAREHOLDINGS Authorised Share Capital Issued Share Capital Paid-up Share Capital Class of Shares Voting Right Size of Shareholdings Less than 100 100 to 1,000 1,001 to 10,000 10,001 to 100,000 100,001 to less than 5% of issued shares 5% of issued shares and above Total * Negligible : : : : : RM500,000,000 201,571,850 Ordinary Shares RM100,785,925 Ordinary Shares of RM0.50 each 1 Vote per Ordinary Share No. of Shareholders 42 241 1,021 254 53 5 1,616 % 2.60 14.91 63.18 15.72 3.28 0.31 100.00 No. of Shares 1,732 184,990 4,651,070 7,612,494 61,309,074 127,812,490 201,571,850 % * 0.09 2.31 3.78 30.41 63.41 100.00
SUBSTANTIAL SHAREHOLDERS Name Permodalan Nasional Berhad Bonia Holdings Sdn Bhd Amanah Raya Nominees (Tempatan) Sdn Bhd
[Beneficiary: Skim Amanah Saham Bumiputera]
No. of Shares 52,109,598 49,996,992 14,379,500 11,326,400
% 25.85 24.80 7.13 5.62
Cimsec Nominees (Asing) Sdn Bhd

[Beneficiary: Exempt An For CIMB-GK Securities Pte Ltd (Retail Clients)]
DIRECTORS SHAREHOLDINGS Name Chiang Sang Sem Chiang Fong Yee

Alternate Director to Mr Chiang Sang Sem
Shareholdings Direct 2,367,000 856,300 305,000 500,000 599,000 % 1.17 0.42 0.15 0.25 0.30 Indirect 62,109,226 ^^^ 10,000 ^ 69,000 ^ 59,000 ^^ 25,000 ^ % 30.81 * 0.03 0.03 0.01 -
Chiang Heng Kieng Chiang Sang Bon Chong Chin Look Chiang Fong Tat Datuk Ng Peng Hong @ Ng Peng Hay Dato Shahbudin Bin Imam Mohamad Lim Fong Boon Chong Sai Sin
^^^ Deemed interested through his substantial shareholdings in Bonia Holdings Sdn Bhd, Kontrak Kosmomaz Sdn Bhd, SGP Investment Pte Ltd, Golden Shine Finance Limited and through his spouse and children. ^^ Deemed interested through his spouse and child. ^ * Deemed interested through his spouse. Negligible
132
analYSiS oF ShareholDinGS
as at 7 October 2009 (contd)
THIRTY LARGEST SHAREHOLDERS AS PER THE RECORD OF DEPOSITORS Name 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. PERMODALAN NASIONAL BERHAD BONIA HOLDINGS SDN BHD AMSEC NOMINEES (TEMPATAN) SDN BHD
[Beneficiary: AmBank (M) Berhad For Bonia Holdings Sdn Bhd]
No. of Shares 52,109,598 31,351,992 18,645,000 14,379,500 11,326,400 9,779,800 5,583,434 4,850,000 4,826,200 4,755,600 3,261,900 2,835,000 2,772,700 2,487,400 2,367,000 2,000,000 1,569,300 1,200,000 1,016,200 777,500 729,000 690,400 599,000 543,546 538,300 520,200 500,000 465,000 464,800 417,898 183,362,668
% 25.85 15.55 9.25 7.13 5.62 4.85 2.77 2.41 2.39 2.36 1.62 1.41 1.38 1.23 1.17 0.99 0.78 0.60 0.50 0.39 0.36 0.34 0.30 0.27 0.27 0.26 0.25 0.23 0.23 0.21 90.97
AMANAH RAYA NOMINEES (TEMPATAN) SDN BHD

[Beneficiary: Skim Amanah Saham Bumiputera]
CIMSEC NOMINEES (ASING) SDN BHD

[Beneficiary: Exempt An For CIMB-GK Securities Pte Ltd (Retail Clients)]
HSBC NOMINEES (ASING) SDN BHD

[Beneficiary: Exempt An For HSBC Private Bank (Suisse) S.A. (Spore TST Accl)]
KONTRAK KOSMOMAZ SDN BHD LEE ENG CHENG LIM KWEE LIAN SUDISAMA SDN BHD CITIGROUP NOMINEES (ASING) SDN BHD
[Beneficiary: GSCO For Truffle Hound Global Value LLC]
12. NIK HATMAH BINTI NIK HASSAN 13. AMANAH RAYA NOMINEES (TEMPATAN) SDN BHD
[Beneficiary: Public Dividend Select Fund ]
14. HSBC NOMINEES (ASING) SDN BHD

[Beneficiary: Exempt An For Credit Suisse (SG BR-TST-Asing)]
15. CHIANG SANG SEM 16. AMSEC NOMINEES (TEMPATAN) SDN BHD
[Beneficiary: Amtrustee Berhad For HLG Strategic Fund (UT-HLG-SF)]
17. KE-ZAN NOMINEES (ASING) SDN BHD

[Beneficiary: Kim Eng Securities Pte Ltd For Exquisite Holdings Limited]
18. HLB NOMINEES (ASING) SDN BHD

[Beneficiary: Pledged Securities Account For Golden Shine Finance Limited]
19. CITIGROUP NOMINEES (TEMPATAN) SDN BHD

[Beneficiary: Exempt An For Prudential Fund Management Berhad]
20. CHONG SEE MOI 21. CHIANG FONG YEE 22. HONG LEONG ASSURANCE BERHAD
[Beneficiary: As Beneficial Owner (Unitlinked GF)]
23. CHIANG FONG TAT 24. NISSIN SDN BHD 25. SBB NOMINEES (TEMPATAN) SDN BHD
[Beneficiary: CIMB Aviva Assurance Berhad (CAFM)]
26. BHLB TRUSTEE BERHAD

[Beneficiary: Exempted - Trust Account For EPF Investment For Member Savings Scheme]
27. CHONG CHIN LOOK 28. CHIANG BOON TIAN 29. RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD
[Beneficiary: Pledged Securities Account For Loke See Ooi]
30. CHIANG SANG YAU Total
133
liSt oF propertieS
held by the Group as at 30 June 2009
Location of Property ATALY INDUSTRIES SDN BHD CT No. 28834 PT No. 20501 No. 29, Jalan Budiman Taman Midah, Cheras 56000 Kuala Lumpur Geran 28306, Lot No. 51016 2G, Jasmine Court 100, Jalan Midah Timur Taman Midah, Cheras 56000 Kuala Lumpur
Description
Tenure
Existing Use
Age of Building (Year)
Land Area (Sq Ft)
Net Book Date Value of RM000 Acquisition
2-storey Terrace House
Freehold
Hostel
27
1,540
101
21/05/1992
Apartment
Freehold
Hostel
23
1,285
73
27/02/1993
BONIA CORPORATION BERHAD GRN No. 50053 6-storey Office Lot No. 50644 cum Warehouse No. 62, Jalan Kilang Midah Taman Midah, Cheras 56000 Kuala Lumpur CB HOLDINGS (MALAYSIA) SDN BHD QT No. 85228 Lot No. 2794 Shopping UG-51, Upper Ground Floor Complex Lot Plaza Phoenix Batu 6, Jalan Cheras 56000 Kuala Lumpur PN No. 1339 Lot No. 385 Unit 2B, 3.04 & 3.05 KOMTAR Shopping Complex 10000 Pulau Pinang PN No. 1339 Lot No. 385 Unit C2, 4.03B KOMTAR Shopping Complex 10000 Pulau Pinang Shopping Complex Lot
Freehold
Office cum Warehouse
11
24,374
16,055
01/12/1998
Freehold
Vacant
15
432
17/05/1993
Leasehold (Expiring in 2084) Leasehold (Expiring in 2092)
Office
23
1,806
1,751
29/08/1994
Office Lot
Vacant
23
1,134
295
31/12/1994
LONG BOW MANUFACTURING SDN BHD Lot No. PT 428 HS(M) 387 Industrial Land Lot 18, Merlimau Industrial Estate and Building Phase ll 77300 Merlimau Melaka Lot No. PT 683 HS(D) 1499 No. 1483, Jalan Jasin Tmn Bunga Muhibbah 77300 Merlimau, Melaka HS(D) No. 55365 Lot No. 21085 No. 60, Jalan Kilang Midah Taman Midah, Cheras 56000 Kuala Lumpur LUXURY PARADE SDN BHD HS(D) No. 72947 PT No. 3865 No. 3, Jalan 8/146, The Metro Centre Bandar Tasik Selatan 57000 Sungai Besi Kuala Lumpur HS(D) No. 72948 PT No. 3866 No. 5, Jalan 8/146, The Metro Centre Bandar Tasik Selatan 57000 Sungai Besi Kuala Lumpur Single-Storey Semi-detached House 6-storey Industrial Building
Leasehold (Expiring in 2085) Freehold
Office cum Factory
23
135,100
3,048
07/02/1989
Hostel
17
3,199
73
12/06/1992
Freehold
R&D Centre cum Warehouse
15,600
10,720
31/01/2008
6-storey Shop-lot
Leasehold (Expiring in 2087)
Rented Out (Partially)
11
1,920
1,400
10/01/1995
6-storey Shop-lot
11
1,920
1,400
10/01/1995
134
liSt oF propertieS
held by the Group as at 30 June 2009 (contd)
Location of Property HS(D) No. 59989-59990 PT 12201-12202 Unit No. G61 The Summit Persiaran Kewajipan USJ 1, UEP-Subang Jaya 46700 Subang Jaya Selangor Darul Eshan HS(D) No. 182 PT SEK 4 Unit No. G0.07, Plaza Bukit Mertajam 566, Jalan Arumugam Pillai 14000 Bukit Mertajam HS(D) No. 55098 PT 4 Unit No. 1.48, Level 3 Plaza Uncang Emas No. 85, Jalan Loke Yew 55200 Kuala Lumpur The Club House Angkasa Condominium No. 5, Jalan Puncak Gading Taman Connaught, Cheras 56000 Kuala Lumpur 154 Units of Parking Bay Angkasa Condominium Mukim of Petaling District of Wilayah Persekutuan HS(D) No. 102556 PT8200 3rd, 4th, 5th & 6th Floor, Asmah Tower Mukim of Petaling District of Wilayah Persekutuan Wilayah Persekutuan HS(D) No. 76874-76878 PT 92 - 96 Unit No L1-046 Plaza Rakyat Pudu, Kuala Lumpur PN (WP) 10228 Lot No. 31627 Mukim of Petaling Daerah Kuala Lumpur Negeri Wilayah Persekutuan H.S.(D) No. 102559 P.T. No 8203 Mukim of Petaling District of Kuala Lumpur A-0-1, A-0-2, A-0-7, A-0-8 B-0-5, B-0-6, B-0-7 & B-0-8 Puncak Banyan Condo Jalan 3/118B, Taman Sri Cendekia 56000 Kuala Lumpur ACTIVE WORLD PTE LTD Mukim 25 Lot No.U18781L 158, Haig Road #16-01, Haig Court Singapore 438794
Description Shopping Complex Lot
Tenure Freehold
Existing Use Rented Out
Age of Building (Year) 11
Land Area (Sq Ft) 1,020
Net Book Date Value of RM000 Acquisition 1,220 16/01/1995
Shopping Complex Lot
Freehold
Rented Out
11
1,038
778
19/03/1995
Shopping Complex Lot
Vacant
12
1,098
770
26/05/1995
Club House
Freehold
7,599
3,000
03/02/2005
Condominium Covered & Uncovered Car Parks Office Lot
Freehold
N.A
1,379
20/06/2008
Freehold
Office cum Warehouse
28,540
6,651
06/01/2005
Shopping Complex Lot 3-storey Detached Factory 8 unit Shop Lots
Leasehold (Expiring in 2081) Leasehold (Expiring in 2085) Freehold
Under Construction Under Construction
N.A.
524
23/05/1996
N.A.
13,595
3,953
15/01/2008
6,546
2,180
13/03/2009
Condominium
Freehold
Hostel
1,463
2,048
05/09/2005
135
notice oF annUal General meetinG
NOTICE IS HEREBY GIVEN THAT the Eighteenth Annual General Meeting of the Company will be held at Parameswara Room, Level 2, Mines Wellness Hotel, Jalan Dulang, MINES Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan on Wednesday, 25 November 2009 at 12.00 noon for the transaction of the following businesses:
1. To receive the Directors Report and the Audited Financial Statements for the financial year ended 30 June 2009 together with the Auditors Report thereon. To declare a First and Final Dividend of 5% less 25% Income Tax and a Special Dividend of 3% less 25% Income Tax for the financial year ended 30 June 2009. To approve the payment of Directors fees for the financial year ended 30 June 2009. To re-elect Mr Chong Sai Sin who retires pursuant to Article 90 of the Articles of Association of the Company. To re-elect the following Directors who retire pursuant to Article 96 of the Articles of Association of the Company: (i) Mr Chiang Sang Sem (ii) Mr Lim Fong Boon (iii) Dato Shahbudin Bin Imam Mohamad 6. To re-appoint Messrs BDO Binder as Auditors of the Company and to authorise the Directors to fix their remuneration. To consider and if thought fit, to pass the following Ordinary Resolution with or without amendments or modifications: Authority to Issue Shares pursuant to Section 132D of the Companies Act 1965 THAT pursuant to Section 132D of the Companies Act 1965, and subject to the approvals of the relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered to issue shares in the Company at any time and upon such terms and conditions, for such purposes as the Directors may, in their absolute discretion deem fit, provided that the aggregate number of shares issued in any one financial year of the Company does not exceed ten per centum (10%) of the issued share capital of the Company for the time being and that the Directors be and are hereby also empowered to obtain approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company. 8. To transact any other ordinary business of the Company for which due notice shall have been given. Ordinary Resolution 4 Ordinary Resolution 5 Ordinary Resolution 6 To refer to Explanatory Note 1
2.
Ordinary Resolution 1 Ordinary Resolution 2
3. 4.
Ordinary Resolution 3
5.
7.
NOTICE OF DIVIDEND PAYMENT NOTICE IS HEREBY GIVEN THAT, subject to the approval of the shareholders of the Company at the Eighteenth Annual General Meeting, the First and Final Dividend of 5% less 25% Income Tax and a Special Dividend of 3% less 25% Income Tax for the financial year ended 30 June 2009 will be paid on 16 December 2009 to the Depositors whose names appear in the Record of Depositors at the close of business on 3 December 2009.
136
notice oF annUal General meetinG

(contd)
A Depositor shall qualify for the entitlement to the dividends only in respect of: a) Shares transferred into the Depositors Securities Accounts before 4.00 p.m. on 3 December 2009 in respect of ordinary transfers; and Shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad.
b)
By Order of the Board
TING OI LING TEOH KOK JONG Company Secretaries Kuala Lumpur 3 November 2009
Notes: 1. A member is entitled to appoint a proxy (or in the case of a corporation, to appoint a representative) to attend and vote in his place. A proxy need not be a member of the Company. The Proxy Form must be signed by the appointor or his attorney duly authorised in writing or in the case of a corporation, executed under its common seal or attorney duly authorised in that behalf. All proxies must be deposited at the Companys Registered Office situated at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not less than forty-eight (48) hours before the time for holding the Meeting or at any adjournment thereof.
2.
3.
Explanatory Notes: Item 1 of the Agenda To receive the Directors Report and the Audited Financial Statements for the financial year ended 30 June 2009 together with the Auditors Report thereon This item is meant for discussion only as the provision of Section 169 (1) of the Companies Act 1965 does not require shareholders approval for the Audited Financial Statements. Henceforth, this item is not put forward for voting. Item 7 of the Agenda Authority to Issue Shares pursuant to Section 132D of the Companies Act 1965 The proposed Ordinary Resolution 8 is for the purpose of granting a renewal general mandate (General Mandate) and empowering the Directors of the Company, pursuant to Section 132D of the Companies Act 1965 to issue new shares in the Company from time to time provided that aggregate number of shares issued pursuant to the General Mandate does not exceed ten per centum (10%) of the issued share capital of the Company for such purposes as the Directors consider would be in the interest of the Company. This would avoid any delay and cost involved in convening a general meeting to approve such an issue of shares. This authority will, unless revoked or varied by the Company at a general meeting, expire at the conclusion of the next annual general meeting or the expiration of the period within which the next annual general meeting is required by law to be held, whichever is the earlier. As at the date of this Notice, no new shares in the Company were issued pursuant to the mandate granted to the Directors at the last annual general meeting held on 24 November 2008 and which will lapse at the conclusion of the forthcoming annual general meeting. 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 the purpose of funding future investment project(s), working capital and/or acquisitions.
137
Statement accompanYinG the notice oF annUal General meetinG
pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad
1.
The Directors who are standing for re-election at the Eighteenth Annual General Meeting a) The Director standings for re-election pursuant to Article 90 of the Articles of Association of the Company is: (i) b) Mr Chong Sai Sin
The Directors standing for re-election pursuant to Article 96 of the Articles of Association of the Company are: (i) Mr Chiang Sang Sem (ii) Mr Lim Fong Boon (iii) Dato Shahbudin Bin Imam Mohamad
The profiles of the above Directors are set out in the section entitled Profile of Directors on pages 6 to 13. Their respective shareholdings in the Company and its subsidiaries are set out in the section entitled Analysis of Shareholdings on page 131. 2. The Details of Attendance of the Directors at Board Meetings The details of attendance of each Director at the Board Meetings are set out on page 13. 3. The Date, Time and Place of the Annual General Meeting The Eighteenth Annual General Meeting of the Company will be held as follows: Date 25 November 2009 Wednesday Time 12.00 noon Place Parameswara Room Level 2, Mines Wellness Hotel Jalan Dulang, MINES Resort City 43300 Seri Kembangan Selangor Darul Ehsan
This page has been intentionally left blank.
Proxy Form
Bonia corporation BerhaD

(223934-t)
I/We_______________________________________________________________________________________________________________
(FULL NAME IN BLOCK LETTERS)
of_________________________________________________________________________________________________________________ being a member/members of BONIA CORPORATION BERHAD hereby appoint __________________________________________ _____________________________________________________________________ (I/C No.: _______________________________) of ___________________________________________________________________________________________________________________
(ADDRESS)
____________________________________________________________________________________________________________________ or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf, at the Eighteenth Annual General Meeting of the Company to be held at Parameswara Room, Level 2, Mines Wellness Hotel, Jalan Dulang, MINES Resort City, 43300 Seri Kembangan, Selangor Darul Ehsan on Wednesday, 25 November 2009 at 12.00 noon or at any adjournment thereof, as indicated below: No. Resolutions 1. 2. 3. 4. 5. 6. 7. 8. Declaration of First and Final Dividend and Special Dividend Approval for the payment of Directors fees Re-election of Mr Chong Sai Sin as Director Re-election of Mr Chiang Sang Sem as Director Re-election of Mr Lim Fong Boon as Director Re-election of Dato Shahbudin Bin Imam Mohamad as Director Re-appointment of Auditors, BDO Binder Authority to Issue Shares For Against
Please indicate with a ( P ) in the appropriate box against the resolution how you wish your vote to be cast. If no specific direction as to voting is given, the proxy will vote or abstain at his discretion. No. of Shares CDS Account No.
Signature/Seal of the Shareholder: _________________________________
Date: ________________________________
Notes: 1. A member is entitled to appoint a proxy (or in the case of a corporation, to appoint a representative) to attend and vote in his place. A proxy need not be a member of the Company. 2. The Proxy Form must be signed by the appointor or his attorney duly authorised in writing or in the case of a corporation, executed under its common seal or attorney duly authorised in that behalf. 3. All proxies must be deposited at the Companys Registered Office situated at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra. 59200 Kuala Lumpur not less than forty-eight (48) hours before the time for holding the Meeting or at any adjournment thereof.
Fold this flap for sealing
Fold here
AFFIX STAMP
THE COMPANY SECRETARY BONIA CORPORATION BERHAD (223934-T) LEVEL 18, THE GARDENS NORTH TOWER MID VALLEY CITY LINGKARAN SYED PUTRA 59200 KUALA LUMPUR
Fold here
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Annual Report 2009

BONIA CORPORATION BERHAD (223934-T) Annual Report 2009

BONIA CORPORATION BERHAD (223934-T) Annual Report 2009

AUDIT COMMITTEE DaTuK ng Peng hong @ ng Peng haY

Chiang Fong Yee

Chong Chin LooK

Chiang heng Kieng

Chong Sai Sin

Chiang Sang Bon

(Appointed on 30 January 2009) Lim Fong Boon

Chong Chin LooK

Chiang Fong TaT

NOMINATION COMMITTEE DaTuK ng Peng hong @ ng Peng haY

DaTuK ng Peng hong @ ng Peng haY

Lim Fong Boon

DaTuK niK huSSain Bin niK aLi

Chiang heng Kieng

DaTo ShahBuDin Bin imam mohamaD

Chong Sai Sin

Lim Fong Boon

Chong Sai Sin

(Appointed on 30 January 2009)

DaTuK ng Peng hong @ ng Peng haY

Lim Fong Boon

BONIA CORPORATION BERHAD (223934-T) Annual Report 2009

BONIA CORPORATION BERHAD (223934-T) Annual Report 2009

BONIA CORPORATION BERHAD (223934-T) Annual Report 2009

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