Johan Holdings Berhad (314-K)
for the financial year ended 31 January 2014
annual report for the financial year ended 31 January 2014
Johan Holdings Berhad (314-K)
Contents
2
1
Corporate Profile
2
Chairman’s Statement
4
Review of Operations
8
Profile of Directors
10
Group Senior Management
11
Five-Year Group Financial Highlights
12
Corporate Information
13
Statement on Corporate Governance
21
Statement on Corporate Social Responsibility
23
Audit Committee Report
26
Statement on Risk Management and Internal Control
28
Additional Information
30
Financial Statements
135
Shareholders’ Information
137
Statement on Directors’ Interests
138
List of Properties Held
139
Notice of Annual General Meeting
Form of Proxy
Annual Report 2014
Corporate
Profile
1
Johan began its activities in 1920 as Johan Tin
Dredging Ltd. It operated a mining lease off the
Sungei Johan in the Kinta District of Perak,
Malaysia with a paid-up capital of RM136,000
which remained unchanged for 61 years until
1981. In 1979, the Company was renamed Johan
Holdings Berhad.
Since 1979, Johan diversified away from its tin
mining business and through acquisitions and
organic growth, the Johan Group today is a
Malaysian grown international group with
diversified operations.
Johan is listed on the Main Market of Bursa
Malaysia Securities Berhad. Its subsidiary, Jacks
International Limited is listed on the Mainboard of
the Singapore Exchange Securities Trading Limited.
Johan Group’s current principal activities are as
franchise operator for Diners Club charge and
credit cards, travel and tours, manufacture of
ceramics wall and floor tiles, distribution and
retailing of health foods and supplements,
property development, resorts and hotels.
2
Johan Holdings Berhad (314-K)
Chairman’s
Statement
Dear Shareholders,
On behalf of your Board of Directors, I am pleased to present the
Annual Report of Johan Holdings Berhad for the financial year
ended 31 January 2014.
Economic and Business Enviroment Review
2013 continued to be a challenging year for the global economy, fraught with uncertainties. The US
economy grew at a slow rate of 1.9% and GDP growth in Europe fell by 0.4%. Growth also slowed in the
developing countries but in China growth was sustained at a high of 7.7%.
Malaysia was affected by the global economic slowdown as well as volatility following uncertainties
over monetary policy adjustments in advanced economies. Malaysia registered a GDP growth of
4.7% in 2013 (5.6% in 2012) amid rising consumer inflation, tighter credit conditions and moderation
in financing in the face of global uncertainties. Demand from the private sectors and improvement in
exports were the main contributors of growth in 2013.
Singapore’s economy grew by 4.1% in 2013, higher than the 1.9% growth in 2012. The manufacturing
sector grew by 7.0% on a year-on-year basis. Growth was supported by improvements in the electronics
cluster and continued strong growth in the transport engineering cluster. The wholesale & retail trade
sector expanded by 7.3% year-on-year.
The Australian economy grew 2.8% in 2013 but remains short of the long-term trend of just above
3%. The main contributor of growth in the December quarter was exports, followed by consumption
expenditure, government investment spending and business inventories. The main detractor was
private sector investment.
Annual Report 2014
3
Chairman’s Statement
cont’d
REVIEW OF FINANCIAL RESULTS
(a)Continuing Operations
Your Group recorded revenue of RM279.925 million for
financial year ended 31 January 2014 (FY2014), down
2.3% from RM286.493 million (FY2013). The lower
revenue was mainly attributed to lower performance by
the Diners Club operations in Malaysia, Singapore and
New Zealand.
Loss from Continuing Operations was RM43.058 million,
compared to loss before tax of RM32.108 million in
FY2013.
(b)Discontinued Operations
Two (2) wholly subsidiaries, namely Skinner Engineering
Pty Ltd and George Kent Singapore Pte Ltd, (“Discontinued
Operations”), were disposed off during the financial year
under review.
These Discontinued Operations recorded profit before tax
of RM32,000 (FY2013 : RM22,000) on total revenue of
RM12.549 million (FY2013: RM19.071 million). Inclusive
of the gain on disposal and cumulative exchange gain
realised from sale of these two subsidiaries, profit after
tax from the Discontinued Operations was RM4.902
million (FY2013: RM133,000).
Overall, Group loss after tax was RM38.156 million,
compared to loss of RM31.975 million in FY2013.
Malaysia’s GDP is expected to grow between 4.5% to 5.5%,
from 4.7% recorded in 2013, on account of expected fiscal
belt-tightening measures. While the economy will continue
to benefit from the gradual global recovery, the private
sector-led domestic demand remains the key driver of
growth. Domestic demand will remain resilient, although
it faces challenges ranging from softer consumer spending
to stricter lending measures by financial institutions to curb
household debt level. The manufacturing sector, one of the
key drivers for overall growth after the services sector, is
expected to grow 3.5%.
The growth projection for Singapore’s GDP for 2014 is
between 2% to 4% as a tight labour market constrains
some industries amid improving global demand. Singapore
is nearing the midpoint of a 10-year economic transition
strategy to reduce its dependence on cheap overseas
workers while attracting new industries such as research
and development. Singapore, whose trade-dependent
economy is vulnerable to fluctuations in global demand,
expects recoveries in the U.S. and Europe to support growth
even as China’s expansion cools.
The immediate task is to return the Group to profitability.
Two loss making subsidiaries were sold: Skinner Engineering
Pty Ltd was divested during the course of the financial
year and Diners Club (New Zealand) Ltd in March 2014.
Your Board continues to assess the future of other non
performing operations of the Group. Your Board has
implemented many measures to improve the performance
of the businesses of the Group over the last two years and
these have shown positive results.
Your Board remains positive, albeit cautious, of the
prospects for the current year.
DIVIDEND
Your Board does not propose to declare any dividend for
the financial year under review.
BUSINESS OUTLOOK AND PROSPECTS
The improvements in global economic conditions seen
in 2013 are expected to continue into 2014. Growth
is expected to grow by 3.4%, supported by broader
economic recovery in developed economies, led by the US
economic recovery as well as sustained growth in emerging
economies.
ACKNOWLEDGEMENT
On behalf of your Board of Directors, I wish to thank the
management and staff at all levels for their commitment,
dedication and collective contribution to the Group’s
performance. I wish also to thank our valued customers,
suppliers, business partners and shareholders for their
continued support.
TAN SRI DATO’ TAN KAY HOCK
Chairman
30 May 2014
4
Johan Holdings Berhad (314-K)
Review of Operations
THE JOHAN GROUP’S BUSINESSES
The businesses of the Johan Group are principally as franchise operator for Diners Club charge and
credit cards, manufacture of ceramic floor and wall tiles, distribution and retailing of health foods
and supplements, air ticketing and travel management, property development and resort hotel
operation. The Group’s businesses are currently based mainly in Malaysia, Singapore and Brunei.
HOSPITALITY & CARD SERVICES DIVISION
Diners Club Malaysia Sdn Bhd (“DCM”)
The Diners Club charge/credit card franchise for Singapore,
Malaysia and New Zealand are operated respectively by
Diners Club (Singapore) Pte. Ltd. (“DCS”), Diners Club
(Malaysia) Sdn. Bhd. (“DCM”) and Diners Club (New
Zealand) Ltd (“DCNZ”). (The Diners Club card franchise in
New Zealand under DCNZ was sold in March 2014).
The Diners Club brand is renowned for its corporate
services primarily corporate card for corporate employee
travel and expense management. Market dynamic changes
with many cross border businesses and meetings taking
place, executives are travelling more frequent than before.
This gave the opportunity for DCM to rejuvenate the
corporate sales sector in the second quarter of 2013, and
with the launch of “Corporate Solutions” programme to
help corporations better manage and consolidate all travel
expenses.
Diners World Travel (Malaysia) Sdn. Bhd (“DWTM”)
and Diners World Travel Pte. Ltd. (“DWTS”) provide air
management services.
Lumut Park Resort Sdn Bhd owns and operates the 150
room resort hotel in Lumut under the name “The Orient
Star Resort, Lumut”. Lumut Marine Resort Berhad owns
and operates the yacht club in Lumut under the name “The
Lumut International Yacht Club”.
This Division recorded total revenue of RM160.855 million,
compared to RM177.901 million for FY2013 down 9.5%.
Higher revenue was contributed by DCS and DWTM, offset
by lower revenue from DCS, DWTS, DCNZ and TOSL. As a
result of lower operating costs, this Division incurred a loss
before tax of RM5.356 million, compared to a loss before
tax of RM7.35 million for FY2013.
Within the span of 9 months, DCM has gone through several
transformations to upscale our services, client commitment
and building the Diners Club brand among corporate
affiliates. Corporate Helpdesk, formed in May 2013, serves
as a one-stop solution for all corporate enquiries, help
assistance and feedback management. Client can now
reach us via our designate Corporate Helpdesk email, or
call in to our dedicated corporate helpdesk line to address
their concerns. DCM has successfully signed up several
international chains of four and five 5 stars hotels, forging
a new corporate partnership with a famous multilevel
marketing company where corporate cards were issued to
the regional heads of eleven respective ASEAN offices.
Annual Report 2014
5
Review of Operations
cont’d
Diners Club (Singapore) Pte Ltd (“DCS”)
2013 signage sponsorships have given DCS a favorable
outcome as we have successfully secured a fair amount
of sizable merchants with prominent locations, thus given
DCS much greater market presence in Singapore. We
have an estimated sponsorship of USD90,000 from Diners
Club International which amounted to RM282,000 for this
signage program this year.
Additionally, we have also managed to strengthen our
existing relationships, widen our card acceptance as well as
adding new partnerships to our growing portfolio.
To encourage the usage of Diners Club cards, various
promotions were held in FY 2013 with our merchants which
strengthen the relationship with these merchants.
In 2013 we successfully established new partnerships with
Citibank and AmBank on Terminal Sharing arrangement.
In this new agreement the rate offered is very competitive
and in tandem with the market rate. We are confident we
are able to expand our horizon and widen up our scope of
Diners Club cards acceptance to the next level.
Diners World Travel (Malaysia) Sdn Bhd (“DWTM”)
For FY 2013, DWTM was ranked top 10 by Air France/KLM in
their agents incentive scheme.
As for Malaysian Airline Systems, we have been ranked top
20 and in the Diamond Award category.
Diners World Travel (Singapore) Pte Ltd (“DWTS”) DWTS became the first travel management company to
be awarded the Singapore Service Class Certification after
rigorous on-site evaluation by SPRING Singapore on all
aspects of service leadership, service agility, customer
experience, customer delight and other service quality
improvement initiatives. This certification will be an
unceasing motivation for us to continually enhance our
services and processes, which ultimately, translate to higher
satisfaction from our clients and business partners.”
6
Johan Holdings Berhad (314-K)
Review of Operations
cont’d
George Kent (Singapore) Pte Ltd (“GKS”) trades in water
meters for supply to the Public Utilities Board in Singapore.
Both Skinner and GKS were sold during the financial year
under review.
Prestige Ceramics Sdn Bhd (“Prestige”)
Prestige recorded total revenue of RM51.810 million, down
1.3% when compared with RM52.522 million for FY2013.
Prestige sustained a loss but was lower than the previous
year. GP margin improved by 2% but this was offset by
higher operating costs.
Lumut Park Resort Sdn Bhd (“LPR”)
The Orient Star Resort, Lumut (“TOSL”) is owned by LPR.
TOSL registered a marginal increase in revenue when
compared to FY2013. However due to higher payroll cost
and operating expenses, it recorded a lower profit before
tax of RM1.542 million as against profit before tax of
RM1.865 million in FY2013.
Strong business were received from the corporate sector
but pinned down by drop in Government package business
by about 30% compared to previous year.
Lumut Marine Resort Berhad The Lumut International Yacht Club continues to operate
below the optimum membership base to enable it to
operate profitably.
BUILDING MATERIALS & ENGINEERING DIVISION
Prestige Ceramics Sdn Bhd (“Prestige”) manufactures
ceramic floor and wall tiles for residential, commercial and
other construction projects in its manufacturing facilities in
Puchong.
Skinner Engineering Pty Ltd (“Skinner”), an Engineering
company is involved in the metal fabrication, installation of
piping and ducting business in Australia.
During the last quarter for the financial year ended 31
January, 2014, Prestige launched the bigger size porcelain
tile of 30x60cm to enhance Prestige’s product range to
be on par with the latest market trend. At the same time,
Prestige invested in the latest digital printing technology
for the production of the 30x60cm tile under a new brand
name “d’VINCI”.
With the new product range in the rebranding exercise,
Prestige will be poised to reposition itself as a manufacturer
of innovative, high quality porcelain tiles with the latest
digital printing technology catering for the middle to high
end market.
In spite of the challenging operating environment, Prestige
will remain focus on costs reduction, better margins and to
improve productivity. Prestige will continue to be innovation
focussed and to equip itself well to compete in terms of
better quality and superior design ceramic tiles.
Annual Report 2014
7
Review of Operations
cont’d
TRADING OF HEALTH FOODS & SUPPLEMENTS DIVISION
Retailing of health foods and supplements business are
undertaken by Nature’s Farm Pte. Ltd. (23 outlets in
Singapore and 2 outlets in Brunei) and Nature’s Farm
(Health Foods) Sdn Bhd (5 outlets in Klang Valley, Malaysia).
This Division generated revenue of RM58.108 million,
compared to RM62.452 million, down 6.9% for FY2012/13. The
lower revenue was attributed to increasing competition and
cautious consumers’ spending patterns. During the first half
of the financial year under review, in Singapore, three (3) retail
outlets which contributed marginal performance were closed,
while four (4) new retail outlets were opened during the
second half year. Revenue was impacted due to loss of sales
from closure of these three outlets and slower sales generated
from start up operations by the four new outlets. Overall,
the lower performance was due to increase in marketing and
distribution costs as more promotion events were held to
boost sales and to promote new products launches.
Nature’s Farm activities in Singapore during the financial
year under review include monthly atrium sales events
being held at various shopping malls, including Tampines
Mall, Vivo City, Ngee Ann City, Parkway Parade and
NEX Serangoon. Each sales event was over the course
of seven days, from Monday to Sunday. At these sales
events, customers enjoyed promotional activities such as
Purchase-with-Purchase (PWP), where they could buy a
selected range of products at special discounted prices; Giftwith-Purchase (GWP), where they were allowed to select
free gifts with their purchases; 2nd at $4.90 specials; cutout discount coupons from atrium invites; free Nature’s
Farm cash vouchers; and product sampling. In September,
Nature’s Farm celebrated its 31st Anniversary with an
extravagant atrium sales event at Tampines Mall. The
celebrations included massive storewide promotions, lucky
draws, a children’s corner, a bear mascot, balloons and free
basic health screening services.
In terms of Corporate sales, Nature’s Farm worked very
closely with Standard Chartered Bank in hosting several
corporate health talks and sales events during the year.
Through this partnership, we had the opportunity to hold
corporate sales and health talks in organizations such as
Leica Electronics, Changi Airport Group and Schaeffler
Group Singapore. In addition to this, we also organized
independent corporate sales events at The Body Clinic,
National University Hospital, Maple Tree Business City, Great
Eastern Life Parenting Seminar and Alexandra Hospital.
Over the course of 2013, we managed to establish many
collaborative partnerships with various organisations such
as banks, hotels, schools and independent entities. We
partnered with Bank of China, Millennium & Copthorne
and DBS Bank as part of their loyalty rewards programmes.
We also tied up with Fitness First, Evolve Mixed Martial
Arts, Credit Suisse, Great Eastern Life, NTUC Income,
American Express, Standard Chartered Bank, National
University of Singapore Society, CIMB, Knowledge Universe
Singapore, Singapore Teachers Union and Singapore Press
Holdings by offering corporate discounts to their staff
and/or their cardholders. Other collaborations include
Mother’s Day and Father’s Day promotions with Diners Club
Singapore, where cardholders could enjoy special discounts
off specific products; Great Singapore Sale promotion
with Oversea-Chinese Banking Corporation; and a joint
promotion with The Body Clinic, whereby customers could
enjoy a free one-time full body analysis and a body aches &
pain healing therapy session with a minimum of $188 nett
spending at any Nature’s Farm outlet.
8
Johan Holdings Berhad (314-K)
Profile of Directors
Name
TAN SRI DATO’ TAN KAY HOCK
PUAN SRI DATIN TAN SWEE BEE
Age
66
67
Nationality
Malaysian
Permanent Resident
Qualification
Barrister-at-Law
Barrister-at-Law
Position on Board
Chairman & Chief Executive
(Non-Independent Executive Director)
Group Managing Director
(Non-Independent Executive Director)
Date of Appointment
5 November 1980
29 January 1983
Working Experience
A lawyer by training having been called to the
Bar by the Honourable Society of Lincoln’s Inn,
UK in 1971. In 1972, he was admitted as an
advocate and solicitor to the Supreme Court
of Malaysia. He is a non-practising lawyer.
Since 1982, he is the Non-Executive Chairman
of George Kent (Malaysia) Berhad (“GKM”),
listed on the Main Market of Bursa Malaysia
Securities Berhad. GKM is an engineering
company involved in brass products
manufacturing, trading and investment,
development of water infrastructure
projects, building and construction works.
He is a Committee Member of the Malaysian
Phillipines Business Council and a Trustee of
Malaysian Humanitarian Foundation.
A lawyer by training having been called
to the Bar by the Honourable Society of
Lincoln’s Inn, UK in 1971. In 1972, she was
admitted as an advocate and solicitor to
the Supreme Court of Malaysia. She is a
non-practising lawyer. She was appointed
Managing Director of Johan Group since
17 December 1984. Since 1989, she is a
Non-Executive Director of George Kent
(Malaysia) Berhad (“GKM”), listed on the
Main Market of Bursa Malaysia Securities
Berhad. GKM is an engineering company
involved in brass products manufacturing,
trading and investment, development of
water infrastructure projects, building and
construction works.
Other directorships of public
companies


Family relationship with
any director and/or major
shareholders of the Company
Husband to Puan Sri Datin Tan Swee Bee,
the Group Managing Director
Wife to Tan Sri Dato’ Tan Kay Hock, the
Chairman and Chief Executive of the
Company
Conflict of interest with the
Company
NIL
NIL
List of convictions for
offences within the past ten
(10) years
NIL
NIL
Committee

George Kent (Malaysia) Berhad
Jacks International Limited
Risk Management Committee – Chairman




George Kent (Malaysia) Berhad
Jacks International Limited
Remuneration Committee – Member
Risk Management Committee – Member
Annual Report 2014
9
Profile of Directors
cont’d
TAN SRI DATO’ SERI DR TING CHEW PEH
DATO’ AHMAD KHAIRUMMUZAMMIL
BIN MOHD YUSOFF
OOI TENG CHEW
71
72
67
Malaysian
Malaysian
Malaysian
Bachelor of Arts from University of
Malaya in 1970, Master of Science
from University of London in 1972 and
Doctor of Philosophy from University of
Warwick in 1976.
Bachelor of Arts (Economics Honours)
from University of Malaya
Fellow member of Institute of
Chartered Accountants in England
and Wales (since 1979) and member
of Malaysian Institute of Certified
Public Accountants (since 1971)
Director
(Non-Independent Non-Executive Director)
Director
(Independent Non-Executive Director)
Director
(Independent Non-Executive Director)
1 November 2003
4 July 2005
12 March 2009
He was formerly a Lecturer (1974-1980)
and Associate Professor (1981-1987) for
Faculty of Humanities and Social Science
of National University of Malaya. He was
also a Parliament Secretary (Ministry of
Health) (1988-1989), Deputy Minister
(Prime Minister’s Department) (19891990) and Minister of Housing and Local
Government (1990-1999). He was a
Member of Parliament (1987-February
2008) and was the Chairman of Klang
Port Authority (2000–2004).
He was a Deputy Chairman of the Urban
Development Authority (UDA) Kuala
Lumpur from 1978 to 1981. He was
subsequently appointed the DirectorGeneral, Chief Executive and Board
Member of UDA in 1981. From May
1986 to 1994, he held various senior
management positions in the Kumpulan
Guthrie Berhad Group and also
Executive Director of Kumpulan Guthrie
Berhad from May 1986 to December
1987. He was a Vice President and a
Director of HICOM Holdings Berhad
from February 1995 to July 2000 and
subsequently held the post of Group
Director in the DRB-Hicom Group
until March 2006. He is currently the
Chairman of Metrojaya Berhad.
He was in public practice since
1974 in Messrs Ernst & Young and
its predecessor firms. He retired in
2001. He is currently a Director of
Wawasan Open University Sdn Bhd
and its related company, Disted
Pulau Pinang Sdn Bhd.



Puncak Niaga Holdings Berhad
Hua Yang Bhd
UTAR Education Foundation

Metrojaya Berhad
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL



Remuneration Committee – Chairman
Audit Committee – Member
Nominating Committee – Member



Audit Committee – Chairman
Nominating Committee – Chairman
Remuneration Committee – Member


Audit Committee – Member
Nominating Committee – Member
10
Johan Holdings Berhad (314-K)
Group Senior Management
CORPORATE HEAD OFFICE
Tan Sri Dato’ Tan Kay Hock
Chairman and Chief Executive
Puan Sri Datin Tan Swee Bee
Group Managing Director
Teh Yong Fah
Group Secretary
Ng Yew Soon Senior General Manager - Finance
Sia Chin Yap Senior Internal Audit Manager
Yap Ee Seong
General Manager - Properties
PRINCIPAL OPERATING SUBSIDIARIES
Diners Club (Malaysia) Sdn Bhd Diners Club (Singapore) Pte Ltd }
}
James Koh Chuan Lim
Executive Director-Regional Operations
William Jacks & Co. (Singapore) Pte Ltd Nature’s Farm Pte Ltd Nature’s Farm (Health Food) Sdn Bhd
}
}
}
Simon Low Kean Jin
Regional Director
Diners World Travel (Malaysia) Sdn Bhd
Catherine Wong Tet Fah General Manager
Diners World Travel (Singapore) Pte Ltd
Robert Koh
Senior General Manager
Prestige Ceramics Sdn Bhd
Caffrey Chin Kek Fu General Manager
The Orient Star Resort, Lumut (owned by Lumut Park Resort Sdn. Bhd.)
Vincent Ee Kim Chuan
Hotel Manager
Annual Report 2014
11
Five-Year Group Financial Highlights
Year Ended 31 January
2014
2013
2012
2011
2010
RM’000
RM’000
RM’000
RM’000
RM’000
Restated
Restated
Restated
Restated
Income Statement
Revenue
279,925
286,493
293,020
294,541
315,675
(Loss)/Profit Before Tax
(35,941)
(27,754)
(43,681)
8,572
29,261
(7,117)
(4,354)
(4,571)
(5,094)
(3,630)
(38,156)
(31,975)
(48,252)
3,478
25,631
Total non-current assets
346,253
320,034
324,708
321,888
207,103
Total current assets
818,046
791,013
744,607
795,676
801,307
Shareholders’ fund
207,977
220,819
254,874
301,911
214,434
9,344
9,024
9,235
8,233
4,659
217,321
229,843
264,109
310,144
219,093
52,976
50,734
51,775
102,518
22,159
894,002
830,470
753,431
704,901
767,158
Income Tax Expense
(Loss)/Profit for the year
Statements of Financial Position
Non-controlling Interest
Shareholders’ Equity
Total non-current liabilities
Total current liabilities
SHARE INFORMATION
Per Ordinary Share
Earnings/(Loss), basic (sen)
(6.17)
(5.11)
(7.90)
0.48
4.03
Net assets (sen)
34.89
36.90
42.40
49.79
35.80
0.15
0.15
0.22
0.32
0.28
(18.50)
(14.42)
(19.32)
1.40
11.70
0.79:1
0.78:1
0.80:1
0.75:1
0.75:1
Share price as at 31 January (RM)
FINANCIAL RATIOS
Return on equity (%)
Net Debt-Equity ratio (Note 1)
Note 1 : Net Debt comprise current & non-current loan and borrowings, trade and other payables, funding from non-recourse investors’
certificates and senior certificates less cash and bank balances.
12
Johan Holdings Berhad (314-K)
Corporate Information
BOARD OF DIRECTORS
Tan Sri Dato’ Tan Kay Hock
Chairman & Chief Executive
Dato’ Ahmad Khairummuzammil Bin Mohd Yusoff
Independent Non-Executive Director
Puan Sri Datin Tan Swee Bee
Group Managing Director
Ooi Teng Chew
Independent Non-Executive Director
Tan Sri Dato’ Seri Dr Ting Chew Peh
Non-Independent Non-Executive Director
AUDIT COMMITTEE
REGISTERED OFFICE
Dato’ Ahmad Khairummuzammil Bin Mohd Yusoff
(Chairman)
Tan Sri Dato’ Seri Dr Ting Chew Peh
Ooi Teng Chew
11th Floor, Wisma E&C
No. 2 Lorong Dungun Kiri
Damansara Heights
50490 Kuala Lumpur
Tel
: 603-2092 1858
Fax
: 603-2092 2812
RISK MANAGEMENT COMMITTEEE
Tan Sri Dato’ Tan Kay Hock
(Chairman)
Puan Sri Datin Tan Swee Bee
Ng Yew Soon
REMUNERATION COMMITTEE
Tan Sri Dato’ Seri Dr Ting Chew Peh
(Chairman)
Dato’ Ahmad Khairummuzammil Bin Mohd Yusoff
Puan Sri Datin Tan Swee Bee
NOMINATING COMMITTEE
Dato’ Ahmad Khairummuzammil Bin Mohd Yusoff
(Chairman)
Tan Sri Dato’ Seri Dr Ting Chew Peh
Ooi Teng Chew
COMPANY SECRETARY
Teh Yong Fah (MACS00400)
AUDITORS
Deloitte & Touche
Chartered Accountants
SHARE REGISTRAR
Johan Management Services Sdn. Bhd.
11th Floor, Wisma E&C
No. 2 Lorong Dungun Kiri
Damansara Heights
50490 Kuala Lumpur
Tel
: 603-2092 1858
Fax
: 603-2092 2812
E-mail
: johanms@po.jaring.my
BUSINESS OFFICE
11th Floor, Wisma E&C
No. 2 Lorong Dungun Kiri
Damansara Heights
50490 Kuala Lumpur
Tel
: 603-2092 1858
Fax
: 603-2092 2812
E-mail
: jhb@johanholdings.com.my
Website
: www.johanholdings.com
GROUP PRINCIPAL BANKERS
(in alphabetical order)
Australia and New Zealand Banking Group Limited
CIMB Bank Berhad
DBS Bank Ltd
Malayan Banking Berhad
Royal Bank of Scotland Group
The Bank of East Asia, Limited
STOCK EXCHANGE LISTING
Main Market, Bursa Malaysia Securities Berhad
Stock Name : JOHAN
Stock Code : 3441
Sector
: Finance
CORPORATE WEBSITE
www.johanholdings.com
Annual Report 2014
13
Statement on Corporate Governance
The Board is committed to ensuring high standards of corporate governance throughout the Group and endeavours to
ensure consistency of policies and procedures of the Group of companies in different geographical regions. This statement
illustrates the extent of which the Board has embodied the spirit and principles of the new Malaysian Code on Corporate
Governance 2012 (“MCCG”). The MCCG sets out the broad principles and specific recommendations on structures and
processes which companies should adopt in making good corporate governance an integral part of the business dealings and
culture. Unless otherwise stated below, the Company is in compliance with the requirements of the MCCG.
BOARD OF DIRECTORS
Board Composition
The Board currently has five (5) members comprising:Tan Sri Dato’ Tan Kay Hock - Chairman and Chief Executive
Puan Sri Datin Tan Swee Bee - Group Managing Director
Dato’ Ahmad Khairummuzammil bin Mohd Yusoff
- Independent Non-Executive Director
Tan Sri Dato’ Seri Dr Ting Chew Peh - Non-Independent Non-Executive Director
Mr Ooi Teng Chew
- Independent Non-Executive Director
This composition fulfils the requirement under the Main Market Listing Requirements of Bursa Malaysia Securities Berhad
(“Listing Requirements”) which stipulates that at least two (2) Directors or one-third of the Board, whichever is higher,
must be independent. Together, the Directors have a diverse wealth of experience as well as skills and knowledge in law,
economics, banking, accounting and general management. The profile of each Director on the current Board is included in
pages 8 to 9 of this Annual Report.
Although the Chairman who also acts as the Chief Executive Officer, nevertheless, he is only responsible for long range
strategic planning for the Group whilst the Group Managing Director has overall responsibility in managing the Group’s
business. As such, there is clear segregation of responsibilities between the Chairman and Group Managing Director to
ensure a balance of power and authority. The role of the Independent Non-Executive Directors is particularly important as
they provide unbiased and independent view, advice and judgement to fulfil a pivotal role in corporate accountability.
The Board is supportive of gender diversity in the boardroom as recommended by the MCCG to promote the representation
of women in the composition of the Board. The Board will endeavour to ensure that gender diversity will be taken into
account in nominating and selecting new directors to be appointed on the Board. Presently, Puan Sri Datin Tan Swee Bee is
the only female Director comprised in the Board of five (5) Directors.
The Board has fixed the maximum number of five (5) listed company board representations which any Director may hold at
any point of time. A director shall inform the Chairman before he/she accepts any new directorships in other public listed
companies.
14
Johan Holdings Berhad (314-K)
Statement on Corporate Governance
cont’d
BOARD OF DIRECTORS cont’d
Duties and Responsibilities
The Board is guided by its Board Charter which provides reference for directors in discharging their duties and
responsibilities to shareholders of the Company and principally include the following:
•
•
•
•
•
•
•
•
•
•
reviewing and adopting a strategic plan including setting performance objectives and approving operating budgets for
the Group and ensuring that the strategies promote sustainability;
overseeing the conduct of the Company’s business and build sustainable value for Shareholders;
reviewing the procedures to identify principal risks and ensuring the implementation of appropriate internal controls
and mitigation measures;
succession planning, including appointing, assessing, training, fixing the compensation of and where appropriate,
replacing senior management;
developing and implementing a Corporate Disclosure Policy (including an investor relations programme or shareholder
communications policy) for the Group;
reviewing the adequacy and the integrity of the Group’s internal control systems and management information
systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines;
monitoring and reviewing management processes aimed at ensuring the integrity of financial and other reporting;
ensuring that the Company’s financial statements are true and fair and conform with the accounting standards;
monitoring and reviewing policies and procedures relating to occupational health and safety and compliance with
relevant laws and regulations; and
ensuring that the Company adheres to high standards of ethics and corporate behaviour.
Code of Ethics
The Board of Directors has adopted a Code of Ethics for Company Directors. This Code of Ethics provides good guidance for
a standard of ethical behaviour for Directors based on trustworthiness and values that can be accepted and to uphold the
spirit of responsibility and social responsibility in line with the legislation, regulations and guidelines for administrating a
company.
To ensure comprehensive, accurate and timely disclosures, the Board of Directors are fully aware of and guided by the
Corporate Disclosure Guide 2011 issued by Bursa Malaysia Securities Berhad on 22 September 2011. The Guide aimed at
providing shareholders and investors with comprehensive, accurate and quality information on a timely and even basis, and
not merely meeting the minimum requirements under the Listing Requirements.
Supply of Information
All Directors are provided with an agenda and a set of Board papers prior to each Board Meeting to be convened. Board
papers are circulated in sufficient time to enable Directors to obtain further explanation, if necessary, in order to be properly
briefed before each meeting. Board members are supplied with full and timely information necessary to enable them to
discharge their responsibilities. Senior management staffs are also invited to attend Board Meetings when necessary to
provide the Board with further explanation and clarification on matters being tabled for consideration by the Board.
The Board meets quarterly, scheduled to hold within two months of each quarter, to consider the quarterly financial results
and review operational performance. Additional meetings are convened as and when necessary.
Annual Report 2014
15
Statement on Corporate Governance
cont’d
BOARD OF DIRECTORS cont’d
Supply of Information cont’d
All Directors have access to the advice and services of the Company Secretary and are updated on new statutory or
regulations requirements concerning their duties and responsibilities.
Newly appointed Directors are briefed by the Board, the Company Secretary and the members of the management on the
nature of business and current issues within the Company and the Group.
Board of Directors’ Meetings
During the financial year ended 31 January 2014, the number of Board of Directors’ Meetings held and the attendance of
each Director were as follows:Directors
No. of Board Meetings
Held
Attended
Tan Sri Dato’ Tan Kay Hock
5
5
Puan Sri Datin Tan Swee Bee
5
5
Tan Sri Dato’ Seri Dr Ting Chew Peh
5
5
Dato’ Ahmad Khairummuzammil bin Mohd Yusoff
5
5
Ooi Teng Chew
5
5
Re-election of Directors
In accordance with the Articles of Association of the Company at least one-third of the Directors including the Managing
Director are required to retire by rotation at each Annual General Meeting but shall be eligible for re-election.
Directors’ Training
The Board encourages its Directors to attend talks, seminars, workshops and in-house conferences to update and enhance
their skills and knowledge and to keep abreast with developments in regulatory and corporate governance issues. During
the year the Directors in their individual capacity and as Director of other public listed companies in Malaysia, had attended
various courses, briefings and seminars relating to risk management, corporate governance, investor relations and financial
statements reporting under MFRS.
Board Committees
The Board had delegated certain responsibilities and duties to the following Board Committees which operate within clearly
defined terms of reference. Except for the Remuneration Committee, the other Committees as listed below do not have
executive powers but report to the Board on all matters considered and their recommendations thereon.
16
Johan Holdings Berhad (314-K)
Statement on Corporate Governance
cont’d
BOARD OF DIRECTORS cont’d
Audit Committee
The Audit Committee currently comprises three (3) Non-Executive Directors as follows:1.
2.
3.
Dato’ Ahmad Khairummuzammil Bin Mohd Yusoff Tan Sri Dato’ Seri Dr Ting Chew Peh Ooi Teng Chew (Independent Non-Executive Director - Chairman)
(Non-Independent Non-Executive Director)
(Independent Non-Executive Director)
The Audit Committee’s terms of reference include the review of the Group’s quarterly and year end financial results, review
of any major audit findings raised by external auditors and internal auditors and management’s response thereon. The
Chairman and Chief Executive, Group Managing Director, Senior General Manager of Finance, Internal Audit Manager and
representatives from the External Auditors attend the Audit Committee Meetings at the invitation of the Audit Committee.
The Audit Committee meets with the external auditors at least once a year without any executive Directors being present.
Agenda of Audit Committee Meetings also include internal audit findings of operating units of the Group and investigations
carried out by internal audit department.
The Audit Committee Report for the financial year pursuant to Paragraph 15.15 of the Main Market Listing Requirements is
contained in pages 23 and 25 of this Annual Report.
Risk Management Committee
The Risk Management Committee comprises the following as members:1.
2.
3.
Tan Sri Dato’ Tan Kay Hock Puan Sri Datin Tan Swee Bee Ng Yew Soon (Non-Independent Executive Director - Chairman)
(Group Managing Director)
(Senior General Manager - Finance)
The Risk Management Committee’s primary responsibility is to oversee the overall risk management of the Group,
particularly on the strategic areas of the business. The Risk Management Committee, supported by various sub-RMCs
established at respective business units that are responsible for identifying, managing and mitigating risks through a
systematic risk evaluation/profiling exercise. The Risk Profile of respective business unit is reviewed and revised on a half
yearly basis and submitted to the Risk Management Committee for review. Details of Risk Management Framework can be
found in the Statement on Risk Management and Internal Control on pages 26 to 27 of this Annual Report.
Remuneration Committee
The Remuneration Committee comprises two (2) Non-Executive Directors and one (1) Executive Director. The members are
comprised of:1.
2.
3.
Tan Sri Dato’ Seri Dr Ting Chew Peh Dato’ Ahmad Khairummuzammil bin Mohd Yusoff Puan Sri Datin Tan Swee Bee (Non-Independent Non-Executive Director - Chairman)
(Independent Non-Executive Director)
(Group Managing Director)
The Remuneration Committee’s primary responsibilities are to recommend to the Board the remuneration package and the
terms of employment on each executive Director. The determination of fees payable to non-executive Director will be a
matter for the Board as a whole, and a Director shall not participate in the decision on their own remuneration packages.
Annual Report 2014
17
Statement on Corporate Governance
cont’d
BOARD OF DIRECTORS cont’d
Remuneration Committee cont’d
The Remuneration Committee is also responsible for developing the Group’s remuneration policy and determining the
remuneration packages of senior executive employees of the Group.
Nominating Committee
The Company’s Nominating Committee was established on 27 March 2013 and comprises the following members:1.
2.
3.
Dato’ Ahmad Khairummuzammil Bin Mohd Yusoff Tan Sri Dato’ Seri Dr Ting Chew Peh Ooi Teng Chew (Independent Non-Executive Director - Chairman)
(Non-Independent Non-Executive Director)
(Independent Non-Executive Director)
The Nominating Committee’s terms of reference include the authority delegated by the Board to oversee the selection and
assessment of Directors. The Nominating Committee shall:(i) recommend to the Board for the appointment of new Director in accordance to the nomination and selection policies;
(ii) assess the effectiveness of the Board as a whole, the committees of the Board and the contribution of each existing
individual Director, in terms of the appropriate size and skills, balance between Executive Directors, Non-Executive and
Independent Director, the mixture of skills and other core competencies required;
(iii) assess the independence of Independent Directors to consider whether the Independent Director can continue to bring
independent and objective judgement to board deliberations; and
(iv) to recommend to the board if an Independent Director who serves the board for more than 9 years is justifiable to
remain independent on board.
For FY2014, the Board has received confirmation in writing from all the Independent Directors of their independence based
on criteria in line with the definition of “Independent Directors” prescribed by the Listing Requirements.
The Board takes cognizance of the MCCG’s recommendation that the tenure of an Independent Director should not exceed
a cumulative term of nine (9) years. Upon completion of the nine (9) years, an Independent Director may continue to
serve on the Board if it is determined that his expertise and experience is relevant to the Company. The Board may wish to
retain an Independent Director who has more than nine (9) years tenure of service to continue to serve as an Independent
Director. In such an event, and as recommended by the MCCG, the Nominating Committee and the Board must carry out
an assessment to justify retaining him as an Independent Director and the Board to make a recommendation and provide
strong justification to seek shareholders’ approval in a general meeting.
Dato’ Ahmad Khairummuzammil Bin Mohd Yusoff, who was appointed as an Independent Director on 4 July 2005 will reach
his tenure of service for nine (9) years on 3 July 2014. Following assessment by the Nominating Committee and the Board,
Dato’ Ahmad Khairummuzammil Bin Mohd Yusoff has been recommended to continue to act as an Independent Director,
subject to shareholders’ approval at the forthcoming AGM of the Company based on the following justifications:
i)
ii)
He fulfilled the criteria under the definition of “Independent Director” as stated in the Listing Requirements,
He has over time, developed increased insight with the Group’s business operations and therefore can contribute to
the effectiveness of the Board as a whole,
18
Johan Holdings Berhad (314-K)
Statement on Corporate Governance
cont’d
BOARD OF DIRECTORS cont’d
Nominating Committee cont’d
iii)
iv)
v)
He does not have any conflict of interest as throughout his tenure of office as an Independent Director of the Company,
he has not entered into and is not expected to enter into any contracts which will give rise to any related party
transactions with the Company and its subsidiaries,
He remains to be objective and independent in expressing his views and participated in active deliberations and
decision making process of the Board and Board Committees in which he is a member. His length of service on the
Board and Board Committees does not in any way interfere with his exercise of independent judgement and ability to
act in the best interest of the Company,
He had exercised due care during his tenure as an Independent Non-Executive Director and as Chairman of the Audit
Committee and Nominating Committee and had carried out his professional duties in the interest of the Company and
its shareholders.
DIRECTORS’ REMUNERATION
The remuneration of Directors is determined at levels which enable the Company to attract and retain Directors with the
relevant experience and expertise to manage the Groups effectively.
The Non-Executive Directors are paid an annual basic fee, any increase of which are subject to approval by shareholders at
the annual general meeting. The Chairman of Audit Committee is paid an allowance of RM1,500/- per meeting and Audit
Committee member is paid RM1,000/- per meeting.
The aggregate remuneration of the Directors for the financial year ended 31 January 2014 is as follows:
Fees
Salaries
& Other
Emoluments
Benefits-InKind
Total
(RM’000)
(RM’000)
(RM’000)
(RM’000)
Tan Sri Dato’ Tan Kay Hock
-
912
111
1,023
Puan Sri Datin Tan Swee Bee
-
699
35
734
Dato’ Ahmad Khairummuzammil bin Mohd Yusoff
50
6
-
56
Tan Sri Dato’ Seri Dr Ting Chew Peh
50
4
-
54
Ooi Teng Chew
50
4
-
54
150
1,625
146
1,921
Executive Directors
Non-executive Directors
Annual Report 2014
19
Statement on Corporate Governance
cont’d
DIRECTORS’ REMUNERATION cont’d
The number of Directors whose remuneration falls into bands of RM50,000 is as follows:Directors
Range of Remuneration
Executive
Non-executive
RM50,001 to RM100,000
-
3
RM700,001 to RM750,000
1
-
RM1,000,001 to RM1,050,000
1
-
2
3
SHAREHOLDERS COMMUNICATION AND INVESTORS RELATIONSHIP POLICY
The Board acknowledges the need for shareholders to be informed of all material business and developments concerning
the Group. In addition to various announcements made during the year, the Board had ensured timely release of financial
results on a quarterly basis to provide shareholders with an overview of the Group’s performance and operations. Copies of
the full announcement are supplied to shareholders and members of the public upon request.
The Annual General Meeting is the principal forum for communicating with shareholders. Shareholders who are unable to
attend are allowed to appoint not more than two (2) proxies, who need not be the shareholders, to attend and vote on
their behalf. Board members as well as the Senior General Manager-Finance and the External Auditors of the Company are
present to answer questions raised by shareholders. Shareholders are given the opportunity to ask questions during the
questions and answers session prior to each resolution being proposed for consideration by shareholders.
Corporate information of the Group is also available via the Company’s website, http://www.johanholdings.com.
ACCOUNTABILITY AND AUDIT
(i) Financial Reporting
The Board acknowledge their responsibility to ensure that the financial statements of the Company and the Group
are prepared in accordance with the provisions of the Companies Act, 1965 and approved accounting standards in
Malaysia so as to give a true and fair view of the state of affairs and the result of the Company and of the Group.
In preparing these financial statements, the Directors have:-
-
-
-
adopted suitable accounting policies and applying them consistently;
made judgement and estimates that are prudent and reasonable;
ensured applicable accounting standards have been followed, subject to any material departures disclosed and
explained in the financial statements; and
prepared the financial statements on a going concern basis.
20
Johan Holdings Berhad (314-K)
Statement on Corporate Governance
cont’d
ACCOUNTABILITY AND AUDIT cont’d
(i) Financial Reporting cont’d
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any
time the financial position of the Company and the Group and to enable them to ensure that the financial statements
as prepared comply with the Companies Act, 1965. The Directors are also responsible for safeguarding the assets
of the Company and the Group and to take reasonable steps for the prevention and detection of fraud and other
irregularities.
(ii) Internal Control
The Board acknowledges its overall responsibility for ensuring that a sound system of internal control is maintained
throughout the Group and the need to review its effectiveness regularly. The Board recognises that risks cannot
be totally eliminated and the system of internal controls instituted can only help minimise and manage risks and
provide some assurance that the assets of the Company and of the Group are safeguarded against material loss and
unauthorised use and that financial statements are not materially misstated.
The information on the Group’s internal control is presented in the Statement on Risk Management and Internal
Control of this Annual Report.
(iii) Relationship with External Auditors
A transparent and professional relationship with the external auditors to enable them to independently report to
shareholders in accordance with statutory and professional requirement is established through the Audit Committee.
The role of the Audit Committee members in relation to the external auditors is set out in the Audit Committee Report
of this Annual Report.
Annual Report 2014
21
Statement on Corporate Social Responsibility
The Johan Group recognise Social Corporate Responsibility (“CSR”) as an integral part to our approach in managing our
businesses, creating value to our shareholders and enhancing the long term sustainability of our Group. Our Group believe
in the concept of CSR in going beyond business to fulfil our responsibilities towards the Environment, Community, Workplace
and Marketplace.
The Environment
We acknowledge our responsibilities for managing and reducing the impact that our businesses has on the environment.
Our commitments are to protect and enhance the environment at large, mitigate any possible adverse impact on the
environment, conforming to and satisfying with requirements of all legislation pertaining to environmental issues.
Prestige Ceramics Sdn Bhd which manufactures ceramic floor and wall tiles, conducts regular occupational safety
and awareness programmes for its employees. The management also perform periodic checks and institute controls on
environmental care and controls in the plant’s intake and ensure proper treatment and discharge of its effluents.
The Community
We believe in adding value to the communities in which we operate our businesses through providing support in diverse
areas of social welfare. The Group also supports charitable organisations in their noble efforts to help the needy and the
disadvantaged. All employees are encouraged to participate in community projects and undertake voluntary works to help
the needy.
On 16 July 2013, The Orient Star Resort, Lumut hosted a Buka Puasa dinner and contributed duit raya for thirty four (34)
orphans from Rumah Anak-Anak Yatim Bait Al-Amin, Parit in Perak. The hotel also organised the annual blood donation
campaign in January 2013 to help replenish the blood bank of Hospital Seri Manjung during the festive season.
Our subsidiary in Singapore, Nature’s Farm Pte Ltd, in the 1st Quarter contributed to the Bukit Gombak Community Centre
through sponship of 40% discount vouchers at a ceremony where over 1,500 senior citizens gathered for a day of fun-filled
activities and social bonding. Other sponsorships for the year included 40% discount vouchers to the University Cancer
Institute, Singapore for World Cancer Day 2013 and $20 Nature’s Farm cash vouchers for participants of a health seminar
organised by Tan Tock Seng Hospital. Nature’s Farm celebrated International Women’s Day on 8 March 2013 with the Let’s
Celebrate, Women! Campaign, doing its part for charity by donating part of sale proceeds to the Asian Women’s Welfare
Association from sale of selected range of products. In support of LionsSaveSight Centre (Singapore) and as part of their
Lions Recycle for Sight Singapore community project, Nature’s Farm® placed collection boxes at various retail outlets for the
public to donate their unused glasses to the needy and destitute in our society. By the end of the year, we had managed to
collect bags full of glasses.
22
Johan Holdings Berhad (314-K)
Statement on Corporate Social Responsibility
cont’d
The Workplace
The Group recognises that our people are our key assets and acknowledges that success and growth of the Group over the
years have been built on the foundation of a skilled and talented workforce. We acknowledge that it is crucial to nurture
our diverse talent pool in order to meet the needs of our diverse businesses, which calls for varying skills, capabilities and
expertise from our employees in the Group. The Group places strong emphasis on talent management and developing
human capital and has in place structured development programmes designed to develop leadership skills, technical
knowledge and soft skills among different groups of employees. The benefits provided to employees include medical
benefits such as treatment at hospitals and clinics, insurance coverage for personal accidents, hospitalisation, surgery and
dental treatment. The Group’s human resource policies and procedures are regularly reviewed to keep abreast of industry
benchmarks and best practices.
The Marketplace
The Group recognises the importance of market perception and confidence on the sustainability of our businesses. As such
we operate by maintaining high integrity in the market place through high ethical standards in the areas of marketing,
advertising and procurement, best practices and procedures on quality, health and safety and good corporate governance.
Details of the Group’s corporate governance and investor relations are set out in the Statement on Corporate Governance on
pages 13 to 20 of the Annual Report.
Annual Report 2014
23
Audit Committee Report
MEMBERS
Dato’ Ahmad Khairummuzammil bin Mohd Yusoff
Tan Sri Dato’ Seri Dr. Ting Chew Peh
Ooi Teng Chew A.
(Chairman - Independent Non-Executive Director)
(Non-Independent Non-Executive Director)
(Independent Non-Executive Director)
TERMS OF REFERENCE
Constitution
i)
The Audit Committee (“the Committee”) was established by the Board of Directors (“the Board”) of the Company
at its meeting held on 8 March 1994.
ii)
The Board shall ensure that the composition and functions of the Committee comply as far as possible with both
the Bursa Securities Listing Requirements as well as other regulatory requirements.
Objectives
i)
To assist the Board in fulfilling its fiduciary responsibilities relating to corporate accounting and reporting
practices of the Company and the Group.
ii)
To maintain, through regularly scheduled meetings, a direct line of communication between the Board and the
external auditors as well as the internal auditors.
iii)
To act upon the Board of Directors’ request to investigate and report on any issue or concern with regard to the
management of the Group.
Duties and Responsibilities
i)
To review with the external auditors the audit plan, audit report, findings, recommendations and their evaluation
of the system of internal controls.
ii)
To review and approve the scope and results of the external audit and to assess the suitability and independence
of the external auditors.
iii)
To consider and recommend for approval of the Board the appointment or re-appointment of the external
auditors, the audit fees and any questions of their resignation or dismissal.
iv)
To review the adequacy of the internal audit plans, scope of examination of the internal auditors and ensure
that appropriate action is taken by Management in respect of the audit observations and the Committee’s
recommendations.
v)
To review the quarterly, half-yearly and annual financial statements before submission to the Board for approval.
The review should focus primarily on compliance with applicable financial reporting standards as well as other
regulatory requirements and the adequacy of information disclosure for a fair and full presentation of the
financial affairs of the Company and the Group.
24
Johan Holdings Berhad (314-K)
Audit Committee Report
cont’d
A.
TERMS OF REFERENCE cont’d
Duties and Responsibilities cont’d
vi)
To review any related party transaction and conflict of interest situation that may arise within the Company and
the Group including any transaction, procedure or conduct that raises questions of management integrity.
vii) To direct any special investigations on the Group’s operations to be carried out by the Group Internal Audit
Division or any other appropriate agencies.
viii) To discuss problems and reservations arising out of external or internal audits and any matters which the auditors
wish to bring up in the absence of Senior Management or the Executive Directors of the Group where necessary.
ix)
To perform other related duties as may be agreed by the Committee and the Board.
x)
To meet with external and internal auditors without the presence of the Senior Management or the Executive
Directors annually.
B. MEETINGS AND ACTIVITIES
During the year ended 31 January 2014, four (4) Audit Committee Meetings were held. Details of attendance of each
Committee member were as follows:No. of Meetings
Audit Committee
Held
Attended
Dato’ Ahmad Khairummuzammil bin Mohd Yusoff (Chairman)
4
4
Tan Sri Dato’ Seri Dr Ting Chew Peh
4
4
Ooi Teng Chew
4
4
At each of these Committee Meetings, both the Senior General Manager-Finance, the Internal Audit Manager and the
representative(s) of the external auditors were invited to review with the Committee members the quarterly reports,
half-year and annual financial statements as the case may be focusing on matters as listed out in the Duties and
Responsibilities above.
After each Committee Meeting, the Chairman of the Committee reports to the Board on the proceedings conducted
thereat and to convey the recommendations by the Committee on the quarterly reports, half-year and annual financial
statements with or without amendments as the case may be to be approved and adopted by the Board for release to
the Bursa Securities.
Annual Report 2014
25
Audit Committee Report
cont’d
B. MEETINGS AND ACTIVITIES cont’d
Highlights of Activities
In line with the terms of reference of the Committee, the following activities were carried out by the Committee during
the year ended 31 January 2014 in the discharge of its functions and duties:-
C.
i)
Review of the audit plans and scope for the year for the Group prepared by Internal Audit Department and the
external auditors;
ii)
Review of the audit reports for the Group prepared by the Internal Audit Department and the external auditors
and consideration of the major findings by the auditors and management’s responses thereto. Monitored the
corrective actions on the outstanding audit issues to ensure that all the key risks and control lapses have been
addressed;
iii)
Review of the quarterly and annual financial statements of the Group prior to submission to the Board for
consideration and approval;
iv)
Review of the related party transactions entered into by the Group to ensure that current procedures for
monitoring of related parties transactions have been complied with;
v)
Review of the fees of the external auditors.
INTERNAL AUDIT FUNCTION
Johan has since December 1990 established an Internal Audit department to carry out internal audit function of the
Group’s key operations in Malaysia and overseas. The scope of internal audit works are conducted on a rotation basis
and as and when directed by the management. The internal audit reports generated were reviewed and discussed at
each of the Audit Committee Meetings to assist the Committee to discharge its functions more effectively. The internal
audit team is independent and has no involvement in the operations of Group companies.
The total cost incurred for the internal audit function for the year ended 31 January 2014 was RM422,394 (2013 :
RM409,453).
26
Johan Holdings Berhad (314-K)
Statement on Risk Management
and Internal Control
The new Malaysian Code on Corporate Governance 2012 requires listed companies to maintain a sound system of risk
management and internal control to safeguard shareholders’ interest and the Company’s assets. This statement is prepared
in accordance with paragraph 15.26 (b) of the Main Market Listing Requirements (“LR”) and Guidelines for Directors of Listed
Issuer – Statement on Risk Management & Internal Control of Bursa Malaysia Securities Berhad.
Directors’ Responsibilities
The Board recognizes its responsibilities for and the importance of governance of risk. A sound system of internal controls
and risk management practices are crucial and shall be embedded in the governance framework. However, it should be
noted that such systems are designed to manage rather than eliminate risk. Also any system can only provide reasonable and
not absolute assurance against material loss or misstatement.
Risk Management Framework
The Board has established a proper risk management framework and it is an ongoing process for identifying, understanding,
communicating, treating and monitoring risk to achieve the Group’s business objectives. This process has been in place
throughout the year under review and carried out in the following perspective:•
Board of Directors
The Board is fully responsible in determining the Group’s risk appetite and level of risk exposure. In its regular Board
Meetings, the Directors are brought to the attention on significant risk and material issues which required decision to
be made. To safeguard shareholders’ interest and the Group’s asset, the Board ensure that business risks are identified,
assessed and managed, in the Group’s strategic planning and decision making process.
•
Audit Committee
The Audit Committee (“AC”) is assisted by an in-house Internal Audit Department (“IAD”) which performs regular
independent reviews, monitor and ensure compliance with the Group’s policies, procedures and systems of risk
management & internal control. The AC, in every Committee Meeting, review internal audit reports for the Group
prepared by the IAD. It will consider major findings of the internal auditors and management response thereto.
Monitoring on the corrective actions of any outstanding audit issues are on going to ensure that all the risks and
control lapses have been addressed.
•
Risk Management Committee
The Risk Management Committee (“RMC”) was set up by the Board in September 2002. The RMC, assisted by the
IAD, identifies, evaluates and manages significant risk faced by the Group. Risk Profiles are submitted by the RMC of
operating subsidiaries on a half year basis to be reviewed by the Head Office RMC. The Risk Profiles are also presented
to the Audit Committee periodically.
The Risk Management Policy of the Group is in place to ensure a systematic approach to identify key risks faced by the
Group and to monitor them on a regular basis. The policy helps to determine the appropriate risk appetite or level of
exposure for the Group. The risk appetite for the Johan Group may be controllable and uncontrollable and it depends
on several factors such as knowledge of the matter, past experience and magnitude of potential gains/losses.
Annual Report 2014
27
Statement on Risk Management
and Internal Control
cont’d
Risk Management Framework cont’d
•
All operating business units
Standard operating policies and procedures (SOPP) were formalised to guide the operations of the Group’s operating
business units. It documents how transactions are captured and where internal controls are applied. In addition,
as part of the performance monitoring process, management information in the form of annual budgets, revised
forecasts, quarterly management accounts and monthly management reports are submitted to the Head Office Finance
Department for review and onward presentation to the Board for review and approval.
Internal Control Framework
The Board acknowledges that a sound system of internal control forms part of the good governance practise and risk
management forms part of the internal control. The following key elements constitute a controlled environment which shall
encompass the System of Internal Control of the Johan Group:•
•
•
•
•
•
Organisational structures in place for each operating unit with clearly defined levels of authority.
Operational management has clear responsibility for identifying risks affecting their business and for instituting
adequate procedures and internal controls to mitigate and monitor such risks on an ongoing basis.
The SOPP of each business units sets out clear definition of authorisation procedures and clear line of accountability,
with strict authorisation, approval and control within the Group.
The IAD, staffed by a team of professionally qualified personnel who is independent and has no involvement in
the operations of Group companies, provides the Audit Committee with reasonable independent assurance on the
effectiveness and integrity of the Group’s system of internal control.
The duty of reviewing and monitoring the effectiveness of the Group’s system of internal control were vested to the AC
which provides independent views. Periodic reports from the IAD to the AC are conducive in recommending remedial
action to be taken by the Management.
The existence of RMC to oversee the overall risk management holds responsibility to identify, assessing, managing and
monitoring significant risk within the Group.
The Board, however, recognised that a sound system of internal control will reduces, but cannot eliminate the possibility
of poor judgement in decision-making, human error, control processes being deliberately circumvented by employees and
others, management overriding controls and the occurrence of unforeseeable circumstances.
Review of Effectiveness
The Board is satisfied with the procedures outlined above and believes, with assurance from the Chairman & Chief Executive
Officer and Senior General Manager – Finance that, the risk management and system of internal controls had continued to
operate adequately and effectively in the financial year under review.
The Board also relies on the assessment by internal auditors to evaluate the state of internal controls and risk management
at each operating unit. The Board is committed to the continuous improvement of internal controls and risk management
practices within the Group to meet its business objectives.
This Statement has been approved by the Board and reviewed by the external auditors as required under Paragraph 15.23
of the LR. Based on their review, the external auditors have reported to the Board that nothing has come to their attention
that cause them to believe that this Statement is inconsistent with their understanding with the procedures adopted by the
Board in the review of the adequacy and integrity of the internal control systems of the Group.
28
Johan Holdings Berhad (314-K)
Additional Information
Utilisation Of Proceeds Raised From Any Corporate Proposal
The Company did not implement any fund raising corporate exercise during the financial year ended 31 January 2014.
Share Buybacks
The Company does not have a scheme to buy back its own shares.
Options, Warrants Or Convertible Securities Exercised
The Employee Share Options Scheme (ESOS) of the Company expired on 31 October 2013. As at 31 October 2013, no option
shares were exercised by employees and the outstanding options lapsed on that date.
The Company did not issue any warrants or convertibles securities during the financial year ended 31 January 2014.
Depository Receipt Programme
The Company did not sponsor any Depository Receipt Programme during the financial year ended 31 January 2014.
Sanctions and/or Penalties Imposed
No sanctions and/or penalties were imposed on the Company and its subsidiaries, directors or management by the relevant
regulatory bodies during the financial year ended 31 January 2014.
Non-Audit Fees
During the financial year ended 31 January 2014, the Group/Company did not incur any non-audit fees to the Company’s
auditors (2013 : Nil).
Variation In Results For The Financial Year
There was no deviation of 10% or more between the profit after tax and minority interest stated in the announced
unaudited results and the audited financial statements of the Company and the Group for the year ended 31 January 2014.
Profit Guarantee
The Company has not given any profit guarantee in respect of any corporate exercise to-date.
Annual Report 2014
29
Additional Information
cont’d
Material Contracts and Contracts RELATING TO LOAN
Save as disclosed below, there were no material contracts (not being contracts entered into in the ordinary course of
business) entered into by the Company and its subsidiaries involving Directors’ and major shareholders’ interests:a) Share Sale Agreement entered into between Abacus Pacific N.V., a wholly-owned subsidiary of the Company, and
George Kent (Malaysia) Berhad (“GKM”) on 19 November 2013, for the disposal of 1,000 ordinary shares of S$1.00
each and 3,500,000 Class “A” shares of S$1.00 each in George Kent (Singapore) Pte Ltd (“GKS”), representing 100%
equity interest in GKS for a cash consideration of S$500,000.00.
Tan Sri Dato’ Tan Kay Hock and Puan Sri Datin Tan Swee Bee are Directors and substantial shareholders of the Company
and GKM.
Johan Holdings Berhad (314-K)
Financial Statements
30
31
Report of the Directors
36
Independent Auditors‘ Report
38
Statements of Comprehensive Income
40
Statements of Financial Position
42
Statements of Changes in Equity
44
Statements of Cash Flows
47
Notes to the Financial Statements
133
Supplementary Information
134
Statement by Directors
134
Declaration by the Officer Primarily Responsible
for the Financial Management of the Company
Annual Report 2014
31
Report of the Directors
The directors of JOHAN HOLDINGS BERHAD hereby submit their report and the audited financial statements of the Group
and of the Company for the financial year ended 31 January 2014.
PRINCIPAL ACTIVITIES
The principal activities of the Company are that of investment holding and provision of management services to its
subsidiaries.
The principal activities of the subsidiaries are set out in Note 17 to the Financial Statements.
There have been no significant changes in the nature of the activities of the Company and its subsidiaries during the financial
year.
RESULTS OF OPERATIONS
The results of operations of the Group and of the Company for the financial year are as follows:
Loss before tax
Income tax expense
Loss for the year from continuing operations
Profit for the year from discontinued operations
The
Group
The
Company
RM’000
RM’000
(35,941)
(7,117)
(43,058)
4,902
(9,716)
(9,716)
-
(38,156)
(9,716)
(38,476)
(9,716)
(Loss)/Profit attributable to:
Owners of the Company
Non-controlling interests
320
(38,156)
(9,716)
In the opinion of the directors, the results of operations of the Group and of the Company during the financial year have not
been substantially affected by any item, transaction or event of a material and unusual nature.
DIVIDENDS
No dividend has been paid or declared by the Group and the Company since the end of the previous financial year. The
directors also do not recommend any dividend payment in respect of the current financial year.
32
Johan Holdings Berhad (314-K)
Report of the Directors
cont’d
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.
ISSUE OF SHARES AND DEBENTURES
The Company has not issued any new shares or debentures during the financial year.
SHARE OPTIONS
The Company’s Employee Share Option Scheme (“ESOS”) is governed by the by-laws approved by the shareholders at an
Extraordinary General Meeting held on 19 June 2003. The ESOS was implemented on 31 October 2003 and was to be in
force for a period of 5 years expiring on 30 October 2008. Subsequently, at the Annual General Meeting of the Company
held on 24 July 2008, shareholders’ approval was obtained for the ESOS to be extended for another period of 5 years
commencing from 1 November 2008 and expiring on 31 October 2013. The ESOS had expired on 31 October 2013 and,
accordingly, the outstanding options lapsed on that date.
The salient features and other terms of the ESOS are disclosed in Note 23 to the Financial Statements.
The Company has been granted exemptions by the Companies Commission of Malaysia vide their letter dated 7 May 2014
from having to disclose in this report the names of employees who have been granted options to subscribe for less than
16,000 ordinary shares of RM0.50 each.
The list of employees of the Group that have been granted options to subscribe for 16,000 or more ordinary shares of
RM0.50 each is as follows:
No. of options over ordinary shares of RM0.50 each
Balance at
1.2.2013
Granted
Teh Yong Fah
45,000
-
(45,000)
-
Ng Yew Soon
41,000
-
(41,000)
-
Koh Chuan Tiok @ Koh Chuan Lim
40,000
-
(40,000)
-
Robert Koh
22,000
-
(22,000)
-
Yap Ee Seong
20,000
-
(20,000)
-
Leong Kwee Heng
20,000
-
(20,000)
-
Yuen Kum Fong
18,000
-
(18,000)
-
Peter Tam Kui Pui
16,000
-
(16,000)
-
Lapsed
Balance at
31.01.2014
Registered in the name
As disclosed above, the ESOS of the Company has expired on 31 October 2013. Accordingly, the outstanding options lapsed
on that date.
Details of options granted to directors are disclosed in Director’s Interests.
Annual Report 2014
33
Report of the Directors
cont’d
OTHER STATUTORY INFORMATION
Before the statements of profit or loss and other comprehensive income and statements of financial position of the Group
and of the Company were made out, the directors took reasonable steps:
(a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance
for doubtful debts, and had satisfied themselves that all known bad debts had been written off and that adequate
allowance had been made for doubtful debts; and
(b) to ensure that any current assets which were unlikely to realise their book values in the ordinary course of business
had been written down to their estimated realisable values.
At the date of this report, the directors are not aware of any circumstances:
(a) which would render the amount written off for bad debts or the amount of allowance for doubtful debts in the
financial statements of the Group and of the Company inadequate to any substantial extent; or
(b) which would render the values attributed to current assets in the financial statements of the Group and of the
Company misleading; or
(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and
of the Company misleading or inappropriate; or
(d) not otherwise dealt with in this report or financial statements which would render any amount stated in the financial
statements of the Group and of the Company misleading.
At the date of this report, there does not exist:
(a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which
secures the liability of any other person; or
(b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.
No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve
months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of
the Group and of the Company to meet their obligations as and when they fall due.
In the opinion of the directors, no item, transaction or event of a material and unusual nature has arisen in the interval
between the end of the financial year and the date of this report which is likely to affect substantially the results of
operations of the Group and of the Company for the succeeding financial year.
34
Johan Holdings Berhad (314-K)
Report of the Directors
cont’d
DIRECTORS
The following directors served on the Board of the Company since the date of the last report:
Tan Sri Dato’ Tan Kay Hock
Puan Sri Datin Tan Swee Bee
Tan Sri Dato’ Seri Dr Ting Chew Peh
Dato’ Ahmad Khairummuzammil Bin Mohd Yusoff
Ooi Teng Chew
DIRECTORS’ INTERESTS
The shareholdings in the Company of those who were directors at the end of the financial year, as recorded in the Register
of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act, 1965, are as follows:
No. of ordinary shares of RM0.50 each
Balance at
1.2.2013
Addition
Disposal
Balance at
31.1.2014
Tan Sri Dato’ Tan Kay Hock
59,391,100
-
-
59,391,100
Puan Sri Datin Tan Swee Bee
85,119,367
-
-
85,119,367
200,000
-
-
200,000
Tan Sri Dato’ Tan Kay Hock
213,717,484
-
-
213,717,484
Puan Sri Datin Tan Swee Bee
187,989,217
-
-
187,989,217
Direct Interests
Ooi Teng Chew
Indirect Interests
In addition to the above, the following directors are deemed to have an interest in the shares of the Company as a result of
the options granted pursuant to the ESOS of the Company:
No. of options over ordinary shares of RM0.50 each
Balance at
1.2.2013
Granted
Tan Sri Dato’ Tan Kay Hock
100,000
-
(100,000)
-
Puan Sri Datin Tan Swee Bee
100,000
-
(100,000)
-
Lapsed
Balance at
31.1.2014
Tan Sri Dato’ Tan Kay Hock and Puan Sri Datin Tan Swee Bee, by virtue of their interests in the shares in the Company,
are also deemed to have interest in the shares of the subsidiaries of the Company to the extent that the Company has an
interest.
None of the other directors in office at the end of the financial year held shares or had beneficial interest in the shares of
the Company or of its related companies during and at the end of the financial year.
Annual Report 2014
35
Report of the Directors
cont’d
DIRECTORS’ BENEFITS
Since the end of the previous financial year, none of the directors of the Company has received or become entitled
to receive any benefit (other than the benefits included in the aggregate amount of emoluments received or due and
receivable by the directors or the fixed salary of a full time employee of the Company as disclosed in Note 10 to the Financial
Statements) by reason of a contract made by the Company or a related corporation with the director or with a firm of which
the director is a member, or with a company in which the director has a substantial financial interest except for any benefit
which may be deemed to have arisen by virtue of the transactions between the Company and certain companies in which
certain directors of the Company are also directors and/or shareholders as disclosed in Note 32 to the Financial Statements.
During and at the end of the financial year, no arrangement subsisted to which the Company was a party whereby directors
of the Company might acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other
body corporate except for the options granted to certain directors pursuant to the Company’s ESOS as disclosed above.
AUDITORS
The auditors, Messrs. Deloitte & Touche, have indicated their willingness to continue in office.
Signed on behalf of the Board
in accordance with a resolution of the Directors,
PUAN SRI DATIN TAN SWEE BEE
Kuala Lumpur
30 May 2014
DATO’AHMAD KHAIRUMMUZAMMIL BIN MOHD YUSOFF
36
Johan Holdings Berhad (314-K)
Independent Auditors’ Report
to the Members of Johan Holdings Berhad
(Incorporated in Malaysia)
Report on the Financial Statements
We have audited the financial statements of JOHAN HOLDINGS BERHAD, which comprise the statements of financial
position of the Group and of the Company as of 31 January 2014, and the statements of profit or loss and other
comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company
for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on
pages 38 to 132.
Directors’ Responsibility for the Financial Statements
The directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in
accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements
of the Companies Act, 1965 in Malaysia. The directors are also responsible for such internal control as the directors
determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors
consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order
to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of
the financial statements.
We believe that the audit evidence that we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the
Company as of 31 January 2014 and of their financial performance and cash flows for the year then ended in accordance
with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the
Companies Act, 1965 in Malaysia.
Annual Report 2014
37
Independent Auditors’ Report
to the Members of Johan Holdings Berhad
(Incorporated in Malaysia)
cont’d
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report that:
(a) in our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and
its subsidiaries of which we have acted as auditors, have been properly kept in accordance with the provisions of the
Act;
(b) we have considered the accounts and auditors’ reports of the subsidiaries, of which we have not acted as auditors,
which are indicated in Note 17 to the Financial Statements, being financial statements that have been included in the
consolidated financial statements;
(c)
we are satisfied that the accounts of the subsidiaries that have been consolidated with the financial statements of
the Company are in form and content appropriate and proper for the purposes of the preparation of the financial
statements of the Group, and we have received satisfactory information and explanations as required by us for those
purposes; and
(d) the auditors’ reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment
made under Section 174(3) of the Act.
Other Reporting Responsibilities
The supplementary information set out in Note 38 on page 133 is disclosed to meet the requirement of Bursa Malaysia
Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the
supplementary information in accordance with Guidance on Special Matter No. 1 “Determination of Realised and Unrealised
Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements” as issued
by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our
opinion, the supplementary information is prepared in all material respects, in accordance with the MIA Guidance and the
directive of Bursa Malaysia Securities Berhad.
Other Matter
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act,
1965 in Malaysia and for no other purpose. We do not assume responsibility towards any other person for the contents of
this report.
DELOITTE & TOUCHE HUANG KHEAN YEONG
AF 0834Partner - 2993/05/16 (J)
Chartered Accountants
Chartered Accountant
30 May 2014
38
Johan Holdings Berhad (314-K)
Statements of Profit or Loss and
Other Comprehensive Income
For the year ended 31 January 2014
The Group
Note
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
1,323
1,313
-
-
Continuing operations
Revenue
5
279,925
286,493
Cost of sales
6
(84,528)
(91,721)
195,397
194,772
1,323
1,313
11,328
10,914
584
1,296
(35,959)
(39,395)
-
-
(141,201)
(121,571)
(8,265)
(21,177)
(30,546)
(3,323)
Gross profit
Other operating income
Distribution expenses
Administrative expenses
Other operating expenses
(11,401)
-
Finance costs
7
(44,329)
(41,928)
(35)
(32)
Loss before tax
8
(35,941)
(27,754)
(9,716)
(8,824)
Income tax expense
11
(7,117)
(4,354)
(43,058)
(32,108)
Loss for the year from continuing operations
(9,716)
(37)
(8,861)
Discontinued operations
Profit for the year from discontinued operations
12
Loss for the year
4,902
(38,156)
133
(31,975)
(9,716)
(8,861)
Other comprehensive income/(loss)
Items that will not be reclassified subsequently to
profit or loss:
Gain on revaluation of properties
24
24,871
Foreign currency translation difference for foreign
operations
24
5,696
Reclassification of exchange reserve to profit or
loss on disposal of foreign subsidiaries
24
(4,903)
Net fair value loss on available-for-sale financial
assets
24
(30)
-
-
-
-
-
-
-
-
-
-
-
-
-
Items that will be reclassified subsequently to profit
or loss:
Other comprehensive income/(loss) for the year,
net of tax
Total comprehensive loss for the year
(2,291)
25,634
(2,291)
(12,522)
(34,266)
(9,716)
(8,861)
Annual Report 2014
39
Statements of Profit or Loss and
Other Comprehensive Income
For the year ended 31 January 2014
cont’d
The Group
Note
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
(38,476)
(31,851)
(9,716)
(8,861)
(Loss)/Profit attributable to:
Owners of the company
Non-controlling interests
320
(124)
-
-
(38,156)
(31,975)
(9,716)
(8,861)
(12,842)
(34,055)
(9,716)
(8,861)
Total comprehensive (loss)/income attributable to:
Owners of the company
Non-controlling interests
320
(211)
(12,522)
(34,266)
(6.96)
(5.13)
0.79
0.02
(Loss)/Earnings per share attributable to owners of
the Company (sen)
Basic and diluted:
13
From continuing operations
From discontinued operations
The accompanying Notes form an integral part of the Financial Statements.
(9,716)
(8,861)
40
Johan Holdings Berhad (314-K)
Statements of Financial Position
As of 31 January 2014
The Group
Note
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
ASSETS
Non-Current Assets
Property, plant and equipment
14
306,424
278,087
708
861
Inventories - non-current
15
6,100
6,100
-
-
Intangible assets
16
24,019
25,062
-
-
Investment in subsidiaries
17
-
-
165,460
168,782
Investment securities
18
1,468
1,418
-
-
Deferred tax assets
19
8,242
9,367
-
-
346,253
320,034
166,168
169,643
12,831
10,689
-
-
Total Non-Current Assets
Current Assets
Investment securities
18
Inventories
15
30,045
35,537
-
-
Trade receivables
20
655,116
646,414
-
-
Other receivables and prepaid expenses
21
30,097
24,992
220
275
Amount owing by subsidiaries
17
-
-
15,492
21,506
428
618
275
244
89,529
72,763
591
165
818,046
791,013
16,578
22,190
1,164,299
1,111,047
182,746
191,833
Tax recoverable
Cash and bank balances
Total Current Assets
Total Assets
31
Annual Report 2014
41
Statements of Financial Position
As of 31 January 2014
cont’d
The Group
Note
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
311,474
311,474
311,474
311,474
EQUITY AND LIABILITIES
Capital and Reserves
Share capital
22
Reserves
24
Accumulated losses
Non-controlling interests
Total Equity
104,914
79,280
69,415
69,415
(208,411)
(169,935)
(228,932)
(219,216)
207,977
220,819
151,957
161,673
9,344
9,024
-
-
217,321
229,843
151,957
161,673
Non-Current Liabilities
Loans and borrowings
25
7,074
9,424
119
400
Senior certificates
27
33,500
33,500
-
-
Deferred tax liabilities
19
12,402
7,810
-
-
52,976
50,734
119
400
Total Non-Current Liabilities
Current Liabilities
Trade payables
28
124,100
83,394
-
-
Other payables and accrued expenses
29
74,046
67,341
416
128
Amount owing to subsidiaries
17
-
-
30,060
29,553
Loans and borrowings
25
227,897
228,821
194
79
Investor certificates
27
441,314
411,653
-
-
Deferred revenue
30
20,523
30,570
-
-
6,122
8,691
-
-
Total Current Liabilities
894,002
830,470
30,670
29,760
Total Liabilities
946,978
881,204
30,789
30,160
1,164,299
1,111,047
182,746
191,833
Tax liabilities
TOTAL EQUITY AND LIABILITIES
The accompanying Notes form an integral part of the Financial Statements.
42
Johan Holdings Berhad (314-K)
Statements of Changes in Equity
For the year ended 31 January 2014
Attributable to owners of the Company
Non-distributable reserves
The Group
Properties Investments
Share
Share Exchange revaluation revaluation Accumulated
capital premium reserve
reserve
reserve
losses
Total
equity
RM’000
RM’000
RM’000
RM’000
RM’000
311,474
69,415
12,069
-
-
-
-
(2,204)
-
-
Balance as of
31 January 2013
311,474
69,415
9,865
-
-
(169,935) 220,819
9,024 229,843
Balance as of
1 February 2013
311,474
69,415
9,865
-
-
(169,935) 220,819
9,024 229,843
-
-
793
24,871
(30)
311,474
69,415
10,658
24,871
(30)
Balance as of
1 February 2012
Total comprehensive
loss for the year
Total comprehensive
income/(loss) for
the year
Balance as of
31 January 2014
RM’000
Noncontrolling
Total interests
RM’000
RM’000 RM’000
(138,084) 254,874
9,235 264,109
(31,851)
(38,476)
(34,055)
(12,842)
(208,411) 207,977
(211) (34,266)
320
(12,522)
9,344 217,321
Annual Report 2014
43
Statements of Changes in Equity
For the year ended 31 January 2014
cont’d
Nondistributable
reserve Share
Share Accumulated
capital
premium
losses
The Company
Total
RM’000
RM’000
RM’000
RM’000
311,474
69,415
(210,355)
170,534
-
-
(8,861)
(8,861)
Balance as of 31 January 2013
311,474
69,415
(219,216)
161,673
Balance as of 1 February 2013
311,474
69,415
(219,216)
161,673
-
-
(9,716)
(9,716)
311,474
69,415
(228,932)
151,957
Balance as of 1 February 2012
Total comprehensive loss for the year
Total comprehensive loss for the year
Balance as of 31 January 2014
The accompanying Notes form an integral part of the Financial Statements.
44
Johan Holdings Berhad (314-K)
Statements of Cash Flows
For the year ended 31 January 2014
The Group
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
(35,941)
(27,754)
CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES
Loss before tax from continuing operations
Profit before tax from discontinued operations
4,902
22
(9,716)
(9,716)
(8,824)
-
(31,039)
(27,732)
(8,824)
44,329
41,940
35
32
8,776
8,270
186
176
-
-
1,895
5,318
Trade receivables
14,146
9,412
-
-
Other receivables
1,214
-
-
-
Amortisation on intangible assets
3,869
3,063
-
-
Net fair value loss on investment securities
2,137
1,995
-
-
Unrealised (gain)/loss on foreign exchange - net
1,703
(6,060)
-
-
Adjustments for:
Interest expense
Depreciation of property, plant and equipment
Allowance for doubtful debts:
Amount owing by subsidiaries
Impairment of goodwill
824
-
-
-
Property, plant and equipment written off
811
-
-
-
Inventories written down
439
1,034
-
-
-
-
3,322
-
(650)
-
-
(31)
-
-
Impairment loss on investment in subsidiaries
Allowance for doubtful debts no longer required:
Trade receivables
Other receivables
Gain on disposal of subsidiaries
(14,671)
(4,870)
-
-
-
Dividend income from investment securities
(811)
(630)
-
-
Interest income
(407)
(3,219)
Gain on disposal of investment securities
(225)
(22)
Gain on disposal of property, plant and equipment
(115)
(439)
(1,241)
-
-
(55)
-
(7)
Write back of inventories written down
-
(754)
-
-
Impairment of property, plant and equipment
-
243
-
-
Annual Report 2014
45
Statements of Cash Flows
For the year ended 31 January 2014
cont’d
The Group
Operating Profit/(Loss) Before Working Capital Changes
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
26,110
26,804
(4,717)
(4,546)
(Increase)/Decrease in:
Inventories
4,695
(1,184)
-
-
(21,351)
(88,170)
-
-
(6,220)
3,724
55
41,565
28,658
-
9,974
13,351
288
(10,047)
5,877
-
Cash From/(Used In) Operations
44,726
(10,940)
(4,374)
Income tax paid
(8,253)
(1,429)
(31)
Net Cash Generated From/(Used In) Operating Activities
36,473
(12,369)
(4,405)
(4,988)
(2,747)
(2,589)
(5)
(25)
Trade receivables
Other receivables and prepaid expenses
(40)
Increase/(Decrease) in:
Trade payables
Other payables and accrued expenses
Deferred revenue
(402)
(4,988)
-
CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES
Purchase of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of investment securities
Purchase of intangible assets
Decrease in amount owing by subsidiaries
Acquisition of investment securities
447
336
-
7
2,107
2,737
-
-
(3,091)
-
-
4,119
967
-
-
(648)
(6,241)
(2,998)
Dividend income from investment securities
811
630
-
-
Net cash flow on disposal of subsidiaries
164
-
-
-
Interest received
407
3,219
439
1,241
(1,756)
4,553
2,190
Net Cash (Used In)/From Investing Activities
(5,700)
46
Johan Holdings Berhad (314-K)
Statements of Cash Flows
For the year ended 31 January 2014
cont’d
The Group
Note
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
(44,329)
(41,940)
(35)
(32)
CASH FLOWS FROM/(USED IN) FINANCING
ACTIVITIES
Interest paid
Deposits pledged with licensed financial institutions
675
1,120
-
-
Net proceeds from investor and senior certificates
29,661
24,223
-
-
(Repayment)/Proceeds for loans and borrowings,
excluding bank overdraft
(56,320)
53,230
(194)
(211)
-
507
(2)
(Decrease)/Increase in amount owing to subsidiaries
-
Net Cash (Used In)/From Financing Activities
(70,313)
36,633
278
(245)
NET (DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS
(39,540)
22,508
426
(3,043)
8,479
7,060
-
-
49,139
19,571
165
3,208
18,078
49,139
591
165
Effect of foreign exchange rate changes
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
31
The accompanying Notes form an integral part of the Financial Statements.
Annual Report 2014
47
Notes to the Financial Statements
For the year ended 31 January 2014
1. GENERAL INFORMATION
The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed on the Main
Market of Bursa Malaysia Securities Berhad.
The principal activities of the Company are that of investment holding and provision of management services to its
subsidiaries.
The principal activities of the subsidiaries are set out in Note 17.
There have been no significant changes in the nature of the principal activities of the Company and its subsidiaries
during the financial year.
The registered office and principal place of business of the Company is located at 11th Floor, Wisma E&C, 2 Lorong
Dungun Kiri, Damansara Heights, 50490 Kuala Lumpur, Malaysia.
The financial statements of the Group and of the Company were authorised by the Board of Directors for issuance on
30 May 2014.
2.
BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
The financial statements of the Group and of the Company have been prepared in accordance with the Malaysian
Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the provisions of the
Companies Act, 1965 in Malaysia.
Adoption of New and Revised Malaysian Financial Reporting Standards
In the current financial year, the Group and the Company has adopted all the new and revised Standards and
Amendments issued by the Malaysian Accounting Standards Board (“MASB”) that are relevant to the operations and
effective for annual periods beginning on or after 1 February 2013 as follows:
MFRS 7
Financial Instruments: Disclosures (Amendments relating to Disclosures - Offsetting Financial Assets and
Liabilities)
MFRS 10
Consolidated Financial Statements
MFRS 10
Consolidated Financial Statements (Amendments relating to Transition Guidance)
MFRS 13
Fair Value Measurement
MFRS 101
Presentation of Financial Statements (Amendments relating to Presentation of Items of Other
Comprehensive Income)
MFRS 127
Separate Financial Statements (IAS 27 as amended by the IASB on May 2011)
MFRS 128
Investments in Associates and Joint Ventures (IAS 31 as amended by the IASB on May 2011)
Amendments to MFRSs contained in the document entitled Annual Improvements 2009 - 2011 cycle
48
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
2.
BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS cont’d
Adoption of New and Revised Malaysian Financial Reporting Standards cont’d
The adoption of these new and revised Standards and Amendments have not had material impact on the amounts
reported in the financial statements of the Group and the Company in the current and previous financial year except as
disclosed below.
Amendments to MFRS 101 Presentation of Items of Other Comprehensive Income
The Group and the Company have applied the amendments to MFRS 101 Presentation of Items of Other
Comprehensive Income for the first time in the current year. The amendments introduce new terminology, whose
use is not mandatory, for the statement of comprehensive income and income statement. Under the amendments
to MFRS 101, the “statement of comprehensive income” is renamed as the “statement of profit or loss and other
comprehensive income”. The amendments to MFRS 101 retain the option to present profit or loss and other
comprehensive income in either a single statement or in two separate but consecutive statements. However, the
amendments to MFRS 101 require items of other comprehensive income to be grouped into two categories in the
other comprehensive income section: (a) items that will not be reclassified subsequently to profit or loss and (b) items
that will be reclassified subsequently to profit or loss when specific conditions are met. Income tax on items of other
comprehensive income is required to be allocated on the same basis - the amendments do not change the option to
present items of other comprehensive income either before tax or net of tax. The amendments have been applied
retrospectively, and hence the presentation of items of other comprehensive income has been modified to reflect the
changes. Other than the above mentioned presentation changes, the application of the amendments to MFRS 101
does not result in any impact on profit or loss, other comprehensive income and total comprehensive income.
Standards and Amendments in issue but not yet effective
At the date of authorisation for issue these financial statements, the new and revised Standards and Amendments
relevant to the Group and the Company which were in issue but not yet effective and not early adopted by the Group
and the Company are as listed below:
MFRS 9
Financial Instruments (IFRS 9 issued by IASB in November 2009)1
MFRS 9
Financial Instruments (IFRS 9 issued by IASB in October 2010)1
MFRS 9
Financial Instruments (Hedge Accounting and amendments to MFRS 9, MFRS 7 and MFRS 139)1
Amendments to
Mandatory Effective Date of MFRS 9 (IFRS 9 issued by IASB in November 2009 and October 2010
MFRS 9 and
respectively) and Transition Disclosures1
MFRS 7
Amendments to
Employee Benefits (Amendments relating to Defined Benefit Plans: Employee Contributions)3
MFRS 119
Amendments to
Financial Instruments: Presentation (Amendments relating to Offsetting Financial Assets and
MFRS 132
Financial Liabilities)2
Amendments to
Impairment of assets (Amendments relating to Recoverable Amounts Disclosures for NonMFRS 136
Financial Assets)2
Amendments to
Financial Instruments: Recognition and Measurement (Amendments relating to Novation of
MFRS 139
Derivatives and Continuation of Hedge Accounting)2
Amendments to MFRSs contained in the document entitled Annual Improvements to MFRSs 2010 - 2012 Cycle3
Amendments to MFRSs contained in the document entitled Annual Improvements to MFRSs 2011 - 2013 Cycle3
Annual Report 2014
49
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
2.
BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS cont’d
Standards and Amendments in issue but not yet effective cont’d
1
2
The directors anticipate that the abovementioned Standards and Amendments will be adopted in the annual financial
statements of the Group and of the Company when they become effective and that the adoption of these Standards
and Amendments will have no material impact on the financial statements of the Group and of the Company in the
period of initial application except as disclosed below.
MFRS 9 and Amendments relating to Mandatory Effective Date of MFRS 9 and Transition Disclosures
MFRS 9 (IFRS 9 issued by IASB in November 2009) introduces new requirements for the classification and measurement
of financial assets. MFRS 9 (IFRS 9 issued by IASB in October 2010) includes the requirements for the classification and
measurement of financial liabilities and for derecognition.
The amendments to MFRS 9 (IFRS 9 issued by IASB in November 2009 and October 2010 respectively) (“MFRS 9”) relating
to “Mandatory Effective Date of MFRS 9 and Transition Disclosures” which became immediately effective on the issuance
date of 1 March 2012 amended the mandatory effective date of MFRS 9 to annual periods beginning on or after 1 January
2015 instead of on or after 1 January 2013, with earlier application still permitted as well as modified the relief from restating
prior periods. However, this mandatory effective date has been removed with the issuance of MFRS 9 Financial Instruments:
Hedge Accounting and Amendments to MFRS 9, MFRS 7 and MFRS 139 (see below). MFRS 7 which was also amended in
tandem with the issuance of the aforementioned amendments introduces new disclosure requirements that are either
permitted or required on the basis of the entity’s date of adoption and whether the entity chooses to restate prior periods.
Key requirements of MFRS 9:
•
all recognised financial assets that are within the scope of MFRS 139 Financial Instruments: Recognition
and Measurement are required to be subsequently measured at amortised cost or fair value. Specifically,
debt investments that are held within a business model whose objective is to collect the contractual cash
flows, and that have contractual cash flows that are solely payments of principal and interest on the principal
outstanding are generally measured at amortised cost at the end of subsequent accounting periods. All other
debt investments and equity investments are measured at their fair values at the end of subsequent accounting
periods. In addition, under MFRS 9, entities may make an irrevocable election to present subsequent changes
in the fair value of equity instrument (that is not held for trading) in other comprehensive income, with only
dividend income generally recognised in profit or loss.
•
with regard to the measurement of financial liabilities designated as at fair value through profit or loss, MFRS
9 requires that the amount of change in the fair value of the financial liability that is attributable to changes
in the credit risk of that liability, is presented in other comprehensive income, unless the recognition of
the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an
accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability’s credit risk are not
subsequently reclassified to profit or loss. Previously, under MFRS 139, the entire amount of the change in the
fair value of the financial liability designated as at fair value through profit or loss was presented in profit or loss.
3
The mandatory effective date of MFRS 9 (IFRS 9 issued by IASB in November 2009 and October 2010 respectively) which was
for annual periods beginning on or after 1 January 2015 has been removed with the issuance of MFRS 9 Financial Instruments:
Hedge Accounting and amendments to MFRS 9, MFRS 7 and MFRS 139. The effective date of MFRS 9 will be decided when
IASB’s IFRS 9 project is closer to completion. However, each version of the MFRS 9 is available for early adoption
Effective for annual periods beginning on or after 1 January 2014
Effective for annual periods beginning on or after 1 July 2014
50
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
2.
BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS cont’d
Standards and Amendments in issue but not yet effective cont’d
MFRS 9 and Amendments relating to Mandatory Effective Date of MFRS 9 and Transition Disclosures cont’d
The Directors anticipate that the application of MFRS 9 in the future may have significant impact on amounts reported
in respect of the Group’s financial assets and financial liabilities. However, it is not practicable to provide a reasonable
estimate of the effect of MFRS 9 until a detailed review has been completed.
MFRS 9 Financial Instruments: Hedge Accounting and Amendments to MFRS 9, MFRS 7 and MFRS 139
This Standard introduces a new general hedge accounting model. The new general hedge accounting model will
allow reporters to reflect risk management activities in the financial statements more closely as it provides more
opportunities to apply hedge accounting. However, entities that apply MFRS 9 will have an accounting policy choice
under the standard as to whether to apply the hedge accounting model in MFRS 139 or MFRS 9. This accounting policy
choice will be revisited when macro hedging project is near to its finalisation.
The principal changes introduced as compared to the general hedge accounting model under MFRS 139 are as follows:
•
•
•
•
•
In addition to the new chapter on hedge accounting, two other important changes were made to MFRS 9:
•
the qualifying criteria for hedge accounting is now based on a more principles-based approach;
increased eligibility of hedging instruments;
increased eligibility of hedged items;
accounting for the time value component of options and forward contracts with less volatility in profit or loss; and
modification and discontinuation of hedging relationships.
Reporting of changes in fair value of an entity’s own debts
MFRS 9 (IFRS 9 as issued by IASB in October 2010) requires an entity to present fair value changes due to own
credit on liabilities designated as at fair value through profit or loss to be presented in other comprehensive
income rather than in profit or loss. This requirement can only be applied when MFRS 9 is adopted.
The amendment now allows entities to elect to early adopt the aforementioned requirement without applying
the other requirements in MFRS 9 (i.e. an entity can continue to apply MFRS 139 and yet, be able to adopt this
new presentation requirement).
Removal of the mandatory effective date of MFRS 9
•
The MASB have decided to remove the mandatory effective date (i.e. 1 January 2015) from MFRS 9. The new date
shall be determined when the impairment phase is closer to completion.
The directors are currently assessing the impact of adoption of MFRS 9 and have not made any accounting policy
decision. Thus, the impact of adopting the new MFRS 9 on the Group’s and the Company’s financial statements
cannot be determined now until the process is complete.
Annual Report 2014
51
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
3.
SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Group and of the Company have been prepared under the historical cost convention
unless otherwise stated in the accounting policies mentioned below. Historical cost is generally based on the fair value
of the consideration given in exchange for assets.
The financial statements of the Group and of the Company are presented in Ringgit Malaysia (“RM”), and all values are
rounded to the nearest thousand (RM’000) except when otherwise indicated.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date, regardless of whether that price is directly observable or
estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into
account the characteristics of the asset or liability if market participants would take those characteristics into account
when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in
these financial statements is determined on such a basis, except for any share-based payment transactions that are within
the scope of MFRS 2, leasing transaction that are within the scope of MFRS 117, and measurements that have some
similarities to fair value but are not fair value, such as net realisable value in MFRS 102 or value-in-use in MFRS 136.
Basis of Consolidation and Subsidiaries
The consolidated financial statements incorporate the financial statements of the Company and entities (including
special purpose entities) controlled by the Company (its subsidiaries). Control is achieved when the Company:
•
•
•
The Company reassesses whether or not it controls and investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control listed above.
When the Company has less than a majority of the voting rights of an investee, it has power over the investee when
the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally.
The Company considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights in
an investee are sufficient to give it power, including:
•
•
•
•
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the
Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of
during the year are included in the consolidated statement of profit or loss and other comprehensive income from the
date the Company gains control until the date when the Company ceases to control the subsidiary.
has power over the investee;
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.
the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote
holders;
potential voting rights held by the Company, other vote holders or other parties;
rights arising from other contractual arrangements; and
any additional facts and circumstances that indicate that the Company has, or does not have, the current ability
to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous
shareholders’ meetings.
52
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
3.
SIGNIFICANT ACCOUNTING POLICIES cont’d
Basis of Consolidation and Subsidiaries cont’d
Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to
the non-controlling interest. Total comprehensive income of subsidiary is attributed to the owners of the Company and
to the non-controlling interests even if this results in the non-controlling interest having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiary to bring their accounting policies into
line with the Group’s accounting policies.
All intra-group assets and liabilities, equity income, expenses and cash flows relating to transactions between members
of the Group are eliminated in full on consolidation.
Changes in Group’s ownership interest in existing subsidiaries
Changes in the Group’s ownership interests in subsidiaries that do not result in a loss of control are accounted for as
equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to
reflect the changes in their relative interest in the subsidiaries. Any difference between the amount by which the noncontrolling interests are adjusted and the fair value of consideration paid or received is recognised directly in equity
and attributed to owners of the Company.
When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated as the
difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained
interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any
non-controlling interests. When assets of the subsidiary are carried at revalued amounts or fair values and the related
cumulative gain or loss has been recognised in other comprehensive income and accumulated in equity, the amounts
previously recognised in other comprehensive income are accounted for as if the Group had directly disposed of the
relevant assets (i.e. reclassified to profit or loss or transferred directly to retained earnings as specified by applicable
MFRSs). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded
as the fair value on initial recognition for subsequent accounting under MFRS 139 Financial Instruments: Recognition
and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or jointly
controlled entity.
Subsidiaries
Investment in subsidiaries, which are eliminated on consolidation, are stated at cost less any accumulated impairment
losses, if any, in the Company’s financial statements.
Business Combinations
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration
transferred in a business combination is measured at fair value which is calculated as the sum of the acquisition-date
fair values of assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree
and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are
recognised in profit or loss as incurred.
Annual Report 2014
53
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
3.
SIGNIFICANT ACCOUNTING POLICIES cont’d
Business Combinations cont’d
At acquisition date, the identifiable assets acquired and liabilities assumed are recognised at the fair value, except that:
•
•
•
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling
interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any)
over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after
reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed
exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the
fair value of the acquirer’s previously held equity interest in the acquiree (if any), the excess is recognised immediately
in profit or loss as a bargain purchase gain.
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the
entity’s net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling
interests’ proportionate share of the recognised amounts of the acquiree’s identifiable net assets. The choice of
measurement basis is made on a transaction-by-transaction basis. Other types of non-controlling interests are
measured at fair value or, when applicable, on the basis specified in another MFRSs.
Where the consideration transferred by the Group in a business combination includes assets or liabilities resulting from
a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value.
Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted
retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments
that arise from additional information obtained during the measurement period (which cannot exceed one year from
the acquisition date) about facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of contingent consideration that do not qualify as
measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration
that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted
for within equity. Contingent consideration that is classified as an asset or liability is remeasured at subsequent
reporting dates in accordance with MFRS 137 Provisions, Contingent Liabilities and Contingent Assets, as appropriate,
with the corresponding gain or loss being recognised in profit or loss.
Where a business combination is achieved in stages, the Group’s previously held equity interests in the acquiree are
remeasured to fair value at the acquisition date (i.e. the date when the Group attains control) and the resulting gain
or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition
date that have previously been recognised in other comprehensive income are reclassified to profit or loss, where such
treatment would be appropriate if that interest were disposed of.
deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements are recognised
and measured in accordance with MFRS 112 Income Taxes and MFRS 119 Employee Benefis respectively.
liabilities or equity instruments related to the replacement by the Group of an acquiree’s share-based payment
awards are measured in accordance with MFRS 2 Share-based Payment; and
assets (or disposal groups) that are classified as held for sale in accordance with MFRS 5 Non-current Assets Held
for Sale and Discountinued Operations are measured in accordance with that Standard.
54
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
3.
SIGNIFICANT ACCOUNTING POLICIES cont’d
Business Combinations cont’d
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete.
Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities
are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition
date that, if known, would have affected the amounts recognised at that date.
Revenue Recognition
Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the
Group and the Company and the amount of revenue can be measured realiably. Revenue is measured at the fair value
of consideration received and receivable in the normal course of business.
The following specific recognition criteria must also be met before revenue is recognised:
(i)
Dividend income
Dividend income from investments is recognised when the right to receive payment has been established.
(ii) Charge and credit card operations
Charge and credit card commissions, cardholders’ subscriptions, renewal fees and service charges are recognised
on inception of the respective events.
Provision of charge and credit card services that result in award credits for cardholders are accounted for as
multiple element revenue transactions and the fair value of the consideration received or receivable is allocated
between the services provided and the reward credits granted. The consideration allocated to the award credits is
measured by reference to their fair value. Such transaction is not recognised as revenue at the time of the initial
transaction but is deferred and recognised as revenue when the reward credits are redeemed and the Group’s
obligations have been fulfilled.
(iii) Ticketing and travel revenue
Revenue from air ticket sales is recognised based on agency fee earned and upon issue and delivery of air tickets.
Revenue from travel services is recognised upon departure or arrival dates of the tours and services rendered.
(iv) Sales of goods
Revenue is recognised upon the transfer of significant risk and rewards of ownership of the goods to the
customer, which generally coincides with delivery and acceptance of the goods sold. Revenue is not recognised
to the extent where there are significant uncertainties regarding recovery of the consideration due, associated
costs or the possible return of goods.
Annual Report 2014
55
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
3.
SIGNIFICANT ACCOUNTING POLICIES cont’d
Revenue Recognition cont’d
(v) Revenue from hotel operations
Revenue fom rental of hotel rooms, sale of food and beverage and other related income are recognised on an
accrual basis.
(vi) Revenue from development properties
Revenue from sale of development properties is recognised in the profit or loss when significant risks and
rewards of ownership of the properties have been transferred to the buyer on delivery in its entirety at a single
time on vacant possession.
(vii) Contract revenue
Contract revenue and contract costs are recognised as revenue and expenses respectively by reference to
the stage of completion of the contract activity at the end of the reporting period, when the outcome of an
engineering contract can be estimated reliably. When the outcome of an engineering contract cannot be
estimated reliably, contract revenue is recognised to the extent of contract costs incurred that are likely to be
recoverable and contract costs are recognised as expense in the period in which they are incurred. An expected
loss on the engineering contract is recognised as an expense immediately when it is probable that total contract
costs will exceed total contract revenue.
Contract revenue comprises the initial amount of revenue agreed in the contract and variations in contract work,
claims and incentive payments to the extent that it is probable that they will result in revenue and they are
capable of being reliably measured.
The stage of completion is determined by reference to the proportion that contract costs incurred for work
performed to date bear to the estimated total contract costs.
(viii) Interest income
Interest income is recognised on an accrual basis using the effective interest rate method.
(ix) Rental income
Rental income is accounted for on a straight-line basis over the lease terms. The aggregate costs of incentives
provided to lessees are recognised as a reduction of rental income over the lease term on a straight-line basis.
56
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
3.
SIGNIFICANT ACCOUNTING POLICIES cont’d
Foreign Currency Conversion
The individual financial statements of each group entity are presented in the currency of the primary economic
environment in which the entity operates (its functional currency). For the purpose of the consolidated financial
statements, the results and financial position of each group entity are expressed in Ringgit Malaysia (“RM”), which is
the functional currency of the Company and the presentation currency for the consolidated financial statements.
In preparing the financial statements of the individual entities, transactions in currencies other than the functional
currency (foreign currencies) are recorded at the rates of exchange prevailing at the dates of the transactions. At
the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates
prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are
retranslated at the rates prevailing at the date when the fair values were determined. Non-monetary items that are
measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences are recognised in profit or loss in the period in which they arise except for:
•
•
•
•
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign
operations are translated into RM using exchange rates prevailing at the end of the reporting period. Income
and expenses items are translated at the average exchange rates for the period, unless exchange rates fluctuated
significantly during that period, in which case the exchange rates at the dates of transactions are used. Exchange
differences arising, if any, are recognised in other comprehensive income and accumulated in equity (attributable to
non-controlling interests as appropriate).
On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a disposal
involving loss of control over a subsidiary that includes a foreign operation, loss of joint control over a jointly controlled
entity that includes a foreign operation, or loss of significant influence over an associate that includes a foreign
operation), all of the accumulated exchange differences in respect of that operation attributable to the Group are
reclassified to profit or loss. Any exchange differences that have previously been attributed to non-controlling interests
are derecognised, but they are not reclassified to profit or loss.
In addition, in relation to a partial disposal of a subsidiary that does not result in the Group losing control over the
subsidiary, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests
and are not recognised in profit or loss. For all other partial disposals (i.e. of associates or jointly controlled entities
that do not result in the Group losing significant influence or joint control), the proportionate share of the accumulated
exchange differences is reclassified to profit or loss.
Exchange differences arising on the retranslation of non-monetary items carried at fair value in respect of which
gain and losses are recognised in other comprehensive income. For such non-monetary items, the exchange
component of that gain or loss is also recognised in other comprehensive income;
Exchange differences on foreign currency borrowings relating to assets under construction for future productive
use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on
those foreign currency borrowings;
Exchange differences on transactions entered into in order to hedge certain foreign currency risks; and
Exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is
neither planned nor likely to occur (therefore, forming part of the net investment in the foreign operation), which
are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment
of the monetary items.
Annual Report 2014
57
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
3.
SIGNIFICANT ACCOUNTING POLICIES cont’d
Foreign Currency Conversion cont’d
Goodwill and fair value adjustments on identifiable assets and liabilities arising on the acquisition of a foreign
operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing
at the end of each reporting period. Exchange differences arising are recognised in other comprehensive income and
accumulated in equity.
Employee Benefits
Short-term benefits
Wages, salaries, bonuses and non-monetary benefits are accrued in the period in which the associated services are
rendered by employees of the Group and the Company. Short-term accumulating compensated absences such as
paid annual leave are recognised when services are rendered by employees that increase their entitlement to future
compensated absences. Short-term non-accumulating compensated absences such as sick leave are recognised when
the absences occur.
Defined contribution plans
The Group participates in the national pension schemes as defined by the laws of the countries in which it has
operations. The Malaysian companies in the Group make contributions to the Employees Provident Fund (“EPF”)
in Malaysia, a defined contribution pension scheme. Contributions to defined contribution pension schemes are
recognised as an expense in the period in which the related service is performed.
Employee share options plans
The Employee Share Options Scheme (“ESOS”), an equity-settled, share-based compensation plan, allows the Group’s
employees to acquire ordinary shares of the Company. The total fair value of share options granted to employees
is recognised as an employee cost with a corresponding increase in the share option reserve within equity over the
vesting period and taking into account the probability that the option will vest. The fair value of share options is
measured at grant date, taking into account, if any, the market vesting conditions upon which the options were granted
but excluding the impact of any non-market vesting conditions.
Non-market vesting conditions are included in assumptions about the number of options that are expected to become
exercisable on vesting date.
At the end of each reporting period, the Group revises its estimates of the number of share options that are expected
to become exercisable on vesting date. It recognises the impact of the revision of original estimates, if any, in profit or
loss, and a corresponding adjustment to equity over the remaining vesting period. The equity amount is recognised in
the share option reserve until the option is exercised, upon which it will be transferred to retained earnings, or until
the option expires, upon which it will be transferred directly to retained earnings.
The proceeds received net of any directly attributable transaction costs are credited to equity when the options are
exercised.
58
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
3.
SIGNIFICANT ACCOUNTING POLICIES cont’d
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards
of ownership to the lessee. All other leases are classified as operating leases.
The Group as lessee
Assets held under finance leases are initially recognised as assets of the Group at their fair value at the inception of
the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is
included in the statement of financial position as a finance lease obligation.
Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a
constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in
profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance
with the Group’s general policy on borrowing costs (see below). Contingent rentals are recognised as expenses in the
periods in which they are incurred.
Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where
another systematic basis is more representative of the time pattern in which economic benefits from the leased asset
are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which
they are incurred.
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a
liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis,
except where another systematic basis is more representative of the time pattern in which economic benefits from the
leased asset are consumed.
The Group as Lessor
Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified as
operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the
leased asset and recognised over the lease term on the same bases as rental income. The accounting policy for rental
income is set out above.
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the
cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment
income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is
deducted from the borrowing costs eligible for recognised.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred. Borrowing costs
consist of interest and other costs that the Group and the Company incurred in connection with the borrowing of
funds.
Annual Report 2014
59
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
3.
SIGNIFICANT ACCOUNTING POLICIES cont’d
Income Tax
Income tax expense for the year comprises currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the
statements of comprehensive income because of items of income or expense that are taxable or deductible in other
years and items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities
are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for
all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that
taxable profits will be available against which those deductible temporary differences, unused tax losses and unused
tax credits can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises
from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a
transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries
and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax
assets arising from deductible temporary differences associated with such investments and interests are only
recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the
benefits of the temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent
that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which
the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively
enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which the Group and the Company expect, at the end of the
reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group and
the Company intend to settle its current tax assets and liabilities on a net basis.
60
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
3.
SIGNIFICANT ACCOUNTING POLICIES cont’d
Income Tax cont’d
Current and deferred tax for the period
Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items
that are recognised outside profit or loss (whether in other comprehensive income or directly in equity), in which case
the current and deferred tax is also recognised in other comprehensive income or directly in equity respectively. Where
current or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the
accounting for the business combination.
Impairment of Non-Financial Assets Other Than Goodwill
At the end of each reporting period, the Group reviews the carrying amounts of its non-financial assets other than
goodwill to determine whether there is any indication that these assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment
loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates
the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent
basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or
otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent
allocation basis can be identified.
Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset (or cash-generating unit) for which
the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is
recognised immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is
increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not
exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset
(or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
Property, Plant and Equipment
Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are
stated in the statement of financial position at their revalued amounts, being the fair value at the date of revaluation,
less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are
performed with sufficient regularity such that the carrying amount does not differ materially from that which would be
determined using fair values at the end of the reporting period.
Annual Report 2014
61
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
3.
SIGNIFICANT ACCOUNTING POLICIES cont’d
Property, Plant and Equipment cont’d
Any revaluation increase arising on the revaluation of such land and buildings is recognised in other comprehensive
income and accumulated in properties revaluation reserve, except to the extent that it reverses a revaluation decrease
for the same asset previously recognised in profit or loss, in which case the increase is credited to profit or loss to the
extent of the decrease previously expensed. A decrease in carrying amount arising on the revaluation of such land and
buildings is charged to profit or loss to the extent that it exceeds the balance, if any, held in the properties revaluation
reserve relating to a previous revaluation of that asset.
Gain or loss arising from the disposal of an asset is determined as the difference between the estimated net disposal
proceeds and the carrying amount of the asset, and is recognised in profit or loss.
Freehold land is not depreciated. Long-term leasehold land are depreciated based on the carrying values of the land
over the remaining period of the leases.
Depreciation of other property, plant and equipment is computed using the straight-line method to write off the cost of
the various assets over their estimated useful lives at the following annual rates:
Freehold buildings
Long-term leasehold buildings
Long-term leasehold hotel properties
Plant and machinery, furniture, equipment and motor vehicles
2%
1.76% - 2%
2%
5% - 33.3%
At the end of each reporting period, the residual values, useful lives and depreciation methods of property, plant and
equipment are reviewed, and the effects of any change in estimates are recognised prospectively.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets.
On the 31 January 2014, the Group changed its accounting policy on land and buildings from cost model to revaluation
model. Management takes the view that this policy provides more realiable and relevant information on the value
of the land and buildings. The policy has been applied prospectively from the date of the policy change. Accordingly,
the adoption of the new policy has no effect on prior years. The effect on the current year is to increase the carrying
amount of land and buildings at the end of the year by RM28,637,000 and resulted in a revaluation surplus and
deferred tax liability of RM24,871,000 and RM3,766,000 respectively.
Intangible Assets
Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the
business less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or groups of
cash-generating units) that is expected to benefit from the synergies of the combination.
62
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
3.
SIGNIFICANT ACCOUNTING POLICIES cont’d
Intangible Assets cont’d
Goodwill cont’d
The cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently
when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is
less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset
in the unit. Any impairment loss for goodwill is recognised directly in profit or loss. An impairment loss recognised for
goodwill is not reversed in subsequent periods.
Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit is
disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation
when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured
based on the relative fair values of the operations disposed of and the portion of the cash-generating unit retained.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination
of the profit or loss on disposal.
Other intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired
in a business combination is their fair value as at the date of acquisition. Following initial recognition, intangible
assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful
lives of intangible assets are assessed to be either finite of indefinite. Intangible assets with finite lives are amortised
on a straight-line basis over the estimated economic useful lives and assessed for impairment whenever there is an
indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an
intangible asset with a finite useful life are reviewed at least at each reporting date.
Computer software acquired are amortised on a straight-line basis over a period of 7 years (their estimated useful
lives).
Inventories
Inventories are stated at lower of cost and net realisable value. Net realisable value represents the estimated selling
price for inventories less all estimated costs of completion and costs necessary to make the sale.
Raw materials, work-in-progress, finished goods and merchandise
Cost of raw materials, finished goods and merchandise is determined on a weighted average or first-in-first-out basis,
as appropriate, according to the category of inventories concerned. Cost of materials and merchandise comprises
the original purchase price plus the costs incurred in bringing the inventories to their present location and condition.
Cost of work-in-progress and finished goods include the costs of raw materials, direct labour, other direct costs and
appropriate production overheads.
Annual Report 2014
63
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
3.
SIGNIFICANT ACCOUNTING POLICIES cont’d
Inventories cont’d
Contract work-in-progress
Contract work-in-progress include amounts of work completed and estimates of the realisable value of work done but
not charged to clients at the end of the reporting period. The statements of profit or loss and other comprehensive
income reflect the profits and losses on contracts completed prior to the end of the reporting period and the results of
current contracts based on the percentage of completion method.
Land held for property development
Land held for property development consists of land on which no development activities have been undertaken
or where development activities are not expected to be completed within the normal operating cycle. Such land is
classified as non-current asset and is stated at cost less accumulated impairment losses.
Costs associated with the acquisition of land include the purchase price of the land, professional fees, stamp duties,
commissions, conversion fees and other relevant levies.
Land held for property development is transferred to property development costs (under current assets) when
development activities have commenced and where the development activities are expected to be completed within
the normal operating cycle.
Properties under development
Cost of properties under development not recognised as an expense is recognised as an asset. Properties under
development comprise costs associated with the acquisition of land and all costs that are directly attributable to
development activities or that can be allocated on a reasonable basis to such activities.
Developed properties held for sale
Cost of developed properties held for sale consists of costs associated with the acquisition of land, direct costs and
appropriate proportions of common costs attributable to developing the properties to completion.
Provisions
Provisions are recognised when the Group and the Company have a present obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of economic resources will be required to settle the obligation, and the
amount of the obligation can be estimated reliably.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation
at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a
provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present
value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third
party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount
of the receivable can be measured reliably.
64
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
3.
SIGNIFICANT ACCOUNTING POLICIES cont’d
Progress Billing in Respect of Property Development
Progress billing in respect of property development refers to progress billings attributable to the sale of properties
under development for which the said properties under development have yet to be delivered.
Financial Instruments
Financial assets and financial liabilities are recognised when, and only when, the Group and the Company become a
party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable
to the acquisition or issue of the financial assets and financial liabilities (other than financial assets and financial liabilities
at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction costs that are directly attributable to the acquisition of
financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Financial Assets
Financial assets are classified into the following specified categories: financial assets “at fair value through profit or
loss” (FVTPL), “held-to-maturity” investments, “available-for-sale” (AFS) financial assets and, “loans and receivables”.
The classification depends on the nature and purpose of the financial assets and is determined at the time of initial
recognition. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date
basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the
time frame established by regulation or convention in the marketplace.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating
interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future
cash receipts through the expected life of the financial asset, or (where appropriate) a shorter period, to the net
carrying amount on initial recognition.
Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL.
Financial assets at FVTPL
Financial assets are classified as at FVTPL when the financial asset is either held for trading or it is designated as at
FVTPL.
A financial asset is classified as held for trading if:
•
•
•
Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss.
it has been acquired principally for the purpose of selling it in the near term; or
on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together
and has a recent actual pattern of short-term profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument.
Annual Report 2014
65
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
3.
SIGNIFICANT ACCOUNTING POLICIES cont’d
Financial Assets cont’d
AFS financial assets
AFS financial assets are non-derivatives that are either designated as available-for-sale or are not classified as loans and
receivables, held-to-maturity investments or financial assets at FVTPL.
All AFS assets are measured at fair value at the end of the reporting period. Fair value is determined in the manner
described in Note 33. Gains and losses arising from changes in fair value are recognised in other comprehensive
income and accumulated in the investments revaluation reserve, with the exception of impairment losses, interest
calculated using the effective interest method, and foreign exchange gains and losses on monetary assets, which are
recognised in profit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain
or loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss.
AFS equity investments that do not have a quoted market price in an active market and whose fair value cannot
be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity
investments are measured at cost less any identified impairment losses at the end of the reporting period.
Dividends on AFS equity instruments are recognised in profit or loss when the Group’s right to receive the dividends is
established.
The fair value of AFS monetary assets denominated in a foreign currency is determined in that foreign currency
and translated at the spot rate at the end of the reporting period. The foreign exchange gains and losses that are
recognised in profit or loss are determined based on the amortised cost of the monetary asset. Other foreign exchange
gains and losses are recognised in other comprehensive income.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in
an active market. Loans and receivables are measured at amortised cost using the effective interest method, less any
impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables
when the recognition of interest would be immaterial.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are
considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after
the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.
Objective evidence of impairment could include:
•
•
•
Significant financial difficulty of the issuer or counterparty; or
Default or delinquency in interest or principal payments; or
It becoming probable that the borrower will enter bankruptcy or financial reorganisation.
66
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
3.
SIGNIFICANT ACCOUNTING POLICIES cont’d
Financial Assets cont’d
Impairment of financial assets cont’d
For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired
individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a
portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an
increase in the number of delayed payments in the portfolio past the average credit period, as well as observable
changes in national or local economic conditions that correlate with default on receivables.
For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between
the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s
original effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the
exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When
a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries
of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the
allowance account are recognised in profit or loss.
When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognised in other
comprehensive income are reclassified to profit or loss in the period.
For financial assets measured at amortised cost, if, in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the
previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the
investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the
impairment not been recognised.
In respect of AFS equity securities, impairment losses previously recognised in profit or loss are not reversed through
profit or loss. Any increase in fair value subsequent to an impairment loss is recognised in other comprehensive income
and accumulated under the heading of investments revaluation reserve. In respect of AFS debt securities, impairment
losses are subsequently reversed through profit or loss if an increase in the fair value of the investment can be
objectively related to an event occurring after the recognition of the impairment loss.
Derecognition of financial assets
The Group and the Company derecognises a financial asset only when the contractual rights to the cash flows from
the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of
the asset to another entity. If the Group and the Company neither transfer nor retain substantially all the risks and
rewards of ownership and continue to control the transferred asset, the Group and the Company recognise their
retained interest in the asset and an associated liability for amounts it may have to pay. If the Group and the Company
retain substantially all the risks and rewards of ownership of a transferred financial asset, the Group and the Company
continue to recognise the financial asset and also recognise a collateralised borrowing for the proceeds received.
On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the
sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other
comprehensive income and accumulated in equity is recognised in profit or loss.
Annual Report 2014
67
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
3.
SIGNIFICANT ACCOUNTING POLICIES cont’d
Financial Liabilities and Equity Instruments issued by the Group and the Company
Classification as debt or equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of
the contractual arrangement.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of
its liabilities. Equity instruments issued by the Group and the Company are recognised at the proceeds received, net of
direct issue costs. Ordinary shares are equity instruments.
Financial liabilities
Financial liabilities are classified as either financial liabilities “at FVTPL” or “other financial liabilities”.
Other financial liabilities
Other financial liabilities are initially measured at fair value, net of transaction costs and are subsequently measured at
amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating
interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future
cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net
carrying amount on initial recognition.
Derecognition of financial liabilities
The Group and the Company derecognise financial liabilities when, and only when, the Group’s and the Company’s
obligations are discharged, cancelled or they expire.
Statements of Cash Flows
The Group and the Company adopt the indirect method in the preparation of the statements of cash flows.
Cash and cash equivalents are short-term, highly liquid investments with maturities of three months or less from the
date of acquisition that are readily convertible to a known amount of cash with insignificant risk of changes in value,
against which bank overdrafts, if any, are deducted.
68
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
4.
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
(i)
Critical judgements in applying the Group’s and the Company’s accounting policies
In the process of applying the Group’s and the Company’s accounting policies, which are described in Note 3
above, the directors are of the opinion that there are no instances of application of judgement which are
expected to have a significant effect on the amounts recognised in the financial statements except as follows:
(a) Land and buildings
The Group’s land and buildings are accounted for using the revaluation model as of 31 January 2014. The
directors are of the opinion that this provides more reliable and relevant information on the value of the
land and buildings.
(b) Control Over Special Purpose Entities (“SPE”)
As disclosed in Note 17, SPE are considered subsidiaries of the Group although the Group does not hold
any shares in the SPE. The directors of the Company have assessed the factors as described in Note 17 and
concluded that the Group has control over these SPE.
(ii) Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty
at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year.
(a)
Engineering contracts
The Group recognises contract revenue by reference to the stage of completion of the contract activity
at the end of each reporting period, when the outcome of an engineering contract can be estimated
reliably. The stage of completion is measured by reference to the proportion that contract costs incurred
for work performed to date bear to the estimated total contract costs. Significant assumptions are required
to estimate the total contract costs and the recoverable variation works that will affect the stage of
completion. The estimates are made based on past experience and knowledge of the project engineers.
(b) Impairment of goodwill
The Group determines whether goodwill is impaired at least on an annual basis. This requires the
estimation of the value-in-use of the cash-generating units to which goodwill is allocated. Estimating the
value-in-use requires the Group to make an estimate of the expected future cash flows from the cashgenerating unit and also to choose a suitable discount rate in order to calculate the present value of those
cash flows. The carrying amount of the Group’s goodwill at 31 January 2014 was RM4,494,000 (2013:
RM5,267,000 ). Further details are disclosed in Note 16.
Annual Report 2014
69
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
4.
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY cont’d
(ii) Key sources of estimation uncertainty cont’d
(c)
Depreciation of plant and equipment
The cost/revalued amount of property, plant and equipment are depreciated on a straight-line basis over
the assets’ useful lives. Management estimates the useful lives of these plant and machinery to be within
3 to 20 years. The carrying amount of the Group’s property, plant and equipment at 31 January 2014 are
disclosed in Note 14. Changes in the expected level of maintenance, usage and technological developments
could impact the economic lives and the residual values of these assets, therefore future depreciation
charges could be revised.
(d) Impairment of property, plant and equipment
The Group assesses whether there is any indication of impairment for all non-financial assets other than
goodwill at each reporting date. Non-financial assets other than goodwill are tested for impairment when
there are indicators that the carrying amounts may not be recoverable. In the current financial year, the
Group carried out the impairment test on plant and machinery with indication of impairment based on a
variety of estimations including the value-in-use of the cash-generating units (“CGU”) to which the plant
and machinery are allocated. Estimating the value-in-use requires the Group to make an estimate of the
expected future cash flows from the CGU and also to choose a suitable discount rate in order to calculate
the present value of those cash flows. Further details of the impairment testing of plant and machinery
performed during the year are disclosed in Note 14.
(e)
Deferred revenue
Deferred revenue arising from customer reward points of the Group pertains to the fair value of the award
credits awarded to card members based on the spending on their credit and charge cards that could be
redeemed for services and merchandise at a later date. There is no expiry date attached to these reward
points. The reward points represents costs which are expected to be incurred and is recognised in
accordance with IC Int 13 Customer Loyalty Programme.
Deferred tax assets
(f)
Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused
tax credits to the extent that it is probable that taxable profits will be available against which the deductible
temporary differences, unused tax losses and unsused tax credits can be utilised. Significant management
judgement is required to determine the amount of deferred tax assets that can be recognised, based upon
the likely timing and level of future taxable profits together with future tax planning strategies. The total
carrying value of deferred tax assets recognised is disclosed in Note 19.
(g) Impairment of trade and other receivables
The Group assesses at the end of each reporting period whether there is any objective evidence that a
financial asset is impaired. To determine whether there is objective evidence of impairment, the Group
considers factors such as the probability of insolvency or significant difficulties of the debtor and default or
significant delay in payments.
70
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
4.
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY cont’d
(ii) Key sources of estimation uncertainty cont’d
(g) Impairment of trade and other receivables cont’d
(h) Customer reward points
5. Where there is objective evidence of impairment the amount and timing of future cash flows are estimated
based on historical loss experience for assets with similar credit risk characteristics. While the estimation
process includes historical data and analysis, there is a significant amount of judgement applied in selecting
inputs and analysing the results produced to determine the impairment allowances. The carrying amounts
of the Group’s loans and receivables at the end of the reporting period are disclosed in Notes 20 and 21.
Customer reward points as disclosed in Note 30 pertain to the amounts awarded to card members based
on the spending on their credit and charge cards that could be redeemed for services and merchandise at a
later date. There is no expiry date attached to these reward points. The reward points represent costs which
are expected to be incurred and is recognised in accordance with IC Int 13 Customer Loyalty Programme.
REVENUE
The Group
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
Charge and credit cards operations
132,439
147,617
-
-
Sale of goods
109,785
101,069
-
-
22,087
29,810
-
-
Hotel operations
7,259
7,804
-
-
Sales of property
8,156
-
-
-
199
193
-
-
-
-
1,323
1,313
279,925
286,493
1,323
1,313
Continuing operations
Air ticketing and travel
Management services
Management fees
Gross billing to charge and credit card customers during the year totalling RM1,548,891,000 (2013: RM1,626,745,000)
comprised of the amount spent by the customers using the charge and credit card, which generated the revenue
earned, as disclosed above.
Gross billing to air ticketing and travel customers during the year totalling RM283,495,000 (2013: RM255,518,000)
comprised of the air tickets and other related charges billed, which generated revenue earned by the Group, as
disclosed above.
Annual Report 2014
71
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
6. COST OF SALES
The Group
2014
2013
RM’000
RM’000
Cost of inventories sold
66,765
70,988
Travel service costs
13,162
20,099
645
634
3,956
-
84,528
91,721
Continuing operations
Hotel operations costs
Property development costs
7.
FINANCE COSTS
The Group
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
Non-recourse investors’ certificates and senior
certificates
32,404
29,822
-
-
Bank borrowings
11,460
11,613
-
-
443
395
32
29
22
98
3
3
44,329
41,928
35
32
Continuing operations
Interest expense on:
Finance leases
Others
72
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
8.
LOSS BEFORE TAX
Loss before tax is arrived at after the following (charges)/credits:
The Group
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
Employee benefits expense (Note 9)
(75,862)
(78,591)
Raw materials and consumables used
(16,608)
(17,541)
-
-
Land and buildings
(14,168)
(13,711)
(555)
(530)
Office equipment
(4,826)
(5,051)
(6)
(9)
(1,895)
(5,318)
Continuing operations
(4,026)
(4,073)
Rental for:
Allowance for doubtful debts:
Amount owing by subsidiaries (Note 17)
-
-
Trade receivables (Note 20)
(14,146)
(9,412)
-
-
Other receivables (Note 21)
(1,214)
-
-
-
Depreciation of property, plant and equipment
(Note 14)
(8,776)
(8,270)
Asset securitisation programme expenses
(5,065)
(6,123)
-
(143)
(1,139)
(32)
(1,703)
6,060
-
-
Amortisation of intangible asset (Note 16)
(3,869)
(3,063)
-
-
Net fair value loss on investment securities
(2,137)
(1,995)
-
-
Changes in inventories of finished goods and work-inprogress
(1,504)
-
-
-
-
(186)
(176)
-
Gain/(Loss) on foreign exchange - net:
Realised
Unrealised
Inventories written down
(439)
630
(1,034)
(12)
73
Annual Report 2014
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
8.
LOSS BEFORE TAX cont’d
Loss before tax is arrived at after the following (charges)/credits: cont’d
The Group
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
Auditors of the Company
(206)
(206)
(46)
(46)
Other auditors
(890)
Audit fees:
Overprovision in prior Year
Impairment of: Property, plant and equipment
(913)
-
-
-
7
-
-
-
(243)
-
-
Goodwill (Note 16)
(824)
-
-
-
Property, plant and equipment written off
(811)
-
-
-
Impairment loss on investment in subsidiaries (Note 17)
-
-
Write back of inventories written down
-
754
-
-
811
630
-
-
407
3,035
3
24
-
-
436
1,217
2,854
531
-
-
115
55
-
7
Trade receivables (Note 20)
14,671
650
-
-
Other receivables (Note 21)
-
31
-
-
225
22
-
-
Dividend income from investment securities
(3,322)
-
Interest income from:
Third parties
Subsidiaries
Bad debts recovered
Gain on disposal of property, plant and equipment
Allowance for doubtful debts no longer required:
Gain on disposal of investment securities
74
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
9.
EMPLOYEE BENEFITS EXPENSE
The Group
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
66,044
66,414
3,405
3,572
Contributions to defined contribution plans
6,202
7,006
396
269
Other staff related expenses
3,616
5,171
225
232
75,862
78,591
4,026
4,073
Continuing operations
Salaries, bonuses and allowance
Included in employee benefits expense of the Group and of the Company are Executive Directors’ remuneration
amounting to RM5,772,000 (2013: RM3,822,000) and RM1,757,000 (2013: RM1,510,000) respectively as further
disclosed in Note 10.
10. DIRECTORS’ REMUNERATION
Directors’ remuneration of the Group and of the Company classified into executive and non-executive directors are as
follows:
The Group
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
2,374
2,230
1,757
1,510
150
150
150
150
14
19
14
19
164
169
164
169
2,538
2,399
1,921
1,679
Continuing operations
Directors of the Company
Executive directors:
Salary and other emoluments
Non-executive directors:
Fees
Salary and other emoluments
Annual Report 2014
75
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
10. DIRECTORS’ REMUNERATION cont’d
Directors’ remuneration of the Group and of the Company classified into executive and non-executive directors are as
follows: cont’d
The Group
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
3,238
1,549
-
-
160
43
-
-
3,398
1,592
-
-
265
106
-
-
3,663
1,698
-
-
6,201
4,097
1,921
1,679
Directors of the subsidiaries
Executive directors:
Salary and other emoluments
Contributions to defined contribution plans
Non-executive director:
Fees
Total
The estimated monetary value of benefits-in-kind received and receivable by the directors otherwise than in cash from
the Group and the Company amounted to RM146,000 (2013: RM116,000).
The number of directors of the Company whose total remuneration during the year fell within the following bands is
analysed below:
Number of Directors
2014
2013
RM800,001 - RM1,000,000
1
1
RM1,000,001 - RM1,300,000
1
1
3
3
Executive directors:
Non-executive directors:
RM10,000 - RM100,000
76
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
11. INCOME TAX EXPENSE
The Group
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
400
384
-
-
5,836
5,152
-
-
(362)
(69)
-
37
5,874
5,467
-
37
1,147
(1,158)
-
-
-
-
Continuing operations
Estimated tax payable:
Current year:
Malaysian tax
Foreign tax
Under/(Over)provision in prior years
Deferred tax (Note 19):
Current year
Underprovision in prior years
96
45
1,243
(1,113)
-
-
Total tax expense relating to continuing operations
7,117
4,354
-
37
Total tax credit relating to discontinued operations
(Note 12)
-
-
-
-
37
Total tax expense
7,117
(111)
4,243
Domestic income tax is calculated at the Malaysian statutory tax rate of 25% (2013: 25%) of the estimated taxable
profit for the year. Taxation of other jurisdictions is calculated at the rate prevailing in the respective jurisdictions.
The Budget 2014 announced on 25 October 2013 reduced the Malaysian corporate income tax rate from 25% to 24%
with effect from year of assessment 2016. Accordingly, the applicable tax rates to be used for the measurement of any
applicable Malaysian deferred tax will be the expected rates.
Annual Report 2014
77
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
11. INCOME TAX EXPENSE cont’d
A reconciliation of income tax expense at the applicable statutory income tax rate to income tax expense at the
effective income tax rate is as follows:
The Group
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
(35,941)
(27,754)
(9,716)
(8,824)
Loss/(Profit) before tax:
Continuing operations
Discontinued operations (Note 12)
32
22
-
-
(35,909)
(27,732)
(9,716)
(8,824)
Tax credit at the applicable statutory tax rate of 25%
(8,977)
(6,933)
(2,429)
(2,206)
Effect of different tax rate of subsidiaries operating in
different jurisdictions
(2,062)
(1,850)
Expenses that are not tax deductible
20,567
Income not subject to tax
(2,838)
-
-
11,341
1,235
1,846
(515)
-
-
-
(971)
-
-
693
3,195
1,194
360
Tax effects of:
Income exempted from tax
Deferred tax assets not recognised
Under/(Over)provision in prior years:
Current tax
(362)
(69)
-
37
Deferred tax
96
45
-
-
7,117
4,243
-
37
12. DISCONTINUED OPERATIONS
During the current financial year, the Group disposed of its entire interest in the following subsidiaries:
(a) Skinner Engineering Pty Ltd for a sale consideration of AUD293,000 (RM864,000) which was completed on 31
May 2013; and
(b) George Kent (Singapore) Pte Ltd and its wholly-owned subsidiary, Kent Precision Pte Ltd for a sale consideration of
SGD500,000 (RM1,265,000) which was completed on 21 November 2013.
Details of the assets and liabilities disposed of and the calculation of the gain on disposal are disclosed in Note 17.
78
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
12. DISCONTINUED OPERATIONS cont’d
The combined results of the discontinued operations included in the loss for the year are set out below. The
comparative profit and cash flows from discontinued operations have been represented to include those operations
classified as discontinued in the current year.
2014
2013
RM’000
RM’000
12,553
19,071
Cost of sales
(10,914)
(14,753)
Gross profit
1,639
4,318
10
385
Revenue
Other income
Distribution expenses
(1,282)
(3,305)
(327)
(1,364)
Finance costs
(8)
(12)
Profit before tax
32
22
Income tax credit
-
111
32
133
Gain on disposal of subsidiaries including cumulative exchange gain of RM4,903,000
reclassified from exchange reserve to profit or loss (Note 17)
4,870
-
Profit for the year from discontinued operations
4,902
133
Administrative expense
Profit after tax
The Group
The following (charges)/credits have been included in arriving at the profit before tax of the discontinued operations:
The Group
2014
2013
RM’000
RM’000
Employee benefits expense
(1,956)
(7,570)
Raw materials and consumable used
(1,098)
(2,348)
(164)
(510)
Rental for land and building
Interest income
Changes in inventories of finished goods
-
184
149
684
Annual Report 2014
79
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
12. DISCONTINUED OPERATIONS cont’d
The Group
2014
2013
RM’000
RM’000
(5,729)
(4,379)
Cash flows from discontinued operations
Net cash outflows from operating activities
Net cash inflows/(outflows) from investing activities
8
(37)
Net cash inflows/(outflows) from financing activities
5,310
(17)
(411)
(4,433)
Net cash outflows
13. (LOSS)/EARNINGS PER SHARE
Basic and diluted (loss)/earnings per share
Basic and diluted (loss)/earnings per share of the Group is calculated by dividing (loss)/earnings for the year
attributable to owners of the Company by the number of ordinary shares in issue during the financial year.
Diluted (loss)/earnings per share amount is the same as basic (loss)/profit per share. The ESOS shares are not included
in 2013 as the effect is anti-dilutive. The ESOS has expired in 2014.
The Group
2014
2013
RM’000
RM’000
(43,378)
(31,984)
(Loss)/Profit attributable to owners of the Company (RM’000):
Continuing operations
Discontinued operations
Number of ordinary shares in issue
4,902
133
(38,476)
(31,851)
622,948,000
622,948,000
(6.96)
(5.13)
0.79
0.02
(6.17)
(5.11)
Basic/Diluted (loss)/earnings per share (sen):
Continuing operations
Discontinued operations
Continuing and discontinued operations
There have been no other transactions involving ordinary shares or potential ordinary shares since the end of the
reporting period and before the completion of these financial statements.
80
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
14. PROPERTY, PLANT AND EQUIPMENT
The Group
Freehold
land
LongLongterm Long-term
term leasehold leasehold
Freehold leasehold land and
hotel
buildings
land buildings properties
Furniture,
Plant equipment
and and motor
machinery
vehicles
Total
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
81,180
23,820
52,050
62,069
38,000
95,842
68,179
421,140
Additions
-
-
-
-
-
517
3,094
3,611
Disposals
-
-
-
-
-
(289)
(13,038)
(13,327)
Write-offs
-
-
-
-
-
-
(2,672)
(2,672)
Exchange
differences
-
-
-
(845)
-
-
(3,902)
(4,747)
Cost/Valuation
Balance as of
1 February 2012
Balance as of
31 January 2013/
1 February 2013
81,180
23,820
52,050
61,224
38,000
96,070
51,661
404,005
Additions
-
-
-
-
-
4,292
2,317
6,609
Disposals
-
-
-
-
-
-
(11,034)
(11,034)
Write-offs
-
-
-
-
(1,490)
(2,423)
(3,928)
Assets of
subsidiaries
disposed
-
-
-
-
(3,427)
(1,590)
(5,017)
-
18,507
-
-
-
26,744
-
3,001
-
246
4,700
7,947
-
-
-
-
82,732
38,000
95,691
43,631
Revaluation
(1,315)
Exchange
differences
-
-
Reclassification
-
-
90,732
22,490
Balance as of
31 January 2014
9,552
(15)
(12,891)
39,159
(12,891)
412,435
Annual Report 2014
81
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
14. PROPERTY, PLANT AND EQUIPMENT cont’d
The Group
Freehold
land
LongLongterm Long-term
term leasehold leasehold
Freehold leasehold land and
hotel
buildings
land buildings properties
Furniture,
Plant equipment
and and motor
machinery
vehicles
Total
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
Balance as of
1 February 2012
-
632
19,363
1,345
1,077
51,335
59,394
133,146
Charge for the year
-
632
406
868
1,077
3,730
1,557
8,270
Disposals
-
-
-
-
-
(70)
(12,976)
(13,046)
Write-offs
-
-
-
-
-
(2,672)
(2,672)
Exchange
differences
-
-
-
-
-
Balance as of
31 January 2013/
1 February 2013
-
1,264
19,769
2,213
2,154
Charge for the year
-
631
406
785
1,081
Disposals
-
-
-
-
-
-
Write-offs
-
(2)
-
-
-
Assets of
subsidiaries
disposed
-
-
-
-
-
Revaluation
-
-
-
-
Exchange
differences
-
-
(211)
2,630
Reclassification
-
-
(12,891)
Balance as of
31 January 2014
-
-
7,073
Accumulated
Depreciation
(1,893)
(64)
41
(23)
54,931
45,344
125,675
3,401
2,472
8,776
(10,702)
(10,702)
(905)
(2,210)
(3,117)
(2,949)
(964)
(3,913)
-
-
(1,893)
(15)
131
1,298
3,833
-
-
-
-
5,628
3,220
54,609
35,238
(12,891)
105,768
82
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
14. PROPERTY, PLANT AND EQUIPMENT cont’d
The Group
Freehold
land
LongLongterm Long-term
term leasehold leasehold
Freehold leasehold land and
hotel
buildings
land buildings properties
Furniture,
Plant equipment
and and motor
machinery
vehicles
Total
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
Balance as of
31 January 2012
-
-
-
-
-
-
-
-
Additions
-
-
-
-
-
243
-
243
Balance as of
31 January 2013
and 1 February
2013/31 January
2014
-
-
-
-
-
243
-
243
Balance as of
31 January 2014
90,732
22,490
32,086
77,104
34,780
40,839
8,393
306,424
Balance as of
31 January 2013
81,180
22,556
32,281
59,011
35,846
40,896
6,317
278,087
Accumulated
impairment
Net Book Value
Annual Report 2014
83
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
14. PROPERTY, PLANT AND EQUIPMENT cont’d
Furniture
and
equipment
Motor
vehicles
Total
RM’000
RM’000
RM’000
2,124
1,421
3,545
Additions
25
71
96
Disposals
-
(75)
(75)
2,149
1,417
3,566
Additions
33
-
33
Disposals
(7)
-
(7)
2,175
1,417
3,592
1,987
617
2,604
15
161
176
-
(75)
(75)
2,002
703
2,705
Charge for the year
25
161
186
Disposals
(7)
-
(7)
2,020
864
2,884
Balance as of 31 January 2014
155
553
708
Balance as of 31 January 2013
147
714
861
The Company
Cost
Balance as of 1 February 2012
Balance as of 31 January 2013/1 February 2013
Balance as of 31 January 2014
Accumulated Depreciation
Balance as of 1 February 2012
Charge for the year
Disposals
Balance as of 31 January 2013/1 February 2013
Balance as of 31 January 2014
Net Book Value
(a) Freehold land and buildings carried at fair value
An independent valuation of the Group’s land and buildings was performed by independent qualified valuers
to determine the fair value of the land and buildings as of 31 January 2014. The valuers have the appropriate
qualifications and recent experience in the fair value measurement of properties in the relevant locations.
The fair value of the land and buildings was determine based on the market comparable approach that reflects
recent transaction prices for similar properties.
84
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
14. PROPERTY, PLANT AND EQUIPMENT cont’d
(a) Freehold land and buildings carried at fair value cont’d
Details of the Group’s land and buildings and information about the fair value hierarchy as at 31 January 2014 are
as follows:
Level 1
Level 2
Level 3
Fair value
as of
31.1.2014
RM’000
RM’000
RM’000
RM’000
- Freehold land
-
-
90,732
90,732
- Buildings
-
-
22,490
22,490
-
-
73,733
73,733
The Group
In Malaysia
A manufacturing plant that contains:
In Singapore
Long term leasehold land and buildings
The following table shows the significant unobservable input used in the valuation model:
Type
Significant unobservable inputs
Relationship of unobservable inputs and fair
value measurement
Land and buildings
Sale price of comparable land and
buildings
The higher the sales price of comparable land
and buildings, the higher the fair value
Had the Group’s land and buildings been measured on a historical cost basis, their carrying amounts would have
been as follows:
2014
RM’000
Freehold land
81,180
Buildings
21,911
Long-term leasehold land and buildings
51,424
Annual Report 2014
85
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
14. PROPERTY, PLANT AND EQUIPMENT cont’d
(b) Assets acquired under finance lease
During the financial year, the Group and the Company acquired property, plant and equipment at aggregate cost
of RM6,609,000 (2013: RM3,611,000) and RM33,000 (2013: RM96,000), respectively of which RM3,862,000
(2013: RM1,022,000) and RM28,000 (2013: RM71,000), respectively, were acquired by means of finance lease
arrangements. The net book value of property, plant and equipment held under finance lease arrangements were
as follows:
Furniture, equipment and motor vehicles
The Group
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
5,664
2,965
552
709
(c) Assets pledged as security
Certain property, plant and equipment have been pledged as security for the bank loans under a mortgage. The
Group is not allowed to pledge these assets as security for other borrowings or to sell them to another entity. The
net book value of pledged assets are as follows:
2014
2013
RM’000
RM’000
113,222
103,736
Long-term leasehold land and buildings
77,104
47,932
Plant and machinery
40,839
40,534
231,165
192,202
Freehold land and buildings
The Group
(d) Impairment of plant and machinery
In 2013, Prestige Ceramics Sdn Bhd, a subsidiary, recognised an impairment loss of RM243,000 on an idle
machine that requires repair. Management currently does not have any future plan to use the said machine and
thus, an impairment loss is recognised.
As of 31 January 2014, the remaining plant and machinery of the said subsidiary, with net book value of
RM40,839,000 (2013: RM40,534,000), have been subjected to impairment review.
The recoverable amounts of the plant and machinery were determined based on value-in-use calculations using
directors’ best estimates of cash flows projections based on the remaining useful lives of the plant and machinery
from the approved financial budget. The cash flows were discounted at a rate of 8% (2013: 8%).
86
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
14. PROPERTY, PLANT AND EQUIPMENT cont’d
(d) Impairment of plant and machinery cont’d
Key assumptions used in value in use calculations
(i)
(ii) Discount rate: Discount rate reflects the current market assessment of the risks specific to the industry
in which the subsidiary operates. The discount rate was estimated based on the average percentage of
a weighted average cost of capital for the industry. This rate was further adjusted to reflect the market
assessment of any risk specific to the subsidiary for which future estimates of cash-flows have not been
adjusted.
(iii) Average remaining useful life: The average remaining useful life of plant and machinery is used to calculate
the value in use for the CGU.
(iv) Growth rates: The forecasted growth rates are based on the management’s approved business plan which
ranged between 2% to 3% (2013: 2% to 3%) per annum.
Sensitivity to changes in assumption
Budgeted gross margins: Gross margins are based on the average results achieved in the current financial
year.
The directors believe that no reasonable possible changes in any of the key assumptions above will cause the
carrying amount of the plant and machinery to materially exceed its recoverable amount.
15. INVENTORIES
(a) Inventories - non-current
Inventories - non-current consist of land held for property development as follows:
Leasehold land
Development expenditure
The Group
2014
2013
RM’000
RM’000
6,073
4,351
27
1,749
6,100
6,100
Annual Report 2014
87
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
15. INVENTORIES cont’d
(b) Inventories - current
Inventories - current consist of the following:
The Group
2014
2013
RM’000
RM’000
Leasehold land
-
223
Development costs
-
5,230
-
5,453
11,028
9,408
Properties under development:
Other inventories at cost:
Raw materials
Work-in-progress
Finished goods
Goods in transit
443
968
17,165
19,043
342
249
28,978
29,668
1,067
416
30,045
35,537
Other inventories at net realisable value:
Finished goods
During the financial year, the amount of other inventories recognised as an expense in cost of sales of the Group
amounted to RM66,765,000 (2013: RM70,990,000).
88
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
16. INTANGIBLE ASSETS
The Group
Goodwill
Computer
software
Total
RM’000
RM’000
RM’000
5,241
21,332
26,573
-
6,151
6,151
-
Cost
Balance as of 1 February 2012
Additions
Disposals
(136)
(136)
26
724
750
5,267
28,071
33,338
Additions
-
2,140
2,140
Disposals
-
-
-
51
1,327
1,378
5,318
31,538
36,856
Exchange differences
Balance as of 31 January 2013/1 February 2013
Exchange differences
Balance as of 31 January 2014
Accumulated amortisation
Balance as of 1 February 2012
-
5,205
5,205
Amortisation for the year
-
3,063
3,063
Disposals
-
(136)
(136)
Exchange differences
-
144
144
Balance as of 31 January 2013/1 February 2013
-
8,276
8,276
Amortisation for the year
-
3,869
3,869
Exchange differences
-
(132)
(132)
Balance as of 31 January 2014
-
12,013
12,013
-
-
-
Additions (Note 8)
(824)
-
(824)
Balance as of 31 January 2014
(824)
-
(824)
Balance as of 31 January 2014
4,494
19,525
24,019
Balance as of 31 January 2013
5,267
19,795
25,062
Accumulated impairment
Balance as of 1 February 2012 and 31 January 2013/1 February 2013
Net carrying amount
Annual Report 2014
89
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
16. INTANGIBLE ASSETS cont’d
Assets acquired under finance lease
During the financial year, the hospitality and card services segment of the Group acquired computer software at
aggregate costs of RM2,140,000 (2013: of RM6,151,000) of which RM1,492,000 (2013: RM3,060,000) was acquired
by means of finance lease arrangements. The net carrying amount of computer software held under finance lease
arrangements as at 31 January 2014 amounted to RM8,321,000 (2013: RM8,025,000).
Impairment of goodwill
The net carrying amount of goodwill allocated to the cash generating units (“CGU”) of Diners Club (Singapore) Pte Ltd
and its subsidiaries (“DCS Group”), which is under the hospitality and card services segment, for impairment testing is
as follows:
Provision for charge
card and credit card
services segment
The Group
2014
2013
RM’000
RM’000
Net carrying amount of goodwill
4,494
5,267
The recoverable amount of DCS Group is determined based on value-in-use calculation using cash flow projections
based on financial budgets approved by directors covering a period of 5 years. The pre-tax discount rate and the
forecasted growth rates applied to the cash flow projections for the five-year period are 10% (2013: 10%) and ranging
from 2.1% to 5.8% (2013: 4.0% to 16.5%) per annum, respectively.
Sensitivity to changes in assumptions
The management believes that no reasonable possible changes in any of the key assumptions above will cause the
carrying amount of the goodwill to materially exceed its recoverable amount.
17. INVESTMENT IN SUBSIDIARIES
The Company
Shares, at cost
Less: Accumulated impairment losses
2014
2013
RM’000
RM’000
380,557
380,557
(215,097)
(211,775)
165,460
168,782
90
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
17. INVESTMENT IN SUBSIDIARIES cont’d
Movements in accumulated impairment losses are as follows:
The Company
At beginning of year
Additions during the year (Note 8)
At end of year
2014
2013
RM’000
RM’000
211,775
211,775
3,322
-
215,097
211,775
The details of the subsidiaries are as follows:
Effective Equity
Interest
Principal Activities
Name of Company
2014
2013
%
%
Johan Management Services Sdn Bhd
100
100
Provision of secretarial and management services
Johan Land Sdn Bhd
100
100
Property development and investment holding
100
100
Property holding and investment
100
100
Investment holding
Johan Capital Sdn Bhd
100
100
Investment holding and management services
Johan Equities Sdn Bhd
100
100
Investment trading
Diners Club (Malaysia) Sdn Bhd
100
100
Provision of charge and credit card services under
Diners Club franchise
Diners World Travel (Malaysia) Sdn Bhd
100
100
In-bound and out-bound tour and ticketing agent
Prestige Ceramics Sdn Bhd
100
100
Manufacturing and marketing of ceramic tiles
William Jacks & Company (Malaysia)
Sendirian Berhad
100
100
Investment holding and trading of engineering and
building material
Nature’s Farm (Health Foods) Sdn Bhd
100
100
Trading in health foods and supplements
Vitamin World Sdn Bhd
100
100
Inactive
96.68
96.68
Inactive
70
70
Incorporated in Malaysia
Johan Properties Sdn Bhd
Johan Pasifik Sdn Bhd
(2)
(2)
(2)
Wismer Automation Sdn Bhd
Lumut Marine Resort Bhd
(2)
Operation and management of marine club
Mustika Resort Sdn Bhd
85
85
Operation of hotel and resort related business
Lumut Park Resort Sdn Bhd
80
80
Operation of hotel and resort related business
JCC Equities Sdn Bhd
100
100
Management services
Jacks Edar Sdn Bhd
100
100
Inactive
(2)
Annual Report 2014
91
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
17. INVESTMENT IN SUBSIDIARIES cont’d
The details of the subsidiaries are as follows: cont’d
Effective Equity
Interest
Principal Activities
Name of Company
2014
2013
%
%
Johan Leasing Sdn Bhd (2)
100
100
Inactive
Johan Nominess (Tempatan) Sdn Bhd (2)
100
100
Inactive
Johan Air Services Sdn Bhd
100
100
Inactive
100
100
Inactive
100
100
Investment holding
-
-
100
100
Investment holding
100
100
Provision of charge card and credit card services
under Diners Club franchise
100
100
Inactive
100
100
In-bound and out-bound tour and ticketing agent
100
100
Investment holding
100
100
Inactive
100
100
Merchandiser
-
100
Trading in engineering products. Disposed on
21 November 2013
-
100
Inactive. Disposed on 21 November 2013
86.75
86.75
Investment holding
86.75
86.75
Trading in health foods and supplements
86.75
86.75
Trading in health foods and supplements
86.75
86.75
Trading in health foods and supplements
77.90
77.90
Inactive
-
-
Incorporated in Malaysia cont’d
(2)
Johan Industries (Malaysia) Sdn Bhd
(2)
Strategic Usage Sdn Bhd
Domayne Asset 2 Corporation Berhad
(5)
Provision of financing agreement between Diners
Club (Malaysia) Sdn Bhd and institutional lenders
Incorporated in Singapore
Johan Investment Private Limited (1)
Diners Club (Singapore) Private Limited
(1)
Johan Air Services Pte Ltd (1)
Diners World Travel Pte Ltd
(1)
Diners World Holdings Pte Ltd
(1)
Diners Publishing Private Limited
Lifestyle Collection (S) Pte Ltd
(1)
(1)
George Kent (Singapore) Pte Limited
(1)
Kent Precision Engineering Pte Ltd (1)
Jacks International Limited
(1) (3)
William Jacks & Co (Singapore) Pte Ltd
Nature’s Farm Pte Ltd
Nutra-Source Pte Ltd
(1)
(1)
(1)
Wismer Automation (Singapore) Pte Ltd
DCS Assets Funding Pte Ltd
(1) (5)
(1)
Provision of financing agreement between Diners
Club (Singapore) Private Limited and institutional
lenders
92
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
17. INVESTMENT IN SUBSIDIARIES cont’d
The details of the subsidiaries are as follows: cont’d
Effective Equity
Interest
Principal Activities
Name of Company
2014
2013
%
%
AIH Holdings Ltd (2)
100
100
Investment holding and management
Johan International Limited (2)
100
100
Investment holding
Worldwide Victory Limited
100
100
Investment holding
100
100
Investment holding
86.75
86.75
Property and investment holding
-
86.75
Engineering. Disposed on 31 May 2013
86.75
86.75
Investment holding and
management
86.75
86.75
Trading in health foods and supplements
100
100
Investment holding
DCNZ Holdings Limited (1)
100
100
Investment holding
Diners Club (NZ) Limited
100
100
Provision of charge card services under Diners Club
franchise
-
-
Incorporated in Hong Kong
(2)
Incorporated in The Netherlands
Abacus Pacific N.V. (4)
Incorporated in Australia
William Jacks (Australia) Pty Ltd (2)
Skinner Engineering Pty Ltd
(2)
Incorporated in Bahamas
Jacks Overseas Limited (4)
Incorporated in People’s Republic of China
Nature’s Farm (Shanghai) Co Ltd (2)
Incorporated in British Virgin Islands
Capital Prime Ltd (2)
Incorporated in New Zealand
(1)
Perpetual Trust Limited (2) (5)
Provision of financing agreement between Diners
Club NZ Limited and institutional lenders
Annual Report 2014
93
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
17. INVESTMENT IN SUBSIDIARIES cont’d
The details of the subsidiaries are as follows: cont’d
(1)
Disposal of subsidiaries
As mentioned in Note 12, the Group disposed of certain subsidiaries in the current financial year and the effect of the
disposal on the financial position of the Group is as follows:
(3)
(4)
(5)
(2)
The financial statements of these subsidiaries are audited by member firm of Deloitte & Touche
The financial statements of these subsidiaries are audited by auditors other than the auditors of the Company
Quoted on the Singapore Exchange Securities Trading Limited
Not required to present audited financial statements under the laws of its country of incorporation
Although the Group does not hold shares in these special purpose entities (“SPE”), they are considered as subsidiaries as
the activities of the SPE are being conducted on behalf of the Group according to its specific business needs and that the
Group retains the majority of the residual or ownership risk related to these companies on their assets. The Group’s residual
or ownership risk related to these companies on their assets. The Group’s consolidated financial statements include the results,
assets and liabilities of these SPE.
The Group
2014
RM’000
ASSETS
Non-Current Assets
Property, plant and equipment
Deferred tax assets
1,104
504
Current Assets
Inventories
358
Trade receivables
4,971
Cash and cash equivalents
1,866
Non-current Liability
Borrowings
(653)
Current Liabilities
Trade payables
Borrowings
Other payables and accrual expenses
Net assets disposed of
(2,562)
(157)
(3,269)
2,162
94
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
17. INVESTMENT IN SUBSIDIARIES cont’d
Disposal of subsidiaries cont’d
As mentioned in Note 12, the Group disposed of certain subsidiaries in the current financial year and the effect of the
disposal on the financial position of the Group is as follows: cont’d
The Group
2014
RM’000
Consideration:
Cash, representing consideration received
Deferred consideration
2,030
99
2,129
Gain on disposal of subsidiaries:
Total consideration
Net assets disposed of
Cumulative exchange differences reclassified from equity as disposal of subsidiaries
Gain on disposal (Note 12)
2,129
(2,162)
4,903
4,870
The gain on disposal of subsidiaries is recorded as part of loss for the year from discontinued operations in the
consolidated statement of profit or loss and other comprehensive income.
Net cash inflow arising on disposal of subsidiaries is as follows:
The Group
2014
RM’000
Cash consideration received
Less: Cash and cash equivalents disposed of
2,030
(1,866)
164
Annual Report 2014
95
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
17. INVESTMENT IN SUBSIDIARIES cont’d
Amount owing by/to subsidiaries
Amount owing by subsidiaries consist of the following:
The Company
Amount owing by subsidiaries
Less: Allowance for doubtful debts
2014
2013
RM’000
RM’000
25,661
29,780
(10,169)
(8,274)
15,492
21,506
Amount owing by/to subsidiaries, which arose mainly from payments on behalf, is unsecured and repayable on
demand. Amount owing by subsidiaries bears interest at rates ranging from 2.95% to 3.45% (2013: 2.95% to 3.45%) per
annum while amount owing to subsidiaries is interest-free.
Movement in the allowance for doubtful debts:
The Company
2014
2013
RM’000
RM’000
At beginning of year
8,274
2,956
Additions during the year (Note 8)
1,895
5,318
10,169
8,274
At end of year
96
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
18. INVESTMENT SECURITIES
The Group
2014
2013
Carrying
amount
Market
value
of quoted
investments
Carrying
amount
Market
value of
quoted
investments
1,461
1,461
1,411
1,411
7
*
7
*
Non-Current:
Available-for-sale financial assets
Equity instruments (quoted outside Malaysia)
Equity instruments (unquoted), at cost
1,468
1,418
Current:
Fair value through profit or loss
Held for trading investments
- Equity instruments (quoted in Malaysia)
- Equity instruments (quoted outside Malaysia)
Total investment securities
10,945
10,945
7,101
7,101
1,886
1,886
3,588
3,588
12,831
10,689
14,299
12,107
*
Unquoted shares are stated at cost after their initial recognition, as they do not have a quoted market price and the fair value
cannot be reliably measured.
Investment pledged as security
The Group’s investment in equity instruments amounting to RM7,428,292 (2013: RM8,800,212) are pledged as security
for a short-term bank loan as disclosed in Note 25.
Annual Report 2014
97
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
19. DEFERRED TAX ASSETS/(LIABILITIES)
Deferred tax assets
The Group
2014
2013
RM’000
RM’000
9,367
9,179
682
316
55
(235)
Trade receivables
966
81
Deferred revenue
94
(30)
Other payables and accrued expenses
(237)
55
Unabsorbed capital allowances
(109)
(45)
(1,535)
(32)
(84)
110
Transfer from properties revaluation reserve (Note 24)
(622)
-
Disposal of subsidiaries (Note 17)
(504)
-
At beginning of year
(Charge)/Credit to profit or loss for the year:
Property, plant and equipment
Inventories
Unused tax losses
Exchange differences
At end of year
85
78
8,242
9,367
The deferred tax assets provided in the financial statements are in respect of the tax effects on the following:
The Group
2014
2013
RM’000
RM’000
(15,228)
(15,288)
15,228
15,288
-
-
Deferred tax liability (before offsetting):
Temporary differences arising from property, plant and equipment
Offsetting
Deferred tax liability (after offsetting)
98
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
19. DEFERRED TAX ASSETS/(LIABILITIES) cont’d
Deferred tax assets cont’d
The deferred tax assets provided in the financial statements are in respect of the tax effects on the following: cont’d
The Group
2014
2013
RM’000
RM’000
Deferred tax assets (before offsetting):
Temporary differences arising from:
Inventories
Trade receivables
Deferred revenue
Other payables and accrued expenses
Unabsorbed capital allowances
Unutilised reinvestment allowances
Unused tax losses
Offsetting
Deferred tax assets (after offsetting)
248
1,018
1,747
516
3,266
9,386
7,289
193
471
1,653
753
3,375
9,386
8,824
23,470
(15,228)
24,655
(15,288)
8,242
9,367
Deferred tax liabilities
The Group
2014
2013
RM’000
RM’000
At beginning of year
Charge/(Credit) to profit or loss for the year:
Property, plant and equipment
Accrued interest income
Trade receivables
Other payables and accrued expenses
Deferred revenue
Unabsorbed capital allowance
Unutilised investment tax allowance
Unused tax losses
Transfer from property revaluation reserve (Note 24)
Exchange differences
At end of year
7,810
8,711
5,011
3,802
245
(238)
(199)
(177)
(4,308)
(2,977)
170
(1,090)
(119)
126
(90)
-
1,159
3,144
289
(1,003)
102
12,402
7,810
Annual Report 2014
99
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
19. DEFERRED TAX ASSETS/(LIABILITIES) cont’d
Deferred tax assets cont’d
The deferred tax liabilities provided in the financial statements are in respect of the tax effects on the following: cont’d
The Group
2014
2013
RM’000
RM’000
15,041
6,597
7,240
3,438
22,281
10,035
(9,879)
(2,225)
12,402
7,810
-
245
Other payables and accrued expenses
1,161
923
Deferred revenue
1,256
1,057
177
-
Unutilised investment tax allowance
4,308
-
Unused tax losses
2,977
-
9879
2,225
(9,879)
(2,225)
Deferred tax liabilities (before offsetting):
Temporary differences arising from:
Property, plant and equipment
Accrued interest income
Offsetting
Deferred tax liabilities (after offsetting)
Deferred tax assets (before offsetting):
Temporary differences arising from:
Trade receivables
Unabsorbed capital allowance
Offsetting
Deferred tax assets (after offsetting)
-
-
100
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
19. DEFERRED TAX ASSETS/(LIABILITIES) cont’d
Deferred tax assets cont’d
As mentioned in Note 3, the tax effects of deductible temporary differences, unused tax losses and unused tax credits
which would give rise to deferred tax assets are recognised to the extent that it is probable that future taxable profits
will be available against which the deductible temporary differences, unused tax losses and unused tax credits can
be utilised. As of 31 January 2014, the estimated amount of deductible temporary differences, unused tax losses
and unused tax credits for which the deferred tax assets have not been recognised in the financial statements due to
uncertainty of their realisation are as follows:
The Group
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
(314)
(248)
(314)
(248)
Temporary difference arising from:
Property, plant and equipment
Amount owing by subsidiaries
Unused tax losses
Unabsorbed capital allowances
-
-
10,169
8,274
145,427
142,460
15,621
12,790
2,728
2,859
181
64
147,841
145,071
25,657
20,880
The unused tax losses, unabsorbed capital allowances, unutilised reinvestment allowances and unutilised investment
allowances are subject to the agreement of the tax authorities.
20. TRADE RECEIVABLES
The Group
2014
2013
RM’000
RM’000
Securitised trade receivables
545,360
533,550
Non-securitised trade receivables
343,838
343,402
889,198
876,952
Collective impairment
(220,983)
(217,197)
Individual impairment
(13,099)
(13,341)
(234,082)
(230,538)
655,116
646,414
Less: Allowance for doubtful debts
Annual Report 2014
101
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
20. TRADE RECEIVABLES cont’d
The Group’s credit period generally ranges from 30 to 90 days (2013 : 30 to 90 days). Other credit terms are assessed
and approved on a case-by-case basis.
Trade receivables disclosed above include amounts (see below for aged analysis) that are past due at the end of the
reporting period but against which the Group has not recognised an allowance for doubtful debts because there has
not been a significant change in credit quality and the amounts are still considered recoverable. The Group does not
hold any collateral or other credit enhancements over these balances nor does it have a legal right of offset against any
amounts owed by the Group to the counterparty.
Ageing of trade receivables not impaired
The Group
2014
2013
RM’000
RM’000
491,268
524,458
Past due 30 days
54,526
63,986
Past due 31 - 60 days
16,537
23,788
Past due 61 - 90 days
5,464
8,782
87,321
25,400
655,116
646,414
Not past due
Past due more than 90 days
The Group’s trade receivables that are subject to collective/individual impairment review at the end of the reporting
period are as follows:
The Group
Collective
Individual
Total
RM’000
RM’000
RM’000
Trade receivables - gross amounts
765,004
124,194
889,198
Less: Allowance for doubtful debts
(220,983)
(13,099)
(234,082)
554,021
111,095
655,116
Trade receivables - gross amounts
743,111
133,841
876,952
Less: Allowance for doubtful debts
(217,197)
(13,341)
(230,538)
525,914
120,500
646,414
As of 31 January 2014
As of 31 January 2013
102
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
20. TRADE RECEIVABLES cont’d
Movement in the allowance for doubtful debts
Movement in allowance accounts for individual and collective impairment are as follows:
At beginning of year
Additions during the year (Note 8)
Allowance no longer required (Note 8)
The Group
2014
2013
RM’000
RM’000
230,538
218,084
14,146
9,412
(14,671)
(650)
Bad debts written off
(4,134)
(1,517)
Exchange differences
8,203
5,209
234,082
230,538
At end of year
In determining the recoverability of the trade receivables, the Group considers any change in the credit quality of the
trade receivables from the date credit was initially granted up to the reporting date. The directors believe that there is
no further credit provision required in excess of the allowance for doubtful debts.
The currency profile of trade receivables is as follows:
The Group
2014
2013
RM’000
RM’000
506,100
467,334
New Zealand Dollar
73,004
90,533
Ringgit Malaysia
76,012
86,830
Australian Dollar
-
1,717
655,116
646,414
Singapore Dollar
Annual Report 2014
103
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
20. TRADE RECEIVABLES cont’d
Movement in the allowance for doubtful debts cont’d
Securitised trade receivables in Singapore, New Zealand and Malaysia are disclosed as follows:
(a) Singapore
Diners Club (Singapore) Private Limited (“DCS”) elected to exit the original Assets Securitisation Programme
with Card Centre Asset Purchase Company Pte Ltd (“CCAPC”), a special purpose entity set up for this purpose
in 2012 and migrated to a revised Asset Securitisation Programme (the “SG Programme”) on 5 September
2011 with DCS Asset Funding Pte Ltd (“DCSAF”), a special purpose entity set up for this purpose to raise funds
up to SGD223,000,000 over a 30 month period through the securitisation of DCS’ charge card and credit card
receivables (“SG Eligible Receivables”).
In DCSAF, a trust is declared over the SG Eligible Receivables sold by DCS. The ownership of the trust assets is held
through five certificates of beneficial interest, namely Class A certificates, Class B certificates, Class C certificates,
Class D certificates and Seller Certificates. Seller Certificates are the certificates representing DCS’ interest in the
trust assets. The proceeds from the Notes will be used to repay DCS for the sold receivables on each receivable
purchase date (ie. each business day other than seventh of each month).
During the period of the SG Programme, the SG Eligible Receivable outstanding as at the tenth working day
before the seventh of each month (“Calculation Date”) will be sold to DCSAF subject to the receivable purchase
agreement. The collections from securitised trade receivables, received by DCS in trust for DCSAF, between two
settlement dates (sixth calendar day of two consecutive months) will be utilised as follows:
(i)
(ii) the balances of the collections will be advanced by DCSAF to DCS on a daily basis for the purchase of new
receivables at the next calculation date.
The securitised trade receivables have not been derecognised as DCS is deemed to have retained substantially all
of the risks and rewards.
The funding from investors in relation to securitised trade receivables are disclosed as Investor Certificates in
Note 27.
10% of the collection up to the Target Interest Collection will be used by DCSAF to meet the financing costs,
administrative expenses and other costs incurred relating to the SG Programme. Any excess will be paid by
DCSAF to DCS on the next settlement date; and
(b) New Zealand
In May 2013, Diners Club (NZ) Limited (“DCNZ”) entered into a new arrangement for its Asset Securitisation
Programme (the “NZ Programme”) involving the revolving sale of its charge and credit card receivables (“Card
Receivables”) to Perpetual Trust Limited, in its capacity as the trustee of Craigieburn Trust (the “Trust”), a special
purpose entity set up for the purpose to raise funds of up to NZD60,600,000 (RM142,200,000) over a three year
period.
104
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
20. TRADE RECEIVABLES cont’d
Movement in the allowance for doubtful debts cont’d
Securitised trade receivables in Singapore, New Zealand and Malaysia are disclosed as follows: cont’d
(b) New Zealand cont’d
The Trust has two beneficiaries: DCNZ is the income beneficiary of the Trust and Development Bank of Singapore
(“DBS”) is the capital beneficiary of the Trust. As income beneficiary, DCNZ is entitled to receive distributions from
the Trust as per the Trust Deed. The capital beneficiary has the right to receive only any residual sums remaining
in the Trust on its termination and after effecting certain distributions. The securitised Card Receivables continue
to be recognised in DCNZ’s financial statements as DCNZ retains substantially all of the risks and rewards over the
securitised card receivables sold.
During the period of the NZ Programme, the eligible card receivables outstanding as at the last working day
of the end of the month (referred to as “Calculation Date”) will be sold to the Trust subject to the receivable
purchase agreement. Between two consecutive transaction dates, the collections from securitised card
receivables will be utilised as follows:
(i) (ii) The balances of the collections are held by the Trust to acquire new eligible card receivables sold by DCNZ
under the receivable purchase agreement.
The funding from investors in relation to securitised trade receivables are disclosed as Investor Certificates in
Note 27.
7% to 9% of the collection will be used by the Trust to meet the financing costs, administrative expenses and
audit fees incurred relating to the NZ Programme. Any excess will be paid back to DCNZ on a monthly basis on the
sixteenth calendar day of the following month or the next working day where the sixteenth is a non working day.
(c) Malaysia
On 29 April 2010, Diners Club (Malaysia) Sdn Bhd (“DCM”) redeemed its Asset Securitisation Programme (the
“MY Programme”) which was used to raise funds of up to RM132,000,000 with Domayne Asset Corporation
Berhad (“DACB”), a special purpose entity set up for the MY Programme and private institution lenders through
the securitisation of DCM’s charge card receivables.
On 1 April 2010, DCM entered into new agreements (“Agreements”) with private institution lenders for a new
asset securitisation programme (the “New Programme”) to raise funds of up to RM150,000,000 over a 4.25 year
period with Domayne Asset 2 Corporation Berhad (“DA2CB”), a special purpose entity set up for this purpose and
private institution lenders through the securitisation of DCM’s charge card and credit card receivables which are
eligible for the New MY Programme (“Eligible MY Trade Receivables”). On 10 April 2013, the New MY Programme
has been renewed for a further 3 year period, expiring on 10 July 2017.
In DA2CB, a trust is declared over the Eligible MY Trade Receivables sold by DCM to DA2CB (“Securitised Trade
Receivables”) and all other assets of DA2CB. The ownership of the trust assets is held through two certificates of
beneficial interest, namely Senior Certificates issued to private institution investors and Subordinated Certificates,
the latter being retained by DCM. Neither DCM nor any other entities in the Group are obliged to support any
losses suffered by the investors.
Annual Report 2014
105
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
20. TRADE RECEIVABLES cont’d
Movement in the allowance for doubtful debts cont’d
Securitised trade receivables in Singapore, New Zealand and Malaysia are disclosed as follows: cont’d
(c) Malaysia cont’d
DCM receives on behalf of DA2CB collections from the securitised trade receivables sold by DCM. The collections
are placed in designated trust accounts in DA2CB and are utilised as follows:
(i)
(ii) 93% of the collections will be placed in a designated trust account in DA2CB (“Principal Collections
Account”) and will be advanced by DA2CB to DCM on a daily basis for the purchase of new Eligible MY
Trade Receivables by DA2CB from DCM.
During the period of the MY Programme, the Eligible MY Trade Receivables outstanding as at the fifth business
day before the end of each month (referred to as “Collection Date”) will be sold to DA2CB pursuant to terms
of the Agreements. Collections from Securitised Trade Receivables sold at the previous Calculation Date will be
advanced on a daily basis to DCM for the purchase by DA2CB of new Eligible MY Trade Receivables before they
are identified as Securitised Trade Receivables at the next Calculation Date. The amount of Eligible MY Trade
Receivables purchased on a daily basis shall be equal to the balance in the Principal Collections Account (“Daily
Cash Amount”) on each day divided by 93%. The purchase price is the Daily Cash Amount, which is 93% of the
face value of the Eligible MY Trade Receivables purchased. The balance advanced on a daily basis is subject to
Eligible MY Trade Receivable balances available.
The Securitised Trade Receivables are secured to obtain the funding from investors disclosed as Senior Certificates
in Note 27. Collections from these Securitised Trade Receivables are restricted for utilisation as described in the
two preceding paragraphs.
The Securitised Trade Receivables have not been derecognised in DCM as DCM retains certain rights and
obligations over the Securitised Trade Receivables sold.
Pursuant to the terms of the Programme, 1% of the proceeds from the issuance of Senior Certificates is retained
in a designated trust account in DA2CB and will be returned to DCM upon termination of the MY Programme,
subject to the terms of the MY Programme.
7% of the collections will be placed in a designated trust account in DA2CB and will be used by DA2CB to
meet Programme-related expenses including Senior Certificate interest, administrative expenses and other
costs as stated in the Agreements. Any excess will be paid by DA2CB to DCM on the next settlement date
as variable interest on the Subordinated Certificates. The settlement dates are on the tenth calendar day of
each month; and
106
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
21. OTHER RECEIVABLES AND PREPAID EXPENSES
The Group
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
Other receivables and refundable deposits
23,562
20,005
220
275
Less: Allowance for doubtful debts
(1,225)
(11)
-
-
Add: Prepaid expenses
22,337
19,994
220
275
7,760
4,998
-
-
30,097
24,992
220
275
The Group and the Company have no significant concentration of credit risk for other receivables that may arise from
exposure to a single debtor or to groups of debtors.
Movement in the allowance for doubtful debts
The Group
At beginning of year
Additions during the year (Note 8)
2014
2013
RM’000
RM’000
11
67,880
1,214
-
Allowance no longer required (Note 8)
-
(31)
Bad debt written off against allowance
-
(67,838)
1,225
11
22. SHARE CAPITAL
The Group and
the Company
2014
2013
RM’000
RM’000
500,000
500,000
311,474
311,474
Authorised:
1,000,000,000 ordinary shares of RM0.50 each
Issued and fully paid:
622,948,000 ordinary shares of RM0.50 each
Annual Report 2014
107
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
23. EMPLOYEE SHARE OPTIONS SCHEME
On 31 October 2003, the Company implemented an Employee Share Options Scheme (“ESOS”) which is governed by
the by-laws and was approved by the shareholders at an Extraordinary General Meeting held on 19 June 2003. The
ESOS has been extended based on approval by the shareholders of the Company at the Annual General Meeting held
on 24 July 2008. The ESOS expired on 31 October 2013.
The main features of the ESOS are as follows:
(i)
(ii) Eligible persons are employees of the Group (including executive directors) who have been confirmed in the
employment of the Group and have served for at least two (2) years before the date of the offer. The eligibility for
participation in ESOS shall be at the discretion of the ESOS Committee appointed by the Board of Directors;
(iii) The total number of shares to be offered shall not exceed in aggregate 10% of the issued share capital of the
Company at any point of time during the tenure of the ESOS;
(iv) The option price for each share shall be the weighted average of the mean market quotation of the shares of
the Company in the daily official list issued by the Bursa Malaysia Securities Berhad for the five (5) trading days
preceeding the date of offer, or the par value of the shares of the Company of RM0.50, whichever is higher;
(v) No option shall be granted for less than 1,000 shares nor more than 500,000 shares to any eligible employee;
(vi) An option granted under the ESOS shall be capable of being exercised by the grantee by notice in writing to the
Company commencing from the date of the offer but before the expiry date;
(vii) All new ordinary shares issued upon exercise of the options granted under the ESOS will rank pari passu in all
respects with the existing ordinary shares of the Company; and
(viii) The person to whom the options have been granted has no right to participate by virtue of the options in any
share issue of any other company.
The ESOS shall be in force for a period of five (5) years from 31 October 2003 and extended for an additional five
(5) years commencing from 1 November 2008 until 31 October 2013;
108
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
23. EMPLOYEE SHARE OPTIONS SCHEME cont’d
The numbers of share options granted and vested under the ESOS on 31 October 2003 are 3,147,000 shares with the
exercise price of RM0.50 per share. The movement in outstanding share options outstanding during the year are as
follows:
No. of options over ordinary shares of RM0.50 each
Balance at
1.2.2013
Granted
Lapsed
Balance at
31.1.2014
’000
’000
’000
’000
1,250
-
(1,250)
-
Exercise period
31 October 2003 to 31 October 2013
24.RESERVES
The Group
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
Share premium (a)
69,415
69,415
69,415
69,415
Exchange reserve (b)
10,658
9,865
-
-
Properties revaluation reserve (c)
24,871
-
-
-
(30)
-
-
-
104,914
79,280
69,415
69,415
Investment revaluation reserve (d)
(a) Share premium
The Company
The share premium arose from the issuance of ordinary shares of the Company.
(b) Exchange reserve
Exchange reserve represents exchange difference arising from the translation of the financial statements of
foreign operations whose functional currencies are different from that of the Group’s presentation currency.
It is also used to record the exchange differences arising from monetary items which form part of the Group’s
investment in foreign operations.
On disposal of foreign operation, all accumulated exchange difference in respect of that operation attributable to
the Group are reclassified to profit or loss.
Annual Report 2014
109
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
24. RESERVES cont’d
(b) Exchange reserve cont’d
Movement during the year are as follows:
(c)
2014
2013
RM’000
RM’000
Balance at beginning of year
9,865
12,156
Foreign currency translation difference for foreign operations
5,696
(2,291)
Reclassification of exchange reserve to profit or loss on disposal of foreign
subsidiaries (Note 17)
(4,903)
-
Balance at end of year
10,658
9,865
Properties revaluation reserve
The Group
2014
2013
RM’000
RM’000
-
-
Increase arising on revaluation of land and Buildings
28,637
-
Deferred tax liability arising on revaluation
(3,766)
-
Balance at end of year
24,871
-
Balance at beginning of year
The Group
(d) Investments revaluation reserve
Fair value reserve represents the difference between the cost and the fair value of financial assets that are
classified as available-for-sale.
110
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
25. LOANS AND BORROWINGS
The Group
Maturity
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
Current
Secured:
Bank overdrafts (Note 31)
On demand
68,056
18,426
-
-
Revolving credits and short-term loans
2014
138,477
191,791
-
-
Trust receipts and bankers’ acceptance
2014
5,865
3,875
-
-
Term loans
2014
2,874
6,295
-
-
Finance lease payables (Note 26)
2014
3,957
2,840
194
79
219,229
223,227
194
79
8,227
4,026
-
-
441
1,568
-
-
8,668
5,594
-
-
227,897
228,821
194
79
Term loans
1,041
3,842
-
-
Finance lease payables (Note 26)
6,033
5,582
119
400
7,074
9,424
119
400
234,971
238,245
313
479
Unsecured:
Short-term loan
Bank overdrafts (Note 31)
Total Current
2014
On demand
Non-current
Secured:
Total Non-Current
Total
The remaining maturities of borrowings as of 31 January 2014 are as follows:
The Group
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
227,897
228,821
194
79
More than 1 year and less than 2 years
5,296
7,244
119
120
More than 2 years and less than 5 years
1,350
1,274
-
280
428
906
-
-
234,971
238,245
313
479
On demand or within one year
5 years or more
111
Annual Report 2014
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
25. LOANS AND BORROWINGS cont’d
The weighted average interest rates per annum for borrowings as of 31 January 2014 are as follows:
The Group
The Company
2014
2013
2014
2013
(%)
(%)
(%)
(%)
Bank overdrafts
6.15
6.00
-
-
Revolving credits and short-term loans
4.84
4.53
-
-
Trust receipts and bankers’ acceptance
6.13
5.10
-
-
Term loans
6.86
5.20
-
-
Obligation under finance lease
3.78
3.93
3.37
3.37
The secured term loans of the Group are secured by charges over certain freehold land and buildings, long-term
leasehold land and buildings, plant and machinery, land held for property development, investment securities and fixed
deposits as disclosed in Notes 14, 15, 18 and 31, respectively.
26. FINANCE LEASE PAYABLES
The Group and the Company have entered into finance lease arrangements for certain items of its furniture,
equipment and motor vehicles (Note 14). These leases do not have terms of renewal, but have purchase options at
nominal values at the end of the lease term. The Group’s and the Company’s finance lease payables are secured by the
financial institutions’ charge over the assets under finance lease.
Future minimum lease payments under finance leases together with the present value of the net minimum lease
payments are as follows:
The Group
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
Not later than 1 year
4,243
3,290
142
218
Later than 1 year but not later than 5 years
6,764
5,988
205
316
-
-
-
31
Total minimum lease payments
11,007
9,278
347
565
Less: Future finance charges
(1,017)
(856)
(34)
(86)
9,990
8,422
313
479
Minimum lease payments:
Later than 5 years
Present value of minimum lease payables
112
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
26. FINANCE LEASE PAYABLES cont’d
Future minimum lease payments under finance leases together with the present value of the net minimum lease
payments are as follows: cont’d
The Group
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
Not later than 1 year
3,957
2,840
194
79
Later than 1 year but not later than 5 years
6,033
5,582
119
400
Present value of minimum lease payables
9,990
8,422
313
479
(3,957)
(2,840)
(194)
(79)
6,033
5,582
119
400
Present value of payments:
Less: Amount due within the next 12 months (current
portion)
Non-current portion
27. INVESTOR AND SENIOR CERTIFICATES
The investor certificates relate to the funding for securitised trade receivables of DCS and DCNZ as disclosed in Note
20. Interest rates payable on the investor certificates range from 3.83% to 14.28% (2013: 3.93% to 14.28%) per annum,
respectively.
The senior certificates related to the funding for securitised trade receivables of DCM as disclosed in Note 20. The
interest rate payable on senior certificates is 9.20% (2013: 9.20%) per annum.
Annual Report 2014
113
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
28. TRADE PAYABLES
The normal credit period granted to the Group for trade purchases ranges from 30 to 120 days (2013: 30 to 120 days).
The currency profile of trade payables is as follows:
The Group
2014
2013
RM’000
RM’000
Singapore Dollar
108,135
70,560
Ringgit Malaysia
12,038
7,895
2,354
3,572
-
758
1,510
501
Chinese Renminbi
-
96
Canadian Dollar
-
12
63
-
124,100
83,394
New Zealand Dollar
Australian Dollar
US Dollar
Euro
29. OTHER PAYABLES AND ACCRUED EXPENSES
Other payables and accrued expenses
The Group
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
74,046
67,341
416
128
The currency profile of other payables and accrued expenses is as follows:
Singapore Dollar
New Zealand Dollar
The Group
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
50,056
50,366
-
-
3,680
10,554
-
-
20,310
4,955
416
128
Chinese Renminbi
-
1,457
-
-
US Dollar
-
9
-
-
74,046
67,341
416
128
Ringgit Malaysia
114
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
30. DEFERRED REVENUE
The Group
2014
2013
RM’000
RM’000
14,838
14,143
5,685
10,717
-
5,710
20,523
30,570
Arising from:
Customer reward points (i)
Interest income (ii)
Progress billings in respect of properties under development (iii)
(i) Deferred revenue arising from customer reward points pertains to the amounts awarded to card members based
on the spending on their credit and charge cards that could be redeemed for services and merchandise at a
later date. There is no expiry date attached to these reward points. The reward point represents costs which are
expected to be incurred and are recognised in accordance with IC Int 13 Customer Loyalty Programmes.
(ii) Deferred revenue arising from interest income are in respect of the unearned interest income from cash advances
granted to credit card customers.
(iii) Deferred revenue arising from program billings are in respect of properties under development that are yet to be
delivered.
31. CASH AND CASH EQUIVALENTS
Cash and cash equivalents included in the statements of cash flows represent the following:
The Company
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
Deposits with licensed financial institutions
10,106
9,708
300
-
Cash and bank balances
79,423
63,055
291
165
89,529
72,763
591
165
(68,497)
(19,994)
-
-
(2,954)
(3,630)
-
-
18,078
49,139
591
165
Less: Bank overdrafts (Note 25)
Less: Pledged deposits with licensed financial
institutions
The Group
2014
Fixed deposits of the Group amounting to RM2,954,000 (2013: RM3,630,000) are pledged with financial institutions as
security for banking facilities extended to the subsidiaries as disclosed in Note 25.
Annual Report 2014
115
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
31. CASH AND CASH EQUIVALENTS cont’d
Included in deposits with licensed banks and cash and bank balances of the Group are amounts held in the designated
trust accounts of the special purpose entities totalling RM54,818,000 (2013: RM30,426,000) pursuant to the terms of
the respective Programmes. These amounts can only be use for the purposes as disclosed in Note 20.
The effective interest rates and maturities of deposits as at the end of the financial year were as follows:
The Group and the Company
2014
Effective
interest rates
2013
Maturities
days
Effective
interest rates
(%)
Maturities
days
(%)
Licensed banks
0.05 - 3.90
1 - 365
0.70 - 8.85
1 - 365
Licensed financial institutions
2.45 - 2.49
365
2.36
365
The currency profile of cash and bank balances is as follows:
The Group
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
Singapore Dollar
51,313
52,643
5
5
New Zealand Dollar
31,247
9,169
-
-
6,001
6,257
585
159
967
80
-
-
Australian Dollar
-
3,837
-
-
Chinese Renminbi
-
514
-
-
Brunei
-
262
-
-
Pound Sterling
1
1
1
1
89,529
72,763
591
165
Ringgit Malaysia
US Dollar
116
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
32. RELATED PARTY TRANSACTIONS
During the financial year, significant related party transactions undertaken between the Group and the Company with
related parties, which are determined on a basis as negotiated between the related parties, are as follows:
The Group
2014
2013
RM’000
RM’000
341
419
-
7
- Recovery of share registration charges
86
121
- Rental expenses for motor vehicles
12
-
- Purchase of goods
7,129
6,513
- Disposal of subsidiaries
1,265
-
2014
2013
RM’000
RM’000
436
1,217
70
109
1,323
1,313
Transactions with corporations in which the directors, Tan Sri Dato’ Tan Kay Hock and
Puan Sri Datin Tan Swee Bee are deemed related through their interest in George
Kent (Malaysia) Berhad:
- Sales of air tickets
- Sales of tiles
The Company
Transactions with subsidiaries :
Interest charged on amount owing by subsidiaries
Secretarial fee payable
Management fees receivable
Compensation of Key Management Personnel
The key management personnel of the Group and of the Company include directors of the Company and subsidiaries
and certain members of senior management of the Group and the Company. Their compensation, other than the
directors’ remuneration as disclosed in Note 10, are as follows:
Salaries and other short-term employee benefits
Contributions to defined contribution plans
The Group
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
11,356
9,015
1,611
1,793
544
375
-
-
11,900
9,390
1,611
1,793
Annual Report 2014
117
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
33. FINANCIAL INSTRUMENTS AND CAPITAL RISK MANAGEMENT
(a) Capital risk management
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and
healthy capital ratios in order to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions.
To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return
capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during
the years ended 31 January 2014 and 31 January 2013.
The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The
Group includes within net debts, loans and borrowings, trade and other payables, funding from non-recourse
investors certificates and senior certificates, less cash and bank balances. Capital includes equity attributable to
the owners of the Company.
2014
2013
RM’000
RM’000
Loans and borrowings (Note 25 )
234,971
238,245
Trade and other payables (Notes 28 and 29)
198,146
150,735
Funding from non-recourse investor certificates and senior certificates (Note 27)
474,814
445,153
Less: Cash and bank balances (Note 31)
(89,529)
(72,763)
Net debt
818,402
761,370
Equity attributable to the owners of the Company
207,977
220,819
1,026,379
982,189
80%
78%
Capital and net debt
Gearing ratio
The Group
(b) Significant accounting policies
Details of significant accounting policies and methods adopted (including the criteria for recognition, the bases of
measurement, and the bases for recognition of income and expenses) for each class of financial assets, financial
liabilities and equity instruments are disclosed in Note 3.
118
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
33. FINANCIAL INSTRUMENTS AND CAPITAL RISK MANAGEMENT cont’d
(c) Categories of financial instruments
The Group
The Company
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
655,116
646,414
-
-
22,337
19,994
220
275
-
-
15,492
21,506
89,529
72,763
591
165
12,831
10,689
-
-
1,468
1,418
-
-
124,100
83,394
-
-
74,046
67,341
416
128
Financial assets
Loans and receivables:
Trade receivables
Other receivables and refundable deposits
(Note 21)
Amount owing by subsidiaries
Cash and bank balances
Fair value through profit or loss:
Held for trading investments (Note 18)
Available-for-sale:
Equity investments (Note 18)
Financial liabilities
At amortised cost:
Trade payables
Other payables and accrued expenses
Amount owing to subsidiaries
-
-
30,060
29,553
33,500
33,500
-
-
Investor certificates
441,314
411,653
-
-
Loans and borrowings (Note 25)
234,971
238,245
313
479
Senior certificates
(d) Financial risk management
The operations of the Group are subject to various financial risks which include credit risk, foreign currency risk,
interst rate risk, liquidity risk and market price risk in connection with its use or holding of financial instruments.
The Group has adopted a financial risk management framework with the principal objective of effectively
managing risks and minimising any potential adverse effects on the financial performance of the Group.
The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are
executed by the general managers of the respective operating units. The Audit Committee provides independent
oversight to the effectiveness of the risk management process.
It is, and has been throughout the current and previous financial year, the Group’s policy that no derivatives shall
be undertaken except for the use as hedging instruments where appropriate and cost-efficient.
Annual Report 2014
119
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
33. FINANCIAL INSTRUMENTS AND CAPITAL RISK MANAGEMENT cont’d
(d) Financial risk management cont’d
The following sections provide details regarding the Group’s and the Company’s exposure to the abovementioned financial risks and the objectives, policies and processes for the management of these risks.
(e) Credit risk management
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default
on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade and other
receivables. The Group’s objective is to seek continual revenue growth while minimising losses incurred due to
increased credit risk exposure.
The Group controls its credit risk by the application of credit approval limits and monitoring procedures. Credit
evaluations are performed on customers requiring credit over a certain amount. Trade receivables are monitored
on an on-going basis.
At the end of the reporting period, the maximum credit exposure of the Group and the Company is represented
by the carrying amounts of the trade and other receivables as shown on the statements of financial position.
The Group determines concentration of credit risk by monitoring the country and industry section profile of its
trade receivables on an ongoing basis. The credit risk concentration profile of the Group’s trade receivables at the
reporting date are as follows:
The Group
2014
2013
RM’000
%
RM’000
%
506,100
77
467,334
72
By country:
Singapore
Australia
-
-
1,717
-
New Zealand
73,004
11
90,533
14
Malaysia and others
76,012
12
86,830
14
655,116
100
646,414
100
4,769
1
11,482
2
376
-
152
-
649,744
99
634,668
98
227
-
112
-
655,116
100
646,414
100
By segment:
Engineering and building materials
General trading
Credit and charge cards business and hospitality
Investment holding and secretarial services
120
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
33. FINANCIAL INSTRUMENTS AND CAPITAL RISK MANAGEMENT cont’d
(f)
Foreign currency risk management
Foreign currency risk is that risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates.
The Group has transactional currency exposures arising from sales and purchases that are denominated in a
currency other than a respective functional currencies of Group entities, primarily Ringgit Malaysia (“RM”),
Singapore Dollar (“SGD”), Australian Dollar (“AUD”) and New Zealand Dollar (“NZD”).
As a result of significant operating activities in Singapore, Australia, New Zealand and Hong Kong, the Group’s
statement of financial position can be affected significantly by movements in the SGD, AUD, NZD and United
States Dollar (“USD”) against RM exchange rate.
The Group is also exposed to currency translation risk arising from its net investments in foreign operations,
including Singapore, Australia, New Zealand and Hong Kong.
Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities
are kept to an acceptable level.
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity of the Group’s loss after tax to a reasonably possible change in
the SGD and USD exchange rates against the respective functional currencies of the Group entities, with all other
variables held constant.
The Group
SGD/RM
USD/RM
2014
2013
RM’000
RM’000
Loss
after tax
Equity
Loss after
tax
Equity
-strengthened 5%
+686
+7,329
+490
+2,959
-weakened 5%
-686
-7,329
-490
-2,959
-strengthened 5%
+36
+421
+5
+422
-weakened 5%
-36
-421
-5
-422
Annual Report 2014
121
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
33. FINANCIAL INSTRUMENTS AND CAPITAL RISK MANAGEMENT cont’d
(g) Interest rate risk management
Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial
instruments will fluctuate because of changes in the market interest rates. The Group’s and the Company’s
exposure to interest rate risk arise primarily from their loans and borrowings bearing interest at floating rates.
Sensitivity analysis for interest rate risk
The sensitivity analysis below have been determined based on the exposure to interest rate for deposits with
licensed financial institutions and loans and borrowings bearing interest at floating rates at the end of the
reporting period. At the reporting date, if interest rates had been 10 basis points lower/higher, with all other
variables held constant, the Group’s loss after tax would have been RM115,000 lower/higher (2013: RM303,000),
arising mainly as a result of lower/higher interest expense on floating rate loans and borrowings and higher/lower
interest income from floating rate deposits. The assumed movement in basis points for interest rate sensitivity
analysis is based on management’s assessment on the currently observable market environment.
(h) Liquidity risk management
Liquidity risk is the risk that the Group and the Company will encounter difficulty in meeting financial obligations
due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from
mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s objective is to
maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.
At the reporting date, approximately 97% (2013: 96%) and 62% (2013: 16%) of the Group’s and the Company’s
loans and borrowings (Note 25) respectively will mature in less than one year based on the carrying amounts
reflected in the financial statements.
122
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
33. FINANCIAL INSTRUMENTS AND CAPITAL RISK MANAGEMENT cont’d
(h) Liquidity risk management cont’d
Liquidity tables
The following tables detail the Group’s and the Company’s remaining contractual maturity for its non-derivative
financial liabilities with agreed repayments periods. The tables have been drawn up based on the undiscounted
cash flows of financial liabilities based on the earliest date on which the Group and the Company can be
required to pay. The tables include both interest and principal cash flows. To the extent the interest flows are
floating rates, the undiscounted amount is derived from the interest rate at the end of the reporting period. The
contractual maturity is based on the earliest date on which the Group and the Company may be required to pay.
The Group
Maturity profile
Less than
1 year
1-5
years
5+
years
Total
RM’000
RM’000
RM’000
RM’000
124,100
-
-
124,100
74,046
-
-
74,046
3,082
41,015
-
44,097
Investor certificates
441,314
-
-
441,314
Loans and borrowings
238,380
6,739
427
245,546
880,922
47,754
427
929,103
Trade payables
83,394
-
-
83,394
Other payables and accrued expenses
67,341
-
-
67,341
-
36,515
-
36,515
Investor certificates
411,653
-
-
411,653
Loans and borrowings
229,271
8,924
906
239,101
791,659
45,439
906
838,004
31 January 2014
Non-interest bearing:
Trade payables
Other payables and accrued expenses
Interest bearing:
Senior certificates
31 January 2013
Non-interest bearing:
Interest bearing:
Senior certificates
Annual Report 2014
123
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
33. FINANCIAL INSTRUMENTS AND CAPITAL RISK MANAGEMENT cont’d
(h) Liquidity risk management cont’d
Liquidity tables cont’d
The Company
Maturity profile
Less than
1 year
1-5
years
5+
years
Total
RM’000
RM’000
RM’000
RM’000
416
-
-
416
30,060
-
-
30,060
142
205
-
347
30,618
205
-
30,823
128
-
-
128
29,553
-
-
29,553
218
316
31
565
29,899
316
31
30,246
31 January 2014
Non-interest bearing:
Other payables and accrued expenses
Interest bearing:
Amount owing to subsidiaries
Loans and borrowings
31 January 2013
Non-interest bearing:
Other payables and accrued expenses
Interest bearing:
Amount owing to subsidiaries
Loans and borrowings
124
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
33. FINANCIAL INSTRUMENTS AND CAPITAL RISK MANAGEMENT cont’d
(h) Liquidity risk management cont’d
Liquidity tables cont’d
The following table details the Group’s and the Company’s expected maturity for its non-derivative financial
assets. The table has been drawn up based on the undiscounted contractual maturities of the financial assets
including interest that will be earned on those assets. The inclusion of information on non-derivative financial
assets is necessary in order to understand the Group’s liquidity risk management as the liquidity is managed on a
net asset and liability basis.
The Group
Maturity profile
Less than
1 year
1-5
years
5+
years
Total
RM’000
RM’000
RM’000
RM’000
12,831
1,468
-
14,299
655,116
-
-
655,116
Other receivables and refundable deposits
22,337
-
-
22,337
Cash and bank balances
79,423
-
-
79,423
10,106
-
-
10,106
779,813
1,468
-
781,281
10,689
1,418
-
12,107
646,414
-
-
646,414
Other receivables and refundable deposits
19,994
-
-
19,994
Cash and bank balances
63,055
-
-
63,055
9,708
-
-
9,708
749,860
1,418
-
751,278
31 January 2014
Non-interest bearing:
Investment securities
Trade receivables
Interest bearing:
Cash and bank balace
31 January 2013
Non-interest bearing:
Investment securities
Trade receivables
Interest bearing:
Cash and bank balances
Annual Report 2014
125
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
33. FINANCIAL INSTRUMENTS AND CAPITAL RISK MANAGEMENT cont’d
(h) Liquidity risk management cont’d
Liquidity tables cont’d
The Company
Maturity profile
Less than
1 year
1-5
years
5+
years
Total
RM’000
RM’000
RM’000
RM’000
220
-
-
220
15,492
-
-
15,492
300
-
-
300
291
-
-
291
16,303
-
-
16,303
31 January 2014
Non-interest bearing:
Other receivables and refundable deposits
Amount owing by subsidiaries
Cash and bank balances
Interest bearing:
Cash and bank balances
31 January 2013
Non-interest bearing:
Other receivables and refundable deposits
Amount owing by subsidiaries
Cash and bank balances
(i)
275
-
-
275
21,506
-
-
21,506
165
-
-
165
21,946
-
-
21,946
Fair values
The fair values of financial instruments refer to the amounts at which the instruments could be exchanged or
settled between knowledgeable and willing parties in an arm’s length transaction. Fair values have been arrived
at based on prices quoted in an active, liquid market or estimated using certain valuation techniques such as
discounted future cash flows based upon certain assumptions. Amounts derived from such methods and
valuation techniques are inherently subjective and therefore do not necessarily reflect the amounts that would
be received or paid in the event of immediate settlement of the instruments concerned.
On the basis of the amounts estimated from the methods and techniques as mentioned in the preceding
paragraph, the carrying amounts of the various financial assets and financial liabilities reflected on the statement
of financial position approximate their fair values.
126
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
33. FINANCIAL INSTRUMENTS AND CAPITAL RISK MANAGEMENT cont’d
(i)
Fair values cont’d
The following methods and assumptions were used to estimate the fair values of the principal financial assets and
liabilities of the Group and of the Company:
•
Cash and cash equivalents, trade and other receivables, refundable deposits, amount owing by/to subsidiaries,
trade and other payables and accrued expenses: The carrying amounts are considered to approximate the fair
values as they are either within the normal credit terms or they have a short-term maturity period.
•
Investment securities: Investment securities are carried at market value.
•
Loans and borrowings: As the loans and borrowings were obtained from licensed financial institutions at
the prevailing market rate, the carrying value of these financial liabilities approximates its fair value.
•
Senior and investor certificates: The fair values of senior certificates and investor certificates are
determined by estimating future cash flows on a borrowing-by-borrowing basis, and discounting these
future cash flows using an interest rate which takes into consideration the Group’s incremental borrowing
rate at year end for similar types of debt arrangements.
Fair value measurements recognised in the statements of financial position
The following table provides an analysis of financial instruments that are measured subsequent to initial
recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.
•
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for
identical assets or liabilities;
•
Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
•
Level 3 fair value measurements are those derived from valuation techniques that include inputs for the
asset or liability that are not based on observable market data (unobservable inputs).
Financial assets
1)
2)
Available-for-sale nonderivative financial assetsInvestment securities
Held-for trading nonderivative financial assetsInvestment securities
Fair value of 31 January
2014
2013
Quoted outside
Malaysia
-RM1,461,000
Quoted in
Malaysia
-RM10,945,000
Quoted outside
Malaysia
-RM1,886,000
Quoted outside
Malaysia
-RM1,411,000
Quoted in
Malaysia
-RM7,101,000
Quoted outside
Malaysia
-RM3,588,00
There were no transfers between Levels 1 and 2 during the financial year.
Fair value
hierarchy
Valuation technique
and key input
Level 1
Quoted bid prices in
an active market
Level 1
Quoted bid prices in
an active market
Annual Report 2014
127
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
33. FINANCIAL INSTRUMENTS AND CAPITAL RISK MANAGEMENT cont’d
(j)
Market price risk management
Market price risk is the risk that fair value or future cash flows of the Group’s financial instrumets will fluctuate
because of changes in market prices (other than interest or exchange rates).
The Group is exposed to equity price risk arising from its investments is quoted equity instruments in Malaysia,
Singapore, Indonesia, Thailand and Hong Kong stock exchanges. These instruments are mainly classified as fair
value through profit or loss. The Group does not have exposure to commodity price risk.
Sensitivity analysis for equity price risk
At the reporting date, if the share price had been 5% (2013: 5%) higher/lower with all other variables held
constant, the Group’s loss net of tax would have been RM715,000 higher/lower (2013: RM596,000), arising as
result of higher/lower fair value gains on its investments in quoted equity instruments.
34. SEGMENT INFORMATION
For the Group’s chief operating decision maker (“CODM”) purposes, the Group is organised into business units based
on their products and services, and has five reportable operating segments as follows:
(i)
(ii) General trading
(iii) Property
(iv) Hospitality and card services
(v) Investment holding and secretarial services
Except as indicated above, no operating segments have been aggregated to form the above reportable segments.
CODM monitors the operating results of its business units separately for the purpose of making decisions about
resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss
which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the
consolidated financial statements. Group financing (including finance costs) and income taxes are managed on a group
basis and are not allocated to operating segments.
Engineering and building materials
64,359
Total revenue
64,359
-
1,767
(2,189)
Segment profit/
(loss)
*
29,663
Segment
liabilities
2014
2013
2014
2013
Property
7,709
19,047
696
(3,534)
1,024
139
129
3
-
72,147
14,039
58,108
16,996
53,578
892
(2,456)
1,108
467
561
-
-
79,794
17,342
62,452
42,415
28,309
-
1,162
-
-
1,385
-
-
8,194
-
8,194
2013
1,279
2014
2013
Investment
holding &
secretarial
services
2014
2013
Discontinued
operations * 2013
Elimination
2014
-
3,707
(5,356)
10,322
44,993
6,853
46
407
958
(7,954)
542
189
127
448
2,452
1,494
193
(6,088)
568
179
610
1,515
1,693
1,500
8,359
868,129 836,200
5,508
68,091
33
(1,973)
61,885
96
(7,350) (30,791) (31,199)
10,577
40,183
4,750
20
(665)
160,855 177,901
-
160,855 177,901
-
-
-
(15,533) (18,842)
-
22
-
-
-
-
(184)
-
4,735
280
(2,225)
-
638
(423)
-
12,720
-
(1,253)
235
-
2,093
(5,629)
(7,904)
(817)
387
(7,420) (14,044) (148,299) (159,971)
-
32
-
-
-
-
-
(12,549) (19,071) (15,533) (18,842)
-
(12,549) (19,071)
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2014
52,388 1,005,953 925,668
-
2,771
15
-
1,077
-
20
-
-
-
Hospitality & card services A
B
A
A
A
A
8,749
(35,941)
5,439
44,329
12,645
814
432
279,925
-
279,925
RM’000
2014
9,762
(27,754)
5,112
41,928
11,128
630
3,035
286,493
-
286,493
RM’000
2013
Per
consolidated
financial
statements
E
946,978
881,204
D 1,164,299 1,111,047
C
Notes
As mentioned under Note 12, during the year, the Group disposed of certain subsidiaries which carried out business under the Group’s
engineering and building materials operations.
36,219
198,618 191,543
415
(2,218)
(500)
Segment assets
Additions to
non-current
assets
4,313
1,963
880
Finance costs
Other non-cash
expenses
Assets:
4,531
4,089
Depreciation and
amortisation
-
-
-
Dividend income
256
65,018
-
65,018
Interest income
Results:
2013
General
trading
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2014
Engineering & building materials
Inter-segment
External
customers
Revenue:
34. SEGMENT INFORMATION cont’d
128
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
Annual Report 2014
129
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
34. SEGMENT INFORMATION cont’d
Note: Nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial statements
A
Inter-segment revenues and expenses eliminations.
B
Other material non-cash expenses and income consist of the following items as presented in the respective
notes to the financial statements.
2014
2013
RM’000
RM’000
2,137
1,995
Gain on disposal of investment securities
(225)
(22)
Gain on disposal of property, plant and equipment
(115)
(55)
15,360
9,412
(14,671)
(681)
Net fair value (gain)/ loss on investment securities
Allowance for doubtful receivables - trade and other receivables
Allowance for doubtful debt no longer required
- trade and other receivables
Net unrealised foreign exchange loss /(gain)
1,703
(6,060)
-
(754)
Inventories written down
439
1,034
Property, plant and equipment written off
811
-
-
243
5,439
5,112
2014
2013
RM’000
RM’000
Property, plant and equipment
6,609
3,611
Intangible assets
2,140
6,151
8,749
9,762
Write back of inventories written down
Impairment of property, plant and equipment
C
D
Additions to non-current assets consist of:
The following items are deducted from segment assets to arrive at total assets reported in the consolidated
statement of financial position:
Inter-segment assets
2014
2013
RM’000
RM’000
(148,299)
(159,971)
130
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
34. SEGMENT INFORMATION cont’d
Note: Nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial statements
cont’d
E
The following items are (deducted from)/added to segment liabilities to arrive at total liabilities reported in the
consolidated statement of financial position:
Inter-segment liabilities
2014
2013
RM’000
RM’000
(817)
387
Geographical information
Revenue and non-current assets information based on the geographical location of customers and assets respectively
are as follows:
Revenue
2014
2013
2014
2013
RM’000
RM’000
RM’000
RM’000
165,814
168,023
73,691
60,624
Malaysia and others
96,858
86,970
252,227
189,901
New Zealand
17,253
19,004
10,625
8,620
-
12,496
-
50,104
279,925
286,493
336,543
309,249
Singapore
Australia
Non-current assets
Non-current assets information presented above consists of the following items as presented in the consolidated
statement of financial position:
Property, plant and equipment
Land held for property development
Intangible assets
2014
2013
RM’000
RM’000
306,424
278,087
6,100
6,100
24,019
25,062
336,543
309,249
Annual Report 2014
131
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
35. COMMITMENTS
(i)
Capital commitments
Capital expenditure as at the reporting date is as follows:
The Group
2014
2013
RM’000
RM’000
1,964
3,332
Capital expenditure
Approved and contracted for:
Property, plant and equipment
(ii) Operating lease commitments
The Group has entered into commercial property leases for the use of land and buildings and office equipment.
These leases have an average tenure of between one to five years with no renewal option or contingent rent
provision included in the contracts. Lease terms do not contain restrictions on the Group’s activities concerning
dividends, additional debt or further leasing.
As at the end of the reporting period, the Group has non-cancellable operating lease commitments in respect of
the rental of premises as follows:
The Group
Within one year
In the second to fifth years
2014
2013
RM’000
RM’000
9,936
13,377
11,080
12,047
21,016
25,424
132
Johan Holdings Berhad (314-K)
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
36. CONTINGENT ASSETS
A subsidiary, Johan Properties Sdn Bhd (“JPSB”) had on 25 July 1996 filed a lawsuit against five Defendants for wrongful
repudiation or breach of a contract in relation to a property held under Lot 289, Section 57, Bandar Kuala Lumpur
(the “Property”). JPSB’s Statement of Claim was for (i) return of the deposit sum of RM1,700,000; (ii) special damages
amounting to RM4,300,000; (iii) general damages; and (iv) interest and costs.
On 2 June 2003, the High Court dismissed JPSB’s suit and the Defendents’ counter claim. On 21 July 2010, the Court of
Appeal had allowed JPSB’s appeal against the decision of the High Court on 2 June 2003. The Defendents’ application
for leave to appeal to the Federal Court was dismissed on 4 April 2011.
Pursuant to the decision of the Court of Appeal, JPSB is entitled to claim from the Defendants the return of the deposit
sum of RM1,700,000 and interest at rate of 8% per annum from 19 October 2000 to the date of full settlement and
costs awarded totalling RM45,000. On 11 September 2013, the Senior Assistant Registrar (“SAR”) of the High Court,
after the assessment trial, awarded JPSB a total sum of RM1,119,600 as special damages as compared to the full
sum of RM4,300,000 claimed against the Defendants. Both JPSB and the Defendants have filed an appeal against the
decision of the SAR. The hearing date for the appeals has been fixed for a decision by the High Court on 27 June 2014.
37. SUBSEQUENT EVENT
On 6 March 2014, the Company announced that Johan Investment Pte Ltd, a wholly- owned subsidiary incorporated in
Singapore, had entered into a conditional share sales agreement with an external party for the disposal of its whollyowned subsidiary, Diners Club (NZ) Pte Ltd, a company incorporated in New Zealand, for a cash consideration of
NZD3,123,000 (RM8,057,340). The disposal was completed on 11 March 2014.
Annual Report 2014
133
Notes to the Financial Statements
For the year ended 31 January 2014
cont’d
38. SUPPLEMENTARY INFORMATION - DISCLOSURE ON REALISED AND UNREALISED PROFITS OR LOSSES
On 25 March 2011, Bursa Malaysia Securities Berhad (“Bursa Malaysia”) issued a directive to all listed issuers pursuant
to Paragraphs 2.06 and 2.23 of the Bursa Securities Main Market Listing Requirements. The directive requires all listed
issuers to disclose the breakdown of the unappropriated profits or accumulated losses as of the end of the reporting
period, into realised and unrealised profits or losses.
On 20 December 2011, Bursa Malaysia further issued guidance on the disclosure and the prescribed format of
disclosure.
The breakdown of the accumulated losses of the Group and of the realised and unrealised profits or losses, pursuant to
the directive, is as follows:
The Group
The Company
2014
2013
2014
2013
RM
RM
RM
RM
Total (accumulated losses)/retained profits of the
Company and its subsidiaries:
- Realised
- Unrealised
Less: Consolidation adjustments
Accumulated losses as per financial statements
(574,704)
(533,391)
96,473
98,371
(478,231)
(435,020)
269,820
265,085
(208,411)
(169,935)
(228,932)
(228,932)
(228,932)
(219,216)
(219,216)
(219,216)
The determination of realised and unrealised profits or losses is based on Guidance of Special Matter No. 1
“Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Securities
Listing Requirements” as issued by the Malaysian Institute of Accountants on 20 December 2011. A charge or a credit
to the profit or loss of a legal entity is deemed realised when it is resulted from the consumption of resources of all
types and form, regardless of whether it is consumed in the ordinary course of business or otherwise. A resource
may be consumed through sale or use. Where a credit or a charge to the profit or loss upon initial recognition or
subsequent measurement of an asset or a liability is not attributed to consumption of resource, such credit or charge
should not be deemed as realised until the consumption of resource could be demonstrated.
This supplementary information have been made solely for complying with the disclosure requirements as stipulated in
the directives of Bursa Malaysia Securities Berhad and is not made for any other purposes.
134
Johan Holdings Berhad (314-K)
Statement by Directors
The directors of JOHAN HOLDINGS BERHAD state that, in their opinion, the accompanying financial statements are drawn up
in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the provisions
of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the
Company as of 31 January 2014 and of the financial performance and the cash flows of the Group and of the Company for
the year ended on that date.
The supplementary information set out in Note 38, which is not part of the financial statements, is prepared in all material
respects, in accordance with Guidance on Special Matter No. 1 “Determination of Realised and Unrealised Profits or Losses
in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements” as issued by the Malaysian
Institute of Accountants and the directive of Bursa Malaysia Securities Berhad.
Signed in accordance with a resolution of the Directors,
DATO’ AHMAD KHAIRUMMUZAMMIL BIN MOHD YUSOFF PUAN SRI DATIN TAN SWEE BEE
Kuala Lumpur
30 May 2014
Declaration by the Officer
Primarily Responsible for the Financial Management of the Company
I, NG YEW SOON, the officer primarily responsible for the financial management of JOHAN HOLDINGS BERHAD, do solemnly
and sincerely declare that the accompanying financial statements are, in my opinion, correct and I make this solemn
declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act,
1960.
Subscribed and solemnly declared by
the abovenamed NG YEW SOON at
KUALA LUMPUR this 30th day of May, 2014.
Before me,
SHAFIE B. DAUD
No. W350
COMMISSIONER FOR OATHS
38A, JALAN TUN MOHD FUAD 1
TAMAN TUN DR. ISMAIL
60000 KUALA LUMPUR
NG YEW SOON
Annual Report 2014
135
Shareholders’ Information
As at 28 May 2014
SHARE CAPITAL INFORMATION
Authorised Share Capital
Issued and Fully Paid-up Capital
Total Number of Shares Issued
Class of Securities
Voting Rights
:
:
:
:
:
RM500,000,000.00
RM311,474,263.50
622,948,527
Ordinary Shares of 50 sen each
One (1) vote per Ordinary Share
DISTRIBUTION OF SHAREHOLDINGS No. of Holders
%
Size of Holdings
Total Holdings
%
100
1.09
Less than 100 shares
2,976
0.00
2,551
27.91
100 to 1,000 shares
2,382,418
0.38
4,608
50.42
1,001 to 10,000 shares
20,474,972
3.29
1,614
17.66
10,001 to 100,000 shares
57,750,227
9.27
264
2.89
100,001 to less than 5% of issued shares
411,310,717
66.03
3
0.03
5% and above of issued shares
131,027,217
21.03
9,140
100.00
Total
622,948,527
100.00
No. of Shares Held
%
LIST OF THIRTY LARGEST REGISTERED SHAREHOLDERS
(as shown in the Record of Depositors)
No. Name of Shareholders
1
STAR WEALTH INVESTMENT LIMITED
47,306,117
7.59
2
TAN KAY HOCK
42,915,100
6.89
3
TAN SWEE BEE
40,806,000
6.55
4
HECTOMIC LIMITED
30,912,200
4.96
5
HSBC NOMINEES (ASING) SDN BHD
- FOR SUNCROWN HOLDINGS LIMITED
30,675,000
4.92
6
ASIAN RIM LIMITED
29,629,418
4.76
7
RHB NOMINEES (ASING) SDN BHD
OSK CAPITAL SDN BHD FOR PRIME CHAMPION INVESTMENTS LIMITED
26,500,500
4.25
8
RHB NOMINEES (ASING) SDN BHD
OSK CAPITAL SDN BHD FOR TRINITY STAR DEVELOPMENTS LIMITED
26,500,500
4.25
9
KIN FAI INTERNATIONAL LIMITED
25,413,000
4.08
10
KWOK HENG HOLDINGS LIMITED
25,194,000
4.04
11
HSBC NOMINEES (ASING) SDN BHD
- FOR TAN SWEE BEE
23,970,900
3.85
12
NORRIS PIE LIMITED
19,477,800
3.13
136
Johan Holdings Berhad (314-K)
Shareholders’ Information
As at 28 May 2014
cont’d
LIST OF THIRTY LARGEST REGISTERED SHAREHOLDERS cont’d
(as shown in the Record of Depositors)
No. Name of Shareholders
No. of Shares Held
%
13
CIMB GROUP NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR TAN SWEE BEE (TAN KAY HOCK)
14,753,467
2.37
14
HSBC NOMINEES (ASING) SDN BHD
- EXEMPT AN FOR COUTTS & CO LTD (HK BRANCH)
12,305,000
1.98
15
HDM NOMINEES (ASING) SDN BHD
- PLEDGED SECURITIES ACCOUNT FOR PROMOTO COMPANY LIMITED
11,550,000
1.85
16
CIMB GROUP NOMINEES (TEMPATAN) SDN BHD
- PLEDGED SECURITIES ACCOUNT FOR TAN KAY HOCK (49545 JPLE)
11,355,000
1.82
17
HSBC NOMINEES (ASING) SDN BHD
- EXEMPT AN FOR CREDIT SUISSE (SG BR-TST-ASING)
10,613,900
1.70
18
KENANGA NOMINEES (ASING) SDN. BHD.
- DMG & PARTNERS SECURITIES PTE LTD FOR KEEN CAPITAL INVESTMENTS LTD
6,750,400
1.08
19
RCI VENTURES SDN BHD
5,550,000
0.89
20
CIMSEC NOMINEES (TEMPATAN) SDN BHD
- CIMB BANK FOR TAN KAY HOCK (MY0041)
5,121,000
0.82
21
CIMSEC NOMINEES (ASING) SDN BHD
- CIMB BANK FOR TAN SWEE BEE (MY0022)
5,100,000
0.82
22
BEKALSAMA SILKSCREENING & SERVICES SDN BHD
3,483,700
0.56
23
MEGA FIRST HOUSING DEVELOPMENT SDN BHD
2,834,200
0.46
24
MAYBANK SECURITIES NOMINEES (ASING) SDN BHD
- PLEDGED SECURITIES ACCOUNT FOR JAGINDER SINGH PASRICHA
2,100,000
0.34
25
MAYBANK NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR ANG PIANG KOK
2,000,000
0.32
26
NORELLA BINTI TALIB
1,593,000
0.26
27
SONG SZE MEY
1,400,000
0.22
28
CHEAH SEE HAN
1,200,000
0.19
29
RHB CAPITAL NOMINEES (ASING) SDN BHD
- PLEDGED SECURITIES ACCOUNT FOR CHI KAIN SANG (LBU)
1,196,600
0.19
30
YAP FU FAH
1,150,000
0.18
469,356,802
75.35
Annual Report 2014
137
Shareholders’ Information
As at 28 May 2014
cont’d
SUBSTANTIAL SHAREHOLDERS (EXCLUDING BARE TRUSTEES) AS AT 28 MAY 2014
(as per Register of Substantial Shareholders)
No. of Ordinary Shares of RM0.50 each
Direct
Interest
%
Tan Sri Dato’ Tan Kay Hock
59,391,100 9.53 213,717,484*
34.31
Puan Sri Datin Tan Swee Bee
85,119,367 13.66 187,989,217*
30.18
Star Wealth Investment Limited
47,306,117
7.59
Name of Substantial Shareholder
Deemed
Interest
-
%
-
Notes:*
Deemed interested by virtue of their equity interest in Kin Fai International Limited, Kwok Heng Holdings Limited and Suncrown
Holdings Limited, shares beneficially held under various nominee companies and shares held in each other’s name including call
options granted over all existing JHB shares held by Star Wealth Investment Limited.
Statement on Directors’ Interests
In the Company and Related Corporation
As at 28 May 2014
DIRECTORS’ INTEREST IN SHARES
(as shown in the Register of Directors’ Holdings)
In Johan Holdings Berhad
No. of Ordinary Shares of RM0.50 each
Direct
Interest
%
Tan Sri Dato’ Tan Kay Hock
59,391,100 9.53 213,717,484*
34.31
Puan Sri Datin Tan Swee Bee
85,119,367 13.66 187,989,217*
30.18 Tan Sri Dato’ Seri Dr Ting Chew Peh
-
-
-
-
Dato’ Ahmad Khairummuzammil bin Mohd Yusoff
-
-
-
-
200,000
0.03
-
-
Name of Director
Ooi Teng Chew
*
Deemed
Interest
%
Deemed interested by virtue of their equity interest in Kin Fai International Limited, Kwok Heng Holdings Limited and Suncrown
Holdings Limited, shares beneficially held under various nominee companies and shares held in each other’s name including call
options granted over all existing JHB shares held by Star Wealth Investment Limited.
138
Johan Holdings Berhad (314-K)
List of Properties Held
As at 31 January 2014
Location
1)
2)
Description
Area
Sq. metre
Tenure
Net
Book Value
RM’000
Age of
Building
(Years)
Year of
Revaluation
Year of
Acquisition
MALAYSIA
PT 6280 HS(D) 2595
Mukim Dengkil
Daerah Sepang
Selangor Darul Ehsan
Offices, factory
and warehouse
112,390
Freehold
113,222
18
2014
1996
Lot 4182
Jalan Titi Panjang
32200 Lumut, Perak
Marine Club
12,141
Leasehold Expiring
29.4.2093
8,582
18
2014
1996
PT 4106
Mukim Lumut
Daerah Manjung
Perak Darul Ridzuan
Hotel
16,137
Leasehold Expiring
14.1.2092
32,086
22
2014
1992
No. S1-22
1st Floor, Wisma Abad
Century Garden
Johor Bharu
Office lot
22
Freehold
34
25
-
1989
P.T. 3005 H.S. (D)
DGS6374 & PT3014
H.S(D) DGS6362
Pulau Pangkor
Mukim Lumut
Daerah Manjung
Leasehold land
58.43
acres
Leasehold Expiring
4.5.2094
34,780
-
2014
1995
Offices
1,435
Leasehold Expiring
2.9.2067
65,343
36
2013
1978
395
Leasehold Expiring
8.1.2055
3,145
19
2014
2004
SINGAPORE
7500E Beach Road
#02-201, #03-301,
#04-201, The Plaza
18 Kaki Bukit Road 3
Office
#05-16
Entrepreneur Business
Centre
Singapore
Annual Report 2014
139
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN that the Eighty-Ninth Annual General Meeting of the Company will be held at George Kent
Technology Centre, Lot 1115, Batu 15 Jalan Dengkil 47100 Puchong, Selangor Darul Ehsan on Thursday, 17th July 2014 at
11:00 a.m. for the following purposes:ORDINARY BUSINESS
1.
To receive the Audited Financial Statements for the financial year ended 31 January 2014
and the Directors’ and Auditors’ Reports thereon.
(Please refer to Note A.)
2.
To re-elect Puan Sri Datin Tan Swee Bee who retires by rotation as a Director pursuant to
Article 83 of the Articles of Association and being eligible, has offered herself for re-election.
(Resolution 1)
3.
To approve a resolution that pursuant to Section 129(6) of the Companies Act, 1965, Dato’
Ahmad Khairummuzammil bin Mohd Yusoff, who is over the age of seventy, be and is
hereby re-appointed as Director of the Company to hold office until the next Annual General
Meeting.
(Resolution 2)
To approve a resolution that pursuant to Section 129(6) of the Companies Act, 1965, Tan Sri
Dato’ Seri Dr Ting Chew Peh, who is over the age of seventy, be and is hereby re-appointed
as Director of the Company to hold office until the next Annual General Meeting.
(Resolution 3)
5.
To approve the payment of Directors’ Fee of RM150,000 in respect of the financial year
ended 31 January 2014. (FY2013: RM150,000)
(Resolution 4)
6.
To re-appoint Auditors and to authorise the Directors to fix their remuneration.
(Resolution 5)
4.
SPECIAL BUSINESS
To consider and if thought fit, pass with or without modifications the following as Ordinary
Resolutions:7.
ORDINARY RESOLUTION
Retention of Independent Non-Executive Director
“THAT subject to passing of Ordinary Resolution 2, approval be and is hereby given to
Dato’ Ahmad Khairummuzammil bin Mohd Yusoff, who had served as an Independent NonExecutive Director of the Company for a cumulative term of nine years, to continue to act as
an Independent Non-Executive Director.”
(Resolution 6)
140
Johan Holdings Berhad (314-K)
Notice of Annual General Meeting
cont’d
8.
ORDINARY RESOLUTION
Authority To Allot And Issue Shares In General Pursuant To Section 132D Of The
Companies Act, 1965
(Resolution 7)
“THAT pursuant to Section 132D of the Companies Act, 1965 and subject to the approvals
of the relevant governmental/regulatory authorities, the Directors be and are hereby
empowered to issue shares in the capital of the Company from time to time and upon
the terms and conditions and for such purposes as the Directors may, in their absolute
discretion, deem fit provided that the aggregate number of shares issued pursuant to this
resolution does not exceed 10% of the issued share capital of the Company for the time
being AND THAT the Directors be and are also empowered to obtain the approval from
Bursa Malaysia Securities Berhad for the listing of and quotation for the additional shares so
issued AND THAT such authority shall continue to be in force until the conclusion of the next
Annual General Meeting of the Company.”
9.
To transact any other business of which due notice shall have been given.
By Order Of The Board.
Teh Yong Fah
Group Secretary (MACS00400)
KUALA LUMPUR
25th June 2014
Notes:A.
This Agenda item is meant for discussion only. The provisions of Section 169 of the Companies Act, 1965 and the Articles of
Association of the Company require that the Audited Financial Statements and the Reports of the Directors and Auditors thereon be
laid before the Company at its Annual General Meeting. As such this Agenda item is not a business which requires a resolution to be
put to the vote by shareholders.
1.
A member entitled to attend and vote at the meeting of the Company is entitled to appoint not more than two proxies (who need not
be members of the Company) to attend and vote instead of the member. Where a member appoints two proxies, he shall specify the
proportion of his shareholdings to be represented by each proxy.
2.
Where a holder of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial
owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised
nominee may appoint in respect of each omnibus account it holds.
3.
The instrument appointing a proxy or proxies must be deposited at the Registered Office of the Company at 11th Floor, Wisma E&C,
No. 2 Lorong Dungun Kiri, Damansara Heights, 50490 Kuala Lumpur not less than forty-eight (48) hours before the time appointed
for holding the meeting.
4.
In respect of deposited securities, only members whose names appear on the Record of Depositors on 9 July 2014 (General Meeting
Record of Depositors) shall be eligible to attend the meeting or appoint proxy(ies) to attend and/or vote on his/her behalf.
Annual Report 2014
141
Notice of Annual General Meeting
cont’d
Explanatory Notes on Special Business
1. Resolution 6 - Retention of Independent Non-Executive Director
Dato’ Ahmad Khairummuzammil bin Mohd Yusoff who served as an Independent Non-Executive Director since his appointment on 4
July 2005 will reach his tenure of service for nine (9) years on 3 July 2014. In line with the Malaysian Code on Corporate Governance
2012, upon assessment and recommendation of the Nominating Committee, the Board has recommended that Dato’ Ahmad
Khairummuzammil bin Mohd Yusoff should continue to act as an Independent Director of the Company based on the following
justification:-
(a)
He fulfilled the criteria under the definition of “Independent Director” as stated in the Listing Requirements,
(b)
He has over time, developed increased insight with the Group’s business operations and therefore can contribute to the
effectiveness of the Board as a whole,
(c)
He does not have any conflict of interest as throughout his tenure of office as an Independent Director of the Company, he has
not entered into and is not expected to enter into any contracts which will give rise to any related party transactions with the
Company and its subsidiaries,
(d)
He remains to be objective and independent in expressing his views and participated in active deliberations and decision
making process of the Board and Board Committees in which he is a member. His length of service on the Board and Board
Committees does not in any way interfere with his exercise of independent judgement and ability to act in the best interest of
the Company,
(e)
He had exercised due care during his tenure as an Independent Non-Executive Director and as Chairman of the Audit
Committee and Nominating Committee and had carried out his professional duties in the interest of the Company and its
shareholders.
2.
Resolution 7 - Authority to Allot And Issue Shares In General Pursuant To Section 132D of The Companies Act, 1965
The proposed Ordinary Resolution if passed will empower the Directors to issue shares of the Company up to 10% of the issued
capital of the Company for the time being for such purposes as the Directors consider would be in the interest of the Company. This
would avoid any delays and costs in convening a general meeting to specifically approve such an issue of shares. This authority
unless revoked or varied by the Company in general meeting will expire at the next Annual General Meeting (“AGM”) of the
Company.
The Company has not issued any new shares under this general authority which was approved at the last AGM held on 11 July
2013 and which will lapse at the conclusion at this AGM. A renewal of this general authority is being sought at this AGM under the
proposed resolution 7. The renewed mandate is to provide flexibility to the Company for any possible future fund raising activities
including but not limited to placement of shares for purposes of funding future investments, working capital and/or acquisition.
This page has been intentionally left blank.
FORM OF PROXY
No. of Shares Held
CDS Account No.
(Before completing the form, please refer to notes on next page)
I/We, (Company/NRIC/Passport No. )
of being a member/members of JOHAN HOLDINGS BERHAD hereby appoint:Name
Address
NRIC/Passport No.
Proportion of
Shareholding (%)
Address
NRIC/Passport No.
Proportion of
Shareholding (%)
and/or (delete as appropriate)
Name
as my/our proxy/proxies to vote for me/us on my/our behalf at the Eighty-Ninth Annual General Meeting of the Company, to
be held at George Kent Technology Centre, Lot 1115, Batu 15 Jalan Dengkil 47100 Puchong, Selangor Darul Ehsan on Thursday,
17th July 2014 at 11:00 a.m. and at any adjournment thereof.
I/We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed at the meeting as hereunder indicated.
RESOLUTIONS
For
Against
1 To re-elect Puan Sri Datin Tan Swee Bee as a Director
2 To re-appoint Dato’ Ahmad Khairummuzammil bin Mohd Yusoff as a Director
3 To re-appoint Tan Sri Dato’ Seri Dr Ting Chew Peh as a Director
4 To approve the payment of Directors’ fees
5 Re-appointment of Auditors and to authorise Directors to fix their remuneration
6 Retention of Independent Non-Executive Director
7 Authority to Directors to allot shares
(Please indicate with a cross (“X”) in the appropriate box against each Resolution how you wish your proxy/proxies to vote. If this proxy form
is returned without any indication as to how the proxy/proxies shall vote, the proxy/proxies will vote or abstain as he/their think fit.)
Dated this
day of
Signature/Common Seal
, 2014.
Notes:1. Vote may be given personally or by proxy/proxies (not more than two proxies) or in the case of a corporation by a representative duly
authorised. Where a member appoints two proxies, he shall specify the proportion of his shareholdings to be represented by each proxy.
The instrument appointing proxy/proxies shall be in writing under the hand of the appointor or his attorney or if such an appointor is a
corporation under its Common Seal or the hands of its attorney. Proxy/proxies need not be a member of the Company.
2. The attendance of the appointer at the Annual General Meeting and exercising his/her voting rights at the Annual General Meeting
personally will automatically revoke the proxy.
3. Where a holder of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial
owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee
may appoint in respect of each omnibus account it holds.
4. The instrument appointing proxy/proxies and the power of attorney (if any) under which it is signed or a notarially certified copy of the
power or authority, shall be deposited at the Registered Office of the Company at 11th Floor, Wisma E&C, No. 2 Lorong Dungun Kiri,
Damansara Heights, 50490 Kuala Lumpur not less than forty-eight (48) hours before the time for holding the meeting or adjourned
meeting (as the case may be) at which the person named in such instrument propose to vote but no instrument (other than power of
attorney under seal) appointing proxy/proxies shall be valid after the expiration of twelve months from the date of its execution.
5. In respect of deposited securities, only members whose names appear on the Record of Depositors on 9 July 2014 (General Meeting Record
of Depositors) shall be eligible to attend the meeting or appoint proxy(ies) to attend and/or vote on his/her behalf.
Then Fold Here
AFFIX
STAMP
The Company Secretary
JOHAN HOLDINGS BERHAD
11th Floor, Wisma E&C
No. 2 Lorong Dungun Kiri
Damansara Heights
50490 Kuala Lumpur
1st Fold Here
Group Corporate Directory
Principal Companies
MALAYSIA
SINGAPORE
Johan Holdings Berhad
11th Floor, Wisma E&C
No. 2 Lorong Dungun Kiri,
Damansara Heights
50490 Kuala Lumpur
Tel
: 603 2092 1858
Fax
: 603 2092 2812
Website : www.johanholdings.com
Jacks International Limited
7500-E, Beach Road
#03-201, The Plaza,
Singapore 199595
Tel
: 65 6295 2027
Fax
: 65 6296 5981
Prestige Ceramics Sdn Bhd
Lot 1115, Batu 15, Jalan Puchong
47100 Puchong,
Selangor Darul Ehsan
Tel
: 603 8062 5388
Fax
: 603 8062 1418
Lumut International Yacht Club
(owned by Lumut Marine Resort Berhad)
Lot 4182, Jalan Titi Panjang
32200 Lumut, Perak Darul Ridzuan
Tel
: 605 683 5191
Fax
: 605 683 7700
The Orient Star Resort, Lumut
(owned by Lumut Park Resort Sdn Bhd)
Lot 203 & 366 Jalan Iskandar Shah
32200 Lumut,
Perak Darul Ridzuan
Tel
: 605 683 4199
Fax
: 605 683 4223
Website : www.orientstar.com.my
Diners Club (Malaysia) Sdn Bhd
15th Floor, Menara Tan & Tan
207 Jalan Tun Razak
50400 Kuala Lumpur
Tel
: 603 2161 1322
Fax
: 603 2161 1518
Website : www.dinersclub.com.my
Diners World Travel (Malaysia) Sdn Bhd
Suit 16.03, 16th Floor, Menara Tan & Tan
207 Jalan Tun Razak
50400 Kuala Lumpur
Tel
: 603 2164 0068
Fax
: 603 2162 4577
Nature’s Farm (Health Foods) Sdn Bhd
No. 9-1, Block A, Jaya One
No. 72A, Jalan Universiti
46200 Petaling Jaya
Tel
: 603 7960 6133
Fax
: 603 7960 6136
Diners Club (Singapore) Pte Ltd
7500-E, Beach Road
#02-201, The Plaza
Singapore 199595
Tel
: 65 6166 0800
Fax
: 65 6294 0534
Website : www.dinersclub.com.sg
Diners World Travel Pte Ltd
7500-E, Beach Road
#02-201, The Plaza,
Singapore 199595
Tel
: 65 6298 8988
Fax
: 65 6295 1485
Website : www.dinerstravel.com.sg
Nature’s Farm Pte Ltd
18, Kaki Bukit Road 3
#05-16 Entrepreneur Business Centre
Singapore 415978
Tel
: 65 6748 9818
Fax
: 65 6748 8135
Website : www.naturesfarm.com