Annual Report - Atlan Holdings Bhd report/documents/ATLAN... · 2019-07-02 · Correspondence adress: ATLAN HOLDINGS BHD. (173250-W) 17TH FLOOR, MENARA ATLAN, 161B, JALAN AMPANG,

Correspondence adress:ATLAN HOLDINGS BHD. (173250-W)

17TH FLOOR, MENARA ATLAN,161B, JALAN AMPANG,50450 KUALA LUMPUR, MALAYSIA.

T +603 2179 2000F +603 2179 2390www.atlan.com.my

Annual Report 2019

laporan tahunan

Annual Report Laporan Tahunan

2019

CHARTING A NEWDIRECTION

At ATLAN, progress is more than just profits. We believe in creating possibilities by looking far and beyond the conventional. We are committed in seeking new technologies, partnerships and ideas to achieve a higher echelon for all stakeholders.

Menara Atlan

02CORPORATE STRUCTURE

04CORPORATE INFORMATION

06PROFILE OF DIRECTORS

11PROFILE OF KEY SENIOR MANAGEMENT

12FINANCIAL HIGHLIGHTS

14CHAIRMAN’S STATEMENT

16PENYATA PENGERUSI

19

董事主席献词

21MANAGEMENT DISCUSSION & ANALYSIS

25SUSTAINABILITY REPORT

48CORPORATE GOVERNANCE OVERVIEW STATEMENT

67ADDITIONAL COMPLIANCE INFORMATION

68AUDIT AND RISK MANAGEMENT COMMITTEE REPORT

71STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

74STATEMENT OF DIRECTORS’ RESPONSIBILITY

75FINANCIAL STATEMENTS

204ANALYSIS OF SHAREHOLDINGS

207LIST OF PROPERTIES

210NOTICE OF ANNUAL GENERAL MEETING

FORM OF PROXY

CONTENTS

Arah Induk Sdn. Bhd.100%

Darul Metro Sdn. Bhd.

Brilliant Pixel Sdn. Bhd.

Brand Connect Holding Pte. Ltd.

DFZ Capital Sdn. Bhd.

Naluri International Limited

Orchard Boulevard Sdn. Bhd.

Thirsty Boys Pte. Ltd.

Drinks Hub AsiaPte. Ltd.

Brand Connect AsiaPacific Pte. Ltd.

50%

50%

United Industries Sdn. Bhd.

United Filter Sdn. Bhd.

Danco Marketing Sdn. Bhd.

United Sanoh IndustriesSdn. Bhd.

Freighter Industries (M)Sdn. Bhd.

United Vehicles IndustriesSdn. Bhd.

UEW Plastic IndustriesSdn. Bhd.

69%

28%

81%

19%

Atlan Capital Sdn. Bhd.100%

Atlan Development Sdn. Bhd.100%

Atlan Management Sdn. Bhd.100%

Atlan Orient Sdn. Bhd.100%

Atlan Properties Sdn. Bhd.100%

Atlan Technology Sdn. Bhd.Atlan Technology Sdn. Bhd.100%

100%

100%

70% 100%

100%

100%

85%*

100%

100%100%

100%

100%

70%

Atlan Assets Sdn. Bhd.100%

Belia Karisma Sdn. Bhd.100%

Blossom Time Sdn. Bhd.100%

Gardenia Success Sdn. Bhd. 100%

Naluri Properties Sdn. Bhd.100%

Ocean Pride Sdn. Bhd. 100%

Radiant Ranch Sdn. Bhd.100%

RZ Equities Sdn. Bhd.#100%

United Industries HoldingsSdn. Bhd.100%

Tegapasti Sdn. Bhd.100%

Timeless Image Sdn. Bhd.100%

Trifiniti Networks Sdn. Bhd.100%

Tropika Ferringhi ManagementSdn. Bhd.100%

Zon Hospitality ServicesSdn. Bhd.100%

Scandinavian Avionics(Malaysia) Sdn. Bhd.25%

Duty Free International Limited75.07%

ATLAN HOLDINGS BHD (173250-W)02

Cergasjaya Sdn. Bhd.

DFZ Utara Sdn. Bhd.

DFZ Emporium Sdn. Bhd.

DFZ (M) Sdn. Bhd.

Jasa Duty Free Sdn. Bhd.

Melaka Duty Free Sdn. Bhd.

Wealthouse Sdn. Bhd.

Zon Emporium Sdn. Bhd.

Binamold Sdn. Bhd.

Cergasjaya Properties Sdn. Bhd.

DFZ Asia Sdn. Bhd.

Gold Vale Development Sdn. Bhd.

Kelana Megah Sdn. Bhd.

PT DFZ Indon

Tenggara Senandung Sdn. Bhd.

Brand Connect (Thailand) Co., Ltd.

Brand Connect Vietnam Company Limited

Brand Connect Pte. Ltd.

0.0025%

1%

Winner Prompt Sdn. Bhd.

Selasih Ekslusif Sdn. Bhd.

Seruntun Maju Sdn. Bhd.

Emas Kerajang Sdn. Bhd.

DFZ Trading Sdn. Bhd.

DFZ Duty Free (Langkawi)Sdn. Bhd.

DFZ Duty Free SuppliesSdn. Bhd.

Jelita Duty Free SuppliesSdn. Bhd.

Black Forest Golf AndCountry Club Sdn. Bhd.

Kadar Prisma Sdn. Bhd. #

UVI Advance TechnologySdn. Bhd.

* Represent 85% equity interest in DFZ Capital Sdn. Bhd. (“DFZ”) less one DFZ Share# In the process of striking-off.

CORPORATE STRUCTURE

(As at 31 May 2019)

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

69.89%

29.30%

28.60%

51%

100%

100%

100%

99%

100%

100%

69.80%

69.90%

100%

100%

48.9975%

ANNUAL REPORT 2019 03

BOARD OF DIRECTORS

Dato’ Sri aDam Sani Bin aBDullah

Chairman Non-Independent Non-Executive Director

lEE SZE SianG

Executive Director

Dato’ Sri roBin tan YEonG ChinG

Non-Independent Non-Executive Director

JEnEral tan Sri Dato’ Sri aBDullah Bin ahmaD @ Dollah Bin amaD (B)

Independent Non-Executive Director

mohD ShariF Bin hJ YuSoF

Senior Independent Non-Executive Director

AUDIT AND RISK MANAGEMENT COMMITTEE

Mohd Sharif Bin Hj Yusof (Chairman)

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

Tan Thiam Chai

Tuan Haji Mohd Jaffar Bin Awang (Ismail)

NOMINATION COMMITTEE

Mohd Sharif Bin Hj Yusof (Chairman)

Dato’ Sri Adam Sani Bin Abdullah


tan thiam Chai


Dato’ Woo hon KonG


onG BoK SionG


tuan haJi mohD JaFFar Bin aWanG (iSmail)


raJa Dato’ ShaharuDin Shah Bin raJa Jalil Shah


REMUNERATION COMMITTEE

Dato’ Sri Adam Sani Bin Abdullah (Chairman)

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


COMPANY SECRETARIES

Chua Siew Chuan (MAICSA 0777689)

Thum Sook Fun (MIA 24701)

REGISTERED OFFICE

17th Floor, Menara Atlan

161B Jalan Ampang

50450 Kuala Lumpur, Malaysia

tel : 603 – 2179 2000

Fax : 603 – 2179 2390

CORPORATE INFORMATION

04 ATLAN HOLDINGS BHD (173250-W)

INVESTOR RELATIONS

Lee Sze Siang


161B Jalan Ampang


tel : 603 – 2179 2000

Fax : 603 – 2179 2390

Email : [email protected]

CORRESPONDENCE ADDRESS


161B Jalan Ampang


tel : 603 – 2179 2000

Fax : 603 – 2179 2390

Web : http://www.atlan.com.my

SHARE REGISTRAR

Securities Services (Holdings)

Sdn. Bhd. (36869-T)

Level 7, Menara Milenium

Jalan Damanlela

Pusat Bandar Damansara

Damansara Heights


tel : 603 – 2084 9000

Fax : 603 – 2094 9940 / 2095 0292

CORPORATE INFORMATION

(CONT’D)

PRINCIPAL BANKERS

Affin Bank Berhad

CIMB Bank Berhad

RHB Bank Berhad

Alliance Bank Malaysia Berhad

AUDITORS

Ernst & Young

21st Floor, MWE Plaza

8 Lebuh Farquhar

10200 Penang

Malaysia

tel : 604 – 688 1888

Fax : 604 – 263 0099

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia

Securities Berhad

Stock Name : Atlan

Stock Code : 7048

Stock Sector : Consumer Products &

Services

Date Listing : 15 January 1996


Dato’ Sri aDam Sani aBDullah, male, a Malaysian, age 63, was appointed as Chairman of the Company on 16 June 2000.

Dato’ Sri Adam is a self-made entrepreneur for more than 39 years. He received his primary education in Malaysia and secondary education in the United Kingdom.

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

PROFILE OF DIRECTORS

Dato’ Sri aDam Sani aBDullah

Chairman Non-Independent Non-Executive Director

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

Dato’ Sri Adam has no conflict of interests with the Company. Other than our Company, Dato’ Sri Adam does not hold any directorship in public companies and public listed companies.

Dato’ Sri Adam has not been convicted of any offences within the past 5 years other than traffic offences and has not been imposed any public sanction or penalty by the relevant regulatory bodies during the financial year 2019.

lEE SZE SianG, male, a Malaysian, age 49, was appointed as Executive Director of the Company on 16 June 2000. He was re-designated to Non-Executive Director on 27 December 2004 and subsequently re-designated as Executive Director of the Company on 8 October 2008.

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

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

lEE SZE SianG

Executive Director

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

Other than our Company, he does not hold any directorship in public companies and public listed companies.

He has not been convicted of any offences within the past 5 years other than traffic offences and has not been imposed any public sanction or penalty by the relevant regulatory bodies during the financial year 2019.


Dato’ Sri roBin tan YEonG ChinG, male, a Malaysian, age 45, was appointed as a Non-Independent Non-Executive Director of the Company on 18 December 2012.

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

Currently, he is the Chief Executive Officer of Berjaya Corporation Berhad and the Executive Director of Sports Toto Malaysia Sdn. Bhd. He is also the Chairman of Berjaya Media Berhad, Sun Media Corporation Sdn Bhd and Informatics Education Ltd, Singapore. He is also an Executive Director of Berjaya Golf Resort Berhad, Bukit Kiara


(CONT’D)

Dato’ Sri roBin tan YEonG ChinG


Resort Berhad and Staffield Country Resort Berhad and a Director of KDE Recreation Berhad. He also holds directorships in several other private limited companies in the Berjaya Corporation Group of companies.

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


JEnEral tan Sri Dato’ Sri aBDullah Bin ahmaD @ Dollah Bin amaD (B), male, a Malaysian, age 71, was appointed as an Independent Non-Executive Director of the Company on 26 January 2011.

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

JEnEral tan Sri Dato’ Sri aBDullah Bin ahmaD @ Dollah Bin amaD (B)


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





tan thiam Chai, male, a Malaysian, age 60, was appointed as a Non-Independent Non-Executive Director of the Company on 18 December 2012.

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

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

He was previously appointed as the Chief Financial Officer of Berjaya Corporation Berhad (‘BCorp’) on 18 July 2008 until his retirement on 31 December 2018 and he is currently the Financial Adviser of BCorp. He is also an Executive Director of Berjaya Land Berhad, a Director of Berjaya Food Berhad, Berjaya Vacation Club Berhad, Indah Corporation Berhad, Cosway Corporation Berhad, Tioman Island Resort Berhad, Cosway Corporation Limited (Hong Kong) and Berjaya Starbucks Coffee Company Sdn Bhd. He also holds directorships in several other private limited companies in the Berjaya Corporation group of companies.

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



PROFILE OF DIRECTORS (CONT’D)

mohD ShariF Bin hJ YuSoF, male, a Malaysian, age 80, was appointed as an Independent Non-Executive Director of the Company on 23 January 2009.

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

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

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



mohD ShariF Bin hJ YuSoF

Senior Independent Non-Executive Director

tan thiam Chai




(CONT’D)

onG BoK SionG, male, a Malaysian, age 60, was appointed as Executive Director of the Company on 26 August 2010. He was re-designated to Group Managing Director on 30 April 2012 and subsequently re-designation as Non-Independent Non-Executive Director on 26 June 2013.

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

He started his career in the construction and property industry in 1983 and had involved in mega construction and property development projects.

Dato’ Woo hon KonG, male, a Malaysian, age 54, was appointed as Non-Independent Non-Executive Director of the Company on 24 April 2002. He was re-designated to the Executive Director position on 5 July 2002 and subsequently re-designated as Non-Independent Non-Executive Director of the Company on 30 October 2008. He was further re-designated to Independent Non-Executive Director of the Company on 16 May 2014.

He holds a Bachelor of Laws degree from the University of Canterbury, New Zealand. He started his career in 1988 as a legal assistant and joined a mid size legal firm as a partner in 1989 until 1994.

Dato’ Woo hon KonG


He was the Chief Executive Officer and Executive Director of Meda Inc. Berhad and Group Chief Executive Officer of Andaman Consolidated Sdn Bhd Group before joining Atlan Group. Currently, he is also the Managing Director of Duty Free International Limited, a company listed on the Main Board of the Singapore Exchange Securities Trading Limited.




He subsequently oversees the management and financial matters of companies involved in real estate and equities market locally and overseas prior to joining Atlan Group.


Other than our Company, Dato’ Woo does not hold any directorship in public companies and public listed companies.


onG BoK SionG



tuan haJi mohD JaFFar Bin aWanG (iSmail), male, a Malaysian, age 65, was appointed as a Independent Non-Executive Director of the Company on 16 May 2017.

He hold a Master of Arts (South East Asean Studies) from University of Hull, United Kingdom and Bachelor of Social Science (Political Science) from University Sains Malaysia (USM).

He has had more than 30 years experience in the government, serving the Johor Civil Service where he held the position of Mayor at Johor Bahru City Council at the time he retired. Currently, he hold directorships in several other private limited Companies.

tuan haJi mohD JaFFar Bin aWanG (iSmail)


He serves as a member of the Audit and Risk Management, Remuneration and Nomination Committees of the Company.




PROFILE OF DIRECTORS (CONT’D)

raJa Dato’ ShaharuDin Shah Bin raJa Jalil Shah, male, a Malaysian, age 61, was appointed as an Independent Non-Executive Director of the Company on 13 June 2018.

He holds a B.A.(Hons) Degree in Accounting and Finance from Middlesex University, United Kingdom. He began his working career in Malaysia in 1985 by joining Permodalan Nasional Berhad (PNB) as a Senior Executive in the Investments Division. In 1990 he left PNB and became Manager of Corporate and Business Development in a public listed company, Malaysian General Investment Corporation Berhad (MGIC). Subsequently, he was appointed as Executive Director of its stockbroking arm, MGIC Securities Sdn. Bhd.(MGICS) in 1992. In 1997, he left MGICS to become Director (Institutional Sales) in Alliance Investment Bank Berhad (AIBB). After leaving AIBB in 2013, he is

raJa Dato’ ShaharuDin Shah Bin raJa Jalil Shah


currently serving as a member of the Board of Directors of Deru Semangat Sdn. Bhd., a related company of TH Plantations Berhad, which is involved in the cultivation of oil palm in Pahang.





HO YUET LENGGroup General Manager – Finance & Corporate Services

PROFILE OF KEY SENIOR MANAGEMENT

ANDREAS CURT WINNENChief Executive Officer of DFZ Capital Sdn Bhd

KHOO CHUN KEONGChief Executive Officer of United Industries Holdings Sdn Bhd

ho YuEt lEnG, female, a Malaysian, age 56, joined the Group as Head of Finance and Corporate in October 2002, and was subsequently promoted to Group General Manager – Finance and Corporate Services in January 2006. Prior to joining the Group, she was the Finance Director of a listed Company on Bursa Malaysia Securities Berhad from years 1995 to 2002. From years 1983 to 1992, she worked in an international public accounting firm.

She holds a professional qualification from The Malaysian Institute of Certified Public Accountant.

She is also a member of the Malaysian Institute of Accountants.

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

She does not hold any directorships in public companies and public listed companies.

She has not been convicted of any offences within the past 5 years other than traffic offences and has not been imposed any public sanction or penalty by the relevant regulatory bodies during the financial year 2019.

anDrEaS Curt WinnEn, male, a German Citizen, age 50, was appointed as Chief Executive Officer of DFZ Capital Sdn Bhd on 1 September 2016. Mr. Andreas holds a qualification as graduate engineer for machine construction from Technical University Braunschweig (Germany).

He was a Managing Director and Chief Executive Officer of Tchibo Manufacturing (Austria) GmbH in Vienna, Austria from January 2006 to December 2007, subsequently from January 2008 to August 2008, he was attached to Tchiba Romania SRL in Bucharest, Romania. From September 2008 to August 2016, he was a Managing Director of Heinrig Impex SRL for the Romanian branches of

Gebr. Heinemann and also concurrently attached to Regal GH, Ljubljana, Solvenia, the Slovene branch of Gebr. Heinemann.


He does not hold any directorships in public companies and public listed companies.

He has not been convicted of any offences within the past 5 years other than traffic offences and has not been imposed any public sanction or penalty by any regulatory bodies during the financial year 2019.

Khoo Chun KEonG, male, a Malaysian, age 47, was appointed as Chief Executive Officer of United Industries Holdings Sdn Bhd on 1 September 2017.

He started with KPMG in 1992 under its articleship program and graduated in 1994. He subsequently joined a public listed company assisting the Managing Director to oversee its operations and expansion before moving on to his consultancy company.

He holds a professional qualification from the Malaysian Institute of Certified Public Accountant

and also a member of the Malaysian Institute of Accountants.


He does not hold any directorships in public companies and public listed companies.



FINANCIAL HIGHLIGHTS

REVENUE(RM’million)

EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION(Before Exceptional Items) (RM’million)

REVENUE BY BUSINESS SEGMENTS (RM’million)

PROFIT AFTER TAX AND NON-CONTROLLING INTERESTS (RM’million)

840.0

800.0

820.0

780.0

760.0

740.0

720.0

700.0

680.0

660.0

640.0

700.0

600.0

500.0

400.0

300.0

200.0

100.0

0

140.0

120.0

100.0

80.0

60.0

40.0

20.0

0

250.0

200.0

150.0

100.0

50.0

0

FY 2

019

Duty Free Automotive Property & Hospitality

FY 2

019

FY 2

019

FY 2

019

FY 2

010

FY 2

011

FY 2

012

FY 2

013

FY 2

014

FY 2

015

FY 2

016

FY 2

017

FY 2

018

FY 2

010

FY 2

011

FY 2

012

FY 2

013

FY 2

014

FY 2

015

FY 2

016

FY 2

017

FY 2

018

FY 2

010

FY 2

011

FY 2

012

FY 2

013

FY 2

014

FY 2

015

FY 2

016

FY 2

017

FY 2

018

FY 2

010

FY 2

011

FY 2

012

FY 2

013

FY 2

014

FY 2

015

FY 2

016

FY 2

017

FY 2

018

Revenue(RM'million)

EBITDA (before exceptional items) (RM'million)

Profit after tax and non-controlling interests (RM'million)

Others


BASIC EARNINGS PER SHARE(Sen)

NET TANGIBLE ASSETS PER SHARE(RM)

CASH AND CASH EQUIVALENTS(RM’million)

DIVIDEND (RM’million)Dividend per share in RM

90.0

70.0

80.0

60.0

50.0

40.0

30.0

20.0

10.0

0

2.50

2.00

1.50

1.00

0.50

0

450.0

400.0

350.0

300.0

250.0

200.0

150.0

100.0

50.0

0

FY 2

019

FY 2

019

FY 2

019

FY 2

010

FY 2

011

FY 2

012

FY 2

013

FY 2

014

FY 2

015

FY 2

016

FY 2

017

FY 2

018

FY 2

010

FY 2

011

FY 2

012

FY 2

013

FY 2

014

FY 2

015

FY 2

016

FY 2

017

FY 2

018

FY 2

010

FY 2

011

FY 2

012

FY 2

013

FY 2

014

FY 2

015

FY 2

016

FY 2

017

FY 2

018

Basic earnings per share (sen)

180.0

140.0

160.0

120.0

100.0

80.0

60.0

40.0

20.0

0

FY 2

019

FY 2

010

FY 2

011

FY 2

012

FY 2

013

FY 2

014

FY 2

015

FY 2

016

FY 2

017

FY 2

018

Dividend (RM'million)

Net tangible assets per share (RM)

Cash and cash equivalents (RM'million)

RM

0.20

RM

0.14

RM

0.17

RM

0.14

RM

0.22

RM

0.65

RM

0.35

RM

0.17

5

RM

0.22

5

RM

0.21

FINANCIAL HIGHLIGHTS

(CONT’D)


Bismillahir rahmanir rahim assalamu alaikum wa rahmatullahi wa Barakatuh

On behalf of the Board of Directors (“Board”) of Atlan Holdings Bhd (“Atlan”, “we” or “the Group”), I am pleased to present to you the annual report and audited financial statements of the Group for the financial year ended 28 February 2019 (“FYE2019”).

Whilst the economic outlook remains bumpy, moving forward, with clearly defined business strategies and strong commitment towards achieving the Group’s objectives, we are confident that we will be able to capitalise on the vast opportunities in Malaysia and the regional markets to deliver greater value to our shareholders. Furthermore, the Group with its strong balance sheet and low gearing, we will have the liberty to explore and capitalise on any valuable opportunities we may encounter.

FINANCIAL PERFORMANCE

Overall, the Group recorded a commendable performance despite being challenged with several external and domestic challenges, reporting a revenue of RM774.9 million for FYE2019 as compared to RM826.3 million in the financial year ended 28 February 2018 (“FYE2018”) whilst profit after tax amounted to RM59.1 million for FYE2019.

During the financial year under review, the Group’s main earnings contributor, the duty free segment, was affected by multiple factors such as the unavailability of certain popular products for sale in the first half of the financial year and the general decline in the number of Chinese tourists to Malaysia during the period under review. Following these setbacks, the Group’s duty free business’ revenue eased to RM555.7 million or a decline of 10.2% from RM619.0 million in FYE2018.

The Group’s automotive segment in turn outperformed with higher orders received, thus the higher revenue growth of 6.0% to RM186.4 million from RM175.9 million in the preceding year. The smallest contributor to the Group which is the property and hospitality segment, reported a lower revenue of RM25.9 million as compared to RM28.5 million in the preceding year due to lower occupancy rate and lower average rental rate.

CHAIRMAN’S STATEMENT

Duty Free Outlet at Senai International Airport

ECONOMIC AND BUSINESS OVERVIEW

Despite a challenging macro-economic backdrop that included global uncertainties, rising costs and soft consumer sentiment, the Group had performed commendably in FYE2019.

Malaysia’s economy reported a sustainable growth of 4.7% in year 2018 amid a slowdown in global economy and the country experienced a change of government and together with it, new policy initiatives and reforms. Private consumption remains a key driver of the economy despite consumers’ cautious spending amid continuous uncertainties in business outlook and rising cost of living concerns. Further, the uncertainties in US monetary policy, slowdown in China’s economic growth, and continuing US-China trade tensions also affected the global economy.


DIVIDEND

In line with our commitment to reward our shareholders, the Board declared a second interim dividend of 10 sen per share for FYE2019. Combined with the first interim dividend of 10 sen per share declared earlier, the total dividends declared amounted to 20 sen for the financial year under review.

This translates to a dividend yield of approximately 4.6% based on the closing share price of RM4.40 on 28 February 2019.

The Board will continue to ensure optimal equilibrium between the shareholders’ interest and business growth where utilisation of its funds is concerned.

CORPORATE DEVELOPMENTS

On 9 July 2018, Duty Free International Limited (“DFIL”) announced that it had entered into a conditional subscription agreement (“Agreement”) with Mr. Robert Justin Frizelle and Meridian Compass Ltd (“Founders”), and Brand Connect Holding Pte Ltd (“Brand Connect”) pursuant to which DFIL was to subscribe for 2.8 million new ordinary shares in the capital of Brand Connect (“Acquisition”). On 8 August 2018, the Acquisition was completed and Brand Connect became a 70% subsidiary of DFIL.

Brand Connect group of companies is engaged in the business of marketing and the trading, wholesale and retail distribution of beverage products across countries in the Asia Pacific region. The acquisition of Brand Connect group of companies by the DFIL is to develop and grow the Group’s beverage distribution business as well as to expand the Group’s market operations beyond the current sales channels in the duty free market of Malaysia to include the duty paid market across South East Asia.

OUTLOOK & PROSPECTS

According to Bank Negara Malaysia, Gross Domestic Product (GDP) is projected to grow between 4.3% to 4.8% in 2019, fuelled primarily by stronger private consumption activities.

Growth however is exposed to certain risk factors, predominantly slower-than-expected global growth and also global uncertainties. In light of this, the Group anticipates the operating environment to remain challenging and competitive.

The Group acknowledges the uncertainties of the market outlook and therefore will continue to review and revise its business strategies to meet the challenges in the year ahead. The Group will remain vigilant and continue to be responsive to the changes in the external environment whilst continuing to focus on its strategies of improving and enhancing operational efficiency and cost management as well as managing business risks prudently as the Group gears towards another year with commitment and confidence.

APPRECIATION

On behalf of the Board of Directors, I would like to express my heartfelt appreciation to the management and staff for their unrelenting efforts and dedication that have steered the Group through challenges and create sustainable value for our stakeholders.

My sincerest gratitude also goes to our valued shareholders, stakeholders, customers, suppliers, clients and all other business associates for their staunch support and steadfast belief in the Group.

To our shareholders who have been supportive and loyal to the Company – we appreciate your unwavering support and confidence in us. We will continue to strive to further develop sustainable growth, value and success for the Group.

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

Thank you.

Wasallamu Alaikum wa Rahmatullahi wa Barakatuh

Adam Sani AbdullahChairman of Atlan Holdings Bhd13 June 2019

CHAIRMAN’S STATEMENT

(CONT’D)


PENYATA PENGERUSI

Bismillahir rahmanir rahim assalamu alaikum wa rahmatullahi wa Barakatuh

Bagi pihak Lembaga Pengarah (“Lembaga”) Kumpulan Atlan Holdings Bhd (“Atlan”, “kami” atau “Kumpulan Atlan”), saya dengan sukacitanya membentangkan Laporan Tahunan dan Penyata Kewangan Beraudit Kumpulan bagi tahun kewangan berakhir 28 Februari 2019 (“tahun kewangan 2019”).

TINJAUAN EKONOMI DAN PERNIAGAAN

Walaupun dengan latar belakang ekonomi makro yang mencabar termasuk keadaan global yang tidak menentu, peningkatan kos dan sentimen lemah pengguna, Kumpulan Atlan telah mencatatkan prestasi yang memberangsangkan pada tahun kewangan 2019.

Ekonomi Malaysia melaporkan pertumbuhan yang mampan di dalam tahun 2018 meskipun di tengah-tengah kelembapan ekonomi dunia, dan negara mengalami perubahan kerajaan dan bersama-samanya dasar inisiatif-inisiatif baru dan pelbagai pembaharuan. Perbelanjaan peribadi pengguna kekal sebagai penggerak utama ekonomi, walaupun sikap perbelanjaan berhati-hati pengguna di tengah-tengah ketidaktentuan yang berterusan di dalam perniagaan dan kebimbangan terhadap peningkatan kos sara hidup. Tambahan lagi, ketidaktentuan dasar

kewangan AS, kelembapan dalam pertumbuhan ekonomi China, dan ketegangan hubungan dagangan AS-China yang berterusan itu turut menjejaskan ekonomi dunia.

Meskipun di dalam keadaan ekonomi yang tidak menentu, melangkah ke hadapan, dengan strategi perniagaan yang jelas dan komitmen yang kukuh dalam mencapai objektif Kumpulan, kami yakin akan memanfaatkan peluang luas di Malaysia dan pasaran serantau untuk memberikan nilai yang lebih besar kepada pemegang saham kami. Selain itu, Kumpulan Atlan dengan kedudukan kewangan yang kukuh dan mempunyai gearing yang rendah, kami akan mempunyai kebebasan untuk meneroka dan memanfaatkan sebarang peluang berharga yang akan kami temui.

PRESTASI KEWANGAN

Secara keseluruhannya, Kumpulan Atlan mencatatkan prestasi yang memberangsangkan walaupun menghadapi beberapa cabaran luaran dan dalaman. Kumpulan melaporkan hasil perolehan sebanyak RM774.9 juta bagi tahun kewangan 2019 berbanding RM826.3 juta pada tahun kewang berakhir 28 Februari 2018 (“tahun kewangan 2018”), manakala keuntungan selepas cukai berjumlah RM59.1 juta untuk tahun kewangan 2019.

Di dalam tahun kewangan yang dikaji, penyumbang utama kepada pendapatan Kumpulan iaitu segmen bebas cukai, telah terjejas oleh beberapa faktor seperti ketiadaan produk popular tertentu yang dijual pada separuh tahun pertama kewangan dan juga bilangan pelancong dari negara China yang berkurangan di dalam tempoh kewangan yang dikaji. Berikutan dengan kekurangan ini, pendapatan perniagaan bebas cukai Kumpulan berkurangan kepada RM555.7 juta atau penurunan 10.2% daripada RM619.0 juta pada tahun kewangan 2018.

The Zon All Suites Residences on the Park


Prestasi segmen automotif Kumpulan bertambah baik dengan pesanan yang lebih tinggi diterima, yang mana menjana pertumbuhan pendapatan yang lebih tinggi sebanyak 6.0% kepada RM186.4 juta daripada RM175.9 juta pada tahun sebelumnya. Penyumbang terkecil kepada pendapatan Kumpulan iaitu segmen hartanah dan hospitaliti, melaporkan pendapatan sebanyak RM25.9 juta, berbanding RM28.5 juta pada tahun sebelumnya, disebabkan oleh kadar penghunian yang lebih rendah dan kadar sewa purata yang rendah.

DIVIDEN

Selaras dengan komitmen kami untuk memberi ganjaran kepada para pemegang saham, Lembaga telah mengisytiharkan dividen interim kedua sebanyak 10 sen sesaham untuk tahun kewangan 2019. Digabungkan dengan dividen interim pertama sebanyak 10 sen sesaham yang diisytiharkan sebelum ini, maka jumlah dividen yang diumumkan berjumlah 20 sen bagi tahun kewangan 2019. Ini diterjemahkan kepada hasil dividen kira-kira 4.6% berdasarkan harga saham penutupan RM4.40 pada 28 Februari 2019.

Lembaga Pengarah akan sentiasa memastikan keseimbangan optimum antara kepentingan pemegang saham dan pertumbuhan perniagaan apabila berkaitan dengan penggunaan dananya.

PERKEMBANGAN KORPORAT

Pada 9 Julai 2018, Duty Free International Limited (“DFIL”) mengumumkan bahawa ia telah memeterai satu perjanjian langganan bersyarat (“Perjanjian”) bersama Encik Robert Justin Frizelle dan Meridian Compass Ltd (“Pengasas”), dan Brand Connect Holding Pte Ltd (“Brand Connect”) di mana DFIL akan melanggan 2.8 juta saham biasa baru di dalam modal Brand Connect (“Pemerolehan”). Pada 8 Ogos 2018, proses pemerolehan tersebut telah selesai dan Brand Connect menjadi 70% anak syarikat di bawah DFIL.

Kumpulan syarikat Brand Connect terlibat dalam perniagaan pemasaran dan perdagangan, pengedaran borong dan runcit produk minuman di seluruh negara di rantau Asia Pasifik. Pemerolehan kumpulan syarikat Brand Connect oleh DFIL ini

adalah untuk membangun dan mengembangkan perniagaan pengedaran Kumpulan dan juga mengembangkan operasi pasaran di luar saluran jualan semasa di dalam pasaran bebas cukai di Malaysia termasuk pasaran duti berbayar di seluruh Asia Tenggara.

TINJAUAN DAN HARAPAN

Menurut Bank Negara Malaysia, Keluaran Dalam Negeri Kasar (KDNK) dijangka meningkat antara 4.3% hingga 4.8% pada tahun 2019, didorong terutamanya oleh aktiviti perbelanjaan peribadi pengguna yang lebih kukuh. Pertumbuhan ini bagaimanapun terdedah kepada faktor risiko tertentu, terutamanya pertumbuhan ekonomi dunia yang lebih perlahan daripada jangkaan dan juga ketidaktentuan global. Memandangkan ini, Kumpulan Atlan menjangkakan persekitaran operasi terus kekal mencabar dan berdaya saing.Kumpulan mengakui ketidaktentuan keadaan pasaran dan oleh itu akan terus mengkaji dan menyemak strategi perniagaannya untuk menghadapi cabaran pada masa hadapan. Kumpulan akan sentiasa berwaspada dan terus memberi tindak balas terhadap perubahan dalam persekitaran luaran sambil terus memberi tumpuan kepada strategi untuk memperbaiki dan mempertingkatkan kecekapan operasi dan pengurusan kos serta mengurus risiko perniagaan dengan berhemat apabila Kumpulan beralih ke satu tahun lagi dengan penuh komitmen dan keyakinan.

PENGHARGAAN

Bagi pihak Lembaga Pengarah, saya ingin mengucapkan penghargaan kepada pihak pengurusan dan kakitangan atas usaha dan dedikasi mereka yang telah membantu Kumpulan menghadapi cabaran dan mewujudkan nilai mampan kepada pihak berkepentingan kami.

Penghargaan terima kasih ini juga ditujukan kepada para pemegang saham, pihak berkepentingan, pelanggan, pembekal, dan semua rakan perniagaan yang lain atas sokongan dan keyakinan mereka yang tidak berbelah bagi kepada Kumpulan Atlan.

Kepada para pemegang saham kami yang telah menyokong dan setia kepada Syarikat - kami menghargai sokongan dan keyakinan anda

PENYATA PENGERUSI

(SAMB.)


yang tidak terhingga kepada kami. Kami akan terus berusaha untuk terus membangunkan pertumbuhan yang mampan, nilai dan kejayaan untuk Kumpulan.

Saya dengan rendah diri berjanji untuk sedia berkhidmat meneruskan komitmen, dedikasi dan usaha saya untuk Kumpulan Atlan.

Terima Kasih,Wasallamu Alaikum wa Rahmatullahi wa Barakatuh

Adam Sani AbdullahPengerusi Atlan Holdings Bhd13 Jun 2019

PENYATA PENGERUSI (SAMB.)

Travel Gadget Shop at Langkawi International Airport


我很荣幸代表董事会，提呈益联控股有限公司（“益联”或“我们”或 “集团”）截至2019年2月28日（“2019财政年”）的年度报告和已审核财务表。

经济与商业展望

纵然处在充满挑战的宏观经济环境，包括全球不确定因素、成本上扬以及消费疲弱，益联在2019财政年却取得鼓舞的表现。

在全球经济放缓下，马来西亚的经济于2018年取得4.7% 的持续成长，我国也第一次经历政权更迭带来的新政策和体制改革。尽管商业展望持续不明朗及生活费偏高，私人消费依然是经济成长的主要推动力。此外，美国的货币政策不明、中国的经济成长放缓以及中美贸易关系紧张也影响了全球经济。

虽然经济展望颠簸，益联按照明确的生意策略和目标，有信心能够运用国内和区域的广泛商业机会为股东增加价值。此外，凭着益联的强稳资产负债表和低负债率，我们能够自由地利用和把握任何可能遇见的宝贵商业机会。

财务绩效

总体上，尽管有外在和内在的挑战，益联在2019财政年依然表现稳固和获利。营业额为7亿7千490万令吉，相较于去年的8亿2千630万令吉，税后利润为5千910万令吉。

在2019财政年，集团的首要业务，即免税业务，受了几个因素影响，如热门产品于上半年缺货以及中国游客来马全年减少。这些因素导致免税业务的营业额从2018年2月28日财政年(“2018财政年”)的6亿1千900万令吉减至2019财政年的5亿5千570万令吉，或减少了10.2%。

集团的汽车零件制造业务因订单增加而增长，营业额从去年的1亿7千590万令吉增长6.0% 至今年度的1亿8千640万令吉。办公楼和酒店业务的营业额则从去年的2千850万令吉放缓至今年度的2千590万令吉，原因是租客率减少以及租金稍微降低。

股息

益联一向来承诺回报股东们，董事局宣布派发第二次的每普通股10仙中期股息，连同第一次的每普通股10仙中期股息，于2019财政年，集团共派发了每普通股20仙的股息。股息收益相等于截至2019年2月28日闭市价每股4.40令吉的4.6%。

企业发展

于2018年7月9日，集团的子公司Duty F ree International Limited (“DFIL”)宣布跟Mr. Robert Justin Frizelle 和 Meridian Compass Ltd （“创办人”）以及Brand Connect Holding Pte Ltd (“Brand Connect”) 签署了有条件认缴股协议，根据协议DFIL 将认缴Brand Connect (“收购”) 的280万新普通股。于2018年8月8日完成有关收购，Brand Connect 已经成为DFIL的70%子公司。

Brand Connect 集团是亚太区域的饮料市场营销商。收购Brand Connect是为了发展益联的饮料销售业务，同时也让集团的市场不只局限于国内免税商品，也拓展至东南亚的缴税商品。

展望与前景

马来西亚国家银行预测2019年国内生产总值将介于4.3% 至4.8% 之间，这是鉴于较强的私人消费活动驱动。然而经济成长受限于客观风险，主要有低于预测的全球成长和全球不稳定因素。有鉴于此，集团预测经商环境将维持竞争和充满挑战。

集团将继续探讨和采用对的商业策略以应对前面的挑战。同时，改善营运效率和成本控制以继续保持竞争力。

董事主席献词


致谢

我谨代表董事会衷心感谢公司管理层和员工的奉献精神和辛勤工作，以致集团能够达致成功。我也借此向公司股东、相关部门和机构、客户、生意伙伴和顾客对于我们的无尽支持和信任致于万二分的谢意。为此，我们会继续保持成长、创造价值和带来辉煌的成功。

而我，作为您谦恭的仆人，承诺持续全力以赴为益联集团效力。

谢谢。

Adam Sani Abdullah益联董事主席2019年6月13日

董事主席献词 (继续)

The Zon All Suites Residences on the Park


MANAGEMENT DISCUSSION & ANALYSIS

BUSINESS OVERVIEW

Atlan Holdings Bhd (“Atlan” or the “Group”) is an investment holding company primarily involved in trading of duty free goods, dutiable and non-dutiable merchandise (Duty Free), auto- components manufacturing (Automotive) and property investment & hospitality (Property and Hospitality).

Established in 1988 as a private limited company, it was involved in precision metal stamping business then, based in Penang. Atlan was listed on the Second Board of Bursa Malaysia Securities Berhad in 1996 and subsequently transferred to the Main Market in 2009.

Duty Free

The Group’s duty free goods, dutiable and non-dutiable segment operates under Duty Free International Limited (“DFIL”) and its group of subsidiaries. DFIL is the leading duty free retailer in Malaysia with an operating history of over 40 years.

DFIL is Atlan’s major revenue contributor, accounting for approximately 71.7% of Atlan’s revenue for the financial year ended 28 February 2019 (“FYE2019”). DFIL was listed on the Catalist Board in Singapore after a successful reverse takeover exercise of Esmart Holdings Ltd in 2011 and was subsequently transferred to the Mainboard of Singapore Exchange Securities Trading Limited in 2016.

DFIL has made its mark as the largest multi-channel duty free and duty paid retailing brand in Malaysia. It reaches out across Malaysia under the branding of “ZON”. ZON is strategically located at all leading entry and exit points in Malaysia, including duty free zones, border towns, international airports and popular tourist destinations, catering for both domestic and international customers.

Automotive

United Industries Holdings Sdn. Bhd. and its group of subsidiaries (“UI Group”), have over four decades of experience in producing and supplying quality automotive components to Original Equipment Manufacturers in Malaysia. UI Group’s current main products and services are manufacturing and supplying of various automotive components

such as metal fuel tanks, screw jacks, tubing and related automotive production and assembly parts.

Property and Hospitality

Atlan currently owns two properties along Jalan Ampang, which is centrally located within Kuala Lumpur City Centre. The Group’s property arm manages a 23-storey office tower called “Menara Atlan” and Atlan’s hospitality arm in turn runs a 23-storey service apartment called “The Zon All Suites Residences on the Park”.

FINANCIAL PERFORMANCE

FYE2019 was a challenging year for the Group, amid a slowdown in global economy coupled with consumers’ general cautious purchasing sentiment combined with a fluctuating Malaysian Ringgit. Despite the challenges mentioned above, Atlan had delivered a commendable financial performance in FYE2019.

For the financial year under review, the Group achieved a respectable revenue of RM774.9 million, translating to a decline of 6.2% as compared to the previous year’s revenue of RM826.3 million. The Group meanwhile recorded a profit before tax (“PBT”) and profit after tax (“PAT”) of RM76.8 million and RM59.1 million respectively against the RM91.3 million and RM66.3 million registered in the preceding year.

The Group’s duty free segment has continued to be the main earnings contributor. The duty free segment’s revenue was RM555.7 million as compared to RM619.0 million in the previous year. The softer performance was mainly due to the unavailability of certain popular products for sale in the first half of the financial year and lower demand from consumers in general during the period under review.

Automotive segment was the second largest contributor to the Group’s revenue for the financial year under review after duty free segment. In line with the new government’s manifesto, the Goods & Services Tax (“GST”) was abolished and replaced with the Sales & Service Tax (“SST”). The consumer optimism and upswing in demand during the transition period from GST to the SST led to higher number of automotive orders for the


Group. The country’s vehicle sales volume for July 2018, according to the Malaysian Automotive Association (“MAA”), was the second highest monthly volume achieved in the history of the local automotive industry1. The segment recorded a revenue and PBT of RM186.4 million and RM15.6 million respectively in contrast to previous year’s RM175.9 million and RM12.0 million respectively.

The Group’s property and hospitality division remains subdued in the financial year under review primarily due to lower occupancy rate, lower average rental rate as well as increasing operating expenditure. The division registered a revenue and PBT of RM25.9 million and RM5.5 million respectively. This division accounts for about 3.3% of the Group’s total revenue.

As at 28 February 2019, the Group’s financial position remains sound given its healthy balance sheet with cash and cash equivalents of RM337.6 million (28 February 2018: RM398.3 million) and a net cash position of RM281.1 million (28 February 2018: RM340.5 million) which is equivalent to RM1.11 per share (28 February 2018: RM1.34). The Group’s total capital commitments, approved, contracted for and not contracted for, as at 28 February 2019, amounted to RM26.0 million (28 February 2018: RM6.9 million).

The cash war chest places the Group in a prime position to explore and capitalise on new synergistic business opportunities it encounters.

DIVIDEND

The Group has consistently been balancing between optimising rewards for its shareholders in the form of dividends and allocating funds to meet the Group’s growth objectives. For FYE2019, the Group declared a total dividend of 20 sen per share, amounting to a total payout of RM50.7 million. The dividend yield works out to 4.60% based on 28 February 2019 closing share price of RM4.40.

BUSINESS RISKS

Duty Free

Whilst the performance of the retail industry is generally shaped by the performance of the

country’s economy and the economic policies, the Group’s retailing of duty free goods, dutiable and non-dutiable products is also exposed to certain risks like regulatory risk and foreign exchange fluctuation risk.

The operations of duty-free business requires a number of licences which include amongst others, duty-free shop licence, wholesale dealer’s licence, bonded warehouse licence and import licence to be renewed on a regular basis. The Group is also subject to changes in regulatory framework by the various authorities from time to time. As a result, any changes in policies and rules would need to be altered and re-aligned by the Group at various levels. To mitigate these risks, the Group continues to diligently work closely with the government authorities and will continuously ensure that its business and operations are in compliance with the relevant laws and regulations as well as adapt to new laws and regulations as and when they are implemented.

The Group has transactional currency exposures arising from purchases that are denominated in a currency other than the functional currency of the operations to which they relate, primarily United States Dollars and Singapore Dollars. Approximately 72% (FYE2018: 64%) of the Group’s purchases are denominated in foreign currencies. Foreign currency exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level via constant monitoring of foreign currency fluctuations and hedging policies implemented within the Group.

Automotive

The automotive industry is highly competitive and competition is likely to further intensify as globalisation acceleration takes place. To remain competitive, the Group will emphasise on product quality and features, safety, manufacturing efficiency and innovations. The Group will continue to be competitive by being innovative in various ways including upgrading new technologies as and when required.


The considerable oversupply of office and residential properties in Malaysia continues to ensue demand and supply imbalances in the property market.

MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)


Newer buildings with better amenities coupled with attractive rents are more accommodative to the demands of potential tenants. However, this does not rule out competitive pricing from the Group which will in turn attract potential tenants.

As for the Group’s hospitality segment, the emergence of alternative tourism accommodation such as AirBnB has elevated the hospitality sector’s competitiveness by a notch or two. The cost of maintaining the Group’s hospitality assets and unforeseen maintenance works has increased over time especially when the assets aged. The Group, through its years of experience, has devised methods of maintaining its competitive edge, adopting effective measures and closely monitoring the industry practices in order to keep abreast with the expectations and preference of the market.

BUSINESS STRATEGY

Duty Free

Strategies outlined by the Group strongly emphasizes on providing the best for our customers, offering the best services and ensuring retail excellence. Accordingly the acquisition of the Brand Connect group (“BC”) will enable the Group to develop and grow its beverage distribution business as well as to expand the market operations beyond the current sales channels in the duty free market of Malaysia to include the duty paid markets across South East Asia.

The Group continues to work closely with Heinemann Asia Pacific Pte. Ltd. to improve on the following 5 targeted key areas:-

1. Increase operational efficiencies2. Cost effectiveness in supply chain3. Efficiency in logistics management of

products4. Enhancement of retail outlets5. Increase in product assortments

Moving forward, the Group remains optimistic about the country’s retail market amidst the changing social and political landscape. The country’s competitive retail landscape is also witnessing signs of consolidation as well as continuous transformation and modernisation of retail formats. Accordingly, in order to thrive and

stay relevant, the Group will implement several initiatives which include improving layout of the retail shops, better merchandising prices and wider range of assortments, whilst on the lookout for more retail spaces and synergistic businesses that will complement its duty free business.

Automotive

The automotive sector is undergoing a phase of technology revolution. We will focus on reinforcing our position as a trusted partner by expanding our manufacturing capabilities to improve productivity and efficiency with minimum impact on cost structure. The focus in staying agile in the automotive sector ensures the Group cater and satisfy the growing needs of the customers. The Group will continue to seek out technical collaboration opportunities to gain access to transformative innovations.


In the highly competitive property sector where office spaces are oversupplied, quality and attractive pricing remain as crucial factors in maintaining the Group’s competitive edge. As our assets are also strategically located in Kuala Lumpur City Centre, the accessibility to affordable prices within this vicinity is key to the Group’s strategy.

The Group will strive to leverage on its competitive strengths whilst putting in greater efforts to secure new tenants/customers and growing rental yields through competitive rate strategies. The Group will continue to take appropriate steps and measures to deliver high quality services and continuously upgrade and refurbish the properties. Extra emphasis will also be placed on strengthening relationships with existing good tenants.

OUTLOOK & PROSPECTS

Looking ahead, the Malaysian economic outlook remains favourable, with Bank Negara Malaysia2 having projected the economy to grow between 4.3% to 4.8% in 2019. The local domestic demand will continue to be the key growth driver, along with a more stable income level and better employment market. Affirmative actions taken by the new government so far has been promising, with consumer friendly initiatives which augur well for the economy.

MANAGEMENT DISCUSSION AND ANALYSIS

(CONT’D)


Duty Free

Tourism Malaysia’s3 figures revealed that tourist arrivals eased from 26.0 million in 2017 to 25.8 million in 2018. The Malaysian government’s quest to promote the country as reflected in the 2019 Budget4 bodes well for the tourism industry’s outlook. The government will allocate RM100 million on a matching grant basis to the private sector in relation to promotional and marketing campaigns to increase tourist arrivals and provide a 2% interest subsidy for RM500 million worth of loan facilities under the SME Tourism Fund managed by SME Bank. The aim is to garner 30 million tourist arrivals as this quantum has been estimated to contribute RM100 billion to the economy by 2020.

Automotive

According to the MAA5, Malaysia’s automotive market had recovered moderately after two consecutive years of decline in spite of the turbulent domestic and global economy. Total Industry Volume (“TIV”) had increased in 2018 by 3.8% to 598,714 units compared to 576,625 units in 2017. The MAA however anticipates 2019 to be a challenging year ahead with TIV to settle at 600,000 units, a potentially flat growth of 0.2%. The Group is however optimistic that the local automotive industry will continue to thrive in the years to come given its 2018 performance amid the challenging economic changes.


The general outlook for the property sector for 2019 remains neutral albeit largely more optimistic sentiment6. Vacant office spaces7 as well as new hotels8 are expected to rise. The Group will however continue to form strong strategies for both its properties. For The Zon All Suites Residences on the Park, the Group will continue to roll out marketing activities in tandem with the government’s initiatives in the tourism sector. The tenancy ratio of Menara Atlan remains healthy as well. The Group will continue on its tactical pricing plans for tenants as compared to the higher prices charged by Grade A offices.

CLOSING REMARKS

Despite the prevailing economic challenges, we remain confident of our prospects and inherent principles of our prudent management policies. The Group has been resilient throughout the many years in operations and we are confident that the Group will remain stable and robust. The Group continues to be committed on implementing sound strategies, initiatives and comprehensive plans to ensure that the core businesses remain resilient and sustainable. At the same time, the Group will fortify its efforts to improve, grow and expand its businesses so as to deliver maximum value to shareholders.

1. http://www.maa.org.my/pdf/Market_Review_2018.pdf2. http://www.bnm.gov.my/files/publication/ar/en/2018/ar2018_book.pdf3. https://www.tourism.gov.my/statistics4. http://www.treasury.gov.my/pdf/budget/speech/bs19.pdf5. http://www.maa.org.my/pdf/Market_Review_2018.pdf6. https://content.knightfrank.com/research/179/documents/en/malaysia-real-estate-highlights-2h-2018-6065.pdf7. http://pdf.savills.asia/asia-pacific-research/malaysia-research/malaysia-retail/my-off-2h-2018.pdf8. http://www.mida.gov.my/home/7456/news/special-report-hotelsmore-hotels/

MANAGEMENT DISCUSSION AND ANALYSIS (CONT’D)


SUSTAINABILITY REPORT

26ABOUT THIS REPORT

26KEY SUSTAINABILITY HIGHLIGTHS

27 SUSTAINABILITY AT ATLAN HOLDINGS BHD

30 STAKEHOLDER ENGAGEMENT

31 MATERIALITY ASSESSMENT

33 OUR SUSTAINABILITY PILLARS

34 MATERIAL SUSTAINABILITY MATTERS


We are pleased to present atlan holdings Bhd’s (“atlan”) 2nd Sustainability Statement for the financial year ended 28 February 2019. it provides insight into our sustainability efforts and our journey towards integrating sustainability into our day-to-day business operations.

reporting scope and boundaries ___________________________________________

The indicators and performance data in this report covers Atlan as a Group which corresponds to our Corporate Structure in the Annual Report. The Group here refers to entities which Atlan has direct managerial control.

Our sustainability performance report also includes our newly acquired subsidiary, Brand Connect Holdings Pte. Ltd. and its subsidiaries (“BCH Group”) on 8 August 2018. This acquisition has not resulted in any significant change to our business operations.

reporting period and methodology _________________________________________

Our Sustainability Statement and methodology (“Statement”) covers the same period as that of the financial year of Atlan and its subsidiaries (the “Group”), from 1 March 2018 to 28 February 2019 (“FY2019”).

Our Statement is prepared in accordance with paragraph 29 in Part A of Chapter 9 - Appendix 9C Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”). We are guided by the Bursa Securities’ Sustainability Reporting Guidelines (2nd Edition) in enhancing our sustainability management and disclosures. This Statement is also available on our corporate website at www.atlan.com.my.

We have not sought external assurance for this Statement.

Feedback Statement _______________________________________________________

We appreciate and welcome your feedback on our Sustainability Statement, please contact us at [email protected]. Your feedback will contribute to the continual improvement of our sustainability journey.

KEY SUSTAINABILITY HIGHLIGHTS

ABOUT THIS REPORT

50% of women in middle

management positions

398 MWh solar energy generated

in FY2019

0.001% of lost-time

injuries (“LTI”)

RM 251,460 approximate annual cost savings arising from solar

panel installation


SUSTAINABILITY AT ATLAN HOLDINGS BHD

Our SuStainability GOvernance

At Atlan, we recognise good governance as a key driver to ensure business continuity. Our sustainability governance plays a pivotal role in ensuring adequate resources, systems and processes are in place for managing our sustainability initiatives and performance.

Our Board of Directors is the ultimate governing body and has oversight of the integration of our sustainability agenda and initiatives across the Group. Our sustainability efforts are steered by our Executive Director and the Sustainability Working Group.

Our Sustainability Working Group manages the day-to-day sustainability projects and initiatives. They also ensure the Key Business Functions are able to complete their plans, meet their timeline and provide accurate information for sustainability disclosure purposes.

Board of Directors Ultimately responsible for the sustainability direction of the Group

Ensures the integration of sustainabilty consideration in strategic business decisions

Approves the overall sustainability-related business strategies

Executive Director Steers and oversees the implementation of sustainability-relatedbusiness strategies

Approves sustainability targets, key indicators and disclosures

Evaluate and assess sustainability risks and opportunities

Sustainability Working Group

Monitors and manages the sustainability implementation of the Group

Facilitates and assists the sustainabilty processes among the key business functions

Report on performance and targets of sustainability processes andcontrols

Key Business Functions

Supports the implementation of sustainability-related business strategies

Develop plans and timeline for sustainability reporting disclosures

Diagram 1: Sustainability Governance Structure at Atlan Holdings Bhd

Our commitment towards maintaining integrity and strong business ethics is demonstrated through the various governance policies and procedures that has been established within the Group. These include our Code of Conduct and Ethics, Anti-Corruption procedures and Whistle-blowing Policy.


cOde Of cOnduct and ethicS

Atlan’s Code of Conduct and Ethics (the “Code”) drives a culture of integrity and honesty across the Group. The Group aspires to operate in an ethical manner and to uphold the highest standards of professionalism and cultivate exemplary corporate conduct.

All our employees and directors are required to comply with the Code. It requires employees to conduct themselves in a manner beyond that required by mere compliance with the law. Similarly, it is also a requirement for our business partners to comply with the Code to ensure professionalism and compliance with applicable laws.

In addition to emphasizing the principles of honesty, trustworthiness and conscientiousness, the Code covers the following matters:

Diagram 2: Core areas of conduct of the Code

All directors and employees are given a personal copy of the Code and are required to sign off their acknowledgment of responsibility to comply with the policies and procedures set out in the Code via the Employee Acknowledgment Form.

The Directors and employees may refer or highlight any concerns on the Code to the Chairman of the Board or Executive Director and/or to their immediate superior, Head of Department or the Head of Internal Audit Department respectively.

Failure to comply with the Code may result in necessary disciplinary action, including termination of employment, to maintain compliance towards fostering an environment where individuals act with utmost integrity and are accountable for their actions.

SUSTAINABILITY AT ATLAN HOLDINGS BHD (CONT’D)

Con�icts ofInterest

BusinessRecords and

Control

SexualHarassment

Con�dentialInformation

Complianceto the law

OutsideInterest

Inside Informationand Securities

Trading

PersonalGifting

Fair andCourteousBehaviour

Protectionof Assets and

Funds

Healthand

Safety

Misconduct


Non-compliance tofinancial reporting

standards

Seriousimpropermatters

Abuse ofpower orauthority

Non-complianceto legal

obligations

Concealmentof

misconducts

Endangermentof health

and safety

Whistle-blowingPolicy

anti-cOrruptiOn and WhiStle-blOWinG pOlicy

Our anti-corruption policies and procedures are laid out in the Employee Handbook and is readily accessible through the Group’s intranet. The anti-corruption and whistle-blowing procedures provide an avenue for our employees to raise genuine concerns arising from the workplace. Its objectives include promoting standards of good corporate practices within the Group and assuring employees that reprisals and victimisation will not be tolerated in the event of whistle-blowing in good faith. Nevertheless, it makes clear that the Group will not condone frivolous, mischievous or malicious allegations. Under the Whistle-blowing Policy, all employees may address their concerns in writing to the Audit and Risk Committee Chairman of the Group.

Whistle-blowing applies, but is not limited to the following types of misconduct:

Diagram 3: Matters addressed within the Whistle-blowing Policy

As at the FY2019, there were zero complaints received by the Audit and Risk Management Committee Chairman of the Group through this channel.

SUSTAINABILITY AT ATLAN HOLDINGS BHD

(CONT’D)


STAKEHOLDER ENGAGEMENT

Our stakeholders are integral to the sustainability of our business. By understanding their expectations and responding to their concerns, we aim to strengthen the confidence they place within us as well as increase accountability.

In the financial year ended 28 February 2018 (“FY2018”), we conducted a materiality assessment workshop during which we identified key stakeholders who have direct influence on our business and operations. These remain the same for this reporting year, as summarised in Table 1 below.

Stakeholder Group

Engagement Platforms Frequency areas of Concern

Customers • Direct visits• Corporate website• Feedback forms• Social media• Loyalty programme

• Continuously• Continuously• Continuously• Continuously• Continuously

Quality of products and services, product prices and promotions

Employees • Annual performance review

• Intranet portal• Email communications• Internal meetings

• Annually

• Continuously• Continuously• Continuously

Job related trainings and development, work-life balance, employment benefits, performance appraisal and reward system

Board of Directors

• Board meetings

• Email communications

• Quarterly and Annually

• As needed

Regulatory compliance, economic performance, corporate governance and risk review

Government • Formal meetings• Dialogues

• As needed• As needed

Regulatory compliance, economic performance and societal welfare

Investors • Media release• Investors relations

roadshow• Announcements

• Investor meetings• Annual Reports

• Quarterly• As needed

• Quarterly / as needed

• As needed• Annually

Regulatory compliance,economic performance, newdevelopment of the Group, return on investment and dividend distribution

Suppliers • Meetings and dialogues• Email communications

• As needed• Continuously

Product knowledge, events,partnerships, compliance and performance against contract terms

Financiers • Financial reports• Regular meetings

• Annually• As needed

Compliance with financiers’ terms and conditions and economic performance

Table 1: Stakeholder Engagement


MATERIALITY ASSESSMENT

Materiality aSSeSSMent prOceSS

Material sustainability matters are economic, environment and social (EES) risks and opportunities that affect our stakeholders’ decisions and impact our business. The identification of material sustainability matters enables us to focus our efforts and allocate resources to address the high priority matters of the Group.

Our material matters were identified through the following materiality assessment process:

Diagram 4: Our materiality assessment process

In FY2018, we conducted a materiality assessment workshop to identify and prioritise our material sustainability matters as explained above. This process involved input from heads of key business functions and key management personnel, while taking into consideration our stakeholders’ expectations. This year, we reviewed the FY2018 materiality matrix and deemed that the materials matters identified remained relevant, seeing there were no significant changes in our stakeholders’ concerns and business environment and operations throughout the year. We will continue to report on the updates on the six higher priority material matters, enhancing the disclosures based on available information.

Preliminary EES issues were identi�ed based on the Bursa Malaysia Sustainability Reporting Guidelines, desktop research and peer benchmarking.

A customised questionanaire with a list of stakeholders and material sustainability matters were circulated to internal stakeholders to shortlist matters that are relevant to Atlan.

Identification

During the materiality assessment workshop, key internal stakeholders were asked to rank the shortlisted material matters according to its:

- Signi�cance to Atlan

- Importance to our stakeholders

Prioritisation

A summarised ranking of the material matters were presented to the Board of Directors for discussion and validation.

Six (6) material matters were selected for reporting in FY2018.

These material matters were deemed relevant in FY2019.

Validation


MATERIALITY ASSESSMENT(CONT’D)

The materiality matrix below is the representation of the outcome of our materiality assessment process in FY2018:

Diagram 5: Materiality matrix

We are committed to enhancing our sustainability reporting, and will review our materiality matrix on an annual basis to ensure relevance with the industry in which we operate as well as with our stakeholder expectations.

• Product service responsibility• Procurement practices

• Workforce health

• Social compliance

• Employment policies

• Human rights

• Workforce engagement

• Local hiring practices

• Diversity

• Community engagement

• Water management

• Product services responsibility

Atlan Materiality Matrix

Low impact to atlan High

Low

S

take

hold

ers

inte

rest

H

igh • Economic performance

• Occupational health and safety

• Employee management

• Training and education

• Anti-corruption

• Environmental compliance

• Energy

Legend:

• Economic

• Environmental

• Social


Atlan’s commitment towards sustainability is demonstrated through balancing our financial goals with our social and environmental initiatives to create shared value for our organisation and stakeholders. Our defined three areas of our sustainability agenda focus are Our Economic, Our People and Our Environment. Our six higher priority material matters are categorized in the aforementioned pillars as summarised in Diagram 6 below:

Diagram 6: Our sustainability pillars

bOundarieS

our material matters organisational Boundary

Economic Performance All

Anti-corruption All

Employee Management All

Training and Education All

Occupational Safety and Health United Industries Group (“UI Group”) only

Energy All

Table 2: Organisational Boundary

Our People

02

Our Economic

01

Our Environment

03

Creation and distribution of economic value to our stakeholders, and ultimately reflecting our commitment to profitable

growth through performance excellence.

• Economic Performance • Anti-corruption

• Employee Management• Training and Education• Occupational Safety and Health

• Energy

Focuses on learning, well-being and development of our people through our

people management and safety and health initiatives

Showcases our commitment of being a responsible corporate citizen by conducting our business in an energy-efficient manner

OUR SUSTAINABILITY PILLARS


MATERIAL SUSTAINABILITY MATTERS

Our ecOnOMic

Economic Performance

Atlan was incorporated in 1988 and its principal activities are investment holding and the provision of management, financial, technical and other ancillary services, while its subsidiaries are involved in property investment, hospitality, auto-components manufacturing and trading of duty free goods, dutiable and non-dutiable merchandise.

As we strive to evolve our core propositions to manage evolving market trends, we acquired a new subsidiary, BCH Group, on 8 August 2018, through our subsidiary, Duty Free International Limited (“DFIL”). BCH Group of companies is engaged in the business of marketing and trading, wholesale and retail distribution of beverage products across countries in the Asia Pacific region. The acquisition of BCH Group by DFIL is intended to develop and grow the Group’s distribution business as well as to expand the Group’s market operations beyond the current sales channels in the duty-free market of Malaysia to include the duty paid market across Southeast Asia.

In pursuit of sustainable profits through revenue generation, Atlan has also contributed to its stakeholders through various activities, including generating employment opportunities and servicing taxes. Diagram 7 below illustrates the Group’s value distribution to our stakeholders. Further information on the Group’s economic performance in FY2019 can be found on page 87 to 203 of our Annual Report.

Menara Atlan


revenue Distribution

Diagram 7: Direct economic value distributed

rm (‘000) FY2019 FY2018 FY2017

Economic Value Generated* 176,836 184,598 199,775

Economic Value Distributed

Employees (Salary and other benefits) 76,160 70,817 77,383

Government (Income tax) 19,723 25,596 21,405

Providers of capital (Dividends and finance costs) 81,325 83,399 86,590

Community (Donations) 4,370 2,000 3,500

total Economic Value Distributed 181,578 181,812 188,878

Table 3: Our value distribution

Note: * Represents revenue and other income net off operating expenses.

Customer Service

A positive customer experience is crucial in driving sustained growth within our operations. In efforts to improve our quality of services, we measure customer satisfaction through surveys. These customer surveys are implemented across our Group and are customised based on the type of services provided.

At DFIL, in FY2019, we implemented the Mystery Shopper programme across all our retail outlets to assess and elevate our customers’ shopping experience. The criteria measured include customer service, cleanliness of store, product display, product knowledge, shop outlook and selling skills.

Meanwhile, at UI Group, we measure our service delivery of supplying and manufacturing automotive parts through regular feedback surveys from our customers. The criteria measured through the survey include timeliness of delivery, quality, reliability and number of rejects. Our commitment to providing excellent customer service has been recognised through the “Best Delivery” award received from Toyota in FY2019.

Through regular engagement with our customers, we have gained insights into areas of improvement as we strive to continually serve our customers better. We will continue to implement operational strategies in our commitment to improve the quality of our service to our customers.

Best delivery award from Toyota


(CONT’D)

VALUE DISTRIBUTED IN FY2018

Employees Government Providers of capital Community

1%

39%46%

14%

VALUE DISTRIBUTED IN FY2019

Employees Government Providers of capital Community

2%

42%45%

11%


Our peOple

Employee management

The continuous growth of the Group is contributed by the strength and talent of our workforce. We strive to provide an inclusive and conducive working environment for our employees. Echoing this commitment, we strive to conduct our business and operations in a manner that promotes diversity, employee well-being and upskilling of our people. The Employee Handbook and the Code sets out standards expected of our employees, which are reflected in our day-to-day operations.

our Workforce

In FY2019, we have a total of 1,724 employees, as compared to 1,554 employees in FY2018 as shown in Diagram 8. Of this aggregate, 79% are permanent employees, while 21% are employed on a contract basis. Our workforce composition has strengthened by 11% due to increased production levels at UI Group and the acquisition of BCH Group.

In delivering on our intent to serve local and international customers, notably in our travel retail segment, we consciously hire local qualified talent as they have greater understanding of the local market. These local citizens are also commonly fluent in Malaysia’s ‘lingua franca’ which contribute to better engagement outcome with our stakeholders. In FY2019, our local talents comprised 82% as compared to 87% in FY2018. This marginal decrease is contributed by the higher expatriates from BCH Group. Nevertheless, we will continue to maintain 80% local hiring at a minimum, across the Group.

1,430

1,319

1,357

182

234

367

1

1

0

2017

2018

2019

Diagram 8: Number of employees

Permanent Contract Part time

1,460

1,347

1,407

153

207

317

2017

2018

2019

Diagram 9: Number of local employees

Local Expatriate

MATERIAL SUSTAINABILITY MATTERS (CONT’D)

Annual Hari Raya Lunch Celebration


Diversity at atlan

At Atlan, we recognise the importance of working in an organisation that reflects the communities in which we live. Diversity in our team enables us to harness diverse knowledge, skills sets and experience to better engage and understand the unique needs of our stakeholders. We nurture an environment that does not discriminate based on ethnicity, gender or age. We emphasise merit-based evaluation in our recruitment and employment practices.

Our women account for 38% of our total employees in FY2019. On the other hand, at our middle management level, we attained 50% of women representation as compared to 42% in FY2018, a notable increase demonstrating our intent to uphold diversity. We are aware of our responsibility as an inclusive employer to promote awareness on the importance of diversity and strive to increase our overall female representation within the Group.

In FY2019 we also hired 546 employees, of which 77% comprised the below 30 years old category, highlighting our endeavours to recruit young, local talent for succession planning and to deliver on our future business outlook.

Employee Benefits

Providing benefits to our employees demonstrates our commitment to their overall well-being, to keep them engaged, motivated and productive. These benefits are provided in accordance with local labour laws. We extend ample consideration towards our employees’ personal commitments, such as their parental responsibilities. We offer both maternal and paternal leave to eligible employees and encourage them to use this benefit to promote bonding time with their family while improving their overall wellbeing.

The key benefits offered to our full-time employees are detailed below:

• Grouppersonalaccidentinsurance• Grouphospitalizationandsurgicalscheme• Healthcare• Hospitalisationandsickleave• Annualleave• Statutory contributions to Employees Provident Fund (“EPF”), Social SecurityOrganisation

(“SOCSO”) and Employment Insurance System (“EIS”)• Parentalleave• Retirementbenefitforunionisedemployees


(CONT’D)

42%

39%

38%

2017

2018

2019

Diagram 10: Women at Atlan (%)

9684

46

0

20

40

60

80

100

120

201720182019

Diagram 11: Number of employeeswho took parental leave


Employee Breakdown

Diversity at atlan

FY2019 FY2018 FY2017

Number of employees as at28 February 1,724 1,554 1,613

Number of new hires

• Female

• Male

161

385

124

407

150

180

Number of resignations

• Female

• Male

161

342

173

349

172

256

Percentage of new hires (%) 31 34 20

Total turnover rate (%) 29 34 27

Table 4: Our employee statistics

Team Activity




(CONT’D)

Diversity at atlan (cont’d)

Diagram 16: Ethnic diversity

58%

61%

62%

42%

39%

38%

2017

2018

2019

Diagram 12: Gender diversity (%)

Male Female

483341 315

454474 478

137129 143

2019 2018 2017

Diagram 13: Age diversity (Male)

Below 30 30-50 over 50

241 213 245

323 310340

86 8792

2019 2018 2017

Diagram 14: Age diversity (Female)


13%

13%

16%

35%

42%

50%

2017

2018

2019

Diagram 15: Female in management (%)

Senior management Middle management

263

222

25027 0

2017

222

200

804

851

30027 1

2018

232

214

830

426

21 1

2019

Chinese Indian Malay Other Sarawakian Sabahan


Changes in workforce


14%

22%

24%

5%

10%

6%

1%

2%

1%

2017

2018

2019

Diagram 17: Percentage of new hires (by age group)


11%

26%

22%

9%

8%

9%

2017

2018

2019

Diagram 18: Percentage of new hires (by gender)

Male Female

16%

19%

18%

8%

11%

9%

3%

4%

2%

2017

2018

2019

Diagram 19: Employee turnover rate (by age group)


16%

23%

20%

11%

11%

9%

2017

2018

2019

Diagram 20: Employee turnover rate (by gender)

Male Female


training and Education

We aim to develop our employees in their professional and personal capacities while promoting greater efficiency. This is done through the various training opportunities for eligible employees. These trainings ensure our employees have a greater understanding of their responsibilities within their role, which in turn builds their confidence to keep up with the evolving needs of the industry while acquiring new skills. Moving forward, we aspire to gradually extend our training programmes to benefit all employees.

In FY2019, the Human Resource department rolled out a series of training initiatives to equip our employees with the tools they require to enhance Atlan’s brand. These initiatives seek to equip our workforce with necessary capabilities and competencies required to carry out their day-to-day duties.

types of training Programmes

The key training initiatives across our Group are detailed in Table 5 below:

Core training areas Description of training

Manufacturing processes and techniques Automotive production system and safety briefings, including DOJO trainings

Product knowledgeRefresher course on product information and brand knowledge

Information technology Enterprise Resource Planning system, basic computer and cyber security skills

Regulatory compliance Content and importance of regulatory requirements such as Code on Corporate Governance, stock exchange rules & regulations

Safety and HealthSafety, health, chemical handling and preparedness in case of an emergency

Leadership and managementOrganisational management skills and team coordination

Table 5: Types of training programmes conducted in FY2019


(CONT’D)

In house Training


In FY2019, we invested a total of 6,955 hours as compared to 5,370 hours in FY2018. The increase in the number of training hours was contributed mainly by DFIL to improve retail upskilling, highlighting our overall dedication to deliver excellent customer service to our customers.

training and Education Performance

Description FY2019 FY2018 FY2017

Number of participants 1,208 846 733

Total number of hours 6,955 5,370 4,712

Total number of employees 1,724 1,554 1,613

Table 6: Statistics on training and education

Performance reviews

Atlan recognises the importance of regular performance reviews as part of our employees’ professional development. These performance reviews are carried out to assess their current competencies and provide them with suitable career direction at Atlan. Through utilisation of the Balanced Scorecard, supervisors are able to objectively analyse the employee’s performance and align them with the Group’s goals.

Diagram 23: Performance and career development review process

For FY2019, 100% of Atlan’s employees have received their performance assessment for the period under review.


2,415

2,893

4,884

2,085

2,271

1,195

212

206

876

2017

2018

2019

Diagram 22: Training hours by division

Duty Free Automotive Property and Hospitality

2.92

3.46

4.03

2017

2018

2019

Diagram 21: Average training hoursper employee

Target setting Each department will set their annual performance targets and key performance indicators for each employee, which ultimately aligns to the Group's vision.

Consultations Employees may enquire and obtain advice on their performance expectations from their immediate superior. Their compentencies will be assessed and training needs will be identi�ed.

Appraisal At year end, a one-to-one appraisal session will be conducted between immediate superior and the employee to evaluate work performance against the targets and expectations set.

Compensation Any high achievers will be rewarded with lucrative money bene�ts, whereas for any under performers, further training will be provided to bridge their capability levels.


occupational Safety and health (“oSh”)

As a core value to UI Group’s business operations, we are committed to ensure the health and safety of our employees, contractors and communities we interact with through our operations. As our manufacturing arm involves the handling of heavy machinery to manufacture automotive component parts, it is paramount that adequate measures and trainings are provided to prevent accidents.

Our accreditations with ISO 14001 and OHSAS 18001 showcase our priority in meeting and maintaining high health and safety standards.

Safety and health Policy

It is vital that all our people work in a safe and healthy environment and the adoption of robust safety and health practices is imperative to achieve stronger business growth. Our Safety and Health Policy extends to all employees, visitors and contractors.

The objectives of the Safety and Health Policy are shown in Diagram 24.

occupational Safety and health Committee (“oSh Committee”)

In view of these objectives, our OSH Committee is tasked to uphold the Group’s safety, health and environmental commitments. The OSH Committee, as depicted in Diagram 26 below is spearheaded by the OSH Chairman, leading both employer’s representatives and employee’s representatives. OSH meetings are regularly conducted to discuss, manage, and address OSH matters arising within our business units.


(CONT’D)

Diagram 24: Objectives of OSH Policy

Diagram 25: OSH Committee

OSH Policy Objectives

Ensureemployees

work in a safe and healthy

environment

Comply with all OSH laws

and regulations

Prevent and eliminate all work-related injuries and

illnesses

Diagram 24: Objectives of OSH Policy

Advisor Chairman

Deputy Chairman

Secretary

Employer Employee

Roles and Responsibilities of OSH Committee

Assist in the development of safety & health rules

Review incidents or near miss occurrences

Review effectiveness of safety & health policies and programmes

Inspection of workplace

Investigation of safety & health complaints


Safety and health Programmes

In FY2019, UI Group continued to drive efforts towards enhancing its safety and health programmes to encourage our employees to contribute towards a safe working environment. Amongst the trainings conducted to instill a culture of safety include first aid training, fire drills and chemical handling training.

DOJO – Safety Training Center

In FY2019, we established a safety “DOJO” – the Japanese term for a specialised training center, to help us educate our employees on prioritising safety at all times. The DOJO focuses on continuous improvement to achieve the best safety performance in the working station, which is an essential element for the automotive industry.

Simulation training allows our employees to simulate real life risks and measures to prevent them. It provides employees the opportunity to experience hands on training with protective gear and equipment that they will later handle in the manufacturing plant. We acknowledge that creating an effective safety culture is an ongoing process. Hence, there will be enhancements made to the DOJO at regular intervals, based on gaps and weaknesses highlighted by the Safety and Health Committee.

Employee Wellbeing

The focus on creating a positive workplace environment keeps our employees motivated, engaged and productive. As part of our effort to improve our employees’ overall wellbeing, we repainted our machinery at our main factory. Additionally, employees perform a brief exercise routine every morning to increase their fitness and agility in order to perform their work better. This activity also serves as a platform to regularly engage with our employees.


Newly painted machinery Morning exercise

DOJO Training Stations


Safety and health Performance

As shown in Diagram 26, our health and safety training have been consistent over the past two years, highlighting our commitment to embedding a culture of safety within our operations.

In FY2019 we recorded 0.001% lost-time injury (“LTI”) which is the same as that in FY2018. Though we have only recorded minor injuries within the Group, we strive to reduce the accident rate within our operations by constantly identifying areas for improvement. In addition, we maintained an exemplary record of zero fatalities throughout our years in operation.

oSh indicator FY2019 FY2018 FY2017

Number of fatalities 0 0 0

LTI rate 0.001% 0.001% 0.0006%

Workers undergoing OHS training 19% 32% 21%

Workers undergoing health surveillance 1.00% 1.58% 1.99%

Table 7: Our OHS Performance

We remain astute of our objectives and continually strive to improve our good safety performance year on year while ensuring that we do not compromise on high safety standards.

108

1,050

1,035

2017

2018

2019

Diagram 20: OSH Training Hours


(CONT’D)


Our envirOnMent

Energy

At Atlan, the diverse nature of our business leads to large volumes of energy being consumed. All this energy contributes to high operational costs, in addition to contributing to a significant environmental footprint to power our operations.

In recognition of the threat of climate change, we have taken steps to mitigate our environmental footprint by reducing our reliance on non-renewables as a source of energy. As we continue in our journey towards transitioning to renewable sources of energy, we monitor and track our energy consumption and aim to install more energy saving fixtures over the years to reduce energy consumption within our premises.

Solar panel at our Bukit Kayu Hitam outlet


energy consumption within our premises.

5,182 5,437 5,887

5,289 5,751 5,433

5,077 4,929 5,291

-

3,000

6,000

9,000

12,000

15,000

18,000

2019 2018 2017

Diagram 27: Energy consumption by division (MWh)

Duty Free Automotive Property and Hospitality


Key initiatives for the Year

As a continuation of our energy saving initiatives in FY2019, UI Group continued to leverage on skylight to reduce the use of highway lights inside the factory during the day. Besides that, the continued monitoring of power systems allowed us to maintain an average power efficiency of 90% throughout the period under review.

As for DFIL, on 2 May 2018, its first solar panels were up and running at the Bukit Kayu Hitam outlet. It has contributed to cost savings of approximately RM20,955 per month since its installation. Albeit this is 3% below our projection, our cumulative savings have amounted to RM251,460 for this year.

Description FY2019 Actual FY2018 Projection

Solar installed capacity(kWp) 353 353

Total electricity generated (MWh) 398 510

Monthly average electricity savings (MWh) 41 42

Monthly average cost savings (RM) 20,955 21,623

Table 8: Solar panel performance

In the financial year ending 29 February 2020, we will work towards further reducing our energy usage by introducing new energy-saving equipment and enhancing operational efficiency. Our efforts will also focus on expanding our use of solar energy to power other outlets at DFIL.


(CONT’D)

Skylight in one of UI Group’s Factory



CORPORATE GOVERNANCE OVERVIEW STATEMENT

The Board of Directors (“Board”) of Atlan Holdings Bhd. (“Atlan” or “the Company”) recognises the importance of adopting good corporate governance throughout the Group as a fundamental part of discharging its responsibilities to protect and enhance shareholders’ value and the financial performance of the Group. The Group will continue to endeavour to apply the recommendations of the Malaysian Code on Corporate Governance released by Securities Commission Malaysia on 26 April 2017 (“MCCG”), in its effort to observe high standards of transparency, accountability and integrity, and strive to strengthen corporate culture anchored on accountability and transparency.

This corporate governance overview outlines the corporate governance practices which have been adopted by the Board of the Company during the financial year ended 28 February 2019, where possible, and applicable laws to be a dynamic framework within which the Company would conduct its business.

Please note that the following statement is to be read together with the Corporate Governance Report, which is available on the Company’s website at www.atlan.com.my.

PRINCIPLE A – BOARD LEADERSHIP AND EFFECTIVENESS

PART 1 - BOARD RESPONSIBILITIES

Intended Outcome 1.0

• EverycompanyisheadedbyaBoard,whichassumesresponsibilityforthecompany’sleadership and is collectively responsible formeeting theobjectivesandgoalsof thecompany.

1.1 Strategicaims,valuesandstandards

The Board is responsible for the leadership, oversight and overall management of the Company. An effective Board is the one that made up of a combination of Executive Director with intimate knowledge of the business and Non-Executive Directors from diversified industry/business background to bring broad business and commercial experience to the Group. The Board has the overall responsibility for corporate governance, establishing goals, strategies and direction, reviewing the Group’s performance and critical business issues and ultimately the enhancement of long-term shareholders’ value. It monitors and delegates the implementation of the strategic direction to the management.

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

The Board reviews the strategic plan of the Company tabled by Management at its meeting. The review would cover the performance targets and long-term plans of the Company to be met by Management. On an annual basis, the Executive Director and Management review with the Board the outlook of the relevant industries for the following financial year.

The Board is satisfied with the strategic plan of the Company as presented by the Management. The Board would continue to review the plan to ensure its implementation.

The Board’s role is to oversee the performance of the Management to determine whether the business is properly managed. The Board gets updates from Management at the quarterly Board meetings when reviewing the unaudited quarterly results. During such meetings, the Board participated actively in the discussion on the performance of the Company and assessed the performance of the Management.



(CONT’D)

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

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

ii) Reviewing and evaluating key policies adopted by the Company; iii) Overseeing the conduct of the Company’s businesses to evaluate whether the businesses

are being properly managed;iv) Identifying principal risks of the business and ensuring the implementation of appropriate

systems to manage these risks; v) Reviewing the adequacy and integrity of the Company’s internal control systems and

management information systems;vi) Establish Board committees and be responsible for all decisions made by the committees; vii) Reviewing and approving unaudited quarterly results and audited financial statements;viii) To ensure all candidates appointed to senior management positions are of sufficient calibre

and satisfied that there are programmes in place to provide for the orderly succession of senior management; and

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

As part of its efforts to ensure the effective discharge of its duties, the Board has delegated certain functions and responsibilities to the following respective Board Committees: -

• NominationCommittee;• RemunerationCommittee;and• AuditandRiskManagementCommittee(“ARMC”).

The Chairman of each Board Committee will report to the Board on the outcome of the Committee’s meetings which also include the key issues deliberated at the Committee’s meetings. The Board Committees discharge their duties in accordance to the Terms of Reference approved by the Board.

1.2 TheChairmanoftheBoard

The Board has elected a Chairman from amongst the members of the Board who is a Non-Executive Director. Dato’ Sri Adam Sani bin Abdullah as the Company’s Non-Independent Non-Executive Chairman provides leadership and guidance to the Board and is responsible for ensuring effectiveness of the Board’s performance. Dato’ Sri Adam Sani bin Abdullah works closely with the rest of the Board members in forming policies and strategies to align the business activities driven by the management team.

The responsibilities of the Chairman are clearly defined in the Board Charter. They include, but not limited to, the following: -

• ToprovideleadershiptotheBoard,andoverseetheBoardintheeffectivedischargeofitsfiduciary duties;

• TosettheagendaforBoardMeetingsandensureefficientandeffectiveconductoftheBoardMeetings;

• Toensurethatcompleteandaccurateinformationtofacilitatedecision-makingareprovidedto the Board members in a timely manner;

• ToleadBoardMeetingsandencourageactiveparticipationandallowdissentingviewstobefreely expressed;

• TopromoteconstructiveandrespectfulrelationsbetweenBoardmembersandmanagetheinterface between the Board and Management;


CORPORATE GOVERNANCE OVERVIEW STATEMENT(CONT’D)

• To ensure that appropriate steps are taken to provide effective communicationwithstakeholders and that their views are communicated to the Board as a whole; and

• ToleadtheBoardinestablishingandmonitoringgoodcorporategovernanceintheCompany.

The Chairman of the Board also acts as Chairman at all Board Meetings and meetings of members.

1.3 SeparationofthepositionsofChairmanandChiefExecutiveOfficer(“CEO”)

The Chairman, Dato’ Sri Adam Sani bin Abdullah, and the Executive Director, Mr. Lee Sze Siang, both holds separate position. There is a clear division of responsibilities between the Chairman (non-executive) and the Executive Director to ensure a balance of power and authority, such that no one individual has unfettered powers of decision-making.

The Chairman is responsible in leading the Board in its collective oversight of Management and ensure effectiveness of the Board matters whilst the Executive Director is responsible to implement the policies and strategies approved by the Board for the purposes of running the business and the day-to-day management of the Company.

1.4 TheCompanySecretaries

In compliance with Practice 1.4 of the MCCG, the Board is supported by suitably qualified and competent Company Secretaries. The Company Secretaries play an advisory role to the Board in relation to the Company’s Constitution, Board’s policies and procedures and compliance with the relevant regulatory requirements, codes or guidance and legislations.

The brief profile of the existing Company Secretaries are as follows: -

Ms.ChuaSiewChuan(FCIS)

Ms. Chua is a Chartered Secretary by profession and she has been elected as a Fellow of the Malaysian Association of the Institute of Chartered Secretaries & Administrators (“MAICSA”) since 1997.

She has now more than 35 years of experience in corporate secretarial practice with working knowledge across a diverse range of industries. Ms. Chua is also the named Chartered Secretary for a number of public listed companies and private limited companies. Ms. Chua has been appointed as Company Secretary of the Company since 1 November 2010.

Ms.ThumSookFun,FCIS,C.A.(M),FCCA

Ms. Thum is a Chartered Secretary by profession. Ms. Thum has been elected as a Fellow member of the MAICSA and also a Fellow member of the Association of Chartered Certified Accountants (“ACCA”). She is also a member of the Malaysian Institute of Accountants (“MIA”).

She has more than 20 years of professional experience in the field of corporate secretarial practice with working knowledge of many industries. Ms. Thum is also the named Company Secretary for a number of public listed companies and private limited companies. Ms. Thum has been appointed as Company Secretary of the Company since 1 November 2010.

The Board has ready and unrestricted access to the advice and services of the Company Secretaries, who are considered capable of carrying out the duties to which the post entails. The Directors may seek advice from the Management on issues under their respective purview. The Directors may also interact directly with the Management, or request further explanation, information or updates on any aspect of the Company’s operations or business concerns from them.


In performing their duties, the Company Secretaries carry out, amongst others, the following tasks:-

• StatutorydutiesasrequiredundertheCompaniesAct2016,MainMarketListingRequirementsof Bursa Malaysia Securities Berhad (“Listing Requirements”), Capital Market and Services Act, 2007;

• FacilitatingandattendingBoardMeetingsandBoardCommitteeMeetings,respectively;• FacilitatingandattendingtheGeneralMeeting(s);• Ensuring thatBoardMeetingsandBoardCommitteeMeetings, respectivelyareproperly

convened and the proceedings are properly recorded;• EnsuringtimelycommunicationoftheBoardleveldecisionstotheManagementforfurther

action;• EnsuringthatallappointmentstotheBoardand/orBoardCommitteesareproperlymadein

accordance with the relevant regulations and/or legislations;• Maintainingrecordsforthepurposeofmeetingstatutoryobligationsofapplicablejurisdictions;• FacilitatingtheprovisionofinformationasmayberequestedbytheDirectorsfromtimeto

time in a timely manner and ensuring adherence to Board policies and procedures;• FacilitatingtheconductoftheassessmentstobeundertakenbytheBoardand/orBoard

Committees as well as to compile the results of the assessments for the Board and/or Board Committee’s notation;

• AssistingtheCompanyonthelodgementsofdocumentswithrelevantstatutoryandregulatorybodies;

• AssistingtheBoardwiththepreparationofannouncementsforreleasetoBursaMalaysiaSecurities Berhad (“Bursa Securities”) and Securities Commission Malaysia; and

• RenderingadviceandsupporttotheBoardandManagement.

The Company Secretaries keep the Board abreast with the latest regulatory updates and also ensure that deliberations at Board and Board Committee meetings are well documented.

The Board is satisfied with the performance and support rendered by the two (2) qualified and experienced Company Secretaries to the Board in discharge of its functions.

1.5 Meetingmaterials

The Board meets at least, quarterly, to consider all matters relating to the overall control, business performance and strategy of the Company. Additional meeting will be called when and if necessary.

A full year meeting schedule which sets out the meeting dates is prepared and circulated to the Directors before the commencement of each calendar year to allow Directors to plan ahead to attend such meetings.

Prior to the scheduled meeting, Directors will be provided a structured agenda together with management reports and proposal papers in a timely manner prior to the meeting. All Directors have full and timely access to information through the Board papers distributed in a timely manner prior to the Board meetings. The Board papers provide, among others, periodic financial information, annual budget, operational and corporate issues, investment proposals and Management proposals that require Board’s approval.

Senior management staff may be invited to attend Board meetings to provide the Board detailed explanations and clarifications on certain matters that are tabled to the Board. All Directors have unrestricted access to information with the Group. The Directors may interact directly with the Management, or request further explanation, information or updates on any aspect of the Company’s operations or business concerns from them. In this way the Board has full access to all information on the Company’s affairs to enable the proper discharge of duties.


(CONT’D)


All deliberations and decisions made at the Board meetings are recorded by the Company Secretaries including whether any Directors abstained from voting or deliberating on a particular matter. Minutes of the meeting are circulated to the Board and the Management for review and comments in a timely manner before the minutes of the last Board meeting are confirmed at the next Board meeting.

The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles and responsibilities as Directors of the Company.

For the financial year ended 28 February 2019, the Board held five (5) meetings. The attendance record of the Directors for the financial year ended 28 February 2019 was satisfactory. This is evidenced by the attendance record of the Directors at the Board meetings as set out in the below table:-

Attendance duringtenureDirectors inoffice

1. Dato’ Sri Adam Sani bin Abdullah 5/52. TengkuAbdulRahmanIbniSultanHajiAhmadShah 3/3 Al-Mustain Billah, DK II., SSAP (Retired on 28.08.2018) 3. Jeneral Tan Sri Dato’ Sri Abdullah bin Ahmad @ Dollah bin Amad (B) 5/54. Dato’ Woo Hon Kong 5/55. MohdSharifbinHjYusof 5/56. Ong Bok Siong 5/57. Lee Sze Siang 5/58. Dato’SriRobinTanYeongChing 4/59. Tan Thiam Chai 5/510. TuanHajiMohdJaffarbinAwang(Ismail) 5/511. RajaDato’ShaharudinShahbinRajaJalilShah(Appointed on 13.06.2018) 3/3

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


• There is demarcation of responsibilities between the board, board committees andmanagement.

• Thereisclarityintheauthorityoftheboard,itscommitteesandindividualdirectors.

2.1 BoardCharter

The Board understands the importance of the roles and responsibilities between the Board and Management. As part of the good corporate governance process, the Board has documented these roles and responsibilities in the Board Charter to ensure accountability of both parties and also to provide reference for Directors in relation to the Board’s role, powers, duties and functions.

The Board reviews the Board Charter periodically, when necessary, to ensure it remains relevant and effective at the prevailing time and business environment. The revised Board Charter was reviewed and approved by the Board on 26 April 2018 to re-align the existing governance policies in the Company with the good standard of corporate governance practices prescribed by MCCG and Listing Requirements, where possible or relevant.



The Board Charter clearly sets out the functions, responsibilities, and processes of the Board and ensures that all Board members are aware of their roles and duties. In order to ensure that the direction and control of the Group are in the hands of the Board, it had adopted a formal schedule of matters reserved for the Board’s deliberation and decision which is set out in the Board Charter.

The Board Charter is available on the Company’s website at www.atlan.com.my.


• TheBoardiscommittedtopromotinggoodbusinessconductandmaintainingahealthycorporateculturethatengendersintegrity,transparencyandfairness.

• TheBoard,management,employeesandotherstakeholdersareclearonwhatisconsideredacceptablebehaviourandpracticeinthecompany.

3.1 CodeofConduct

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

The Board of Directors conducts themselves in an ethical manner while executing their duties and functions and comply with the Company’s Code of Conduct and Ethics.

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

The Company’s Code of Conduct and Ethics is available on the Company’s website at www.atlan.com.my.

3.2 WhistleblowingPolicy

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

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

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

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

The whistleblowing policy is published on the Company’s website at www.atlan.com.my.


(CONT’D)


PRINCIPLE A: PART 2 - BOARD COMPOSITION


• Boarddecisionsaremadeobjectively in thebest interestsof thecompany taking intoaccountdiverseperspectivesandinsights.

4.1 Boardcomposition

The Board currently comprises of five (5) Independent Non-Executive Directors including a Senior Independent Director out of total ten (10) Directors in the Board. Therefore, the following prescribed requirements have been fully complied by the Board: -

• Paragraph3.04(1)oftheListingRequirementswhichstipulatesthatatleast2directorsor1/3 of the board of directors, whichever is the higher, are independent directors; and

• Practice4.1oftheMCCG,whereatleasthalfoftheboardcomprisesIndependentDirector

The Independent Non-Executive Directors of the Company are independent of management and free fromanybusinessrelationshipwhichcouldmateriallyinterferewiththeexerciseoftheirjudgment.Theyprovideguidance,unbiased,fullybalancedandindependentviews,adviceandjudgmentto many aspects of the Group’s strategy so as to safeguard the interests of minority shareholders and to ensure that the highest standards of conduct and integrity were maintained by the Group.

The Board places great importance on its Independent Directors where they serve as an essential source of impartial and professional guidance to protect the interest of the shareholders. The Independent Non-Executive Directors are professionals of high calibre and credibility who play a pivotal role in corporate accountability by contributing their knowledge, advice and experience towardsmaking independent judgment on issues of strategies, performance, resources andstandards of conducts.

Any material and important proposals that will significantly affect the policies, strategies, directions andassetsoftheGroupwillbesubjecttoapprovalbytheBoard.NoneofthemembersoftheBoardhas unfettered powers of decision. All Independent Non-Executive Directors do not participate in the day-to-day management of the Group and do not engage in any business dealing or other relationship with the Group.

The Board is satisfied that the Independent Directors represent the interest of public shareholders in theCompanyandtheBoardhasappointedEn.MohdSharifbinHjYusofastheSeniorIndependentNon-Executive Director and any concerns from the shareholders can be conveyed to the said Senior Independent Non-Executive Director.

4.2 Tenureofindependentdirector

The Board is mindful that the recommendation in MCCG, the tenure of an independent director does not exceed a cumulative term limit of nine (9) years. Upon completion of the nine (9) years, an independent director may continue to serve on the board as a non-independent director. If the Boardintendstoretainanindependentdirectorbeyondnine(9)years,itshouldjustifyandseekannual shareholders’ approval.

The Board is also mindful of Practice 4.2 of the MCCG which require the Board to seek annual shareholders’ approval through a two-tier voting process. If the Board continues to retain the independent director after the twelfth year, the Board should seek annual shareholders’ approval through a two-tier voting process.



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

In ascertaining the independence status of the Directors, the Board continues to believe that tenure should not form part of the assessment criteria. It is of the view that the fiduciary duties of Directors are the primary concern of all Directors, regardless of their status. The Board firmly believes that the ability of a Director to serve effectively is dependent on his/her calibre, qualification, experience and personalqualities,particularlyhis/herintegrityandobjectivity.Italsobelievestherearesignificantadvantages to be gained from long-serving Directors who possess insight and knowledge of the Company’s business and affairs in view of the continuous challenges faced by the Company.

Currently, the longestserving IndependentDirector isEn.MohdSharifbinHjYusofwhohaveserved the Board for more than 10 years.

Both the Nomination Committee and the Board have on 25 April 2019 assessed the independence

ofEn.MohdSharifbinHjYusofandaresatisfiedwithhisskills,contributionand independentjudgments. Besides, En.MohdSharif binHj Yusof remained objective and independent inexpressing his views and in participating in deliberation and decision making of the Board and Board Committees. His length of service on the Board does not in any way interfere with his exercise ofindependentjudgementandabilitytoactinthebestinterestsoftheCompany.Inaddition,En.MohdSharifbinHjYusofhasindividuallyconfirmedanddeclaredinwritingthatheisIndependentDirector and he has satisfied all the criteria of an Independent Director as set out in Paragraph 1.01 of the Listing Requirements.

In line with the Practice 4.2 of the MCCG, the Company will be seeking its shareholders’ approval at this forthcoming 30thAnnualGeneralMeeting(“AGM”)toretainEn.MohdSharifbinHjYusofasindependent director of the Company.

4.3 DiversityofBoardandSeniorManagement

The Company does not practise any form of gender, ethnicity and age group biasness as all candidates for either Board or Senior Management team shall be given fair and equal treatment.

The Board believes that there is no detriment to the Company in not adopting a formal gender, ethnicity and age group diversity policy as the Company is committed to provide fair and equal opportunities and nurturing diversity within the Group.

Notwithstanding with the above, the Board affirms its commitment to boardroom diversity as a truly diversified board can enhance the board’s effectiveness, perspective, creativity and capacity to thrive in good times and to weather the tough times.

In identifying suitable candidates for appointment to the Board, the Nomination Committee will considercandidatesonmeritagainstobjectivecriteriaandwithdueregardfor thebenefitsofdiversity on the Board.

4.4 Genderdiversity

As mentioned above, the Board did not set specific targets on gender diversity for the Company but endeavour to improve the number of women directors on the Board, based on pre-determined skill sets and competencies.


(CONT’D)


4.5 Boardappointment

The Board is responsible for the appointment of new Directors, the Nomination Committee is delegated with the role of screening and conducting an initial selection, which includes an external search, before making a recommendation to the Board. Nomination Committee has the authority to obtain the services of professional recruitment firms to source for candidates for directorship or seek independent professional advice whenever necessary.

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

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

• TorecommendtotheBoard,candidatesforalldirectorshipstobefilledbytheshareholdersorthe Board. In making its recommendation, the Committee should consider the candidate’s: -i) Skills, knowledge, expertise and experience;ii) Competencies, commitment, contribution and performance;iii) Professionalism;iv) Integrity; andv) In the case of the candidates for the position of independent non-executive directors,

the Nomination Committee should also evaluate the candidate’s ability to discharge such responsibilities/ functions as expected from independent non-executive directors

• Toconsider,inmakingrecommendations,candidatesfordirectorshipsproposedwithinthebounds of practicability, by any senior executive or any director or shareholder

• ToensuretheboardcompositionmeetstheneedsoftheCompany• Todevelop,maintainandreviewthecriteriatobeusedintherecruitmentprocessandannual

assessment of directors• TorecommendtotheBoard,directorstofilltheseatsonBoardCommittees• To review its requiredmix of skills and experience and other qualities, including core

competencies which directors of the Company should bring to the Board• ToannuallyassesstheeffectivenessoftheBoardasawholeandassessthecontributionof

each individual director, including independent non-executive directors, as well as the chief executive officer

• Toreviewthere-appointmentandre-electionofdirectorsoftheCompany• Tofacilitateboardinductionandtrainingprogrammes• ToreviewthetermofofficeandperformanceofARMCandeachofitsmembersannually

4.6 NominatingCommittee

The Nomination Committee of the Company comprises exclusively of Non-Executive Directors, a majorityofwhomareIndependentDirectors.TheNominationCommitteeischairedbytheSeniorIndependent Director. Its composition is as follows: -

Position Name Directorship Chairman En.MohdSharifbinHjYusof SeniorIndependentand Non-Executive Director Member Dato’ Sri Adam Sani bin Abdullah Non-Independent and Non-Executive Director Member TuanHajiMohdJaffarbinAwang(Ismail) Independentand Non-Executive Director



En.MohdSharifbinHjYusofasaSeniorIndependentandNon-ExecutiveDirectoroftheCompanywas appointed as the Chairman of Nomination Committee on 26 April 2018.

En.MohdSharifbinHjYusofwasappointedbytheBoardastheSeniorIndependentDirectorbased on his experience with the Board and strong comprehension of the Company’s governance issues. His collective tenure in the Company accords familiarity on the workings of the Board and its individual members. He is respected by the other Board members as he has consistently conscientious in preserving the interest of the Company first and foremost throughout his tenure as director.

In line with the amendment of Listing Requirements, the Terms of Reference of the Nomination Committee has been revised and updated on 26 April 2018.

The Nomination Committee had undertaken the following activities for the financial year 2019:-

(i) Facilitated the self and peers’ assessment on ARMC members;(ii) Reviewed the effectiveness of the ARMC as a whole;(iii) Reviewed the effectiveness of the individual directors, the Board as a whole;(iv) Annual review of the composition of the Board and all Board Committees having regard to the

mix of skills, character, experience, integrity, competence and time commitment rendered;(v) Reviewed the independence of Independent Directors;(vi) Reviewed the required mix of skills, experience and other qualities of the Board; and(vii) Reviewed and recommended to the Board, the re-election of the directors who will be retiring

at the forthcoming AGM of the Company.

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

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

• TheNewMalaysianCodeofCorporateGovernance(MCCG)–Aparadigmshifttoraisethebar of corporate governance

• PwC–SalesandServiceTax(“SST”)Briefing• ForbesAsiaForum,Singapore:ThenextTycoons–AGenerationEmerges• CGSession:MCCGReporting&CGGuide• LHAGTax,SST&CustomsSeminar2018• Gaining&edgeviaanalyticsinanM&AtransactionbyErnst&Young• EconomicOutlook&Opportunities for business (ByHonGrantRobertsonNewZealand

Minister of Finance and Minister for Sports & Recreation)• NationalTaxSeminar2018(byLHDN)• BerjayaBudgetWorkshop(byGroupTax)• VoluntaryTaxDisclosure(byLHAG)

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

During the financial year 2019, the Directors were updated on the amendments to the Listing Requirements.

Upon review, the Board concluded that the Directors’ Trainings for the financial year 2019 were adequate.


(CONT’D)




• Stakeholdersareabletoformanopinionontheoveralleffectivenessoftheboardandindividualdirectors.

5.1 AnnualassessmentoftheDirectors,BoardasawholeandBoardCommittees

The Nomination Committee is required to assess the Board’s effectiveness in terms of its composition, roles and responsibilities, and whether the Board Committees have discharged their functions and duties in accordance with the terms of reference. The Nomination Committee assesses on annual basis the composition of the Board to ensure that the Board has the appropriate mix of expertise and experience, and collectively possesses the necessary core competencies for effective functioning and informed decision making. All assessments and evaluations carried out by the Nomination Committee in discharging its functions have been well documented.

During the financial year 2019, the Nomination Committee conducted an annual assessment of its Directors and the effectiveness of the Board of Directors as a whole in terms of Board mix and composition, quality of information and decision making, boardroom activities and Board’s relationshipwithmanagement.ItalsoconductedanassessmentoftheDirectorswhoaresubjectto retirement at the forthcoming 30th AGM in accordance with the provisions of the Constitution of the Company and the relevant provisions of the Companies Act, 2016. Upon recommendation by the Nomination Committee of the proposed re-election of the relevant directors, the Board had recommended and supported the re-election of the relevant Directors to be tabled at the 30th AGM for shareholders’ approval.


• Thelevelandcompositionofremunerationofdirectorsandseniormanagementtakeintoaccountthecompany’sdesiretoattractandretaintherighttalentintheboardandseniormanagementtodrivethecompany’slong-termobjectives.

• Remunerationpoliciesanddecisionsaremadethroughatransparentandindependentprocess.

6.1 RemunerationPolicy

In general, the remuneration is structured so as to link rewards to corporate and individual performance, as in the case of the Executive Director and Senior Management. As for the Non-Executive Directors, the level of remuneration reflects the experience and level of responsibilities undertaken individually by the Director concerned.

The Board does not have any formal remuneration policy. Notwithstanding that, in determining the remuneration packages of Executive Director and Senior Management, the Remuneration Committee has considered the compensation and benefits which commensurate with the level of the Executive Director and Senior Management’s responsibilities and performance, as well as taking into consideration the Group’s performance relative to the industry. The Executive Director is not entitled to annual fee or allowance nor he is entitled to receive any meeting allowances for the Board and Board Committees Meetings he attends.

The Board collectively determines the remuneration for the Non-Executive Director to ensure the same is appropriately reflective of experience and the level of responsibilities and contributions including the number of the scheduled meetings for the Board, board of subsidiaries and Board committees; and competitive compared with the prevalent market practices. Each of the Non-Executive Directors abstains from deliberating and voting on his own remuneration.


For the financial year 2019, the Remuneration Committee had performed its duty to assess annually the remuneration package of its Executive Director and Senior Management.

In addition, the Remuneration Committee had also deliberated on the Directors’ fees for the financial yearended28February2019whichissubjecttotheshareholders’approvalattheforthcomingAGM. Further to the deliberations, the Remuneration Committee had reported to the Board its recommendation and findings.

6.2 RemunerationCommittee

The Remuneration Committee of the Company comprises of all Non-Executive Directors and majorityofwhomareIndependentDirectors.Itscompositionisasfollows:

Position Name Directorship Chairman Dato’ Sri Adam Sani bin Abdullah Non Independent and Non-Executive Director Member Jeneral Tan Sri Dato’ Sri Abdullah bin Independent and Ahmad @ Dollah bin Amad (B) Non-Executive Director Member TuanHajiMohdJaffarbinAwang(Ismail) Independentand Non-Executive Director

The Remuneration Committee is primarily responsible for recommending the policy and framework of the remuneration of the directors and senior management, including the terms and remuneration of the executive director(s), to the Board in order to align with the business strategy and long-term objectivesoftheCompany.Theremunerationofdirectorsandseniormanagementisdeterminedat levels which enable the Company to attract and retain directors and senior management with the relevant experience and expertise to govern the Group effectively.

In line with the amendment of Listing Requirements and MCCG, the Terms of Reference of Remuneration Committee has been revised and updated by the Board on 26 April 2018.


• Stakeholders are able to assesswhether the remuneration of directors and seniormanagementiscommensuratewiththeirindividualperformance,takingintoconsiderationthecompany’sperformance.

7.1 DetailsoftheremunerationofDirectors

Pursuant to Section 230 of the Companies Act 2016, the fees of the Directors and any benefits payable to the directors of a listed company and its subsidiaries shall be approved by a general meeting.

Forthefinancialyearended28February2019(“FY2019”),theBoardofDirectorsdecidedthattheDirectors’feesforFY2019bemaintainedasthepreviousfinancialyearforeachDirectorandrecommended to the shareholders’ approval at the forthcoming 30th AGM.

In addition, the Directors are covered under the Directors’ & Officers’ Liability Insurance in respect of liabilities arising from acts committed in their capacity as directors and officers of the Atlan Group as their benefit, provided that such director or officer has not acted negligently, fraudulently or dishonestly, or is in breach of his or her duty of trust.

The relevant resolutions in relation to the Directors’ remuneration payable to the Directors are to be presented to the shareholders for approval at the forthcoming 30th AGM.


(CONT’D)



A summary in named basis of each individual directors of the remuneration of the Director (including benefit-in-kind)intheCompanyforservicesrenderedtotheGroupfortheFY2019isanalysedasfollows: -

COMPANY GROUP Salaries& Benefits Other Fees Fees Allowance Bonus inKind Emolument Total NON-EXECUTIVE DIRECTORS RM RM RM RM RM RM RM

1) Dato’SriAdamSanibinAbdullah* 38,000 113,246 – – – – 151,246 2) TengkuAbdulRahmanIbni 15,000 – – – – – 15,000 SultanHajiAhmadShah Al-Mustain Billah, DKII., SSAP (Retired on 28 August 2018) 3) JeneralTanSriDato’Sri 30,000 – – – – – 30,000 Abdullah bin Ahmad @ Dollah bin Amad (B) 4) Dato’SriRobinTanYeongChing 30,000 – – – – – 30,000 5) Dato’WooHonKong 30,000 – – – – – 30,000 6) RajaDato’ShaharudinShahbin 22,500 – – – – – 22,500 RajaJalilShah (Appointed on 13 June 2018) 7) MohdSharifbinHjYusof 35,000 – – – – – 35,000 8) TanThiamChai 30,000 – – – – – 30,000 9) TuanHajiMohdJaffarbin 30,000 – – – – – 30,000 Awang (Ismail) 10) OngBokSiong** – – 540,000 100,000 – 78,552 718,552

260,500 113,246 540,000 100,000 – 78,552 1,092,298

EXECUTIVE DIRECTOR 1) LeeSzeSiang – – 531,800 160,000 – 82,464 774,264

260,500 113,246 1,071,800 260,000 – 161,016 1,866,562

* Also Non-Executive Chairman of Duty Free international Limited** Also Managing Director of Duty Free international Limited

7.2 RemunerationofSeniorManagement

In determining the remuneration packages of the Senior Management personnel, factors that were taken into consideration included their individual responsibilities, skills, expertise and contributions to the Group’s performance and whether the remuneration packages are competitive and sufficient to ensure that the Group is able to attract and retain executive talents.

The Company believes it may not be in its best interest to disclose the information on the remuneration on a named basis of each member of the Senior Management personnel, having considered the highly competitive human resource environment for personnel with the requisite knowledge, expertise and experience in the Group’s business activities.

The remuneration of the Senior Management personnel is a combination of annual salary, bonus and benefits-in-kind are determined in a similar manner as other management employees of the Group. The basis of determination has been consistently applied and is based on individual performance, the overall performance of the Group and benchmarked against other companies operating in similar industry.


PRINCIPLEB–EFFECTIVEAUDITANDRISKMANAGEMENT

PART 1 - AUDIT COMMITTEE


• ThereisaneffectiveandindependentAuditCommittee.• TheboardisabletoobjectivelyreviewtheAuditCommittee’sfindingsandrecommendations.

Thecompany’sfinancialstatementisareliablesourceofinformation.

8.1 TheChairmanoftheAuditCommitteeisnottheChairmanoftheBoard

The Company complied with the Practice 8.1 of the MCCG which stipulates that the Chairman of the Audit Committee is not the Chairman of the Board.

The ARMC is chaired by a Senior Independent and Non-Executive Director, En. Mohd Sharif bin HjYusof,whoisnottheChairmanoftheBoard.TheChairmanoftheARMCisaFellowMemberof the Institute of Chartered Accountants, England and Wales and an Associate Member of the Malaysian Institute of Accountants.

8.2 Formerauditkeypartner

Practice 8.2 of the MCCG requires the Audit Committee to have a policy that requires a former key audit partner to observe a cooling-off period of at least two years before being appointed as a member of the Audit Committee.

The Terms of Reference of the ARMC has been updated accordingly in order for the ARMC to formalise such policy.

8.3 Suitability,objectivityandindependenceoftheexternalauditor

In accordance with the Terms of Reference of the ARMC, the ARMC, on an annual basis would review and monitor the suitability and independence of the external auditors.

During the year under review, the ARMC members met with the external auditors namely Ernst & YoungtwiceintheabsenceoftheManagement.

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

The ARMC has assessed and is satisfied with the competence and independence of the external auditors and had recommended the re-appointment of the external auditors for shareholders’ consideration at the AGM.

FortheauditoftheFY2019,theARMCreviewedandendorsedcertainnon-auditengagementsprovidedbyErnst&Youngandmonitoredthefeeoftotalnon-auditworkcarriedoutbythemwiththemainobjectiveofensuringtherewasnoimpairmentofindependencyorobjectivity.Thetotalamount of fees paid for non-audit services rendered by the Group to external auditors for the financial year 2019 were RM217,000 only.


(CONT’D)



8.4 QualificationoftheAuditCommittee

All ARMC members are financially literate and its composition and performance are reviewed by the Nomination Committee annually and recommended to the Board for its approval.

Two (2) of the ARMC members are the members of the Malaysian Institute of Accountants (“MIA”) thus fulfilling the requirement under Paragraph 15.09(1)(c)(i) of the Listing Requirements which requires at least one (1) of the Audit Committee members to be a member of the MIA.

ARMC members acknowledge the need for continuous education trainings, however, for the year under review, some members of the ARMC attended training on the developments in accounting and auditing standards, practices and rules.

All ARMC members will attend at least one training in financial year 2020 which is relevant to accounting and auditing standards, practices and rules in enhancing their professional development.

8.5 CompositionoftheAuditCommittee

The ARMC comprises four (4) Non-Executive Directors, of whom three (3) are Independent Directors.

This is in compliance with Paragraph 15.09(1)(c) of the Listing Requirements, which stipulates that “alltheauditcommitteemembersmustbenon-executivedirectors,withamajorityofthembeingindependent directors”

In terms of the Step-Up Practice 8.4 of the MCCG which recommends that the Audit Committee should comprise solely of Independent Directors, the Company do not intend to adopt such step-up practice for the time being.

PRINCIPLEB:PART2-RISKMANAGEMENTANDINTERNALCONTROLFRAMEWORK


• Companiesmakeinformeddecisionsaboutthelevelofrisktheywanttotakeandimplementnecessarycontrolstopursuetheirobjectives.

• Theboard isprovidedwith reasonableassurance that adverse impact arising fromaforeseeablefutureeventorsituationonthecompany’sobjectivesismitigatedandmanaged.

9.1 Establishmentofriskmanagementandinternalcontrolframework

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

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

The Company has established the Risk Management Team which is under the purview of the ARMC to oversee the risk management of the Group. The Risk Management Framework was adopted by the Directors. The Board through the ARMC would obtain report from the internal auditors on the periodic check on the internal control system.


9.2 Featuresofitsriskmanagementandinternalcontrolframework

The details of the Company’s internal control system and framework are set out in the Statement on Risk Management and Internal Control on pages 71 to 73 of this Annual Report.

9.3 RiskManagementCommittee

This practice is not adopted by the Company. The function of Risk Management Committee is currently assumed by the ARMC.


• Companieshaveaneffectivegovernance,riskmanagementandinternalcontrolframeworkandstakeholdersareabletoassesstheeffectivenessofsuchaframework.

10.1 Internalauditfunction

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

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

In order to maintain sound systems of internal controls, the Board has established an Audit & Risk Assessment (“ARA”) department, which is completely independent from all operations to monitor and review the effectiveness of the internal controls within the organisation. The scope of work covered by the internal audit function during the financial year set out on pages 68 to 70 of this Annual Report.

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

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

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

During the financial year, the ARA department has presented its internal audit reports to ARMC andManagement in regards toanymajorauditfindingon theweaknesses in thesystemandcontrols of the operation. Areas for improvement were highlighted and the implementation of recommendations was monitored. None of the internal control weaknesses have resulted in any material losses, contingencies or uncertainties that would require disclosure in the Annual Report.

ThetotalcostsoftheinternalauditfunctioninrespectoftheFY2019wasapproximatelyRM781,000. As of 28 February 2019, the ARA department consists of eight (8) audit personnel and are led by

two (2) Co-Head of ARA, namely Mr. Chong Wee Siong, John, and Ms. Koo Lee Theng.


(CONT’D)



Mr. Chong Wee Siong, John, who holds a Bachelor of Science in Applied Accounting and is a Fellow Member of the Association of Chartered Certified Accountants (“FCCA”). He is also CIA and CRMA certified from the Institute of Internal Auditors (“IIA”).

Ms. Koo Lee Theng is a Chartered Accountant of the Malaysian Institute of Accountants (MIA), a member of Certified Practising Accountant of Australia (CPA), The Malaysian Institute of Certified Public Accountants (MICPA) and The Institute of Internal Auditor Malaysia (IIA).

None of the internal audit personnel had any relationship or conflict of interest that could impair theirobjectivityandindependenceinconductingtheirinternalauditfunctions.TheARADepartmentprovides the ARMC with reasonable assurance on the adequacy and integrity of the Group’s internal control systems.

PRINCIPLE C – INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITHSTAKEHOLDERS

PART1-COMMUNICATIONWITHSTAKEHOLDER


• Thereiscontinuouscommunicationbetweenthecompanyandstakeholderstofacilitatemutualunderstandingofeachother’sobjectivesandexpectations.

• Stakeholdersareable tomake informeddecisionswithrespect to thebusinessof thecompany,itspoliciesongovernance,theenvironmentandsocialresponsibility.

11.1 Effective,transparentandregularcommunicationwithitsstakeholders

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

The Company continues to recognise the importance of transparency and accountability to its shareholders and investors. The Board always ensures that the shareholders are informed of thefinancialperformanceandmajorcorporateactivitiesof theCompany.Such information iscommunicated to shareholders and investors through various disclosures and announcements to Bursa Securities, including the quarterly financial results, annual reports and where appropriate, circulars and press releases.

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

Investor relations activities such as meetings with fund managers and analysts and interviews bythepressareheldatappropriatetimetoexplaintheGroup’sstrategy,performanceandmajordevelopments.


In maintaining the commitment to effective communication with shareholders, the Group adopts the practice of comprehensive, timely and continuing disclosures of information to its shareholders as wellastothegeneralinvestingpublic.Thepracticeofdisclosureofinformationisnotjustestablishedto comply with the requirements of the Listing Requirements. It also adopts the recommendations of the MCCG with regard to strengthening engagement and communication with shareholders. Where possible and applicable, the Group also provides additional disclosure of information on a voluntary basis. The Group believes that consistently maintaining a high level of disclosure and extensive communication with its shareholders is vital to shareholders and investors to make informed investment decisions.

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

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

PRINCIPLE C : PART 2 - CONDUCT OF GENERAL MEETINGS


• Shareholdersareabletoparticipates,engagetheboardandseniormanagementeffectivelyandmakeinformedvotingdecisionsatGeneralMeetings.

12.1 NoticeforanAnnualGeneralMeeting

General meeting serves as a principal platform for the Board and Senior Management to engage with shareholders and encourage effective shareholders’ communication on the Company’s performance, corporate and business developments and any other matters affecting shareholder interests. The Company Secretaries, by order of the Board, served a notice of AGM to all shareholders of the Company at least 28 days prior to its forthcoming 30th AGM to provide the shareholders sufficient time to consider the proposed resolutions that will be discussed and decided at the 30th AGM. Notice of the 30th AGM clearly sets out details of the resolutions proposed accompanying with explanatory notes on the rationale of each resolution to enable the shareholders to make informed decision in exercising their voting rights.

The notice of an AGM also provides information to the shareholders with regard to, amongst others their entitlement to attend the AGM, the right to appoint a proxy and also the qualifications of a proxy.

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


(CONT’D)



12.2 AttendanceinGeneralMeetings

The general meeting also serves as an avenue for the Chairman and the Board members to engage in a two-way communication with shareholders where the shareholders are encouraged to participate in the question-and-answer session with the Board personally and exercise their right to vote on the proposed resolutions. The Board will ensure that all Board members, particularly the chairperson of each Board Committee will make their endeavours to attend general meeting to facilitate engagement with shareholders and to address any relevant questions and concerns raised by the shareholders. The external auditors will be present at the AGM to respond to any queries from shareholders on the audit conducted, the preparation and content of the auditors’ report, the accounting policies adopted by the Company, and the independent audit review of the Company’s financial position.

12.3 Voting

The Company’s General Meeting is not held in a remote location. The Company has adopted manual polling for its 2018 AGM. As for voting in absentia and remote shareholders’ participation, the existing proxy form authorizing proxies or Chairman of meeting is an alternative measure adopted by the Company.

Shareholders are allowed to appoint any person(s) as their proxies to attend, participate, speak and vote in his/her stead at a general meeting.

Practice 12.3 of MCCG encouraged listed companies with a large number of shareholders of which have meetings in remote locations should leverage technology to facilitate: -

• Votinginabsentia;and• Remoteshareholders’participationatGeneralMeetings.

AsalistedentityonBursaSecuritiesinMalaysia,theBoardnotedthatmajorityoftheshareholdersof the Company reside in Malaysia and predominantly in either Penang or Kuala Lumpur. Therefore, the general meetings of the Company have always been held in Penang or Kuala Lumpur.

COMPLIANCE STATEMENT

The Board is satisfied that to the best of its knowledge, the Company is substantially in compliance with the principles and practices set out in the MCCG as well as the relevant Listing requirements for the financial year 2019. Any practices in the MCCG which have not been implemented during the financial year will be reviewed by the Board and implemented where possible and relevant to the Group’s business.

This Statement is made in accordance with the resolution of the Board dated 13 June 2019.


ADDITIONAL COMPLIANCE INFORMATION

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

1. UtilisationofProceeds

During the financial year ended 28 February 2019, the Company did not raise any funds through any corporate proposal/shareholders’ mandate under Sections 75 and 76 of the Companies Act, 2016.

2. AuditandNon-AuditFees

Audit fees paid to external auditors by the Company and by the Group for the financial year ended 28 February 2019 amounted to RM70,000 and RM1,346,000 respectively.

Non-audit fees paid to external auditors by the Company and by the Group for the financial year ended 28 February 2019 amounted to RM88,000 and RM217,000 respectively.

The non-audit fees breakdown for the Company amounting to RM88,000 are as follows:-

RM

Advisory Services on Sustainability Reporting 77,000Reviewing Statement on Risk Management and Internal Control 11,000

Total: 88,000

In considering the nature and scope of non-audit fees, the ARMC is satisfied that they are not likely tocreateanyconflictorimpairtheindependenceandobjectivityoftheexternalauditors.

3. MaterialContracts InvolvingDirectors’,ChiefExecutivewho isnotaDirectorandMajorShareholders’Interests

Other than those related party transactions as disclosed in Note 37 to the financial statements, there were no material contracts entered into by the Company and its subsidiaries involving directors’, chiefexecutivewhoisnotadirectorandmajorshareholders’interests,eitherstillsubsistingattheend of the financial year or entered into since the previous financial year end.


AUDIT AND RISK MANAGEMENT COMMITTEE REPORT

The Audit and Risk Management Committee (“ARMC”) of the Company was established to serve as a committee of the Board of Directors of the Company (“the Board”) and to assist the Board in fulfilling its statutory duties and fiduciary responsibilities.

The ARMC comprises the following members: -

Position Name Directorship

Chairman MohdSharifBinHjYusof SeniorIndependent Non-Executive Director

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

Member Tan Thiam Chai Non-Independent Non-Executive Director

EncikMohdSharifBinHjYusofandMr.TanThiamChaiarethememberoftheMalaysianInstituteofAccountants. Accordingly, the Company complies with Paragraph 15.09 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements”). None of the ARMC members are alternate Director.

ATTENDANCE

TheARMCmetfive(5)timesduringthefinancialyearended28February2019(“FY2019”).Detailsofthe attendance of the Committee members holding office during the financial year are as follows: -

Members AttendanceatMeeting MohdSharifBinHjYusof 5/5Jeneral Tan Sri Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad (B) 5/5Tan Thiam Chai 5/5TuanHajiMohdJaffarBinAwang(Ismail) 5/5

AUTHORITYANDDUTIESOFTHEAUDITANDRISKMANAGEMENTCOMMITTEE

The ARMC is governed by its terms of reference, which is available on the Company’s website at www.atlan.com.my.


AUDIT AND RISK MANAGEMENT COMMITTEE REPORT

(CONT’D)

SUMMARYOFACTIVITIESOFTHEAUDITANDRISKMANAGEMENTCOMMITTEE

TheactivitiesoftheARMCfortheFY2019areasfollows:-

(i) FinancialPerformanceandReporting

• ReviewedquarterlyfinancialresultsoftheGroupforFY2019presentedbytheManagementbefore recommending to the Board for their consideration and approval;

• ReviewedwiththeexternalauditorstheannualauditedfinancialstatementsoftheCompanyand of the Group to ensure the said audited financial statements were drawn up in accordance with the relevant legislation and the applicable approved accounting standards before recommending to the Board for their consideration and approval; and

• Reviewedanddeliberatedonauditissuesraisedbytheexternalauditorsandtheactionplansrequired to address those issues.

(ii) InternalAudit(“IA”)

• ReviewedandapprovedtheannualIAplanpresentedbytheinternalauditorsafterbeingsatisfied with the contents’ suitability, adequacy and scope of coverage;

• Reviewed the IA reports, which highlighted the audit issues, recommendations andmanagement’s responses;

• Reviewedthefollowupreportsbytheinternalauditorsonthestatusofactionstakenbythemanagement on recommendations suggested in the IA reports;

• Discussedwiththemanagementonactionstakentoimprovethesystemsofinternalcontrolbased on the recommendations and findings identified in the IA reports and made necessary recommendations to the Board for approval;

• Assessand facilitate the introductionofnewaudit teammembers in theAuditandRiskManagement Assessment (“ARA”) Department; and

• Evaluatedtheeffectivenessandindependenceoftheinternalauditfunctionincarryingoutits responsibilities in respect of risk management, internal control, and governance.

(iii) Externalauditors

• ReviewedanddiscussedwiththeexternalauditorstheirAuditPlanandscopeofworksforthe financial year;

• MettwicewiththeexternalauditorswithoutthepresenceoftheManagementteamtodiscussissues of concern to the external auditors arising from the annual statutory audit;

• Reviewed the results of the audit,management letter togetherwith themanagement’sresponses and comments to the findings; and

• Evaluatedtheperformanceoftheexternalauditorsforthefinancialyearunderreviewcoveringareas such as calibre, quality processes, audit team experience, audit scope, audit governance and independence as well as audit fees of the external auditors. The Group’s external auditors also confirmed their independence and the ARMC having been satisfied with the independence,stabilityandperformanceofMessrs.Ernst&Young,maderecommendationsto the Board for approval on the re-appointment of the external auditors.


(iv) CorporateGovernance

• Reviewed the impactof the relevant regulatorychangesandensuredcomplianceby theCompany and the Group;

• ReviewedandrecommendtheReportoftheARMCandStatementofRiskManagementandInternal Control for inclusion in the Annual Report to ensure the contents therein are accurate and in compliance with the Listing Requirements to the Board for approval;

• ReviewedtheTermsofReferenceofARMCtoensureitisinlinewiththeMalaysianCodeofCorporate Governance and Listing Requirements to the Board for approval; and

• ReviewedthedividendpaymentproposedbytheManagementandtheresultsofthesolvencytest performed on the Group pursuant to Section 132(3) of the Companies Act, 2016.

(v) RiskManagement

• Reviewed and endorsed the riskmanagement frameworks, guidelines and other keycomponents of risk management for implementation within the Company and throughout the Group; and

• Reviewedtheprogressofongoingriskmanagementactivitiestoidentify,evaluate,monitorand manage critical risks.

INTERNAL AUDIT FUNCTION

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

The IA activities are specified in the annual audit plan, which is submitted to the ARMC for approval. IA reports with findings and recommendations are forwarded to the ARMC for their review.

TheactivitiescarriedoutbytheInternalAuditorsforFY2019include:-

• ConductedauditreviewsoftheGroup’ssystemofinternalcontrolsonreliabilityandintegrityoffinancial and operational information, safeguarding of assets, efficiency of operations, compliance with established policies as well as procedures and statutory requirements;

• ProvidedrecommendationstotheManagementtoassisttheoperationsmanagementandGroupin improving and accomplishing internal control requirements;

• PresentedtheinternalauditreporttotheARMConaquaterlybasis;and

• Performedfollow-upreviewstoensurethatcorrectiveactionswereimplementedeffectively.

For the financial year under review, the total costs incurred by the Group for maintaining the IA functions are RM781,000.

This Statement is made in accordance with the resolution of the Board dated 13 June 2019.

AUDIT AND RISK MANAGEMENT COMMITTEE REPORT(CONT’D)


STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

PREAMBLE

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

RESPONSIBILITY

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

However, it should be noted that such system is designed to manage rather than eliminate the risk of failuretoachievebusinessobjectivesandcanonlyprovidereasonableandnotabsoluteassuranceagainstmaterial misstatement loss and fraud. For the purpose of this statement, the associated company is not dealt with as part of the Group.

INTERNAL CONTROL SYSTEMS

TheembeddedcontrolsystemisdesignedtofacilitateachievementoftheGroup’sbusinessobjectives.It comprises the following: -

• OrganisationalStructure

The organisational structure has well-defined lines of responsibility, delegation of authority, segregationofdutiesandinformationflowtosupporttheGroupinachievingitsbusinessobjectives.

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

• AuditandRiskManagementCommittee

The ARMC convenes its meeting regularly to meet their strategic business agenda, thus ensuring that the Board properly apprised and maintains effective supervision over the entire operations.

• ControlActivities

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

• BudgetingandMonitoringProcesses

The Group has in place budgeting process for all operating units with periodical monitoring of performancesothatmajorvariancesarefollowed-upandManagementactiontaken.


• ManagingandMonitoringofCapitalandRevenueExpenditure

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

Detailed justificationandapprovalprocess formajorprojectsandacquisitionsare imposedtoensurecongruencewithCompany’sstrategicobjectives.

• InformationandCommunicationControls

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

• IndependentAuditing

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

RISKMANAGEMENT

The Board acknowledges that risk management is an integral part of the Group business operations. It is an ongoing process which involves different levels of managements to identify, assess, evaluate, monitor, manage and mitigate the risks that may affect the achievement of its business and corporate objectives.RegularManagementandoperationalmeetingsareheldtodeliberatesolutionstomitigatekeyrisks.ThisongoingriskmanagementactivitiesareundertakenatallmajorsubsidiariesoftheGroup,as well as collectively at the Group level. The ongoing risk management process is coordinated by the Audit and Risk Assurance Department (ARA) of the Group.

Key elements of the Group’s risk management framework are described below:

• RiskIdentification

Risk identification is performed on an ongoing basis by different levels of management. The respective business units of the Group are the risk owners and are responsible to develop the appropriate risk response strategies.

• RiskAssessment

The Group maintains a risk database together with their corresponding controls, which are categorized below: -

❖ Strategic risk, risk which affect the overall direction of the business.

❖ Operational risk, derived from the inability of internal processes and procedures to address operational failings due to people or systems.

❖ Financial, risk associated with financial reporting and recording of transactions.

❖ Compliance, risk associated in relation to legal, statutory, and corporate governance.

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL(CONT’D)


STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

(CONT’D)

• RiskMitigationProcess

Potential risk were identified by the respective business functions based on relevant knowledge, expertise,andadvice fromsubjectmatterexperts.Thepoliciesandproceduresof theGroupembed internal controls to address and mitigate known risks.

• Reporting&Communication

ARA reports to the ARMC, on a quarterly basis, on any significant changes in the business and external environment, and any updates to key risks in the risk register.

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

INTERNAL AUDIT FUNCTION

The Internal Audit function supports the ARMC, and by extension, the Board, by providing reasonable independent assurance on the effectiveness of the Group’s internal control.

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

The Internal Audit function adopts the risk-based approach when carrying out its internal audit work plan,whichreflects theriskprofileof theGroup’smajorbusinesssectors is routinely reviewedandapproved by the ARMC. The scope of the Internal Audit function covers the audit of all business units and operations.

REVIEWOFADEQUACYOFRISKMANAGEMENTANDINTERNALCONTROL

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

For the financial year ended 28 February 2019, the Board has received assurances from the Executive Director that the Group’s internal controls are adequate and effective in all material aspects.

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

REVIEw BY EXTERNAL AUDITORS

The external auditors have reviewed the statement on risk management and internal control as required by Paragraph 15.23 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. Their review was performed in accordance with Audit and Assurance Practice Guides 3 issued by the Malaysian Institute of Accountants.


STATEMENT OF DIRECTORS’ RESPONSIBILITYIN RESPECT OF THE AUDITED FINANCIAL STATEMENTS

The Directors are required by the Companies Act, 2016 (“Act”) to prepare the financial statements which have been made out in accordance with the provisions of the Act and the applicable approved accounting standards set out by Malaysian Accounting Standards Board so as to give a true and fair view of the state of affairs of the Group and of the Company at the end of each financial year and of their results and cash flows for the financial year.

In preparing the financial statements, the Directors have:-

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

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

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

FINANCIALSTATEMENTS

76DIRECTORS’ REPORT

81STATEMENT BY DIRECTORS

81 STATUTORY DECLARATION

82 INDEPENDENT AUDITORS’ REPORT

87INCOME STATEMENTS

88 STATEMENTS OF COMPREHENSIVE INCOME

89 STATEMENTS OF FINANCIAL POSITION

92 STATEMENTS OF CHANGES IN EQUITY

95 STATEMENTS OF CASH FLOWS

99 NOTES TO THE FINANCIAL STATEMENTS


DIRECTORS’ REPORT

The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 28 February 2019.

Principalactivities

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

The principal activities of the subsidiaries are set out in Note 18 to the financial statements.

Results

Group Company RM’000 RM’000 Profit/(loss) net of tax 59,139 (110,865)

Profit/(loss) attributable to: Owners of the parent 39,896 (110,865) Non-controllinginterests 19,243 –

59,139 (110,865)

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

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

Dividends

The amounts of dividends paid by the Company since 28 February 2018 were as follows:

RM’000In respect of the financial year ended 28 February 2019:

First interim dividend (single-tier) of 10% on 253,650,409 ordinary shares, declared on 12 July 2018 and paid on 16 August 2018 25,365

Second interim dividend (single-tier) of 10% on 253,650,409 ordinary shares, declared on 10 January 2019 and paid on 13 March 2019 25,365

50,730

The directors do not recommend the payment of any final dividend in respect of the financial year ended 28 February 2019.


DIRECTORS’ REPORT(CONT’D)

Directors

The names of the directors of the Company in office since the beginning of the financial year to the date of this report are: Dato’ Sri Adam Sani Bin Abdullah**Dato’SriRobinTanYeongChingJeneral Tan Sri Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad (B)**Dato’ Woo Hon KongTan Thiam Chai MohdSharifBinHajiYusofLee Sze Siang**Ong Bok Siong**TuanHajiMohdJaffarBinAwang(Ismail)RajaDato’ShaharudinShahBinRajaJalilShah (appointedon13June2018)TengkuAbdulRahmanIbniSultanHajiAhmadShahAl-MustainBillah,DKII,SSAP (retiredon28August2018)

** These directors are also directors of certain subsidiaries of the Company.

The names of the directors of the Company’s subsidiaries in office since the beginning of the financial year to the date of this report (not including those directors listed above) are:

General Tan Sri Dato’ Seri Mohd Azumi Bin Mohamed (Retired)Dato’ Megat Hisham Bin Megat MahmudChew Soo LinY.A.M.Dato’SeriSharifahFaziraBtDYMMSyedSirajuddin(F)HoYuetLeng(F)Max Borries Claus HeinemannMarvinChristianVonPlatoDato’ Mohamed Suhaimi Bin SulaimanDatukHajiMohdRadzuanBinAbdullahMasahito AdachiTadayoshi MizukamiDato’ Wong Thien SangMamat Bin SamatRosly Bin AhmadAhmad Shaker Bin AhmadAhmadZubirBinKhalidRajaMuzafarBinRajaHassan



Directors’benefits

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

Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salary of a full-time employee of the Company as shown in Note 7 to the financial statements) by reason of a contract made by the Company or a related corporation with any director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest, except as disclosed in Note 37 to the financial statements.

The Company maintains a liability insurance for the directors and officers of the Group. The total amount of sum insured for the financial year amounted to RM20,000,000.

Directors’interests

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

Numberofordinaryshares 1March 28February 2018 Acquired Sold 2019

HoldingCompanyDistinctContinentSdn.Bhd.

DirectinterestDato’SriAdamSaniBinAbdullah 1 – – 1 DeemedinterestDato’SriAdamSaniBinAbdullah* 999 – – 999

TheCompany

DirectinterestDato’SriAdamSaniBinAbdullah 64,061 – – 64,061

DeemedinterestDato’SriAdamSaniBinAbdullah** 130,255,153 – – 130,255,153

* Disclosure pursuant to Section 59(11)(c) of the Companies Act 2016.

** Deemed interest through shares held in Distinct Continent Sdn. Bhd. and Alpretz Capital Sdn. Bhd., by virtue of Section 8(4) of the Companies Act 2016.

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

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


Holdingcompany

The immediate and ultimate holding company is Distinct Continent Sdn. Bhd., which is incorporated in Malaysia.

Otherstatutoryinformation

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

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

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

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

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

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

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

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

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

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

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

(f) In the opinion of the directors:

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

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



Significantandsubsequentevents

Details of significant and subsequent events are disclosed in Note 43 to the financial statements.

Auditors

Theauditors,Ernst&Young,haveexpressedtheirwillingnesstocontinueinoffice.

Auditors’ remuneration is disclosed in Note 8 to the financial statements.

Totheextentpermittedbylaw,theCompanyhasagreedtoindemnifyitsauditors,Ernst&Young,aspartoftheterms of its audit engagement against claims by third parties arising from the audit (for an unspecified amount). No paymenthasbeenmadetoindemnifyErnst&Youngduringorsincetheendofthefinancialyear.

Signed on behalf of the Board in accordance with a resolution of the directors dated 13 June 2019.

LeeSzeSiang OngBokSiong



STATEMENT byDIRECTORS

PURSUANT TO SECTION 251(2) OF THE COMPANIES ACT 2016

We, Lee Sze Siang and Ong Bok Siong, being two of the directors of Atlan Holdings Bhd., do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 87 to 203 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 28 February 2019 and of their financial performance and cash flows for the year then ended.

Signed on behalf of the Board in accordance with a resolution of the directors dated 13 June 2019.

LeeSzeSiang OngBokSiong

STATUTORyDECLARATION

PURSUANT TO SECTION 251(1)(b) OF THE COMPANIES ACT 2016

I, Lee Sze Siang, being the director primarily responsible for the financial management of Atlan Holdings Bhd., do solemnly and sincerely declare that the accompanying financial statements set out on pages 87 to 203 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the abovenamed Lee Sze Siangat Kuala Lumpur in the Federal Territoryon 13 June 2019. LeeSzeSiang (MIA 16287)

Before me,

HAJJAH JAMILAH ISMAILNo. W626Commissioner for Oaths


INDEPENDENTAuDITORS’ REPORTTO THE SHAREHOLDERS OF ATLAN HOLDINGS bHD

Reportontheauditofthefinancialstatements

Opinion

We have audited the financial statements of Atlan Holdings Bhd. which comprise the statements of financial position as at 28 February 2019 of the Group and of the Company, and income statements, statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 87 to 203.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as at 28 February 2019, and of their financial performance and their 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 2016 in Malaysia.

Basisforopinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independenceandotherethicalresponsibilities

We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.

Keyauditmatters

Keyauditmattersarethosemattersthat,inourprofessionaljudgement,wereofmostsignificanceinourauditofthe financial statements of the Group and of the Company for the current year. These matters were addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditors’ responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis of our audit opinion on the accompanying financial statements.


INDEPENDENTAuDITORS’ REPORT

(CONT’D)

Keyauditmatters(cont’d)

Acquisition of Brand Connect Holding Pte. Ltd.

(Refer to the disclosure on the acquisition of Brand Connect Holding Pte. Ltd. in Note 18(c) to the financial statements.)

In August 2018, the Group acquired a 52% controlling interest in Brand Connect Holding Pte. Ltd (“BCH’). The acquisition of BCH was accounted for using the acquisition method. The Group engaged an independent external valuer to perform the Purchase Price Allocation (“PPA”) exercise as disclosed in Note 18(c) to the financial statements. Aspartoftheacquisition,theGroupgrantedputoptionstotheremainingshareholdersofBCH(“theVendors”),whichgavetheVendorstherighttoselltheirinterestsinBCHtotheGroupundervariousconditions.TheVendorsalso granted call options to the Group, which gave the Group the right to acquire the remaining interest in BCH from theVendorsunderthesametermsoftheputoptions.Weconsideredtheaccountingforthisacquisitiontobeakeyauditmatterasthiswasasignificanttransactionduringtheyearandsignificantjudgementandestimateswereinvolved in the PPA exercise, mainly relating to the identification and measurement of fair value of the identifiable assets and liabilities as well as the measurement of the financial liability relating to the put options.

In addressing this area of focus, we had discussions with the component auditor and reviewed the following procedures performed by the component auditor in respect of the acquisition of BCH which include the following:

• Reviewedthesalesandpurchaseagreementtoobtainanunderstandingofthetransactionsandthekeyterms;

• Assessedthecompetency,capabilitiesandobjectivityoftheexternalvaluerengagedbymanagement;• Corroboratedtheidentificationoftheidentifiableassetsandliabilities,includingintangibleassets,basedon

discussion with management and understanding of the business of BCH;• Involvedinternalspecialiststoassistinthereviewofthevaluationmethodologiesusedbymanagementand

the external valuer in the measurement of fair value of acquired assets and liabilities including the fair value of call and put options;

• Reviewedmanagement’smeasurementofthefinancialliabilityamountoftheputoptions;and• AssessedtheadequacyoftherelateddisclosuresinthefinancialstatementsregardingtheacquisitioninNote

18(c).

Impairment assessment of goodwill

(Refer to the disclosure on goodwill in Note 16 to the financial statements.)

As at 28 February 2019, the Group recorded goodwill of RM27.4 million, which represents 10.9% of the non-current assets and 4.0% of net assets. We considered the audit of management’s annual impairment assessment ofgoodwilltobeakeyauditmatterbecausetheassessmentprocessinvolvedsignificantmanagementjudgement,and is based on assumptions that are affected by future market and economic conditions. Based on the annual impairment testing, management assessed that the goodwill is not impaired.

As disclosed in Note 16 to the financial statements, the goodwill is allocated to three cash-generating units (“CGUs”). TherecoverableamountsoftheCGUshavebeendeterminedbasedonValue-In-Use(“VIU”)calculationsusingcashflowprojectionsapprovedbymanagement.WeassessedthevaluationmethodusedbytheGroupandevaluatedthe key assumptions used in the impairment analysis, in particular the revenue growth rates, budgeted gross margin, discount rateand long-termgrowthrate.Wecheckedthat thecashflowprojectionswerebasedonapprovedmanagement budgets. We reviewed the robustness of management’s budgeting process by comparing previous forecasts to actual results. We evaluated the assumptions used by comparing them to historical data as well as local economic development and industry outlook. For the assumption on renewal of the Group’s duty free license agreement, we inquired with senior management on their historical renewal experience and their assessment of the Group’s ability to renew the agreement. We involved our internal valuation specialist to assess the reasonableness of the discount rate and long-term growth rate used by the Group. We also reviewed management’s analysis of the sensitivityoftheVIUcalculationstochangesintherespectivekeyassumptions.Finally,wereviewedtheadequacyof the disclosures made on the goodwill impairment test in Note 16 to the financial statements.


INDEPENDENTAuDITORS’ REPORT(CONT’D)

Keyauditmatters(cont’d)

Impairment of investments in subsidiary companies

(Refer to the disclosure on investments in subsidiary companies in Note 18 to the financial statements.)

As at 28 February 2019, the market capitalisation of the Company’s listed subsidiary company, Duty Free International Limited (“DFIL”) was lower than the Company’s cost of investment in DFIL, indicating that the carrying amount of the investment in the subsidiary company of RM784.4 million may be impaired. Accordingly, the Company estimated the recoverableamountofthisinvestmentinsubsidiarycompanybasedonValue-in-use(“VIU”)oftheCashGeneratingUnits(“CGU”)underDFIL.EstimatingtheVIUofCGUsinvolvedestimatingthefuturecashinflowsandoutflowsthatwill be derived from the CGUs, and discounting them at an appropriate rate. The Company recorded an impairment of RM194.2 million as a result of its assessment.

Duetothesignificanceoftheamountandsubjectivityinvolvedintheimpairmenttest,weconsideredthisimpairmenttest to be an area of audit focus. Specifically, we focused on the evaluation of assumptions used by management to estimate the recoverable amounts of the CGUs within DFIL which include estimates of the growth rate of revenue, operating costs and terminal value growth rates.

We obtained an understanding of the relevant internal controls over the estimation of the recoverable amount of the CGUs under DFIL. We assessed the valuation method used by the Group and evaluated the key assumptions used in the impairment analysis, in particular the revenue growth rates, budgeted gross margin, discount rate and long-termgrowthrate.Wecheckedthatthecashflowprojectionswerebasedonapprovedmanagementbudgets.We reviewed the robustness of management’s budgeting process by comparing previous forecasts to actual results. We evaluated the assumptions used by comparing them to historical data as well as local economic development and industry outlook. We involved an internal specialist to assist us in assessing the terminal value growth rate and the weighted-average cost of capital discount rate used to determine the present value of the cash flows of CGUs and whether the rate used reflects the current market assessments of the time value money.

Informationotherthanthefinancialstatementsandauditors’reportthereon

The directors of the Company are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements of the Group and of the Company and our auditors’ report thereon. We have obtained the Directors’ Report prior to the date of this auditors’ report. The remaining other information expected to be included in the annual report are expected to be made available to us after the date of this auditors’ report.

Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

When we read the remaining other information expected to be included in the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to the directors of the Company and take appropriate action.


Responsibilitiesofthedirectorsforthefinancialstatements

The directors of the Company are responsible for the preparation of financial statements of the Group and of the Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements of the Group and of the Company, the directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

Auditors’responsibilitiesfortheauditofthefinancialstatements

OurobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsoftheGroupandoftheCompany as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing,weexerciseprofessionaljudgementandmaintainprofessionalscepticismthroughouttheaudit.Wealso:

• IdentifyandassesstherisksofmaterialmisstatementofthefinancialstatementsoftheGroupandoftheCompany, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditproceduresthatareappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Company’s internal control.

• Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesand related disclosures made by the directors.

• Concludeontheappropriatenessofthedirectors’useofthegoingconcernbasisofaccountingand,basedon the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s or the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group or the Company to cease to continue as a going concern.

• Evaluatetheoverallpresentation,structureandcontentofthefinancialstatementsoftheGroupandoftheCompany, including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtainsufficientappropriateauditevidenceregardingthefinancialinformationoftheentitiesorbusinessactivities within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

INDEPENDENTAuDITORS’ REPORT

(CONT’D)


INDEPENDENTAuDITORS’ REPORT(CONT’D)

Auditors’responsibilitiesfortheauditofthefinancialstatements(cont’d)

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial statements of the Group and of the Company for the current year and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Reportonotherlegalandregulatoryrequirements

In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that the subsidiaries of which we have not acted as auditors, are disclosed in Note 18 to the financial statements.

Othermatters

This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

Ernst&Young LeeAiChungAF: 0039 No. 03265/04/2021 JChartered Accountants Chartered Accountant

Penang, Malaysia13 June 2019


INCOMESTATEMENTS

FOR THE yEAR ENDED 28 FEbRUARy 2019

Group Company Note 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000

Revenue 4 774,916 826,335 57,917 53,663Other income 5 19,286 39,977 35,705 277Raw materials and consumablesused (551,839) (498,575) – –Changesinfinishedgoods 37,466 (65,236) – –Employee benefits expense 6 (76,160) (70,817) (285) (263)Depreciationandamortisation (15,354) (16,336) – –Other operating expenses 8 (107,289) (120,061) (200,615) (3,371)

Operating profit 81,026 95,287 (107,278) 50,306Shareofresultsofanassociate (74) 158 – –Finance costs 9 (4,125) (4,159) (3,211) (3,423)

Profit/(loss) before tax 76,827 91,286 (110,489) 46,883Income tax expense 10 (17,688) (24,961) (376) (632)

Profit/(loss) net of tax 59,139 66,325 (110,865) 46,251

Profit/(loss)attributableto:Owners of the parent 39,896 49,033 (110,865) 46,251Non-controllinginterests 19,243 17,292 – –

59,139 66,325 (110,865) 46,251

Earningspershareattributable toownersoftheparent (senpershare) Basic 11 15.73 19.33 Diluted 11 15.73 19.33

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


STATEMENTS OFCOMPREhENSIVE INCOMEFOR THE yEAR ENDED 28 FEbRUARy 2019


Profit/(loss) for the year 59,139 66,325 (110,865) 46,251

Othercomprehensiveincome:

Item that may be reclassified to profit or loss in subsequent periods -Foreigncurrencytranslation (168) – – –

Total comprehensive income for the year 58,971 66,325 (110,865) 46,251

Totalcomprehensiveincome attributableto:Owners of the parent 39,782 49,033 (110,865) 46,251Non-controllinginterests 19,189 17,292 – –

58,971 66,325 (110,865) 46,251



STATEMENTS OFFINANCIAL POSITION

AS AT 28 FEbRUARy 2019

Group Note 2019 2018 RM’000 RM’000

Assets

Non-currentassetsProperty, plant and equipment 13 134,323 141,679Investment properties 14 31,913 36,494Land use rights 15 21,421 21,871Goodwill 16 27,408 27,408Intangibleassets 17 888 –Investment in associate 19 647 721Other investments 20 147 129Prepayments 21 29,709 39,489Deferred tax assets 22 4,507 2,267

250,963 270,058

CurrentassetsInventories 23 210,669 172,539Biological assets 24 103 152Trade and other receivables 25 132,284 92,944Capitalisedcontractcosts 4 3,771 –Prepayments 21 13,505 12,956Tax recoverable 5,151 7,663Marketable securities 26 4 5Derivativeassets 27 – 8Cash and bank balances 28 349,780 410,231

715,267 696,498

Totalassets 966,230 966,556


STATEMENTS OFFINANCIAL POSITION(CONT’D)

Group Note 2019 2018 RM’000 RM’000 Equityandliabilities

CurrentliabilitiesTrade and other payables 29 155,990 135,682Contractliabilities 4 3,347 –Derivative liabilities 27 99 1,043Employee benefits 30 502 594Dividends payable 40,119 34,731Tax payable 1,429 2,744Borrowings 31 36,240 27,881

237,726 202,675

Netcurrentassets 477,541 493,823

Non-currentliabilitiesEmployee benefits 30 2,699 2,930Deferred tax liabilities 22 7,326 7,121Derivativeliabilities 27 515 –Borrowings 31 32,444 41,803

42,984 51,854

Totalliabilities 280,710 254,529

Netassets 685,520 712,027

Equityattributabletoownersoftheparent

Share capital 33 356,528 356,528Currency translation reserve (328) (214)Other reserve 34 (46,485) (39,455)Retained earnings 35 208,732 216,236

518,447 533,095Non-controlling interests 167,073 178,932

Totalequity 685,520 712,027

Totalequityandliabilities 966,230 966,556


STATEMENTS OFFINANCIAL POSITION

(CONT’D)

Company Note 2019 2018 RM’000 RM’000

Assets

Non-currentassetsProperty, plant and equipment 13 1 1Investment in subsidiaries 18 864,231 1,020,732Investment in associate 19 437 437Otherreceivables 25 23,836 –

888,505 1,021,170

Currentassets Other receivables 25 3,048 46,909Prepayments 21 7 9Tax recoverable 3 2,413Dividends receivable 34,318 26,852Marketable securities 26 4 5Cash and bank balances 28 3,104 3,238

40,484 79,426

Totalassets 928,989 1,100,596

Equityandliabilities Currentliabilities Other payables 29 175,454 175,466Borrowing 31 10,000 10,000Dividends payable 25,365 25,365

210,819 210,831

Netcurrentliabilities (170,335) (131,405)

Non-currentliability Borrowing 31 30,000 40,000

Totalliabilities 240,819 250,831

Netassets 688,170 849,765

Equityattributabletoownersoftheparent Share capital 33 356,528 356,528Retained earnings 35 331,642 493,237

Totalequity 688,170 849,765

Totalequityandliabilities 928,989 1,100,596



STATEMENTS OFChANgES IN EquITYFOR THE yEAR ENDED 28 FEbRUARy 2019

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5,05

6-Tran

sfertorese

rve

–

(2,558

)–

–(2,558

)–

2,55

8-Tran

sfertopay

ables

29

(7,348

)–

––

––

(7,348

)Dividen

dson

ordinarysh

ares

12

(50,73

0)

(50,73

0)

––

–(50,73

0)

–Dividen

dspaidtono

n-co

ntrolling

interests

(26,47

0)

––

––

–(26,47

0)

Totaltrans

actions

withowne

rs

(85,47

8)

(54,43

0)

––

(7,030

)(47,40

0)

(31,04

8)

At28

Feb

ruary20

19

68

5,52

0 51

8,44

7 35

6,52

8 (3

28)

(46,

485)

20

8,73

2 16

7,07

3


STATEMENTS OFChANgES IN EquITY

(CONT’D)

Attributab

letoowne

rsoftheparen

t

Non-distributab

le

Distributab

le

Total

equity

attributab

le

toowne

rs

C

urrenc

y

Non-

Total

ofthe

Sha

re

trans

lation

Other

Retaine

d

controlling

20

18

Note

equity

paren

t

cap

ital

res

erve

res

erve

earning

sin

terests

Group

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

RM’000

At1March

201

7

648,

780

480,

316

356,

528

(214

) (3

2,05

9)

156,

061

168,

464

Totalc

omprehe

nsiveinco

me

66

,325

49

,033

–

––

49,033

17

,292

Tran

sactions

withowne

rsC

hang

es o

f eq

uity

inte

rest

in s

ubsi

dia

ries

- A

risin

g fr

om d

ilutio

n/(a

ccre

tion)

ofequityin

terestin

asub

sidiary

29

,826

13

,777

–

–(7,396

)21

,173

16

,049

-

Aris

ing

from

par

t d

isp

osal

of

eq

uityin

terestin

asub

sidiary

46

,336

43

,236

–

––

43,236

3,10

0Dividen

dson

ordinarysh

ares

12

(53,26

7)

(53,26

7)

––

–(53,26

7)

–Dividen

dspaidtono

n-co

ntrolling

interests

(25,97

3)

––

––

–(25,97

3)

Totaltrans

actions

withowne

rs

(3,078

)3,74

6–

–(7,396

)11

,142

(6,824

)

At28

Feb

ruary20

18

71

2,02

7 53

3,09

5 35

6,52

8 (2

14)

(39,

455)

21

6,23

6 17

8,93

2


STATEMENTS OFChANgES IN EquITY(CONT’D)

Distributable Total Share Retained Note equity capital earnings RM’000 RM’000 RM’000 Company

At1March2018 849,765 356,528 493,237Totalcomprehensiveincome (110,865) – (110,865)TransactionswithownersDividendsonordinaryshares 12 (50,730) – (50,730)

At28February2019 688,170 356,528 331,642

At1March2017 856,781 356,528 500,253Totalcomprehensiveincome 46,251 – 46,251Transactionswithowners Dividendsonordinaryshares 12 (53,267) – (53,267)

At28February2018 849,765 356,528 493,237



STATEMENTS OFCASh FLOWS

FOR THE yEAR ENDED 28 FEbRUARy 2019


Operatingactivities

Profit/(loss) before tax 76,827 91,286 (110,489) 46,883

Adjustmentsfor: Amortisation of intangible assets 158 – – – Amortisationoflanduserights 450 450 – – Amortisation of other investments 1 1 – – Changes in fair value of marketable securities 69 (229) 69 (229) Depreciation 14,745 15,886 – – Dividendincome – – (55,974) (50,910) Employeebenefits – (2,089) – – Changes in fair value of biologicalassets 49 35 – – Gain arising from changes infairvalueofoptions (1,017) (7,976) – – Gain on disposal of property, plantandequipment (40) (1,032) – – Gain on disposal of investmentproperties (1,003) – – – Impairment loss on receivables: -thirdparties – 22 – – -subsidiaries – – 3,708 1,849 Impairment loss on investment insubsidiary – – 194,201 – Impairment loss on property, plantandequipment 161 – – – Interest expense 4,125 4,159 3,211 3,423 Interest income (12,617) (8,456) (1,943) (2,753) Inventorieswrittenback (1,357) (668) – – Inventorieswrittendown 3,184 1,134 – – Inventorieswrittenoff 124 157 – – Loss on forward foreign exchangecontracts 81 8 – – Property, plant and equipment writtenoff 1,144 31 – – Reversal of impairment loss on receivables: -thirdparties (127) (235) – – -subsidiary – – (35,589) – Reversal of provision for guarantees – (14,875) – –Shareofresultsofanassociate 74 (158) – –Unrealised (gain)/loss on foreign exchange - net (4,246) 19,977 (68) 235

Operating cash flows before changes in working capital 80,785 97,428 (2,874) (1,502)


STATEMENTS OFCASh FLOWS(CONT’D)


Operatingactivities(cont’d)

Balance brought forward 80,785 97,428 (2,874) (1,502)Changes in working capital: (Increase)/decrease in inventories (32,206) 70,541 – – Decrease/(increase) in receivables 6,638 (10,151) 2 1 Increase/(decrease) in payables 13,108 (7,491) 1 (662)

Cash generated from/(used in) operations 68,325 150,327 (2,871) (2,163)(Tax paid)/Tax refund (18,802) (27,036) 2,034 (507)Employeebenefitspaid (323) (634) – –

Net cash flows generated from/(used in) operating activities 49,200 122,657 (837) (2,670)

Investingactivities

Acquisition of: -investmentproperties (13) (27) – – - property, plant and equipment (9,963) (10,588) – –Addition subscription of shares insubsidiary – – (37,700) –Dividendsreceived – – 48,508 59,920Interest received 12,617 8,456 1,943 2,753Proceeds from disposal of property,plantandequipment 3,714 3,241 – –Repurchase of shares by a subsidiary (5,986) (9,985) – –Proceeds from issuance of new ordinarysharesbysubsidiary – 39,811 – –Investmentindebtsecurities (30,000) – – –Net cash inflow on acquisition ofasubsidiary (3,760) – – –Purchaseofotherinvestment (19) – – –

Net cash flows (used in)/ generated from investing activities (33,410) 30,908 12,751 62,673


Group Company Note 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000 Financingactivities

(Increase)/decrease in pledged fixeddeposits (292) 1,777 – –Dividends paid to: - non-controlling interests ofsubsidiaries (21,023) (31,763) – – - ordinary shareholders of the Company (50,730) (53,267) (50,730) (53,267)Interest paid (4,125) (4,159) (3,211) (3,423)Proceeds from non-controlling interestspartialdivestment – 46,336 – –Repayment from/(advances to) subsidiaries – – 51,893 (6,523)Repayment of borrowings (5,254) (1,680) (10,000) (5,000)Repayment of obligations underfinanceleases (523) (1,952) – –

Net cash flows used in financing activities (81,947) (44,708) (12,048) (68,213)

Net(decrease)/increasein cashandcashequivalents (66,157) 108,857 (134) (8,210)Effects of foreign exchange ratechanges 5,414 – – –Cashandcashequivalentsat beginningoffinancialyear 398,330 289,473 3,238 11,448

Cashandcashequivalentsat endoffinancialyear 28 337,587 398,330 3,104 3,238

STATEMENTS OFCASh FLOWS

(CONT’D)


Reconciliation of liabilities arising from financing activities:

Carrying Carrying amountas Non-cash amountasat at1March changes 28February 2018 Cashflows Others 2019 RM’000 RM’000 RM’000 RM’000

Group

Term loans 51,252 501 4,437 56,190Bankers’acceptances 17,057 (5,755) – 11,302Obligations under finance leases 1,375 (523) 340 1,192Dividends payable 34,731 (71,753) 77,141 40,119

Total liabilities from financing activities 104,415 (77,530) 81,918 108,803

Company

Termloans 50,000 (10,000) – 40,000Dividends payable 25,365 (50,730) 50,730 25,365Amounts due from related companies (46,906) 51,906 (31,881) (26,881)Amountsduetorelatedcompanies 174,862 (13) – 174,849


Carrying Carrying amountas Non-cash amountasat at1March changes 28February 2017 Cashflows Others 2018 RM’000 RM’000 RM’000 RM’000

Group

Termloans 56,500 (5,248) – 51,252Bankers’acceptances 13,489 3,568 – 17,057Obligations under finance leases 2,199 (1,952) 1,128 1,375Dividends payable 40,485 (85,030) 79,276 34,731


Company

Termloans 55,000 (5,000) – 50,000Dividends payable 25,365 (53,267) 53,267 25,365Amounts due from related companies (42,244) (6,511) 1,849 (46,906)Amountsduetorelatedcompanies 174,874 (12) – 174,862


STATEMENTS OFCASh FLOWS(CONT’D)



NOTES TO THE FINANCIAL STATEMENTS

- 28 FEbRUARy 2019

1. Corporateinformation

The Company is a public limited liability company incorporated and domiciled in Malaysia, and is listed on the Bursa Malaysia Securities Berhad (“Bursa Securities”). The registered office of the Company is located at 17th Floor, Menara Atlan, 161B, Jalan Ampang, 50450 Kuala Lumpur.

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

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

The principal activities of the subsidiaries are set out in Note 18.

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

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 13 June 2019.

2. Summaryofsignificantaccountingpolicies

2.1 Basisofpreparation

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRS”), International Financial Reporting Standards (“IFRS”) and the requirements of the Companies Act 2016 in Malaysia.

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

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

2.2 Changesinaccountingpolicies

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

On 1 March 2018, the Group and the Company adopted the following mandatory new and amended MFRSs.

Effectivefor annualperiods beginningonDescription orafter

MFRS 2 Classification and Measurement of Share-based Payment Transactions (Amendments to MFRS 2) 1 January 2018MFRS 9 Financial Instruments 1 January 2018MFRS 15 Revenue from Contracts with Customers 1 January 2018MFRS 140 Transfers of Investment Property (Amendments to MFRS 140) 1 January 2018AnnualImprovementstoMFRSStandards2014–2016Cycle 1January2018IC Interpretation 22 Foreign Currency Transactions and Advance Consideration 1 January 2018Amendments to MFRS 4: Applying MFRS 9 Financial Instruments with MFRS 4 Insurance Contracts 1 January 2018


NOTES TO THE FINANCIAL STATEMENTS(CONT’D)

2. Summaryofsignificantaccountingpolicies(cont’d)

2.2 Changesinaccountingpolicies(cont’d)

The adoption of the above standards and interpretations did not have any effect on the financial performance or position of the Group and the Company except as discussed below:

MFRS15RevenuefromContractswithCustomers

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

The core principle of MFRS 15 is that an entity should recognise revenue which depict the transfer of

promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

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

The effects of adopting MFRS 15 are as follows:

(i) Revenuerecognition

The Group has adopted the new standard on the required effective date using the modified retrospective method. The directors have assessed the effects of applying the new standard on the Group’s financial statements and concluded that there are no significant changes to the recognition and measurement of revenue and related costs to fulfil a contract.

(ii) Capitalisedcontractcosts

Upon the adoption of MFRS 15, the Group has now separately disclosed capitalised contract costs on the statement of financial position for certain tooling revenue transactions.

(iii) Principalversusagentconsideration

The Group has certain consignment arrangements. Before the adoption of MFRS 15, the Group concluded that based on the existence of credit risk and the nature of the consideration in the contract, it has an exposure to the significant risks and rewards associated with the sale of goods to its customers, and accounted for the contracts as if it is a principal. Upon the adoption of MFRS 15, the Group determined that it does not control the goods before they are transferred to customers. Hence, it is an agent in these contracts because it does not have the ability to direct the use of the goods or obtain benefits from them.

(iv) Contractliabilities

The Group receives consideration in advance from certain customers before the transfer of goods and services. The considerations received were classified as other payables previously. Upon the adoption of MFRS 15, the Group recognises such consideration received in advance as contract liabilities.

Upon the adoption of MFRS 15, the Group has now separately disclosed contract liabilities on the statement of financial position for revenue sales of goods.



(CONT’D)



MFRS15RevenuefromContractswithCustomers(cont’d)

The effects of adopting MFRS 15 are as follows (cont’d):

(v) Presentationanddisclosurerequirements

The presentation and disclosure requirements in MFRS 15 are also more detailed than the previous standard. For the comparative year ended 28 February 2018, the Group has not disclosed the amount of the transaction price allocated to the remaining performance obligations and an explanation of when the corresponding revenue is expected to be recognised.

The adoption of the new accounting standards did not have any impact on the financial statements or results of the Group.

MFRS9FinancialInstruments

MFRS 9 Financial Instruments replaces MFRS 139 Financial Instruments: Recognition and Measurement andbringstogetherallthreeaspectsoftheaccountingforfinancialinstrumentsproject:classificationand measurement, impairment and hedge accounting.

The Group and the Company adopted this new standard prospectively on the required effective date and did not restate comparative information which continues to be reported under MFRS 139. The Group and the Company performed assessment on these three aspects of this standard. Overall, there is no significant impact on its statement of financial position and retained earning as at 1 March 2018.

(i) Classificationandmeasurement

Loans and receivables are held to collect contractual cash flows and are expected to give rise to cash flows representing solely payments of principal and interest. The Group analysed the contractual cash flow characteristics of those instruments and concluded that they meet the criteria for amortised cost measurement under MFRS 9. Therefore, reclassification for these instruments is not required.

(ii) Impairment

Under MFRS 9, the Group and the Company are required to record expected credit loss on its trade and other receivables, either on a 12-month or lifetime basis. The Group and the Company apply simplified approach permitted by MFRS 9 and record expected lifetime loss on its trade receivables. This impairment requirement does not have a significant impact on its carrying amount of the trade receivables.

MFRS140TransfersofInvestmentProperty(AmendmentstoMFRS140)

The amendments clarify that when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in management’s intentions for the use of a property does not provide evidence of change in use.

These amendments do not have any impact on the Group’s and the Company’s financial statements.





AnnualImprovementstoMFRSStandards2014–2016Cycle

The Annual Improvements to MFRS Standards 2014-2016 Cycle include a number of amendments to various MFRSs, which are summarised below. These amendments do not have a significant impact on the Group’s and the Company’s financial statements.

Standards Descriptions

MFRS1First-timeAdoptionofMalaysian Financial ReportingStandards –Deletionof short-termexemptions for first-timeadopters

This amendment is not applicable to the Group as the Group is not a first-time adopter of MFRS.

MFRS 128 Investments inAssociates and Joint Ventures–Clarification thatmeasuringinvesteesat fair value throughprofitor loss isan investment-by-investmentchoice

The amendments clarify that:- an entity that is a venture capital organisation, or other

qualifying entity, may elect, at initial recognition, on an investment-by-investment basis, to measure its investmentsinassociatesandjointventuresatfairvaluethrough profit or loss.

- if an entity, that is not itself an investment entity, has an interestinassociateorjointventurethatisaninvestmententity, the entity may, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to theinvestmententityassociate’sor joint venture’s interestsin subsidiaries. This election is made separately for each investmententityassociateorjointventure,atalaterdateon which:(a) the investmententityassociateor joint venture is

initially recognised; (b) theassociateorjointventurebecomesaninvestment

entity; and(c) theinvestmententityassociateorjointventurefirst

becomes a parent.

These amendments are not applicable to the Group as the Group is not a venture capital organisation and the Group does not haveanyassociateorjointventurethatisaninvestmententity.

ICInterpretation22ForeignCurrencyTransactionsandAdvanceConsideration

The interpretation clarifies that, in determining the exchange rate to use on initial recognition of an asset, expense or income, when consideration for that item has been paid or received in advance in a foreign currency which resulted in the recognition of a non-monetary asset or non-monetary liability, the date of transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine the transaction date for each payment or receipt of advance consideration. This Interpretation does not have any impact on the Group’s and the Company’s financial statements.



(CONT’D)


2.3 Standardsissuedbutnotyeteffective

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

Effectivefor annualperiods beginningonDescription orafter MFRS 9 Prepayment Features with Negative Compensation (Amendments to MFRS 9) 1 January 2019MFRS 16 Leases 1 January 2019MFRS128Long-termInterestsinAssociatesandJointVentures (Amendments to MFRS 128) 1 January 2019AnnualImprovementstoMFRSStandards2015–2017Cycle 1January2019MFRS 119 Plan Amendment, Curtailment or Settlement (Amendments to MFRS 119) 1 January 2019IC Interpretation 23 Uncertainty over Income Tax Treatments 1 January 2019Amendments to References to the Conceptual Framework in MFRS Standards 1 January 2020Definition of a Business (Amendments to MFRS 3 Business Combination) 1 January 2020Definition of Material (Amendment to MFRS 101 Presentation of Financial Statements and MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors) 1 January 2020Amendments to MFRS 138: Intangible assets 1 January 2021Amendments to MFRS 10 and MFRS 128: Sale or Contribution of AssetsbetweenanInvestoranditsAssociateorJointVenture Deferred

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

MFRS9PrepaymentFeatureswithNegativeCompensation(AmendmentstoMFRS9)

Under MFRS 9, a debt instrument can be measured at amortised cost or at fair value through other comprehensive income, provided that the contractual cash flows are solely payments of principal and interest on the principal amount outstanding (the SPPI criterion) and the instrument is held within the appropriate business model for that classification. The amendments to MFRS 9 clarify that a financial asset passes the SPPI criterion regardless of the event or circumstance that causes the early termination of the contract and irrespective of which party pays or receives reasonable compensation for the early termination of the contract.

The amendments must be applied retrospectively. Earlier application is permitted. These amendments are not expected to have a significant impact on the Group’s and the Company’s financial statements.

MFRS16Leases

MFRS 16 will replace MFRS 117 Leases, IC Interpretation 4 Determining whether an Arrangement contains a Lease, IC Interpretation 115 Operating Lease-Incentives and IC Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. MFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under MFRS 117.




2.3 Standardsissuedbutnotyeteffective(cont’d)

MFRS16Leases(cont’d) At the commencement date of a lease, a lessee will recognise a liability to make lease payments and

an asset representing the right to use the underlying asset during the lease term. The right-of-use asset isinitiallymeasuredatcostandsubsequentlymeasuredatcost(subjecttocertainexceptions),lessaccumulateddepreciationandimpairmentlosses,adjustedforanyremeasurementoftheleaseliability.The lease liability is initially measured at present value of the lease payments that are not paid at that date.Subsequently,theleaseliabilityisadjustedforinterestandleasepayments,aswellastheimpactof lease modifications.

Classification of cash flows will also be affected as operating lease payments under MFRS 117 are presented as operating cash flows, whereas under MFRS 16, the lease payments will be split into a principal (which will be presented as financing cash flows) and an interest portion (which will be presented as operating cash flows).

Lessor accounting under MFRS 16 is substantially the same as the accounting under MFRS 117. Lessors will continue to classify all leases using the same classification principle as in MFRS 117 and distinguish between two types of leases: operating and finance leases. MFRS 16 also requires lessees and lessors to make more extensive disclosures than under MFRS 117.

MFRS 16 is effective for annual periods beginning on or after 1 January 2019. Early application is permitted but not before an entity applies MFRS 15. A lessee can choose to apply the standard using either a full retrospective or a modified retrospective approach.

The Group plans to adopt the new standard on the required effective date using the modified retrospective approach. The Group elected to measure all of their right-of-use assets at the date of initial application at an amount equal to the lease liability.

The Group has performed a preliminary impact assessment based on currently available information, andtheassessmentmaybesubjecttochangesarisingfromongoinganalysisuntiltheGroupadoptsMFRS 16 in 2019.

On the adoption of MFRS 16, the Group expects to recognise right-of-use assets and lease liabilities for its leases previously classified as operating leases.

MFRS128Long-termInterestsinAssociatesandJointVentures(AmendmentstoMFRS128)

The amendments clarify that an entity applies MFRS 9 Financial Instruments to long-term interests in anassociateorjointventuretowhichtheequitymethodisnotappliedbutthat,insubstance,formpartofthenetinvestmentintheassociateorjointventure(long-terminterests).InapplyingMFRS9,anentitydoesnotaccountforanylossesoftheassociate,orjointventure,oranyimpairmentlossesonthenetinvestment,recognisedasadjustmentstothenetinvestmentintheassociateorjointventurethatarisefromapplyingMFRS128InvestmentsinAssociatesandJointVentures.

Entities must apply the amendments retrospectively, with certain exceptions. Early application of the amendments is permitted and must be disclosed. As the amendments eliminate ambiguity in the wording of the standard, the directors of the Company do not expect the amendments to have any impact on the Group’s and the Company’s financial statements.



(CONT’D)



AnnualImprovementstoMFRSStandards2015–2017Cycle

The Annual Improvements to MFRS Standards 2015-2017 Cycle include a number of amendments to various MFRSs, which are summarised below. These amendments do not have a significant impact on the Group’s and the Company’s financial statements.

Standards Descriptions

MFRS112IncomeTaxes–Incometaxconsequencesofpaymentsonfinancial instruments classifiedasequity

The amendments clarify that the income tax consequences of dividends are linked more directly to past transactions or events that generated distributable profits than to distributions to owners. Therefore, an entity recognises the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or events.

An entity applies these amendments for annual reporting periods beginning on or after 1 January 2019. Earlier application is permitted. When an entity first applies these amendments, it applies them to the income tax consequences of dividends recognised on or after the beginning of the earliest comparative period.

MFRS 123 Borrowing Costs –Borrowing costs eligible forcapitalisation

The amendments clarify that an entity treats as part of general borrowings any borrowing originally made to develop a qualifying asset when substantially all of the activities necessary to prepare that asset for its intended use or sale are complete.

An entity applies these amendments to borrowing costs incurred on or after the beginning of the annual reporting periods beginning on or after 1 January 2019. Earlier application is permitted.

MFRS119PlanAmendment,CurtailmentorSettlement(AmendmentstoMFRS119)

The amendments require entities to use the updated actuarial assumptions to determine current service cost and net interest for the remainder of the annual reporting period after a plan amendment, curtailment or settlement, which occurs during the reporting period. The amendments also clarify how the requirements for accounting for a plan amendment, curtailment or settlement affect the asset ceiling requirements.

The amendments should be applied prospectively to plan amendments, curtailments or settlements that occur on or after 1 January 2019, with earlier application permitted. These amendments will not have a significant impact on the Group’s and the Company’s financial statements.

ICInterpretation23UncertaintyoverIncomeTaxTreatments

The interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of MFRS 112 and does not apply to taxes or levies outside the scope of MFRS 112, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments.





ICInterpretation23UncertaintyoverIncomeTaxTreatments(cont’d)

The interpretation specifically addresses the following:- whether an entity considers uncertain tax treatments separately;- the assumptions an entity makes about the estimation of tax treatments by taxation authorities; - how an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits

and tax rates; and - how an entity considers changes in facts and circumstances.

An entity must determine whether to consider each uncertain tax treatment separately or together with one or more uncertain tax treatments. The approach that better predicts the resolution of the uncertainty should be followed. The Group and the Company will apply the interpretation from its effective date.

DefinitionofaBusiness(AmendmentstoMFRS3BusinessCombination)

Under MFRS 3, the amendments to the definition of a business are to help entities determine whether an acquired set of activities and assets is a business or not. The amendments clarify the following:- Minimum requirements to be a business;- Market participants’ ability to replace missing elements;- Assessing whether an acquired process is substantive; - Narrowed the difinitions of outputs; and- Introduced an optional concentration test.

The amendments must be applied to transactions that are either business combinations or asset acquisitions for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 January 2020. Consequently, the Group does not have to revisit such transactions that occurred in prior periods. Earlier application is permitted and must be disclosed. These amendments are not expected to have a significant impact on the Group’s and the Company’s financial statements.

DefinitionofMaterial(AmendmenttoMFRS101PresentationofFinancialStatementsandMFRS108AccoutingPolicies,ChangesinAccountingEstimatesandErrors)

Under MFRS 101 and MFRS 108, the amendments were made to align the definition of ‘material’ across the standards and to clarify certain aspects of the definition. The new definition states that, ‘Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide finanicial information about a specific reporting entity.

The amendments clarify that materiality will depend on the nature or magnitude of information, or both. An entity will need to assess whether the information, either individually or in combination with other information, is material in the context of the financial statements.

The amendments must be applied prospectively. Early application is permitted and must be disclosed. These amendments are not expected to have a significant impact on the Group’s and the Company’s financial statements.



(CONT’D)



MFRS17InsuranceContracts

MFRS 17 will replace MFRS 4 Insurance Contracts. MFRS 17 applies to all types of insurance contracts (i.e life, non-life, direct insurance and re-insurance), regardless of the type of entities that issue them, as well as to certain guarantees and financial instruments with discretionary participation features. The overallobjectiveofMFRS17istoprovideanaccountingmodelforinsurancecontractsthatismoreuseful and consistent for insurers. In contrast to the requirements in MFRS 4, which are largely based on grandfathering previous local accounting policies, MFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects. The core of MFRS 17 is the general model, supplemented by:

- A specific adaptation for contracts with direct participation features (the variable fee approach); and

- A simplified approach (the premium allocation approach) mainly for short-duration contracts.

MFRS 17 is effective for reporting periods beginning on or after 1 January 2021, with comparative figures required. Early application is permitted, provided the entity also applies MFRS 9 and MFRS 15 on or before the date it first applies MFRS 17. This standard is not applicable to the Group.

2.4 Basisofconsolidation

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

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

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

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

Generally, there is apresumption that amajority of voting rights result in control. To support thispresumptionandwhentheGrouphaslessthanamajorityofthevotingorsimilarrightsofaninvestee,the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

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

(ii) Rights arising from other contractual arrangements; and

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

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

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




2.4 Basisofconsolidation(cont’d)

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

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

Businesscombinations

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

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes in the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognised in profit or loss. If the contingent consideration is classified as equity, it will not be remeasured. Subsequent settlement is accounted for within equity.

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

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

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss. The accounting policy for goodwill is set out in Note 2.10.

Acquisitions of subsidiaries that includes put options to acquire non-controlling interests in the future are accounted for in accordance with MFRS 10 Consolidated Financial Statements. During the period the non-controlling interests put options remain unexercised, the non-controlling interests are calculated and immediately derecognised as though it was acquired at that date. A financial liability with respect to put options is recognised in accordance with MFRS 9 Financial Instruments. The difference between derecognition of the non-controlling interests and recognition of the financial liabilities is accounted for as an equity transaction, and disclosed under capital reserve in equity.



(CONT’D)


2.5 Transactionswithnon-controllinginterests

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

Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controllingandnon-controllinginterestsareadjustedtoreflectthechangesintheirrelativeinterestsinthesubsidiary.Anydifferencebetweentheamountbywhichthenon-controllinginterestisadjustedand the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the parent.

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

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

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

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

2.6 Foreigncurrency

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

(a) Transactionsandbalances Transactions in foreign currencies are measured in the respective functional currencies of the

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

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




2.6 Foreigncurrency(cont’d)

(b) Consolidatedfinancialstatements

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

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

2.7 Property,plantandequipment

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

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

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

Buildings over 20 to 93 yearsLeasehold land over 99 yearsGolf course over 60 yearsMotor vehicles 14.3% - 20%Office equipment, furniture and fittings 10% - 33.3%Plant and machinery 10% - 33.3%Other assets 5% - 20%

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

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

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

The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjustedprospectively,ifappropriate.



(CONT’D)


2.7 Property,plantandequipment(cont’d)

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

2.8 Intangibleassets

Intangible assets acquired separately are measured initially at cost. Following initial acquisition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is reflected in profit or loss in the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite useful lives are amortised over the estimated 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 are reviewed at least at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates.

Distribution rights

The distribution rights were acquired in business combinations and amortised on a straight line basis over its finite useful life of 3 years. The useful lives of the distribution rights are estimated based on the current contract duration.

2.9 Investmentproperties

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

Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:

Buildings over 36.5 to 50 yearsLeasehold land over 99 years

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

2.10 Goodwill

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

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




2.10 Goodwill(cont’d)

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

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

2.11 Landuserights

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

2.12 Impairmentofnon-financialassets

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

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

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

Impairment losses are recognised in profit or loss.

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



(CONT’D)


2.13 Subsidiaries

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

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

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

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

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

2.14 Investmentsinassociates

An associate is an entity in which the Group has significant influence. Significant influence is the power toparticipateinthefinancialandoperatingpolicydecisionsoftheinvesteebutisnotcontrolorjointcontrol over those policies.

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

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

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

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

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

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




2.14 Investmentsinassociates(cont’d)

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

2.15 Financialassets

Initialrecognitionandmeasurement

Financial assets are recognised when, and only when the entity becomes party to the contractual provisions of the instruments.

At initial recognition, the Group and the Company measure a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Trade receivables are measured at the amount of consideration to which the Group and the Company

expect to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third party if the trade receivables do not contain a significant financing component at initial recognition.

Subsequentmeasurement

Investments in debt instruments

Subsequent measurement of debt instruments depends on the Group’s and the Company’s business model for managing the asset and the contractual cash flow characteristics of the asset. The three measurement categories for classification of debt instruments are:

- Amortised cost

Financial assets that are held for the collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Financial assets are measured at amortised cost using the effective interest method, less impairment. Gains and losses are recognised in profit or loss when the assets are derecognised or impaired, and through amortisation process.

- Fairvaluethroughothercomprehensiveincome(“FVOCI”)

Financial assets that are held for collection of contractual of cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measuredatFVOCI.FinancialassetsmeasuredatFVOCIaresubsequentlymeasuredat fairvalue. Any gains or losses from changes in fair value of the financial assets are recognised in other comprehensive income, except for impairment losses, foreign exchange gains and losses and interest calculated using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equitytoprofitorlossasareclassificationadjustmentwhenthefinancialassetisderecognised.

- Fair value through profit or loss

Assets thatdonotmeet thecriteria for amortisedcostorFVOCIaremeasuredat fair valuethrough profit or loss. A gain or loss on a debt instrument that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognised in profit or loss statement in the period in which it arises. Interest income from these financial assets is included in finance income.



(CONT’D)


2.15 Financialassets(cont’d)

Subsequentmeasurement(cont’d)

Investment in equity instruments

On initial recognition of an investment in equity instrument that is not held for trading, the Group and the Company may irrevocably elect to present subsequent changes in fair value in OCI. Dividends from such investments are to be recognised in profit or loss when the Group’s and the Company’s right to receive payments is established. For investments in equity instruments which the Group and the Company have not elected to present subsequent changes in fair value in OCI, changes in fair value are recognised in profit or loss.

Derivatives

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. Changes in fair value of derivatives are recognised in profit or loss.

Derecognition

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

2.16 Impairmentoffinancialassets

The Group and the Company assess at each financial year end whether there has been a significant increase in credit risk for financial assets by comparing the risk of default occuring over the expected life with the risk of default since initial recognition. In determining whether credit risk on a financial asset has increased significantly since initial recognition, the Group and the Company use external credit rating and other supportive information to assess deterioration in credit quality of a financial asset where practical. The Group and the Company assess whether the credit risk on a financial asset has increased significantly on an individual or collective basis. For collective basis evaluation, financial assets are grouped on the basis of similar risk characteristics.

The Group and the Company consider past loss experience and observable data such as current changes and future forecasts in economic conditions to estimate the amount of expected impairment loss. The methodology and assumptions including any forecasts of future economic conditions are reviewed regularly.

The carrying amount of the financial asset is reduced through the use of an allowance account and the impairment loss is recognised in profit or loss. When a financial asset becomes uncollectible, it is written off against the allowance account.

The Group and the Company measure the impairment loss based on the two-step approach to measure the Expected Credit Loss (“ECL”) on financial assets:

- 12-month ECL

For a financial asset for which there is no significant increase in credit risk since initial recognition, the Group and the Company shall measure the allowance for impairment for that financial asset at an amount based on the probability of default occuring within the next 12 months considering the loss given default of that financial asset.




2.16 Impairmentoffinancialassets(cont’d)

The Group and the Company measure the impairment loss based on the two-step approach to measure the Expected Credit Loss (“ECL”) on financial assets (cont’d):

- Lifetime ECL

For a financial asset for which there is a significant increase in credit risk since initial recognition, a lifetime ECL for that financial asset is recognised as allowance for impairment by the Group and the Company. If, in a subsequent period the significant increase in credit risk since initial recognition is no longer evident, the Group and the Company shall revert the loss allowance measurement from lifetime ECL to 12-month ECL.

If in a subsequent period, the credit quality improves and reverses any previously assessed significant increase in credit risk since initial recognition, then the impairment loss reverts from lifetime ECL to 12-month ECL.

2.17 Cashandcashequivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term, highlyliquidinvestmentsthatarereadilyconvertibletoknownamountsofcashandwhicharesubjectto an insignificant risk of changes in value. These also include bank overdrafts that form an integral part of the Group’s cash management.

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

2.18 Inventories

(a) Tradinginventories

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

(b) Manufacturinginventories

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

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

of manufacturing overheads based on normal operating capacity.

(c) Inventoryproperty

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

Wherenecessary,allowanceisprovidedfordamaged,obsoleteandslowmovingitemstoadjustthecarrying value of inventories to the lower of cost and net realisable value.

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



(CONT’D)


2.19 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.

Provisionsarereviewedateachreportingdateandadjustedtoreflectthecurrentbestestimate.Ifitis no longer probable that an outflow of economic resources be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

2.20 Financialliabilities

Initialrecognitionandmeasurement

Financial liabilities are classified as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group and the Company determine the classification of their financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings, plus directly attributable transaction costs.

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

Subsequentmeasurement

The subsequent measurement of financial liabilities depends on their classification as described below:

Financial liabilities at fair value through profit or loss

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

Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative financial instruments entered into by the Group and the Company that do not meet the hedge accounting criteria. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognised in profit or loss.

The Group and the Company have designated interest rate swap as a financial liability at fair value through profit or loss.

Loans and borrowings

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

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included in finance costs in profit or loss.




2.20 Financialliabilities(cont’d)

Subsequentmeasurement(cont’d)

Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument.

Financialguaranteesarerecognisedinitiallyasaliabilityatfairvalue,adjustedfortransactioncoststhat are directly attributable to the issuance of the guarantee. Subsequent to initial recognition, financial guarantees are measured at the higher of the amount of the loss allowance determined in accordance with the impairment model under MFRS 9 and the amount initially recognised less, when appropriate, the cumulative amount of income recognised.

Derecognition

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

2.21 Borrowingcosts

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

All other borrowing costs are recognised in profit or loss in the period they are incurred. Borrowing

costs consist of interest and other costs that the Group and the Company incurred in connection with the borrowing of funds.

2.22 Employeebenefits

(a) Shorttermbenefits

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

(b) Definedcontributionplans

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



(CONT’D)


2.22 Employeebenefits(cont’d)

(c) Terminationbenefits

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

(d) Definedbenefitplans

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

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

Past service costs are recognised in profit or loss on the earlier of:

- the date of the plan amendment or curtailment; and- the date that the Group recognises restructuring-related costs.

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

The Group recognises the following changes in the net defined benefit obligation under ‘employee benefits expense’ in the income statements:

- service costs comprising current service costs, past-service costs, gains and losses on curtailments, and non-routine settlements; and

- net interest expense or income.

2.23 Leases

(a) Aslessee

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




2.23 Leases(cont’d)

(a) Aslessee(cont’d)

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

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

(b) Aslessor

Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. The accounting policy for rental income is set out in Note 2.24(f).

2.24 Revenue

The Group and the Company satisfy a performance obligation and recognise revenue over time if the Group’s and the Company’s performance:

(i) Do not create an asset with an alternative use to the Group and the Company and have an enforceable right to payment for performance completed to-date; or

(ii) Create or enhance an asset that the customer controls as the asset is created or enhanced; or

(iii) Provide benefits that the customer simultaneously receives and consumes as the Group and the Company perform.

For performance obligations where any one of the above conditions is not met, revenue is recognised at the point in time at which the performance obligation is satisfied.

When the Group and the Company satisfy a performance obligation by delivering the promised goods or services, it creates a contract based asset on the amount of consideration earned by the performance. Where the amount of consideration received from a customer exceeds the amount of revenue recognised, this gives rise to a contract liability.

Revenue is measured at the fair value of consideration received or receivable. The following describes the performance obligations in contracts with customers:

(a) Saleofgoods

Revenue from sales of goods is recognised net of discounts when control of the asset is transferred to the customer, generally on the delivery of goods. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

(b) Dividendincome

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



(CONT’D)


2.24 Revenue(cont’d)

(c) Rentalofhotelroomsandotherservices

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

(d) Managementincome

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

(e) Interestincome

Interest income is recognised using the effective interest method.

(f) Rental,parkingandrelatedservices

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

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

(g) Saleofinventoryproperty

Revenue from sales of inventory property is recognised at the point in time when the control of the properties is transferred to the buyers without any significant contractual acts to complete.

(h) Saleofoilpalmfreshfruitbunches

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

2.25 Incometaxes

(a) Currenttax

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

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

(b) Deferredtax

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




2.25 Incometaxes(cont’d)

(b) Deferredtax(cont’d)

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

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

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

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

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

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

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

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

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

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



(CONT’D)


2.25 Incometaxes(cont’d)

(c) GoodsandServicesTax(“GST”)

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

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

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

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

2.26 Bearertreesandbiologicalassets

Bearer trees are living plants used in the production or supply of agricultural produce; are expected to bear produce for more than one period; and have a remote likelihood of being sold as agricultural produce, except for incidental scrap sales. Bearer trees mainly include mature oil palm plantations. Mature plantations are depreciated on a straight-line basis over its estimated useful life of 25 years.

In general, oil palms are considered mature 30 to 36 months after field planting.

The carrying values of bearer trees are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

The residual values, useful life and depreciation method are reviewed at each financial year end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits.

A bearer tree is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the bearer trees is included in the income statement in the year the bearer plant is derecognised.

Produce that grows on mature plantations are measured at fair value less estimated point-of-sale costs. Point-of-sale costs include all costs that would be necessary to sell the produce.

2.27 Segmentreporting

For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 41, including the factors used to identify the reportable segments and the measurement basis of segment information.

2.28 Sharecapitalandshareissuanceexpenses

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

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




2.29 Treasuryshares

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

2.30 Contingencies

A contingent liability is:

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

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

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

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

A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group and of the Company.

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

2.31 Fairvaluemeasurement

The Group and the Company measure financial instruments, such as, derivatives, and non-financial assets such as properties, at fair value at each reporting date. Also, fair values of financial instruments measured at amortised cost are disclosed in Note 38.

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

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

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

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

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

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



(CONT’D)


2.31 Fairvaluemeasurement(cont’d)

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

- Level1:Quoted(unadjusted)marketpricesinactivemarketsforidenticalassetsorliabilities;- Level2:Valuationtechniquesforwhichthelowestlevelinputthatissignificanttothefairvalue

measurement is directly or indirectly observable; or - Level3:Valuationtechniquesforwhichthelowestlevelinputthatissignificanttothefairvalue

measurement is unobservable.

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

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

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

At each reporting date, the Group and the Company analyse the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Group’s and the Company’s accountingpolicies.Forthisanalysis,theGroupandtheCompanyverifythemajorinputsappliedinthe latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents.

TheGroupandtheCompany,inconjunctionwiththeGroup’sandtheCompany’sexternalvaluers,alsocompare the changes in the fair value of each asset and liability with relevant external sources, where practical, to determine whether the change is reasonable.

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

2.32 Currentandnon-currentclassification

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

An asset is classified as current when it is:

- expected to be realised or intended to sold or consumed in normal operating cycle;- held primarily for the purpose of trading;- expected to be realised within 12 months after the reporting period; or- cash and cash equivalents unless restricted from being exchanged or used to settle a liability for

at least 12 months after the reporting period.

All other assets are classified as non-current.




2.32 Currentandnon-currentclassification(cont’d)

A liability is classified as current when:

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

the reporting period.

All other liabilities are classified as non-current.

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

2.33 Relatedparties

A related party is defined as follows:

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

(a) hascontrolorjointcontrolovertheCompany;(b) has significant influence over the Company; or(c) is a member of the key management personnel of the Company or of a parent of the

Company.

(ii) an entity is related to the Company if any of the following conditions applies:

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

(b) oneentityisanassociateorjointventureoftheotherentity(oranassociateorjointventureof a member of a group of which the other entity is a member);

(c) bothentitiesarejointventuresofthesamethirdparty;(d) oneentityisajointventureofathirdentityandtheotherentityisanassociateofthethird

entity;(e) the entity is a post-employment benefit plan for the benefit of employees of either the

Company or an entity related to the Company. If the Company is itself such a plan, the sponsoring employers are also related to the Company;

(f) theentityiscontrolledorjointlycontrolledbyapersonidentifiedin(i);or(g) a person identified in (i) (a) has significant influence over the entity or is a member of the

key management personnel of the entity (or of a parent of the entity).

2.34 Contractliabilities

A contract liability is the obligation to transfer goods and services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. Contract liabilities are recognised as revenue when the Company performs its obligation under the contracts.



(CONT’D)

3. Significantaccountingjudgementsandestimates

The preparation of the Group’s and of the Company’s financial statements requires management to make judgements,estimatesandassumptionsthataffectthereportedamountsofrevenues,expenses,assetsandliabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptionsandestimatescouldresultinoutcomesthatcouldrequireamaterialadjustmenttothecarryingamount of the asset or liability affected in the future periods.

3.1 Judgementsmadeinapplyingaccountingpolicies

In the process of applying the Group’s and the Company’s accounting policies, management has made thefollowingjudgements,apartfromthoseinvolvingestimations,whichhavethemostsignificanteffecton the amounts recognised in the financial statements:

(a) Classificationbetweeninvestmentpropertiesandproperty,plantandequipment

TheGrouphasdevelopedcertaincriteriabasedonMFRS140inmakingjudgementwhetheraproperty qualified as an investment property. Investment property is a property held to earn rentals or for capital appreciation or both.

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

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

One of the land and building of the Group is currently held with undetermined future use. Accordingly, this property is classified as investment property.

(b) Impairmentoffinancialassets

The Group and the Company follow the guidance of MFRS 9 in determining when a financial assetisconsideredimpaired.Thisdeterminationrequiressignificantjudgement.TheGroupandthe Company evaluate, among other factors, the duration and extent to which the fair value of a financial asset is less than its cost; and the financial health of and the near-term business outlook of the issuer of the instrument, including factors such as industry performance, changes in technology and operational and financing cash flows.

(c) Controlovercertainsubsidiaries

As at 28 February 2019, the proportion of equity interest of the Group is disclosed in Note 18(a).

Pursuant to the shareholders agreements, the Group is responsible for the management, business directionandstrategiesofeachofthe5companies,EmasKerajangSdn.Bhd.,SeruntunMajuSdn.Bhd.,DFZEmporiumSdn.Bhd.,DFZ(M)Sdn.Bhd.andWealthouseSdn.Bhd..TheGroupassessed that it has retained control over the said 5 companies during the financial year through stipulations in the shareholders agreements.



3. Significantaccountingjudgementsandestimates(cont’d)

3.1 Judgementsmadeinapplyingaccountingpolicies(cont’d)

(d) Purchasepriceallocation

As disclosed in Note 18(c), put options are granted to the Group to acquire remaining interest in Brand Connect Holding Pte. Ltd. (“BCH”). Judgement has been made by the Group to determine the earliest possible date for the put options to be exercised. In the computation of the liability amount, estimates used during the review of purchase price allocation, are disclosed in Note 3.2(g).

3.2 Keysourcesofestimationuncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the reportingdatethathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassets and liabilities within the next financial year are discussed below.

(a) Impairmentofgoodwill

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

When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows. Further details of the carrying value, the key assumptions applied in the impairment assessment of goodwill and sensitivity analysis to changes in the assumptions are given in Note 16. The carrying amount of the Group’s goodwill is disclosed in Note 16.

(b) Impairmentofreceivables

TheGroupandtheCompanyassessateachreportingdatewhetherthereisanyobjectiveevidencethatafinancialassetisimpaired.Todeterminewhetherthereisobjectiveevidenceofimpairment,the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

Wherethereisobjectiveevidenceofimpairment,theamountandtimingoffuturecashflowsareestimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of the Group’s and the Company’s receivables at the reporting date is disclosed in Note 25.

(c) Provisions

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

(d) Usefullivesofplantandequipment

The cost of plant and equipment is depreciated on a straight-line basis over the plant and equipment’s estimated useful lives. Management estimates the useful lives of these plant and equipment (excludes freehold land, leasehold land, golf course, and buildings) to be within 3 to 25 years. The carrying amount of the Group’s plant and equipment at 28 February 2019 was RM30,838,000 (2018: RM36,224,000). Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.



(CONT’D)

3. Significantaccountingjudgementsandestimates(cont’d)

3.2 Keysourcesofestimationuncertainty(cont’d)

(e) Deferredtaxassets

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

The carrying amount of recognised and unrecognised tax losses and capital allowances of the Group and of the Company is disclosed in Note 22.

(f) Impairmentlossoninvestmentsinsubsidiaries

The carrying amounts of the investments in subsidiary companies of the Company as at 28 February 2019 was RM864,231,000 (2018: RM1,020,732,000).

The Company assesses whether there is any indicators of impairment for its investments in subsidiary companies at each reporting date. In assessing whether there is any indication that its investments in subsidiary companies may be impaired, the Company considers the external and internal sources of information.

The market capitalisation of the Company’s listed subsidiary company, Duty Free International

Limited (“DFIL”) is lower than the cost of investment in subsidiary for the Company, indicating that the gross carrying amount of the investment in the subsidiary company of RM784,367,000 as at 28 February 2019 may be impaired. Accordingly, the Company estimated the recoverable amount ofthisinvestmentinsubsidiarycompanybasedonValue-in-use(“VIU”)oftheCashGeneratingUnits(“CGU”)underDFIL.EstimatingtheVIUofCGUinvolvedestimatingthefuturecashinflowsand outflows that will be derived from the CGU, and discounting them at an appropriate rate.

TherecoverableamountissensitivetothediscountrateusedfortheVIUaswellastheexpectedfuture cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to impairment review of investments in subsidiaries by the Company.

(g) Purchasepriceallocation

Purchase accounting requires extensive use of accounting estimates to allocate the purchase price to the fair values of the assets and liabilities acquired, including intangible assets. Significant estimateshavebeenmadetodeterminethefairvalueadjustmentsamount.Detailsofpurchaseprice allocation are disclosed in Note 18(c).



4. Revenue

Revenue represents invoiced value of goods sold net of discounts and returns.

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000 Revenuerecognisedatapoint oftime Salesofgoods 738,197 791,606 – –Rental of hotel rooms and other services 10,840 11,146 – –Rental,parkingandrelatedservices 15,305 16,739 – –Saleofoilpalmfreshfruitbunches 1,342 1,773 – –Gross dividends: -subsidiaries – – 55,974 50,910 Revenuerecognisedovertime Managementincome 215 215 – –Interest income: -subsidiaries – – 1,543 2,455 - others 9,017 4,856 400 298

Revenuefromcontractswith customers 774,916 826,335 57,917 53,663

Contractbalances

Information about receivables and contract liabilities and balances arising from contracts with customers is disclosed as follows:

Group 2019 2018 Note RM’000 RM’000 Trade receivables 25 40,809 35,980Capitalisedcontractcosts 3,771 –Contractliabilities 3,347 –

Capitalised contract costs consist mainly of costs incurred for sales which have not yet been recognised as revenue.

Contract liabilities primarily relate to the Group’s obligation to transfer goods or services to customers for which the Group has received advances from customers for wholesales of goods.



(CONT’D)

5. Otherincome

Included in other income are as follows:

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000

Gain arising from changes in fairvalueofoptions 1,017 7,976 – –Gain on disposal of: -property,plantandequipment 40 1,032 – – -investmentproperty 1,003 – – –Gain on foreign exchange: -realised 1,178 2,530 – – -unrealised 4,297 102 68 –Changes in fair value of marketable securities – 229 – 229Inventorieswrittenback* 1,357 668 – –Interestincomefromathirdparty 3,600 3,600 – –Rental income: -advertisementspace 3,017 3,446 – – -property,plantandequipment 572 574 – –Reversalofprovisionforguarantees – 14,875 – –Reversal of impairment loss on receivables: -thirdparties 127 235 – – -subsidiary – – 35,589 –

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

6. Employeebenefitsexpense

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000 Wages and salaries 61,886 60,801 260 260Socialsecuritycontribution 711 637 – –Contribution to defined contribution plan 6,206 6,295 – –Decrease in liability for defined benefitplan(Note30(c)) – (2,089) – –Other benefits 7,357 5,173 25 3

76,160 70,817 285 263

Included in employee benefits expense of the Group are executive director’s remuneration amounting to RM774,000 (2018: RM743,000)



7. Directors’remuneration

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

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000 Executive: Salariesandotheremoluments 532 512 – –Bonus 160 150 – –Definedcontributionplan 82 81 – –

Totalexecutivedirector’sremuneration 774 743 – –

Non-executive: Salariesandotheremoluments 540 540 – –Bonus 100 150 – –Definedcontributionplan 79 84 – –Fees 374 372 260 260Benefitinkind – 9 – –

Total non-executive directors’ remuneration 1,093 1,155 260 260

Total directors’ remuneration 1,867 1,898 260 260

Total directors’ remuneration (excludingfees) 1,493 1,526 – –

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

Numberofdirectors 2019 2018

Executivedirector: RM700,001–RM750,000 – 1 RM750,001–RM800,000 1 – Non-executivedirectors: Below RM50,000 8 8 RM100,001–RM150,000 – 1 RM150,001–RM200,000 1 – RM700,001–RM750,000 1 – RM750,001–RM800,000 – 1

11 11

The total number of directors as at 28 February 2019 is 10 (2018: 10).



(CONT’D)

8. Otheroperatingexpenses

Included in other operating expenses are as follows:

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000 Amortisationofotherinvestments 1 1 – –Auditors’ remuneration: Ernst&Young - statutory audit 1,189 1,154 70 70 -underprovisioninpreviousyear – 6 – 5Other auditors -statutoryaudit 157 24 – –Changes in fair value of marketable securities 69 – 69 –Loss arising from changes in fair value ofbiologicalassets 49 35 – –Impairment loss on property, plant and equipment 161 – – –Impairment loss on investment in subsidiary(Note18) – – 194,201 –Impairment loss on receivables: -thirdparties – 22 – – -subsidiaries – – 3,708 1,849Inventorieswrittendown 3,184 1,134 – –Inventorieswrittenoff 124 157 – –Leaseofland 216 216 – –Legal and professional fees 4,086 799 799 (255)Loss on foreign exchange: -realised 422 319 – – -unrealised 51 20,079 – 235Loss on forward foreign exchange contracts 81 8 – –Management fee charged by a subsidiary – – 855 915Property, plant and equipment writtenoff 1,144 31 – –Contingentrent 5,453 5,241 – –Rentalexpense 42,365 40,655 – –



9. Financecosts

Group Company 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000Interest expense on: -bankers’acceptance 304 403 – – -bankoverdrafts 262 103 – – -obligationsunderfinanceleases 75 158 – – - term loans 3,404 3,491 3,211 3,423 -others 80 4 – –

4,125 4,159 3,211 3,423

10. Incometaxexpense

Majorcomponentsofincometaxexpense

Themajorcomponentsofincometaxexpenseforthefinancialyearsended28February2019and28February2018 are as follows:


Current income tax - Malaysian income tax 20,518 25,409 427 574 - (Over)/under provision in respect of previous years (795) 187 (51) 58

19,723 25,596 376 632

Deferred income tax - Origination and reversal of temporarydifferences (2,436) (310) – – - Under/(over) provision in respect ofpreviousyears 401 (325) – –

(2,035) (635) – –

Income tax expense recognised in profit or loss 17,688 24,961 376 632

Reconciliation between tax expense and accounting profit

Domestic current income tax is calculated at the Malaysian statutory tax rate of 24% (2018: 20% to 24%). The reduction in the income tax rate is based on the percentage of increase in chargeable income as compared to the immediate preceding year of assessment.



(CONT’D)

10. Incometaxexpense(cont’d)

Reconciliation between tax expense and accounting profit (cont’d)

The reconciliation between tax expense and the product of accounting profit multiplied by the applicable corporate tax rate for the financial years ended 28 February 2019 and 28 February 2018 are as follows:


Profit/(loss) before tax 76,827 91,286 (110,489) 46,883

Taxation at Malaysian statutory tax rate of 24% 18,438 21,908 (26,517) 11,252Effect of different tax rates inothercountry (586) (256) – –Effect of expenses not deductible for tax purposes 5,608 9,690 48,935 1,540Effectofincomenotsubject to taxation (3,217) (4,921) (21,991) (12,218)Effect of reduction in Malaysian statutorytaxrate – (918) – –Utilisation of previously unrecogniseddeferredtaxassets (1,136) (668) – –Reinvestment allowances claimed duringtheyear (728) (134) – –Deferred tax assets recognised duringtheyear (668) – – –Deferred tax assets not recognised duringtheyear 371 398 – –Under/(over) provision of deferred tax inpreviousyears 401 (325) – –(Over)/under provision of income tax in previous years (795) 187 (51) 58

Income tax expense recognised in profit or loss 17,688 24,961 376 632

The Group has tax savings from the following:

Group 2019 2018 RM’000 RM’000

Utilisation of previously unabsorbed capital allowances and unrecognised temporary differences 1,136 668



11. Earningspershare

Basic earnings per share amounts are calculated by dividing profit net of tax attributable to owners of the parent by the number of ordinary shares outstanding during the financial year.

Diluted earnings per share are calculated by dividing profit, net of tax, attributable to owners of the Company by the number of ordinary shares outstanding during the financial year plus the number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. The Company does not have any diluted earnings per share.

The following reflect the profit and share data used in the computation of basic and diluted earnings per share for the years ended 28 February 2019 and 28 February 2018:

Group 2019 2018 RM’000 RM’000

Profit net of tax attributable to owners of the parent 39,896 49,033

Group 2019 2018 Number Number ofshares ofshares ’000 ’000

Number of ordinary shares for basic earnings per share computation 253,650 253,650

Number of ordinary shares for diluted earnings per share computation 253,650 253,650

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

12. Dividends

Company 2019 2018 RM’000 RM’000

Recognisedduringthefinancialyear:

Dividends on ordinary shares:

In respect of the financial year ended 28 February 2019 -Firstinterimsingle-tierdividendof10% 25,365 – -Secondinterimsingle-tierdividendof10% 25,365 –

In respect of the financial year ended 28 February 2018 -Firstinterimsingle-tierdividendof6% – 15,219 -Secondinterimsingle-tierdividendof5% – 12,683 -Thirdinterimsingle-tierdividendof10% – 25,365

50,730 53,267



(CONT’D)13

.Property,p

lantand

equipmen

t

Office

Cap

ital

equ

ipmen

t,

La

ndand

G

olf

wor

k-in-

Motor

fu

rnitu

re

Plantand

Bea

rer

Other

buildings

*

cou

rse

progres

sveh

iclesand

fittings

m

achine

ry

tree

s

ass

ets

Total

RM’000

R

M’000

R

M’000

R

M’000

R

M’000

RM’000

RM’000

RM’000

RM’000

Group

At2

8Fe

brua

ry201

9

Cos

t

At 1

Mar

ch 2

018

171,

144

44,6

48

11,2

99

9,85

9 36

,677

87

,051

2,

825

2,32

0 36

5,82

3Add

ition

s1,89

2–

2,53

655

32,82

32,49

4–

510

,303

Acq

uisitio

nofsub

sidiaries

––

––

31

208

––

239

Dispo

sals

(33)

––

(144

)(103

)(33)

––

(313

)Write-offs

(72)

––

(21)

(1,826

)(323

)–

–(2,242

)Tran

sferto

cap

italised

con

trac

tcos

t–

–(3,771

)–

––

––

(3,771

)Rec

lassifica

tion

500

–(8,579

)–

6,20

71,87

2–

––

At 2

8 Fe

brua

ry 2

019

173,

431

44,6

48

1,48

5 10

,247

43

,809

91

,269

2,

825

2,32

5 37

0,03

9


NOTES TO THE FINANCIAL STATEMENTS(CONT’D)13

.Property,p

lantand

equipmen

t(cont’d)

Office

Cap

ital

equ

ipmen

t,

La

ndand

G

olf

wor

k-in-

Motor

fu

rnitu

re

Plantand

Bea

rer

Other

buildings

*

cou

rse

progres

sveh

iclesand

fittings

m

achine

ry

tree

s

ass

ets

Total

RM’000

R

M’000

R

M’000

R

M’000

R

M’000

RM’000

RM’000

RM’000

RM’000

Acc

umulated

dep

reciationan

dim

pairm

entlos

ses

At1

March

201

896

,816

13

,521

–

8,28

230

,114

73

,802

74

486

522

4,14

4Dep

reciationch

arge

forthe

yea

r3,40

076

6–

636

2,53

85,29

011

352

12

,795

Dispo

sals

(6)

––

(144

)(103

)(33)

––

(286

)Write-offs

(21)

––

(21)

(738

)(318

)–

–(1,098

)Im

pairm

entlos

s11

8–

–-

43

––

–16

1

At2

8Fe

brua

ry201

910

0,30

714

,287

–

8,75

331

,854

78

,741

85

791

7235

,716

Ana

lyse

d as

:Acc

umulated

dep

reciation

62,037

14

,287

–

8,75

331

,811

78

,741

85

791

719

7,40

3Acc

umulated

impa

irmen

tlos

ses

38,270

–

––

43

––

–38

,313

100,30

714

,287

–

8,75

331

,854

78

,741

85

791

723

5,71

6

Netcarryingam

ount

73

,124

30

,361

1,

485

1,49

4 11

,955

12

,528

1,

968

1,40

8 13

4,32

3



(CONT’D)13

.Property,p

lantand

equipmen

t(cont’d)

Office

Cap

ital

equ

ipmen

t,

La

ndand

G

olf

wor

k-in-

Motor

fu

rnitu

re

Plantand

Bea

rer

Other

buildings

*

cou

rse

progres

sveh

iclesand

fittings

m

achine

ry

tree

s

ass

ets

Total

RM’000

R

M’000

R

M’000

R

M’000

R

M’000

RM’000

RM’000

RM’000

RM’000

Group

At2

8Fe

brua

ry201

8

Cos

t

At 1

Mar

ch 2

017

173,

819

44,6

48

10,3

60

10,2

46

43,7

83

82,5

07

2,82

5 2,

602

370,

790

Add

ition

s95

–

7,46

631

11,83

02,01

3–

111

,716

Dispo

sals

––

(306

)(698

)–

(2,189

)–

–(3,193

)Write-offs

(3,087

)–

––

(8,964

)(1,156

)–

(283

)(13,49

0)Rec

lassifica

tion

317

–(6,221

)–

28

5,87

6–

––

At 2

8 Fe

brua

ry 2

018

171,

144

44,6

48

11,2

99

9,85

9 36

,677

87

,051

2,

825

2,32

0 36

5,82

3



.Property,p

lantand

equipmen

t(cont’d)

Office

Cap

ital

equ

ipmen

t,

La

ndand

G

olf

wor

k-in-

Motor

fu

rnitu

re

Plantand

Bea

rer

Other

buildings

*

cou

rse

progres

sveh

iclesand

fittings

m

achine

ry

tree

s

ass

ets

Total

RM’000

R

M’000

R

M’000

R

M’000

R

M’000

RM’000

RM’000

RM’000

RM’000

Acc

umulated

dep

reciation

an

dim

pairm

entlos

ses

At1

March

201

795

,554

12

,755

–

8,23

237

,190

69

,518

63

01,09

422

4,97

3Dep

reciationch

arge

forthe

yea

r4,34

376

6–

748

1,86

55,72

411

454

13

,614

Dispo

sals

––

–(698

)–

(286

)–

–(984

)Write-offs

(3,081

)–

––

(8,945

)(1,150

)–

(283

)(13,45

9)Rec

lassifica

tion

––

––

4(4)

––

–

At2

8Fe

brua

ry201

896

,816

13

,521

–

8,28

230

,114

73

,802

74

486

522

4,14

4

Ana

lyse

d as

:Acc

umulated

dep

reciation

58,664

13

,521

–

8,28

230

,114

73

,802

74

486

518

5,99

2Acc

umulated

impa

irmen

tlos

ses

38,152

–

––

––

––

38,152

96,816

13

,521

–

8,28

230

,114

73

,802

74

486

522

4,14

4

Netcarryingam

ount

74

,328

31

,127

11

,299

1,

577

6,56

3 13

,249

2,

081

1,45

5 14

1,67

9



(CONT’D)

13. Property,plantandequipment(cont’d)

* Landandbuildings

Longterm leasehold Freehold Buildings land land Total RM’000 RM’000 RM’000 RM’000

Group

At28February2019

Cost

At 1 March 2018 160,357 1,393 9,394 171,144Additions 1,892 – – 1,892Disposal (33) – – (33)Write-offs (72) – – (72)Reclassification 500 – – 500

At 28 February 2019 162,644 1,393 9,394 173,431

Accumulateddepreciation andimpairmentlosses

At1March2018 96,781 35 – 96,816Depreciationchargefortheyear 3,382 18 – 3,400Disposal (6) – – (6)Write-offs (21) – – (21)Impairmentloss 118 – – 118

At28February2019 100,254 53 – 100,307

Analysed as:Accumulateddepreciation 61,984 53 – 62,037Accumulatedimpairmentlosses 38,270 – – 38,270

100,254 53 – 100,307

Netcarryingamount 62,390 1,340 9,394 73,124




* Landandbuildings(cont’d)

Longterm leasehold Freehold Buildings land land Total RM’000 RM’000 RM’000 RM’000

Group

At28February2018

Cost

At 1 March 2017 163,032 1,393 9,394 173,819Additions 95 – – 95Write-offs (3,087) – – (3,087)Reclassification 317 – – 317

At 28 February 2018 160,357 1,393 9,394 171,144

Accumulateddepreciation andimpairmentlosses

At1March2017 95,549 5 – 95,554Depreciationchargefortheyear 4,313 30 – 4,343Write-offs (3,081) – – (3,081)

At28February2018 96,781 35 – 96,816

Analysed as:Accumulateddepreciation 58,629 35 – 58,664Accumulatedimpairmentlosses 38,152 – – 38,152

96,781 35 – 96,816

Netcarryingamount 63,576 1,358 9,394 74,328



(CONT’D)


Officeequipment, furniture Motor andfittings vehicles TotalCompany RM’000 RM’000 RM’000

At28February2019

Cost

At1March2018/28February2019 73 – 73

Accumulateddepreciation

At1March2018/28February2019 72 – 72

Netcarryingamount 1 – 1

At28February2018

Cost

At 1 March 2017 73 183 256Disposal – (183) (183)

At28February2018 73 – 73

Accumulateddepreciation

At 1 March 2017 72 183 255Disposal – (183) (183)

At28February2018 72 – 72

Netcarryingamount 1 – 1




(a) During the financial year, the Group acquired property, plant and equipment with an aggregate cost of RM10,542,000 (2018: RM11,716,000).

Group 2019 2018 RM’000 RM’000

Hire purchase 340 1,128Cash payment 9,963 10,588Acquisitionofsubsidiaries 239 –

10,542 11,716

The net carrying amount of plant and equipment held under finance leases as at reporting date are as follows:

Group 2019 2018 RM’000 RM’000

Motor vehicles 1,198 1,288Plant and machinery 106 276

1,304 1,564

(b) The net carrying amount of property, plant and equipment pledged as securities for borrowings (Note 31) are as follows:

Group 2019 2018 RM’000 RM’000

Freehold land 2,861 2,861Leasehold land 1,342 1,358Buildings 30,678 31,398Others 9,455 9,773

44,336 45,390

(c) Included in the plant and machinery of the Group are staff costs capitalised amounting to RM215,000 (2018: RM234,000).



(CONT’D)

14. Investmentproperties

Group 2019 2018 RM’000 RM’000

Cost

At beginning of the year 113,639 113,612Additions 13 27Disposal (4,269) –

At end of the year 109,383 113,639

Accumulateddepreciationandimpairmentlosses

At beginning of the year 77,145 74,873Depreciation charge for the year 1,950 2,272Disposal (1,625) –


Analysed as:Accumulated depreciation 54,470 53,174Accumulated impairment losses 23,000 23,971

77,470 77,145

Netcarryingamount 31,913 36,494

Fairvalue 88,700 95,920

Direct operating expenses arising from income generating investment properties included in income statements 4,333 4,340

The fair value of the investment properties was based on a valuation report provided by an independent qualifiedvaluer.Valuationwasbasedoncurrentpricesinanactivemarketforcertainpropertiesandwhereappropriate, the investment method reflecting receipt of contractual rentals, expected future market rentals, current market yields, void periods, maintenance requirements and approximate capitalisation rates is used.

Investment properties with net carrying amount of RM31,913,000 (2018: RM33,811,000) are situated on a land owned by a third party with whom the Group has an operating lease arrangement as disclosed in Note 36(b).

Investment properties with a net carrying amount of RM31,913,000 (2018: RM36,494,000) are pledged as securities for borrowings (Note 31).



14. Investmentproperties(cont’d)

A quantitative sensitivity analysis of the change in the yield rate as at 28 February 2019 and 28 February 2018 is shown below:

Fairvalue Valuation Unobservable SensitivityoftheDescription RM’000 techniques inputs Range inputtofairvalue

Land** – Comparable Yieldadjustments – 1%increaseor (2018: method based on (2018: decrease in the 2,810) management’s -15% yield rate would assumptions* to 33%) result in decrease or increase in fair value by approximately RM Nil (2018: RM21,000).

Building** – Comparable Yieldadjustments – 1%increaseor (2018: method based on (2018: decrease in the 1,410) management’s -25% yield rate would assumptions* to -15%) result in decrease or increase in fair value by approximately RM Nil (2018: RM14,000).

Buildings 88,700 Investment Yieldadjustments 7.25% 0.5%increaseor (2018: method based on to 7.75% decrease in the 91,700) management’s (2018: yield rate would assumptions* 7.25% result in decrease to 7.75%) or increase in fair value by approximately RM3.6 million. (2018: RM3.8 million).

* Theyieldadjustmentsaremadeforanydifferenceinthenature,locationorconditionofthespecificproperty.

** The land and building was disposed off during the financial year ended 28 February 2019.



(CONT’D)

15. Landuserights

Group 2019 2018 RM’000 RM’000

Cost

At beginning of the year/end of the year 34,171 34,171

Accumulatedamortisation

At beginning of the year 12,300 11,850Amortisation for the year 450 450


Netcarryingamount 21,421 21,871

Amount to be amortised: - Not later than 1 year 449 449 - Later than 1 year but not later than 5 years 1,798 1,798 - Later than 5 years 19,174 19,624

21,421 21,871

16. Goodwill

Group 2019 2018 RM’000 RM’000

Cost

At beginning of year and at end of year 27,408 27,408

Impairmenttestsforgoodwill

(a) Allocationofgoodwill

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

Group 2019 2018 RM’000 RM’000

Trading of duty free goods, dutiable and non-dutiable merchandise 27,408 27,408



16. Goodwill(cont’d)

Impairmenttestsforgoodwill(cont’d)

(b) Keyassumptionsusedinvalue-in-usecalculations

The recoverable amount of the CGU is determined based on value-in-use calculations using cash flow projectionsfromfinancialforecastswithkeyassumptionsapprovedbymanagementcoveringa5-yearperiod with a growth rate of approximately 5% (2018: 5% to 12%). The forecasted growth rate used to extrapolate cash flow beyond the 5-year period is 2.5% (2018: 2.5%).

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

(i) Budgeted gross margin

The basis used to determine the value assigned to the budgeted gross margin is the average gross margin achieved in the year immediately before the budgeted year, increased for expected efficiency improvements. The budgeted gross margins for trading of duty free goods, dutiable and non-dutiable merchandise segment are in the range of 8% to 34% (2018: 7% to 32%).

(ii) Revenue growth rates

The growth rates are based on the management’s estimated products prices and sales forecast. The selling prices used to calculate the cash inflows from operations were determined after taking intoconsiderationpricetrendsoftheindustry,whichtheCGUsareexposedto.Valuesassignedare consistent with the external sources of information.

(iii) Long-term growth rates

The forecasted growth rates are based on published industry research and do not exceed the long-term average growth rate for the industries relevant to the CGUs.

(iv) Duty-free licences

The duty-free business requires a number of licences, which include duty-free shop licence, wholesale dealer’s licence, bonded warehouse licence and/or liquor import licence. It is assumed that the licences will be renewed upon their expiry on terms and conditions which are not less favourable.

(v) Pre-tax discount rate

Thepre-taxdiscountrateappliedtothecashflowprojectionsof14.5%to14.9%(2018:9.9%)isbased on the weighted average cost of capital (“WACC”) of a subsidiary, Duty Free International Limited Group.

(c) Sensitivitytochangesinassumptions

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



(CONT’D)

17. Intangibleassets

Distributionrights Group 2019 2018 RM’000 RM’000

CostAtbeginningoftheyear – –Additions-acquisitionofsubsidiaries 1,046 –

Atendoftheyear 1,046 –

AccumulatedamortisationAtbeginningoftheyear – –Amortisation 158 –

Atendoftheyear 158 –

Netcarryingamount 888 –

Distribution rights relate to the various distribution contracts for the Group’s beverages distribution business that were acquired in business combination. As explained in Note 2.8, the useful life of these rights is estimated to be 3 years. The amortisation of distribution rights is included in the profit or loss.

18. Investmentinsubsidiaries

Company 2019 2018 RM’000 RM’000

Quoted equity instruments, at cost outside Malaysia 784,367 784,367Unquoted shares, at cost 311,745 274,045

1,096,112 1,058,412Less: Accumulated impairment losses (231,881) (37,680)

864,231 1,020,732



18. Investmentinsubsidiaries(cont’d)

(a) Details of the subsidiaries, which were incorporated in Malaysia (unless otherwise indicated), as at 28 February 2019, are as follows:

Proportionof ownershipinterestNameofCompany inordinaryshares Principalactivities 2019 2018 % %

Arah Induk Sdn. Bhd. 100 100 Dormant

Atlan Properties Sdn. Bhd. 100 100 Investment holding

Atlan Technology Sdn. Bhd. 100 100 Dormant

Atlan Orient Sdn. Bhd. 100 100 Dormant

Naluri Properties Sdn. Bhd. 100 100 Property investment, general construction and apartment hotel business

Duty Free International Limited 75 74 Investment holding (“DFIL”) (Incorporated in Singapore)+^

United Industries Holdings 100 100 Investment holding Sdn. Bhd. (“UIH”) ZonHospitalityServices 100 100 Dormant Sdn. Bhd.

Blossom Time Sdn. Bhd. 100 100 Property development

Timeless Image Sdn. Bhd. 100 100 Investment holding

RZEquitiesSdn.Bhd.** 100 100 Dormant

Trifiniti Networks Sdn. Bhd. 100 100 Dormant

Atlan Assets Sdn. Bhd. 100 100 Dormant

Atlan Management Sdn. Bhd. 100 100 Providing various administration, advisory, management, planning, functions and assistance to its holding company and related companies

Atlan Development Sdn. Bhd. 100 100 Dormant

Atlan Capital Sdn. Bhd. 100 100 Dormant

Ocean Pride Sdn. Bhd. 100 100 Dormant

Tegapasti Sdn. Bhd. 100 100 Dormant



(CONT’D)


(a) Details of the subsidiaries, which were incorporated in Malaysia (unless otherwise indicated), as at 28 February 2019, are as follows (cont’d):


Belia Karisma Sdn. Bhd. 100 100 Dormant

Radiant Ranch Sdn. Bhd. 100 100 Dormant

Gardenia Success Sdn. Bhd. 100 100 Dormant

Tropika Ferringhi Management Sdn. Bhd. 100 100 Property management

HeldthroughBeliaKarisma Sdn.Bhd.andAtlanAssets Sdn.Bhd.

Naluri International Limited 100 100 Investment holding (Incorporated in Hong Kong)#

HeldthroughDFIL

DFZCapitalSdn.Bhd.(“DFZ”)*** 64 63 Investmentholding

Darul Metro Sdn. Bhd. 75 74 Dormant

Orchard Boulevard Sdn. Bhd. 75 74 Investment holding and resort development

BrilliantPixelSdn.Bhd. 75 – Investmentholding

BrandConnectHoldingPte.Ltd.# 52 – Investmentholding

HeldthroughDFZ

DFZTradingSdn.Bhd. 64 63 Investmentholdingand management services

Selasih Ekslusif Sdn. Bhd. 64 63 Retailer of duty free and non-dutiable merchandise

Winner Prompt Sdn. Bhd. 64 63 Licensed distributor and wholesaler of duty free merchandise

EmasKerajangSdn.Bhd.@ 45 44 Retailerofdutyfreeand non-dutiable merchandise

SeruntunMajuSdn.Bhd.@ 44 44 Retailerofdutyfreeand non-dutiable merchandise






HeldthroughOrchardBoulevard Sdn.Bhd.

GoldValeDevelopmentSdn.Bhd. 75 74 Dormant

Kelana Megah Sdn. Bhd. 75 74 Dormant

CergasjayaPropertiesSdn.Bhd. 75 74 Resortdevelopment, properties management and cultivation of oil palm

Black Forest Golf And Country 75 74 Dormant Club Sdn. Bhd.

Binamold Sdn. Bhd. 75 74 Property investment

Tenggara Senandung Sdn. Bhd. 75 74 Dormant

DFZAsiaSdn.Bhd. 75 74 Investmentholding PTDFZIndon 74 74 Dormant (Incorporated in Republic of Indonesia)#

HeldbyBrandConnectHolding Pte. Ltd.

DrinksHubAsiaPte.Ltd.# 52 – Wholesaleofbeverages

Brand Connect Asia Pacific Pte.Ltd.# 52 – Retailsaleofbeverages

ThirstyBoysPte.Ltd.# 52 – Wholesaleofbeverages

HeldthroughDFZTrading Sdn.Bhd.

CergasjayaSdn.Bhd. 64 63 Wholesalerandretailerof duty free and non-dutiable merchandise

Melaka Duty Free Sdn. Bhd. 32 32 Retailer of duty free and non-dutiable merchandise



(CONT’D)




HeldthroughDFZTrading Sdn.Bhd.(cont’d)

DFZDutyFreeSuppliesSdn.Bhd. 64 63 Wholesaleranddistributor of duty free and non-dutiable merchandise

Jasa Duty Free Sdn. Bhd. 64 63 Retailer of duty free and non-dutiable merchandise

DFZEmporiumSdn.Bhd.@ 19 19 Retailerofdutyfreeand non-dutiable merchandise

DFZ(M)Sdn.Bhd.@ 44 44 Retailerofdutyfreeand non-dutiable merchandise

Wealthouse Sdn. Bhd.@ 18 18 Retailer of duty free and non-dutiable merchandise

Jelita Duty Free Supplies Sdn. Bhd. 64 63 Wholesaler and distributor of duty free and non-dutiable merchandise

DFZDutyFree(Langkawi)Sdn.Bhd. 64 63 Retailerofdutyfreeand non-dutiable merchandise ZonEmporiumSdn.Bhd. 64 63 Retailerofdutyfreeand non-dutiable merchandise

DFZUtaraSdn.Bhd. 64 63 Dormant

HeldthroughDFZAsiaSdn.Bhd.

PTDFZIndon(Incorporated in Republic of Indonesia)# 1 1 Dormant






HeldthroughBrandConnect AsiaPacificPte.Ltd.

BrandConnectPte.Ltd.# 52 – Retailsaleofbeverages

BrandConnectVietnam CompanyLimited# 52 – Brandmanagementand distributor of premium beverages

HeldthroughUIH

United Industries Sdn. Bhd. 100 100 Manufacturing and marketing of exhaust systems and other automotive component parts

United Sanoh Industries Sdn. Bhd. 70 70 Manufacturing and distribution of brake, fuel, other automotive component parts

and clutch tubings

HeldthroughUnitedIndustries Sdn.Bhd.

UEW Plastic Industries Sdn. Bhd. 100 100 Dormant

Freighter Industries (M) Sdn. Bhd. 100 100 Dormant

Danco Marketing Sdn. Bhd. 100 100 Dormant

HeldthroughUIHand UnitedIndustriesSdn.Bhd.

UnitedVehiclesIndustriesSdn.Bhd. 100 100 Manufacturingandmarketingof fuel tanks, other automotive component parts and wheelbarrows

United Filter Sdn. Bhd. 97 97 Dormant



(CONT’D)




HeldthroughUnitedVehicles IndustriesSdn.Bhd.

Kadar Prisma Sdn. Bhd.* 100 100 Dormant

UVIAdvanceTechnologySdn.Bhd. 100 100 Dormant

+ A corporation listed on Singapore Stock Exchange (“SGX-ST”)^ AuditedbymemberfirmofErnst&YoungGlobalinSingapore# AuditedbyafirmotherthanErnst&Young@ The terms of non-voting Convertible Redeemable Preference Shares has led to the total effective

ownership interest held as shown below:

Totaleffective ownershipinterestheld 2019 2018 % %

Nameofcompany

EmasKerajangSdn.Bhd. 64 63 SeruntunMajuSdn.Bhd. 64 63 DFZEmporiumSdn.Bhd. 64 63 DFZ(M)Sdn.Bhd. 64 63 Wealthouse Sdn. Bhd. 64 63

The Group assessed that these investees are subsidiaries as control was retained by the Group through stipulations in the shareholder agreement, signed by the Group and the non-controlling interests.

* Company was placed under Strike Off during the financial year ended 28 February 2019** Company was placed under Strike Off since financial year ended 28 February 2017*** On 30 November 2017, Heinemann Asia Pacific Pte. Ltd. (“HAP”) exercised the Second Tranche

Call Option, requiring the Company’s subsidiary, Duty Free International Limited (“DFIL”) to sell toHAP5%of the issuedandpaid-upsharecapitalofDFZCapitalSdn.Bhd. (“DFZ”),being10,498,181sharesinDFZ,foranaggregatecashconsiderationofEuro9,850,000.Thedisposalwas successfully completed on 29 December 2017.




(b) Subsidiaries with material non-controlling interests

The Group regards DFIL and its subsidiaries (“DFIL Group”) and United Sanoh Industries Sdn. Bhd. (“USISB”) as subsidiaries which have non-controlling interests that are material to the Group. The equity interest held by non-controlling interests are as follows:

DFILGroup USISB 2019 2018 2019 2018 % % % %

Equity interest held by non-controlling interests 25 26 30 30

The summarised financial information of DFIL Group and USISB is set out below. The information presented below is based on the amounts before inter-company elimination.

(i) Summarised statements of financial position

DFILGroup USISB 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000

Non-current assets 155,544 164,755 6,175 6,739Current assets 597,300 584,305 52,167 46,916

Total assets 752,844 749,060 58,342 53,655

Current liabilities 177,767 144,236 17,976 14,615Non-current liabilities 5,778 5,139 807 814

Total liabilities 183,545 149,375 18,783 15,429 Net assets 569,299 599,685 39,559 38,226

Equity attributable to owners of the company 415,229 432,445 27,691 26,758Non-controlling interests 154,070 167,240 11,868 11,468

569,299 599,685 39,559 38,226



(CONT’D)


(b) Subsidiaries with material non-controlling interests (cont’d)

(ii) Summarised statements of comprehensive income


Revenue 556,326 620,124 65,545 66,383

Profit for the year 52,575 48,220 4,333 5,350

Profit attributable to: Owners of the company 34,837 30,959 3,033 3,745 Non-controlling interests 17,738 17,261 1,300 1,605

52,575 48,220 4,333 5,350

Item that may be reclassified to profit or loss in subsequent periods - Foreign currency translation (168) – – –

Total comprehensive income 52,407 48,220 4,333 5,350

Total comprehensive income attributable to: Owners of the company 34,723 30,959 3,033 3,745 Non-controlling interests 17,684 17,261 1,300 1,605

52,407 48,220 4,333 5,350

Dividends paid to non-controllinginterests 25,570 25,973 900 –




(b) Subsidiaries with material non-controlling interests (cont’d)

(iii) Summarised statements of cash flows


Net cash generated from/(used in): - Operating activities 28,812 123,603 11,401 5,517 - Investing activities (27,003) 5,290 (1,312) (1,312) - Financing activities (75,053) (4,553) (7,159) 259

Net (decrease)/increase in cash and cash equivalents (73,244) 124,340 2,930 4,464Effects of foreign exchange rate changes 5,528 (21,716) – –Cash and cash equivalents at beginning of the year 364,140 261,516 12,409 7,945

Cash and cash equivalents at end of the year 296,424 364,140 15,339 12,409

(c) Acquisition of subsidiary

On 8 August 2018 (the “acquisition date”), the Group subscribed 2,800,000 new ordinary shares in the capital of Brand Connect Holding Pte. Ltd. (“BCH”) at a consideration of US$2,800,000 following the satisfaction of the conditions precedent to the Agreement (“Acquisition”). Following the completion of the Acquisition, BCH became a 52% owned subsidiary of the Group.

Brand Connect group of companies is engaged in the business of marketing, wholesale and retail distribution of beverage products across countries in the Asia Pacific region. The Group has acquired BCH to develop and grow the Group’s beverage distribution business. The acquisition is also expected to expand the Group’s market operations beyond the current sales channels in the duty-free market of Malaysia, to include the duty paid market across South East Asia.



(CONT’D)


(c) Acquisition of subsidiary (cont’d)

The fair value of the identifiable assets and liabilities of Brand Connect group of companies as at the acquisition date were:

Fairvalue recognisedon acquisition RM’000

Property, plant and equipment 239Intangible assets- distribution rights 1,046Cash and cash equivalents 7,773Trade and other receivables 7,971Inventories 7,875

24,904

Deferred tax liabilities (198)Borrowings (4,437)Trade and other payables (3,087)Income tax payable (78)

(7,800)

Total identifiable net assets at fair value 17,104Non-controlling interest measured at the non-controlling interest’s proportionate share of BCH’s net idenfiable assets (5,056)

12,048

Consideration transferred for the acquisition of BCHCash paid 11,533Put options 618Call options (103)

Total consideration transferred 12,048

Effect of the acquisition of BCH on cash flows Total consideration for 52% equity interest acquired 12,048Less: non-cash consideration (515)

Consideration settled in cash 11,533Less: Cash and cash equivalents of subsidiary acquired (7,773)

Net cash inflow on acquisition 3,760




(c) Acquisition of subsidiary (cont’d)

Put and call options as part of consideration transferred

In connection with the acquisition, the Group granted put options to the remaining shareholders of BCH(“theVendors”),whichgavetheVendorstherighttoselltheirinterestsinBCHtotheGroupundervariousconditions.TheVendorsalsograntedcalloptionstotheGroup,whichgavetheGrouptherighttobuytheremaininginterestinBCHfromtheVendorsunderthesametermsoftheputoptions.Asatthe acquisition date, the fair value of these options was RM515,000 and recognised as derivative liability in the statement of financial position. There is no material change in fair value of the put options as at 28 February 2019.

Trade and other receivables acquired

Trade and other receivables acquired comprise of trade receivables with fair values of RM6,079,000. Their gross proceeds of RM6,079,000 is expected to be collected.

Impact of the acquisition on profit or loss

From the acquisition date, BCH has contributed RM31,914,000 of revenue and net loss of RM884,000 to the Group’s profit for the year. If the business combination had taken place at the beginning of the year, the Group’s revenue would have been RM783,210,000 and the Group’s profit for the year would have been RM58,071,000.

(d) Impairment loss recognised

The management of the Company has carried out a review of the recoverable amount of its investments in subsidiaries. The review has led to the recognition of impairment loss of RM194,201,000 in the profit or loss. The recoverable amount was based on the higher of fair value less cost to sell and value-in-usecalculationusingcashflowprojectionsbasedonthefinancialbudgetsapprovedbymanagementcovering a five-year period.

The key assumptions used in value-in-use calculations are presented below:

(i) Budgeted gross margin

The basis used to determine the value assigned to the budgeted gross margin is the average gross margin achieved in the year immediately before the budgeted year, increased for expected efficiency improvements. The budgeted gross margins are 32%.

(ii) Revenue growth rates

The growth rates are based on the management’s estimated products prices and sales forecast. The selling prices used to calculate the cash inflows from operations were determined after taking intoconsiderationpricetrendsoftheindustry,whichtheCGUsareexposedto.Valuesassignedare consistent with the external sources of information.

(iii) Long-term growth rates

The forecasted growth rates are based on published industry research and do not exceed the long-term average growth rate for the industries relevant to the CGUs.



(CONT’D)


(d) Impairment loss recognised (cont’d)

(iv) Discount rate

Thediscountrateappliedtothecashflowprojectionsof13%isbasedontheweightedaveragecost of capital of Duty Free International Limited.

Sensitivity to changes in assumptions

The recoverable amount based on value-in-use computation is sensitive towards possible changes in long-term growth rates and discount rate.

A rise or reduction of 0.1% in the long-term growth rates would result in a further improvement or impairment in the carrying amount. A rise or reduction of 0.1% in the discount rate would result in a further impairment or improvement in the carrying amount.

19. Investmentinassociate


Unquoted shares in Malaysia, at cost 437 437 437 437Sharesofpostacquisitionresults 210 284 – –

647 721 437 437

Represented by:Share of net assets of associate 647 721 437 437

The particulars of the associate, which is incorporated in Malaysia, are as follows:

ProportionofNameofCompany ownershipinterest 2019 2018 Principalactivities % % Scandinavian Avionics (Malaysia) 25 25 Sale of aviation related Sdn. Bhd.# electrical instruments and the provision of avionics support services

# AuditedbyafirmotherthanErnst&Young

The financial year end of the associate is 31 December. The results of the associate are accounted for in the Group’s financial statements under the equity method, based on the most recently available audited financial statements and the unaudited management financial statements of the associate made up to period ended 28 February 2019.

The associate requires the parent’s consent to distribute its profits. The parent does not foresee giving such consent at the reporting date.



19. Investmentinassociate(cont’d)

The associate had no contingent liabilities or capital commitments as at 28 February 2019 or 28 February 2018.

The summarised financial information of the associate is set out below and represents the amounts in the financial statements of the associate and not the Group’s share of those amounts.

(a) Summarised statements of financial position

Group 2019 2018 RM’000 RM’000

Non-current assets 490 481Current assets 5,295 6,350

Total assets 5,785 6,831

Current liabilities, representing total liabilities 3,196 3,948

Net assets 2,589 2,883

(b) Summarised statements of comprehensive income

Group 2019 2018 RM’000 RM’000

Revenue 3,370 9,730(Loss)/profit before tax (294) 631(Loss)/profit net of tax, representing total comprehensive income (294) 631

(c) Reconciliation of the summarised financial information presented above to the carrying amount of the Group’s interest in the associate

Group 2019 2018 RM’000 RM’000

Net assets at beginning of the year 2,883 2,252(Loss)/profit net of tax (294) 631

Net assets at end of the year 2,589 2,883

Interest in the associate 25% 25% Carrying value of Group’s interest in the associate 647 721



(CONT’D)

20. Otherinvestments

Group 2019 2018 RM’000 RM’000

Unquoted shares at cost - in Malaysia 21 21 -outsideMalaysia – 3,688

21 3,709Less:Accumulatedimpairmentlosses – (3,688)

21 21Corporate golf club and vacation club memberships at cost 144 125Less: Accumulated amortisation (18) (17)

147 129

21. Prepayments


CurrentPrepaidrental 10,160 9,785 – –Prepaid other operating expenses 3,345 3,171 7 9

13,505 12,956 7 9

Non-currentPrepaidrental 29,709 39,489 – –

Totalprepayments 43,214 52,445 7 9

Amount to be charged out to profit or loss: - Not later than 1 year 13,505 12,956 7 9 - Later than 1 year but not laterthan5years 29,709 39,122 – – -Laterthan5years – 367 – –

43,214 52,445 7 9

IncludedintheprepaidrentalisthebalancerentalpaidinadvancebytheGrouptoBerjayaWaterfrontSdn.Bhd. amounting to RM35,567,000 (2018: RM44,367,000).



22. Deferredtax

Group 2019 2018 RM’000 RM’000

At beginning of the year 4,854 5,489Recognised in profit or loss (Note 10) (2,035) (635)


Presentedafterappropriateoffsettingasfollows:

Deferred tax assets (4,507) (2,267)Deferred tax liabilities 7,326 7,121

2,819 4,854

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

DeferredtaxliabilitiesoftheGroup:

Property, plantand equipment RM’000

At 1 March 2017 9,255Recognised in profit or loss (667)

At 28 February 2018 8,588

At 1 March 2018 8,588Recognised in profit or loss 565

At 28 February 2019 9,153



(CONT’D)

22. Deferredtax(cont’d)

DeferredtaxassetsoftheGroup:

Unutilisedtax lossesand unabsorbed capital allowances Others Total RM’000 RM’000 RM’000

At 1 March 2017 (799) (2,967) (3,766)Recognised in profit or loss (143) 175 32

At 28 February 2018 (942) (2,792) (3,734)

At 1 March 2018 (942) (2,792) (3,734)Recognised in profit or loss (624) (1,976) (2,600)

At 28 February 2019 (1,566) (4,768) (6,334)

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


Unabsorbed capital allowances 53,014 55,611 818 818Unabsorbed reinvestment allowances 10,307 16,122 – –Unutilisedtaxlosses 222,747 226,748 – –Other deductible temporary differences 119,003 120,590 – –

405,071 419,071 818 818

Deferred tax assets have not been recognised in respect of these items as they may not be used to offset taxable profits of other subsidiaries in the Group and they have been risen in subsidiaries that have insufficient profits to fully utilise these unabsorbed capital allowances, unabsorbed reinvestment allowances, unutilised tax losses and other deductible temporary differences in the foreseeable future.

The deferred tax assets attributable to unabsorbed capital allowances, unabsorbed reinvestment allowances andunutilisedtaxlossesareavailableforoffsettingagainstfuturetaxableprofitssubjecttonosubstantialchange in shareholdings under the Income Tax Act, 1967 and guidelines issued by the tax authority.



23. Inventories

Group 2019 2018 RM’000 RM’000

CostFood and beverages 24 39Raw materials 21,839 18,568Work in progress 2,941 3,098Trading goods 170,029 135,304Finished goods 1,395 1,726Inventory property 13,665 13,665Consumables 776 139

210,669 172,539

During the year, the amount of inventories recognised as an expense in the income statements was RM503,112,000 (2018: RM555,200,000).

24. Biologicalassets

Group 2019 2018 RM’000 RM’000

Atfairvalue

At beginning of the year 152 187Loss arising from changes in fair value (Note 8) (49) (35)

At end of the year 103 152

Mature oil palm trees produce fresh fruit bunches (“FFB”), which are used to produce Crude Palm Oil (“CPO”) and Palm Kernel (“PK”). The group adopted the Amendments to MFRS 116 and MFRS 141 on 1 March 2016, which changed the accounting requirements for biological assets. Bearer plant will now fall within the scope of MFRS 116 Property, Plant and Equipment whereas agricultural produce growing on bearer trees (e.g. fruit growing on a tree) will remain within the scope of MFRS 141 Agriculture. The fair values of bearer fruits are determined by using the total sales figure in the following month with the assumptions of all the fruits harvested are sold subsequently to the customer.

During the year, the Group’s bearer fruits produced approximately 3,100 tonnes (2018: 3,400 tonnes) of FFB. The selling prices per tonne for those FFB based on CPO and PK selling price ranged between RM1,200 to RM2,500 (2018: RM2,000 to RM2,900). The selling prices per tonne for those FFB are based on a calculation using the periodic market prices of CPO and PK and contracted pre-determined extraction rates of CPO and PK as agreed with the buyer of FFB crop.



(CONT’D)

25. Tradeandotherreceivables


Current

TradereceivablesThirdparties 41,277 36,575 – –Less:Allowanceforimpairment (468) (595) – –

Tradereceivables,net 40,809 35,980 – –

OtherreceivablesDuefromsubsidiaries – – 26,805 102,547Less:Allowanceforimpairment – – (23,760) (55,641)

– – 3,045 46,906

Deposits 5,605 3,987 3 3DuefromBerjayaWaterfront Sdn.Bhd. 40,434 40,434 – –Debtsecurities 30,000 – – –Sundryreceivables 14,284 9,826 – –Goods and Services Tax (“GST”)receivable 1,519 3,084 – –

91,842 57,331 3 3Less:Allowanceforimpairment (367) (367) – –

Other receivables, net 91,475 56,964 3,048 46,909

Total current trade and other receivables, net 132,284 92,944 3,048 46,909

Non-current

OtherreceivableDuefromsubsidiaries – – 23,836 –

Total other receivables 91,475 56,964 26,884 46,909

Total trade and other receivables 132,284 92,944 26,884 46,909Less:GSTreceivable (1,519) (3,084) – –

Total trade and other receivables excluding GST receivable 130,765 89,860 26,884 46,909Add: Cash and bank balances (Note 28) 349,780 410,231 3,104 3,238

Total loans and receivables 480,545 500,091 29,988 50,147



25. Tradeandotherreceivables(cont’d)

Trade receivables

Trade receivables are non-interest bearing and are generally on 14 to 120 days (2018: 14 to 120 days) terms. Other credit terms are assessed and approved on a case-by-case basis. Trade receivables are recognised at their original invoice amounts which represent their fair values on initial recognition.

Due from subsidiaries

The amounts owing from subsidiaries are unsecured and are recoverable on demand. The interest bearing and non-interest bearing amounts are as follows:

Company 2019 2018 RM’000 RM’000

Interest bearing 26,836 46,390Non-interest bearing 45 516

Total 26,881 46,906

The effective interest is 6.0% (2018: 5.0%) per annum.

DuefromBerjayaWaterfrontSdn.Bhd.(“BerjayaWaterfront”)

TheamountduefromBerjayaWaterfrontisrelatedtotheuncollectedportionofthesaleconsiderationfortheGroup’sinterestsoverleaseholdpropertiesinTheZonJohorBahru,whichwascompletedinMarch2013.Thisbalancehadbeensubjecttointerestthroughoutthetermthatthebalancewasoutstanding.Theinterestrate was initially at 6% per annum, but this has been revised to 9% per annum from 16 July 2015 onwards. In April 2019, Darul Metro Sdn. Bhd. (“DMSB”) received RM0.9 million, being accrued interest up to 15 April 2019.

The balance of RM40.0 million was scheduled to be due on 15 April 2019. Subsequent to year end, both partieshadmutuallyagreedthatBerjayaWaterfrontshallpaytheremainingdeferredconsiderationofRM40.0milliononorbefore15April2020andBerjayaWaterfrontwillcontinuetopayinterestattherateof9%perannum on unpaid consideration on quarterly basis.

TheamountisguaranteedbyBerjayaWaterfront’sholdingcompany.

Debt securities

Debt securities are investment in medium term note, which are interest bearing at 6.0% per annum and expired on 25 March 2019.



(CONT’D)


Goods and Services Tax (“GST”) receivable

(i) Inthepreviousfinancialyear,asubsidiaryoftheCompany,SeruntunMajuSdn.Bhd.(“SMSB”)hadreceived Bills of Demand dated 2 November 2017 from the Royal Malaysian Customs of Perak Darul Ridzuan (“Customs”) which demanded payments of GST amounting to RM1,225,000 for the period from 1 April 2015 to 31 December 2016.

The said Bills of Demand were raised by the Customs who alleged that SMSB did not comply with certain conditions of a duty-free shop located at the border.

On 27 November 2017, SMSB had appealed to the Director-General in respect of GST pursuant to Section 124 of the GST Act. To-date, the matter is still pending a decision from the Director-General.

The Company, after consultation with its solicitors, strongly believes that there is no legal and/or factual basis for the Customs to arrive at their decision to raise the said Bills of Demand. The solicitors of SMSB are taking the necessary defence actions on its behalf.

As at 28 February 2019, SMSB had paid RM1,225,000 demanded by the Customs and this is included in GST receivable.

(ii) Also, included in GST receivable is RM1,509,000, relating to the GST paid for the Bills of Demand which were raised by the Customs Department as disclosed in Note 42.

Ageing analysis of trade receivables

The ageing analysis of the Group’s trade receivables is as follows:

Group 2019 2018 RM’000 RM’000

Neither past due nor impaired 31,549 29,721

1 to 30 days past due not impaired 5,601 2,95331 to 60 days past due not impaired 2,332 1,66561 to 90 days past due not impaired 449 7191 to 120 days past due not impaired 187 634More than 120 days past due not impaired 691 936

Past due but not impaired 9,260 6,259Impaired 468 595

41,277 36,575

Receivables that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group.

None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the financial year.




Trade receivables that are past due but not impaired

The Group has trade receivables amounting to RM9,260,000 (2018: RM6,259,000) that are past due at the reporting date but not impaired. Although these balances are unsecured in nature, they are mostly due from creditworthy debtors.

None of the Group’s trade receivables that are past due but not impaired have been renegotiated during the financial year.

Trade receivables that are impaired

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

Group 2019 2018 RM’000 RM’000

IndividuallyimpairedTrade receivables - nominal amounts 468 595Less: Allowance for impairment (468) (595)

– –

Movement in allowance accounts:

Group 2019 2018 RM’000 RM’000

At beginning of the year 595 573Chargefortheyear – 22Writtenback (127) –

At end of the year 468 595

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

Management conducts periodic assessment on its trade receivable balances on an account-by-account basis. Hence, all impairment losses are provided for specific trade receivable balances. Management is of the opinion that there are no further factors that warrants the consideration of additional impairment losses on a collective basis.



(CONT’D)


Other receivables that are impaired

Other receivables that are impaired at the reporting date and the movement of the allowance accounts used to record the impairment are as follows:

Group 2019 2018 RM’000 RM’000

IndividuallyimpairedSundry receivables - nominal amounts 367 367Less: Allowance for impairment (367) (367)

– –

Company 2019 2018 RM’000 RM’000

IndividuallynotimpairedDue from subsidiaries 26,881 31,307IndividuallyimpairedDue from subsidiaries - nominal amounts 23,760 71,240

50,641 102,547Less: Allowance for impairment (23,760) (55,641)

26,881 46,906

Movement in allowance accounts:


At beginning of the year 367 602 55,641 53,792Chargefortheyear – – 3,708 1,849Reversal – (235) (35,589) –

At end of the year 367 367 23,760 55,641

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

Management conducts periodic assessment on its sundry receivable balances on an account-by-account basis. Hence, all impairment losses are provided for specific sundry receivable balances. Management is of the opinion that there are no further factors that warrants the consideration of additional impairment losses on a collective basis.



26. Marketablesecurities

GroupandCompany 2019 2018 Marketvalue Marketvalue Carrying ofquoted Carrying ofquoted amount investments amount investments RM’000 RM’000 RM’000 RM’000

Held for trading investmentsEquity instruments - Quoted outside Malaysia 4 4 5 5

Changes in fair value

During the financial year, the Group and the Company have recognised a decrease in fair value amounting to RM69,000 (2018: increase of RM229,000) and RM69,000 (2018: increase of RM229,000), respectively with regards to the equity instruments.

27. Derivativeassetsandliabilities

Notional amount Assets Liabilities RM’000 RM’000 RM’000

Group

At28February2019

Forwardcurrencycontracts 6,805 – 99Callandputoptions 515 – 515

– 614

At28February2018

Forward currency contracts 9,823 8 26Calloptions 1,017 – 1,017

8 1,043

At28February2019

Current – 99Noncurrent – 515

– 614

At28February2018

Current 8 1,043Noncurrent – –

8 1,043



(CONT’D)

27. Derivativeassetsandliabilities(cont’d)

The Group uses forward foreign currency contracts to manage some of its transaction exposure. These contracts are not designated as cash flow or fair value hedges and are entered into for periods consistent with currency translation exposure and fair value changes exposure. Such derivatives do not qualify for hedge accounting. The derivatives represent total financial assets and liabilities at fair value through profit or loss, classified held for trading.

During the financial year, the Group recognised loss on forward foreign exchange contracts amounting to RM81,000 (2018: RM8,000) arising from fair value changes of financial derivative. The fair value changes are attributable to changes in foreign exchange and forward rate.

The call options in previous years were in relation to the fair value of call options issued which gives Heinemann AsiaPacificPte.Ltd.(“HAP”)theoptiontoacquireamaximumof15%additionalequityinterestinDFZCapitalSdn.Bhd.(“DFZ”),asubsidiaryoftheCompany.Duringpreviousfinancialyear,HAPexercisedtheSecondTrancheCallOptionandpurchase5%ofequityinterestinDFZ.Thecalloptionexpiredduringthecurrentfinancial year.

During the current financial year, in connection with the acquisition of Brand Connect Holding Pte. Ltd. (“BCH”), call and put options were granted to the Group and non-controlling interests. Please refer to Note 29 for the financial liability recognised on the put options.

28. Cashandbankbalances


Cash on hand and at banks 211,196 245,857 3,104 1,151Depositswithlicensedbanks 138,584 164,374 – 2,087

349,780 410,231 3,104 3,238

Cash at banks earns interest at floating rates based on daily bank deposit rates. Deposits with licensed banks are made for varying periods of between one day and one year (2018: one day and one year) depending on the immediate cash requirements of the Group and of the Company, and earn interest at the respective deposit rates. The effective interest rates for the Group and the Company were 2.90% to 5.85% (2018: 2.70% to 5.28%) per annum and Nil (2018: 3.40%) per annum, respectively.

Deposits with licensed banks of the Group amounting to RM12,193,000 (2018: RM11,901,000) are pledged to banks for credit facilities granted to certain subsidiaries as disclosed in Note 31.



28. Cashandbankbalances(cont’d)

For the purpose of the statements of cash flows, cash and cash equivalents comprise the following as at the reporting date:


Cash on hand and at banks 211,196 245,857 3,104 1,151Depositswithlicensedbanks 138,584 164,374 – 2,087

349,780 410,231 3,104 3,238Deposits pledged with licensedbanks (12,193) (11,901) – –

Cash and cash equivalents 337,587 398,330 3,104 3,238

29. Tradeandotherpayables


TradepayablesThirdparties 109,599 97,611 – –Retentionsums – 1 – –

109,599 97,612 – –

OtherpayablesDuetosubsidiaries – – 174,849 174,862Sundry payables 8,188 9,219 66 15Goods and Services Tax (“GST”)payable 175 1,362 – –Accruals 22,960 21,018 539 589Depositspayable 5,750 4,629 – –Rentalpayable 652 476 – –Royaltypayable 549 597 – –Deposits received for proposeddisposals 560 560 – –Contributioncostpayable 209 209 – –Putoptionliability 7,348 – – –

46,391 38,070 175,454 175,466

Total trade and other payables 155,990 135,682 175,454 175,466



(CONT’D)

29. Tradeandotherpayables(cont’d)


Total trade and other payables 155,990 135,682 175,454 175,466Less:GSTpayable (175) (1,362) – –

Total trade and other payables excluding GST payable 155,815 134,320 175,454 175,466Add: Borrowings (Note 31) 68,684 69,684 40,000 50,000

Total financial liabilities carried at amortised cost 224,499 204,004 215,454 225,466

Trade payables

The amounts are non-interest bearing. The credit terms of trade payables normally range from 30 to 120 days (2018: 30 to 120 days).

Due to subsidiaries

The amounts due to subsidiaries are unsecured, non-interest bearing and are repayable on demand.

Sundry payables

The amounts are non-interest bearing. Sundry payables are normally settled on an average term of 30 to 120 days (2018: 30 to 120 days).

Deposits received for proposed disposals

This deposit relates to the proposed sale of Kelana Megah Sdn. Bhd.’s intended lease interests in the land parcelbearinglotnumberPTB20379toBerjayaWaterfrontSdn.Bhd.foraconsiderationofRM27,990,000(“KMSB Agreement”). The conditions precedent for the sale have not been fulfilled to date.

Put option liability

The put option liability reflects the carrying value of the put options to acquire the 30% non-controlling interest in a subsidiary Brand Connect Holding Pte. Ltd. (“BCH”). The carrying value of the liability has been calculated based on expected financial performance of BCH and expected exercise date.



30. Employeebenefits

The Group’s defined benefit plan is unfunded and it provides retirement benefits for employees upon retirement on the account of medical grounds and for employees who pass away while under employment. The retirement benefits are only applicable to employees who are in the scope of the 2 Collective Agreements signed between the National Union of Transport Equipment and Allied Industries Workers and 3 subsidiaries of the Group.

The Minister of Human Resources had on 13 November 2014 and 14 September 2015, referred the finalisation of the new Collective Agreements to the Industrial Court, pursuant to Section 26(2) of the Industrial Relations Act, 1967.

Therefore, the Collective Agreements for the period from 1 January 2011 to 31 December 2013 subsists until superseded by new Collective Agreements.

Under the subsisting Collective Agreements, eligible employees are entitled to retirement benefit amounting to one, two, three and four weeks’ of last drawn salary, based on the period and length of service, upon reaching the age of 60. Eligible employees may opt to retire at the age of 50.

The Industrial Court had on 7 September 2017 and 12 September 2017 issued final consent awards with the agreement from all parties on the Collective Agreements for the period from 1 January 2014 to 31 December 2016 and 1 January 2017 to 29 February 2020.

Under the Collective Agreements for the period from 1 January 2014 to 31 December 2016, the retirement benefits ceased with effect from 31 December 2016 and shall be calculated up to 31 December 2016 and shall be paid directly to the employees upon the employees attaining the optional retirement age of 55 years.

Under the Collective Agreements for the period from 1 January 2017 to 29 February 2020, in place of the retirement benefit, eligible employees shall receive an additional 1% based on the basic salary, in respect of the Group’s contribution to the Employee Provident Fund.

(a) The amounts recognised in the statements of financial position are determined as follows:

Group 2019 2018 RM’000 RM’000

Present value of unfunded defined benefit obligations 3,201 3,524

Analysed as:Current 502 594

Non-current: Later than 1 year but not later than 2 years 385 124Later than 2 years but not later than 5 years 633 797Later than 5 years 1,681 2,009

2,699 2,930

Total employee benefits 3,201 3,524



(CONT’D)

30. Employeebenefits(cont’d)

(b) Movement in the net liability recognised in the statements of financial position:

Group 2019 2018 RM’000 RM’000

At beginning of the year 3,524 6,247Expenserecognisedintheprofitorloss – (2,089)Benefits paid (323) (634)


(c) The amounts recognised in the income statements:

Group 2019 2018 RM’000 RM’000

Currentservicecost – 119Interestonobligation – 187Pastservicecosts – (2,395)

Total,includedinemployeebenefitsexpense(Note6) – (2,089)

(d) Principal actuarial assumptions used at the reporting date (expressed as weighted averages):

Group 2019 2018 % %

Discount rate 5.3 5.3Futuresalaryincrease –* –*Priceinflation –* –*

* Future salary increase and price inflation assumption is no longer a principal actuarial assumptions as the Group’s retirement benefits had ceased with effect from 31 December 2016.

(e) A quantitative sensitivity analysis of the change in the rates as at 28 February 2019 and 28 February 2018 is shown below:

Group 2019 2018 Impacton Impacton defined defined Increase/ benefit benefit (decrease) obligations obligations

% RM’000 RM’000

Discount rate 1.0 (189) (205)Discount rate (1.0) 189 205



30. Employeebenefits(cont’d)

(f) The expected benefit payments in future years are as follows:

Group 2019 2018 RM’000 RM’000

Not later than 1 year 502 594Later than 1 year and not later than 5 years 1,018 921Later than 5 years and not later than 10 years 856 1,074

2,376 2,589

31. Borrowings

Group Company Maturity 2019 2018 2019 2018 RM’000 RM’000 RM’000 RM’000

CurrentSecured:Obligations under financeleases 2020 532 541 – –Bankers’acceptances 2020 11,302 17,057 – –Term loans - term loan 2020 10,000 10,000 10,000 10,000 -shorttermloan 2020 13,277 – – – -Islamictermloan 2020 1,129 283 – –

36,240 27,881 10,000 10,000

Non-currentSecured:Obligationsunder 2021 660 834 – – finance leases - 2024 Term loans - term loan 2021 30,000 40,000 30,000 40,000 - 2023 -Islamictermloan 2021 1,784 969 – – - 2024

32,444 41,803 30,000 40,000

Total borrowings 68,684 69,684 40,000 50,000

TotalborrowingsObligations under finance leases (Note32) 1,192 1,375 – –Bankers’acceptances 11,302 17,057 – –Term loans 56,190 51,252 40,000 50,000

Total borrowings 68,684 69,684 40,000 50,000



(CONT’D)

31. Borrowings(cont’d)


Maturityofborrowings (excludingobligations underfinanceleases)Not later than 1 year 35,708 27,340 10,000 10,000Later than 1 year and not later than 5 years 31,784 40,969 30,000 40,000

67,492 68,309 40,000 50,000

The borrowings are secured by way of:

- fixed charges on certain properties of the Group with a net carrying amount of RM76,249,000 (2018: RM81,884,000);

- deposits with licensed banks of the Group amounting to RM12,193,000 (2018: RM11,901,000);- fixed and floating charges over all present and future assets of certain subsidiaries; and- corporate guarantees by the Company and by certain subsidiaries of the Group.

Obligations under finance leases

These obligations are secured by a charge over the leased assets (Note 13). The discount rates implicit in the leases of the Group range from 2.96% to 3.55% (2018: 2.80% to 3.55%) per annum.

Bankers’ acceptances

Bankers’ acceptances bear interest rates which range from 3.64% to 4.07% (2018: 3.34% to 4.00%) per annum.

Term loan

Term loan bears interest rate at BLR - 0.50% per annum. The term loan is secured by certain investment properties of the Group.

Short term loan

Short term loan are denominated in USD and SGD with weighted average effective interest rate of 3.87% per annum.

Islamic term loan

Islamic term loan bears interest rate at BFR - 1.50% per annum. The term loan is secured by certain properties of the Group and corporate guarantee by the Company.



32. Obligationsunderfinanceleases

Group 2019 2018 RM’000 RM’000

Futureminimumleasepayments:

Not later than 1 year 591 604Later than 1 year and not later than 5 years 702 884

Total future minimum lease payments 1,293 1,488Less: Future finance charges (101) (113)

Present value of finance lease liabilities (Note 31) 1,192 1,375

Analysisofpresentvalueoffinanceleaseliabilities:

Not later than 1 year 532 541Later than 1 year and not later than 5 years 660 834

1,192 1,375Less: Amount due within 12 months (532) (541)

Amount due after 12 months 660 834

33. Sharecapital

Share capital Number (Issuedand ofshares fullypaid) ’000 RM’000

GroupandCompany

At 1 March 2017 and 28 February 2018 253,650 356,528 At 1 March 2018 and 28 February 2019 253,650 356,528

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions and rank equally with regard to the Company residual assets.



(CONT’D)

34. Otherreserve

Other reserve arises from changes in the Group’s equity interest in subsidiaries.

Group 2019 2018 RM’000 RM’000

At beginning of the year (39,455) (32,059)Changes of equity interest in a subsidiary: - arising from accretion of equity interest in a subsidiary (4,472) (7,396)Transfertoreserve (2,558) –

At end of the year (46,485) (39,455)

The accretion of equity interest in a subsidiary was due to the repurchase of shares by DFIL.

With the transactions above, the Company’s equity interest in DFIL is 74.89% (2018: 74.30%) as at 28 February 2019.

35. Retainedearnings

The Company may distribute dividends out of its entire retained earnings as at 28 February 2019 and 2018 under the single tier system.

36. Commitments

(a) Capitalcommitments

Group 2019 2018 RM’000 RM’000

Capital expenditure Approved and contracted for: Property, plant and equipment 3,943 2,892 Approved but not contracted for: Property, plant and equipment 25,843 3,959

29,786 6,851



36. Commitments(cont’d)

(b) Non-cancellableoperatingleasecommitments–aslessee

Future minimum rentals payable under non-cancellable operating leases (excluding land use rights) at the reporting date are as follows:

Group 2019 2018 RM’000 RM’000

Not later than 1 year 1,618 216 Later than 1 year but not later than 5 years 9,491 864 Later than 5 years 155,471 164,312

166,580 165,392

Operating lease commitments represent rentals payable by the Group for use of land and buildings.

Included in operating lease commitments are commitments in respect of a non-cancellable operating lease expiring in 2038 for a piece of property leased by a subsidiary, Naluri Properties Sdn. Bhd. (“NPSB”). NPSB has an option to renew the lease for another 30 years after the expiry of the lease. Should the lease be renewed, the additional lease payments for the renewal period, which is not included in the above would amount to RM7,200,000.

37. Relatedpartydisclosures

(a) Significanttransactions

(i) In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between the Group, the Company and related parties took place at terms agreed between the parties during the financial year:


Dividend income fromsubsidiaries – – 55,974 50,910DonationtoYayasan Harmoni* 4,370 2,000 570 200PurchasesfromHAP 261,020 244,160 – –Management fee paid/payabletoHAP 1,341 2,199 – –Ad-space rental received/ receivablefromHAP 1,799 2,079 – –Reimbursement of costsfromHAP 3,948 4,244 – –Interest income fromsubsidiaries – – 1,543 2,455Management fee chargedbyasubsidiary – – 855 915

* Dato’SriAdamSaniBinAbdullahisthefounderandexecutivechairmanofYayasanHarmoni,a non-profitable non-government organisation.



(CONT’D)

37. Relatedpartydisclosures(cont’d)

(b) Compensationofkeymanagementpersonnel

The remuneration of certain directors and other members of key management during the year were as follows:

Group 2019 2018 RM’000 RM’000

Short-term employee benefits 5,696 5,549Defined contribution plan 397 418

6,093 5,967

Included in the remuneration of total key management personnel are:

Group 2019 2018 RM’000 RM’000

Directors’ remuneration (excluding fees) 1,493 1,526

38. Fairvalueofassetsandliabilities

(a) Fairvaluehierarchy

The Group classifies fair value measurement using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

- Level1:Quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities;

- Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

- Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).



38. Fairvalueofassetsandliabilities(cont’d)

(b) Fairvalueofassetsandliabilitiesthatarecarriedatfairvalue

The following table shows an analysis of each class of assets and liabilities carried at fair value by level of fair value hierarchy:

Level1 Level2 Level3 Total RM’000 RM’000 RM’000 RM’000

Group

At28February2019

AssetsmeasuredatfairvalueFinancialassets:Marketablesecurities 4 – – 4

Non-financialassets:Biologicalassets – – 103 103

LiabilitiesmeasuredatfairvalueFinancialliabilities:Derivatives liabilities -Forwardcurrencycontracts – 99 – 99 -Callandputoptions – – 515 515

Assetsforwhichfairvalues aredisclosedInvestmentproperties – – 88,700 88,700



(CONT’D)


(b) Fairvalueofassetsandliabilitiesthatarecarriedatfairvalue(cont’d)

The following table shows an analysis of each class of assets and liabilities carried at fair value by level of fair value hierarchy (cont’d):

Level1 Level2 Level3 Total RM’000 RM’000 RM’000 RM’000

Group

At28February2018

AssetsmeasuredatfairvalueFinancialassets:Marketablesecurities 5 – – 5Derivatives assets -Forwardcurrencycontracts – 8 – 8

Non-financialassets:Biologicalassets – – 152 152

LiabilitiesmeasuredatfairvalueFinancialliabilities:Derivative liabilities -Forwardcurrencycontracts – 26 – 26 -Calloptions – – 1,017 1,017

Assetsforwhichfairvalues aredisclosedInvestmentproperties – – 95,920 95,920

Company

At28February2019


At28February2018





(c) Level1fairvaluemeasurements

Marketable securities (Note 26): Fair value is determined directly by reference to their published market bid price at the reporting date (Level 1).

(d) Level2fairvaluemeasurements

Derivatives (Note 27): Forward currency contracts are valued using a valuation technique with market observable inputs (Level 2). The most frequently applied valuation techniques include forward pricing models, using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates and interest rate curves.

(e) Level3fairvaluemeasurements

The following is a description of the fair value measurements using significant unobservable inputs (Level 3):

Biological assets (Note 24): The fair values of bearer fruits are determined by using the total sales figure in the following month with the assumptions of all the fruits harvested are sold subsequently to the customer.

Call and put options (Note 27): The fair values of call and put options are determined by using Binomial tree model, which includes some assumptions that are supported by observable market data. The key inputs used in determining the fair value are as follows:

Fairvalue asat 28February RangeDescription 2019 Valuation Unobservable (weighted

RM’000 techniques inputs average)

Call and put options 515 Black-Scholes Exercise price USD 3,040,000 Time to expire 10.6 years Volatility 31.1% Risk free rate 1.82% Dividend yield 0%

A significant increase in the expected dividend yield would result in a significantly higher fair value measurement. A significant increase (decrease) in risk free rate would result in a significantly lower (higher) fair value measurement.

In order to determine the effect of the above reasonably possible alternative assumptions, the Group adjustedthefollowingkeyunobservableinputsusedinthefairvaluemeasurement:

If the underlying exercise price had been increased by 10% (2018: nil) with all other variables held constant, the fair value of options will increase by approximately RM77,000 (2018: Nil) as at the end of the reporting period.



(CONT’D)


(e) Level3fairvaluemeasurements(cont’d)

Fairvalue asat 28February RangeDescription 2018 Valuation Unobservable (weighted

RM’000 techniques inputs average)

Call options 1,017 Binomial Tree Exercise price EUR1.0321 UnderlyingDFZ share value EUR 0.7125 Volatility 36.97% Risk free rate 3.26% Dividend yield 12.07%

Sensitivity analysis for call options

In order to determine the effect of the above reasonably possible alternative assumptions, the Group adjustedthefollowingkeyunobservableinputusedinthefairvaluemeasurement:

If the underlying share value had been increased by 10% (2018: 10%) with all other variables held constant, the fair value of call options will increase by approximately RM1.0 million (2018: RM1.0 million) as at the end of the reporting period.

(f) Fairvalueoffinancialinstrumentsbyclassesthatarenotcarriedatfairvalueandwhosecarryingamountsareareasonableapproximationoffairvalue

The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are a reasonable approximation of fair value:

Note Trade and other receivables (current) 25 Trade and other payables (current) 29Borrowings (current) 31

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the reporting date.

The carrying amounts of the current portion of borrowings are reasonable approximations of fair values due to the insignificant impact of discounting.

The fair values of current borrowings are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.

Amounts due from/(to) holding company, subsidiaries and a related company and finance lease obligations.

The fair values of these financial instruments are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.




(g) Fairvalueoffinancialinstrumentsbyclassesthatarenotcarriedatfairvalueandwhosecarryingamountsarenotreasonableapproximationoffairvalue

2019 2018 Carrying Fair Carrying Fair amount value amount value RM’000 RM’000 RM’000 RM’000Group

Obligations under finance leases (Note 32) 1,192 1,218 1,375 1,406

39. Financialriskmanagementobjectivesandpolicies

The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, interest rate risk, foreign currency risk and market price risk.

The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are executed by the Group and by the Company. The Audit Committee provides independent oversight to the effectiveness of the risk management process.

It is, and has been, throughout the current and previous financial year, the Group’s policy that no derivatives shall be undertaken except for the use as hedging instruments where appropriate and cost-efficient. The Group and the Company do not apply hedge accounting.

The following sections provide details regarding the Group’s and the Company’s exposure to the above-mentionedfinancialrisksandtheobjectives,policiesandprocessesforthemanagementoftheserisks.

(a) Creditrisk Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty

default on its obligations. The Group's credit risk is primarily attributable to trade receivables.

The credit risk of the Group's other financial assets, which comprise cash and cash equivalents, arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these financial assets.

TheGroup’sobjective is toseekcontinual revenuegrowthwhileminimising losses incurredduetoincreased credit risk exposure. The Group trades only with recognised and creditworthy third parties. It istheGroup'spolicythatallcustomerswhowishtotradeoncredittermsaresubjecttocreditverificationprocedures. In addition, receivable balances are monitored on an on-going basis with the result that the Group's exposure to bad debts is not significant. Since the Group trades only with recognised and creditworthy third parties, there is no requirement for collateral.

The Group considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period.

The Group has determined the default event on a financial asset to be when the counterparty fails to make contractual payments, within 60 days when they fall due, which are derived based on the Group’s historical information.



(CONT’D)

39. Financialriskmanagementobjectivesandpolicies(cont’d)

(a) Creditrisk(cont’d)

TheGroupconsiders“lowrisk”tobeaninvestmentgradecreditratingwithatleastonemajorratingagency for those investments with credit rating. To assess whether there is a significant increase in credit risk, the company compares the risk of a default occurring on the asset as at reporting date with the risk of default as at the date of initial recognition. The Group considers available reasonable and supportive forwarding-looking information which includes the following indicators:

- Internal credit rating- External credit rating- Actual or expected significant adverse changes in business, financial or economic conditions

that are expected to cause a significant change to the borrower’s ability to meet its obligations- Actual or expected significant changes in the operating results of the customer- Significant increases in credit risk on other financial instruments of the same customer- Significant changes in the value of the collateral supporting the obligation or in the quality of

third-party guarantees or credit enhancements- Significant changes in the expected performance and behaviour of the customer, including

changes in the payment status of borrowers in the group and changes in the operating results of the customer

Regardless of the analysis above, a significant increase in credit risk is presumed if a debtor is more than 30 days past due in making contractual payment.

The Group determined that its financial assets are credit-impaired when:

- There is significant difficulty of the issuer or the borrower- A breach of contract, such as a default or past due event- It is becoming probable that the borrower will enter bankruptcy or other financial reorganisation- There is a disappearance of an active market for that financial asset because of financial difficulty

The Group categorises a loan or receivable for potential write-off when a debtor fails to make contractual payments more than 120 days past due. Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Group. Where loans and receivables have been written off, the company continues to engage enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognised in profit or loss.

A summary of the Group’s basis for recognition of the Group’s expected credit loss (“ECL”) for trade receivables, debt securities and other receivable is as follows:

Assets classifications Basis for recognition of expected credit loss provision

Trade receivables Lifetime ECL (simplified approach)

Debt securities 12-month ECL

Other receivables 12-month ECL

DuefromBerjayaWaterfrontSdn.Bhd. Lifetime ECL

The gross carrying amount of trade and other receivables are disclosed in Note 25.





Trade receivables

The Group provides for lifetime expected credit losses for all trade receivables using a provision matrix. The provision rates are determined based on the Group’s historical observed default rates analysed in accordance to days past due. The loss allowance provision as at 28 February 2019 is determined as follows, the expected credit losses below also incorporate forward looking information such as forecast of economic conditions where the gross domestic product will deteriorate over the next year, leading to an increased number of defaults.

Summarised below is the information about the credit risk exposure on the Group’s trade receivables using provision matrix.

Morethan Morethan Morethan 30days 60days 90days28February2019 Current pastdue pastdue pastdue Total Gross carrying amount 5,601 2,332 449 1,346 9,728Lossallowanceprovision – – – (468) (468)

Debt securities and other receivables

The company's debt securities at amortised cost are considered to have low credit risk, and the loss allowance recognised during the period was therefore limited to 12 months expected losses. Management consider ‘low credit risk’ for the debt securities when they have a low risk of default and the issuer has a strong capacity to meet its contractual cash flow obligations in the near term.

AsforotherreceivablesincludingamountduefromBerjayaWaterfrontSdn.Bhd.,theGroupassessedthelatestperformanceandfinancialpositionofthecounterparties,adjustedforthefutureoutlookoftheindustry in which the counterparties operate in. The Group measured the impairment loss allowance using general approach of ECL and determined that the ECL is insignificant.

Excessive risk concentration

The Group does not have any significant exposure to any individual customer or counterparty nor does ithaveanymajorconcentrationofcreditriskrelatedtoanyfinancialassets,exceptfortheamountduefromBerjayaWaterfrontSdn.Bhd.asdescribedinNote25.

Exposure to credit risk

At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by:

- The carrying amount of each class of financial assets recognised in the statements of financial position.

- Nominal amount of RM47,680,000 (2018: RM42,029,000) relating to corporate guarantees provided by the Company as securities for banking facilities to certain subsidiaries.



(CONT’D)



Credit risk concentration profile

The Group determines concentrations of credit risk by monitoring the industry sector profile of its trade receivables on an on-going basis. The credit risk concentration profile of the Group’s trade receivables at the reporting date are as follows:

Group 2019 2018

RM’000 %oftotal RM’000 %oftotal

Bybusinesssegments:

Property and hospitality 206 1% 502 1%Trading of duty free goods, dutiable and non-dutiable merchandise 16,802 41% 5,471 15%Automotive 23,801 58% 30,007 84%

40,809 100% 35,980 100%

Financial assets that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment record with the Group. Cash and cash equivalents and derivatives that are neither past due nor impaired are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 25.

(b) Liquidityrisk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that refinancing, repayment and funding needs are met. As part of its overall liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group strives to maintain available banking facilities at a reasonable level to its overall debt position. As far as possible, the Group raises committed funding from both capital markets and financial institutions and balances its portfolio with some short term funding so as to achieve overall cost effectiveness.




(b) Liquidityrisk(cont’d)

Analysisoffinancialinstrumentsbyremainingcontractualmaturities

The table below summarises the maturity profile of the Group’s and of the Company’s financial assets and liabilities at the reporting date based on contractual undiscounted repayment obligations.

2019 On demand orwithin Oneto Morethan oneyear fiveyears fiveyears Total RM’000 RM’000 RM’000 RM’000

Group

Financialassets:Tradeandotherreceivables 130,765 – – 130,765Cashandbankbalances 349,780 – – 349,780

Total undiscounted financial assets 480,545 – – 480,545

Financialliabilities: Tradeandotherpayables 155,815 – – 155,815Derivativesliabilities 99 – 515 614Borrowings 38,879 36,203 – 75,082

Total undiscounted financial liabilities 194,793 36,203 515 231,511

Total net undiscounted financial assets/(liabilities) 285,752 (36,203) (515) 249,034

Company

Financialassets:Otherreceivables 26,884 – – 26,884Cashandbankbalances 3,104 – – 3,104

Total undiscounted financialassets 29,988 – – 29,988

Financialliabilities:Otherpayables 175,454 – – 175,454Borrowing 12,588 33,716 – 46,304

Total undiscounted financialliabilities 188,042 33,716 – 221,758

Total net undiscounted financialliabilities (158,054) (33,716) – (191,770)



(CONT’D)


(b) Liquidityrisk(cont’d)

Analysisoffinancialinstrumentsbyremainingcontractualmaturities(cont’d)

The table below summarises the maturity profile of the Group’s and of the Company’s financial assets and liabilities at the reporting date based on contractual undiscounted repayment obligations (cont’d).

2018 On demand orwithin Oneto Morethan oneyear fiveyears fiveyears Total RM’000 RM’000 RM’000 RM’000

Group

Financialassets:Tradeandotherreceivables 89,860 – – 89,860Cashandbankbalances 410,231 – – 410,231Derivativesassets 8 – – 8


Financialliabilities:Tradeandotherpayables 134,320 – – 134,320Derivativesliabilities 1,043 – – 1,043Borrowings 31,193 48,143 – 79,336

Total undiscounted financialliabilities 166,556 48,143 – 214,699

Total net undiscounted financialassets/(liabilities) 333,543 (48,143) – 285,400

Company

Financialassets:Otherreceivables 46,909 – – 46,909Cashandbankbalances 3,238 – – 3,238


Financialliabilities:Otherpayables 175,466 – – 175,466Borrowing 13,191 46,209 – 59,400

Total undiscounted financial liabilities 188,657 46,209 – 234,866

Total net undiscounted financialliabilities (138,510) (46,209) – (184,719)




(c) Interestraterisk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and of the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group's and the Company’s exposure to interest rate risk arises primarily from interest-bearing borrowings. Borrowings at floating rates expose the Group to cash flow interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk.

The Group manages its interest rate exposure by maintaining a mix of fixed and floating rate borrowings.

Sensitivity analysis for interest rate risk

The table below demonstrates the sensitivity to a reasonably possible change in interest rates with all other variables held constant, of the Group's and of the Company’s profit net of tax (mainly through the impact on interest expense on floating rate loans and borrowings). The assumed movement in the basis points for interest rate sensitivity analysis is based on the currently observable market environment.

Increase/ (decrease) Effecton

inbasis profitnet points oftax RM’000

Group

28February2019Ringgit Malaysia +10 59Ringgit Malaysia -10 (59)

28February2018Ringgit Malaysia +10 73Ringgit Malaysia -10 (73)

Company

28February2019Ringgit Malaysia +10 (30)Ringgit Malaysia -10 30

28February2018Ringgit Malaysia +10 (36)Ringgit Malaysia -10 36



(CONT’D)


(d) Foreigncurrencyrisk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group has transactional currency exposures arising from sales or purchases that are denominated in a currency other than the Group’s functional currency. The foreign currencies in which these transactions are denominated are mainly United States Dollar (“USD”), Singapore Dollar (“SGD”), Thai Baht ("THB") andJapaneseYen("JPY").Approximately72%(2018:64%)oftheGroup’spurchasesaredenominatedin foreign currencies. Foreign currency exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level.

The Group also holds cash and cash equivalents denominated in foreign currencies for working capital

purposes. At the reporting date, such foreign currency balances (mainly in Euro (“EUR”), SGD and USD) amounted to RM123,671,000 (2018: RM191,632,000).

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity of the Group's profit net of tax to a reasonably possible changeintheUSD,SGD,THB,JPYandEURexchangeratesagainsttherespectivefunctionalcurrenciesof the Group entities, with all other variables held constant.

Group 2019 2018 RM’000 RM’000

USD/RM - strengthened 3% (2018: 3%) 1,933 2,712 - weakened 3% (2018: 3%) (1,933) (2,712) SGD/RM - strengthened 3% (2018: 3%) 228 236 - weakened 3% (2018: 3%) (228) (236) THB/RM - strengthened 3% (2018: 3%) (73) (47) - weakened 3% (2018: 3%) 73 47 JPY/RM -strengthened3%(2018:3%) (126) (140) - weakened 3% (2018: 3%) 126 140 EUR/RM -strengthened3%(2018:3%) – 1,412 -weakened3%(2018:3%) – (1,412)

(e) Marketpricerisk

Market price risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in market prices (other than interest or exchange rates).

The Group does not have exposure to commodity price risk.



40. Capitalmanagement

TheprimaryobjectiveoftheGroup’scapitalmanagementistoensurethatitmaintainsastrongcreditratingand healthy capital ratios in order to support its business and maximise shareholder value.

TheGroupmanages its capital structure andmakes adjustments to it, in light of changes in economicconditions. Tomaintain or adjust the capital structure, theGroupmay adjust thedividendpayment toshareholders,returncapitaltoshareholdersorissuenewshares.Nochangesweremadeintheobjectives,policies or processes during the year under review.

The Group monitors capital using a gearing ratio, which is total external debt divided by total capital.

The Group ensures that the gearing ratio shall not be more than 2.0 times to comply with covenants from its borrowings.

The Group includes within total external debt, all financial borrowings of the Group. Total external debt due and payable within 12 months consists of bankers’ acceptances, bank overdrafts, interest payable and current portion of obligations under finance leases. Capital includes equity attributable to owners of the parent and non-controlling interests.


Borrowings (non-current) 32,444 41,803 30,000 40,000Borrowings (current excluding term loans, i.e. due and payablewithin12months) 11,834 17,598 – –Borrowings (current - term loans) 24,406 10,283 10,000 10,000

Total external debt 68,684 69,684 40,000 50,000

Total equity 685,520 712,027 688,170 849,765

Gearing ratio (times) 0.10 0.10 0.06 0.06



(CONT’D)

41. Segmentinformation

(a) Reportingformat

The primary segment reporting format is determined to be business segments as the Group's risks and rates of return are affected predominantly by differences in the products and services. The activities of the Group are carried out mainly in Malaysia and as such, segmental reporting by geographical locations is not presented. The operating businesses are organised and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.

(b) Businesssegments

The Group comprises the following main business segments:

(i) Investment holding;

(ii) Property and hospitality;

(iii) Trading of duty free goods, dutiable and non-dutiable merchandise; and

(iv) Automotive.

Other business segments mainly consist of provision of corporate services, dormant and inactive companies, none of which are of a sufficient size to be reported separately.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing (including finance costs) and income taxes are managed on a group basis and are not allocated to operating segments.

(c) Allocationbasisandtransferpricing

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

The directors are of the opinion that transfer prices between business segments are based on negotiated prices. Segment revenue, expenses and results include transfers between business segments. These transfers are eliminated on consolidation.



.Seg

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tinform

ation(cont’d)

2019

Trading

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Per

Prope

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ts

co

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Inve

stmen

tan

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fin

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hos

pitality

merch

andise

Autom

otive

Others

elim

inations

statemen

ts

RM’000

R

M’000

R

M’000

R

M’000

R

M’000

RM’000

Note

RM’000

Rev

enue

:Ex

ternalcus

tomers

7,29

525

,465

55

5,70

618

6,43

614

–

77

4,91

6Inter-se

gmen

t12

6,08

946

8–

–7,22

5(133

,782

)A

–

Tota

l rev

enue

13

3,38

4 25

,933

55

5,70

6 18

6,43

6 7,

239

(133

,782

)

774,

916

Res

ults:

Dep

reciation

–(5,594

)(3,670

)(5,466

)(45)

30

(14,74

5)Amortis

ation

–(465

)(158

)(1)

–15

(609

)Lo

ss a

risin

g fro

m c

hang

es in

fairva

lueofbiologica

lass

ets

–(49)

––

––

(49)

Gai

n ar

isin

g fro

m c

hang

es in

fairva

lueofoptions

1,01

7–

––

––

1,01

7Sha

reofres

ultsofa

nas

sociate

(74)

––

––

–

(74)

Othernon

-cas

h(exp

ense

s)/in

come

(69)

(1)

(3,686

)59

2–

–B

(3,164

)S

egm

ent p

rofit

77

,034

5,

515

59,2

28

15,9

78

(9,0

50)

(71,

878)

C

76

,827

Ass

ets:

Inve

stmen

tinas

sociate

647

––

––

–

647

Add

ition

stonon

-currentass

ets

86

576

6,37

04,51

158

–

D

11,601

Seg

men

t ass

ets

29

6,68

0 12

4,55

2 39

6,01

5 13

7,96

4 71

4 10

,305

E

966,

230

Liab

ilitie

s:S

egm

ent l

iabi

litie

s 28

,211

22

,475

10

8,97

4 42

,078

1,

533

77,4

39

F 28

0,71

0



(CONT’D) 41

.Seg

men

tinform

ation(cont’d)

2018

Trading

ofdutyfree

go

ods,dutiable

Per

Prope

rty

and

Adjus

tmen

ts

co

nsolidated

Inve

stmen

tan

dno

n-du

tiable

and

fin

ancial

holding

hos

pitality

merch

andise

Autom

otive

Others

elim

inations

statemen

ts

RM’000

R

M’000

R

M’000

R

M’000

R

M’000

RM’000

Note

RM’000

Rev

enue

:Ex

ternalcus

tomers

3,20

828

,115

61

8,96

717

5,88

416

1–

82

6,33

5Inter-se

gmen

t14

8,15

542

3–

–7,36

5(155

,943

)A

–

Tota

l rev

enue

15

1,36

3 28

,538

61

8,96

7 17

5,88

4 7,

526

(155

,943

)

826,

335

Res

ults:

Dep

reciation

–(6,034

)(3,670

)(6,181

)(30)

29

(15,88

6)Amortis

ationofla

nduse

righ

ts

–(465

)–

––

15

(450

)Lo

ss a

risin

g fro

m c

hang

es in

fairva

lueofbiologica

lass

ets

–(35)

––

––

(35)

Gai

n ar

isin

g fro

m c

hang

es in

fairva

lueofoptions

7,97

6–

––

––

7,97

6Sha

reofres

ultsofa

nas

sociate

158

––

––

–

158

Othernon

-cas

hinco

me/(exp

ense

s)

229

(2)

(487

)(187

)–

–B

(447

)S

egm

ent p

rofit

64

,902

7,

743

99,9

64

12,3

84

5,08

4 (9

8,79

1)

C

91,2

86

Ass

ets:

Inve

stmen

tinas

sociate

721

––

––

–

721

Add

ition

stonon

-currentass

ets

128

1,07

52,32

68,16

549

–

D

11,743

Seg

men

t ass

ets

32

4,40

1 12

9,73

9 36

3,35

3 13

3,18

8 5,

224

10,6

51

E 96

6,55

6

Liab

ilitie

s:S

egm

ent l

iabi

litie

s 20

,244

40

,506

86

,736

44

,837

1,

089

61,1

17

F 25

4,52

9



41. Segmentinformation(cont’d)

A Inter-segment revenues are eliminated on consolidation.

B Other material non-cash (expenses)/income consist of the following items as presented in the respective notes to the financial statements:

Note 2019 2018 RM’000 RM’000 Changes in fair value of marketable securities 5/8 (69) 229Impairmentlossonreceivables 8 – (22)Inventories written down 8 (3,184) (1,134)Inventories written off 8 (124) (157)Inventories written back 5 1,357 668Property, plant and equipment written off 8 (1,144) (31)

(3,164) (447)

C The following items are deducted from/(added to) segment profit to arrive at “Profit before tax” presented in the income statements:

2019 2018 RM’000 RM’000 Inter-segment transactions 67,679 94,790Share of results of an associate 74 (158)Finance costs 4,125 4,159

71,878 98,791

D Additions to non-current assets consist of:

2019 2018 RM’000 RM’000 Property, plant and equipment 10,542 11,716Investment properties 13 27Intangibleassets 1,046 –

11,601 11,743



(CONT’D)

41. Segmentinformation(cont’d)

E The following items are added to segment assets to arrive at total assets reported in the statements of financial position:

2019 2018 RM’000 RM’000

Investment in associate 647 721Deferred tax assets 4,507 2,267Tax recoverable 5,151 7,663

10,305 10,651

F The following items are added to segment liabilities to arrive at total liabilities reported in the statements of financial position:

2019 2018 RM’000 RM’000

Deferred tax liabilities 7,326 7,121Tax payable 1,429 2,744Borrowings 68,684 51,252

77,439 61,117

42. Materiallitigations

Bills of Demand in respect of import duties, excise duties, sales tax and GST

On30November2017,theCompanyannouncedthattheCompany’ssubsidiary,SeruntunMajuSdn.Bhd.(“SMSB”) had received Bills of Demand dated 14 November 2017 from the Royal Malaysian Customs State of Perak (“Customs”), which SMSB received on 21 November 2017, demanding payments of customs duties, excise duties, sales tax and Goods and Services Tax (“GST”) all totalling RM41,595,000 for the period from 15 November 2014 to 30 September 2016.

The said Bills of Demand were raised by the Customs who alleged that SMSB did not comply with certain conditions of a duty-free shop located at the border.

On29November2017,theHighCourtgrantedleavetoSMSB’sapplicationforjudicialreview,aswellasaninterim stay of the enforcement of the Bills of Demand until the disposal of the inter partes stay hearing under the Customs Act, 1967 and Excise Act, 1976.

The High Court has on 4 January 2018 fixed the case for hearing on 12 April 2018 and subsequently postponed to 17 April 2018. During the hearing on 17 April 2018, SMSB argued that the Bills of Demand are illegal and areraisedbeyondthescopeoftheCustoms’jurisdiction.Thisisonthepremisethattheallegedconditionswere not attached to the duty free shop licences issued to SMSB, as required under Section 65D(2) of the Customs Act, 1967.



42. Materiallitigations(cont’d)

The High Court subsequently postponed the date for decision on the matter from 25 May 2018 to 29 June 2018.

On29June2018,thedecisionoftheHighCourtwasnottograntanapplicationforjudicialreviewtoSMSB.On 2 July 2018, SMSB filed an appeal to the Court of Appeal against the High Court’s decision of not granting anapplicationforjudicialreview.Simultaneously,SMSBalsofiledaformalapplicationtostaytheeffectandenforcement of the bills of demand raised on SMSB for import and excise duties.

On 28 August 2018, the High Court granted interim stay pending the disposal of the stay application, which was to be heard on 5 October 2018 before a new Judge. The hearing was postponed from 4 December 2018 to 17 January 2019, which was subsequently again postponed to 20 February 2019. On 20 February 2019, upon hearing the submission for both parties, the Court granted an interim stay to SMSB pending the disposal of its Court of Appeal hearing. Parties were to update the Court after the Court of Appeal hearing.

On 6 March 2019, the Court of Appeal conducted the hearing, whereby both SMSB and Customs submitted their respective legal arguments. The Court of Appeal then instructed parties to file additional supplementary submission on one novel point of law before 20 March 2019. SMSB has already submitted the said supplementary submission. The Court of Appeal will inform parties once they are ready to deliver a decision.

On 13 March 2019, the High Court was briefed on the status of the hearing of the Court of Appeal. As there was no tentative date fixed by the Court of Appeal for the decision, the High Court has then granted an interim stay until the disposal of the hearing.

In addition, SMSB also filed a Notice of Motion before the Court of Appeal to stay the effect and enforcement of the said notices of additional assessment pending the appeal on stay before the Court of Appeal.

In addition, on 12 December 2017, SMSB had also appealed to the Director-General of Customs in respect of the sales tax pursuant to Section 68 of the Sales Tax Act and had submitted an application to the Director- General of Customs in respect of GST pursuant to Section 124 of the GST Act. To-date, the matter is still pending a decision from the Director-General of Customs.

The Board, having obtained advice from its solicitor, is of the opinion that the payment of the Bills of Demand raised by the Customs is possible, but not probable, and accordingly no provision for any liability has been made in the financial statements.

43. Significantandsubsequentevents

(a) During the financial year, Duty Free International Limited (“DFIL”) had repurchased 9,600,800 of its ordinary shares from the open market for a total cash consideration of approximately RM5,986,000 (including transaction cost). The shares were bought with internally generated funds and all repurchased shares are being held as treasury shares.

With the repurchase of shares by DFIL, the Company’s holding in DFIL (excluding treasury shares) increased from 74.30% as at 28 February 2018 to 74.89% as at the 28 February 2019.

Following the completion of repurchase of shares, DFIL’s issued and paid-up share capital with voting rights comprises 1,208,445,693 ordinary shares, excluding treasury shares and DFIL has 491,400,042 outstanding convertible warrants each with exercise price of S$0.43 expiring on 13 May 2022. DFIL’s treasury shares as at 28 February 2019 amounted to 20,752,700.



(CONT’D)

43. Significantandsubsequentevents(cont’d)

(a) Subsequent to the financial year, DFIL had repurchased 2,945,300 of its ordinary shares the open market for a total cash consideration of approximately RM1,739,000 (including transaction cost). The shares were bought with internally generated funds and all repurchased shares are being held as treasury shares. Consequently, the Company’s holding in DFIL was further increased to 75.07% as at 31 May 2019.

Following the completion of repurchase of shares, DFIL’s issued and paid-up share capital with voting rights comprises 1,205,500,393 ordinary shares, excluding treasury shares and DFIL has 491,400,042 outstanding convertible warrants each with exercise price of S$0.43 expiring on 13 May 2022. DFIL’s treasury shares as at 31 May 2019 amounted to 23,698,000.

(b) On 9 July 2018, the Board of the Company announced that a subsidiary of the Company, DFIL had entered into a conditional subscription agreement (“Agreement”) with Mr. Robert Justin Frizelle and Meridian Compass Ltd (“Founders”), and Brand Connect Holding Pte. Ltd. (“Brand Connect”) pursuant to which DFIL shall subscribe for 2,800,000 new ordinary shares in the capital of Brand Connect (“Subscription Shares”) (the “Proposed Subscription”).

On 8 August 2018, the Acquisition was completed. DFIL subscribed 2,800,000 new ordinary shares in the Capital of Brand Connect Holding Pte. Ltd. at the consideration of US$2,800,000 following the satisfaction of the conditions precedent to the Agreement (“Acquisition”). Following the completion of the Acquisition, Brand Connect Holding Pte. Ltd. became a 70% owned subsidiary of DFIL.

Brand Connect group of companies is engaged in the business of marketing and the trading, wholesale and retail distribution of beverage products across countries in the Asia Pacific region. The acquisition of Brand Connect group of companies by DFIL is to develop and grow DFIL’s beverage distribution business as well as to expand DFIL’s market operations beyond the current sales channels in the duty free market of Malaysia to include the duty paid market across South East Asia.

The management had finalised the purchase price allocation (“PPA”) exercise within one year, from 8 August 2018, being date of acquisition. The fair value of (i) assets and liabilities of the Brand Connect Groupand(ii)purchaseconsiderationonacquisitiondatehasbeenadjustedaccordinglybasedonthefinalised PPA report.


ANALySIS OF ShAREhOLDINgSAS AT 31 MAy 2019

Directors’DirectandDeemedInterestsintheCompanyand/oritssubsidiarycompanies

According to the Register of Directors’ Shareholdings required to be kept under Section 59 of the Companies Act, 2016 the Directors’ interests in the Company and its subsidiaries are as follows:-

DirectInterest DeemedInterest No.of No.of Ordinary Ordinary Shares % Shares %

Dato’ Sri Adam Sani Bin Abdullah 64,061 0.03 130,255,153 (1) 51.35

Notes:-

(a) Dato’ Sri Adam Sani Bin Abdullah is deemed to have an interest in the shares of all the subsidiaries by virtue of his interest in the shares in the Company.

(b) Other than disclosed above, none of the other Directors had any interest in shares in the Company or its subsidiaries.

(c) (1) Deemed interested through Distinct Continent Sdn. Bhd. and Alpretz Capital Sdn. Bhd.

ListofSubstantialShareholdersasat31May2019(AsshownintheRegisterofSubstantialShareholders)

DirectInterest DeemedInterest No.of No.of Ordinary OrdinaryNameofSubstantialShareholders Shares % Shares %

Distinct Continent Sdn. Bhd. 83,220,340 32.81 47,034,813 (1) 18.54AlpretzCapitalSdn.Bhd. 47,034,813 18.54 – –Dato’ Sri Adam Sani Bin Abdullah 64,061 0.03 130,255,153 (2) 51.35SebastianPaulLimChinFoo – – 130,255,153(2) 51.35BerjayaCorporationBerhad 60,600,000 23.89 7,100,000(3) 2.80TanSriDato'SeriVincent – – 67,930,000(4) 26.78 TanCheeYioun

Notes:-

(1) Deemed interested by virtue of Alpretz Capital Sdn. Bhd. being a wholly-owned subsidiary of Distinct Continent Sdn Bhd.

(2) Deemed interested through Distinct Continent Sdn. Bhd. and Alpretz Capital Sdn. Bhd. by virtue of Section 8 of the Companies Act 2016

(3) DeemedinterestedbyvirtueofitsinterestinInter-PacificCapitalSdnBhdandBerjayaPhilippinesInc.(4) DeemedinterestedbyvirtueofhisinterestinBerjayaCorporationBerhadanditsrelatedcorporation


ANALySIS OF ShAREhOLDINgS

(CONT’D)

ANALYSIS OF SHAREHOLDINGS AS AT 31 MAY 2019

Class of Shares : Ordinary shares

VotingRights : One(1)voteperordinaryshare

DISTRIBUTION OF SHAREHOLDINGS AS AT 31 MAY 2019

No.of %of No.of %ofIssuedSizeofShareholdings Shareholders Shareholders Shares ShareCapital

Less than 100 183 17.65 4,643 0.00100–1,000 310 29.89 107,059 0.041,001–10,000 382 36.84 1,252,880 0.4910,001–100,000 103 9.93 3,351,029 1.32100,001 to less than 5% of issued shares 56 5.40 148,326,548 58.485% and above of issued shares 3 0.29 100,608,250 39.66

TOTAL 1,037 100.00 253,650,409 100.00

THIRTY(30)LARGESTSHAREHOLDERSASAT31MAY2019

No.ofNameofShareholders SharesHeld %

1. ABB Nominee (Tempatan) Sdn. Bhd. 56,337,750 22.21 - Pledged Securities Account for Distinct Continent Sdn. Bhd. (Adam Sani)

2. ABB Nominee (Tempatan) Sdn. Bhd. 22,270,500 8.78 - Pledged Securities Account for Alpretz Capital Sdn. Bhd.

3. AllianceGroup Nominees (Tempatan) Sdn. Bhd. 22,000,000 8.67 -PledgedSecuritiesAccountforBerjayaCorporationBerhad

4. RHB Nominees (Tempatan) Sdn. Bhd. 12,600,000 4.97 - Bank of China (Malaysia) Berhad Pledged Securities Account for Distinct Continent Sdn. Bhd.

5. RHB Nominees (Tempatan) Sdn. Bhd. 11,552,367 4.55 - Bank of China (Malaysia) Berhad Pledged Securities Account for Distinct Continent Sdn. Bhd. (OKB)

6. Alpretz Capital Sdn. Bhd. 10,764,313 4.24

7. RHB Nominees (Tempatan) Sdn. Bhd. 10,500,000 4.14 - Bank of China (Malaysia) Berhad Pledged Securities Account forBerjayaCorporationBerhad

8. Lembaga Tabung Angkatan Tentera 9,934,900 3.92

9. Maybank Nominees (Tempatan) Sdn. Bhd. 9,300,000 3.67 -PledgedSecuritiesAccountforBerjayaCorporationBerhad

10. BerjayaCorporationBerhad 6,830,000 2.69


ANALySIS OF ShAREhOLDINgS(CONT’D)

THIRTY(30)LARGESTSHAREHOLDERSASAT31MAY2019(cont’d)

No.ofNameofShareholders SharesHeld %

11. CIMB Group Nominees (Tempatan) Sdn. Bhd. 6,470,000 2.55 -PledgedSecuritiesAccountforBerjayaCorporationBerhad

12. Kenanga Nominees (Tempatan) Sdn. Bhd. 6,000,000 2.37 - Pledged Securities Account for Alpretz Capital Sdn. Bhd.

13. CIMB Group Nominees (Asing) Sdn. Bhd. 5,204,600 2.05 - Exempt An For DBS Bank Ltd

14. Inter-Pacific Equity Nominees (Asing) Sdn. Bhd. 5,100,000 2.01 -BerjayaPhilippinesInc.

15. Inter-Pacific Equity Nominees (Tempatan) Sdn. Bhd. 5,000,000 1.97 - IPM for Alpretz Capital Sdn Bhd

16. Affin Hwang Nominees (Tempatan) Sdn. Bhd. 4,500,000 1.77 -PledgedSecuritiesAccountforBerjayaCorporationBerhad

17. Phoon Ching Heong 3,995,554 1.58

18. Kenanga Nominees (Tempatan) Sdn. Bhd. 3,960,000 1.56 -PledgedSecuritiesAccountforChooYeowMing

19. Kenanga Nominees (Tempatan) Sdn. Bhd. 3,000,000 1.18 - Pledged Securities Account for Alpretz Capital Sdn. Bhd.

20. Distinct Continent Sdn. Bhd. 2,730,223 1.08

21. Cartaban Nominees (Asing) Sdn. Bhd. 2,614,775 1.03 - Exempt An For LGT Bank AG (Foreign)

22. Chew Soo Lin 2,340,834 0.92

23. UOB Kay Hian Nominees (Asing) Sdn. Bhd. 2,155,843 0.85 - Exempt An For UOB Kay Hian Pte. Ltd.

24. RHB Nominees (Tempatan) Sdn. Bhd. 2,000,000 0.79 - Bank of China (Malaysia) Berhad Pledged Securities Account for Inter-Pacific Capital Sdn. Bhd.

25. Kenanga Nominees (Tempatan) Sdn. Bhd. 1,855,000 0.73 - Pledged Securities Account for Ong Kar Beau

26. UOB Kay Hian Nominees (Asing) Sdn. Bhd. 1,502,132 0.59 - Pledged Securities Account for Chew Soo Lin

27. Kenanga Nominees (Asing) Sdn. Bhd. 1,500,000 0.59 - Pledged Securities Account For Seymour Pacific Limited

28. Citigroup Nominees (Tempatan) Sdn. Bhd. 1,428,288 0.56 - UBS AG SG for Phoon Ching Heong

29. HLB Nominees (Asing) Sdn. Bhd. 1,414,475 0.56 - Southern Dynamic Consultants Limited

30. SyedSirajuddinPutraJamalullail 1,350,041 0.53


LIST OF PROPERTIES

FOR FINANCIAL yEAR ENDED 28 FEbRUARy 2019

Location Description ExistingUseTenure/ExpiryDate

AgeofBuildingYears

ApproxAreas

SqMetre

NetBookValue

asat28February

2019RM’mil

DateofAcquisition

1 Lot No. 1, Section 63, Town of Kuala Lumpur, Wilayah Persekutuan

Office building,hotel apartment building andbuilding underconstruction

Registered office, officeblock for rentand hotel apartments for letting

Leasehold (60 years - expiring2038) renewable for a further30 years

Office building

(33),Hotel

apartment (22)

18,701.20 52.43 1974

2 Lot PT 482 HS(M) 19/1981, Mukim Sungai Laka, Daerah Kubang Pasu, Kedah Darul Aman

Double storeyshophouse

Staff quarters Leasehold (99 years - expiring2080)

32 297.00 0.08 1987

3 Lot 2224 HS(M) 1/1987, PT 1443, Bukit Kayu Hitam, Mukim Sungai Laka, Daerah Kubang Pasu, Kedah Darul Aman

A single storeywarehouse annexed to a double storeyshopping complexand 30 units ofsingle storeylock-up shops andancillary building

Duty Free shopping complex and warehouse

Leasehold (60 years - expiring2072)

31 20,234.00 2.18 1987

4 Lot 127-142 & 169-174, PT 1889-1904 & 1931-1936, HS(M) 135/1989- 150/1989 & 177/1989- 182/1989, Bandar Baru Laka Temin, Mukim Sungai Laka, Daerah Kubang Pasu, Kedah Darul Aman

22 units singlestorey terrace house

Staff quarters Leasehold (99 years - expiring2088)

26 3,216.00 0.37 1996

5 Lot 475, Seksyen 1, Bandar Batu Ferringhi, Daerah Timur Laut, Pulau Pinang Darul Mutiara

Vacantland Vacantland Freehold N/A 2,346.00 – 2003

6 Lot 3688, 3689 & PT 2209, Bukit Kayu Hitam, Mukim Sungai Laka, Daerah Kubang Pasu, Kedah Darul Aman

Vacantland,part of which isGolf and CountryClub

Rented out and partly vacant

Leasehold (60 years - expiring2053 and 2057)

21 3,127,220.00 38.55 1993 & 1997


LIST OF PROPERTIES(CONT’D)


AgeofBuildingYears

ApproxAreas

SqMetre

NetBookValue

asat28February

2019RM’mil

DateofAcquisition

7 Lot 44 Premises No. 42/1/2&3, Kompleks MunshiAbdullah, Jalan Munshi Abdullah, 75100 MelakaDarul Azim

4 & 1/2 storey shophouse

Business and office premises


34 130.00 0.39 1992

8 Lot 4720,Mukim Titi Tinggi, 2 Jalan Baru Sadao, 02100 Padang Besar, Perlis Darul Sunnah

Store Store Leasehold (60 years - expiring2054)

25 9,474.00

10.21

1994

9 Lot 3548, Mukim Titi Tinggi, 2 Jalan Baru Sadao, 02100 Padang Besar, Perlis Darul Sunnah

Warehouse annexed to a single storey shopping complex

Duty Free Complex andwarehouse


27 14,658.00 1990

10 Lot 2063, Mukim Titi Tinggi, Padang Besar, 30 Bangunan PKENPs, Jalan Besar, 02100 Padang Besar, Perlis Darul Sunnah

Shop Shop Freehold 32 223.00 0.17 1990

11 Shop Lot Nos 47 & 48, Mukim Titi Tinggi, Padang Besar, 3D & 4D Kompleks Arked Niaga PKENPs, 02100 Padang Besar, Perlis Darul Sunnah

Shop Shop Leasehold (99 years - expiring2090)

29 58.00 0.23 1990

12 PN 108045, Lot 4858, Mukim Pengkalan Hulu, District of Hulu Perak, Perak Darul Ridzuan

Duty Free Complex Duty Free Complex


29 10,116.00 8.82 1990

13 Lot No. 5017, Mukim Kapar, District of Klang, Selangor Darul Ehsan

Industrial premises Factories, office and ancillary buildings

Freehold 15 - 34 12,140.55 11.76 1982



AgeofBuildingYears

ApproxAreas

SqMetre

NetBookValue

asat28February

2019RM’mil

DateofAcquisition

14 Lot No PT 54753, Mukim Kapar, District of Klang, Selangor Darul Ehsan

Industrial premises Factory, office and warehouse

Freehold 16 - 41 24,281.00 15.34 1979

15 8 PersiaranKampung Jawa, No Hakmilik 6711,Lot 9891, Mukim 12, Daerah Barat Daya, Pulau Pinang Darul Mutiara

Factory land and building

Business and office premises

Leasehold (99 years expiring2113)

21 4,355.00

5.09

2002

16 PajakanNegeriNo3839, Lot no 11618, Mukim 12, Daerah Barat Daya, Pulau Pinang Darul Mutiara

Factory land Business and office premises

Leasehold (99 years expiring2111)

N/A 1,106.00 2001

17 PS 1641-A, Kawasan PerindustrianPulau Sebang, 78000 AlorGajah,Melaka.

A single-storey open-sided detached factory

Factory Leasehold (99 years expiring on 23 Oct2100)

3 2,323.04 2.39 2017

LIST OF PROPERTIES

(CONT’D)


NOTICE OF ANNuAL gENERAL MEETINg

NOTICE IS HEREBY GIVEN THAT the Thirtieth Annual General Meeting (“30th AGM”) of AtlanHoldingsBhd. will be held at the Meeting Room, Wisma Atlan, 8 Persiaran Kampung Jawa, 11900 Bayan Lepas, Penang on Monday, 5 August 2019 at 11.00 a.m. for the following purposes:-

AGENDA

AsOrdinaryBusiness:-

1. To receive the Audited Financial Statements for the financial year ended 28 February 2019 together with the Directors’ and Auditors’ Report thereon.

2. To re-elect the following Directors who retire by rotation in accordance with Article 78

of the Company’s Constitution and being eligible, offer themselves for re-election :-

a) Dato' Sri Adam Sani bin Abdullah; b) Dato’SriRobinTanYeongChing;andc) Tan Thiam Chai.

3. Tore-appointMessrs.Ernst&YoungasAuditorsoftheCompanyfortheensuingyearand to authorise the Directors to fix their remuneration.

AsSpecialBusiness:-

4. To consider and if thought fit, to pass the following resolutions, with or without any modifications:-

i) OrdinaryResolution PaymentofDirectors’Fees

“THAT the Directors’ fees of RM260,500 for the financial year ended 28 February 2019 be and is hereby approved.”

ii) OrdinaryResolution PaymentofbenefitspayabletotheDirectors

“THAT the payment of benefit payable to the Directors of the Company up to an amount of RM200,000 from the conclusion of this meeting until the next Annual General Meeting of the Company pursuant to Section 230(1)(b) of the Companies Act, 2016 be and is hereby approved.”

iii) OrdinaryResolution Authoritytoissueandallotshares

“THAT subject always to theCompanies Act, 2016 (“Act”), theCompany’sConstitution, the Listing Requirements of Bursa Malaysia Securities Berhad and approvals of the relevant Governmental and/or regulatory authorities, the Directors be and are hereby empowered pursuant to Sections 75 and 76 of the Act, to issue and allot shares in the Company pursuant to the Act, at any time to such persons and upon such terms and conditions and for such purposes as the Directors may deem fit provided that the aggregate number of shares issued pursuant to this Resolution does not exceed 10% of the total 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 (“AGM”) of the Company or the expiration of the period within which the next AGM is required to be held, whichever is earlier, unless such authority is revoked or varied by resolution passed by the shareholders in general meeting.”

(Please referto Note 2)

Resolution 1Resolution 2Resolution 3

Resolution 4

Resolution 5

Resolution 6

Resolution 7



(CONT’D)

iv) OrdinaryResolution MandateforEn.MohdSharifbinHjYusofwhohasservedasanIndependent

Non-ExecutiveDirectoroftheCompanyforacumulativetermofmorethannine(9)years,tocontinuetoactasanIndependentNon-ExecutiveDirectoroftheCompany

“THATapprovalbeand isherebygiven toEn.MohdSharifbinHjYusof,whohas served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to continue to act as an Independent Non-Executive Director of the Company.”

v) SpecialResolution ProposedAdoption of a newConstitution of theCompany (“Proposed

Adoption”)

“THAT approval be and is hereby given for the revocation of the existing Memorandum and Articles of Association of the Company and in place thereof, the proposed new Constitution as set out in the Circular to Shareholders dated 28 June 2019 be and is hereby adopted as the Company’s Constitution AND THAT the Directors of the Company be and are hereby authorised to do all acts and things and take all such steps as may be considered necessary to give full effect to the Proposed Adoption”

5. To transact any other business of which due notice shall have been given in accordance with the Companies Act, 2016 and the Company’s Constitution.

By Order of the Board,

CHUASIEWCHUAN(MAICSA0777689)THUMSOOKFUN(MIA24701)Company Secretaries

Date: 28 June 2019

Resolution 8

Resolution 9


NOTICE OF ANNuAL gENERAL MEETINg(CONT’D)

Notes:-

1) InformationforShareholders/Proxies

1.1 A member entitled to attend and vote at the Meeting is entitled to appoint more than one (1) proxy to attend and vote in his or her stead. Where a member appoints two or more proxies, the appointments shall be invalid unless he or she specifies the proportions of his or her shareholdings to be represented by each proxy.

1.2 A proxy may but need not to be a member of the Company. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend the Meeting shall have the same rights as the member to speak and vote at the Meeting.

1.3 The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer or attorney duly authorised.

1.4 Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991 (“SICDA”), it may appoint at least one (1) proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.

1.5 Where a member of the Company is an Exempt Authorised Nominee (“EAN”) which holds ordinary shares in the Company for multiple beneficial owners in one (1) Securities Account (“Omnibus Account”), there shall be no limit to the number of proxies which the EAN may appoint in respect of each Omnibus Account it holds. An EAN refers to an additional nominee defined under the SICDA which is exempted from compliance with the provisions of subsection 25A(1) of the SICDA.

1.6 The instrument appointing a proxy must be deposited at the Company’s registered office at 17th Floor, Menara Atlan, 161B, Jalan Ampang, 50450 Kuala Lumpur not less than 48 hours before the time for holdingthemeetingoranyadjournmentthereof.

1.7 For the purpose of determining who shall be entitled to attend, speak and vote at this meeting, the Company shall be requesting Bursa Malaysia Depository Sdn. Bhd. to make available to the Company pursuant to Article 56(b) of the Constitution of the Company and Paragraph 7.16(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements”), a Record of Depositors as at 30 July 2019 (“General Meeting Record of Depositors”) and a Depositor whose name appears on such Record of Depositors shall be entitled to attend, speak and vote at the meeting or appoint proxy to attend, speak and vote in his/her stead.

1.8 Pursuant to Paragraph 8.29A(1) of the Listing Requirements, all resolutions set out in this notice will be put to vote by way of a poll.

2) AuditedFinancialStatementsforthefinancialyearended28February2019

This Agenda item is meant for discussion only, as the provision of Section 340(1)(a) of the Companies Act, 2016 (“Act”) does not require a formal approval for the Audited Financial Statements from the shareholders of the Company and hence, Agenda 1 is not put forward for voting.


3) Re-electionofDirectorsandretirementofDirector

Article 78 of the Company’s Constitution states that one-third (1/3) of the Directors shall retire from office and shall be eligible for re-election at each AGM. All Directors shall retire from office at least once in each three (3) years but shall be eligible for re-election. A retiring Director shall retain office until the close of the meeting at which he retires.

In determining the eligibility of the Directors to stand for re-election at the forthcoming AGM, the Nomination Committee (“NC”) has considered the following: -

i. Evaluation on the effectiveness of the individual director, the Board as a whole and all Board Committees; and

ii. For Independent Non-Executive Directors (“INEDs”) only, the level of independence demonstrated by the INEDs and their ability to act in the best interest of the Company.

In line with Practice 5.1 of the Malaysian Code of Corporate Governance 2017 (“MCCG”), the Board has conducted an assessment of the Directors of the Company based on the relevant performance criteria which include the following: -

i. Board mix and composition; ii. Quality of information and decision making;iii. Boardroom activities;iv. Board’s relationship with the management.

The Board approved the NC’s recommendation for the re-election of the retiring Directors pursuant to Article 78 of the Company’s Constitution at the forthcoming AGM of the Company. At the relevant Board meeting, all the retiring Directors under Article 78 of the Company’s Constitution have consented to their re-election and abstained from deliberation as well as decision on their own eligibility to stand for re-election.

4)Re-appointmentofAuditors

Pursuant to Section 271(3)(b) of the Act, shareholders shall appoint auditors who shall hold office until the conclusion of the next AGM in year 2020. The current auditors have expressed their willingness to continue in office and the Board has recommended their re-appointment. The shareholders shall consider this Resolution 4 and to authorise the Board to determine their remuneration thereof.

TheBoardandARMChaveconsideredthere-appointmentofMessrs.Ernst&YoungasauditorsoftheCompanyandcollectivelyagreedthatMessrs.Ernst&YounghasmettherelevantcriteriaprescribedbyParagraph 15.21 of Listing Requirements.


(CONT’D)


NOTICE OF ANNuAL gENERAL MEETINg(CONT’D)

5) PaymentofDirectors’feesandbenefitsmadepayabletotheDirectors

Section 230(1) of the Act provides amongst others, that the fees of the Directors and any benefits payable to the Directors of a listed company and its subsidiaries shall be approved at a general meeting.

Forthefinancialyearended28February2019(“FY2019”),theBoardofDirectorsdecidedthattheDirectors’fees for FY2019bemaintainedas theprevious financial year for eachDirector. In conjunctionwith theappointmentofRajaDato’ShaharudinShahbinRajaJalilShahasIndependentNon-ExecutiveDirectoron13June2018followedbytheretirementofYangAmatMuliaTengkuAbdulRahmanIbniSultanHajiAhmadShah Al-Mustain Billah, DK II., SSAP as Director of the Company at the last AGM held on 28 August 2018, theproposedDirectors’feesforFY2019isRM260,500(FY2018:RM260,500).

The benefits payable to the Directors pursuant to Section 230(1)(b) of the Act have been reviewed by the Board of Directors of the Company, which recognizes that the benefits payable are in the best interest of the Company from the conclusion of this meeting until the next AGM. The benefits comprise of benefits in kind and the meeting allowance, which will only be accorded based on actual attendance of meetings by the Directors. In the event the proposed amount is insufficient e.g. due to more meetings or enlarged Board size, approval will be sought at the next AGM for the shortfall.

The Board wishes to seek for shareholders’ approval at the 30th AGM for the payment of Directors’ fees and benefit payable to the Directors: -

i) Resolution 5 on the proposed Directors’ fees of RM260,500 in respect of the financial year ended 28 February 2019;

ii) Resolution 6 on the benefits payable to the Non-Executive Directors pursuant to Section 230(1)(b) of the Act.

6) Authoritytoissueandallotshares

The proposed Resolution 7 is primarily to seek for the renewal of a general mandate to give flexibility to the Board of Directors to issue and allot shares up to 10% of the issued share capital (excluding treasury shares) of the Company for the time being, at any time in their absolute discretion pursuant to Sections 75 and 76 of the Act, without convening a general meeting (hereinafter referred to as the “General Mandate”).

The Company has been granted a general mandate by its shareholders at the last AGM held on 28 August 2018 (hereinafter referred to as the “Previous Mandate”) and it will lapse at the conclusion of the 30th AGM.

As at the date of this Notice, the Previous Mandate granted by the shareholders had not been utilised and hence, no proceed was raised therefrom.

The purpose to seek the General Mandate is to enable the Directors to issue and allot shares at any time to such persons in their absolute discretion without convening a general meeting as it would be both time-consuming and costly to organise a general meeting. This General Mandate, unless revoked or varied by the Company in a general meeting, will expire at the conclusion of the next AGM of the Company.

The General Mandate will provide flexibility to the Company for any possible fund-raising activities, including butnotlimitedtofurtherplacingofshares,forpurposeoffundingfutureinvestmentproject(s),acquisitions,working capital and/or settlement of banking facilities.


7)MandateforEn.MohdSharifbinHjYusoftocontinuetoactasIndependentNon-ExecutiveDirector

Pursuant to Practice 4.2 of the MCCG, it recommends that shareholders’ approval must be sought in the event that the Company intends to retain the Independent Non-Executive Directors who have served in that capacity for more than 9 years. While the shareholders’ approval through a two-tier voting process must be sought if the Company intends to retain the Independent Non-Executive Directors who have served in that capacity for more than 12 years.

TheNChasattheannualassessmentassessedthe independenceofEn.MohdSharifbinHjYusofwhohad served on the Board as an Independent Non-Executive Director for a cumulative term of more than 9 years.En.MohdSharifbinHjYusofhasremainedobjectiveandindependentinexpressinghisviewsandinparticipating in deliberation and decision making of the Board and Board Committees. His length of service ontheBoarddoesnotinanywayinterferewithhisexerciseofindependentjudgementandabilitytoactinthebestinterestsoftheCompany.Inaddition,En.MohdSharifbinHjYusofhadconfirmedanddeclaredinwriting that he is Independent Director and he has satisfied all the criteria of an Independent Director set out in Paragraph 1.01 of the Listing Requirements. The Board has therefore recommended that the approval of theshareholdersbesoughttoretainEn.MohdSharifbinHjYusofasIndependentNon-ExecutiveDirector.

ThefulldetailsoftheBoard’sjustificationstoretainEn.MohdSharifbinHjYusofasIndependentDirectorisset out in the Corporate Governance Overview Statement in the Company’s Annual Report 2019.

TheResolution8,ifpassed,willenabletheCompanytoretainEn.MohdSharifbinHjYusofasIndependentNon-Executive Director.

8)AdoptionofanewConstitutionoftheCompany(“ProposedAdoption”)

The Resolution 9, if passed, will bring the proposed new Constitution in line with the Act and Listing Requirements as well as to provide clarity to certain provision and to render consistency throughout in order to facilitate and further enhance administrative efficiencies.

Further information on the Proposed Adoption is set out in the Circular to shareholders dated 28 June 2019.

Personaldataprivacy:

By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the AGM and/oranyadjournmentthereof,amemberoftheCompany(i)consentstothecollection,useanddisclosureofthe member’s personal data by the Company (or its agents) for the purpose of the processing and administration bytheCompany(oritsagents)ofproxiesandrepresentativesappointedfortheAGM(includinganyadjournmentthereof) and the preparation and compilation of the attendance lists, minutes and other documents relating to the AGM(includinganyadjournmentthereof),andinorderfortheCompany(oritsagents)tocomplywithanyapplicablelaws, listing rules, regulations and/or guidelines (collectively, the “Purposes”), (ii) warrants that where the member discloses the personal data of the member’s proxy(ies) and/or representative(s) to the Company (or its agents), the member has obtained the prior consent of such proxy(ies) and/or representative(s) for the collection, use and disclosure by the Company (or its agents) of the personal data of such proxy(ies) and/or representative(s) for the Purposes, and (iii) agrees that the member will indemnify the Company in respect of any penalties, liabilities, claims, demands, losses and damages as a result of the member’s breach of warranty.

STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING(Pursuant to Paragraph 8.27(2) of the Listing Requirements)

As at date of this notice, there are no individuals who are standing for election as Directors (excluding the above Directors who are standing for re-election) at this forthcoming 30th AGM.


(CONT’D)

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✄CDS Account No.

No. of Shares Held

I/We ____________________________________________________ NRIC No./Company No. _________________________________ (full name in block letters)

of ______________________________________________________________________________________________________________(full address)

being a member ofATLANHOLDINGSBHD(173250-W) hereby appoint _______________________________________________

______________________________________________________ of _______________________________________________________

or failing *him/her, ___________________________________________ of _________________________________________________

*my/our proxy to vote for *me/us on *my/our behalf at the Thirtieth Annual General Meeting of the Company to be held at the Meeting Room, Wisma Atlan, 8 Persiaran Kampung Jawa, 11900 Bayan Lepas, Penang on Monday, 5 August 2019 at 11.00 a.m. andatanyadjournmentthereof.

Please indicate your vote by a (X) in the respective box of each resolution. If no specific direction as to voting is given, the proxy will vote or abstain from voting on the resolutions at his/her discretion.

No. Resolutions For AgainstAS ORDINARY BUSINESS:-Resolution 1 To re-elect Dato' Sri Adam Sani bin Abdullah as Director of the CompanyResolution 2 Tore-electDato’SriRobinTanYeongChingasDirectoroftheCompanyResolution 3 To re-elect Mr. Tan Thiam Chai as Director of the CompanyResolution 4 Tore-appointMessrs.Ernst&YoungasAuditorsoftheCompanyAS SPECIAL BUSINESS:-Resolution 5 OrdinaryResolution–PaymentofDirectors'feesResolution 6 OrdinaryResolution–PaymentofbenefitspayabletotheDirectorsResolution 7 OrdinaryResolution–AuthoritytoIssueandAllotSharesResolution 8 OrdinaryResolution–MandateforEn.MohdSharifbinHjYusoftocontinuetoactas

an Independent Non-Executive Director of the CompanyResolution 9 SpecialResolution–ProposedAdoptionofanewConstitutionoftheCompany

* Strike out whichever not applicable

Note: Please note that the short descriptions given above of the Resolutions to be passed do not in any way whatsoever reflect the intent and purpose of the Resolutions. The short descriptions have been inserted for convenience only. Shareholders are encouraged to refer to the Notice of Annual General Meeting for the full purpose and intent of the Resolutions to be passed.

As witness *my/our hand(s) this _____________ day of _____________________, 2019.

__________________________________Signature of Shareholder(s)

Notes:-

1. A member entitled to attend and vote at the Meeting is entitled to appoint more than one (1) proxy to attend and vote in his or her stead. Where a member appoints two or more proxies, the appointments shall be invalid unless he or she specifies the proportions of his or her shareholdings to be represented by each proxy.

2. A proxy may but need not to be a member of the Company. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend the Meeting shall have the same rights as the member to speak and vote at the Meeting.

3. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer or attorney duly authorised.

4. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991 (“SICDA”), it may appoint at least one (1) proxy in respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities Account.

5. Where a member of the Company is an Exempt Authorised Nominee (“EAN’) which holds ordinary shares in the Company for multiple beneficial owners in one (1) Securities Account (“Omnibus Account”), there shall be no limit to the number of proxies which the EAN may appoint in respect of each Omnibus Account it holds. An EAN refers to an additional nominee defined under the SICDA which is exempted from compliance with the provisions of subsection 25A(1) of the SICDA.

6. The instrument appointing a proxy must be deposited at the Company’s registered office at 17th Floor, Menara Atlan, 161B, Jalan Ampang, 50450 Kuala Lumpur not less than 48 hours before the time for holding the meeting or any adjournment thereof.

7. For the purpose of determining who shall be entitled to attend, speak and vote at this meeting, the Company shall be requesting Bursa Malaysia Depository Sdn. Bhd. to make available to the Company pursuant to Article 56(b) of the Constitution of the Company and Paragraph 7.16(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements”), a Record of Depositors as at 30 July 2019 (“General Meeting Record of Depositors”) and a Depositor whose name appears on such Record of Depositors shall be entitled to attend, speak and vote at the meeting or appoint proxy to attend, speak and vote in his/her stead.

8. Pursuant to Paragraph 8.29A(1) of the Listing Requirements, all resolutions set out in the Notice of 30th Annual General Meeting will be put to vote by way of a poll.

9. Any alteration in this form must be initialed.

PROXY FORM

COMMONSEAL

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THE COMPANY SECRETARIES

ATLAN HOLDINGS BHD(Company No.: 173250-W)

17th Floor, Menara Atlan161B, Jalan Ampang50450 Kuala Lumpur

Malaysia

AFFIXPOSTAGE

STAMP

Correspondence adress:ATLAN HOLDINGS BHD. (173250-W)

17TH FLOOR, MENARA ATLAN,161B, JALAN AMPANG,50450 KUALA LUMPUR, MALAYSIA.

T +603 2179 2000F +603 2179 2390www.atlan.com.my

Annual Report 2019

laporan tahunan

Annual Report Laporan Tahunan

2019

Documents

Annual Report - Atlan Holdings Bhd report/documents/ATLAN... · 2019-07-02 · Correspondence adress: ATLAN HOLDINGS BHD. (173250-W) 17TH FLOOR, MENARA ATLAN, 161B, JALAN AMPANG,