Upload
others
View
5
Download
0
Embed Size (px)
Citation preview
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 Laporan Tahunan
2017
Annual Report 2017
laporan tahunan
CHARTING A NEWDIRECTION
At ATLAN, progress is more than just profits. It is the embodiment of us believing in creating possibilities by looking far and beyond the conventional. Together, we are progressing by seeking new technologies, partnerships and ideas to go further and faster into the future.
CONTENTS
02 CORPORATE STRUCTURE
04 CORPORATE INFORMATION
06 PROFILE OF DIRECTORS
12 PROFILE OF KEY SENIOR MANAGEMENT
14 FINANCIAL HIGHLIGHTS
16 CHAIRMAN’S STATEMENT
19 PENYATA PENGERUSI
22 董事主席献词
24 MANAGEMENT DISCUSSION & ANALYSIS
28 STATEMENT ON CORPORATE GOVERNANCE
44 ADDITIONAL COMPLIANCE INFORMATION
45 AUDIT & RISK MANAGEMENT COMMITTEE REPORT
48 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
51 CORPORATE SOCIAL RESPONSIBILITY
53 STATEMENT OF DIRECTORS’ RESPONSIBILITY
54 FINANCIAL STATEMENTS
176 ANALYSIS OF SHAREHOLDINGS
179 LIST OF PROPERTIES
182 NOTICE OF ANNUAL GENERAL MEETING
FORM OF PROXY
01
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 1 6/21/17 4:57 PM
Arah Induk Sdn. Bhd.100%
Atlan Capital Sdn. Bhd.100%
Atlan Development Sdn. Bhd.100%
Atlan Technology Sdn. Bhd.100% Atlan Technology Sdn. Bhd.100%
Atlan Assets Sdn. Bhd.100%
Belia Karisma Sdn. Bhd.100%
Blossom Time Sdn. Bhd.100%
Gardenia Success Sdn. Bhd. 100% Darul Metro Sdn. Bhd.100%
United Industries Sdn. Bhd.100%
United Filter Sdn. Bhd.
Danco Marketing Sdn. Bhd.100%
Naluri Properties Sdn. Bhd.100%
Ocean Pride Sdn. Bhd. 100%
Radiant Ranch Sdn. Bhd.100%
RZ Equities Sdn. Bhd.#100%
Tegapasti Sdn. Bhd.100%
Trifiniti Networks Sdn. Bhd.100%
Timeless Image Sdn. Bhd.100%
International AviationConsultants Sdn. Bhd.#100%
United Industries HoldingsSdn. Bhd.100%
Tropika Ferringhi ManagementSdn. Bhd.100%
Zon Hospitality ServicesSdn. Bhd.100%
Scandinavian Avionics(Malaysia) Sdn. Bhd.25%
Duty Free International Limited73.67% DFZ Capital Berhad90%*
Naluri International Limited100%
Atlan Properties Sdn. Bhd.100%
Atlan Orient Sdn. Bhd.100%
Atlan Management Sdn. Bhd.100%
Naluri CorporationSdn. Bhd.#100%
Orchard BoulevardSdn. Bhd.100%
United Sanoh IndustriesSdn. Bhd.70%
Freighter Industries (M)Sdn. Bhd.100%
United Vehicles IndustriesSdn. Bhd.
UEW Plastic IndustriesSdn. Bhd.100%
50%
50%
69%
28%
81%
19%
02
AtlanAR17(Main)_Koh.indd 2 6/21/17 4:57 PM
CORPORATESTRUCTURE
(As at 31 May 2017)
Cergasjaya Sdn. Bhd.100%
DFZ Utara Sdn. Bhd.100%
DFZ Emporium Sdn. Bhd.29.30%
DFZ (M) Sdn. Bhd.69.89%
Jasa Duty Free Sdn. Bhd.100%
Melaka Duty Free Sdn. Bhd.51%
Wealthouse Sdn. Bhd.28.60%
Zon Emporium Sdn. Bhd.100%
Binamold Sdn. Bhd.100%
Cergasjaya Properties Sdn. Bhd.100%
DFZ Asia Sdn. Bhd.100%
Gold Vale Development Sdn. Bhd.100%
Kelana Megah Sdn. Bhd.100%
PT DFZ Indon99%
Tenggara Senandung Sdn. Bhd.100%
Kadar Prisma Sdn. Bhd.100%
UVI Advance TechnologySdn. Bhd.100% 1%
Winner Prompt Sdn. Bhd.100%
Selasih Ekslusif Sdn. Bhd.100%
Seruntun Maju Sdn. Bhd.69.80%
Emas Kerajang Sdn. Bhd.69.90%
DFZ Trading Sdn. Bhd.100%
100% DFZ Duty Free (Langkawi)Sdn. Bhd.
100% DFZ Duty Free SuppliesSdn. Bhd.
100% Jelita Duty Free SuppliesSdn. Bhd.
100% Black Forest Golf AndCountry Club Sdn. Bhd.
* Represent 90% equity interest in DFZ Capital Berhad (”DFZ”) less one DFZ Share.# Intheprocessofstriking-off.
03
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 3 6/21/17 4:57 PM
BOARD OF DIRECTORS
Dato’ Sri Adam Sani Bin AbdullahChairmanNon-Independent Non-Executive Director
Lee Sze SiangExecutive Director
Tengku Abdul Rahman Ibni Sultan Haji Ahmad Shah Al-Mustain Billah, DK II., SSAPIndependent Non-Executive Director
Dato’ Sri Robin Tan Yeong ChingNon-Independent Non-Executive Director
Jeneral Tan Sri Dato’ Sri Abdullah BinAhmad @ Dollah Bin Amad (B)Independent Non-Executive Director
Dato’ Shagul Hamid Bin K.R. Williams @ AbdullahIndependent Non-Executive Director
Mohd Sharif Bin Hj YusofSenior Independent Non-Executive Director
Tan Thiam ChaiNon-Independent Non-Executive Director
Dato’ Woo Hon KongIndependent Non-Executive Director
Ong Bok SiongNon-Independent Non-Executive Director
Tuan Mohd Jaffar Bin Awang (Ismail)Independent Non-Executive Director (Appointed on 16 May 2017)
CORPORATEINFORMATION
04
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 4 6/21/17 4:57 PM
Audit And Risk Management CommitteeMohd Sharif Bin Hj Yusof
(Chairman)Dato’ Shagul Hamid Bin K.R.
Williams @ AbdullahJeneral Tan Sri Dato’ Sri Abdullah
Bin Ahmad @ Dollah Bin Amad (B)Tan Thiam ChaiTuan Mohd Jaffar Bin Awang (Ismail)
(Appointed on 16 May 2017)
Remuneration CommitteeDato’ Sri Adam Sani Bin
Abdullah (Chairman)Jeneral Tan Sri Dato’ Sri Abdullah
Bin Ahmad @ Dollah Bin Amad (B)Dato’ Shagul Hamid Bin K.R.
Williams @ AbdullahDato’ Sri Robin Tan Yeong ChingTuan Mohd Jaffar Bin Awang (Ismail)
(Appointed on 16 May 2017)
Nomination CommitteeDato’ Sri Adam Sani Bin
Abdullah (Chairman)Tengku Abdul Rahman Ibni
Sultan Haji Ahmad Shah Al-Mustain Billah, DK II., SSAP
Dato’ Shagul Hamid Bin K.R. Williams @ Abdullah
Tuan Mohd Jaffar Bin Awang (Ismail) (Appointed on 16 May 2017)
Principal BankersAffin Bank BerhadCIMB Bank BerhadRHB Bank BerhadAlliance Bank Malaysia Berhad
AuditorsErnst & Young21st Floor, MWE Plaza8 Lebuh Farquhar10200 PenangMalaysiaTel: 604 – 263 0033Fax: 604 – 263 0099
Stock Exchange ListingMain Market of Bursa Malaysia Securities BerhadStock Name: AtlanStock Code: 7048Stock Sector: Trading / Services Date Listing: 15 January 1996
Company SecretariesChua Siew Chuan
(MAICSA 0777689)Thum Sook Fun (MIA 24701)
Registered Office17th Floor, Menara Atlan 161B Jalan Ampang50450 Kuala Lumpur, MalaysiaTel: 603 – 2179 2000Fax: 603 – 2179 2390
Investor RelationsLee Sze Siang17th Floor, Menara Atlan 161B Jalan Ampang50450 Kuala Lumpur, MalaysiaTel: 603 – 2179 2000Fax: 603 – 2179 2390Email: [email protected]
Correspondence Address17th Floor, Menara Atlan 161B Jalan Ampang50450 Kuala Lumpur, MalaysiaTel: 603 – 2179 2000Fax: 603 – 2179 2390 Web: http://www.atlan.com.my
Share Registrar Securities Services (Holdings) Sdn. Bhd. (36869-T)Level 7, Menara MileniumJalan DamanlelaPusat Bandar DamansaraDamansara Heights50490 Kuala Lumpur, MalaysiaTel: 603 – 2084 9000Fax: 603 – 2094 9940 / 2095 0292
05
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 5 6/21/17 4:57 PM
PROFILE OFDIRECTORS
DATO’ SRI ADAM SANI ABDULLAHChairmanNon-Independent Non-Executive Director
DATO’ SRI ADAM SANI ABDULLAH, male, a Malaysian, age 61, was appointed as Chairman of the Company on 16 June 2000.
Dato’ Sri Adam is a self-made entrepreneur for more than 37 years. He received his primary education in Malaysia and secondary education in the United Kingdom.
Dato’ Sri Adam also serves as Chairman of the Remuneration and Nomination Committees of the Company. He is also the Non-Executive Chairman of Duty Free International Limited, a company listed on the Main Board of the Singapore Exchange Securities Trading Limited.
Dato’ Sri Adam does not have any family relationship with any director. Mr. Sebastian Paul Lim Chin Foo, a substantial shareholder of the Company, is the son of Dato’ Sri Adam.
Dato’ Sri Adam has no conflict of interests with the Company and 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 2017.
06
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 6 6/21/17 4:57 PM
LEE SZE SIANGExecutive Director
LEE SZE SIANG, male, a Malaysian, age 46, 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.
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.
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 2017.
TENGKU ABDUL RAHMAN IBNI SULTAN HAJI AHMAD SHAH AL-MUSTAIN BILLAH, DK II., SSAPIndependent Non-Executive Director
TENGKU ABDUL RAHMAN IBNI SULTAN HAJI AHMAD SHAH AL-MUSTAIN BILLAH, DK II., SSAP, male, a Malaysian, age 57, was appointed as an Independent Non-Executive Director of the Company on 9 October 2000.
Tengku Abdul Rahman was educated at Harrow College, United Kingdom in Business Administration. He was a Director on the Board of Public Bank Berhad from 1983 to March 2011. He also served as a Director for Public Islamic Bank Berhad and Public Investment Bank Berhad till March 2011.
Tengku Abdul Rahman also serves as a member of the Nomination Committee of the Company.
Tengku Abdul Rahman does not have any family relationship with any director and/or major shareholder of the Company and has no conflict of interests with the Company.
Tengku Abdul Rahman 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 2017.
profile of directors (cont’d.)
07
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 7 6/21/17 4:57 PM
JENERAL TAN SRI DATO’ SRI ABDULLAH BIN AHMAD @ DOLLAH BIN AMAD (B)Independent Non-Executive Director
JENERAL TAN SRI DATO’ SRI ABDULLAH BIN AHMAD @ DOLLAH BIN AMAD (B), male, a Malaysian, age 69, was appointed as an Independent Non-Executive Director of the Company on 26 January 2011.
He is graduated from Royal Air Force Staff College in Bracknell, United Kingdom in 1982. He holds Master Degree in International Relations and Strategic Studies from University of Lancaster, United Kingdom in 1986. He joined the Royal Malaysian Air Force (“RMAF”) in 1968 as a cadet officer and had served the RMAF for 36 years before retiring as the Chief of RMAF in 2004 with last rank as General.
He serves as a member of the Audit and Risk Management and Remuneration Committee of the Company.
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.
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 2017.
profile of directors (cont’d.)
DATO’ SRI ROBIN TAN YEONG CHINGNon-Independent Non-Executive Director
DATO’ SRI ROBIN TAN YEONG CHING, male, a Malaysian, age 43, was appointed as a Non-Independent Non-Executive Director of the Company on 18 December 2012.
He graduated with a Bachelor of Social Science degree in Accounting/Law from the University of Southampton, United Kingdom, in 1995. He joined Berjaya Group Berhad in 1995 as an Executive and subsequently became the General Manager, Corporate Affairs in 1997.
Currently, he is the Chairman/Chief Executive Officer (“CEO”) of Berjaya Corporation Berhad, the CEO of Berjaya Sports Toto Berhad, an Executive Director of Sports Toto Malaysia Sdn. Bhd. and the Executive Chairman of Berjaya Food Berhad. He is also the Chairman of Berjaya Media Berhad, Sun Media Corporation Sdn Bhd and Informatics Education Ltd, Singapore and a Director of KDE Recreation Berhad and Berjaya Golf Resort Berhad. He also holds directorships in several other private limited companies in the Berjaya Corporation Group of companies.
He serves as a member of the Remuneration Committee of the Company.
He does not have any family relationship with any director. His father, Tan Sri Dato’ Seri Vincent Tan Chee Yioun is a deemed major shareholder of the Company.
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 2017.
08
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 8 6/21/17 4:57 PM
MOHD SHARIF BIN HJ YUSOFSenior Independent Non-Executive Director
MOHD SHARIF BIN HJ YUSOF, male, a Malaysian, age 78, was appointed as an Independent Non-Executive Director of the Company on 23 January 2009.
He is a Fellow Member of the Institute of Chartered Accountants, England and Wales and an Associate Member of the Malaysian Institute of Accountants. He has had more than 20 years experience in the government and financial sectors, serving the Selangor State Government, Bumiputra Merchant Bankers Berhad (now known as CIMB Bank Berhad) and thereafter British American Life & General Insurance Co Bhd (now known as Manulife Insurance (Malaysia) Berhad) where he held the position of Senior Vice President, Finance/Company Secretary at the time he retired.
He serves as Chairman of the Audit and Risk Management Committee of the Company.
He currently sits on the board of Ireka Corporation Berhad, Axis Reit Managers Berhad and AYS Ventures Bhd.
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.
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 2017.
DATO’ SHAGUL HAMID BIN K.R. WILLIAMS @ ABDULLAHIndependent Non-Executive Director
DATO’ SHAGUL HAMID BIN K.R. WILLIAMS @ ABDULLAH, male, a Malaysian, age 68, was appointed as an Independent Non-Executive Director of the Company on 30 December 2004.
Dato’ Shagul holds B.A. (Hons), 2nd Lower, Degree in English Studies, University of Malaya (1973). He joined the Pensions Division of Public Services Department as Assistant Director in 1973 and was subsequently promoted and has held various positions in the Public Sector. His last held position as a full-time public servant was as Head of Languages Division in the National Institute of Public Administration Kuala Lumpur (INTAN) in 1997. However, he has been back several times in the Public Sector, to hold several contract positions.
Dato’ Shagul serves as a member of the Audit and Risk Management, Remuneration and Nomination Committees of the Company.
Dato’ Shagul 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.
Dato’ Shagul 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 2017.
profile of directors (cont’d.)
09
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 9 6/21/17 4:57 PM
DATO’ WOO HON KONGIndependent Non-Executive Director
DATO’ WOO HON KONG, male, a Malaysian, age 52, was appointed as Non-Independent Non-Executive Director of the Company on 24 April 2002. He was re-designated to the Executive Director position on 5 July 2002 and subsequently re-designated as Non-Independent Non-Executive Director of the Company on 30 October 2008. He was further re-designated to Independent Non-Executive Director of the Company on 16 May 2014.
He holds a Bachelor of Laws degree from the University of Canterbury, New Zealand. He started his career in 1988 as a legal assistant and joined a mid size legal firm as a partner in 1989 until 1994. He subsequently oversees the management and financial matters of companies involved in real estate and equities market locally and overseas prior to joining Atlan Group.
He currently sits on the board of M3 Technologies (Asia) Berhad.
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.
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 2017.
TAN THIAM CHAINon-Independent Non-Executive Director
TAN THIAM CHAI, male, a Malaysian, age 58, 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.
Currently, he is the Chief Financial Officer of Berjaya Corporation Berhad. 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 Taiga Building Products Ltd (Canada). He also holds directorships in several other private limited companies in the Berjaya Corporation group of companies.
He serves as a member of the Audit and Risk Management Committee of the Company.
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.
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 2017.
profile of directors (cont’d.)
10
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 10 6/21/17 4:57 PM
TUAN MOHD JAFFAR BIN AWANG (ISMAIL)Independent Non-Executive Director
TUAN MOHD JAFFAR BIN AWANG (ISMAIL), male, a Malaysian, age 63, was appointed as a Independent Non-Executive Director of the Company on 16 May 2017.
He holds 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 holds directorships in several other Private Limited Companies and also as a member of Johor Public Service Commission.
He serves as a member of the Audit and Risk Management, Remuneration and Nomination Committees of the Company.
He does not have any family relationship with any director and/or major shareholder of the Company and has no conflict of interests with the Company.
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 2017.
ONG BOK SIONGNon-Independent Non-Executive Director
ONG BOK SIONG, male, a Malaysian, age 58, was appointed as Executive Director of the Company on 26 August 2010. He was re-designated to Group Managing Director on 30 April 2012 and subsequently re-designation as Non-Independent Non-Executive Director on 26 June 2013.
He holds a Bachelor of Laws degree from the University of London, United Kingdom, Bachelor of Science degree in Building Economics and Quantity Surveying (first class honours) from the Heriot-Watt University, Scotland, United Kingdom and Diploma in Building Technology from Tunku Abdul Rahman College. He also holds professional membership with various professional bodies.
He started his career in the construction and property industry in 1983 and had involved in mega construction and property development projects. He was the Chief Executive Officer and Executive Director of Meda Inc. Berhad and Group Chief Executive Officer of Andaman Consolidated Sdn Bhd Group before joining Atlan Group. Currently, he is also the Managing Director of Duty Free International Ltd, a company listed on the Main Board of the Singapore Exchange Securities Trading Limited.
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.
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 2017.
profile of directors (cont’d.)
11
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 11 6/21/17 4:57 PM
PROFILE OFKEY SENIOR MANAGEMENTHO YUET LENGGroup General Manager –Finance & Corporate Services
HO YUET LENG, female, a Malaysian, age 54, joined the Group as Head of Finance and Corporate Services 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 was with Ernst & Young.
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 has not been convicted of any offences within the past 5 years and has not been imposed any public sanction or penalty by the relevant regulatory bodies during the financial year 2017.
ANDREAS CURT WINNENChief Executive Officer of DFZ Capital Berhad
ANDREAS CURT WINNEN, male, a German Citizen, age 48, was appointed as Chief Executive Officer of DFZ Capital Berhad on 1 September 2016. 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 have any family relationship with any director and/or major shareholder of the Company and has no conflict of interests with the Company.
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 2017.
12
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 12 6/21/17 4:57 PM
13
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 13 6/21/17 4:58 PM
FINANCIALHIGHLIGHTS
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)
900.0
800.0
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
700.0
600.0
500.0
400.0
300.0
200.0
100.0
0
FY 2
008
FY 2
009
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
008
FY 2
009
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
008
FY 2
009
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
008
FY 2
009
FY 2
010
FY 2
011
FY 2
012
FY 2
013
FY 2
014
FY 2
015
FY 2
016
FY 2
017
■ Duty Free ■ Automotive ■ Property & Hospitality
14
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 14 6/21/17 4:58 PM
BASIC EARNINGS PER SHARE (sen) DIVIDEND PAYOUT (RM’million)
NET TANGIBLE ASSETS PER SHARE (RM) CASH AND CASH EQUIVALENTS (RM’million)
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0
180.0
160.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
0
2.00
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0
350.0
300.0
250.0
200.0
150.0
100.0
50.0
0
FY 2
008
FY 2
009
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
008
FY 2
009
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
008
FY 2
009
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
008
FY 2
009
FY 2
010
FY 2
011
FY 2
012
FY 2
013
FY 2
014
FY 2
015
FY 2
016
FY 2
017
financial highlights (cont’d.)
15
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 15 6/21/17 4:58 PM
CHAIRMAN’SSTATEMENT
Bismillahir Rahmanir Rahim Assalamu Alaikum wa Rahmatullahi wa BarakatuhOn behalf of the Board of Directors 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 2017 (“FYE2017”).
KEY MESSAGE
In summary, FYE2017 has been an eventful year for Atlan. The Group executed strategic plans through our newly forged partnership with Heinemann Asia Pacific Pte. Ltd. (“HAP”). Our reputation in the Singaporean market has also strongly improved since the successful transfer of our core subsidiary, Duty Free International Limited (“DFIL”) from the Catalist to the Mainboard of the Singapore Exchange Securities Trading Limited (“SGX-ST”).
ECONOMIC OVERVIEW
The World Bank Global has forecasted that growth of the global economy will rise from 2.3% in 2016 to 2.7% in 2017 which will be mainly driven by growth from the emerging market and developing economies. There is a projected improvement of 4.2%.
On the regional front, the Organisation for Economic Co-operation and Development has forecast a real GDP growth at an average of 6.2% per year from 2017 to 2021 in the 10 ASEAN member countries of Emerging Asia, with Malaysia as one of the top ASEAN-5 contributing countries.
Despite positive forecasts from various economic reports, FYE2017 was a challenging year across the board, impacted by uncertainties around the globe. However, I am pleased to report that, because of the Group’s strong foundations, we have remained resilient through the ups and downs of the economic fluctuations. Atlan has once again performed very strongly, both operationally and financially.
FINANCIAL PERFORMANCE
For the financial year under review, the Group delivered a record revenue of RM809.4 million on the back of a strong profit after tax, amounting to RM75.6 million. This translates into an increase of 5.4% and 34.9% respectively.
The strong financial performance was mostly attributed to the Group’s duty-free business. As the core contributor, the duty free business segment constituted 78.0% of the Group’s overall revenue. This was followed by the automotive segment and, property and hospitality segment which delivered 18.2% and 3.6% respectively.
DIVIDEND
Over the years, the Group’s promise to add value and reward our shareholders with our successes remains unshaken. This is proven by the multiple dividend payments made throughout FYE2017.
On the 19 August 2016, the Group paid the first interim single tier dividend of RM0.125 per ordinary share.
On the 13 March 2017, the Group paid the second interim single tier dividend of RM0.100 per ordinary share.
In respect of FYE2017, the Group paid a total dividend of RM0.225 per ordinary share, amounting to a total payout of RM57.1 million. This translates into a total dividend payout ratio of 75.5% of the net earnings for the financial year or 104.6% of the attributable earnings for the financial year.
16
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 16 6/21/17 4:58 PM
BUSINESS DEVELOPMENTS
On 1 June 2016, the Group completed the First Tranche Sale Shares of 10% equity interest plus one share in DFZ Capital Berhad, a wholly owned subsidiary of DFIL, to HAP, a wholly owned subsidiary of Gebr. Heinemann. This strategic business partnership initiative is part of the Group’s long-term plans to grow our duty-free business. We are certain that it will further enhance the overall travel retail experience in Malaysia and gradually place the Group on par with the best duty-free operators in the world.
On 5 October 2016, the Group’s subsidiary, DFIL was successfully transferred of its listing from Catalist to the Mainboard of SGX-ST. This transfer marks the strong operating and financial track record of the Group, and we believe it will provide greater visibility, recognition and participation in the capital markets both locally and overseas. During the financial year under review, DFIL also:1. Completed four (4) placement exercises issuing
a total of 89 million new ordinary shares and 5.5 million treasury shares to institutional funds, raising a total net proceeds of RM92.8 million.
2. Proposed two (2) bonus warrants for every five (5) existing ordinary shares issue of up to 491,400,157 warrants held by the shareholders of the company which was approved by the Shareholders on 28 April 2017.
OUTLOOK & PROSPECTS
We continue to be optimistic about the positive global economy growth expectations in 2017, yet remain cautious of the uncertainty in policy directions from key power economies, commodity prices and fluctuations of foreign exchange rates.
Duty FreeFrom our business point of view, the growth in economies represents an improvement in disposable income. This increase in purchasing power is in sync with Malaysia’s aggressive tourism initiatives to achieve a total of 32 million tourist arrivals for the year 2017, which is deemed a positive factor for the Group’s duty free business.
In addition, the Group is in the process of executing its long-term strategic plans to improve the business and develop a broader range of opportunities in capitalising growth going forward.
AutomotiveThe automotive sector outlook remains challenging, due to the overall persistent weakness in consumer sentiment, tightening credit from financial institutions and the weaker Ringgit. The Group expects to remain profitable yet conservative in this business segment and will pursue more business opportunities to increase our shareholders’ value.
Property and HospitalityWith the strategic location of our properties, we are positive that this business segment will continue to deliver a steady stream of income to the Group. The viability of this business correlates highly with the continuous influx of tourist and business tenants in the city which is in tandem with the Government’s initiatives to boost the tourism sector and infrastructures connecting to the city centre.
chairman’s statement (cont’d.)
17
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 17 6/21/17 4:58 PM
APPRECIATION
On behalf of the Board, I would like to convey my appreciation to our financiers, suppliers, business partners, customers, various government agencies and regulators that have provided valuable support, advice and guidance throughout the years.
To my fellow Board members, thank you for your valuable insights and advice. I look forward to the many more successes we will create together.
I would like to extend my heartfelt gratitude to our management team and employees for their commitment, dedication and hard work that have been the cornerstone of the Group’s many successes.
To our shareholders, we appreciate your endless support and trust in Atlan. We will continue to commit and work hard 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 the Atlan Group.
Thank you.
Wasallamu Alaikum wa Rahmatullahi wa Barakatuh
Adam Sani Abdullah,Chairman of Atlan Holdings Bhd8 June 2017
chairman’s statement (cont’d.)
18
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 18 6/21/17 4:58 PM
PENYATA PENGERUSI
Bismillahir Rahmanir Rahim Assalamu Alaikum wa Rahmatullahi wa BarakatuhBagi Pihak Lembaga Pengarah Kumpulan Atlan Holdings Bhd (“Atlan”, “kami” atau “Kumpulan Atlan”), saya dengan sukacitanya membentangkan Laporan Tahunan dan Penyata Kewangan Beraudit bagi tahun kewangan berakhir 28 Febuari 2017 (“tahun Kewangan 2017”).
UTUSAN UTAMA
Secara ringkasnya, tahun Kewangan 2017 adalah suatu tahun yang bermakna bagi Atlan. Kumpulan Atlan telah melaksanakan satu rancangan strategik melalui perkongsian baru dengan Heinemann Asia Pacific Pte. Ltd. (“HAP”). Reputasi kami di dalam pasaran Singapura juga telah berkembang dengan perpindahan anak syarikat besar kami, Duty Free International Limited (“DFIL”) dari Papan Catalist ke Papan Utama di Singapore Exchange Securities Trading Limited (“SGX-ST”).
TINJAUAN EKONOMI
Bank Dunia Global telah menjangkakan pertumbuhan ekonomi dunia akan meningkat dari 2.3% di tahun 2016 ke 2.7% di tahun 2017 yang mana ini adalah disebabkan oleh pasaran pesat dan pembangunan ekonomi. Pertumbuhan ini dijangkakan meningkat sebanyak 4.2%.
Pada peringkat serantau, Organisasi Pembangunan dan Koperasi Ekonomi telah menjangkakan pertumbuhan KDNK purata 6.2% setahun dari tahun 2017 ke tahun 2021 di dalam 10 negara Asia Tenggara yang pesat membangun, dengan Malaysia sebagai salah satu negara penyumbang kepada 5 negara terbaik di Asia Tenggara.
Meskipun ada ramalan positif dari pelbagai laporan ekonomi, tahun Kewangan 2017 adalah suatu tahun yang mencabar bagi semua, yang mana terjejas dengan ketidaktentuan ekonomi di seluruh dunia. Walaubagaimanapun, saya dengan sukacitanya ingin memberitahu, dengan asas yang kukuh dari Kumpulan, kami masih berjaya kekal berdaya tahan menghadapi baik buruk kesan dari ekonomi yang tidak menentu. Kumpulan Atlan sekali lagi mempamerkan prestasi yang sangat kukuh, dari segi operasi dan kewangannya.
PRESTASI KEWANGAN
Di dalam tahun kewangan yang dikaji, Kumpulan Atlan telah berjaya merekodkan perolehan sebanyak RM809.4 juta disusuli dengan keuntungan selepas cukai sebanyak RM75.6 juta. Kesemua ini menunjukkan penambahan masing-masing sebanyak 5.4% dan 34.9%.
Prestasi kewangan yang kukuh ini secara keseluruhannya disumbangkan oleh perniagaan bebas cukai kami. Sebagai penyumbang utama, segmen perniagaan bebas cukai telah berjaya menyumbangkan 78.0% dari perolehan Kumpulan Atlan. Ini diikuti oleh segmen otomotif dan segmen hartanah dan hospitaliti yang masing-masing sebanyak 18.2% dan 3.6%.
DIVIDEN
Selama bertahun tahun, janji Atlan untuk menambah nilai dan memberi ganjaran kepada para pemegang saham di atas kejayaan Syarikat, masih kekal jitu. Ini dibuktikan dengan beberapa pembayaran dividen telah dibuat di dalam tahun Kewangan 2017.
Pada 19 Ogos 2016, Atlan telah membayar dividen interim pertama peringkat tunggal sebanyak RM0.125 sesaham biasa.
19
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 19 6/21/17 4:58 PM
Pada 13 March 2017, Atlan telah membayar dividen interim kedua peringkat tunggal sebanyak RM0.100 sesaham biasa.
Dalam tahun kewangan 2017, Atlan telah membayar dividen sebanyak RM0.225 sesaham biasa yang menjadikan jumlah bayaran sebanyak RM57.1 juta. Ini mentafsirkan jumlah nisbah pembayaran dividen adalah sebanyak 75.5% daripada keuntungan bersih atau 104.6% daripada keuntungan yang boleh diagihkan untuk tahun kewangan.
PERKEMBANGAN PERNIAGAAN
Pada 1 Jun 2016, Kumpulan Atlan telah berjaya melaksanakan Penjualan Saham Peringkat Pertama sebanyak 10% kepentingan ekuiti ditambah dengan satu (1) saham di dalam DFZ Capital Berhad, anak syarikat milik penuh DFIL, kepada HAP iaitu anak syarikat milik penuh Gebr. Heinemann. Inisiatif perkongsian perniagaan strategik ini adalah sebahagian daripada rancangan jangka panjang Kumpulan Atlan untuk memajukan perniagaan bebas cukai kami. Kami yakin bahawa perkongsian ini akan terus meningkatkan keseluruhan pengalaman peruncit pelancongan di Malaysia dan lama kelamaan akan meletakkan Kumpulan Atlan sebaris dengan operator bebas cukai terbaik dunia.
Pada 5 Oktober 2016, anak syarikat kami DFIL telah berjaya dipindahkan dari senarai Papan Catalist ke Papan Utama SGX-ST. Perpindahan ini menandakan operasi dan rekod kewangan Kumpulan Atlan yang kukuh, dan kami percaya bahawa ia akan memberi gambaran yang lebih luas, pengiktirafan dan penyertaan di dalam pasaran modal tempatan dan luar negara.
Di dalam tahun kewangan yang di kaji, DFIL juga:1. Melaksanakan empat (4) terbitan penempatan
sejumlah 89 juta saham baru biasa dan 5.5 juta saham perbendaharaan ke institusi dana, dengan jumlah perolehan bersih sebanyak RM92.8 juta.
2. Mencadangkan dua (2) waran bonus untuk setiap lima (5) saham terbitan biasa sedia ada berjumlah setakat 491,400,157 waran yang dipegang oleh pemegang saham DFIL, yang telah diluluskan oleh Pemegang Saham pada 28 April 2017.
TINJAUAN DAN HARAPAN
Kami terus optimis berhubung dengan jangkaan pertumbuhan ekonomi global yang positif dalam tahun 2017, namun kekal berhati-hati terhadap ketidaktentuan dalam penunjuk polisi dari kuasa ekonomi utama, harga komoditi dan turun naik kadar pertukaran wang asing. Bebas CukaiDari sudut perniagaan kami, pertumbuhan ekonomi menunjukkan perkembangan dalam pendapatan pengguna. Pertambahan dalam kuasa beli pengguna adalah selari dengan inisiatif agresif pelancongan Malaysia untuk mencapai 32 juta ketibaan pelancong pada tahun 2017, yang dianggap faktor positif kepada perniagaan bebas cukai Kumpulan.
Tambahan pula, Kumpulan Atlan adalah dalam proses melaksanakan plan strategik jangka panjangnya untuk mengembangkan perniagaan dan membangunkan peluang-peluang yang lebih luas dalam memanfaatkan pertumbuhan masa hadapan.
penyata pengerusi (samb.)
20
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 20 6/21/17 4:58 PM
Otomotif Sektor otomotif kekal mencabar disebabkan oleh kelemahan yang berterusan dalam sentimen pengguna, pengetatan kredit dari institusi kewangan dan kelemahan Ringgit. Kumpulan Atlan menjangkakan akan kekal untung namun bersikap berhati-hati di dalam segmen perniagaan ini dan akan terus mengejar peluang-peluang perniagaan untuk menambahkan nilai pemegang saham kami.
Hartanah dan HospitalitiDengan lokasi strategik hartanah kami, kami yakin yang segmen perniagaan ini akan terus menyalurkan pendapatan kepada Kumpulan Atlan. Kemajuan perniagaan ini adalah berhubung rapat dengan kemasukan berterusan pelancong dan penyewa perniagaan ke bandar ini selaras dengan inisiatif Kerajaan dalam meransang sektor pelancongan dan infrastruktur yang menghubungkan pusat bandar.
PENGHARGAAN
Bagi pihak Lembaga Pengarah, saya ingin mengucapkan setinggi penghargaan kepada pihak bank, pembekal, rakan kongsi, pelanggan, pelbagai agensi kerajaan atas sokongan yang berterusan, nasihat yang bernilai dan tunjuk ajar selama ini.
Berbanyak terima kasih diucapkan kepada ahli Lembaga Pengarah di atas pandangan dan nasihat yang berharga. Saya sangat berharap akan lebih banyak kejayaan dicapai bersama.
Saya juga ingin mengucapkan penghargaan kepada pasukan pengurusan dan kakitangan atas komitmen, dedikasi dan kerja keras yang menjadi asas kepada kejayaan Kumpulan Atlan.
Penghargaan ini juga ditujukan kepada para pemegang saham di atas sokongan yang berterusan dan kepercayaan kepada Atlan. Kami akan terus komited dan bekerja keras dalam membina pertumbuhan, nilai dan kejayaan Kumpulan.
Saya dengan rendah diri berjanji untuk sedia berkhidmat meneruskan komitmen, dedikasi dan usaha saya kepada Kumpulan Atlan.
Terima Kasih
Wasallamu Alaikum wa Rahmatullahi wa Barakatuh
Adam Sani Abdullah,Pengerusi Atlan Holdings Bhd8 Jun 2017
penyata pengerusi (samb.)
21
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 21 6/21/17 4:58 PM
董事主席 献词
我很荣幸代表董事会,提呈益联控股有限公司(“益联”或“我们”或“集团”)截至2017年2月28日(“2017财政年”)的年度报告和已审核财务表。
关键信息
2017财政年对益联来说是富有意义的一年。益联执行了与Heinemann Asia Pacific Pte. Ltd.(“HAP”)的策略性伙伴合作事项。益联在新加坡的声誉也随着主要子公司Duty Free International Limited (“DFIL”)从新加坡证件交易所(Singapore Exchange Securities Trading Limited,简称“SGX-ST”)的凯利板(Catalist)转去主板(Mainboard)而显著提高。
经济展望
世界银行预测世界经济成长将从2016年的2.3%成长至2017年的2.7%。经济成长主要是由新兴市场和发展中经济体推动,预期将有4.2%的成长。
区域经济方面,经济合作与发展组织预测来自新兴亚洲的十个东盟国家的实际国内增长总值从2017年至2021年每年将平均成长6.2%,马来西亚是东盟国家首五个贡献者之一。
虽然几份经济报告都呈现正面的预测,2017财政年整体上我们还是受到全球不稳定因素的影响而充满挑战。但是,我很高兴的告知,由于集团的强大基础,在经济起落的波动之下我们依然保持弹性。益联无论在营运上或财务上再一次表现卓越。
财务绩效
益联在2017财政年取得标清的8亿940万令吉营业额,同时税后利润为7千560万令吉,相较于去年各别取得5.4% 和34.9% 的成长。
这强劲的财务绩效近乎归功于集团的免税业务。作为主要贡献者,免税业务占了集团整体营业额的78.0%,接着是汽车零件制造业务以及办公楼和酒店业务,各别贡献了18.2%和3.6%。
股息
多年以来,益联成功为股东创造价值和取得回馈。这可从2017财政年两次派发股息得到证明。
于2016年8月19日,集团派发了每普通股12.50仙的第一期中期单期股息。
于2017年3月13日,集团派发了每普通股10仙的第二期中期单期股息。
于2017财政年,集团派发了每普通股22.50仙的股息,相等于5千710万令吉的股息,即总股息支付与净利比例为75.5%,或可归属利润比例为104.6%。
企业发展
于2016年6月1日,集团完成了第一次出售股票事项,即把DFIL的独资子公司 DFZ Capital Berhad(“DFZ”)的10%股权加一股的股份卖给HAP,一家Gebr. Heinemann的独资子公司。这项策略性商业伙伴合作是集团为要强化免税业务的其中一个长远计划。我们有信心这会提升马来西亚的整体旅游零售经验并逐步让集团跟其他世界最好的免税业务经营者处于同等水平。
22
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 22 6/21/17 4:58 PM
于2016年10月5日,集团的子公司DFIL成功从新加坡证件交易所(Singapore Exchange Securities Trading Limited, 简称 “SGX-ST ”) 的凯利板(Catalist)转去主板(Mainboard)。这项转移标记着集团的杰出运作和财务表现。我们相信这将为集团在国内和海外的资本市场提供更大的知名度、认知和参与的机会。
在2017财政年里,DFIL也:
一 完成四次总数共8千900万新发股和550万库藏股于机构基金的配股事项,带来总净额9千280万令吉。
二 建议现持公司股每5普通股获派送2红利认股权证,总数不超过491,400,157认股权证,此项建议已于2017年4月28日获得股东批准。
展望与前景
我们乐观看待全球经济正面成长,同时对于主要经济体的政策方向、原产品价格和外汇波动的不确定性不掉以轻心。
免税业务从我们的商业观点来看,经济成长表示可支配收入增加。购买力增加也是我国政府欲在2017年吸引3千2百万游客抵达马来西亚的原因,这对于集团的免税业务是个利好因素。
此外,集团正在执行长远的策略性计划以促进生意和更广泛的资本化发展机会。
汽车零件制造业务汽车行业前景依然充满挑战,归咎于持续的疲弱消费氛围、金融机构收紧信贷和马币疲软。集团保守的相信此业务仍能带来盈利,同时也会探讨更多商机以为股东加值。
办公楼和酒店业务由于我们的产业处于策略性地点,我们相信此业务能够继续为集团带来稳定的收入。此行业可以保持活力跟游客和商户继续涌进城市相关,得利于政府主动刺激旅游业和加强城市中心的基础建设。
致谢我谨代表董事会感谢银行家、供应商、生意伙伴、客户、相关政府部门和监管机构所给予的支持、协助和指导。
借此我向董事会的同伴所给予的宝贵咨询和解,致于最深切的谢意。期待我们一起创造更多更大的成就。
我也向管理人员和员工的贡献、辛勤工作和奉献精神,致上万二分的谢意。
对于公司股东,董事会感谢您们对益联的无尽支持和信任。我们会继续努力确保集团持续增长和增值。
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2017年6月8日
董事主席献词(继续)
23
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 23 6/21/17 4:58 PM
MANAGEMENT DISCUSSION & ANALYSISDear Valued Shareholders and Investors,On behalf of the Board of Directors of Atlan Holdings Bhd (“Atlan”, “we” or the “Group”), I am pleased to present to you the Management Discussion and Analysis (“MD&A”) of the Group.
The objective of the MD&A is to provide shareholders with a better understanding of the Group’s business, operations and financial position for the financial year ended 28 February 2017 (“FYE2017”).
BUSINESS OVERVIEW
Atlan is an investment holding company with three (3) principal business divisions under several subsidiaries comprising trading of duty free and non-dutiable merchandise, auto-components manufacturing, property investment and hospitality. The Group’s trading of duty free and non-dutiable segment is undertaken by Duty Free International Limited and its group of subsidiaries (“DFIL Group”). DFIL is listed on the Mainboard of the Singapore Exchange Securities Trading Limited. DFIL Group’s principal activity is duty free trading under the brand name “Zon” with an operating history of 39 years. The Zon is the largest multi-channel duty free and duty paid retailing brand in Malaysia that is extensively located at all leading entry and exit points at duty free zones, international airports, seaports, international ferry terminals, border towns and popular tourist destinations.
The Group’s automotive segment is undertaken by the United Industries Group (“UI Group”) which manufactures and supplies automotive component parts such as metal fuel tanks, tubing, screw jack and various related automotive production and assembly parts.
Property and hospitality segment consists of property management of an office tower named “Menara Atlan”, and hotel operations of a serviced apartment named “The Zon All Suites Residences on the Park” both of which are strategically located at Jalan Ampang, approximately 800m to the Suria Kuala Lumpur City Centre Mall (“KLCC”).
FINANCIAL PERFORMANCE
For the financial year under review, the Group recorded a robust revenue of RM809.4 million, achieving 5.4% growth for FYE2017, compared to 29 February 2016 (“FYE2016”).
The core revenue contributor of 78.0% comes from the duty free segment, reporting of total revenue of RM631.7 million, an increase of 4.6% compared to FYE2016. The improvement in revenue was mainly due to the increase in sales volume and improvement in the pricing for certain products as well as contribution from the new outlets at Kuala Lumpur International Airport 2.
The automotive segment is our second largest contributor, reporting a total revenue of RM147.2 million, an increase of 11.1% compared to FYE2016. This was mainly due to higher orders received from our customers in particular after the opening of the new plant in Malacca in December 2016.
As for our property and hospitality segment, the Group reported a total revenue of RM28.8 million, slightly lower compared to FYE2016 due to lower occupancy rate and competitive rental rates.
Overall, I am pleased to report that the Group achieved a strong growth in the profit after tax (“PAT”) of RM75.6 million and profit after tax and minority interest (“PATAMI”) of RM54.5 million, representing a double digit growth of 34.9% and 27.4% compared to FYE2016. The increase was also contributed from net foreign exchange gain of RM9.0 million.
24
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 24 6/21/17 4:58 PM
The Group’s financial position continued to grow with shareholders’ funds at RM648.8 million, cash and bank balances of RM303.2 million and in a net cash position of RM231.0 million. By keeping a healthy financial position, the Group had also pared down borrowings to RM72.2 million, inventories to RM243.7 million and, trade and other payables to RM143.2 million.
The Group aims to maintain a prudent financial structure to ensure that it has access to adequate capital and financing on terms which are favourable to the Group. The Group’s total capital commitments, approved, contracted for and not contracted for, as at 28 February 2017, amounted to RM6.9 million (29.2.2016: RM14.2 million) for the Group.
DIVIDEND
On the 19 August 2016, the Group paid a first interim single tier dividend of RM0.125 per ordinary share.
On the 13 March 2017, the Group paid a second interim single tier dividend of RM0.100 per ordinary share.
In respect of FYE2017, the Group paid a total dividend of RM0.225 per ordinary share, amounting to a total payout of RM57.1 million. This translates into a total dividend payout ratio of 75.5% of the net earnings for this financial year which is consistent with the past financial years.
BUSINESS RISKS
Duty FreeAs DFIL Group is principally involved in the retailing of duty free and non-dutiable merchandise, the Group is subject to certain risks inherent in the retailing industry. These include, inter-alia, costs of labour, business and credit conditions, entry of new players, renewal of business/duty free licence, changes in consumers’ tastes and preferences, changes in disposal income and changes in the legal and environment framework within which the retailing industry operates. The operating costs of DFIL Group particularly costs of labour and other administrative costs, which if on an increasing trend, will have an impact on the profit margins of the DFIL Group. The Group seeks to manage these business risks through, amongst others, prudent business policies, continuous review and evaluation of the Group’s operation and strategies, close working relationships with the Group’s partners and stakeholders especially the community in which we operate, the government authorities, as well as continuous upgrade and improvement of our retail outlets and product assortments to attract more customers.
AutomotiveDue to the nature of its business, the UI Group are subjected to certain risks inherent in the automotive industry. These include the macro effects of a general health of the global and national economy, the entry of new players into the automotive sub-sector industry, the closure or relocation of car assemblers of multinational automotive corporations and the introduction of new technologies, methodologies and/or products which may place UI Group at a competitive disadvantage. The UI Group seeks to mitigate these risks, amongst others, by improving on technological competence in design and development of its products, increasing technical collaboration with foreign experts to pursue technological advancement and implementing stringent quality assurance measures to minimise rejections.
management discussion & analysis (cont’d.)
25
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 25 6/21/17 4:58 PM
Property and HospitalityThe property and hospitality business is subject to certain risks inherent which include amongst others, increases in costs of labour, changes in business and credit conditions, entry of new players, changes in consumers’ tastes and preferences. The hotel business is dependent on domestic and international tourism. It is therefore exposed to the inherent risks of the tourism sector. An oversupply in office space could affect the occupancy situation and lead to negative income growth risks for the Group whereby existing tenants could move out to newer office towers with lower rental rates. The Group takes appropriate steps and measures to reduce and mitigate these business risks by offering competitive rates, high quality services and continuously upgrade and refurbishment of the properties.
BUSINESS STRATEGY
Duty FreeThe Group’s duty free business segment operating under DFIL Group has achieved two remarkable milestones for the year under review. The Group completed a strategic business & equity partnership with Gebr. Heinemann and successfully transferred DFIL’s listing status from the Catalist to the Mainboard of Singapore Exchange Securities Trading Limited (“SGX-ST”).
Moving forward, the Group will adopt and work with our strategic partner’s resources and expertise in the areas of purchasing, merchandising, product assortment & costing, retail store management, distribution and logistics management. We endeavour to unlock the value in 5 targeted key areas which are:-i. increase operational efficienciesii. cost effectiveness in supply chainiii. efficiency in logistics management of productsiv. enhancement of retail outletsv. increase in product assortments
With the above key areas of focus, the Group aims to improve its business performance and consequently further enhance shareholders’ value.
AutomotiveThis challenging industry depends mainly on the orders from our clients which are the automotive manufacturers in Malaysia. For the year under review, we have performed commendably well, in particular supported with the production deliverables of the additional new plant in Malacca.
Henceforth, the Group will continue to endeavour to meet production deliverables to customers as well as focusing on operational efficiencies to ensure this business segment remains competitive and profitable.
Property and HospitalityThe Group will continue to ensure that both properties under our management are well furbished and maintained to the expectations of our current and future tenants and patrons.
Menara Atlan is located in the golden triangle of Kuala Lumpur City Centre and as such, provides opportunities to the Group to attract better occupancy at competitive rates in a highly sought-after location of Kuala Lumpur.
The Zon All Suites Residences on the Park is a serviced apartment that is well affordable in comparison to the hotel rates in the vicinity. In line with Malaysia’s tourism initiatives, the Group will intensify sales and marketing promotions to attract more international tourists and at the same time improve operational efficiency and provide higher standard of services.
OUTLOOK & PROSPECTS
According to Bank Negara Malaysia (“BNM”), the global economy is projected to improve in 2017, supported by an expansion in domestic demand in the advanced and emerging market economies along with expectations of a recovery in trade activity in the regions. Public sector expenditure is also expected to remain supportive of growth. The domestic demand is projected to sustain based on the expectation of improving global economy’s spill over effects
management discussion & analysis (cont’d.)
26
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 26 6/21/17 4:58 PM
on domestic economy and the expected gradual recovery of export growth. However, domestic headwinds such as continuous adjustment to higher cost of living and cautious economic sentiment could affect private consumption, the key economic driver in the last few years. Nevertheless, slower consumption spending is mitigated by the current stable employment market and continued wage growth. The Group acknowledges that its financial performance in 2017/2018 will continue to be impacted by such challenges and will continue to push forward its strategies to reform its businesses towards improving revenue and profitability.
Duty FreeThe Group while leveraging on its established presence and competitive strengths as a key player in Malaysia’s retailing landscape, will continue to employ appropriate marketing and pricing strategies, improve merchandise assortment, maintaining quality customer service and with operational efficiency efforts to ensure that its core businesses remain resilient and sustainable. Focus will be on managing operational strategies and efficiency at its stores to boost revenue and realised cost efficiency.
AutomotiveThe domestic automotive industry is expected to be sluggish in 2017 as new vehicle sales remain weak. Malaysian Automotive Association predicts a mild recovery in new vehicle sales, in line with the anticipated improvement in the economy and has forecasted a TIV of 590,000 units in 2017, which will be a modest 1.7% growth from 2016. In this subdued economy, we remain positive and confident about the future of our business as we expect a gradual upswing in the industry in the coming years. On this front, we will leverage on the business initiatives that we have already put in place to maximise our opportunities in light of the changing dynamics in the automotive industry in Malaysia.
Property and HospitalityOn its property and hospitality segment, which is facing challenging times to sustain occupancy rate in the face of the softer rental market and intense competition, the Group recognize that it has to remain competitve for its services business in areas where it operates so as to continue being the preferred location for existing and potential customers. The Group will put in greater efforts to secure new tenants/customers and grow rental yields through competitive rate strategies. Extra emphasis will also be placed on providing a higher standard of services at both the properties, and strengthening relationships with existing tenants.
Mr. Lee Sze SiangExecutive Director of Atlan Holdings Bhd8 June 2017
management discussion & analysis (cont’d.)
27
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AtlanAR17(Main)_Koh.indd 27 6/21/17 4:58 PM
28
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
STATemeNT ON CORPORATE GOvERNANCEThe Board of Directors (“Board”) of Atlan Holdings Bhd. recognises the importance of adopting good corporate governance throughout the Group as a fundamental part of discharging its responsibilities to protect and enhance shareholders’ value and the financial performance of the Group. The Group will continue to endeavour to apply the recommendations of the Malaysian Code on Corporate Governance 2012 (“the Code”) in its effort to observe high standards of transparency, accountability and integrity.
The Board is also mindful on the new Malaysian Code on Corporate Governance released by Securities Commission Malaysia on 26 April 2017 (“MCCG 2017”), a set of best practices to strengthen corporate culture anchored on accountability and transparency.
The new MCCG 2017 takes on a new approach to promote greater internalisation of corporate governance culture and the MCCG 2017 has 3 Principles supported by 36 practices and 12 Intended Outcomes. The first set of companies required to report on conformance with the MCCG 2017 in their annual report are companies with financial years ending 31 December 2017.
This statement outlines the Group’s main corporate governance practices and policies in alignment with the recommended principles of the Code as below: -
• Establishclearrolesandresponsibilities• Strengthencomposition• Reinforceindependence• Fostercommitment• Upholdintegrityinfinancialreporting• Recogniseandmanagerisks• Ensuretimelyandhighqualitydisclosure• Strengthenrelationshipbetweencompanyandshareholders
The following paragraphs describe how the Group has applied the Principles of the Code and how the BoardhascompliedwiththeRecommendationssupportingthePrinciplesduringthefinancialyearended28February2017.
PrinciPle 1 - establish clear roles and resPonsibilities
1.1 board should establish clear functions reserved for board and those to delegated to Management
The Board is responsible for the oversight and overall management of the Company. An effective BoardistheonethatismadeupofacombinationofExecutiveDirectorswithintimateknowledgeofthebusinessandNon-ExecutiveDirectorsfromdiversifiedindustry/businessbackgroundtobringbroadbusinessandcommercialexperiencetotheGroup.TheBoardhastheoverallresponsibilityforCorporate Governance, establishing goals, strategies and direction, reviewing the Group’s performance and critical business issues and ultimately the enhancement of long term shareholders’ value. It monitors and delegates the implementation of the strategic direction to the management.
The Board has a formal schedule of matters reserved for its decisions which include, amongst others, the following:-
i) ReviewingandadoptingstrategicplansfortheCompanywhichwillenhancethefuturegrowthof the Company;
ii) ReviewingandevaluatingkeypoliciesadoptedbytheCompany;
29
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
statement on corporate governance (cont’d.)
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) ReviewingtheadequacyandintegrityoftheCompany’sinternalcontrolsystemsandmanagementinformation systems;
vi) EstablishBoardcommitteesandberesponsibleforalldecisionsmadebythecommittees;vii) To ensure all candidates appointed to senior management positions are of sufficient caliber
and satisfied that there are programmes in place to provide for the orderly succession of senior management; and
viii) Overseeing the development and implementation of a shareholder communications policy for the Company.
As part of its efforts to ensure the effective discharge of its duties, the Board has delegated certain functions to Board Committees with each operating within its clearly defined terms of reference. TheBoardCommitteesareAuditandRiskManagementCommittee,NominationCommitteeandRemunerationCommittee.TheChairmanofeachCommitteewillreporttotheBoardontheoutcomeof the Committee’s meetings which also include the key issues deliberated at the Committee’s meetings. Minutes of the Committees’ meetings are a permanent agenda of the Board’s meeting and these are circulated at the Board’s meeting for notation.
1.2 board should establish clear roles and responsibilities in discharging its fiduciary and leadership functions
ThereisacleardivisionofresponsibilitybetweentheNon-ExecutiveChairmanandExecutiveDirectorto ensure there is a balance of power and authority. The Board has a collective responsibility for the managementoftheGroup.TheNon-ExecutiveDirectorsareresponsibleforbringingindependentjudgment and scrutiny to decisions taken by the Board and providing objective challenges to the Managementteam.AllIndependent,Non-ExecutiveDirectorsdonotparticipateintheday-to-daymanagement of the Group and do not engage in any business dealing or other relationship with the Group.
The Chairman is primarily responsible for orderly conduct and working of the Board whilst the ExecutiveDirectorisresponsiblefortheday-to-daybusinessoperationsandimplementationofBoardpolicies and decisions.
The Board placed great importance on the balance of its Independent Directors where they serve as an essential source of impartial and professional guidance to protect the interest of the shareholders. TheIndependentNon-ExecutiveDirectorsareprofessionalsofhighcaliberandcredibilitywhoplayapivotalroleincorporateaccountabilitybycontributingtheirknowledge,adviceandexperiencetowards making independent judgment on issues of strategies, performance, resources and standards of conducts. Any material and important proposals that will significantly affect the policies, strategies, directions and assets of the Group will be subject to approval by the Board. None of the members of the Board has unfettered powers of decision.
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. Onanannualbasis,theExecutiveDirectorandManagementreviewwiththeBoardtheoutlookofthe 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.
30
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
TheExecutiveDirectorisresponsiblefortheday-to-dayoperationandfinancialmanagementoftheGroup. He is supported by the Management team to ensure the operations are carried out smoothly. 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.
TheCompanyhasinplaceaRiskManagementFramework.TheRiskManagementCommitteeadoptedtheRiskManagementFrameworkasapprovedbytheBoard.TheRiskManagementCommitteeassiststheAuditandRiskManagementCommitteeandBoardtoidentifytheprincipalrisksandensuretheimplementation of the appropriate internal controls and mitigation measures.
ThedetailsoftheRiskManagementFrameworkaresetoutintheStatementonRiskManagementandInternalControlinthisAnnualReport.
The Board views succession planning as important for business continuity. The Board has entrusted the Nomination Committee with the responsibility to ensure that an appropriate framework and plan for succession within the Group are in place. The Nomination Committee in line with its terms of referenceassessandalsodiscusswiththeNon-ExecutiveChairmanonthesuccessionplanningforthe Group on annual basis.
The Company has a website to ensure that the shareholders are able to communicate with the Company.
The Board is responsible for the adequacy and the integrity of the management information and internal controls system of the Company. The details of the Internal Control systems are set out in theStatementonRiskManagementandInternalControlinthisAnnualReport.
1.3 Formalise ethical standards through a code of conduct and ensure its compliance
EmployeesareintroducedtotheethicalcorporatecultureoftheGroupduringemployeeinductionand thereafter, employees are constantly monitored to ensure the culture is upheld in their dealings within the Group and also in their association with our customers, distributors, suppliers, governmental and regulatory authorities and other business associates. Any employee may report directly to the Chairman of any ethical misconduct discover within the Group.
TheBoardofDirectorsconducted themselves inanethicalmannerwhileexecuting theirdutiesandfunctions,andcompliedwiththeCompany’sCodeofEthicsrecommendedbytheCompaniesCommission of Malaysia.
InadditiontotheCompanyDirectors’CodeofEthicsestablishedbytheCompaniesCommissionof Malaysia, the Group also gives emphasis on the behavioral ethics and conduct that sets out the sound principles and standards of good practice within the Group’s business landscape, which are expectedtobeobservedbytheDirectorsandemployees.BothDirectorsandemployeesarerequiredto uphold the highest integrity in discharging their duties and in dealings with various stakeholders such as shareholders, customers, fellow employees and regulators.
statement on corporate governance (cont’d.)
31
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
statement on corporate governance (cont’d.)
The Company has implemented a whistle blowing 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 allowedtheperpetrationoffraudand/ormisconductandtopreventarecurrence;and
(iii) administrative, disciplinary, civil and/or criminal actions that are initiated following thecompletion 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.
1.4 ensure the company’s strategy promote sustainability
The Company focuses on key areas of environment conservation and social contribution with the aim to promote sustainable development. A report on sustainability activities, demonstrating the Company’s commitment to the global environmental, social, governance and sustainability agenda, appearsintheCorporateSocialResponsibilityStatementofthisAnnualReport.
1.5 Procedures to allow the directors access to information and advice
All Directors have full and timely access to information through the Board papers distributed in a timely manner prior to the Board meetings. The Board papers provide, among others, periodic financial information, annual budget, operational and corporate issues, investment proposals and management proposals that require Board’s approval. Senior management staff may be invited to attendBoardmeetingstoprovidetheBoarddetailedexplanationsandclarificationsoncertainmattersthat are tabled to the Board. All Directors have unrestricted access to information with the Group. TheDirectorsmayinteractdirectlywiththeManagement,orrequestfurtherexplanation,informationor 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.
TheBoardmayseekindependentprofessionaladviceattheCompany’sexpenseonspecificissuesto enable it to discharge its duties in relation to the matters being deliberated. Individual Directors may also obtain independent professional or other advice in furtherance of their duties, subject to the approval of the Chairman or the Board, depending on the quantum of the fees involved.
1.6 ensure board is supported by suitably qualified and competent company secretary
The Board is satisfied with the performance and support rendered by the Company Secretaries to the Board in the discharge of its functions. The Company Secretaries play an advisory role to the Board in relation to the Company’s Constitution, Board’s policies and procedures and compliance with the relevant regulatory requirements, codes or guidance and legislations. The Board is supported by suitably qualified and competent Company Secretaries who are members of a professional body.
The Board has ready and unrestricted access to the advice and services of the Company Secretaries, who are considered capable of carrying out the duties to which the post entails.
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.
32
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
1.7 Formalise, periodically review and make public the board charter
The Board understands the importance of the roles and responsibilities between the Board and Management. As part of the good corporate governance process, the Board has documented these roles and responsibilities in the Board Charter to ensure accountability of both parties and also to provide reference for directors in relation to the Board’s role, powers, duties and functions. The Board has reviewed the Board Charter in conjunction with the implementation of Companies Act, 2016 to ensure it remains consistent with the Board’s objectives and responsibilities, and all the relevant standards of corporate governance from time to time.
The Board Charter is available on the Company’s website at www.atlan.com.my .
PrinciPle 2: strengthen coMPosition
2.1 establish a nominating committee which should comprise exclusively non-executive directors, a majority of whom must be independent
TheNominationCommitteeoftheCompanycomprisesexclusivelyofNon-ExecutiveDirectors,amajority of whom must be Independent Directors. Its composition is as follows: -
Position name directorship Chairman Dato’SriAdamSaniBinAbdullah Non-IndependentNon-Executive Director Member TengkuAbdulRahmanIbniSultan IndependentNon-Executive Haji Ahmad Shah Al-Mustain Director Billah, DK II., SSAP Member Dato’ShagulHamidBinK.R.Williams IndependentNon-Executive @ Abdullah Director
Member TuanMohdJaffarBinAwang(Ismail) IndependentNon-Executive (Appointed w.e.f. 16 May 2017) Director
The Nomination Committee meets at least once a year or whenever the need arises.
2.2 nominating committee should develop, maintain and review criteria for recruitment process and annual assessment of directors
The Nomination Committee is empowered to bring to the Board, recommendations as to the appointment of any new director or to fill board vacancies as and when they arise. In making its recommendation,theNominationCommitteewillconsidertherequiredmixofskills,knowledge,expertise, experience and other qualities, including core competencieswhichDirectors of theCompany should bring to the Board.
statement on corporate governance (cont’d.)
33
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
statement on corporate governance (cont’d.)
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,expertiseandexperience;ii) Competencies, commitment, contribution and performance;iii) Professionalism;iv) Integrity; andv) Inthecaseofthecandidatesforthepositionofindependentnon-executivedirectors,the
Nomination Committee should also evaluate the candidate’s ability to discharge such responsibilities/functionsasexpectedfromindependentnon-executivedirectors
• Toconsider, inmakingrecommendations,candidates fordirectorshipsproposedwithintheboundsofpracticability,byanyseniorexecutiveoranydirectororshareholder
• 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• Toannuallyassess theeffectivenessof theboardasawholeandassess thecontributionof
eachindividualdirector,includingindependentnon-executivedirectors,aswellasthechiefexecutiveofficer
• Toreviewthere-appointmentandre-electionofDirectorsoftheCompany• Tofacilitateboardinductionandtrainingprogrammes• ToreviewthetermofofficeandperformanceofAuditandRiskManagementCommitteeand
each of its members annually
In addition to the above, 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 Board is assessed based onthecharacter,competence,experience,integrityandtimeavailabilityofeachDirectoraswellastheir abilities to contribute positively at meetings and in decision making. The Nomination Committee assesses on annual basis the composition of the Board to ensure that the Board has the appropriate mixofexpertiseandexperience,andcollectivelypossessesthenecessarycorecompetenciesforeffective functioning and informed decision making. All assessments and evaluations carried out by the Nomination Committee in discharging its functions have been well documented.
The Director who was re-appointed as a Director of the Company at the last 27th Annual General Meeting held on 20 July 2016 pursuant to Section 129(6) of the Companies Act, 1965 (which was then in force) will continue in office until the conclusion of the forthcoming Annual General Meeting. The Companies Act, 2016 (which repealed the Companies Act, 1965) has removed the age limit and the re-appointment of Director who is over 70 years to be subject to shareholders’ approval at each Annual General Meeting.
During the financial year 2017, the Nomination Committee conducted an annual assessment of its Directors and the effectiveness of the Board of Directors as a whole. It also conducted an assessment of the Directors who are subject to retirement at the forthcoming annual general meeting in accordance with the provisions of the Constitution of the Company and the relevant provisions of the Companies Act,2016.UponrecommendationbytheNominationCommitteeoftheproposedre-electionorre-appointment of the relevant directors, the Board will then recommend and support the re-election and re-appointment of the relevant independent directors to be tabled at the annual general meeting for shareholders’ approval.
34
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
Based on the review of the Board composition during the financial year 2017, the Board concurred with the Nomination Committee’s recommendation to maintain the optimum Board size at 10. The optimal size would enable effective oversight, delegation of responsibilities and productive discussions among members of the Board.
The Company does not practise any form of gender, ethnicity and age group biasness as all candidates 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 Company. In identifying suitable candidates for appointment to the Board, the Nomination Committee will consider candidates on merit against objective criteria and with due regard for the benefits of diversity on the Board.
2.3 board should establish formal and transparent remuneration policies and procedures to attract and retain directors
TheRemunerationCommitteeoftheCompanycomprisesamajorityofNon-ExecutiveDirectorsandits composition is as follows:
Position name directorship Chairman Dato’SriAdamSaniBinAbdullah Non-IndependentNon-Executive Director Member Dato’ShagulHamidBinK.R.Williams IndependentNon-ExecutiveDirector @ Abdullah Member JeneralTanSriDato’SriAbdullah IndependentNon-ExecutiveDirector Bin Ahmad @ Dollah Bin Amad (B) Member Dato’SriRobinTanYeongChing Non-IndependentNon-Executive Director
Member TuanMohdJaffarBinAwang(Ismail) IndependentNon-ExecutiveDirector (Appointed w.e.f. 16 May 2017)
TheRemunerationCommitteeisprimarilyresponsibleforrecommendingthepolicyandframeworkofDirectors’remuneration,includingthetermsandremunerationoftheExecutiveDirectors,totheBoard in order to align with the business strategy and long term objectives of the Company. The remuneration of directors is determined at levels which enable the Company to attract and retain DirectorswiththerelevantexperienceandexpertisetogoverntheGroupeffectively.
In general, the remuneration is structured so as to link rewards to corporate and individual performance, asinthecaseoftheExecutiveDirectors.AsfortheNon-ExecutiveDirectors,thelevelofremunerationreflectstheexperienceandlevelofresponsibilitiesundertakenindividuallybytheDirectorconcerned.
Duringthefinancialyear2017,theRemunerationCommitteehadperformeditsdutytoassessannuallythe remunerationpackageof itsExecutiveDirectorandproposed the remunerationofExecutiveDirector to the Board for consideration.
statement on corporate governance (cont’d.)
35
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
statement on corporate governance (cont’d.)
Pursuant to Section 230 of the Companies Act, 2016 (which is in force with effect from 31 January 2017), 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.
IndeterminingtheestimatedtotalamountofremunerationfortheNon-ExecutiveDirectors,theBoardconsidered various factors including the number of the scheduled meetings for the Board, Board of subsidiariesandBoardcommitteesaswellasthetimespentbythesaidNon-ExecutiveDirectorsinvolved in these meetings.
Pursuant to Section 289 of the Companies Act, 2016, the Company may indemnify or directly or indirectly effect insurance for a Director of the Company but not the liability for any act of omission in his capacity as a director or the cost incurred by that Director in defending or settling any claim or proceedings relating to any such liability. The Directors of the Company are covered under the Directors’ & Officers’ (“D&O”) Liability Insurance in respect of liabilities arising from acts committed in their capacity as directors of the Group (of which each of the Director pays a nominal sum of D&O Liability Insurance’s premium and the Company pays the balance of premium) as their benefit, provided that such director 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 coming 28th AGM.
A summary of the remuneration of the Directors (including benefit-in-kind) in the Company for services renderedtotheGroupforthefinancialyearended28February2017isanalysedasfollows:-
i. directors’ remuneration
benefit in rM’000 Fees salaries -in-kind total executive director - Company – – – – - Subsidiaries – 745 – 745 non-executive directors - Company 253 – – 253 - Subsidiaries 118 989 7 1,114
371 1,734 7 2,112
ii. range of remuneration
number of directors range of remuneration executive non-executive RM50,000andbelow – 7 RM150,001toRM200,000 – 1 RM700,001toRM750,000 1 – RM950,001toRM1,000,000 – 1
36
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
PrinciPle 3 – reinForce indePendence
3.1 board should undertake an assessment of its independent directors annually
The Board through the Nomination Committee assessed the Independent Directors on an annual basis, with a view to ensure the independent directors bring independent and objective judgment to the Board and this mitigates arising from conflict of interest or undue influence from interested parties.Wherethereisalikelyconflictofinterestposition,theBoardwouldtakeappropriateactionto rectify the situation. Should any director have an interest in any matter under deliberation, he is required to disclose his interest and abstain from participating discussions on the matter.
The Board also received confirmation in writing from the Independent Directors of their independence. The Board is satisfied with the assessment of the Independent Directors.
3.2 tenure of independent director should not exceed cumulative term of 9 years. Upon completion of tenure, independent director can continue serving but as non-executive director
One of the recommendation of the Code states that the tenure of an Independent Director should be capped at 9 years, either be a consecutive service of nine (9) years or a cumulative service of nine yearswithintervals.Uponcompletionofthenineyearstenureinoffice,anIndependentDirectormay continue to serve on the company subject to the re-designation as a Non-Independent Director.
WiththeintroductionofMCCG2017,theBoardalsomindfulthatthetenureofanindependentdirectordoesnotexceedacumulativetermlimitofnineyears.Uponcompletionofthenineyears,an independent director may continue to serve on the board as a non-independent director. If the board intends to retain an independent director beyond nine years, it should justify and seek annual shareholders’ approval. 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.
Currently, the longest serving IndependentDirectorsareTengkuAbdulRahman IbniSultanHajiAhmadShahAl-MustainBillah,DKII.,SSAP.andDato’ShagulHamidBinK.R.Williams@Abdullahwho have served the Board for more than nine years.
Dato’ShagulHamidBinK.R.Williams@Abdullahhadexpressedhisintentionnottoseekforre-
election as a Director of the Company at the forthcoming Annual General Meeting of the Company and will retire in accordance with Article 78 of the Company’s Constitution. Hence, he will retain office until the conclusion of forthcoming Annual General Meeting of the Company.
Both the Nomination Committee and the Board have assessed the independence of Tengku Abdul Rahman Ibni SultanHajiAhmadShahAl-MustainBillah,DKII., SSAPandare satisfiedwithhisskills, contribution and independent judgements. Besides, he has always remained objective and independentinexpressinghisviewsandinparticipatingindeliberationanddecisionmakingoftheBoard and Board Committees. His length of services on the Board does not in any way interfere with hisexerciseofindependentjudgementandabilitytoactinthebestinterestsoftheCompany.Inaddition,YangAmatMuliaTengkuAbdulRahmanIbniSultanHajiAhmadShahAl-MustainBillah,DKII., SSAP has individually confirmed and declared in writing that he is independent and he has satisfied all the criteria of an Independent Director set out in paragraph 1.01 of the Main Market ListingRequirementsofBursaMalaysiaSecuritiesBerhad.
InlinewiththeRecommendation3.3oftheCode,theCompanywillbeseekingitsshareholders’approvalatthisforthcomingAnnualGeneralMeetingtoretainTengkuAbdulRahmanIbniSultanHaji Ahmad Shah Al-Mustain Billah, DKII., SSAP as independent director of the Company.
statement on corporate governance (cont’d.)
37
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
statement on corporate governance (cont’d.)
3.3 shareholders’ approval for re-appointment as independent non-executive director after a tenure of nine Years
Thiswasexplainedintheforegoingsection.
3.4 separation of Positions of the chairman and executive officer
There isacleardivisionof rolesandresponsibilitiesbetween theChairman(non-executive)andExecutiveDirector.TheChairmanholdsanon-executivepositionandisprimarilyresponsibleforthe leadership of the Board and ensures effectiveness of the Board matters.
TheExecutiveDirectoroverseesthebusinessoperationsoftheGroupandtheimplementationoftheBoard’sdecisionsandpolicies.ThedistinctandseparateroleoftheChairmanandExecutiveDirector,with a clear division of responsibilities, ensure a balance of power and authority, such that no one individual has unfettered powers of decision-making.
TheIndependentNon-ExecutiveDirectorsoftheCompanyareindependentofmanagementandfree
fromanybusinessrelationshipwhichcouldmateriallyinterferewiththeexerciseoftheirjudgment.They provide guidance, unbiased, fully balanced and independent views, advice and judgment to many aspects of the Group’s strategy so as to safeguard the interests of minority shareholders and to ensure that the highest standards of conduct and integrity were maintained by the Group.
3.5 the board must comprise majority independent directors if the chairman is not an independent director
The Board is mindful on the recommendation of the Code that the Board must comprise a majority of independent directors where the Chairman of the Board is not an Independent Director. However, the Board has assessed the situation and is satisfied with the present Board composition which comprised ofsufficientIndependentDirectorsoftheBoardwithwideboardroomexperienceandexpertisetoprovide the necessary check and balance.
TheBoardcurrentlycomprisesoffour(4)Non-IndependentNon-ExecutiveDirectors,anExecutiveDirectorandsix(6)IndependentNon-ExecutiveDirectors.TheBoardhascompliedwiththeMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad(“ListingRequirements”)thatatleast1/3oftheBoardareIndependentDirectors.
The Directors collectively, with their different background and specialization, bring with them a diversewealthofexperienceandexpertiseinareassuchasbusiness,finance,legal,engineering,regulatory and operations which is relevant to the Group. A brief profile of each individual Directors aresetoutinthisAnnualReport.
The Board is satisfied that the Independent Directors represent the interest of public shareholders in theCompanyandtheBoardhasappointedEn.MohdSharifBinHjYusofastheSeniorIndependentNon-ExecutiveDirectorandanyconcernsfromtheshareholderscanbeconveyedtothesaidSeniorIndependentNon-ExecutiveDirectors.
38
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
PrinciPle 4: Foster coMMitMent
4.1 board should set expectations on time commitment for its members and protocols for accepting new directorships
The Board meets at least, quarterly, to consider all matters relating to the overall control, business performance and strategy of the Company. Additional meeting will be called when and if necessary. The relevant reports and Board Papers are distributed to all Directors in advance of the Board Meeting to allow the Directors sufficient time to peruse for effective discussion and decision making during the meetings. All pertinent issues discussed at the meetings in arriving at decisions and conclusions are properly recorded in the discharge of the Board’s duties and responsibilities.
The Board is satisfied with the level of time commitment given by the Directors towards fulfilling theirrolesandresponsibilitiesasDirectorsoftheCompany.Forthefinancialyearended28February2017, the Board held five (5) meetings. The attendance record of the Directors for the financial year ended28February2017wassatisfactory.ThisisevidencedbytheattendancerecordoftheDirectorsat the Board meetings as set out in the below table:-
directors attendance
1. Dato’SriAdamSaniBinAbdullah 5/52. TengkuAbdulRahmanIbniSultanHajiAhmadShahAl-Mustain 3/5 Billah, DK II., SSAP3. Dato’ShagulHamidBinK.R.Williams@Abdullah 4/54. JeneralTanSriDato’SriAbdullahBinAhmad@DollahBinAmad(B) 5/55. Dato’WooHonKong 5/56. MohdSharifBinHjYusof 5/57. OngBokSiong 5/58. LeeSzeSiang 4/59. Dato’SriRobinTanYeongChing 5/510. TanThiamChai 5/511. TuanMohdJaffarBinAwang(Ismail) N/A*
Note:* Not applicable as he was only appointed on 16 May 2017.
All the Directors have complied with the minimum 50% attendance requirement in respect of Board Meeting as stipulated in the ListingRequirements of BursaMalaysia SecuritiesBerhad (“ListingRequirements”).IntheintervalsbetweenBoardMeetings,foranymattersrequiringBoard’sdecisions,the Board’s approvals are obtained through circular resolutions. The resolutions passed by way of suchcircularresolutionsarethennotedatthenextBoardMeeting.
4.2 board should ensure members have access to appropriate continuing education programme
The Directors are mindful that they should receive appropriate continuous training to further enhance their skills and knowledge. Accordingly, the Company organises trainings at least once every two (2) years for the Board to ensure they are kept up-to-date on relevant developments.
statement on corporate governance (cont’d.)
39
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
statement on corporate governance (cont’d.)
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:-
• ProposedCompaniesAct2016:Changesanditsimpactonyou• NewChallengefortheBoardofDirectors–CyberRisk• 14th International Construction Conference on Challenges of Global Mega Project : Survival of
theFittestforProjectExcellence• AvoidingandResolvingConstructionDisputes• ChallengesoftheYoungProfessionalsfortheBuiltEnvironment:SuccessNeverByChance• LHA&G–ManagingTaxMattersinTaxingTimes• FocusGrouptosolicitFeedbackonSustainabilityReporting• TheCybersecurityThreatandHowBoardShouldMitigatetheRisks• AccountingforRevenueunderMFRS15• TheVelocityofGlobalChange&Sustainability–TheNewBusinessModel• ModelingaConstitutionunderthenewCompaniesAct2016
The Company Secretaries circulated the relevant guidelines on statutory and regulatory requirements fromtimetotimetotheBoardforreference.TheexternalauditorsalsobriefedtheBoardmembersonanychangestotheMalaysianFinancialReportingStandardsthataffecttheCompany’sfinancialstatements during the year.
During the financial year 2017, the Directors were updated on the amendments to the Listing RequirementsofBursaSecuritiesandCompaniesAct,2016.
PrinciPle 5: UPhold integritY in Financial rePorting
5.1 audit committee should ensure financial statements comply with applicable financial reporting standards
In presenting the annual audited financial statements and quarterly announcements of results to shareholders, the Board take responsibility to present a balanced and meaningful assessment of the Group’s position and prospect and to ensure that the financial statements are drawn up in accordance with the provisions of Companies Act, 2016 and applicable accounting standards in Malaysia. The AuditandRiskManagementCommitteeassiststheBoardinscrutinizinginformationfordisclosuretoensureaccuracy,adequacyandcompleteness.TheResponsibilityStatementbytheDirectorsinrelationtothepreparationofthefinancialstatementsisalsosetoutinthisAnnualReport.
TheAuditandRiskManagementCommitteenormallymeetswiththeGroup’sexternalauditorstoreview the scope and adequacy of the audit process, the annual financial statements and their audit findings. In linewith thegoodcorporategovernancepractices, theAuditandRiskManagementCommittee alsomeetswith the external auditors at least twice a year.Thesemeetings are heldwithoutthepresenceoftheExecutiveDirectorandtheManagement.TheAuditandRiskManagementCommitteealsomeetswiththeexternalauditorsadditionallywheneveritdeemsnecessary.
40
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
5.2 audit committee should have policies and procedures to assess suitability and independence of external auditors
Onanannualbasis, theAuditandRiskManagementCommitteewouldreviewandmonitor thesuitabilityandindependenceoftheexternalauditors.TheAuditandRiskManagementCommitteealsoreviewedtheprovisionofnon-auditservicesbytheexternalauditorsandnotedthatthetotalamountoffeespaidfornon-auditservicesrenderedtotheGroupbytheexternalauditorsforthefinancialyear2017wereRM463,000only.
TheAuditandRiskManagementCommitteehadobtainedawrittenassurance fromtheexternalauditors 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.
TheAuditandRiskManagementCommitteeissatisfiedwiththecompetenceandindependenceoftheexternalauditorsandhadrecommendedthere-appointmentoftheexternalauditorsforshareholders’consideration at the annual general meeting.
PrinciPle 6: recognise and Manage risks
6.1 board should establish a sound framework to manage risks
The Board acknowledges that risk management is an integral part of the Group business operations. It is an ongoing process which involves different levels of managements to identify, evaluate, monitor and manage and mitigate the risks that may affect the achievement of its business and corporate objectives.
The Management is responsible for creating risk awareness culture and to build the necessary environment for effective risk management. Significant issues related to internal controls and risk managementarehighlightedtotheBoard.Ifdeemednecessary,assistancefromexternalpartiesshallbe consulted on issues in which the Board needs to seek an opinion.
TheCompanyhasestablishedtheRiskManagementTeamwhichisunderthepurviewoftheAuditandRiskManagementCommitteetooverseetheriskmanagementoftheGroup.TheRiskManagementFrameworkwas adopted by theDirectors.TheBoard through theAudit andRiskManagementCommittee would obtain report from the internal auditors on the periodic check on the internal control system. The details of the Company’s internal control system and framework are set out in theStatementonRiskManagementandInternalControlonpages48to50ofthisAnnualReport.
TheAuditandRiskManagementCommittee’sTermsofReferencehasbeenrevisedon13October2016 which is entrusted to provide advice and assistance to the Board in fulfilling its statutory andfiduciaryresponsibilitiesrelatingtotheCompany’sinternalandexternalauditfunctions,riskmanagement and compliance systems and practice, financial statements, accounting and control systems and matters that may significantly impact the financial condition or affairs of the business. TheAuditandRiskManagementCommittee’sroleandfunctionsaresetoutinitsTermsofReferencewhich available at www.atlan.com.my.
statement on corporate governance (cont’d.)
41
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
statement on corporate governance (cont’d.)
6.2 internal audit Function
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.
Inordertomaintainsoundsystemsofinternalcontrols,theBoardhasestablishedanAudit&RiskAssessment(“ARA”)department,whichiscompletelyindependentfromalloperationstomonitorandreview the effectiveness of the internal controls within the organisation. The scope of work covered by the internal audit function during the financial year is set out on pages 45 to 47 of this Annual Report.
The internal auditors adopt a risk-based approach towards the planning and conduct of audits, which are consistent with the Group’s framework in designing, implementing and monitoring its internal control system.
The internal audit function is guided by Internal Audit Charter which was approved by the Audit andRiskManagementCommittee.AuditengagementisfocusedonareasofpriorityaccordingtotheirriskassessmentandinaccordancewiththeannualauditplansapprovedbytheAuditandRiskManagement Committee.
TheHeadoftheARAdepartmentattendedthemeetingsandreporteddirectlytotheAuditandRiskManagement Committee on the annual internal audit plan and internal audit reports on the audit conducted in accordance with the annual audit plan.
During the financial year, theARAdepartment has presented its internal audit reports toAuditandRiskManagementCommitteeandmanagementinregardstoanymajorauditfindingontheweaknesses in the system and controls of the operation. Areas for improvement were highlighted and the implementation of recommendations was monitored. None of the internal control weaknesses have resulted in any material losses, contingencies or uncertainties that would require disclosure in theAnnualReport.
Thetotalcostsoftheinternalauditfunctioninrespectofthefinancialyearended28February2017wasapproximatelyRM1,239,000.
PrinciPle 7: ensUre tiMelY and high qUalitY disclosUre
7.1 corporate disclosure Policies
The Board is aware of the need to establish corporate disclosure policies and procedures to enable comprehensive, accurate and timely disclosures relating to the Company to the regulators, shareholders and stakeholders. The Company has identified persons authorized and responsible to approve and disclose material information to shareholders and stakeholders to ensure compliance with the ListingRequirements.TheBoardhasdelegatedtheauthoritytotheExecutiveDirectortoapproveallannouncementsforreleasetoBursaMalaysiaSecuritiesBerhad.TheExecutiveDirectorworksclosely with the Board, the senior management and the company secretaries who are privy to the information to maintain strict confidentiality of the information.
42
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
7.2 leverage on information technology for effective dissemination of information
The Company continues to recognise the importance of transparency and accountability to its shareholders and investors. The Board always ensures that the shareholders are informed of the financial performance and major corporate activities of the Company. Such information is communicated to shareholders and investors through various disclosures and announcements to Bursa Malaysia Securities Berhad, including the quarterly financial results, annual reports and where appropriate, circulars and press releases.
Apart from the mandatory announcements through Bursa Malaysia Securities Berhad, the Company also maintains a website www.atlan.com.my to which shareholders and investors can have access to information on the operations and business activities of the Group.
Investor relations activities such as meetings with fund managers and analysts and interviews by the press are held at appropriate time to explain theGroup’s strategy, performance andmajordevelopments.
PrinciPle 8: strengthen relationshiP between coMPanY and shareholders
8.1 encourage shareholder Participation at general Meetings
The Company provides information to the shareholders with regard to, amongst others, details of the Annual General Meeting, their entitlement to attend the Annual General Meeting, the right to appointaproxyandalsothequalificationsofaproxy.
Tofurtherpromoteparticipationofmembersthroughproxy(ies),whichisinlinewiththeinsertionofparagraph7.21oftheListingRequirements,theCompanyhadamendeditsConstitutiontoincludeexplicitlytherightofproxiestospeakatgeneralmeetings,toallowamemberwhoisanexemptauthorizednomineetoappointmultipleproxiesforeachomnibusaccountitholdsandexpresslydisallowanyrestrictiononproxy’squalification.
8.2 Voting by poll
The Chairman of the meeting must ensure that any resolution set out in the notice of any general meeting is voted by poll in accordance with the provisions of the Constitution of the Company. All the resolutions to be tabled at the forthcoming 28th Annual General Meeting will be voted by poll and all shareholders will be briefed on the voting procedures by the independent scrutineer prior to the poll voting.
Poll voting more accurately and fairly reflects shareholders’ view by ensuring that every vote is recognized, in accordance with the principle of “one share one vote”. The practice thus enforces greater shareholder rights and allow shareholders who appoint the Chairman of the meeting as their proxytohavetheirvotesproperlycountedinthefulfilmentoftheirvotingrights.
The Company will appoint the Poll Administrator to conduct the polling process and an independent Scrutineer to oversee the polling process for the upcoming 28th Annual General Meeting of the Company.
statement on corporate governance (cont’d.)
43
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
statement on corporate governance (cont’d.)
8.3 effective communication and Proactive engagements
In maintaining the commitment to effective communication with shareholders, the Group adopts the practice of comprehensive, timely and continuing disclosures of information to its shareholders as well as to the general investing public. The practice of disclosure of information is not just established to complywiththerequirementsoftheListingRequirements.ItalsoadoptstherecommendationsoftheCodewithregardtostrengtheningengagementandcommunicationwithshareholders.Wherepossibleand applicable, the Group also provides additional disclosure of information on a voluntary basis. The Groupbelievesthatconsistentlymaintainingahighlevelofdisclosureandextensivecommunicationwith its shareholders is vital to shareholders and investors to make informed investment decisions.
TheAnnualReportisthemainchannelofcommunicationbetweentheCompanyanditsstakeholders.TheAnnualReportcommunicatescomprehensiveinformationofthefinancialresultsandactivitiesundertaken by the Group. As a listed issuer, the contents and disclosure requirements of the annual reportarealsogovernedbytheListingRequirements.
Another key avenue of communication with its shareholders is the Company’s Annual General Meeting, which provides a useful forum for shareholders to engage directly with the Company’s Directors. At each annual general meeting, the Directors of the Company would be present at the meetings to answer any questions that the shareholders may ask. The Chairman of the meeting provided time for the shareholders to ask questions for each agenda in the notice of the annual general meeting. The externalauditorswerealsopresentattheannualgeneralmeetingtoansweranyquestionsthattheshareholders may ask. The shareholders were also able to meet with the Directors after the meeting whiletheymingledwiththeshareholders,proxiesandcorporaterepresentatives.
coMPliance stateMent
TheBoardissatisfiedthatinfinancialyear2017,savefortheaboverelevantexplanations,theCompanyis in compliance with principles and recommendations of the Code in all material aspects.
This statement is made in accordance with the resolution of the Board dated 8 June 2017.
44
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
ADDITIONAL COmpLIANCe INfORmATIONTheinformationsetoutbelowisdisclosedincompliancewiththeListingRequirementsofBursaMalaysiaSecurities Berhad:-
1. Utilisation of Proceeds
Duringthefinancialyearended28February2017,theCompanydidnotraiseanyfundsthroughanycorporateproposal/shareholders’mandatepursuanttosection132DoftheCompaniesAct,1965.
2. audit and non-audit Fees
Auditfeespaid/payabletoexternalauditorsbytheCompanyandbytheGroupforthefinancialyearended28February2017amountedtoRM69,000andRM1,458,000respectively.
Non-auditfeespaid/payabletoexternalauditorsbytheCompanyandbytheGroupforthefinancialyearended28February2017amountedtoRM10,000andRM463,000respectively.
3. Material contracts involving directors’, chief executive who is not a director and Major shareholders’ interests
Other than those related party transactions 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.
45
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
AUDIT AND RISK mANAGemeNTCOmmITTEE REPORTTheAuditandRiskManagementCommitteecomprisesthefollowingmembers:-
Position name directorship
Chairman MohdSharifBinHjYusof SeniorIndependentNon-ExecutiveDirector
Member Dato’ShagulHamidBinK.RWilliams IndependentNon-ExecutiveDirector @ Abdullah
Member JeneralTanSriDato’SriAbdullah IndependentNon-ExecutiveDirector Bin Ahmad @ Dollah Bin Amad (B) Member TanThiamChai Non-IndependentNon-ExecutiveDirector
Member TuanMohdJaffarBinAwang(Ismail) IndependentNon-ExecutiveDirector (Appointed w.e.f. 16 May 2017)
attendance
TheAuditandRiskManagementCommitteemetfive(5)timesduringthefinancialyearended28February2017(“FYE2017”).DetailsoftheattendanceoftheCommitteemembersholdingofficeduringthefinancialyear are as follows: -
Members attendance
MohdSharifBinHjYusof 5/5Dato’ShagulHamidBinK.R.Williams@Abdullah 4/5JeneralTanSriDato’SriAbdullahBinAhmad@DollahBinAmad(B) 5/5TanThiamChai 5/5TuanMohdJaffarBinAwang(Ismail) N/A*
Note:-* Not applicable as he was only appointed on 16 May 2017.
aUthoritY and dUties oF the aUdit coMMittee
The Audit Committee is governed by its terms of reference, which is available on the Company’s website at www.atlan.com.my .
46
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
sUMMarY oF actiVities oF the aUdit and risk ManageMent coMMittee
TheactivitiesoftheAuditandRiskManagementCommitteefortheFYE2017areasfollows:-
(i) Financial Performance and reporting• ReviewedquarterlyfinancialresultsoftheGroupforFYE2017presentedbytheManagement
before 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) internal audit (“ia”)• Reviewed and approved the annual IAplanpresentedby the internal auditors after being
satisfied with the contents’ suitability, adequacy and scope of coverage;• ReviewedtheIAreports,whichhighlightedtheauditissues,recommendationsandmanagement’s
responses;• ReviewedthefollowupreportsbytheInternalAuditorsonthestatusofactionstakenbythe
management on recommendations suggested in the IA reports; and• DiscussedwiththeManagementonactionstakentoimprovethesystemsofinternalcontrol
based on the recommendations and findings identified in the IA reports and made necessary recommendations to the Board for approval.
(iii) external auditors• ReviewedanddiscussedwiththeexternalauditorstheirAuditPlanandscopeofworksforthe
financial year;• MettwicewiththeexternalauditorswithoutthepresenceoftheManagementteamtodiscuss
issuesofconcerntotheexternalauditorsarisingfromtheannualstatutoryaudit;• Reviewedtheresultsoftheaudit,managementlettertogetherwiththeManagement’sresponses
and comments to the findings; and• Evaluatedtheperformanceoftheexternalauditorsforthefinancialyearunderreviewcovering
areassuchascalibre,qualityprocesses,auditteamexperience,auditscope,auditgovernanceandindependenceaswellasauditfeesoftheexternalauditors.TheGroup’sexternalauditorsalsoconfirmedtheirindependenceandtheAuditandRiskManagementCommitteehavingbeensatisfiedwiththeindependence,stabilityandperformanceofMessrs.Ernst&Young,maderecommendationstotheBoardforapprovalonthere-appointmentoftheexternalauditors.
(iv) corporate governance• ReviewedtheimpactoftherelevantregulatorychangesandensuredcompliancebytheCompany
and the Group; and• ReviewedandrecommendedtheReportoftheAuditandRiskManagementCommitteeand
StatementofRiskManagementandInternalControlandAuditandRiskManagementCommitteereportforinclusionintheAnnualReporttoensurethecontentsthereinareaccurateandincompliancewiththeMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhadto the Board for approval.
audit and risk management committee report (cont’d.)
47
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
(v) risk Management• Reviewedandendorsedtheriskmanagementframeworks,guidelinesandotherkeycomponents
of risk management for implementation within the Company and throughout the Group; and• Reviewedtheprogressofongoingriskmanagementactivitiestoidentify,evaluate,monitorand
manage critical risks.
sUMMarY oF actiVities oF the internal aUdit FUnction
TheIAfunctionisindependentoftheauditableareasintheorganisationandreportstotheAuditandRiskManagement Committee. The responsibilities include reviewing the adequacy of the systems of internal controls and evaluating the various financial and operational risks faced by the organisation.
The internal audit activities are specified in the annual audit plan, which is submitted to the Audit and RiskManagementCommitteeforapproval.IAreportswithfindingsandrecommendationsareforwardedtotheAuditandRiskManagementCommitteefortheirreview.
Forthefinancialyearunderreview,thetotalcostsincurredbytheGroupformaintainingtheIAfunctionswasRM1,239,000.
audit and risk management committee report (cont’d.)
48
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
STATemeNT ON RISK mANAGemeNT ANd INTERNAL CONTROL
PreaMble
Pursuanttoparagraph15.26(b)oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad,theBoardisrequiredtoincludeinitsAnnualReportastatementonriskmanagementandinternalcontrolof the Group. In making this statement on risk management and internal control, it is essential to address thePrinciples,RecommendationsandCommentaryintheMalaysianCodeonCorporateGovernance.
resPonsibilitY
The Board acknowledges its stewardship responsibility for the Group’s internal control and risk management system to safeguard shareholders’ investment and the Group’s assets as well as for reviewing its adequacy and integrity of the system.
However, it should be noted that such system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against materialmisstatementlossandfraud.Forthepurposeofthisstatement,theassociatedcompanyisnotdealt with as part of the Group.
internal control sYsteMs
The embedded control systems are designed to facilitate achievement of the Group’s business objectives. It comprises the following: -
• OrganisationalStructure
The organisational structure has well-defined lines of responsibility, delegation of authority, segregation of duties and information flow to support the Group in achieving its business objectives.
Inaddition,thecommitteesmadeuppredominantlyofnon-executivedirectorssuchasAuditandRiskManagementCommittee,NominationCommitteeandRemunerationCommitteewithdefinedterms of reference and functions, provide the essential support to the Board.
• AuditandRiskManagementCommittee TheAudit andRiskManagementCommittee convenes regularly tomeet their strategicbusiness
agenda, thus ensuring that the Board properly apprises and maintains effective supervision over the entire operations.
• ControlActivities
The Group continuously reviews and updates its policies, procedures and standards in accordance with changes in the operating environment.
• BudgetingandMonitoringProcesses
The Group has in place budgeting process for all operating units with periodical monitoring of performance so that major variances are followed-up and management action taken.
49
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
• ManagingandMonitoringofCapitalandRevenueExpenditure
Thefunctionallimitsofauthorityforrevenueandcapitalexpenditureforalloperatingunitsservetofacilitatetheapprovalprocesswhilstkeepingpotentialexposureincheck.
Detailed justification and approval process for major projects and acquisitions are imposed to ensure congruence with Company’s strategic objectives.
• InformationandCommunicationControls
The Group’s computerised information systems are streamlined to ensure compliance with hardware and software regulations and guidelines for system integrity, effectiveness and efficiency.
• IndependentAuditing
Independentappraisalsbyinternalandexternalauditorsensureongoingcompliancewithpolicies,procedures, standards and legislations whilst assessing the effectiveness of the Group’s systems of financial, compliance and operational controls.
risk ManageMent
The Board acknowledges that risk management is an integral part of the Group business operations. It is an ongoing process which involves different levels of managements to identify, assess, evaluate, monitor and manage and mitigate the risks that may affect the achievement of its business and corporate objectives. Regularmanagementandoperationalmeetingsareheldtodeliberatekeyrisksandtheappropriatemitigatingcontrols. This ongoing risk management activities are undertaken at all major subsidiaries of the Group, as well as collectively at the Group level.
The Management is responsible for creating risk awareness culture and to build the necessary environment for effective risk management. Significant issues related to internal controls and risk management are highlightedtotheBoard.Ifdeemednecessary,assistancefromexternalpartiesshallbeconsultedonissuesin which the Board needs to seek an opinion.
internal aUdit FUnction
AnInternalAuditfunctionsupportstheAuditandRiskManagementCommittee,andbyextension,theBoard, 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 systemsandreportstotheAuditandRiskManagementCommitteeonaquarterlybasis.
The Internal Audit function adopts the risk-based approach when carrying out its internal audit work plan, which reflects the risk profile of the Group’s major business sectors is routinely reviewed and approved bytheAuditandRiskManagementCommittee.ThescopeoftheInternalAuditfunctioncoverstheauditof all business units and operations.
statement on risk management and internal control (cont’d.)
50
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
statement on risk management and internal control (cont’d.)
reView oF adeqUacY oF risk ManageMent and internal control
TheAuditandRiskManagementCommitteeisresponsibletoreviewtheauditreportsfromtheinternalandexternalauditorsandassesstheeffectivenessoftheactionstakenbytheManagementonrecommendationsmadebytheinternalandexternalauditorsforresolvinglapsesorweaknessesinthecontrols.
Forthefinancialyearended28February2017,theBoardhasreceivedassurancesfromtheExecutiveDirector 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 andworkperformedbyinternalandexternalauditors,theBoard,withconcurrenceoftheAuditandRiskManagement Committee, is of the opinion that the Group’s internal controls are adequate and effective in all material aspects.
reView bY external aUditors
Theexternalauditorshavereviewedthestatementonriskmanagementandinternalcontrolasrequiredbyparagraph15.23oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad.Theirreviewwas performed in accordancewithRecommendedPracticeGuide5 issuedby theMalaysianInstitute of Accountants.
51
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
CORpORATeSOCIAL RESPONSIbILITyCorporateSocialResponsibility(CSR)hasbecomeanincreasinglyimportantsubjectmatterovertheyearsespecially since there is greater realisation among corporations that business is more than just profit.
TheBoardacknowledgestheimportanceofCSRandviewsCSRasanextensionoftheGroup’seffortsinfosteringastrongcorporategovernanceculture.WorkingtowardsCSRenablestheGrouptoco-existwiththecommunityandtheenvironmentwhilebuildingasoundbusiness.CSRalsoenablestheGrouptoberecognised by the community as a responsible corporate citizen that helps to make sustainable growth a reality.
coMMUnitY
The Group plays its role as socially responsible corporate citizen in the community through various activities held with the aim of caring for wellbeing of the society at large. The Group continues to support education and welfare in the local communities.
During the year, the Group had contributed donations to various worthy societies and institutions through thenon-profitorganisation,YayasanHarmoni(“YH”).YHalsomadecontributionsonbehalfoftheGroupto welfare homes for single mothers, orphans and the less fortunate. Amongst others during the year, the GrouphadcontributedtoAUTORRFoundationforseniorcitizenandorphans,lessfortunateindividualswhorequiredmedicalassistanceforchronicillnessesandduringthemonthofRamadhan,cashandgoodscontribution were given to the poor.
The Group believes that education is a prerequisite for harmonious functioning of any society. Accordingly, theGrouphascontributedthroughYH,toschoolsforthewelfareoflessfortunatestudentsaswellasbuildingfunds for school facilities. The Group also continued to contribute to Sumbangan Bantuan Persekolahan, toassistqualifiedemployeesintheGroup,whohaveschool-goingchildren,withexpensesforthenewschool year.
workPlace & ethic condUct
The Group is committed in its social responsibilities at the workplace via compliance and respect to HumanRightswhich includesemploymentof staffunder fair andequitable termsaswell asofferingequal opportunity for career advancement based on performance. Continuous learning and development programmes were carried out throughout the year to equip the staff with relevant skills, knowledge and experiencewhichwouldenhancetheindividualstaff’scompetencyandeventuallyaddvaluetotheGroup.UpwardmobilityofstaffisencouragedandstaffwelfareiscloselymonitoredtoavoidanyviolationofLabourorHumanRights.
The Group also organised various gatherings and festive celebrations for its employees.
EmployeesareintroducedtotheethicalcorporatecultureoftheGroupduringemployeeinductionandthereafter, employees are constantly monitored to ensure the culture is upheld in their dealings within the Group and also in their association with 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.
A written code of conduct on ethical standards has been established by the Company to assist the employees in defining ethical standards and conduct at work.
52
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
enVironMent
During the year, the Group undertook several initiatives preserving the environment including upgrading its information technology infrastructure on its move to paperless environment, reducing the usage of papers via electronic communication and recycling paper.
MarketPlace
The Group ensures that its operations are in line with the best practices guidelines set in Malaysian Code on Corporate Governance. All activities are conducted at arms length and do not favour any single party.
As part of promoting investor relations, the Group maintains an online platform via its website which provides information on the Group encompassing formal announcements, quarterly financial results and updates on the Group’s performance and development with the objective of fostering and maintaining good relations with and providing timely information to various stakeholders of the Group.
The Group will continue to support and encourage all employees and businesses to find ways to help their communities.TheGroup’sinitiativesinsupportingCSRareanongoingcommitmenttowardscreationofa competitive nation, yet a moral, ethical, caring and harmonious society.
corporate social responsibility (cont’d.)
53
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
STATemeNT Of dIRECTORS’ RESPONSIbILITyin respect of the Audited financial Statements
The Directors are required by the Companies Act 2016 to prepare financial statements which give a true and fair view of the state of affairs of the Group and of the Company at the end of each financial year and of their results and cash flows for the financial year then ended.
In preparing the financial statements, the Directors have:-
• Adoptedappropriateaccountingpoliciesandappliedthemconsistently;• Madejudgementsandestimatesthatarereasonable;• Ensuredthatapplicableaccountingstandardshavebeencompliedwith;and• Appliedthegoingconcernbasis.
The Directors are responsible for ensuring that the Group and the Company keep proper accounting records, which disclose with reasonable accuracy on the financial position of the Group and of the Company, and which enable them to ensure that the financial statements comply with the provisions of the Companies Act 2016.
The Directors are also responsible for taking reasonable steps to safeguard the assets of the Group and of the Company and to prevent and detect other irregularities.
54
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
fINANCIALSTATEmENTS
55 DIRECTORS’ REPORT
60 STATEMENT BY DIRECTORS
60 STATUTORY DECLARATION
61 INDEPENDENT AUDITORS’ REPORT
66 INCOME STATEMENTS
67 STATEMENTS OF COMPREHENSIVE INCOME
68 STATEMENTS OF FINANCIAL POSITION
71 STATEMENTS OF CHANGES IN EQUITY
74 STATEMENTS OF CASH FLOWS
77 NOTES TO THE FINANCIAL STATEMENTS
175 SUPPLEMENTARY INFORMATION
55
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
DIReCTORS’ RepORT
The directors have pleasure in presenting their report together with the audited financial statements of the Group and oftheCompanyforthefinancialyearended28February2017.
Principal activities
The principal activities of the Company are investment holding and the provision of management, financial, technical and other ancillary services.
The principal activities of the subsidiaries are set out in Note 17 to the financial statements.
results
group company rM'000 rM'000
Profitnetoftax 75,599 63,852
Profit attributable to: Owners of the parent 54,536 63,852Non-controlling interests 21,063 –
75,599 63,852
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
TheamountsofdividendspaidbytheCompanysince29February2016wereasfollows:
rM'000Inrespectofthefinancialyearended28February2017: Firstinterimdividend(single-tier)of12.5%,on253,650,000ordinaryshares, declared on 14 July 2016 and paid on 19 August 2016 31,706 Second interim dividend (single-tier) of 10%, on 253,650,000 ordinary shares, declared on 13 January 2017 and paid on 13 March 2017 25,365
57,071
Thedirectorsdonotrecommendthepaymentofanyfinaldividendinrespectofthefinancialyearended28February2017.
56
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
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 AbdullahTengkuAbdulRahmanIbniSultanHajiAhmadShahAl-MustainBillah,DKII,SSAPDato’SriRobinTanYeongChingJeneral Tan Sri Dato' Sri Abdullah Bin Ahmad @ Dollah Bin Amad (B)Dato'ShagulHamidBinK.R.Williams@AbdullahDato'WooHonKongTan Thiam Chai MohdSharifBinHajiYusofLee Sze SiangOng Bok Siong Tuan Mohd Jaffar Bin Awang (Ismail) (appointed on 16 May 2017)
The persons who are directors of the subsidiary companies of the Company during the year (not including those directors listed above) are disclosed in Note 17 to the financial statements.
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 benefitsincludedintheaggregateamountofemolumentsreceivedordueandreceivablebythedirectorsorthefixedsalary 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 withacompanyinwhichthedirectorhasasubstantialfinancialinterest,exceptasdisclosedinNote37tothefinancialstatements.
indemnities to directors, officers or auditors
The Directors of the Company are covered under the Directors’ & Officers’ (“D&O”) Liability Insurance in respect of liabilities arising from acts committed in their capacity as directors of the Atlan Holdings Bhd. as their benefit (of which each of the Director pays a nominal sum of D&O Liability Insurance’s premium and Company pays the balance of premium), provided that such director has not acted negligently, fraudulently or dishonestly, or is in breach of his duty of trust.
57
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
directors’ report (cont’d.)
directors' interests
According to the register of directors' shareholdings, the interests of directors in office at the end of the financial year in shares in the Company and its related corporations during the financial year were as follows:
number of ordinary shares of rM1 each 1 March 28 February 2016 acquired sold 2017
holding companydistinct continent sdn. bhd.
direct interestOrdinary shares of the Company Dato' Sri Adam Sani Bin Abdullah 1 – – 1 deemed interestOrdinary shares of the Company Dato'SriAdamSaniBinAbdullah* 999 – – 999 the company
direct interestOrdinary shares of the Company Dato' Sri Adam Sani Bin Abdullah 64,061 – – 64,061 deemed interestOrdinary shares of the Company Dato'SriAdamSaniBinAbdullah** 130,255,153 – – 130,255,153
* DisclosurepursuanttoSection59(11)(c)oftheCompaniesAct2016.
** DeemedinterestthroughsharesheldinDistinctContinentSdn.Bhd.andAlpretzCapitalSdn.Bhd.,byvirtueofSection 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 inthesharesintheCompanyanditsrelatedcorporationstotheextentDistinctContinentSdn.Bhd.hasaninterest.
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.
58
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
other statutory information
(a) Before the income statements, statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the directors took reasonable steps:
(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for impairment and satisfied themselves that all known bad debts had been written off and that adequate allowance 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 expectedsotorealise.
(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 oftheGroupandoftheCompanyinadequatetoanysubstantialextent;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 adherencetotheexistingmethodofvaluationofassetsorliabilitiesoftheGroupandoftheCompanymisleadingor 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) Atthedateofthisreport,theredoesnotexist:
(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.
directors’ report (cont’d.)
59
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
directors’ report (cont’d.)
significant and subsequent events
Details of significant and subsequent events are disclosed in Note 42 to the financial statements.
auditors and auditors’ remuneration
Theauditors,Ernst&Young,haveexpressedtheirwillingnesstocontinueinoffice.
Auditors' remuneration are disclosed in Note 8 to the financial statements.
Signed on behalf of the Board in accordance with a resolution of the directors dated 8 June 2017.
lee sze siang ong bok siong
60
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
STATemeNT BY DIReCTORSPursuant to Section 251(2) of the Companies Act 2016
STATUTORY DeCLARATIONPursuant to Section 251(1)(b) of the Companies Act 2016
We,LeeSzeSiangandOngBokSiong,beingtwoofthedirectorsofAtlanHoldingsBhd.,doherebystatethat,intheopinion of the directors, the accompanying financial statements set out on pages 66 to 174 are drawn up in accordance withMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompanies Act 2016 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Companyasat28February2017andoftheirfinancialperformanceandcashflowsfortheyearthenended.
The information set out in Note 43 on page 175 to the financial statements have been prepared in accordance with the GuidanceonSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements,asissuedbytheMalaysianInstituteofAccountants.
Signed on behalf of the Board in accordance with a resolution of the directors dated 8 June 2017.
lee sze siang ong bok siong
I, Lee Sze Siang, being the director primarily responsible for the financial management of Atlan Holdings Bhd., do solemnly and sincerely declare that the accompanying financial statements set out on pages 66 to 175 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 declaredby the abovenamed Lee Sze SiangatKualaLumpurintheFederalTerritoryon 8 June 2017. lee sze siang
Before me,
haJJah JaMilah isMailNO.W626Commissioner for Oaths
61
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
INDepeNDeNT AUDITORS’ RepORTto the shareholders of Atlan Holdings bhd.
report on the audit of the financial statements
opinion
WehaveauditedthefinancialstatementsofAtlanHoldingsBhd.whichcomprisethestatementsoffinancialpositionasat28February2017oftheGroupandoftheCompany,andincomestatements,statementsofcomprehensiveincome,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 66 to 174.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group andoftheCompanyasat28February2017,andoftheirfinancialperformanceandtheircashflowsfortheyearthenendedinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandthe requirements of the Companies Act 2016 in Malaysia.
basis for opinion
WeconductedourauditinaccordancewithapprovedstandardsonauditinginMalaysiaandInternationalStandardsonAuditing. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit ofthefinancialstatementssectionofourreport.Webelievethattheauditevidencewehaveobtainedissufficientandappropriate to provide a basis for our audit opinion.
independence and other ethical responsibilities
WeareindependentoftheGroupandoftheCompanyinaccordancewiththeBy-Laws(onProfessionalEthics,ConductandPractice)oftheMalaysianInstituteofAccountants(“By-Laws”)andtheInternationalEthicsStandardsBoardforAccountants’Codeof Ethics for ProfessionalAccountants (“IESBACode”), andwehave fulfilledour other ethicalresponsibilitiesinaccordancewiththeBy-LawsandtheIESBACode.
key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financialstatementsoftheGroupandoftheCompanyforthecurrentyear.Thesematterswereaddressedinthecontextof our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, andwedonotprovideaseparateopiniononthesematters.Foreachmatterbelow,ourdescriptionofhowourauditaddressedthematterisprovidedinthatcontext.
WehavefulfilledtheresponsibilitiesdescribedintheAuditors’responsibilitiesfortheauditofthefinancialstatementssection 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.
62
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
key audit matters (cont’d.)
Valuationofoptions
AsdisclosedinNote26tothefinancialstatements,on1June2016,asubsidiaryoftheCompany,DutyFreeInternationalLimited(“DFIL”)issuedtwotranchesofoptionstoHeinemannAsiaPacificPte.Ltd.(“HAP”)whichgaveHAPtheoptiontoacquireuptoamaximumadditionalinterestof15%inDFIL’ssubsidiary,DFZCapitalBerhad(“DFZ”).Theseoptionswerederivativesandaccountedforatfairvaluethroughprofitorloss.Asat28February2017,managementestimatedthatthefairvalueoftheseoptionswasRM9.0million,whichrepresented3%oftheGroup’stotalliabilities.
ThevaluationoftheseoptionsisnotbasedonaquotedpriceinanactivemarketasDFZisnotapubliclytradedcompany.Weconsideredthevaluationoftheseoptionstobeakeyauditmatterbecausethevaluationinvolvesahighdegreeofmanagement judgement and estimation uncertainty.
WeassessedthevaluationmethodusedbytheGroupandevaluatedthekeyassumptionsusedinthevaluation,inparticularthevalueofDFZ’sshareanditsvolatility.Weinvolvedourinternalspecialistteamtoassistusinreviewingthevaluationmethodandthekeyassumptionsused.WeevaluatedtheassumptiononthevalueofDFZ’ssharebytakingintoconsiderationDFZ’srecentperformance,actualtransactionpricewithHAPandindustryoutlook.FortheassumptionofvolatilityofDFZ’sshareprice,weassessedthereasonablenessof thisassumptionbycomparingtheinputtovolatilitycalculationtomarketinformation.Wealsoreviewedmanagement’sanalysisofthesensitivityofthevaluationtochangesintherespectivekeyassumptions.Finally,wereviewedtheadequacyofthedisclosuresmadeonthe valuation of these options in Note 26 to the financial statements.
Impairment assessment of goodwill
Asat28February2017,theGrouprecordedgoodwillofRM27.4million,whichrepresents9.6%ofthenon-currentassetsand4.2%ofnetassets.Weconsideredtheauditofmanagement’sannualimpairmentassessmentofgoodwillto be a key audit matter because the assessment process involved significant management judgement, 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.
AsdisclosedinNote16tothefinancialstatements,thegoodwillisallocatedtothreecash-generatingunits(“CGUs”).The recoverable amounts of theCGUshavebeendeterminedbasedon value-in-use calculationsusing cashflowprojectionsapprovedbymanagement.WeassessedthevaluationmethodusedbytheGroupandevaluatedthekeyassumptions used in the impairment analysis, in particular the selling price, budgeted gross margin, discount rate and long-termgrowthrate.Wecheckedthatthecashflowprojectionswerebasedonapprovedmanagementbudgets.Wereviewedtherobustnessofmanagement’sbudgetingprocessbycomparingpreviousforecasts toactualresults.Weevaluated the assumptions used by comparing them to historical data as well as local economic development and industryoutlook.FortheassumptiononrenewaloftheGroup’sdutyfreelicenseagreement,weinquiredwithseniormanagementontheirhistoricalrenewalexperienceandtheirassessmentoftheGroup’sabilitytorenewtheagreement.Wealsoreviewedmanagement’sanalysisofthesensitivityofthegoodwillbalancestochangesintherespectivekeyassumptions.Finally,wereviewedtheadequacyofthedisclosuresmadeonthegoodwillimpairmenttestinNote16to the financial statements.
independent auditors’ report (cont’d.)
63
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
information other than the financial statements and auditors’ report thereon
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.
Our opinion on the financial statements of the Group and of the Company does not cover the other information and wedonotexpressanyformofassuranceconclusionthereon.
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, wearerequiredtoreportthatfact.Wehavenothingtoreportinthisregard.
responsibilities of the directors for the financial statements
The directors of the Company are responsible for the preparation of financial statements of the Group and of the Company thatgivea trueand fairview inaccordancewithMalaysianFinancialReportingStandards, InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct2016inMalaysia.Thedirectorsarealsoresponsiblefor 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’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ reportthatincludesouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will alwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandareconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofusers 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.
independent auditors’ report (cont’d.)
64
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
auditors’ responsibilities for the audit of the financial statements (cont’d.)
• Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheGroup’s and the Company’s internal control.
• Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesandrelated disclosures made by the directors.
• Concludeontheappropriatenessofthedirectors’useofthegoingconcernbasisofaccountingand,basedontheauditevidenceobtained,whetheramaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificant doubt on the Group’s or the Company’s ability to continue as a going concern. If we conclude that a materialuncertaintyexists,wearerequiredtodrawattentioninourauditors’reporttotherelateddisclosuresinthe 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.
• ObtainsufficientappropriateauditevidenceregardingthefinancialinformationoftheentitiesorbusinessactivitieswithintheGrouptoexpressanopiniononthefinancialstatementsoftheGroup.Weareresponsibleforthedirection,supervisionandperformanceofthegroupaudit.Weremainsolelyresponsibleforourauditopinion.
Wecommunicatewiththedirectorsregarding,amongothermatters,theplannedscopeandtimingoftheauditandsignificant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Wealsoprovidethedirectorswithastatementthatwehavecompliedwithrelevantethicalrequirementsregardingindependence, 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.
Fromthematterscommunicatedwiththedirectors,wedeterminethosemattersthatwereofmostsignificanceintheaudit of the financial statements of the Group and of the Company for the current year and are therefore the key audit matters.Wedescribethesemattersinourauditors’reportunlesslaworregulationprecludespublicdisclosureaboutthematterorwhen,inextremelyrarecircumstances,wedeterminethatamattershouldnotbecommunicatedinourreportbecausetheadverseconsequencesofdoingsowouldreasonablybeexpectedtooutweighthepublicinterestbenefits of such communication.
report on other legal and regulatory requirements
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 17 to the financial statements.
independent auditors’ report (cont’d.)
65
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
independent auditors’ report (cont’d.)
other reporting responsibilities
The supplementary information set out in Note 43 on page 175 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information inaccordancewithGuidanceonSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLosses in theContextofDisclosurePursuant toBursaMalaysiaSecuritiesBerhadListingRequirements,asissuedbytheMalaysianInstituteofAccountants("MIAGuidance")andthedirectiveofBursaMalaysiaSecurities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.
other matters
This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act2016inMalaysiaandfornootherpurpose.Wedonotassumeresponsibilitytoanyotherpersonforthecontentof this report.
ernst & Young lim Foo chewAF:0039 No.1748/01/18(J)Chartered Accountants Chartered Accountant
Penang, Malaysia8 June 2017
66
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
INCOme STATemeNTSfor the year ended 28 february 2017
group company note 2017 2016 2017 2016 rM'000 rM'000 rM'000 rM'000 (restated) Revenue 4 809,435 768,058 72,760 43,724Other income 5 29,270 12,468 242 1,316Rawmaterialsand consumables used (432,844) (618,963) – –Changes in finished goods (95,898) 127,998 – –Employeebenefitsexpense 6 (77,383) (66,848) (266) (253)Depreciation and amortisation (16,957) (17,509) – –Otheroperatingexpenses 8 (113,707) (114,954) (4,656) (7,147)
Operating profit 101,916 90,250 68,080 37,640Share of results of an associate 19 39 – –Financecosts 9 (5,382) (7,225) (3,748) (4,404)
Profitbeforetax 96,553 83,064 64,332 33,236Incometaxexpense 10 (20,954) (27,029) (480) (597)
Profitnetoftax 75,599 56,035 63,852 32,639
Profit attributable to:Owners of the parent 54,536 42,813 63,852 32,639Non-controlling interests 21,063 13,222 – –
75,599 56,035 63,852 32,639
earnings per share attributable to owners of the parent (sen per share) Basic 11 21.50 16.88
Diluted 11 21.50 16.88
Theaccompanyingaccountingpoliciesandexplanatoryinformationformanintegralpartofthefinancialstatements.
67
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
Theaccompanyingaccountingpoliciesandexplanatoryinformationformanintegralpartofthefinancialstatements.
STATemeNTS Of COmpReHeNSIVe INCOmefor the year ended 28 february 2017
group company note 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000 (restated)
Profit for the year 75,599 56,035 63,852 32,639
other comprehensive income:
Items that not to be reclassified to profit or loss in subsequent period -Remeasurementgainon defined benefit plans 30 1,626 – – – -Incometaxeffect 21 (390) – – –
Total comprehensive income for the year 76,835 56,035 63,852 32,639
total comprehensive income attributable to:Owners of the parent 55,664 42,813 63,852 32,639Non-controlling interests 21,171 13,222 – –
76,835 56,035 63,852 32,639
68
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
STATemeNTS Of fINANCIAL pOSITIONas at 28 february 2017
group note 28.2.2017 29.2.2016 1.3.2015 rM'000 rM'000 rM'000 (restated) (restated)
assets
non-current assetsProperty, plant and equipment 13 145,817 146,152 147,528Investment properties 14 38,739 39,066 42,641Land use rights 15 22,321 22,770 23,220Goodwill 16 27,408 27,408 27,408Investment in associate 18 563 544 505Other investments 19 130 130 131Prepayments 20 49,270 59,050 68,831Deferredtaxassets 21 1,734 948 1,063
285,982 296,068 311,327
current assetsInventories 22 243,703 331,908 206,816Biological assets 23 187 182 99Trade and other receivables 24 92,850 84,316 94,122Prepayments 20 12,329 12,260 12,271Taxrecoverable 7,830 4,753 5,117Marketable securities 25 11 9 79Derivative assets 26 3 – 168Cash and bank balances 27 303,151 84,185 110,381 660,064 517,613 429,053
total assets 946,046 813,681 740,380
69
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
statements of financial position (cont’d.)
group note 28.2.2017 29.2.2016 1.3.2015 rM’000 rM’000 rM’000 (restated) (restated)
equity and liabilities
current liabilitiesTrade and other payables 28 143,209 172,556 115,351Derivative liabilities 26 9,006 1,632 –Provisions 29 14,557 14,296 12,540Employeebenefits 30 22 302 342Dividends payable 40,485 – 205Taxpayable 4,351 8,146 3,900Borrowings 31 19,557 49,152 94,235
231,187 246,084 226,573
net current assets 428,877 271,529 202,480
non-current liabilitiesEmployeebenefits 30 6,225 6,982 6,566Deferredtaxliabilities 21 7,223 6,498 7,347Borrowings 31 52,631 68,428 16,858
66,079 81,908 30,771
total liabilities 297,266 327,992 257,344
net assets 648,780 485,689 483,036 equity attributable to owners of the parentShare capital 33 356,528 253,650 253,650Share premium 33 – 102,878 102,878Currency translation reserve (214) (214) (214)Other reserve 34 (32,059) (32,560) (32,567)Retainedearnings 156,061 71,130 72,706
480,316 394,884 396,453Non-controlling interests 168,464 90,805 86,583
total equity 648,780 485,689 483,036
total equity and liabilities 946,046 813,681 740,380
70
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
company note 2017 2016 rM'000 rM'000
assets
non-current assets Property, plant and equipment 13 1 1Investment in subsidiaries 17 1,020,732 1,020,732Investment in associate 18 437 437
1,021,170 1,021,170
current assets Other receivables 24 42,247 50,266Prepayments 20 10 11Taxrecoverable 2,538 2,574Dividend receivable 35,862 –Marketable securities 25 11 9Cash and bank balances 27 11,448 12,097 92,116 64,957
total assets 1,113,286 1,086,127
equity and liabilities current liabilities Other payables 28 176,140 176,073Borrowing 31 5,000 5,000Taxpayable – 54Dividend payable 25,365 –
206,505 181,127
net current liabilities (114,389) (116,170)
non-current liability Borrowing 31 50,000 55,000
total liabilities 256,505 236,127
net assets 856,781 850,000
equity attributable to owners of the parentShare capital 33 356,528 253,650Share premium 33 – 102,878Retainedearnings 35 500,253 493,472
total equity 856,781 850,000
total equity and liabilities 1,113,286 1,086,127
statements of financial position (cont’d.)
Theaccompanyingaccountingpoliciesandexplanatoryinformationformanintegralpartofthefinancialstatements.
71
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
STATemeNTS Of CHANGeS IN eQUITYfor the year ended 28 february 2017
a
ttri
buta
ble
to o
wne
rs o
f the
par
ent
n
on-d
istr
ibut
able
d
istr
ibut
able
to
tal
equi
ty
attr
ibut
able
to
ow
ners
c
urre
ncy
n
on-
2017
tota
l
of th
e
sha
re
sha
re
tran
slat
ion
o
ther
re
tain
ed
con
trol
ling
gro
up
not
e eq
uity
pa
rent
c
apita
l p
rem
ium
re
serv
e
rese
rve
e
arni
ngs
inte
rest
s
r
M’0
00
rM
’000
r
M’0
00
rM
’000
r
M’0
00
rM
’000
r
M’0
00
rM
’000
at 1
Mar
ch 2
016,
as
prev
ious
ly
st
ated
488,
299
397,
032
253,
650
102,
878
(214
) (3
2,56
0)
73,2
78
91,2
67Effectsofado
ptionofamen
dmen
ts
toM
FRS11
6an
dMFR
S14
12.2
(2,610
)(2,148
)–
––
–(2,148
)(462
)
at 1
Mar
ch 2
016,
rest
ated
485,
689
394,
884
253,
650
102,
878
(214
) (3
2,56
0)
71,1
30
90,8
05
Profi
t,ne
toftax
75,599
54
,536
–
––
–54
,536
21
,063
Oth
er c
ompr
ehen
sive
inco
me
fo
r the
yea
r
1,23
6 1,
128
– –
– –
1,12
8 10
8
tota
l com
preh
ensiv
e in
com
e
76,8
35
55,6
64
– –
– –
55,6
64
21,1
71
adj
ustm
ent f
or e
ffect
s of
com
pani
es a
ct 2
016
33
–
– 10
2,87
8 (1
02,8
78)
– –
– –
tran
sact
ions
with
ow
ners
C
hang
es o
f equ
ity in
tere
st in
subs
idia
ries
- A
risin
g fro
m d
ilutio
n of
equ
ity
inte
rest
in a
sub
sidi
ary
95
,759
30
,031
–
– –
601
29,4
30
65,7
28
- Aris
ing
from
par
t dis
posa
l of
equi
ty in
tere
st in
a s
ubsi
diar
y
74,6
73
59,0
57
– –
– –
59,0
57
15,6
16Sh
areissuan
ceexp
enses
(2,968
)(2,249
)–
––
(100
)(2,149
)(719
)D
ivid
ends
on
ordi
nary
sha
res
12
(5
7,07
1)
(57,
071)
–
– –
– (5
7,07
1)
–D
ivid
ends
pai
d to
non
-con
trolli
ng
in
tere
sts
(2
4,13
7)
– –
– –
– –
(24,
137)
tota
l tra
nsac
tions
with
ow
ners
86,2
56
29,7
68
– –
– 50
1 29
,267
56
,488
at 2
8 Fe
brua
ry 2
017
64
8,78
0 48
0,31
6 35
6,52
8 –
(214
) (3
2,05
9)
156,
061
168,
464
72
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
statements of changes in equity (cont’d.)
att
ribu
tabl
e to
ow
ners
of t
he p
aren
t
non
-dis
trib
utab
le
dis
trib
utab
le
tota
l
eq
uity
at
trib
utab
le
to o
wne
rs
cur
renc
y
non
-20
16
to
tal
of
the
s
hare
s
hare
tr
ansl
atio
n
oth
er
reta
ined
c
ontr
ollin
g g
roup
n
ote
equi
ty
pare
nt
cap
ital
pre
miu
m
rese
rve
re
serv
e
ear
ning
s in
tere
sts
rM
’000
r
M’0
00
rM
’000
r
M’0
00
rM
’000
r
M’0
00
rM
’000
r
M’0
00
at 1
Mar
ch 2
015,
as
prev
ious
ly
st
ated
485,
317
398,
330
253,
650
102,
878
(214
) (3
2,56
7)
74,5
83
86,9
87Effectsofado
ptionofamen
dmen
ts
toM
FRS11
6an
dMFR
S14
12.2
(2,281
)(1,877
)–
––
–(1,877
)(404
)
at 1
Mar
ch 2
015,
rest
ated
483,
036
396,
453
253,
650
102,
878
(214
) (3
2,56
7)
72,7
06
86,5
83
Profi
t,ne
toftax
56,035
42
,813
–
––
–42
,813
13
,222
Oth
er c
ompr
ehen
sive
inco
me
fo
r the
yea
r
– –
– –
– –
– –
tota
l com
preh
ensiv
e in
com
e
56
,035
42
,813
–
– –
– 42
,813
13
,222
tran
sact
ions
with
ow
ners
C
hang
es o
f equ
ity in
tere
st in
a
su
bsid
iary
7 7
– –
– 7
– –
Div
iden
ds o
n or
dina
ry s
hare
s
12
(44,
389)
(4
4,38
9)
– –
– –
(44,
389)
–
Div
iden
ds p
aid
to n
on-c
ontro
lling
inte
rest
s
(9,0
00)
– –
– –
– –
(9,0
00)
tota
l tra
nsac
tions
with
ow
ners
(53,
382)
(4
4,38
2)
– –
– 7
(44,
389)
(9
,000
)
at 2
9 Fe
brua
ry 2
016,
rest
ated
485,
689
394,
884
253,
650
102,
878
(214
) (3
2,56
0)
71,1
30
90,8
05
73
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
statements of changes in equity (cont’d.)
non-distributable distributable total share share retained note equity capital premium earnings rM'000 rM'000 rM'000 rM'000
company
at 1 March 2016 850,000 253,650 102,878 493,472total comprehensive income 63,852 – – 63,852adjustment for effects of companies act 2016 33 – 102,878 (102,878) –transactions with owners Dividends on ordinary shares 12 (57,071) – – (57,071)
at 28 February 2017 856,781 356,528 – 500,253
at 1 March 2015 861,750 253,650 102,878 505,222total comprehensive income 32,639 – – 32,639transactions with owners Dividends on ordinary shares 12 (44,389) – – (44,389)
at 29 February 2016 850,000 253,650 102,878 493,472
Theaccompanyingaccountingpoliciesandexplanatoryinformationformanintegralpartofthefinancialstatements.
74
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
STATemeNTS Of CASH fLOWSfor the year ended 28 february 2017
group company note 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000 (restated) operating activities
Profitbeforetax 96,553 83,064 64,332 33,236
Adjustments for:Amortisation of land use rights 449 450 – –Amortisation of other investments – 1 – –Bad debts written off – 8 – –Changes in fair value of marketable securities 191 472 191 472Depreciation 16,508 17,059 – –Dividend income – – (70,049) (40,551)Employeebenefits 695 638 – –Gain arising from changes in fair value of biological assets (5) (83) – –Gain arising from changes in fair value of options (4,044) – – –Gain on disposal of property, plant and equipment (3,037) (477) – –Impairment loss on: - subsidiaries – – 2,425 4,470 - receivables 24 380 – –Interestexpense 5,382 7,225 3,748 4,404Interest income (6,506) (5,263) (2,711) (3,173)Inventories written back (578) (1,003) – –Inventories written down 2,223 800 – –Inventories written off 88 256 – –Property, plant and equipment written off 40 112 – –Reversalofimpairmentloss on: - property, plant and equipment – (302) – – - subsidiary – – – (76) - receivables – (275) – –Share of results of an associate (19) (39) – –Unrealised(gain)/losson foreignexchange–net (7,198) 1,836 (193) (402)
Operating cash flows before changes in working capital 100,766 104,859 (2,257) (1,620)
75
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
statements of cash flows (cont’d.)
group company note 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000 (restated)
operating activities (cont’d.)
Balance brought forward 100,766 104,859 (2,257) (1,620)Changes in working capital: Decrease/(increase)in inventories 86,472 (125,145) – –Decrease in receivables 8,458 13,255 1 64Decrease/(increase)in payables (30,957) 58,510 182 36
Cashgeneratedfrom/ (used in) operations 164,739 51,479 (2,074) (1,520)Taxespaid (28,277) (23,153) (498) (660)Employeebenefitspaid (106) (262) – –
Net cash flows generated from/(usedin)operating activities 136,356 28,064 (2,572) (2,180) investing activities Acquisition of: - investment properties (93) (6) – – - property, plant and equipment (16,156) (10,307) – –Dividend received – – 34,187 40,551Interest received 6,506 5,263 2,711 3,173Proceeds from disposal of: - proposed disposals – 7,500 – – - property, plant and equipment 3,995 683 – –Proceeds from placements of treasury shares of subsidiary 4,967 – – –Proceeds from issuance of new ordinary shares by subsidiary 87,824 – – –Proceedsfromexerciseof warrants in a subsidiary by non-controlling interests – 7 – –
Net cash flows generated from investing activities 87,043 3,140 36,898 43,724
76
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
group company note 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000 (restated)
Financing activities
Increaseinpledgedfixed deposits (217) (245) – –Dividends paid to: - non-controlling interests of subsidiaries (9,039) (9,205) – – - ordinary shareholders of the Company (31,706) (44,389) (31,706) (44,389)Interest paid (5,382) (7,225) (3,748) (4,404)Proceeds from borrowings 1,500 60,000 – 60,000Proceeds from non-controlling interests partial divestment 87,712 – – –Repaymentfromsubsidiaries – – 5,479 7,369Repaymentofborrowings (46,890) (55,464) (5,000) (58,000)Repaymentofobligations under finance leases (628) (1,097) – –
Net cash flows used in financing activities (4,650) (57,625) (34,975) (39,424)
net increase/(decrease) in cash and cash equivalents 218,749 (26,421) (649) 2,120cash and cash equivalents at beginning of financial year 70,724 97,145 12,097 9,977
cash and cash equivalents at end of financial year 27 289,473 70,724 11,448 12,097
statements of cash flows (cont’d.)
Theaccompanyingaccountingpoliciesandexplanatoryinformationformanintegralpartofthefinancialstatements.
77
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
NOTeS TO THe fINANCIAL STATemeNTS- 28 february 2017
1. corporate information
The Company is a public limited liability company incorporated and domiciled in Malaysia, and is listed on the Bursa Malaysia Securities Berhad (“Bursa Securities”). The registered office of the Company is located at 17th Floor,MenaraAtlan,161B,JalanAmpang,50450KualaLumpur.
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 17.
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 8 June 2017.
2. summary of significant accounting policies
2.1 basis of preparation
The financial statements of the Group and of the Company have been prepared in accordance with MalaysianFinancialReportingStandards(“MFRS”),InternationalFinancialReportingStandards(“IFRS”)and the requirements of the Companies Act 2016 in Malaysia.
On 15 September 2016, the Companies Act 2016 (“New Act”) was enacted and it replaces the Companies Act, 1965 in Malaysia with the New Act with effect from 31 January 2017. The key changes of the New Act are disclosed in Note 2.33.
Thefinancialstatementshavebeenpreparedonthehistoricalcostbasisexceptasdisclosedintheaccountingpolicies below.
ThefinancialstatementsarepresentedinRinggitMalaysia(“RM”)andallvaluesareroundedtothenearestthousand(RM’000),exceptwhenotherwiseindicated.
2.2 changes in accounting policies
Theaccountingpoliciesadoptedareconsistentwiththoseofthepreviousfinancialyearexceptasfollows:
On 1 March 2016, the Group and the Company adopted the following mandatory new and amended MFRSs.
notes to the financial statements (cont’d.)
78
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.2 changes in accounting policies (cont’d.)
effective for annual periods beginning on description or after
AnnualImprovementstoMFRSs2012–2014Cycle 1January2016AmendmentstoMFRS116andMFRS138:ClarificationofAcceptableMethodsof Depreciation and Amortisation 1 January 2016AmendmentstoMFRS116andMFRS141:Agriculture:BearerPlants 1January2016AmendmentstoMFRS11:AccountingforAcquisitionsofInterestsinJointOperations 1January2016AmendmentstoMFRS127:EquityMethodinSeparateFinancialStatements 1January2016AmendmentstoMFRS101:DisclosureInitiatives 1January2016AmendmentstoMFRS10,MFRS12andMFRS128:InvestmentEntities:Applyingthe ConsolidationException 1January2016MFRS14RegulatoryDeferralAccounts 1January2016
The adoption of the above standards does not have any significant impact on the financial statements of the GroupandtheCompanyexceptforAmendmentstoMFRS116andMFRS141Agriculture:BearerPlants.
amendments to MFrs 116 and MFrs 138: clarification of acceptable Methods of depreciation and amortisation
The amendments clarify that revenue reflects a pattern of economic benefits that are generated from operating a business (of which the asset forms part of the business) rather than the economic benefits that are consumed through the use of an asset. As a result, a revenue-based method cannot be used to depreciate property, plant and equipment and may only be used in very limited circumstances to amortise intangible assets.
The amendments do not have any impact to the Group as the Group has not used a revenue-based method to depreciate its non-current assets.
amendments to MFrs 116 and MFrs 141 agriculture: bearer Plants
The amendments change the accounting requirements for biological assets that meet the definition of bearer plants.Undertheamendments,biologicalassetsthatmeetthedefinitionofbearerplantswillnolongerbewithinthescopeofMFRS141.Instead,MFRS116willapply.Afterinitialrecognition,bearerplantswillbemeasuredunderMFRS116ataccumulatedcost(beforematurity)andusingeitherthecostmodelorrevaluation model (after maturity). The amendments also require that produce that grows on bearer plants willremaininthescopeofMFRS141andaremeasuredatfairvaluelesscoststosell.
TheGroupappliedamendmentMFRS116andMFRS141retrospectivelyinthecurrentperiodinaccordancewith the transitional provision set out in the revised standard. The opening statement of financial position of the earliest comparative period presented (1 March 2015) and the comparative figures have been accordingly restated.
79
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.2 changes in accounting policies (cont’d.)
amendments to MFrs 116 and MFrs 141 agriculture: bearer Plants (cont’d.)
Theeffectsofadoptionofamendments toMFRS116andMFRS141totheconsolidatedstatementsoffinancial position and consolidated income statement are as follows:
as previously stated adjustment as restated rM’000 rM’000 rM’000consolidated statements of financial positionas at 29 February 2016Property, plant and equipment 143,844 2,308 146,152Biological assets (non-current) 5,100 (5,100) –Biological assets (current) – 182 182Retainedearnings (73,278) 2,148 (71,130)Non-controlling interests (91,267) 462 (90,805) as at 1 March 2015Property, plant and equipment 145,108 2,420 147,528Biological assets (non-current) 4,800 (4,800) –Biological assets (current) – 99 99Retainedearnings (74,583) 1,877 (72,706)Non-controlling interests (86,987) 404 (86,583)
as previously stated adjustment as restated rM’000 rM’000 rM’000consolidated income statementas at 29 February 2016Other income 12,685 (217) 12,468Depreciation and amortisation (17,397) (112) (17,509)
amendments to MFrs 11 Joint arrangements: accounting for acquisitions of interests in Joint operations
TheamendmentstoMFRS11requirethatajointoperatorwhichacquiresaninterestinajointoperationswhichconstituteabusinesstoapplytherelevantMFRS3BusinessCombinationsprinciplesforbusinesscombinations accounting. The amendments also clarify that a previously held interest in a joint operation is not remeasured on the acquisition of an additional interest in the same joint operation while joint control isretained.Inaddition,ascopeexclusionhasbeenaddedtoMFRS11tospecifythattheamendmentsdonot apply when the parties sharing joint control, including the reporting entity, are under common control of the same ultimate controlling party.
These amendments do not have any impact on the Group’s consolidated financial statements as there has been no interest acquired in a joint operation during the year.
notes to the financial statements (cont’d.)
80
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.2 changes in accounting policies (cont’d.)
amendments to MFrs 127: equity Method in separate Financial statements
The amendments will allow entities to use the equity method to account for investments in subsidiaries, jointventuresandassociate in their separatefinancial statements.EntitiesalreadyapplyingMFRSandelecting to change to the equity method in its separate financial statements will have to apply this change retrospectively.Forfirst-timeadoptersofMFRSelectingtousetheequitymethodinitsseparatefinancialstatements,theywillberequiredtoapplythismethodfromthedateoftransitiontoMFRS.Theseamendmentsdo not have any impact on the Group’s and the Company’s financial statements.
amendments to MFrs 101: disclosure initiatives
TheamendmentstoMFRS101includenarrow-focusimprovementsinthefollowingfiveareas:
• Materiality• Disaggregationandsubtotals• Notesstructure• Disclosureofaccountingpolicies• Presentationofitemsofothercomprehensiveincomearisingfromequityaccountedinvestments
The amendments do not have any impact on the Group’s and the Company’s financial statements.
amendments to MFrs 10, MFrs 12 and MFrs 128: investment entities: applying the consolidation exception
Theamendmentsclarifythattheexemptionfrompresentingconsolidatedfinancialstatementsappliestoa parent entity that is a subsidiary of an investment entity, when the investment entity measures all of its subsidiaries at fair value. The amendments further clarify that only a subsidiary that is not an investment entity itself and provides support services to the investment entity is consolidated. In addition, the amendments also provide that if an entity that is not itself an investment entity has an interest in an associate or joint venture that is an investment entity, the entity may, when applying the equity method, retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associate’s or joint venture’s interests in subsidiaries.
The amendments do not have any impact on the Group’s financial statements as the Group does not apply theconsolidationexception.
MFrs 14 regulatory deferral accounts
MFRS14isanoptionalstandardthatallowsanentity,whoseactivitiesaresubjecttorate-regulations,tocontinueapplyingmostofitsexistingaccountingpoliciesforregulatorydeferralaccountbalancesuponitsfirst-timeadoptionofMFRS.EntitiesthatadoptMFRS14mustpresenttheregulatorydeferralaccountsasseparate line items on the statements of financial position and present movements in the account balances as separate line items in the income statements and statements of comprehensive income. The standard requires disclosures on the nature of, and risks associated with, the entity’s rate-regulation and the effects of thatrate-regulationonitsfinancialstatements.SincetheGroupisanexistingMFRSpreparer,thisstandarddoes not apply.
81
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.2 changes in accounting policies (cont’d.)
annual improvements to MFrss 2012–2014 cycle
TheAnnualImprovementstoMFRSs2012-2014CycleincludeanumberofamendmentstovariousMFRSs,which are summarised below. These amendments do not have a significant impact on the Group’s and the Company’s financial statements.
standards descriptions
MFrs 5 non-currentassets held for saleand discontinued operations
TheamendmenttoMFRS5clarifiesthatchangingfromonedisposalmethodto the other should not be considered to be a new plan of disposal, rather it is a continuation of the original plan. There is therefore no interruption oftheapplicationoftherequirementsinMFRS5.
The amendment also clarifies that changing the disposal method does not change the date of classification. This amendment is applied prospectively.
MFrs 7 Financialinstruments:disclosures
The amendment clarifies that a servicing contract that includes a fee can constitute continuing involvement in a financial asset. An entity must assess the nature of the fee and arrangement against the guidance for continuing involvement inMFRS 7 in order to assesswhether the disclosures arerequired.
In addition, the amendment also clarifies that the disclosures in respect of offsetting of financial assets and financial liabilities are not required in the condensed interim financial report. This amendment is applied retrospectively.
MFrs 119 employee benefits
TheamendmenttoMFRS119clarifiesthatmarketdepthofhighqualitycorporate bonds is assessed based on the currency in which the obligation is denominated, rather than the country where the obligation is located. When there isnodeepmarket forhighqualitycorporatebonds in thatcurrency, government bond rates must be used. This amendment is applied prospectively.
MFrs 134 interim Financial reporting
The amendment states that the required interim disclosures must either be in the interim financial statements or incorporated by cross-reference between the interim financial statements and wherever they are included within the greater interim financial report (e.g., in the management commentary or risk report). The other information within the interim financial report must be available to users on the same terms as the interim financial statements and at the same time. This amendment is applied retrospectively.
notes to the financial statements (cont’d.)
82
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.3 standards issued but not yet effective
The standards and interpretations that are issued but not yet effective up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.
effective for annual periods beginning ondescription or after
AmendmentstoMFRS107DisclosuresInitiatives 1January2017AmendmentstoMFRS112RecognitionofDeferredTaxforUnrealisedLosses 1January2017AnnualImprovementstoMFRSs2014–2016
(i) AmendmentstoMFRS12DisclosureofInterestsinOtherEntities 1January2017(ii) AmendmentstoMFRS1First-timeAdoptionofMalaysianFinancial ReportingStandards 1January2018(iii) AmendmentstoMFRS128InvestmentinAssociatesandJointVentures 1January2018
AmendmentstoMFRS4ApplyingMFRS9FinancialInstrumentswithMFRS4 Insurance Contracts 1 January 2018AmendmentstoMFRS140TransferofInvestmentProperty 1January2018ICInterpretation22ForeignCurrencyTransactionsandAdvanceConsideration 1January2018AmendmentstoMFRS2ClassificationandMeasurementofShare-basedPayment Transactions 1 January 2018MFRS15RevenuefromContractswithCustomers 1January2018MFRS9FinancialInstruments 1January2018MFRS16Leases 1January2019AmendmentstoMFRS10andMFRS128:SaleorContributionofAssetsbetweenan InvestoranditsAssociateorJointVenture Deferred
TheDirectorsexpectthattheadoptionofthestandardsandinterpretationsabovewillhavenomaterialimpacton thefinancialstatements in theperiodof initialapplicationother than forMFRS9FinancialInstruments,MFRS15RevenuefromContractswithCustomersandMFRS16Leases.TheGroupandtheCompanyarestillintheprogressofassessingthefinancialimpactofMFRS9,MFRS15andMFRS16.
amendments to MFrs 107 disclosures initiatives
TheamendmentstoMFRS107DisclosuresInitiativesrequiresanentitytoprovidedisclosuresthatenableusers of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. On initial application of this amendment, entities are not required to provide comparative information for preceding periods. These amendments are effective for annual periods beginning on or after 1 January 2017, with early application permitted. Application of amendments will result in additional disclosures to be provided by the Group and the Company.
83
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.3 standards issued but not yet effective (cont’d.)
amendments to MFrs 112 recognition of deferred tax for Unrealised losses
Theamendmentsclarifythatanentityneedstoconsiderwhethertaxlawrestrictsthesourcesoftaxableprofits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore,theamendmentsprovideguidanceonhowanentityshoulddeterminefuturetaxableprofitsandexplainthecircumstancesinwhichtaxableprofitmayincludetherecoveryofsomeassetsformorethan their carrying amount.
Entities are required to apply the amendments retrospectively.However, on initial application of theamendments, the change in the opening equity of the earliest comparative period may be recognised in opening retained earnings (or in another component of equity, as appropriate), without allocating the change betweenretainedearningsandothercomponentsofequity.Entitiesapplyingthisreliefmustdisclosethatfact.
These amendments are effective for annual periods beginning on or after 1 January 2017 with early application permitted. If an entity applies these amendments for an earlier period, it must disclose that fact. TheseamendmentsarenotexpectedtohaveanyimpactontheGroupandontheCompany.
amendments to MFrs 2 classification and Measurement of share-based Payment transactions
TheamendmentstoMFRS2addressthreemainareas:
a) The effects of vesting conditions on the measurement of a cash-settled share-based payment transaction;b) The classification of a share-based payment transaction with net settlement features for withholding
taxobligations;andc) Accounting where a modification to the terms and conditions of a share-based payment transaction
changes its classification from cash settled to equity settled.
On adoption, entities are required to apply the amendments without restating prior periods, but retrospective application is permitted if elected for all three amendments and other criteria are met. The amendments are effective for annual periods beginning on or after 1 January 2018, with early application permitted. These amendmentsarenotexpectedtohaveanyimpactontheGroup.
MFrs 15 revenue from contracts with customers
MFRS15establishesanewfive-stepmodelthatwillapplytorevenuearisingfromcontractswithcustomers.MFRS15willsupersedethecurrentrevenuerecognitionguidanceincludingMFRS118Revenue,MFRS111 Construction Contracts and the related interpretations when it becomes effective.
ThecoreprincipleofMFRS15 is thatanentityshouldrecognise revenuewhichdepict the transferofpromised goods or services to customers in an amount that reflects the consideration to which the entity expectstobeentitledinexchangeforthosegoodsorservices.
UnderMFRS15,anentityrecognisesrevenuewhen(oras)aperformanceobligationissatisfied,i.ewhen“control” of the goods or services underlying the particular performance obligation is transferred to the customer.
Eitherafullormodifiedretrospectiveapplicationisrequiredforannualperiodsbeginningonorafter1January 2018 with early adoption permitted. The Group and the Company are currently assessing the impact ofMFRS15andplantoadoptthenewstandardontherequiredeffectivedate.
notes to the financial statements (cont’d.)
84
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.3 standards issued but not yet effective (cont’d.)
MFrs 9 Financial instruments
InNovember2014,MASB issued thefinalversionofMFRS9Financial Instrumentswhich reflectsallphasesof thefinancial instrumentsprojectand replacesMFRS139Financial Instruments:RecognitionandMeasurementandallpreviousversionsofMFRS9.Thestandard introducesnewrequirements forclassificationandmeasurement,impairmentandhedgeaccounting.MFRS9iseffectiveforannualperiodsbeginning on or after 1 January 2018,with early application permitted. Retrospective application isrequired,butcomparativeinformationisnotcompulsory.TheadoptionofMFRS9willhaveaneffectonthe classification and measurement of the Group’s financial assets, but no impact on the classification and measurement of the Group’s financial liabilities. The Group and the Company are currently assessing the impactofMFRS9andplantoadoptthenewstandardontherequiredeffectivedate.
MFrs 16 leases
MFRS16willreplaceMFRS117Leases,ICInterpretation4DeterminingwhetheranArrangementcontainsaLease,ICInterpretation115OperatingLease-IncentivesandICInterpretation127EvaluatingtheSubstanceofTransactionsInvolvingtheLegalFormofaLease.MFRS16setsouttheprinciplesfortherecognition,measurement, presentation and disclosure of leases and requires lessees to account for all leases under a singleon-balancesheetmodelsimilartotheaccountingforfinanceleasesunderMFRS117.
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. Lessees will be required to recogniseinterestexpenseontheleaseliabilityandthedepreciationexpenseontheright-of-useasset.
LessoraccountingunderMFRS16issubstantiallythesameastheaccountingunderMFRS117.LessorswillcontinuetoclassifyallleasesusingthesameclassificationprincipleasinMFRS117anddistinguishbetween two types of leases: operating and finance leases.
MFRS16iseffectiveforannualperiodsbeginningonorafter1January2019.EarlyapplicationispermittedbutnotbeforeanentityappliesMFRS15.Alesseecanchoosetoapplythestandardusingeitherafullretrospective or a modified retrospective approach. The Group and the Company are currently assessing theimpactofMFRS16andplantoadoptthenewstandardontherequiredeffectivedate.
amendments to MFrs 10 and MFrs 128: sale or contribution of assets between an investor and its associate or Joint Venture
The amendments clarify that:
- gains and losses resulting from transactions involving assets that do not constitute a business, between investor and its associate or joint venture are recognised in the entity’s financial statements only to theextentofunrelatedinvestors’interestsintheassociateorjointventure;and
- gains and losses resulting from transactions involving the sale or contribution of assets to an associate or a joint venture that constitute a business is recognised in full.
The amendments are to be applied prospectively to the sale or contribution of assets occurring in annual periodsbeginningonorafteradatetobedeterminedbyMalaysianAccountingStandardsBoard.Earlierapplicationispermitted.TheseamendmentsarenotexpectedtohaveanyimpactontheGroup.
85
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.4 basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied for like transactions and events in similar circumstances.
The Company controls an investee, if and only if, the Company has all the following:
(i) Powerovertheinvestee(i.e.existingrightsthatgiveitthecurrentabilitytodirecttherelevantactivitiesof the investee);
(ii) Exposure,orrights,tovariablereturnsfromitsinvestmentwiththeinvestee;and (iii) The ability to use its power over the investee to affect its returns.
Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
(i) The contractual arrangement with the other vote holders of the investee;
(ii) Rightsarisingfromothercontractualarrangements;and
(iii) The Group’s voting rights and potential voting rights.
Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases when the Companylosescontrolofthesubsidiary.Allintra-groupbalances,incomeandexpensesandunrealisedgainsandlossesresultingfromintra-grouptransactionsareeliminatedinfullexceptforunrealisedlosses,which are not eliminated when there are indications of impairment.
Losses within a subsidiary are attributed to the non-controlling interests even if that results in a deficit balance.
Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of the Company.
WhentheGrouplosescontrolofasubsidiary,againorlosscalculatedasthedifferencebetween(i)theaggregate 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.
notes to the financial statements (cont’d.)
86
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.4 basis of consolidation (cont’d.)
business combinations
Acquisitions of subsidiaries are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interests in the acquiree. The Group elects on a transaction-by-transaction basis whether to measure the non-controlling interests in the acquiree either at fair value or at theproportionateshareoftheacquiree’sidentifiablenetassets.Transactioncostsincurredareexpensedand 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 tobeanassetorliability,willberecognisedinaccordancewithMFRS139eitherinprofitorlossorasachange to other comprehensive income. If the contingent consideration is classified as equity, it will not be remeasured. Subsequent settlement is accounted for within equity. In instances where the contingent considerationdoesnotfallwithinthescopeofMFRS139,itismeasuredinaccordancewiththeappropriateMFRS.
WhentheGroupacquiresabusiness,itassessesthefinancialassetsandliabilitiesassumedforappropriateclassification 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.
Goodwillisinitiallymeasuredatcost,beingtheexcessoftheaggregateoftheconsiderationtransferredand the amount recognised for non-controlling interests over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss. The accounting policy for goodwill is set out in Note 2.9.
2.5 transactions with non-controlling interests
Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of the Company, and is presented separately in the consolidated statement of comprehensive income and within equity in the consolidated statement of financial position, separately from equity attributable to owners of the Company.
Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the parent.
Total comprehensive income within a subsidiary is attributed to the non-controlling interest even if it results in a deficit balance.
87
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.5 transactions with non-controlling interests (cont’d.)
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 Foreign currency
TheGroup’sconsolidatedfinancialstatementsarepresentedinRinggitMalaysia,whichisalsotheCompany’sfunctionalcurrency.EachentityintheGroupdeterminesitsownfunctionalcurrencyanditemsincludedin the financial statements of each entity are measured using that functional currency.
(a) transactions and balances Transactions in foreign currencies are measured in the respective functional currencies of the Company
anditssubsidiariesandarerecordedoninitialrecognitioninthefunctionalcurrenciesatexchangeratesapproximatingthoserulingatthetransactiondates.Monetaryassetsandliabilitiesdenominatedinforeigncurrenciesaretranslatedattherateofexchangerulingattheendofthereportingperiod.Non-monetary items that are measured in terms of historical cost in a foreign currency are translated usingtheexchangeratesasatthedatesoftheinitialtransactions.Non-monetaryitemsmeasuredatfairvalueinaforeigncurrencyaretranslatedusingtheexchangeratesatthedatewhenthefairvaluewas determined.
Exchangedifferencesarisingonthesettlementofmonetaryitemsorontranslatingmonetaryitemsattheendofthereportingperiodarerecognisedinprofitorlossexceptforexchangedifferencesarising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.
(b) consolidated financial statements
Forconsolidationpurpose,theassetsandliabilitiesofforeignoperationsaretranslatedintoRMattherateofexchangerulingattheendofthereportingperiodandtheirprofitorlossaretranslatedattheexchangeratesprevailingatthedateofthetransactions.Theexchangedifferencesarisingonthetranslation 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, theproportionateshareofthecumulativeamountoftheexchangedifferencesarere-attributedtonon-controllinginterestsandarenotrecognisedinprofitorloss.Forpartialdisposalsofassociatesthat are foreignoperations, theproportionate share of the accumulated exchangedifferences isreclassified to profit or loss.
notes to the financial statements (cont’d.)
88
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.7 Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and to the Company and the cost of the item can be measured reliably.
Subsequent to recognition, property, plant and equipment are measured at cost less accumulated depreciation andaccumulatedimpairmentlosses,ifany.Whensignificantpartsofproperty,plantandequipmentarerequired to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.
Freeholdlandisstatedatcostlessaccumulatedimpairmentlosses,ifany.Freeholdlandhasanunlimiteduseful life and therefore is not depreciated. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:
Buildings over 26 to 50 yearsLeasehold land over 99 yearsGolf course over 60 yearsMotor vehicles 14.3% - 20%Office equipment, furniture and fittings 5% - 33.3%Plant and machinery 10% - 33.3%Other assets 5% - 20%
Buildingssituatedonleasedlandareamortisedovertheunexpiredtermofleases.
Capital work-in-progress is not depreciated as these assets are not yet available for use.
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.
The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefitsareexpectedfromitsuseordisposal.Anygainorlossonderecognitionoftheassetisincludedinthe profit or loss in the year the asset is derecognised.
2.8 investment properties
Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are carried at cost less accumulated depreciation and impairment losses, if any.
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 propertyispermanentlywithdrawnfromuseandnofutureeconomicbenefitisexpectedfromitsdisposal.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.
89
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.9 goodwill
Goodwill is initiallymeasuredat cost. Following initial recognition, goodwill ismeasuredat cost lessaccumulated impairment losses.
Forthepurposeofimpairmenttesting,goodwillacquiredinabusinesscombinationis,fromtheacquisitiondate,allocatedtoeachoftheGroup’scash-generatingunitsthatareexpectedtobenefitfromthesynergiesof the combination.
The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each cash-generating unit (or group of cash-generating units)towhichthegoodwillrelates.Wheretherecoverableamountofthecash-generatingunitislessthanthe carrying amount, an impairment loss is recognised in the profit or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.
Wheregoodwillformspartofacash-generatingunitandpartoftheoperationwithinthatcash-generatingunit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative fair values of the operations disposed of and the portion of the cash-generating unit retained.
2.10 land use rights
Landuserightsareinitiallymeasuredatcost.Followinginitialrecognition,landuserightsaremeasuredat cost less accumulated amortisation and accumulated impairment losses, if any. The land use rights are amortised on a straight-line basis over the respective lease terms of 37 to 99 years.
2.11 impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If anysuchindicationexists,orwhenanannualimpairmentassessmentforanassetisrequired,theGroupmakes an estimate of the asset’s recoverable amount.
Anasset’srecoverableamountisthehigherofanasset’sfairvaluelesscoststosellanditsvalueinuse.Forthe purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiablecashflows(cash-generatingunits(“CGU”)).
Inassessingvalueinuse,theestimatedfuturecashflowsexpectedtobegeneratedbytheassetarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheasset.Wherethecarryingamountofanassetexceedsitsrecoverableamount, the asset is written down to its recoverable amount. Impairment losses recognised in respect of aCGUorgroupsofCGUsareallocatedfirsttoreducethecarryingamountofanygoodwillallocatedtothose 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.
notes to the financial statements (cont’d.)
90
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.11 impairment of non-financial assets (cont’d.)
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 impairmentlossesmaynolongerexistormayhavedecreased.Apreviouslyrecognisedimpairmentlossis 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 isincreasedtoitsrecoverableamount.Thatincreasecannotexceedthecarryingamountthatwouldhavebeen determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss.
2.12 subsidiaries
A subsidiary is an entity over which the Group has all the following:
(i) Powerovertheinvestee(i.e.existingrightsthatgiveitthecurrentabilitytodirecttherelevantactivitiesof the investee);
(ii) Exposure,orrights,tovariablereturnsfromitsinvestmentwiththeinvestee;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.
2.13 investments in associates
An associate is an entity in which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
Onacquisitionofaninvestmentinassociate,anyexcessofthecostofinvestmentovertheGroup’sshareof the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill and includedinthecarryingamountoftheinvestment.AnyexcessoftheGroup’sshareofthenetfairvalueoftheidentifiableassetsandliabilitiesoftheinvesteeoverthecostofinvestmentisexcludedfromthecarryingamount 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.
Undertheequitymethod,oninitialrecognitiontheinvestmentinanassociateisrecognisedatcost,andthe carrying amount is increased or decreased to recognise the Group’s share of the profit or loss and other comprehensiveincomeoftheassociateafterthedateofacquisition.WhentheGroup’sshareoflossesinanassociateequalorexceedsitsinterestintheassociate,theGroupdoesnotrecognisefurtherlosses,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 arerecognisedintheGroup’sfinancialstatementsonlytotheextentofunrelatedinvestors’interestsintheassociate.Unrealisedlossesareeliminatedunlessthetransactionprovidesevidenceofanimpairmentofthe asset transferred.
91
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.13 investments in associates (cont’d.)
The most recent available audited financial statements of the associate is used by the Group in applying theequitymethod.Wherethedatesoftheauditedfinancialstatementsusedarenotcoterminouswiththose of the Group, the share of results is arrived at from the last audited financial statements available and managementfinancialstatementstotheendoftheaccountingperiod.Wherenecessary,adjustmentsaremade to bring the accounting policies in line with those of the Group.
Afterapplicationoftheequitymethod,theGroupappliesMFRS139FinancialInstruments:Recognitionand Measurement to determine whether it is necessary to recognise any additional impairment loss with respecttoitsnetinvestmentintheassociate.Whennecessary,theentirecarryingamountoftheinvestmentistestedforimpairmentinaccordancewithMFRS136ImpairmentofAssetsasasingleasset,bycomparingits recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairmentlossisrecognisedinprofitorloss.Reversalofanimpairmentlossisrecognisedtotheextentthat the recoverable amount of the investment subsequently increases.
In the Company’s separate financial statements, investment in associate is accounted for at cost less impairment losses, if any. On disposal of such investment, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.
2.14 Financial assets
Financialassetsarerecognisedinthestatementsoffinancialpositionwhen,andonlywhen,theGroupand the Company become a party to the contractual provisions of the financial instrument.
Whenfinancialassetsarerecognisedinitially,theyaremeasuredatfairvalue,plus,inthecaseoffinancialassets not at fair value through profit or loss, directly attributable transaction costs.
The Group and the Company determine the classification of their financial assets at initial recognition, and the categories include financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and available-for-sale financial assets.
(a) Financial assets at fair value through profit or loss
Financialassetsareclassifiedasfinancialassetsatfairvaluethroughprofitorlossiftheyareheldfortradingoraredesignatedassuchuponinitialrecognition.Financialassetsheldfortradingarederivatives (including separated embedded derivatives) or financial assets acquired principally for the purpose of selling in the near term.
Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net gainsornetlossesonfinancialassetsatfairvaluethroughprofitorlossdonotincludeexchangedifferences,interestanddividendincome.Exchangedifferences,interestanddividendincomeonfinancial assets at fair value through profit or loss are recognised separately in profit or loss as part of other losses or other income.
Financialassetsat fairvaluethroughprofitor losscouldbepresentedascurrentornon-current.Financialassetsthatareheldprimarilyfortradingpurposesarepresentedascurrentwhereasfinancialassets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.
notes to the financial statements (cont’d.)
92
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.14 Financial assets (cont’d.)
(b) loans and receivables
Financialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarketareclassified as loans and receivables.
Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.
Loansandreceivablesareclassifiedascurrentassets,exceptforthosehavingmaturitydateslaterthan 12 months after the reporting date which are classified as non-current.
(c) held-to-maturity investments
Financialassetswithfixedordeterminablepaymentsandfixedmaturityareclassifiedasheld-to-maturity when the Group has the positive intention and ability to hold the investment to maturity.
Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the held-to-maturity investments are derecognised or impaired, and through the amortisation process.
Held-to-maturityinvestmentsareclassifiedasnon-currentassets,exceptforthosehavingmaturity
within 12 months after the reporting date which are classified as current.
(d) available-for-sale financial assets
Available-for-sale financial assets are financial assets that are designated as available for sale or are not classified in any of the three preceding categories.
After initial recognition, available-for-sale financial assets are measured at fair value. Any gains or losses from changes in fair value of the financial assets are recognised in other comprehensive income, exceptthatimpairmentlosses,foreignexchangegainsandlossesonmonetaryinstrumentsandinterestcalculated using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when the financial asset is derecognised. Interest income calculated using the effective interest method is recognised in profit or loss. Dividends on an available-for-sale equity instrument are recognised in profit or loss when the Group’s and the Company’s right to receive payment is established.
Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss, if any.
Available-for-salefinancialassetsareclassifiedasnon-currentassetsunlesstheyareexpectedtoberealised within 12 months after the reporting date.
93
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.14 Financial assets (cont’d.)
Afinancialassetisderecognisedwhenthecontractualrighttoreceivecashflowsfromtheassethasexpired.On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.
Regularwaypurchasesorsalesarepurchasesorsalesoffinancialassetsthatrequiredeliveryofassetswithinthe period generally established by regulation or convention in the marketplace concerned. All regular way purchases and sales of financial assets are recognised or derecognised on the trade date, i.e., the date that the Group and the Company commit to purchase or sell the asset.
2.15 impairment of financial assets
The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired.
(a) trade and other receivables and other financial assets carried at amortised cost
To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the Company consider factors such as the probability of insolvency or significantfinancialdifficultiesofthedebtoranddefaultorsignificantdelayinpayments.Forcertaincategories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group’sandtheCompany’spastexperienceofcollectingpayments,anincreaseinthenumberofdelayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.
Ifanysuchevidenceexists,theamountofimpairmentlossismeasuredasthedifferencebetweenthe asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assetswith theexceptionof tradeandother receivables,where thecarryingamount is reducedthroughtheuseofanallowanceaccount.Whenatradeorotherreceivablebecomesuncollectible,it is written off against the allowance account.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairmentlossisreversedtotheextentthatthecarryingamountoftheassetdoesnotexceeditsamortised cost at the reversal date. The amount of reversal is recognised in profit or loss.
(b) available-for-sale financial assets
Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor, and the disappearance of an active trading market are considerations to determine whether there is objective evidence that investment securities classified as available-for-sale financial assets are impaired.
notes to the financial statements (cont’d.)
94
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.15 impairment of financial assets (cont’d.)
(b) available-for-sale financial assets (cont’d.)
If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to profit or loss.
Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the subsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensiveincome.Foravailable-for-saledebtinvestments,impairmentlossesaresubsequentlyreversed in profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss in profit or loss.
2.16 cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. These also include bank overdrafts that form an integral part of the Group’s cash management.
Forthepurposeofthestatementsofcashflows,cashandcashequivalentsconsistofcashandbankbalancesas defined above, net of outstanding bank overdrafts and deposits pledged with licensed banks.
2.17 inventories
(a) trading inventories
Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the inventories to their present location and condition are accounted for on a weighted average basis.
(b) Manufacturing inventories
Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the inventories to their present location and condition are accounted for as follows:
(i) Rawmaterials:purchasecostsonafirst-infirst-outbasis.(ii) Finishedgoodsandwork-in-progress:costsofdirectmaterialsandlabourandaproportionof
manufacturing overheads based on normal operating capacity.
(c) inventory property
Inventory property cost includes freehold land, amounts paid to contractors for construction, borrowing costs, planning and design costs, costs of site preparation, professional fees for legal services, property transfertaxes,constructionoverheadsandotherrelatedcosts.
Wherenecessary,allowanceisprovidedfordamaged,obsoleteandslowmovingitemstoadjustthecarryingvalue 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.
95
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.18 Provisions
Provisions are recognised when the Group and the Company have a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably.
Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre-taxratethatreflects,whereappropriate,therisksspecifictotheliability.Whendiscountingisused,the increase in the provision due to the passage of time is recognised as a finance cost.
2.19 Financial liabilities
Financialliabilitiesareclassifiedaccordingtothesubstanceofthecontractualarrangementsenteredintoand the definitions of a financial liability.
Financialliabilities,withinthescopeofMFRS139,arerecognisedinthestatementsoffinancialpositionwhen, and only when, the Group and the Company become a party to the contractual provisions of the financialinstrument.Financialliabilitiesareclassifiedaseitherfinancialliabilitiesatfairvaluethroughprofit or loss or other financial liabilities.
(a) Financial liabilities at fair value through profit or loss
Financialliabilitiesatfairvaluethroughprofitorlossincludefinancialliabilitiesheldfortradingandfinancial liabilities designated upon initial recognition as at fair value through profit or loss.
FinancialliabilitiesheldfortradingincludederivativesenteredintobytheGroupandbytheCompanythat do not meet the hedge accounting criteria. Derivative liabilities are initially measured at fair value and subsequently stated at fair value, with any resultant gains or losses recognised in profit or loss.Netgainsorlossesonderivativesincludeexchangedifferences.
The Group and the Company have not designated any financial liabilities as at fair value through profit or loss.
(b) other financial liabilities
The Group’s and the Company’s other financial liabilities include trade payables, other payables and loans and borrowings.
Trade and other payables are recognised initially at fair value plus directly attributable transaction
costs and subsequently measured at amortised cost using the effective interest method.
Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Group and the Company have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
Forotherfinancialliabilities,gainsandlossesarerecognisedinprofitorlosswhentheliabilitiesarederecognised, and through the amortisation process.
notes to the financial statements (cont’d.)
96
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.19 Financial liabilities (cont’d.)
A financial liability is derecognisedwhen theobligationunder the liability is extinguished.When anexistingfinancialliabilityisreplacedbyanotherfromthesamelenderonsubstantiallydifferentterms,orthetermsofanexistingliabilityaresubstantiallymodified,suchanexchangeormodificationistreatedas a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.
2.20 Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due.
Financialguaranteecontractsarerecognisedinitiallyasaliabilityatfairvalue,netoftransactioncosts.Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or loss over the period of the guarantee. If the debtors fails to make payment relating to financial guarantee contract when it is due and the Group, as the issuer, is required to reimburse the holder for the associated loss, theliabilityismeasuredatthehigherofthebestestimateoftheexpenditurerequiredtosettlethepresentobligation at the reporting date and the amount initially recognised less cumulative amortisation.
2.21 borrowing costs
Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences whentheactivitiestopreparetheassetforitsintendeduseorsaleareinprogressandtheexpendituresandborrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period they are incurred. Borrowing costs
consist of interest and other costs that the Group and the Company incurred in connection with the borrowing of funds.
2.22 employee benefits
(a) short term benefits
Wages,salaries,bonusesandsocialsecuritycontributionsarerecognisedasanexpenseintheyearin 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) defined contribution plans
Definedcontributionplansarepost-employmentbenefitplansunderwhichtheGrouppaysfixedcontributions into separate entities or funds and will have no legal or constructive obligations to pay further contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years. Such contributions are recognisedasexpenseintheperiodinwhichtherelatedservicesisperformed.Asrequiredbylaw,companiesinMalaysiamakesuchcontributionstotheEmployeesProvidentFund(“EPF”).Someof the Group’s foreign subsidiaries also make contributions to their respective countries’ statutory pension schemes.
97
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.22 employee benefits (cont’d.)
(c) termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date orwheneveranemployeeacceptsvoluntaryredundancyinexchangeforthesebenefits.TheGroupand 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 terminationbenefits isbasedon thenumberofemployeesexpected toaccept theoffer.Benefitsfalling due more than 12 months after reporting date are discounted to present value.
(d) defined benefit plans
The Group operates an unfunded, defined benefit plan for its eligible employees. The Group’s net obligation in respect of defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in return for their services in the current and prior periods and that benefit is discounted to determine the present value. The discount rate is the market yield at the reporting date on high quality corporate bonds or government bonds. The calculation is performed by an actuary using the projected unit credit method.
Re-measurements, comprising actuarial gains and losses, are recognised immediately in thestatement of financial position with a corresponding debit or credit to retained earnings through other comprehensiveincomeintheperiodinwhichtheyoccur.Re-measurementsarenotreclassifiedtoprofit 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 benefitsexpense’intheincomestatements:
- service costs comprising current service costs, past-service costs, gains and losses on curtailments, and non-routine settlements; and
- netinterestexpenseorincome.
notes to the financial statements (cont’d.)
98
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.23 leases
(a) as lessee
Finance leases,which transfer to theGroup substantially all the risks and rewards incidental toownership 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 oftheliability.Financechargesarechargedtoprofitorloss.Contingentrents,ifany,arechargedasexpensesintheperiodsinwhichtheyareincurred.
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.
Operatingleasepaymentsarerecognisedasanexpenseinprofitorlossonastraight-linebasisoverthe lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction ofrentalexpenseovertheleasetermonastraight-linebasis.
(b) as lessor
Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. The accounting policy for rental income is set out in Note 2.24(f).
2.24 revenue
RevenueisrecognisedtotheextentthatitisprobablethattheeconomicbenefitswillflowtotheGroupandtotheCompanyandtherevenuecanbereliablymeasured.Revenueismeasuredatthefairvalueofconsideration received or receivable.
(a) sale of goods
Revenuefromsaleofgoodsisrecogniseduponthetransferofsignificantrisksandrewardsofownershipofthegoodstothecustomer,usuallyondeliveryofgoods.Revenueisnotrecognisedtotheextentwhere there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.
(b) dividend income
Dividend income is recognised when the right to receive payment is established.
(c) rental of hotel rooms and other services
Revenuefromrentalofhotelroomsandotherrelatedservicesarerecognisedasandwhentheservicesare rendered.
(d) Management income
Management income is received from a third party operator who manages golf course of a subsidiary. The income is recognised on an accrual basis.
99
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.24 revenue (cont’d.)
(e) interest income
Interest income is recognised using the effective interest method.
(f) rental, parking and related services
Rentalincomeisrecognisedonastraight-linebasisovertherentaltenancyagreementsorovertheterm of the lease. The aggregate costs of incentives provided to lessees are recognised as a reduction of rental income over the lease term on a straight-line basis.
Parking and related services are recognised net of discounts, if any, as and when the services are rendered.
(g) sale of inventory property
A property is regarded as sold when the significant risks and rewards have been transferred to the buyer,whichisnormallyonunconditionalexchangeofcontracts.Forconditionalexchanges,salesare recognised only when all the significant conditions are satisfied.
(h) sale of oil palm fresh fruit bunches
Revenuefromsaleofoilpalmfreshfruitbunchesisrecognisedwhensignificantrisksandrewardsof ownership of goods are transferred to the customer.
2.25 income taxes
(a) current tax
Currenttaxassetsandliabilitiesaremeasuredattheamountexpectedtoberecoveredfromorpaidtothetaxationauthorities.Thetaxratesandtaxlawsusedtocomputetheamountarethosethatareenacted or substantively enacted by the reporting date.
Currenttaxesarerecognisedinprofitorlossexcepttotheextentthatthetaxrelatestoitemsrecognisedoutside profit or loss, either in other comprehensive income or directly in equity.
(b) deferred tax
Deferredtaxisprovidedusingtheliabilitymethodontemporarydifferencesatthereportingdatebetween the taxbasesofassetsand liabilitiesand theircarryingamounts forfinancial reportingpurposes.
Deferredtaxliabilitiesarerecognisedforalltemporarydifferences,except:
- wherethedeferredtaxliabilityarisesfromtheinitialrecognitionofgoodwillorofanassetorliability in a transaction that is not a business combination and, at the time of the transaction, affectsneithertheaccountingprofitnortaxableprofit;and
- inrespectoftaxabletemporarydifferencesassociatedwithinvestmentsinsubsidiariesandassociates, 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.
notes to the financial statements (cont’d.)
100
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.25 income taxes (cont’d.)
(b) deferred tax (cont’d.)
Deferredtaxassetsarerecognisedforalldeductibletemporarydifferences,carryforwardofunusedtaxcreditsandunusedtaxlosses,totheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferences,andthecarryforwardofunusedtaxcreditsandunusedtaxlossescanbeutilisedexcept:
- wherethedeferredtaxassetrelatingtothedeductibletemporarydifferencearisesfromtheinitial recognition of an asset or liability in a transaction that is not a business combination and,atthetimeofthetransaction,affectsneithertheaccountingprofitnortaxableprofitorloss; and
- in respect of deductible temporary differences associated with investments in subsidiaries andassociates,deferredtaxassetsarerecognisedonlytotheextentthatitisprobablethatthetemporarydifferenceswillreverseintheforeseeablefutureandtaxableprofitwillbeavailableagainst which the temporary differences can be utilised.
Thecarryingamountofdeferredtaxassetsisreviewedateachreportingdateandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitwillbeavailabletoallowallorpartofthedeferredtaxassettobeutilised.Unrecogniseddeferredtaxassetsarereassessedateachreportingdateandarerecognisedtotheextentthatithasbecomeprobablethatfuturetaxableprofitwillallowthedeferredtaxassetstobeutilised.
Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplytotheyearwhentheassetisrealisedortheliabilityissettled,basedontaxratesandtaxlawsthathavebeenenacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit orloss.Deferredtaxitemsarerecognisedincorrelationtotheunderlyingtransactioneitherinothercomprehensiveincomeordirectlyinequityanddeferredtaxarisingfromabusinesscombinationisadjusted against goodwill on acquisition.
Deferredtaxassetsanddeferredtaxliabilitiesareoffset,ifalegallyenforceablerightexiststosetoffcurrenttaxassetsagainstcurrenttaxliabilitiesandthedeferredtaxesrelatetothesametaxableentityandthesametaxationauthority.
(c) goods and services tax (“gst”)
Revenues,expensesandassetsarerecognisednetoftheamountofGSTexcept:
- wheretheGSTincurredinapurchaseofassetsorservicesisnotrecoverablefromthetaxationauthority, in which case the GST is recognised as part of the cost of acquisition of the asset or aspartoftheexpenseitemasapplicable;and
- receivables and payables that are stated with the amount of GST included.
ThenetamountofGSTrecoverablefrom,orpayableto,thetaxationauthorityisincludedaspartofreceivables or payables in the statements of financial position.
101
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.26 bearer trees and biological assets
Bearertreesarelivingplantsusedintheproductionorsupplyofagriculturalproduce;areexpectedtobearproduce for more than one period; and have a remote likelihood of being sold as agricultural produce, exceptforincidentalscrapsales.Bearertreesmainlyincludematureoilpalmplantations.Matureplantationsare 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 thattheamount,methodandperiodofdepreciationareconsistentwithpreviousestimatesandtheexpectedpattern of consumption of the future economic benefits.
Abearertreeisderecognisedupondisposalorwhennofutureeconomicbenefitsareexpectedfromitsuse 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 segment reporting
Formanagementpurposes,theGroupisorganisedintooperatingsegmentsbasedontheirproductsandservices 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 share capital and share issuance expenses
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 treasury shares
Whensharesof theCompany, thathavenotbeencancelled, recognisedasequityare reacquired, theamountofconsiderationpaidisrecogniseddirectlyinequity.Reacquiredsharesareclassifiedastreasuryshares and presented as a deduction from total equity. No gain or loss is recognised in profit or loss on the purchase,sale,issueorcancellationoftreasuryshares.Whentreasurysharesarereissuedbyresale,thedifference between the sales consideration and the carrying amount is recognised in equity.
notes to the financial statements (cont’d.)
102
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.30 contingencies Acontingentliabilityorassetisapossibleobligationorassetthatarisesfrompasteventsandwhoseexistence
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 Fair value measurement
The Group and the Company measure financial instruments, such as, derivatives, and non-financial assets such as properties, at fair value at each reporting date. Also, fair values of financial instruments measured at amortised cost are disclosed in Note 38.
Fairvalueisthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransaction 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 whichsufficientdataareavailabletomeasurefairvalue,maximisingtheuseofrelevantobservableinputsand minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
- Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities;- Level2: Valuationtechniquesforwhichthelowestlevelinputthatissignificanttothefairvalue measurement is directly or indirectly observable; or - Level3: Valuationtechniquesforwhichthelowestlevelinputthatissignificanttothe fair value measurement is unobservable.
Forassetsandliabilitiesthatarerecognisedinthefinancialstatementsonarecurringbasis,theGroupandthe 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.
103
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.31 Fair value measurement (cont’d.)
The Group and the Company determine the policies and procedures for recurring fair value measurement, suchaspropertiesandunquotedavailable-for-sale(“AFS”)financialassets.
Externalvaluersmaybeinvolvedforvaluationofsignificantassets,suchaspropertiesandAFSfinancialassets. Involvementof external valuers is decideduponannuallyby theGroupandby theCompany.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,theGroupandtheCompanyverifythemajorinputsappliedinthelatest valuation by agreeing the information in the valuation computation to contracts and other relevant documents.
TheGroupandtheCompany,inconjunctionwiththeGroup’sandtheCompany’sexternalvaluers,alsocomparethechangesinthefairvalueofeachassetandliabilitywithrelevantexternalsources,wherepractical, to determine whether the change is reasonable.
Forthepurposeoffairvaluedisclosures,theGroupandtheCompanyhavedeterminedclassesofassetsand liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of thefairvaluehierarchyasexplainedabove.
2.32 current and non-current classification
The Group and the Company present assets and liabilities in statements of financial position based on current and non-current classification.
An asset is classified as current when it is:
- expectedtoberealisedorintendedtosoldorconsumedinnormaloperatingcycle;- held primarily for the purpose of trading;- expectedtoberealisedwithin12monthsafterthereportingperiod;or- cashandcashequivalentsunlessrestrictedfrombeingexchangedorusedtosettlealiabilityforat
least 12 months after the reporting period.
All other assets are classified as non-current.
A liability is classified as current when:
- itisexpectedtobesettledinnormaloperatingcycle;- 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.
Deferredtaxassetsandliabilitiesareclassifiedasnon-currentassetsandliabilities,respectively.
notes to the financial statements (cont’d.)
104
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
2. summary of significant accounting policies (cont’d.)
2.33 significant changes in regulatory requirements
Companies Act 2016
Amongst the key changes introduced in the New Act which will affect the financial statements of the Group and the Company upon the commencement of the New Act on 31 January 2017 are:• theremovaloftheauthorisedsharecapital;• theordinarysharesoftheCompanywillceasetohaveparornominalvalue;and• theCompany’ssharepremiumwillbecomepartofthesharecapital.
The adoption of the New Act has no financial impact on the Group and the Company for the current financialyearended28February2017.Theeffectofadoptionmainlyonthedisclosurestothefinancialstatements of the Group and the Company.
3. significant accounting judgements and estimates
The preparation of the Group’s and of the Company’s financial statements requires management to make judgements, estimatesandassumptions thataffect the reportedamountsof revenues,expenses,assetsand liabilities,andthe disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future periods.
3.1 Judgements made in applying accounting policies
In the process of applying the Group’s and the Company’s accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements:
(a) classification between investment properties and property, plant and equipment
TheGrouphas developed certain criteria basedonMFRS140 inmaking judgementwhether aproperty 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.
105
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
3. significant accounting judgements and estimates (cont’d.) 3.1 Judgements made in applying accounting policies (cont’d.)
(b) impairment of financial assets
TheGroupandtheCompanyfollowtheguidanceofMFRS139indeterminingwhenafinancialasset is considered impaired. This determination requires significant judgement. The Group and theCompanyevaluate,amongotherfactors,thedurationandextenttowhichthefairvalueofafinancial asset is less than its cost; and the financial health of and the near-term business outlook of the issuer of the instrument, including factors such as industry performance, changes in technology and operational and financing cash flows.
(c) control over certain subsidiaries
Asat28February2017,theproportionofequityinterestoftheGroupisdisclosedinNote17(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..TheGroupassessedthat it has retained control over the said 5 companies during the financial year through stipulations in the shareholders agreements.
3.2 key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilitieswithinthenextfinancialyeararediscussedbelow.
(a) impairment of goodwill
Goodwillistestedforimpairmentannuallyandatothertimeswhensuchindicatorsexist.Thisrequiresan estimation of the value in use of the cash-generating units to which goodwill is allocated.
Whenvalueinusecalculationsareundertaken,managementmustestimatetheexpectedfuturecashflows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate thepresentvalueofthosecashflows.Furtherdetailsofthecarryingvalue,thekeyassumptionsappliedin 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) impairment of receivables
The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.
Wherethereisobjectiveevidenceofimpairment,theamountandtimingoffuturecashflowsareestimatedbasedonhistoricallossexperienceforassetswithsimilarcreditriskcharacteristics.Thecarrying amount of the Group’s and the Company’s receivables at the reporting date is disclosed in Note 24.
notes to the financial statements (cont’d.)
106
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
3. significant accounting judgements and estimates (cont’d.)
3.2 key sources of estimation uncertainty (cont’d.)
(c) retirement benefit obligations
The Group has contracted an actuary to determine the Group’s obligations in respect of the defined benefit plan of the Group. The estimate of the obligations is dependent on the assumptions of the discount rate, future salary increases and price inflation. Any change in these assumptions will affect the estimates.
(d) Provisions
The provisions are determined based on the management’s best estimates after considering the probable outflow of resources embodying economic benefits that will be required to settle the obligation.
(e) Useful lives of plant and equipment
The cost of plant and equipment is depreciated on a straight-line basis over the plant and equipment’s estimatedusefullives.Managementestimatestheusefullivesoftheseplantandequipment(excludesfreehold land, leasehold land, golf course, and buildings) to be within 3 to 25 years. The carrying amount of theGroup’s plant and equipment at 28 February 2017was RM35,659,000 (2016:RM33,465,000).Changes in theexpected levelofusageand technologicaldevelopmentscouldimpact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.
(f) deferred tax assets
Deferredtaxassetsarerecognisedforallunusedtaxlossesandunabsorbedcapitalallowancestotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthelossesandcapitalallowances can be utilised. Significant management judgement is required to determine the amount ofdeferredtaxassetsthatcanberecognised,baseduponthelikelytimingandleveloffuturetaxableprofitstogetherwithfuturetaxplanningstrategies.
ThecarryingamountofrecognisedandunrecognisedtaxlossesandcapitalallowancesoftheGroupand of the Company is disclosed in Note 21.
(g) impairment loss on investments in subsidiaries
The Company has subsidiaries which are principally involved in trading of duty free goods and non-dutiable merchandise. The Company carried out the impairment test based on the estimation of the higherofthevalue-in-useorthefairvaluelesscosttosellofthecash-generatingunit(“CGU”)towhichtheinvestmentinsubsidiariesbelongto.EstimatingtherecoverableamountrequirestheCompanytomakeanestimateoftheexpectedfuturecashflowsfromtheCGUandalsotodetermineasuitablediscount rate in order to calculate the present value of those cash flows. The carrying amount of the Company’s investment in subsidiaries is disclosed in Note 17.
(h) Valuation of call options
The fair values of call options are determined using Binomial Tree valuation technique with unobservable inputs that require judgement and estimation in establishing the fair values. The key assumptions applied in determining of the valuation of these call options and sensitivity analysis aredescribedinNote38.ThevaluationofcalloptionsaresensitivetochangesinunderlyingDFZCapitalBerhad(“DFZ”)sharevalue.Changesinthisassumptionmayresultinchangesincarryingvalue.Thecarryingamountoftheunquotedcalloptionsasat28February2017isRM8,993,000.
107
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
4. revenue
group company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000
Sale of goods 775,946 733,210 – –Gross dividends: - subsidiaries – – 70,049 40,551Rentalofhotelroomsand other services 13,007 13,887 – –Management income 335 250 – –Interest income: - subsidiaries – – 2,250 2,735 -fixeddeposits 2,916 1,945 461 438Rental,parkingand related services 15,995 17,438 – –Sale of oil palm fresh fruit bunches 1,236 1,328 – –
809,435 768,058 72,760 43,724
5. other income
Included in other income are as follows:
group company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000
(restated)
Gain arising from changes in fair value of biological assets 5 83 – –Gain arising from changes in fair value of options 4,044 – – –Gain on disposal of property, plant and equipment 3,037 477 – –Gainonforeignexchange: - realised 2,744 193 – 18 - unrealised 7,458 403 193 402Inventorieswrittenback* 578 1,003 – –Interest income from a third party 3,590 3,318 – –Rentalincome: - advertisement space 3,210 3,851 – – - property, plant and equipment and land use rights 578 616 – – - others – 111 – –Reversalofimpairmentlosson: - property, plant and equipment – 302 – – - receivables (third parties) – 275 – – - receivables (subsidiaries) – – – 76
* Thewritebackofinventorieswasmadewhentherelatedinventoriesweresoldabovetheircarryingamounts.
notes to the financial statements (cont’d.)
108
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
6. employee benefits expense
group company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000
Wagesandsalaries 60,868 55,105 253 253Social security contribution 765 573 – –Contribution to defined contribution plan 6,109 5,910 – –Increase in liability for defined benefit plan (Note 30(c)) 695 638 – –Retirementgratuity 3,000 – – –Other benefits 5,946 4,622 13 –
77,383 66,848 266 253
IncludedinemployeebenefitsexpenseoftheGroupareexecutivedirector’sremunerationamountingtoRM745,000(2016:RM669,000).
7. directors’ remuneration
The details of remuneration receivable by directors of the Company during the year are as follows:
group company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000
executive:Salaries and other emoluments 664 596 – –Defined contribution plan 81 73 – –
Totalexecutivedirector’s remuneration 745 669 – –
non-executive:Salaries and other emoluments 885 1,120 – –Defined contribution plan 104 135 – –Fees 371 365 253 253Benefit in kind 7 – – –
Totalnon-executivedirectors’ remuneration 1,367 1,620 253 253
Total directors’ remuneration 2,112 2,289 253 253
Total directors’ remuneration (excludingfees) 1,741 1,924 – –
109
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
7. directors’ remuneration (cont’d.)
The number of directors of the Company whose total remuneration during the financial year fell within the following bands is analysed below:
number of directors 2017 2016
executive director: RM650,001–RM700,000 – 1 RM700,001–RM750,000 1 –
non-executive directors: BelowRM50,000 7 7 RM100,001–RM150,000 – 1 RM150,001–RM200,000 1 – RM950,001–RM1,000,000 1 – RM1,250,001–RM1,300,000 – 1
10 10
Thetotalnumberofdirectorsasat28February2017is10(2016:10).
8. other operating expenses
Includedinotheroperatingexpensesareasfollows:
group company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000
Amortisationofotherinvestments –* 1 – –Auditors’ remuneration: - statutory audit 1,153 1,093 69 69 - special audit 305 – – – - over provision in previous year (3) – – –Bad debts written off – 8 – –Changes in fair value of marketable securities 191 472 191 472Impairment loss on receivables: - third parties 24 380 – – - subsidiaries – – 2,425 4,470Inventories written down 2,223 800 – –Inventories written off 88 256 – –Lease of land 216 216 – –Legal and professional fees 2,888 4,323 652 572Lossonforeignexchange: - realised 931 7,803 – – - unrealised 260 2,239 – –Management fee charged by a subsidiary – – 630 600Property, plant and equipment written off 40 112 – –Contingent rent 7,698 6,715 – –Rentalexpense 39,381 36,763 – –
* Theamountislessthanathousand.
notes to the financial statements (cont’d.)
110
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
9. Finance costs
group company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000
Interestexpenseon: - bankers’ acceptance 774 771 – – - bank overdrafts 175 153 – – - obligations under finance leases 138 86 – – -USDtradeloans 5 290 – – - term loans 4,232 5,411 3,748 4,404 - letter of credit 58 514 – –
5,382 7,225 3,748 4,404
10. income tax expense
Majorcomponentsofincometaxexpense
Themajorcomponentsofincometaxexpenseforthefinancialyearsended28February2017and29February2016 are as follows:
group company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000
(restated)
Currentincometax-Malaysianincometax 25,370 28,925 504 606- Over provision in respect of previous years (3,965) (1,162) (24) (9)
21,405 27,763 480 597
Deferredincometax- Origination and reversal of temporary differences (84) (865) – –-(Over)/underprovisionin respect of previous years (367) 131 – –
(451) (734) – –
Incometaxexpenserecognised in profit or loss 20,954 27,029 480 597
111
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
10. income tax expense (cont’d.)
Reconciliationbetweentaxexpenseandaccountingprofit
DomesticcurrentincometaxiscalculatedattheMalaysianstatutorytaxraterangeof20%to24%(2016:24%).Thereductionintheincometaxrateisbasedonthepercentageofincreaseinchargeableincomeascomparedtotheimmediateprecedingyearofassessment.TheeffectofthechangeinfuturetaxratetodeferredtaxoftheGroup and of the Company is determined not to be significant.
Thereconciliationbetweentaxexpenseandtheproductofaccountingprofitmultipliedbytheapplicablecorporatetaxrateforthefinancialyearsended28February2017and29February2016areasfollows:
group company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000
(restated)
Profitbeforetax 96,553 83,064 64,332 33,236
Taxationatstatutoryrate 23,173 19,935 15,440 7,977
Effectofdifferenttaxratesin other country (928) 271 – –Effectofexpensesnotdeductible fortaxpurposes 6,312 6,670 1,876 2,665Effectofincomenotsubject totaxation (3,309) (447) (16,812) (10,036)Utilisationofpreviously unrecognised deferred taxassets – (261) – –Reinvestmentallowancesclaimed during the year (577) – – –Deferredtaxassetsnotrecognised during the year 615 1,892 – –(Over)/underprovisionofdeferred taxinpreviousyears (367) 131 – –Overprovisionofincometax in previous years (3,965) (1,162) (24) (9)
Incometaxexpenserecognised in profit or loss 20,954 27,029 480 597
TheGrouphastaxsavingsfromthefollowing:
group 2017 2016 rM’000 rM’000
Utilisationofpreviouslyunrecognisedtaxlosses – 255 Utilisationofpreviouslyunabsorbedcapitalallowances, unutilised reinvestment allowances and unrecognised
temporary differences – 6
– 261
notes to the financial statements (cont’d.)
112
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
11. earnings per share
Basicearningspershareamountsarecalculatedbydividingprofitnetoftaxattributabletoownersoftheparentby the number of ordinary shares outstanding during the financial year.
Dilutedearningspersharearecalculatedbydividingprofit,netoftax,attributabletoownersoftheCompanyby 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 fortheyearsended28February2017and29February2016:
group 2017 2016 rM’000 rM’000
(restated)
Profitnetoftaxattributabletoownersoftheparent 54,536 42,813
group 2017 2016
number number of shares of shares ‘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 2017 2016 rM’000 rM’000
Recognisedduringthefinancialyear:
Dividends on ordinary shares:
Inrespectofthefinancialyearended28February2017: -Firstinterimsingle-tierdividendof12.5% 31,706 – - Second interim single-tier dividend of 10% 25,365 –
Inrespectofthefinancialyearended29February2016: -Firstinterimsingle-tierdividendof10% – 25,365 - Second interim single-tier dividend of 7.5% – 19,024
57,071 44,389
113
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
13.
Prop
erty
, pla
nt a
nd e
quip
men
t
offi
ce
c
apita
l
equ
ipm
ent,
land
and
g
olf
wor
k-in
- M
otor
fu
rnitu
re
Pla
nt a
nd
bea
rer
o
ther
b
uild
ings
*
cou
rse
p
rogr
ess
v
ehic
les
a
nd fi
ttin
gs
mac
hine
ry
tree
s
ass
ets
to
tal
rM
’000
r
M’0
00
rM
’000
r
M’0
00
rM
’000
r
M’0
00
rM
’000
r
M’0
00
rM
’000
gro
up
at 2
8 Fe
brua
ry 2
017
c
ost
At 1
Mar
ch 2
016,
pre
viou
sly
stat
ed
172,
535
44,6
48
8,89
0 9,
577
42,7
84
78,4
12
– 2,
597
359,
443
Effectsofado
ptionofamen
dmen
tstoM
FRS11
6an
dMFR
S14
1–
––
––
–2,82
5–
2,82
5
At 1
Mar
ch 2
016,
rest
ated
17
2,53
5 44
,648
8,
890
9,57
7 42
,784
78
,412
2,
825
2,59
7 36
2,26
8A
dditi
ons
2,24
8 –
8,85
5 66
9 1,
369
3,60
5 –
5 16
,751
Tran
sfer
red
to in
vest
men
t pro
perti
es
(Not
e 14
) (4
,268
) –
– –
– –
– –
(4,2
68)
Dis
posa
ls
– –
(766
) –
(33)
(2
,609
) –
– (3
,408
)Write-offs
––
––
(219
)(334
)–
–(553
)Re
classific
ation
3,30
4–
(6,619
)–
(118
)3,43
3–
––
At2
8Februa
ry201
717
3,81
944
,648
10
,360
10
,246
43
,783
82
,507
2,82
52,60
237
0,79
0
notes to the financial statements (cont’d.)
114
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
13.
Prop
erty
, pla
nt a
nd e
quip
men
t (c
ont’d
.)
offi
ce
c
apita
l
equ
ipm
ent,
land
and
g
olf
wor
k-in
- M
otor
fu
rnitu
re
Pla
nt a
nd
bea
rer
o
ther
b
uild
ings
*
cou
rse
p
rogr
ess
v
ehic
les
a
nd fi
ttin
gs
mac
hine
ry
tree
s
ass
ets
to
tal
rM
’000
r
M’0
00
rM
’000
r
M’0
00
rM
’000
r
M’0
00
rM
’000
r
M’0
00
rM
’000
acc
umul
ated
dep
reci
atio
n an
d
impa
irm
ent l
osse
s
At 1
Mar
ch 2
016,
pre
viou
sly
stat
ed
92,5
48
11,9
48
– 7,
298
35,5
20
67,2
39
– 1,
046
215,
599
Effectsofado
ptionofamen
dmen
tstoM
FRS11
6an
dMFR
S14
1–
––
––
–51
7–
517
At 1
Mar
ch 2
016,
rest
ated
92
,548
11
,948
–
7,29
8 35
,520
67
,239
51
7 1,
046
216,
116
Dep
reci
atio
n ch
arge
for t
he y
ear
4,53
1 80
7 –
934
1,90
1 5,
018
113
48
13,3
52Tr
ansf
erre
d to
inve
stm
ent
pr
oper
ties
(Not
e 14
) (1
,532
) –
– –
– –
– –
(1,5
32)
Dis
posa
ls
– –
– –
(33)
(2
,417
) –
– (2
,450
)Write-offs
––
––
(191
)(322
)–
–(513
)Re
classific
ation
7–
––
(7)
––
––
At2
8Februa
ry201
795
,554
12
,755
–
8,23
23
7,19
069
,518
63
01,09
422
4,97
3
Ana
lyse
d as
:
A
ccum
ulat
ed d
epre
ciat
ion
57,4
02
12,
755
– 8,
232
37,1
90
69,5
18
630
1,09
4 18
6,82
1A
ccum
ulat
ed im
pairm
ent l
osse
s 38
,152
–
– –
– –
– –
38,1
52
95,5
54
12,7
55
– 8,
232
37,1
90
69,5
18
630
1,09
4 22
4,97
3
net
car
ryin
g am
ount
78
,265
31
,893
10
,360
2,
014
6,59
3 12
,989
2,
195
1,50
8 14
5,81
7
115
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
13.
Prop
erty
, pla
nt a
nd e
quip
men
t (c
ont’d
.)
offi
ce
c
apita
l
equ
ipm
ent,
land
and
g
olf
wor
k-in
- M
otor
fu
rnitu
re
Pla
nt a
nd
bea
rer
o
ther
b
uild
ings
*
cou
rse
p
rogr
ess
v
ehic
les
a
nd fi
ttin
gs
mac
hine
ry
tree
s
ass
ets
to
tal
rM
’000
r
M’0
00
rM
’000
r
M’0
00
rM
’000
r
M’0
00
rM
’000
r
M’0
00
rM
’000
gro
up
at 2
9 Fe
brua
ry 2
016
cos
t
At 1
Mar
ch 2
015,
pre
viou
sly
stat
ed
171,
289
44,6
48
5,01
7 9,
216
45,2
20
112,
142
– 2,
524
390,
056
Effectsofado
ptionofamen
dmen
tstoM
FRS11
6an
dMFR
S14
1–
––
––
–2,82
5–
2,82
5
At 1
Mar
ch 2
015,
rest
ated
17
1,28
9 44
,648
5,
017
9,21
6 45
,220
11
2,14
2 2,
825
2,52
4 39
2,88
1A
dditi
ons
599
– 5,
056
874
2,29
1 3,
225
– 73
12
,118
Dis
posa
ls
– –
– (2
67)
(222
) (6
18)
– –
(1,1
07)
Write-offs
(163
)–
–(246
)(4,454
)(36,76
1)
––
(41,62
4)Re
classific
ation
810
–(1,183
)–
(51)
424
––
–
At2
9Februa
ry201
617
2,53
544
,648
8,89
09,57
742
,784
78
,412
2,82
52,59
736
2,26
8
notes to the financial statements (cont’d.)
116
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
13.
Prop
erty
, pla
nt a
nd e
quip
men
t (c
ont’d
.)
offi
ce
c
apita
l
equ
ipm
ent,
land
and
g
olf
wor
k-in
- M
otor
fu
rnitu
re
Pla
nt a
nd
bea
rer
o
ther
b
uild
ings
*
cou
rse
p
rogr
ess
v
ehic
les
a
nd fi
ttin
gs
mac
hine
ry
tree
s
ass
ets
to
tal
rM
’000
r
M’0
00
rM
’000
r
M’0
00
rM
’000
r
M’0
00
rM
’000
r
M’0
00
rM
’000
acc
umul
ated
dep
reci
atio
n an
d
impa
irm
ent l
osse
s
At 1
Mar
ch 2
015,
pre
viou
sly
stat
ed
88,5
02
11,5
47
– 6,
734
38,3
30
98,9
96
– 83
9 24
4,94
8Effectsofado
ptionofamen
dmen
tstoM
FRS11
6an
dMFR
S14
1–
––
––
–40
5–
405
At 1
Mar
ch 2
015,
rest
ated
88
,502
11
,547
–
6,73
4 38
,330
98
,996
40
5 83
9 24
5,35
3D
epre
ciat
ion
char
ge fo
r the
yea
r 4,
268
628
– 91
7 1,
832
5,51
2 –
209
13,3
66D
epre
ciat
ion
char
ge fo
r the
yea
r,
ef
fect
s of
ado
ptio
n of
am
endm
ents
toM
FRS11
6an
dMFR
S14
1–
––
––
–11
2 –
112
Impa
irmen
t los
s re
vers
ed^
(75)
(2
27)
– –
– –
– –
(302
)D
ispo
sals
–
– –
(107
) (2
21)
(573
) –
– (9
01)
Write-offs
(163
)–
–(246
)(4,378
)(36,72
5)
––
(41,51
2)Re
classific
ation
16
––
–(43)
29
–(2)
–
At2
9Februa
ry201
692
,548
11
,948
–
7,29
835
,520
67
,239
51
71,04
621
6,11
6
Ana
lyse
d as
:
A
ccum
ulat
ed d
epre
ciat
ion
53,4
23
11,9
48
– 7,
298
35,5
20
67,2
39
517
1,04
6 17
6,99
1A
ccum
ulat
ed im
pairm
ent l
osse
s 39
,125
–
– –
– –
– –
39,1
25
92,5
48
11,9
48
– 7,
298
35,5
20
67,2
39
517
1,04
6 21
6,11
6
Net
car
ryin
g am
ount
79
,987
32
,700
8,
890
2,27
9 7,
264
11,1
73
2,30
8 1,
551
146,
152
117
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
13. Property, plant and equipment (cont’d.)
* land and buildings
long term leasehold Freehold buildings land land total rM’000 rM’000 rM’000 rM’000
group at 28 February 2017 cost At 1 March 2016 161,338 1,803 9,394 172,535Additions 2,110 138 – 2,248Transferred to investment properties (Note 14) (2,465) (1,803) – (4,268)Reclassification 2,049 1,255 – 3,304
At28February2017 163,032 1,393 9,394 173,819
accumulated depreciation and impairment losses At 1 March 2016 92,118 430 – 92,548Depreciation charge for the year 4,495 36 – 4,531Transferred to investment properties (Note 14) (1,071) (461) – (1,532)Reclassification 7 – – 7
At28February2017 95,549 5 – 95,554
Analysed as: Accumulated depreciation 57,397 5 – 57,402Accumulated impairment losses 38,152 – – 38,152
95,549 5 – 95,554
net carrying amount 67,483 1,388 9,394 78,265
notes to the financial statements (cont’d.)
118
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
13. Property, plant and equipment (cont’d.)
* land and buildings (cont’d.)
long term leasehold Freehold buildings land land total rM’000 rM’000 rM’000 rM’000
group at 29 February 2016 cost At 1 March 2015 160,092 1,803 9,394 171,289Additions 599 – – 599Write-offs (163) – – (163)Reclassification 810 – – 810
At29February2016 161,338 1,803 9,394 172,535
accumulated depreciationand impairment losses At 1 March 2015 88,104 398 – 88,502Depreciation charge for the year 4,236 32 – 4,268Impairment loss reversed ^ (75) – – (75)Write-offs (163) – – (163)Reclassification 16 – – 16
At29February2016 92,118 430 – 92,548
Analysed as: Accumulated depreciation 53,132 291 – 53,423Accumulated impairment losses 38,986 139 – 39,125
92,118 430 – 92,548
net carrying amount 69,220 1,373 9,394 79,987
^ Reversalofimpairmentlosshasbeenmadetoincreasethecarryingvalueofthegolfcoursetoitsestimatedrecoverable amount based on indicative valuation provided by an independent firm of valuers.
119
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
13. Property, plant and equipment (cont’d.)
office equipment, furniture Motor and fittings vehicles total company rM’000 rM’000 rM’000 at 28 February 2017 cost At1March2016/28February2017 73 183 256 accumulated depreciation At1March2016/28February2017 72 183 255 net carrying amount 1 – 1
at 29 February 2016 cost At1March2015/29February2016 73 183 256 accumulated depreciation At1March2015/29February2016 72 183 255 net carrying amount 1 – 1
notes to the financial statements (cont’d.)
120
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
13. Property, plant and equipment (cont’d.)
(a) During the financial year, the Group acquired property, plant and equipment with an aggregate cost of RM16,751,000(2016:RM12,118,000).
group 2017 2016 rM’000 rM’000
Hire purchase 595 1,811Cash payment 16,156 10,307
16,751 12,118
The net carrying amount of property, plant and equipment held under finance leases as at reporting date are as follows:
group 2017 2016 rM’000 rM’000
Motor vehicles 1,799 1,814Plant and machinery 980 1,290
2,779 3,104
(b) The net carrying amount of property, plant and equipment pledged as securities for borrowings (Note 31) are as follows:
group 2017 2016 rM’000 rM’000
Freeholdland 2,861 2,861Leasehold land 1,388 1,373Buildings 33,279 36,216Others 7,869 5,527
45,397 45,977
(c) IncludedintheplantandmachineryoftheGrouparestaffcostscapitalisedamountingtoRM254,000(2016:RM378,000).
121
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
14. investment properties
group 2017 2016 rM’000 rM’000
cost At beginning of the year 109,251 109,245Additions 93 6Transferred from property, plant and equipment (Note 13) 4,268 –
At end of the year 113,612 109,251
accumulated depreciation and impairment losses At beginning of the year 70,185 66,604Depreciation charge for the year 3,156 3,581Transferred from property, plant and equipment (Note 13) 1,532 –
At end of the year 74,873 70,185
Analysed as: Accumulated depreciation 50,902 47,185Accumulated impairment losses 23,971 23,000
74,873 70,185 net carrying amount 38,739 39,066
Fair value 93,020 88,400
Directoperatingexpensesarisingfromincomegenerating investment properties included in income statements 4,235 4,212
The fair value of the investment properties was based on a valuation report provided by an independent qualified valuer.Valuationwasbasedoncurrentpricesinanactivemarketforcertainpropertiesandwhereappropriate,theinvestmentmethodreflectingreceiptofcontractualrentals,expectedfuturemarketrentals,currentmarketyields,voidperiods,maintenancerequirementsandapproximatecapitalisationratesisused.
InvestmentpropertieswithnetcarryingamountofRM36,003,000(2016:RM39,066,000)aresituatedonalandowned by a third party with whom the Group has an operating lease arrangement as disclosed in Note 36(b).
Investment propertieswith a net carrying amount of RM38,739,000 (2016:RM39,066,000) are pledged assecurities for borrowings (Note 31).
notes to the financial statements (cont’d.)
122
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
14. investment properties (cont’d.)
Aquantitativesensitivityanalysisofthechangeintheyieldrateasat28February2017and29February2016isshown below:
descriptionFair valuerM’000
Valuation techniques
Unobservableinputs range
sensitivity of theinput to fair value
Land** 2,810 Comparable method
Yieldadjustments based on management’s assumptions*
-15% to 33% 1% increase or decrease in the yield rate would result in decrease or increase in fair value by approximately RM21,000.
Building** 1,410 Comparablemethod
Yieldadjustments based on management’s assumptions*
-25% to -15% 1% increase or decrease in the yield rate would result in decrease or increase in fair value by approximately RM14,000.
Buildings 88,800(2016:88,400)
Investmentmethod
Yieldadjustments based on management’s assumptions*
6.25% to 7.25%(2016: 6.5%)
0.5% increase or decrease in the yield rate would result in decrease or increase in fair value by approximately RM3.8million. (2016:RM7.0 million)
* Theyieldadjustmentsaremade foranydifference in thenature, locationorconditionof the specificproperty.
** Transferredfromproperty,plantandequipment.
123
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
15. land use rights
group 2017 2016 rM’000 rM’000
cost
Atbeginningoftheyear/endoftheyear 34,171 34,171
accumulated amortisation
At beginning of the year 11,401 10,951Amortisation for the year 449 450
At end of the year 11,850 11,401
net carrying amount 22,321 22,770
Amount to be amortised: - Not later than 1 year 449 467- Later than 1 year but not later than 5 years 1,798 1,870- Later than 5 years 20,074 20,433
22,321 22,770
16. goodwill
group 2017 2016 rM’000 rM’000
cost At beginning of year and at end of year 27,408 27,408
impairment tests for goodwill
(a) allocation of goodwill
GoodwillhasbeenallocatedtotheGroup’scash-generatingunit(“CGU”)identifiedaccordingtobusinesssegment as follows:
group 2017 2016 rM’000 rM’000
Trading of duty free goods and non-dutiable merchandise 27,408 27,408
notes to the financial statements (cont’d.)
124
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
16. goodwill (cont’d.)
impairment tests for goodwill (cont’d.)
(b) key assumptions used in value-in-use calculations
TherecoverableamountoftheCGUisdeterminedbasedonvalue-in-usecalculationsusingcashflowprojections based on financial forecasts with key assumptions approved by management covering a 5-year periodwithagrowthrateofapproximately5%(2016:5%).Theforecastedgrowthrateusedtoextrapolatecash flow beyond the 5-year period is 1% (2016: 1%).
Key assumptions and management’s approach to determine the values assigned to each key assumption are as follows:
(i) budgeted gross margin
The basis used to determine the value assigned to the budgeted gross margin is the average gross marginachievedintheyearimmediatelybeforethebudgetedyear,increasedforexpectedefficiencyimprovements. The budgeted gross margins for trading of duty free goods and non-dutiable merchandise segment are in the range of 7% to 33% (2016: 7% to 29%).
(ii) selling price
The selling price used to calculate the cash inflows from operations was determined after taking into considerationpricetrendsoftheindustriesinwhichtheCGUsareexposedto.Valuesassignedareconsistentwiththeexternalsourcesofinformation.
(iii) discount rate
The discount rate applied to the cash flow projections of 5.8% (2016: 7.4%) is based on the weighted averagecostofcapitalofasubsidiary,DutyFreeInternationalLimitedGroup.
(c) sensitivity to changes in assumptions
Withregardtotheassessmentofvalue-in-useofallCGUs,themanagementbelievesthatanyreasonablechangeinanyoftheabovekeyassumptionswouldnotcausethecarryingvalueoftheCGUstomateriallyexceedtheirrecoverableamounts.
125
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
17. investment in subsidiaries
company 2017 2016 rM’000 rM’000
Quoted equity instruments, at cost Outside Malaysia 784,367 784,367Unquotedshares,atcost 274,045 274,045
1,058,412 1,058,412Less: Accumulated impairment losses (37,680) (37,680)
1,020,732 1,020,732
Market value of quoted equity instruments: Outside Malaysia 1,131,872 935,268
Forthisfinancialyearended28February2017,themarketvalueofitsquotedinvestmentinasubsidiaryexceededits cost of investments.
(a) Details of the subsidiaries, which were incorporated in Malaysia (unless otherwise indicated), as at 28 February2017,areasfollows:
Proportion of ownership interest name of company in ordinary shares Principal activities 2017 2016 % %
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
DutyFreeInternationalLimited 76 82 Investmentholding (“DFIL”)(Incorporatedin Singapore)+^
UnitedIndustriesHoldings 100 100 Investmentholding Sdn.Bhd.(“UIH”) ZonHospitalityServices 100 100 Dormant Sdn. Bhd.
notes to the financial statements (cont’d.)
126
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
17. investment in subsidiaries (cont’d.)
(a) Details of the subsidiaries, which were incorporated in Malaysia (unless otherwise indicated), as at 28 February2017,areasfollows:(cont’d.)
Proportion of ownership interest name of company in ordinary shares Principal activities 2017 2016 % %
Blossom Time Sdn. Bhd. 100 100 Property development
Timeless Image Sdn. Bhd. 100 100 Investment holding
International Aviation 100 100 Dormant ConsultantsSdn.Bhd.**
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
Belia Karisma Sdn. Bhd. 100 100 Dormant
RadiantRanchSdn.Bhd. 100 100 Dormant
Gardenia Success Sdn. Bhd. 100 100 Dormant
TropikaFerringhiManagement 100 100 Propertymanagement Sdn. Bhd.
held through atlan Properties sdn. bhd.
NaluriCorporationSdn.Bhd.** 100 100 Dormant
127
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
17. investment in subsidiaries (cont’d.)
(a) Details of the subsidiaries, which were incorporated in Malaysia (unless otherwise indicated), as at 28 February2017,areasfollows:(cont’d.)
Proportion of ownership interest name of company in ordinary shares Principal activities 2017 2016 % %
held through belia karisma sdn. bhd. and atlan assets sdn. bhd.
Naluri International Limited 100 100 Investment holding (Incorporated in Hong Kong)#
held through naluri international limited
TRIMCapitalManagement(M) – 100 Dormant Sdn.Bhd.*
held through dFil
DFZCapitalBerhad(“DFZ”)**** 68 82 Investmentholding
Darul Metro Sdn. Bhd. 76 82 Dormant
Orchard Boulevard Sdn. Bhd. 76 82 Investment holding and resort development
held through dFZ
DFZTradingSdn.Bhd. 68 82 Investmentholdingand management services
SelasihEkslusifSdn.Bhd. 68 82 Retailerofdutyfreeand non-dutiable merchandise
WinnerPromptSdn.Bhd. 68 82 Licenseddistributorand wholesaler of duty free merchandise
EmasKerajangSdn.Bhd.@ 48 57 Retailerofdutyfreeand non-dutiable merchandise
SeruntunMajuSdn.Bhd.@ 48 57 Retailerofdutyfreeand non-dutiable merchandise
notes to the financial statements (cont’d.)
128
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
17. investment in subsidiaries (cont’d.)
(a) Details of the subsidiaries, which were incorporated in Malaysia (unless otherwise indicated), as at 28 February2017,areasfollows:(cont’d.)
Proportion of ownership interest name of company in ordinary shares Principal activities 2017 2016 % %
held through orchard boulevard sdn. bhd.
GoldValeDevelopment 76 82 Dormant Sdn. Bhd.
Kelana Megah Sdn. Bhd. 76 82 Dormant
CergasjayaProperties 76 82 Resortdevelopment,properties Sdn. Bhd. management and cultivation of oil palm
BlackForestGolfAndCountry 76 82 Dormant Club Sdn. Bhd.
Binamold Sdn. Bhd. 76 82 Property investment
Tenggara Senandung Sdn. Bhd. 76 82 Dormant
DFZAsiaSdn.Bhd. 76 82 Investmentholding
MediaZoneSdn.Bhd.*** – 82 Dormant
FirstInfluxSdn.Bhd.*** – 82 Dormant
FrontTop(M)Sdn.Bhd.*** – 82 Dormant
PTDFZIndon 75 81 Dormant (Incorporated in RepublicofIndonesia)#
held through dFZ trading sdn. bhd.
CergasjayaSdn.Bhd. 68 82 Wholesalerandretailerofduty free and non-dutiable merchandise
MelakaDutyFreeSdn.Bhd. 35 42 Retailerofdutyfreeandnon- dutiable merchandise
129
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
17. investment in subsidiaries (cont’d.)
(a) Details of the subsidiaries, which were incorporated in Malaysia (unless otherwise indicated), as at 28 February2017,areasfollows:(cont’d.)
Proportion of ownership interest name of company in ordinary shares Principal activities 2017 2016 % %
held through dFZ trading sdn. bhd. (cont’d.) DFZDutyFreeSupplies 68 82 Wholesaleranddistributorof Sdn. Bhd. duty free and non-dutiable merchandise
JasaDutyFreeSdn.Bhd. 68 82 Retailerofdutyfreeand non-dutiable merchandise
DFZEmporiumSdn.Bhd.@ 20 24 Retailerofdutyfreeand non-dutiable merchandise
DFZ(M)Sdn.Bhd.@ 48 57 Retailerofdutyfreeand non-dutiable merchandise
WealthouseSdn.Bhd.@ 20 23 Retailerofdutyfreeand non-dutiable merchandise
JelitaDutyFreeSupplies 68 82 Wholesaleranddistributorof Sdn. Bhd. duty free and non-dutiable Merchandise
DFZDutyFree(Langkawi) 68 82 Retailerofdutyfreeand Sdn. Bhd. non-dutiable merchandise
ZonEmporiumSdn.Bhd. 68 82 Retailerofdutyfreeand non-dutiable merchandise
DFZUtaraSdn.Bhd. 68 82 Dormant
held through dFZ asia sdn. bhd.
PTDFZIndon 1 1 Dormant (IncorporatedinRepublic of Indonesia)#
notes to the financial statements (cont’d.)
130
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
17. investment in subsidiaries (cont’d.)
(a) Details of the subsidiaries, which were incorporated in Malaysia (unless otherwise indicated), as at 28 February2017,areasfollows:(cont’d.)
Proportion of ownership interest name of company in ordinary shares Principal activities 2017 2016 % %
held through Uih
UnitedIndustriesSdn.Bhd. 100 100 Manufacturingandmarketing ofexhaustsystemsandother automotive component parts
UnitedSanohIndustries 70 70 Manufacturinganddistribution Sdn. Bhd. of brake, fuel, other automotive component parts and clutch tubings
held through United industries sdn. bhd.
UEWPlasticIndustries 100 100 Dormant Sdn. Bhd.
FreighterIndustries(M) 100 100 Dormant Sdn. Bhd.
Danco Marketing Sdn. Bhd. 100 100 Dormant
held through Uih and United industries sdn. bhd.
UnitedVehiclesIndustries 100 100 Manufacturingandmarketing Sdn. Bhd. of fuel tanks, other automotive component parts and wheelbarrows
UnitedFilterSdn.Bhd. 97 97 Dormant
held through United Vehicles industries sdn. bhd.
Kadar Prisma Sdn. Bhd. 100 100 Dormant
UVIAdvanceTechnology 100 100 Dormant Sdn. Bhd.
131
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
17. investment in subsidiaries (cont’d.)
(a) Details of the subsidiaries, which were incorporated in Malaysia (unless otherwise indicated), as at 28 February2017,areasfollows:(cont’d.)
+ AcorporationlistedonSingaporeStockExchange(“SGX-ST”)^ AuditedbymemberfirmofErnst&YoungGlobalinSingapore# AuditedbyafirmotherthanErnst&Young@ The termsofnon-votingConvertibleRedeemablePreferenceShareshas led to the totaleffective
ownership interest held as shown below:
total effective ownership interest held
2017 2016 % %
name of company EmasKerajangSdn.Bhd. 68 82Seruntun Maju Sdn. Bhd. 68 82DFZEmporiumSdn.Bhd. 68 82DFZ(M)Sdn.Bhd. 68 82WealthouseSdn.Bhd. 68 82
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.
* Companywasstrikedoffwitheffectfrom27February2017** CompanywasplacedunderStrikeOffsincefinancialyearended29February2016*** Companywaswindingupduringthefinancialyear**** Disposalof10%equityinterestplusoneshareinDFZtoHeinemannAsiaPacificPte.Ltd.(“HAP”)
foranaggregatecashconsiderationofEUR19,700,000assetoutinNote42(g)
The persons who are directors of the subsidiary companies of the Company during the year (not including the Company’s directors) are:
GeneralTanSriDato’SeriMohdAzumiBinMohamed(Retired)Dato’ Megat Hisham Bin Megat MahmudChew Soo LinY.A.M.Dato’SeriSharifahFaziraBtDYMMSyedSirajuddin(F)HoYuetLeng(F)MaxBorriesClausHeinemannMarvinChristianVonPlatoDato’ Mohamed Suhaimi Bin SulaimanDatukHajiMohdRadzuanBinAbdullahMasahito AdachiTadayoshi MizukamiDato’WongThienSangMamat Bin SamatRoslyBinAhmadAhmad Shaker Bin AhmadAhmadZubirBinKhalidRajaMuzafarBinRajaHassanChuah Teck Tiong
notes to the financial statements (cont’d.)
132
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
17. investment in subsidiaries (cont’d.)
(b) Subsidiaries with material non-controlling interests
TheGroupregardsDFILanditssubsidiaries(“DFILGroup”)andUnitedSanohIndustriesSdn.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:
dFil group Usisb 2017 2016 2017 2016 % % % %
Equityinterestheldby non-controlling interests 24 18 30 30
ThesummarisedfinancialinformationofDFILGroupandUSISBissetoutbelow.Theinformationpresentedbelow is based on the amounts before inter-company elimination.
(i) Summarised statements of financial position
dFil group Usisb 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000 (restated)
Non-current assets 177,132 187,831 7,458 6,703Current assets 544,412 423,821 49,268 34,146
Total assets 721,544 611,652 56,726 40,849
Current liabilities 163,782 192,395 22,068 10,905Non-current liabilities 5,465 17,450 1,782 1,328
Total liabilities 169,247 209,845 23,850 12,233
Net assets 552,297 401,807 32,876 28,616
Equityattributableto owners of the company 406,241 330,564 23,013 20,031Non-controlling interests 146,056 71,243 9,863 8,585
552,297 401,807 32,876 28,616
133
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
17. investment in subsidiaries (cont’d.)
(b) Subsidiaries with material non-controlling interests (cont’d.)
(ii) Summarised statements of comprehensive income
dFil group Usisb 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000 (restated)
Revenue 632,588 604,508 64,391 59,841
Profit for the year 76,966 61,659 3,897 5,740
Profit attributable to: Owners of the company 55,118 50,804 2,728 4,018 Non-controlling interests 21,848 10,855 1,169 1,722
76,966 61,659 3,897 5,740
Other comphensive income not to be reclassified to profit or loss in subsequent period -Remeasurementgain on defined benefit plans – – 471 – -Incometaxeffect – – (113) –
Total comprehensive income 76,966 61,659 4,255 5,740
Total comprehensive income attributable to:Owners of the company 55,118 50,804 2,979 4,018Non-controlling interests 21,848 10,855 1,276 1,722
76,966 61,659 4,255 5,740
Dividends paid to non-controlling interests 24,137 8,730 – 270
notes to the financial statements (cont’d.)
134
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
17. investment in subsidiaries (cont’d.)
(b) Subsidiaries with material non-controlling interests (cont’d.)
(iii) Summarised statements of cash flows
dFil group Usisb 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000 (restated)
Net cash generated from/(usedin): - Operating activities 123,377 12,194 1,520 8,453 - Investing activities 1,348 6,471 (1,978) (1,396) -Financingactivities 91,730 (45,695) (1,792) (2,238)
Netincrease/(decrease) in cash and cash equivalents 216,455 (27,030) (2,250) 4,819Effectsofforeign exchangeratechanges 6,243 9 – –Cash and cash equivalents at beginning of the year 38,818 65,839 13,196 8,377
Cash and cash equivalents at end of the year 261,516 38,818 10,946 13,196
(c) Impairment loss recognised
The management of the Company has carried out a review of the recoverable amount of its investment in subsidiaries.ThereviewhasledtotheretentionoftheimpairmentlossofRM37,680,000recognisedintheprior years’ profit or loss. The recoverable amount was based on the value-in-use calculation using cash flow projections based on the financial budgets approved by management covering a five-year period.
135
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
18. investment in associate
group company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000
UnquotedsharesinMalaysia,atcost 437 437 437 437Shares of post acquisition results 126 107 – –
563 544 437 437
Representedby:Share of net assets of associate 563 544 437 437
The particulars of the associate, which is incorporated in Malaysia, are as follows:
Proportion ofname of company ownership interest 2017 2016 Principal activities % % 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 andtheunauditedmanagementfinancialstatementsoftheassociatemadeuptoperiodended28February2017.
The associate requires the parent’s consent to distribute its profits. The parent does not foresee giving such consent at the reporting date.
Theassociatehadnocontingentliabilitiesorcapitalcommitmentsasat28February2017or29February2016.
notes to the financial statements (cont’d.)
136
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
18. investment in associate (cont’d.) 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 2017 2016 rM’000 rM’000 Non-current assets 348 348Current assets 3,669 3,137
Total assets 4,017 3,485
Current liabilities, representing total liabilities 1,765 1,309
Net assets 2,252 2,176
(b) Summarised statements of comprehensive income
group 2017 2016 rM’000 rM’000 Revenue 9,210 7,538Profitbeforetax 76 155Profitnetoftax,representingtotalcomprehensiveincome 76 155
(c) Reconciliationof thesummarisedfinancial informationpresentedaboveto thecarryingamountof theGroup’s interest in the associate
group 2017 2016 rM’000 rM’000 Net assets at beginning of the year 2,176 2,021Profitnetoftax 76 155
Net assets at end of the year 2,252 2,176
Interest in the associate 25% 25% Carrying value of Group’s interest in the associate 563 544
137
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
19. other investments
group 2017 2016 rM’000 rM’000 Unquotedsharesatcost - in Malaysia 21 21 - outside Malaysia 3,688 3,688
3,709 3,709Less: Accumulated impairment losses (3,688) (3,688)
21 21Corporate golf club and vacation club memberships at cost 125 125Less: Accumulated amortisation (16) (16)
130 130
20. Prepayments
group company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000
currentPrepaid rental 9,780 9,840 – –Prepaidotheroperatingexpenses 2,549 2,420 10 11
12,329 12,260 10 11
non-currentPrepaid rental 49,270 59,050 – –
total prepayments 61,599 71,310 10 11
Amount to be charged out to profit or loss: - Not later than 1 year 12,329 12,260 10 11 - Later than 1 year but not later than 5 years 39,122 39,122 – – - Later than 5 years 10,148 19,928 – –
61,599 71,310 10 11
IncludedintheprepaidrentalisthebalancerentalpaidinadvancebytheGrouptoBerjayaWaterfrontSdn.Bhd.amountingtoRM53,167,000(2016:RM61,967,000).
notes to the financial statements (cont’d.)
138
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
21. deferred tax
group 2017 2016 rM’000 rM’000 At beginning of the year 5,550 6,284Recognisedinprofitorloss (451) (734)Recognisedinequity 390 –
At end of the year 5,489 5,550
Presented after appropriate offsetting as follows:
Deferredtaxassets (1,734) (948)Deferredtaxliabilities 7,223 6,498
5,489 5,550
Thecomponentsandmovementsofdeferredtaxliabilitiesandassetsduringtheyearpriortooffsettingareasfollows:
deferred tax liabilities of the group:
Property, plant and equipment rM’000 At 1 March 2015 7,971Recognisedinprofitorloss (495)
At29February2016 7,476
At 1 March 2016 7,476Recognisedinprofitorloss 1,779
At28February2017 9,255
139
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
21. deferred tax (cont’d.)
deferred tax assets of the group:
Unutilised tax losses and unabsorbed capital allowances others total rM’000 rM’000 rM’000 At 1 March 2015 (192) (1,495) (1,687)Recognisedinprofitorloss (171) (68) (239)
At29February2016 (363) (1,563) (1,926)
At 1 March 2016 (363) (1,563) (1,926)Recognisedinprofitorloss (436) (1,794) (2,230)Recognisedinequity – 390 390
At28February2017 (799) (2,967) (3,766)
Deferredtaxassetshavenotbeenrecognisedinrespectofthefollowingitems:
group company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000
Unabsorbedcapitalallowances 55,817 54,681 818 818Unabsorbedreinvestmentallowances 119,556 119,556 – –Unutilisedtaxlosses 232,992 232,248 – –Other deductible temporary differences 9,818 9,136 – –
418,183 415,621 818 818
Deferredtaxassetshavenotbeenrecognisedinrespectoftheseitemsastheymaynotbeusedtooffsettaxableprofits of other subsidiaries in the Group and they have been risen in subsidiaries that have insufficient profits to fullyutilisetheseunabsorbedcapitalallowances,unabsorbedreinvestmentallowances,unutilisedtaxlossesandother deductible temporary differences in the foreseeable future.
Thedeferredtaxassetsattributabletounabsorbedcapitalallowances,unabsorbedreinvestmentallowancesandunutilisedtaxlossesareavailableforoffsettingagainstfuturetaxableprofitssubjecttonosubstantialchangeinshareholdingsundertheIncomeTaxAct,1967andguidelinesissuedbythetaxauthority.
notes to the financial statements (cont’d.)
140
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
22. inventories
group 2017 2016 rM’000 rM’000 cost Foodandbeverages 30 2Rawmaterials 24,049 14,696Workinprogress 3,302 3,470Trading goods 199,827 296,981Finishedgoods 2,672 2,910Inventory property 13,665 13,665Consumables 158 184
243,703 331,908
Duringtheyear,theamountofinventoriesrecognisedasanexpenseintheincomestatementswasRM527,931,000
(2016:RM490,698,000).
23. biological assets
group 28.2.2017 29.2.2016 1.3.2015 rM’000 rM’000 rM’000 (restated) (restated)at fair value At beginning of the year 182 99 –Gain arising from changes in fair value (Note 5) 5 83 99
At end of the year 187 182 99
Matureoilpalmtreesproducefreshfruitbunches(“FFB”),whichareusedtoproduceCrudePalmOil(“CPO”)andPalmKernel(“PK”).ThegroupadoptedtheAmendmentstoMFRS116andMFRS141on1March2016,which changed the accounting requirements for biological assets. Bearer plant will now fall within the scope of MFRS116Property,PlantandEquipmentwhereasagriculturalproducegrowingonbearertrees(e.g.fruitgrowingonatree)willremainwithinthescopeofMFRS141Agriculture.Thefairvaluesofbearerfruitsaredeterminedby using the total sales figure in the following month with the assumptions of all the fruits harvested are sold subsequently to the customer.
Duringtheyear,theGroup’sbearerfruitsproducedapproximately2,200tonnes(2016:3,600tonnes)ofFFB.ThesellingpricespertonneforthoseFFBrangedbetweenRM2,300toRM3,500(2016:RM1,300toRM2,700).ThesellingpricespertonneforthoseFFBarebasedonacalculationusingtheperiodicmarketpricesofCPOandPKandcontractedpre-determinedextractionratesofCPOandPKasagreedwiththebuyerofFFBcrop.
141
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
24. trade and other receivables
group company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000
currenttrade receivablesThird parties 40,762 29,193 – –Less: Allowance for impairment (573) (582) – –
Trade receivables, net 40,189 28,611 – –
other receivablesDue from subsidiaries – – 96,036 101,630Less: Allowance for impairment – – (53,792) (51,367)
– – 42,244 50,263
Deposits 4,497 4,564 3 3DuefromBerjayaWaterfront Sdn. Bhd. 40,434 40,444 – –Sundry receivables 4,461 6,821 – –GoodsandServicesTax (“GST”) receivable 3,873 4,480 – –
53,265 56,309 3 3Less: Allowance for impairment (604) (604) – –
Other receivables, net 52,661 55,705 3 3
Total current trade and other receivables, net 92,850 84,316 42,247 50,266
Total trade and other receivables 92,850 84,316 42,247 50,266Less: GST receivable (3,873) (4,480) – –
Total trade and other receivables excludingGSTreceivable 88,977 79,836 42,247 50,266Add: Cash and bank balances (Note 27) 303,151 84,185 11,448 12,097
Total loans and receivables 392,128 164,021 53,695 62,363
Trade receivables
Trade receivables are non-interest bearing and are generally on 14 to 120-days (2016: 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.
notes to the financial statements (cont’d.)
142
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
24. trade and other receivables (cont’d.)
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 2017 2016 rM’000 rM’000
Interest bearing 41,786 47,923Non-interest bearing 458 2,340
Total 42,244 50,263
The effective interest is 5.0% (2016: 5.0%) per annum.
DuefromBerjayaWaterfrontSdn.Bhd.(“BerjayaWaterfront”)
TheamountduefromBerjayaWaterfrontisrelatedtotheuncollectedportionofthesaleconsiderationfortheGroup’sinterestsoverleaseholdpropertiesinTheZonJohorBahru,whichwascompletedinMarch2013.Thisbalance had been subject to interest throughout the term that the balance was outstanding. The interest rate was initially at 6% per annum, but this has been revised to 9% per annum from 16 July 2015 onwards. In April 2017, DarulMetroSdn.Bhd.(“DMSB”)receivedRM0.9million,beingaccruedinterestupto15April2017.
ThebalanceofRM40.0millionwasscheduledtobedueon15April2017.Subsequenttoyearend,bothpartieshadmutuallyagreedthatBerjayaWaterfrontshallpaytheremainingdeferredconsiderationofRM40.0milliononorbefore15April2018andBerjayaWaterfrontwillcontinuetopayinterestattherateof9%perannumonunpaid consideration on quarterly basis.
TheamountisguaranteedbyBerjayaWaterfront’sholdingcompany.
Ageing analysis of trade receivables
The ageing analysis of the Group’s trade receivables is as follows:
group 2017 2016 rM’000 rM’000 Neither past due nor impaired 26,616 18,882
1 to 30 days past due not impaired 7,936 6,20431 to 60 days past due not impaired 2,933 1,59561 to 90 days past due not impaired 1,488 1,42891 to 120 days past due not impaired 1,032 406More than 120 days past due not impaired 184 96
Past due but not impaired 13,573 9,729Impaired 573 582
40,762 29,193
143
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
24. trade and other receivables (cont’d.) Receivablesthatareneitherpastduenorimpaired
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
TheGrouphas tradereceivablesamountingtoRM13,573,000(2016:RM9,729,000) thatarepastdueat thereporting 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 2017 2016 rM’000 rM’000
individually impaired Trade receivables - nominal amounts 573 582Less: Allowance for impairment (573) (582)
– –
Movement in allowance accounts:
group 2017 2016 rM’000 rM’000 At beginning of the year 582 525Charge for the year 24 332Writtenoff (33) –Reversalofimpairmentlosses – (275)
At end of the year 573 582
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.
notes to the financial statements (cont’d.)
144
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
24. trade and other receivables (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 2017 2016 rM’000 rM’000
individually impairedSundry receivables - nominal amounts 604 604Less: Allowance for impairment (604) (604)
– –
company 2017 2016 rM’000 rM’000
individually not impaired Due from subsidiaries 33,511 37,883individually impaired Due from subsidiaries - nominal amounts 62,525 63,747
96,036 101,630Less: Allowance for impairment (53,792) (51,367)
42,244 50,263
Movement in allowance accounts:
group company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000
At beginning of the year 604 556 51,367 46,973Charge for the year – 48 2,425 4,470Reversal* – – – (76)
At end of the year 604 604 53,792 51,367
* Theimpairmentlossontheamountsduefromsubsidiarieswasreversedduringthefinancialyearasthesubsidiaries were able to repay their obligations.
Sundry receivables that are individually determined to be impaired at the reporting date relate to debtors that are in legal 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.
145
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
25. Marketable securities
group and company 2017 2016
Market value Market value carrying of quoted carrying of quoted amount investments amount investments rM’000 rM’000 rM’000 rM’000
Held for trading investmentsEquityinstruments - Quoted outside Malaysia 11 11 9 9
Changes in fair value
During the financial year, the Group and the Company have recognised a decrease in fair value amounting to RM191,000(2016:decreaseofRM472,000)andRM191,000(2016:decreaseofRM472,000),respectivelywithregards to the equity instruments.
26. derivative assets and liabilities
notional amount assets liabilities rM’000 rM’000 rM’000
group
at 28 February 2017
Forwardcurrencycontracts 23,377 3 13Call options 8,993 – 8,993
3 9,006
at 29 February 2016 Forwardcurrencycontracts 115,122 – 1,632
TheGroupusesforwardforeigncurrencycontractstomanagesomeofitstransactionexposure.Thesecontractsare not designated as cash flow or fair value hedges and are entered into for periods consistent with currency translationexposureandfairvaluechangesexposure.Suchderivativesdonotqualifyforhedgeaccounting.Thederivatives represent total financial assets and liabilities at fair value through profit or loss, classified held for trading.
The call options was in relation to the fair value of call options issued which gives HAP the option to acquire a maximumof15%additionalequityinterestinDFZ,asubsidiaryoftheCompanyassetoutinNote42(g).
notes to the financial statements (cont’d.)
146
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
27. cash and bank balances
group company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000
Cash on hand and at banks 105,723 36,966 4,171 4,037Deposits with licensed banks 197,428 47,219 7,277 8,060
303,151 84,185 11,448 12,097
Cash at banks earns interest at floating rates based on daily bank deposit rates. Deposits with licensed banks are made for varying periods of between one day and one year depending on the immediate cash requirements of the Group and of the Company, and earn interest at the respective deposit rates. The effective interest rates for the Group and the Company were 2.50% to 5.32% (2016: 2.16% to 4.33%) per annum and 2.60% to 3.95% (2016: 2.75% to 3.95%) per annum, respectively.
DepositswithlicensedbanksoftheGroupamountingtoRM13,678,000(2016:RM13,461,000)arepledgedtobanks for credit facilities granted to certain subsidiaries as disclosed in Note 31.
For thepurposeof thestatementsofcashflows,cashandcashequivalentscomprise the followingasat thereporting date:
group company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000 Cash on hand and at banks 105,723 36,966 4,171 4,037Deposits with licensed banks 197,428 47,219 7,277 8,060
303,151 84,185 11,448 12,097Deposits pledged with licensed banks (13,678) (13,461) – –
Cash and cash equivalents 289,473 70,724 11,448 12,097
147
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
28. trade and other payables
group company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000
trade payablesThird parties 103,706 139,608 – –Retentionsums 1 3 – –
103,707 139,611 – –
other payablesDue to subsidiaries – – 174,874 174,989Sundry payables 9,420 7,976 909 1,084Goods and Services Tax(“GST”)payable 1,297 654 – –Accruals 21,467 17,960 357 –Deposits payable 4,418 4,540 – –Rentalpayable 1,589 714 – –Royaltypayable 542 28 – –Deposits received for proposed disposals 560 560 – –Contribution cost payable 209 513 – –
39,502 32,945 176,140 176,073
Total trade and other payables 143,209 172,556 176,140 176,073
Total trade and other payables 143,209 172,556 176,140 176,073Less: GST payable (1,297) (654) – –
Total trade and other payables excludingGSTpayable 141,912 171,902 176,140 176,073Add: Borrowings (Note 31) 72,188 117,580 55,000 60,000
Total financial liabilities carried at amortised cost 214,100 289,482 231,140 236,073
Trade payables
The amounts are non-interest bearing. The credit terms of trade payables normally range from 30 to 120 days (2016: 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 (2016: 30 to 120 days).
notes to the financial statements (cont’d.)
148
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
29. Provisions
group 2017 2016 rM’000 rM’000
Provision for guarantees 14,557 14,296
The movements of provisions are as follows:
group 2017 2016 rM’000 rM’000 At beginning of the year 14,296 12,540Unrealisedforeignexchangedifference 261 1,756
At end of the year 14,557 14,296
TheseguaranteesaredenominatedinDeutschemarkwhichareequivalenttoEuro3.1million(2016:Euro3.1million) in respect of credit facilities granted by the Group with a financial institution to ACL Advanced Cargo Logistic GmbH, a former subsidiary company of the Group, now an investment company of the Group.
30. employee benefits
The Group’s defined benefit plan is unfunded and it provides retirement benefits for employees upon retirement on the account of medical grounds and for employees who pass away while under employment. The retirement benefitsareonlyapplicabletoemployeeswhoareintheNationalUnionofTransportEquipmentandAlliedIndustriesWorkers.
Undertheplan,eligibleemployeesareentitledtoretirementbenefitsofone,two,threeandfourweeks’oflastdrawnsalarybasedonthelengthofserviceupontheageof60.Eligibleemployeesalsohavetheoptiontoretireat the age of 50.
Thelastactuarialvaluationreportdated16June2015wasissuedbyanindependentvalueroftheFellowoftheInstitute of Actuaries.
149
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
30. employee benefits (cont’d.)
(a) The amounts recognised in the statements of financial position are determined as follows:
group 2017 2016 rM’000 rM’000 Present value of unfunded defined benefit obligations 6,247 7,284
analysed as: Current 22 302
Non-current: Later than 1 year but not later than 2 years 27 302Later than 2 years but not later than 5 years 849 1,015Later than 5 years 5,349 5,665
6,225 6,982
Total employee benefits 6,247 7,284
(b) Movement in the net liability recognised in the statements of financial position:
group 2017 2016 rM’000 rM’000 At beginning of the year 7,284 6,908Expenserecognisedintheprofitorloss 695 638Remeasurementeffectsrecognisedinother comprehensive income (1,626) –Benefits paid (106) (262)
At end of the year 6,247 7,284
(c) The amounts recognised in the income statements:
group 2017 2016 rM’000 rM’000
Current service cost 370 348Interest on obligation 325 290
Total,includedinemployeebenefitsexpense(Note6) 695 638
notes to the financial statements (cont’d.)
150
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
30. employee benefits (cont’d.)
(d) Principalactuarialassumptionsusedatthereportingdate(expressedasweightedaverages):
group 2017 2016 % % Discount rate 5.5 5.5Futuresalaryincrease 5.5 5.5Price inflation 3.5 3.5
(e) Aquantitativesensitivityanalysisofthechangeintheratesasat28February2017and29February2016is shown below:
group 2017 2016 impact on impact on defined defined increase/ benefit benefit (decrease) obligations obligations % rM’000 rM’000
Discount rate 1.0 (791) (666)Futuresalaryincrease 1.0 944 785
Discount rate (1.0) 936 793Futuresalaryincrease (1.0) (797) (672)
(f) Theexpectedbenefitpaymentsinfutureyearsareasfollows:
group 2017 2016 rM’000 rM’000
Not later than 1 year 22 18Later than 1 year and not later than 5 years 876 207Later than 5 years and not later than 10 years 3,332 2,411
4,230 2,636
(g) Thedurationofthedefinedbenefitplanobligationsasat28February2017isbetween12.1and17.6years(2016: between 12.1 and 17.6 years).
151
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
31. borrowings
group company Maturity 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000 currentSecured:Obligations under finance leases 2018 831 804 – –Bankers’ acceptances 2018 13,489 30,070 – –USDtradeloans – – 9,247 – –Term loans- term loan 2018 5,000 5,000 5,000 5,000- islamic term loan 2018 237 – – –- loan at effective cost of funds + 1.50% per annum – – 4,000 – –Interest payable – – 31 – –
19,557 49,152 5,000 5,000
non–currentSecured:Obligations under 2019 – finance leases 2022 1,368 1,428 – –Term loans- term loan 2019 – 2023 50,000 55,000 50,000 55,000- islamic term loan 2019 – 2022 1,263 – – –- loan at effective cost of funds + 1.50% per annum – – 12,000 – –
52,631 68,428 50,000 55,000
Total borrowings 72,188 117,580 55,000 60,000
total borrowingsObligations under finance leases (Note 32) 2,199 2,232 – –Bankers’ acceptances 13,489 30,070 – –USDtradeloans – 9,247 – –Term loans 56,500 76,000 55,000 60,000
72,188 117,549 55,000 60,000Interest payable – 31 – –
Total borrowings 72,188 117,580 55,000 60,000
notes to the financial statements (cont’d.)
152
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
31. borrowings (cont’d.)
group company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000
Maturity of borrowings (excluding obligations under finance leases)Not later than 1 year 18,726 48,348 5,000 5,000Later than 1 year and not later than 5 years 41,263 57,000 40,000 45,000More than 5 years 10,000 10,000 10,000 10,000
69,989 115,348 55,000 60,000
The borrowings are secured by way of:
- fixedchargesoncertainpropertiesof theGroupwithanetcarryingamountofRM84,136,000 (2016:RM85,043,000);
- depositswithlicensedbanksoftheGroupamountingtoRM13,678,000(2016:RM13,461,000);- fixedandfloatingchargesoverallpresentandfutureassetsofcertainsubsidiaries;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 2.00% to 3.85% (2016: 2.7% to 3.9%) per annum.
Bankers’ acceptances
Bankers’ acceptances bear interest rates which range from 3.60% to 4.25% (2016: 3.77% to 4.40%) per annum.
USDtradeloans
The average interest rates for the loans range from 1.95% to 2.35% per annum in prior financial year. The loans had been fully repaid during the financial year.
Loan at effective cost of funds + 1.50% per annum
ThisloanissecuredbyacorporateguaranteefromasubsidiaryofRM20,000,000andisrepayablein20quarterlyrepayments commencing March 2015. The average interest rate for the loan is 5.23% per annum in prior financial year. The loan had been fully repaid during the financial year.
Term loan
TermloanbearsinterestrateatBLR-0.50%perannum.Thetermloanissecuredbycertaininvestmentpropertiesof the Group.
Islamic term loan
IslamictermloanbearsinterestrateatBFR-1.50%perannum.Thetermloanissecuredbycertainpropertiesofthe Group and corporate guarantee by the Company.
153
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
32. obligations under finance leases
group 2017 2016 rM’000 rM’000 Future minimum lease payments:
Not later than 1 year 935 921Later than 1 year and not later than 5 years 1,465 1,539
Total future minimum lease payments 2,400 2,460Less:Futurefinancecharges (201) (228)
Present value of finance lease liabilities (Note 31) 2,199 2,232
analysis of present value of finance lease liabilities:
Not later than 1 year 831 804Later than 1 year and not later than 5 years 1,368 1,428
2,199 2,232Less: Amount due within 12 months (831) (804)
Amount due after 12 months 1,368 1,428
33. share capital and share premium
total share share capital capital and (issued and share share fully paid) premium premium rM’000 rM’000 rM’000group and company
At1March2015and29February2016 253,650 102,878 356,528
At 1 March 2016 253,650 102,878 356,528Adjustment for effects of Companies Act 2016 102,878 (102,878) –
At28February2017 356,528 – 356,528
notes to the financial statements (cont’d.)
154
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
33. share capital and share premium (cont’d.)
Theholdersofordinaryshares(excepttreasuryshares)areentitledtoreceivedividendsasandwhendeclaredbythe Company. All ordinary shares carry one vote per share without restrictions and rank equally with regard to the Company residual assets.
Share premium
Sharepremiumrepresentstheexcessofconsiderationreceivedfromtheissueofsharesoverthenominal(par)value, which is based on the Companies Act, 1965 (Malaysia). On 31 January 2017, the Companies Act 2016 came into force. As a result, the share premium was reclassified under share capital balances.
34. other reserve
Other reserve arises from changes in the Group’s equity interest in subsidiaries.
group 2017 2016 rM’000 rM’000 At beginning of the year (32,560) (32,567)Changes of equity interest in a subsidiary: - Dilution of equity interest in a subsidiary 601 7Shareissuanceexpenses (100) –
At end of the year (32,059) (32,560)
Thedilutionofequity interest inasubsidiarywasdue to the issuanceofadditionalDFILshares to thenon-
controlling interests.
Withthetransactionsabove,theCompany’sequityinterestinDFILremainsat75.78%(2016:82.29%)asat28February2017.
35. retained earnings
TheCompanymaydistributedividendsoutofitsentireretainedearningsasat28February2017underthesingletier system.
155
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
36. commitments
(a) capital commitments
group 2017 2016 rM’000 rM’000
Capital expenditure Approved and contracted for: Property, plant and equipment 1,500 671 Approved but not contracted for: Property, plant and equipment 5,451 13,512
6,951 14,183
(b) non-cancellable operating lease commitments – as lessee
Futureminimumrentalspayableundernon-cancellableoperatingleases(excludinglanduserights)atthereporting date are as follows:
group 2017 2016 rM’000 rM’000 Not later than 1 year 216 216Later than 1 year but not later than 5 years 864 864Laterthan5years* 164,528 164,744
165,608 165,824
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 expiringin2038forapieceofpropertyleasedbyasubsidiary,NaluriPropertiesSdn.Bhd.(“NPSB”).NPSBhasanoptiontorenewtheleaseforanother30yearsaftertheexpiryofthelease.Shouldtheleaseberenewed, the additional lease payments for the renewal period, which is not included in the above would amounttoRM7.2million.
* Thisincludesnon-cancellableoperatingleasecommitmentofRM161million(2016:RM161million)ofasubsidiary,SelasihEkslusifSdn.Bhd..
notes to the financial statements (cont’d.)
156
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
37. related party disclosures
(a) significant transactions
(i) In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between the Group, the Company and related parties took place at terms agreed between the parties during the financial year:
group company
2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000
Dividend income from subsidiaries – – 70,049 40,551DonationtoYayasan Harmoni* 3,500 3,000 300 300Purchases from HAP 122,008 – – –Managementfeepaid/ payable to HAP 1,185 – – –Ad-spacerentalreceived/ receivable from HAP 1,173 – – –Reimbursementof costs from HAP 1,583 – – –Interest income from subsidiaries – – 2,250 2,735Management fee charged by a subsidiary – – 630 600
* Dato’SriAdamSaniBinAbdullahisthefounderandexecutivechairmanofYayasanHarmoni,a non-profitable non-government organisation.
(b) compensation of key management personnel
The remuneration of certain directors and other members of key management during the year were as follows:
group 2017 2016 rM’000 rM’000
Short-term employee benefits 7,132 4,123Defined contribution plan 400 520
7,532 4,643
Included in short-term employee benefits in the financial year was the payment of retirement gratuity of
RM3,000,000(2016:RMNil)tolongserviceemployeewhoretiredfromtheGroup.
Included in the remuneration of total key management personnel are:
group 2017 2016 rM’000 rM’000 Directors’remuneration(excludingfees) 1,741 1,924
157
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
38. Fair value of assets and liabilities
(a) Fair value hierarchy
The Group classifies fair value measurement using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:
- Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;
- Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
- Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
(b) assets and liabilities measured at fair value
The following table shows an analysis of each class of assets and liabilities measured at fair value by level of fair value hierarchy:
level 1 level 2 level 3 total rM’000 rM’000 rM’000 rM’000 group
at 28 February 2017
Financial assets:Marketable securities 11 – – 11Derivatives assets-Forwardcurrencycontracts – 3 – 3
non-financial assets:Biological assets – – 187 187
Financial liabilities:Derivatives liabilities-Forwardcurrencycontracts – 13 – 13Call options – – 8,993 8,993
at 29 February 2016, restated
Financial assets:Marketable securities 9 – – 9
non-financial assets:Biological assets – – 182 182
Financial liabilities:Derivatives-Forwardforeignexchange contracts – 1,632 – 1,632
notes to the financial statements (cont’d.)
158
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
38. Fair value of assets and liabilities (cont’d.)
(b) assets and liabilities measured at fair value (cont’d.)
The following table shows an analysis of each class of assets and liabilities measured at fair value by level of fair value hierarchy: (cont’d.)
level 1 level 2 level 3 total rM’000 rM’000 rM’000 rM’000 company
at 28 February 2017
Financial assets:Marketable securities 11 – – 11
at 29 February 2016
Financial assets:Marketable securities 9 – – 9
(c) level 1 fair value measurements
Marketablesecurities(Note25):Fairvalueisdetermineddirectlybyreferencetotheirpublishedmarketbid price at the reporting date (Level 1).
(d) level 2 fair value measurements
Derivatives (Note26):Forwardcurrencycontractsarevaluedusingavaluation techniquewithmarketobservable 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 ofcounterparties,foreignexchangespotandforwardratesandinterestratecurves.
(e) level 3 fair value measurements
The following is a description of the fair value measurements using significant unobservable inputs (Level 3):
Biological assets: 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.
159
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
38. Fair value of assets and liabilities (cont’d.)
(e) level 3 fair value measurements (cont’d.)
Call options: The fair values of call 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:
Fair value as at Valuation Unobservable rangedescription 28 February 2017 techniques inputs (weighted rM’000 average)
Calloptions 8,993 BinomialTree Exerciseprice EUR0.9852 UnderlyingDFZ sharevalue EUR0.7884 Volatility 34.17% Riskfreerate 3.35% Dividend yield 9.47%
Sensitivity analysis for call options
In order to determine the effect of the above reasonably possible alternative assumptions, the Group adjusted the following key unobservable input used in the fair value measurement:
If the underlying share value had been increased by 10% with all other variables held constant, the fair valueofcalloptionswillincreasebyapproximatelyRM4.5millionasatendofyear.
(f) Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value
2017 2016 carrying Fair carrying Fair amount value amount value rM’000 rM’000 rM’000 rM’000 group
Obligations under finance leases (Note 32) 2,199 2,214 2,232 2,258
notes to the financial statements (cont’d.)
160
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
39. Financial risk management objectives and policies
TheGroupandtheCompanyareexposedtofinancialrisksarisingfromtheiroperationsandtheuseoffinancialinstruments. 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 areexecutedbytheGroupandbytheCompany.TheAuditCommitteeprovidesindependentoversighttotheeffectiveness 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 beundertakenexceptfortheuseashedginginstrumentswhereappropriateandcost-efficient.TheGroupandthe Company do not apply hedge accounting.
ThefollowingsectionsprovidedetailsregardingtheGroup’sandtheCompany’sexposuretotheabove-mentionedfinancial risks and the objectives, policies and processes for the management of these risks.
(a) credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s credit risk is primarily attributable to trade receivables.
The credit risk of the Group’s other financial assets, which comprise cash and cash equivalents, arises from defaultofthecounterparty,withamaximumexposureequaltothecarryingamountofthesefinancialassets.
The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased creditriskexposure.TheGrouptradesonlywithrecognisedandcreditworthythirdparties.ItistheGroup’spolicy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition,receivablebalancesaremonitoredonanon-goingbasiswiththeresultthattheGroup’sexposureto bad debts is not significant. Since the Group trades only with recognised and creditworthy third parties, there is no requirement for collateral.
TheGroupdoesnothaveanysignificantexposuretoanyindividualcustomerorcounterpartynordoesithave any major concentration of credit risk related to any financial assets.
Exposuretocreditrisk
Atthereportingdate,theGroup’sandtheCompany’smaximumexposuretocreditriskisrepresentedby:
- The carrying amount of each class of financial assets recognised in the statements of financial position.
- NominalamountofRM41,700,000(2016:RM40,200,000)relatingtocorporateguaranteesprovidedby the Company as securities for banking facilities to certain subsidiaries.
161
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
39. Financial risk management objectives and policies (cont’d.)
(a) credit risk (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 2017 2016
rM’000 % of total rM’000 % of total
by business segments:
Property and hospitality 302 1% 590 2%Trading of duty free goods and non-dutiable merchandise 6,522 16% 10,510 37%Automotive 33,365 83% 17,511 61%
40,189 100% 28,611 100%
Financialassetsthatareneitherpastduenorimpaired
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.
Financialassetsthatareeitherpastdueorimpaired
Information regarding financial assets that are either past due or impaired is disclosed in Note 24.
(b) liquidity risk
Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that refinancing, repayment and funding needs are met. As part of its overall liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group strives to maintain available banking facilities at a reasonable level to its overall debt position. As far as possible, the Group raises committed funding from both capital markets and financial institutions and balances its portfolio with some short term funding so as to achieve overall cost effectiveness.
analysis of financial instruments by remaining contractual maturities
The table below summarises the maturity profile of the Group’s and of the Company’s financial assets and liabilities at the reporting date based on contractual undiscounted repayment obligations.
notes to the financial statements (cont’d.)
162
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
39. Financial risk management objectives and policies (cont’d.)
(b) liquidity risk (cont’d.)
analysis of financial instruments by remaining contractual maturities (cont’d.)
2017 on demand or within one to More than one year five years five years total rM’000 rM’000 rM’000 rM’000
group
Financial assets:Trade and other receivables 88,977 – – 88,977Cash and bank balances 303,151 – – 303,151Derivatives assets 3 – – 3
Total undiscounted financial assets 392,131 – – 392,131
Financial liabilities:Trade and other payables 141,912 – – 141,912Derivatives liabilities 9,006 – – 9,006Borrowings 20,126 52,977 10,625 83,728
Total undiscounted financial liabilities 171,044 52,977 10,625 234,646
Total net undiscounted financial assets 221,087 (52,977) (10,625) 157,485
company
Financial assets:
Other receivables 42,247 – – 42,247Cash and bank balances 11,448 – – 11,448
Total undiscounted financial assets 53,695 – – 53,695
Financial liabilities:Other payables 176,140 – – 176,140Borrowing 5,313 50,000 10,625 65,938
Total undiscounted financial liabilities 181,453 50,000 10,625 242,078
Total net undiscounted financial liabilities (127,758) (50,000) (10,625) (188,383)
163
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
39. Financial risk management objectives and policies (cont’d.)
(b) liquidity risk (cont’d.)
analysis of financial instruments by remaining contractual maturities (cont’d.)
2016 on demand or within one to More than one year five years five years total rM’000 rM’000 rM’000 rM’000
group
Financial assets:Trade and other receivables 79,836 – – 79,836Cash and bank balances 84,185 – – 84,185
Total undiscounted financial assets 164,021 – – 164,021
Financial liabilities:Trade and other payables 171,902 – – 171,902Derivatives liabilities 1,632 – – 1,632Borrowings 50,277 69,925 10,635 130,837
Total undiscounted financial liabilities 223,811 69,925 10,635 304,371
Total net undiscounted financial liabilities (59,790) (69,925) (10,635) (140,350)
company
Financial assets:Other receivables 50,266 – – 50,266Cash and bank balances 12,097 – – 12,097
Total undiscounted financial assets 62,363 – – 62,363
Financial liabilities:Other payables 176,073 – – 176,073Borrowing 5,317 55,478 10,635 71,430
Total undiscounted financial liabilities 181,390 55,478 10,635 247,503
Total net undiscounted financial liabilities (119,027) (55,478) (10,635) (185,140)
notes to the financial statements (cont’d.)
164
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
39. Financial risk management objectives and policies (cont’d.)
(c) interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Group’s and of the Company’s financial instruments will fluctuate because of changes in market interest rates.
TheGroup’sandtheCompany’sexposuretointerestrateriskarisesprimarilyfrominterest-bearingborrowings.BorrowingsatfloatingratesexposetheGrouptocashflowinterestraterisk.BorrowingsobtainedatfixedratesexposetheGrouptofairvalueinterestraterisk.
TheGroupmanagesitsinterestrateexposurebymaintainingamixoffixedandfloatingrateborrowings.
Sensitivity analysis for interest rate risk
The table below demonstrates the sensitivity to a reasonably possible change in interest rates with all other variablesheldconstant,oftheGroup’sandoftheCompany’sprofitnetoftax(mainlythroughtheimpactoninterestexpenseonfloatingrateloansandborrowings).Theassumedmovementinthebasispointsforinterest rate sensitivity analysis is based on the currently observable market environment.
increase/ (decrease) effect on in basis profit net points of tax rM’000 group
28 February 2017 RinggitMalaysia +10 89RinggitMalaysia -10 (89)
29 February 2016 RinggitMalaysia +10 (39)UnitedStatesDollar +10 (7)
RinggitMalaysia -10 39UnitedStatesDollar -10 7
company 28 February 2017 RinggitMalaysia +10 (42)RinggitMalaysia -10 42
29 February 2016 RinggitMalaysia +10 (46)RinggitMalaysia -10 46
165
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
39. Financial risk management objectives and policies (cont’d.)
(d) Foreign currency risk
Foreigncurrencyriskistheriskthatthefairvalueorfuturecashflowsofafinancialinstrumentwillfluctuatebecauseofchangesinforeignexchangerates.
TheGrouphastransactionalcurrencyexposuresarisingfromsalesorpurchasesthataredenominatedinacurrencyotherthanthefunctionalcurrencyoftheoperationstowhichtheyrelate,primarilyUnitedStatesDollar(“USD”),SingaporeDollar(“SGD”),ThaiBaht(“THB”)andJapaneseYen(“JPY”).TheforeigncurrenciesinwhichthesetransactionsaredenominatedaremainlyUSDandJPY.Approximately52%(2016:55%)oftheGroup’spurchasesaredenominatedinforeigncurrencies.Foreigncurrencyexposuresintransactionalcurrencies other than functional currencies of the operating entities are kept to an acceptable level.
Atthereportingdate,theGrouphasshorttermborrowingsofRMNil(2016:RM9,247,000)whicharedenominatedinUSD.
Sensitivity analysis for foreign currency risk
ThefollowingtabledemonstratesthesensitivityoftheGroup’sprofitnetoftaxtoareasonablypossiblechangeintheUSD,SGD,THBandJPYexchangeratesagainsttherespectivefunctionalcurrenciesoftheGroup entities, with all other variables held constant.
group 2017 2016 rM’000 rM’000
USD/RM -strengthened3%(2016:3%) 3,863 (1,801) - weakened 3% (2016: 3%) (3,863) 1,801 SGD/RM -strengthened3%(2016:3%) 13 (131) - weakened 3% (2016: 3%) (13) 131 THB/RM -strengthened3%(2016:3%) (80) (29) - weakened 3% (2016: 3%) 80 29 JPY/RM -strengthened3%(2016:3%) (201) (111) - weakened 3% (2016: 3%) 201 111
(e) Market price risk
Market price risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuatebecauseofchangesinmarketprices(otherthaninterestorexchangerates).
TheGroupdoesnothaveexposuretocommoditypricerisk.
notes to the financial statements (cont’d.)
166
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
40. capital management
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthycapitalratiosinordertosupportitsbusinessandmaximiseshareholdervalue.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the year under review.
TheGroupmonitorscapitalusingagearingratio,whichistotalexternaldebtdividedbytotalcapital.
The Group ensures that the gearing ratio shall not be more than 2.0 times to comply with covenants from its borrowings.
TheGroupincludeswithintotalexternaldebt,allfinancialborrowingsoftheGroup.Totalexternaldebtdueandpayable 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.
group company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000 (restated)
Borrowings (non-current) 52,631 68,428 50,000 55,000Borrowings(currentexcluding term loans, i.e. due and payable within 12 months) 14,320 40,152 – –Borrowings (current - term loans) 5,237 9,000 5,000 5,000
Totalexternaldebt 72,188 117,580 55,000 60,000
Total equity 648,780 485,689 856,781 850,000
Gearing ratio (times) 0.11 0.24 0.06 0.07
167
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
41. segment information
(a) reporting format
The primary segment reporting format is determined to be business segments as the Group’s risks and rates of return are affected predominantly by differences in the products and services. The activities of the Group are carried out mainly in Malaysia and as such, segmental reporting by geographical locations is not presented. The operating businesses are organised and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.
(b) business segments
The Group comprises the following main business segments:
(i) Investment holding;
(ii) Property and hospitality;
(iii) Trading of duty free goods and non-dutiable merchandise; and
(iv) Automotive.
Other business segments mainly consist of provision of corporate services, dormant and inactive companies, none of which are of a sufficient size to be reported separately.
Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based onoperatingprofitorlosswhich,incertainrespectsasexplainedinthetablebelow,ismeasureddifferentlyfrom operating profit or loss in the consolidated financial statements. Group financing (including finance costs)andincometaxesaremanagedonagroupbasisandarenotallocatedtooperatingsegments.
(c) allocation basis and transfer pricing
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
The directors are of the opinion that transfer prices between business segments are based on negotiated prices.Segmentrevenue,expensesandresultsincludetransfersbetweenbusinesssegments.Thesetransfersare eliminated on consolidation.
notes to the financial statements (cont’d.)
168
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
41.
segm
ent
info
rmat
ion
(con
t’d.)
2017
tra
ding
of d
uty
free
Pe
r
Prop
erty
go
ods
and
adj
ustm
ents
cons
olid
ated
inve
stm
ent
and
non-
dutia
ble
and
finan
cial
h
oldi
ng
hos
pita
lity
m
erch
andi
se
aut
omot
ive
o
ther
s
elim
inat
ions
sta
tem
ents
rM
’000
r
M’0
00
rM
’000
r
M’0
00
rM
’000
r
M’0
00
not
e r
M’0
00
reve
nue:
Externalcustomers
1,63
628
,825
63
1,72
114
7,22
132
–
80
9,43
5In
ter-s
egm
ent
166,
768
480
– –
7,43
5 (1
74,6
83)
A
–
Tota
l rev
enue
16
8,40
4 29
,305
63
1,72
1 14
7,22
1 7,
467
(174
,683
)
809,
435
resu
lts:
Dep
reci
atio
n –
(6,0
33)
(4,1
84)
(5,5
04)
(817
) 30
(16,
508)
Am
ortis
atio
n of
land
use
righ
ts
– (4
65)
– –
– 16
(449
)G
ain
aris
ing
from
cha
nges
in
fair
valu
e of
bio
logi
cal a
sset
s –
5 –
– –
–
5G
ain
aris
ing
from
cha
nges
in
fair
valu
e of
opt
ions
4,
044
– –
– –
–
4,04
4Sh
are
of re
sults
of a
n as
soci
ate
19
–
– –
– –
19
Othernon
-cash(exp
enses)/in
come
(191
)(1)
(1,738
)(58)
––
B(1,988
)Se
gmen
tprofit/(loss)
106,45
37,01
587
,620
6,01
1(10,71
5)
(99,83
1)
C
96,553
ass
ets:
Inve
stm
ent i
n as
soci
ate
56
3 –
– –
– –
56
3A
dditi
ons
to n
on-c
urre
nt a
sset
s 10
2 39
2 4,
564
11,7
59
27
– D
16
,844
Segm
enta
ssets
244,72
212
7,02
042
9,48
613
3,88
880
310
,127
E
946,04
6
liab
ilitie
s:Se
gmen
tliabilities
49,642
10
,072
96
,481
57
,526
15
,471
68
,074
F
297,26
6
169
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
41.
segm
ent
info
rmat
ion
(con
t’d.)
2016
tra
ding
of d
uty
free
Pe
r
Prop
erty
go
ods
and
adj
ustm
ents
cons
olid
ated
inve
stm
ent
and
non-
dutia
ble
and
finan
cial
h
oldi
ng
hos
pita
lity
m
erch
andi
se
aut
omot
ive
o
ther
s
elim
inat
ions
sta
tem
ents
rM
’000
r
M’0
00
rM
’000
r
M’0
00
rM
’000
r
M’0
00
not
e r
M’0
00
(res
tate
d)
(r
esta
ted)
reve
nue:
Externalcustomers
455
31,163
60
3,91
513
2,49
530
–
76
8,05
8In
ter-s
egm
ent
97,0
91
481
– –
7,30
5 (1
04,8
77)
A
–
Tota
l rev
enue
97
,546
31
,644
60
3,91
5 13
2,49
5 7,
335
(104
,877
)
768,
058
resu
lts:
Dep
reci
atio
n (1
) (7
,414
) (3
,670
) (5
,913
) (9
1)
30
(1
7,05
9)A
mor
tisat
ion
of la
nd u
se ri
ghts
–
(465
) –
– –
15
(4
50)
Gai
n ar
isin
g fro
m c
hang
es in
fa
ir va
lue
of b
iolo
gica
l ass
ets
– 83
–
– –
–
83Re
versalofimpa
irmen
tlosson
pr
oper
ty, p
lant
and
equ
ipm
ent
– 30
2 –
– –
–
302
Shar
e of
resu
lts o
f an
asso
ciat
e 39
–
– –
– –
39
Othernon
-cash(exp
enses)/in
come
(459
)(65)
(66)
(423
)84
1(853
)B
(1,025
)Se
gmen
tprofit/(loss)
48,656
7,71
092
,575
6,15
7(11,04
1)
(60,99
3)
C
83,064
ass
ets:
Inve
stm
ent i
n as
soci
ate
54
4 –
– –
– –
54
4A
dditi
ons
to n
on-c
urre
nt a
sset
s 75
24
5 6,
060
5,70
5 39
–
D
12,1
24Se
gmen
tassets
65,251
11
8,96
551
6,10
510
5,76
51,35
06,24
5E
813,68
1
liab
ilitie
s:Se
gmen
tliabilities
2,89
48,49
717
7,01
533
,720
15
,222
90
,644
F
327,99
2
notes to the financial statements (cont’d.)
170
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
41. segment information (cont’d.)
A Inter-segment revenues are eliminated on consolidation.
B Othermaterialnon-cash(expenses)/incomeconsistofthefollowingitemsaspresentedintherespectivenotes to the financial statements:
note 2017 2016 rM’000 rM’000
Bad debts written off 8 – (8)Changes in fair value of marketable securities 8 (191) (472)Impairment loss on receivables 8 (24) (380)Inventories written down 8 (2,223) (800)Inventories written off 8 (88) (256)Reversalofinventorieswrittenoff 5 578 1,003Property, plant and equipment written off 8 (40) (112)
(1,988) (1,025)
C Thefollowingitemsaredeductedfrom/(addedto)segmentprofittoarriveat“Profitbeforetax”presentedin the income statements:
2017 2016 rM’000 rM’000
Inter-segment transactions 94,468 53,807Share of results of an associate (19) (39)Financecosts 5,382 7,225
99,831 60,993
D Additions to non-current assets consist of:
2017 2016 rM’000 rM’000
Property, plant and equipment 16,751 12,118Investment properties 93 6
16,844 12,124
E Thefollowingitemsareaddedtosegmentassetstoarriveattotalassetsreportedinthestatementsoffinancialposition:
2017 2016 rM’000 rM’000
Investment in associate 563 544Deferredtaxassets 1,734 948Taxrecoverable 7,830 4,753
10,127 6,245
171
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
41. segment information (cont’d.)
F Thefollowingitemsareaddedtosegmentliabilitiestoarriveattotalliabilitiesreportedinthestatementsof financial position:
2017 2016 rM’000 rM’000
Deferredtaxliabilities 7,223 6,498Taxpayable 4,351 8,146Borrowings 56,500 76,000
68,074 90,644
42. significant and subsequent events
(a) On25February2016,anannouncementwasmadebyasubsidiaryoftheCompany,DFILinrelationtotheissuanceofanaggregateof39,000,000newordinarysharesinthecapitalofDFIL(“SubscriptionShares1”)atanissuepriceofS$0.32foreachSubscriptionShare(“Subscription1”),representingapproximately3.55%ofthetotalnumberofissuedordinarysharesofDFIL.On7March2016,39,000,000newordinaryshareswere issued and allotted to the subscribers pursuant to the Subscription 1. Subsequent to the completion of the issuance of Subscription Shares 1 on 7 March 2016, the Subscription Shares 1 were then listed and quotedontheCatalistBoardoftheSGX-ST.
TheCompany’sequityinterestinDFILwasdilutedto79.47%asat7March2016from82.29%asat29February2016.
DFILhad,on24March2016,placedoutanaggregateof5,500,000treasurysharesinthecapitalofDFIL(“Placement Shares”), at a placement price of S$0.32 for each Placement Share (“Placement”). The Placement Shares were undertaken by way of private placement in accordance with Section 272 B of the Securities andFutureAct(Chapter289)ofSingapore.
TheCompany’sequityinterestinDFILwasfurtherdilutedto79.09%asat24March2016.
On27 July2016,anannouncementwasmadebyDFIL in relation to the issuanceofanaggregateof20,000,000newordinarysharesinthecapitalofDFIL(“SubscriptionShares2”)atanissuepriceofS$0.365foreachSubscriptionShare(“Subscription2”),representingapproximately1.75%ofthetotalnumberofissuedordinarysharesofDFIL.On10August2016and11August2016,17,400,000and2,600,000newordinary shares were issued and allotted respectively to the subscribers pursuant to the Subscription 2. Subsequent to the completion of the issuance of Subscription Shares 2 on 10 August 2016 and 11 August 2016respectively,theSubscriptionShares2werethenlistedandquotedontheCatalistBoardoftheSGX-ST.
TheCompany’sequityinterestinDFILwasdilutedto77.73%asat11August2016from79.09%asat24March 2016.
On10August2016,anannouncementwasmadebyDFILinrelationtotheissuanceofanaggregateof30,000,000newordinarysharesinthecapitalofDFIL(“SubscriptionShares3”)atanissuepriceofS$0.365foreachSubscriptionShare(“Subscription3”),representingapproximately2.58%ofthetotalnumberofissuedordinarysharesofDFIL.On26August2016,30,000,000newordinaryshareswereissuedandallotted to the subscribers pursuant to the Subscription 3. Subsequent to the completion of the issuance of Subscription Shares 3 on 26 August 2016, the Subscription Shares 3 were then listed and quoted on the CatalistBoardoftheSGX-ST.
notes to the financial statements (cont’d.)
172
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
42. significant and subsequent events (cont’d.)
(a) TheCompany’sequityinterestinDFILwasdilutedto75.78%asat26August2016from77.73%asat11August 2016.
On13February2017,anannouncementwasmadebyDFILinrelationtotheissuanceofanaggregateof18,500,000newordinarysharesinthecapitalofDFIL(“SubscriptionShares4”)atanissuepriceofS$0.38foreachSubscriptionShare(“Subscription4”),representingapproximately1.55%ofthetotalnumberofissuedordinarysharesofDFIL.
On24February2017,anannouncementwasmadebyDFILinrelationtotheissuanceofanaggregateof15,650,000ordinarysharesinthecapitalofDFIL(“SubscriptionShares5”)atanissuepriceofS$0.38foreachSubscriptionShare(“Subscription5”),representingapproximately1.31%ofthetotalnumberofissuedordinarysharesofDFIL.
FurthertotheDFIL’sannouncementon16March2017inrelationtotheApprovalIn-Principle,thetotal34,150,000 Subscription Shares 4 and Subscription Shares 5 were issued and allotted to the Subscribers pursuant to the Subscription 4 and Subscription 5 on 23 March 2017. These Subscription Shares were subsequently listed and quoted on the Mainboard on 24 March 2017.
AsaconsequenceofissuanceofSubscriptionShares4and5,theCompany’sholdinginDFILwasdilutedto 73.67% as at 24 March 2017 from 75.78% as at 26 August 2016.
TheSubscriptionSharesshallrankparipassuinallrespectswithandcarryallrightssimilartotheexistingissuedordinarysharesofDFIL(“Shares”),exceptthattheywillnotrankforanydividend,right,allotmentorother distributions, the record date for which falls on or before the date of completion of the Subscription.
FollowingthecompletionoftheSubscription4and5,DFIL’sissuedandpaid-upsharecapitalcomprises1,228,500,393ordinaryshares,excludingtreasuryshares.DFIL’streasurysharesasthedateofthisreportis 698,000.
(b) On31March2016,theBoardoftheCompanyannouncedthatFrontTop(M)Sdn.Bhd.(“FTSB”),asubsidiarycompanywhichwasplacedunderMembers’VoluntaryWinding-upon22October2015,hasconvenedand held its final meeting pursuant to Section 272(1) of the Companies Act, 1965.
TheReturnbyLiquidatorrelatingtoFinalMeetingofFTSBwaslodgedon31March2016withtheCompaniesCommissionofMalaysiaandtheOfficialReceiver.PursuanttoSection272(5)oftheCompaniesAct,1965,ontheexpirationofthree(3)monthsafterthesaidlodgementdate,FTSBhasbeendissolved.
(c) On29August2016,theBoardoftheCompanyannouncedthatMediaZoneSdn.Bhd.(“MZSB”)andFirstInfluxSdn.Bhd.(“FISB”),bothsubsidiarycompaniesoftheCompanywhichwereplacedunderMembers’VoluntaryWinding-upon22October2015,haveconvenedandheldtheirfinalmeetingpursuanttoSection272(1) of the Companies Act, 1965.
TheReturnbyLiquidatorrelatingtoFinalMeetingofMZSBandFISBwerelodgedon29August2016withtheCompaniesCommissionofMalaysiaandtheOfficialReceiver.PursuanttoSection272(5)oftheCompaniesAct,1965,ontheexpirationofthree(3)monthsafterthesaidlodgementdate,MZSBandFISBhave been dissolved.
(d) On 6 October 2016, the Board of the Company announced that the listing of the Company’s subsidiary, DFILhasbeentransferredfromCatalisttotheMainboardoftheSingaporeExchangeSecuritiesTradingLimited(SGX-ST”)witheffectfrom5October2016.
173
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
42. significant and subsequent events (cont’d.)
(e) On27February2017,theBoardoftheCompanyannouncedthatfollowingtheapplicationmadetotheCompaniesCommissionofMalaysia(“CCM”)forstrikingoffitsdormantwholly-ownedsubsidiary,TRIMCapitalManagement (M) Sdn.Bhd. (Companyno.442422-P) (“TRIM”)pursuant to Section308of theCompaniesAct,1965(“Act”),TRIMhastoday,27February2017,receivedthefinalnoticedated20February2017 pursuant to Section 308(4) of the Act from CCM (“Notice”). The Notice confirmed that the name of TRIMhasbeenstruck-offfromtheRegisterandtheNoticeshallbepublishedintheGazette.Henceforth,TRIMshallbedissolvedonthepublicationoftheNoticeintheGazette.
Thestriking-offofTRIMhasnomaterialeffectontheearningsornetassetsoftheGroupforthefinancialyearended28February2017.
(f) On17March2016,theBoardoftheCompanyannouncedthatasubsidiaryoftheCompany,DFILhasenteredintoaSalesandPurchaseAgreement(“SPA”)todisposeof10%equityinterestplusoneshare(“FirstTrancheSaleShares”)inDFZCapitalBerhad(“DFZ”),awhollyownedgroupsubsidiary,toHeinemannAsiaPacificPte.Ltd.(“HAP”)foraconsiderationofEUR19,700,000,withfurtheroptionstodisposeamaximumof15%equityinterestinDFZbyDFIL(“ProposedDisposal”).
UnderthetermsoftheSPA,DFILhasalsograntedthefollowingcalloptiontoHAP(“CallOptions”)foranominalconsiderationofEUR1.00each:
(i) Inthe18-monthperiodbeginningonthedateofcompletionofthesaleoftheFirstTrancheSaleShares(“Completion”),theoptiontorequireDFILtosellHAPasecondTrancheofsharesinDFZ(the “Second Tranche Sale Shares”) (“Second Tranche Call Option”), and
(ii) Inthe12-monthperiodbeginningonthedateofexpiryoftheSecondTrancheCallOptionperiod,theoptiontorequireDFILtoselltoHAPathirdtrancheofsharesinDFZ(the“ThirdTrancheSaleShares”) (“Third Tranche Call Option”).
(collectively, the “ Proposed Disposals”)
TheaggregatenumberofsharesinDFZwhichmaybeacquiredbyHAPundertheCallOptionsshallnotexceed15%oftheissuedandpaid-upsharecapitalofDFZasatthedateoftheSPA.EachCallOptionmayonlybeexercisedonce.TheThirdTrancheCallOptionwillremainvalidandbindingnotwithstandingtheSecondTrancheCallOptionnotbeingexercised.
UponthecompletionofProposedDisposals(assumingalltheCallOptionsarefullyexercised),75%minusoneshareoftheissuedandpaid-upsharecapitalofDFZwillbeheldbyDFILwhiletheremaining25%plus one share will be held by HAP.
TheProposedDisposalswereapprovedbytheBoardofDFILattheExtraordinaryGeneralMeeting(“EGM”)on30May2016.Consequently,thesaleandpurchaseoftheFirstTrancheSaleShareswascompletedon1 June 2016.
Inaddition,DFILhasalsograntedputoptiontoHAPwhereHAPcanrequireDFILtopurchasetheDFZshares held by HAP in the event of change of control or substantial violation to the terms of agreements enteredbetweenHAPandDFIL.ThefairvalueofputoptionswasassessedtobeRMNilasof28February2017astheexercisepriceisbasedonthefairvalueofDFZsharesattheexercisedate.
notes to the financial statements (cont’d.)
174
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
42. significant and subsequent events (cont’d.)
(g) On24March2017,anannouncementwasmadebyasubsidiaryoftheCompany,DFIL,hasproposedabonusissueofupto491,400,157warrants(“BonusWarrants”),onthebasisoftwo(2)BonusWarrantsforeveryfive(5)existingordinarysharesinthecapitalofDFIL(“ProposedBonusWarrantIssue”)heldbytheshareholdersofDFIL(“Shareholders”)asat5.00p.m.on9May2017(the“BookClosureDate”).
On28April2017,theproposedBonusWarrantswasapprovedwiththeexercisepriceofSGD0.43pereach new share.
DFILhadon2May2017(a)executedadeedpollconstitutingtheBonuswarrants,and(b)enteredintoawarrant agency agreement with Boardroom Corporate & Advisory Services Pte Ltd (“Boardroom”) in relation totheappointmentofBoardroomasthewarrantagentandregistrarfortheBonusWarrants.
FurthertotheAnnouncementsinrelationtotheProposedBonusWarrantIssue,DFILhadon16May2017announcedthat491,400,042BonusWarrantshavebeenissuedandallottedtoShareholderswhoareentitledtotheBonusWarrantsasat5.00pmon9May2017pursuanttotheProposedBonusWarrantIssue.TheBonusWarrantsweresubsequentlylistedandquotedontheOfficialListoftheSGX-STwitheffectfrom9.00 a.m. on 18 May 2017.
TheBonusWarrants are exercisableduring theperiodcommencingonand including thedate six (6)monthsfromthedateoflistingoftheBonusWarrantsontheSGX-STandexpiringat5.00p.m.onthedateimmediatelyprecedingthefifth(5th)anniversaryofthedateofissueoftheBonusWarrantsunlesssuchdateisadateonwhichtheRegisterofMembersofDFILisclosedorisnotaMarketDay,inwhicheventtheexerciseperiodshallexpireonthedatepriortotheclosureoftheRegisterofMembersofDFILortheimmediatelyprecedingMarketDay,butexcludingsuchperiod(s)duringwhich the registerofWarrantholdersofDFILmaybeclosedpursuanttothetermsandconditionsoftheBonusWarrantssetoutintheDeed Poll.
175
notes to the financial statements (cont’d.)
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
43. supplementary information
ThebreakdownoftheretainedearningsoftheGroupandoftheCompanyasat28February2017intorealisedand unrealised profits is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 and prepared in accordance with Guidance on Special Matter No. 1, Determination of RealisedandUnrealisedProfitsorLosses in theContextofDisclosurePursuant toBursaMalaysiaSecuritiesBerhadListingRequirements,asissuedbytheMalaysianInstituteofAccountants.
group company 2017 2016 2017 2016 rM’000 rM’000 rM’000 rM’000 (restated)
Totalretainedearnings/ (accumulated losses) - realised 387,457 333,353 500,253 493,472 - unrealised (36,092) (28,397) – –
Total share of retained earnings from associate - realised 126 107 – –
351,491 305,063 500,253 493,472Add: Consolidation adjustments (195,430) (233,933) – –
Total retained earnings as per financial statements 156,061 71,130 500,253 493,472
176
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
ANALYSIS Of SHAReHOLDINGSas at 31 may 2017
directors’ direct and deemed interests in the company and/or its subsidiary companies
AccordingtotheRegisterofDirectors’ShareholdingsrequiredtobekeptunderSection59oftheCompaniesAct2016the Directors’ interests in the Company and its subsidiaries are as follows:-
direct interest deemed interest no. of no. of ordinary ordinaryname shares % shares %
Dato’ Sri Adam Sani Bin Abdullah 64,061 0.03 130,255,153(1) 51.35
notes:-
(a) Dato’ Sri Adam Sani Bin Abdullah is deemed to have an interest in the shares of all the subsidiaries by virtue of his interest in the shares in the Company
(b) Other than disclosed above, none of the other Directors had any interest in shares in the Company or its subsidiaries(c) (1) Deemed interested through Distinct Continent Sdn. Bhd. and Alpretz Capital Sdn. Bhd.
list of substantial shareholders as at 31 May 2017(AsshownintheRegisterofSubstantialShareholders)
direct interest deemed interest no. of no. of ordinary ordinaryname of substantial shareholders shares % shares %
Distinct Continent Sdn. Bhd. 83,220,340 32.81 47,034,813(1) 18.54Alpretz Capital Sdn. Bhd. 47,034,813 18.54 – –Dato’ Sri Adam Sani Bin Abdullah 64,061 0.03 130,255,153(2) 51.35SebastianPaulLimChinFoo – – 130,255,153(2) 51.35Berjaya Corporation Berhad 60,600,000 23.89 7,330,000(3) 2.89TanSriDato'SeriVincent TanCheeYioun – – 67,930,000(4) 26.78
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) Deemed interested by virtue of its interest in Inter-Pacific Capital Sdn. Bhd., Berjaya Philippines Inc. and Sublime Cartel Sdn. Bhd.
(4) Deemed interested by virtue of his interest in Berjaya Corporation Berhad and its related corporation
177
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
analysis of shareholdings (cont’d.)
analYsis oF shareholdings as at 31 MaY 2017
Class of Shares : Ordinary shares (“Share(s)”)
VotingRights : One(1)voteperShare
distribUtion oF shareholdings as at 31 May 2017
no. of % of no. of % of issuedsize of shareholdings shareholders shareholders shares share capital
Less than 100 172 16.63 4,784 0.00100 – 1,000 304 29.40 89,789 0.041,001 – 10,000 386 37.33 1,254,996 0.4910,001 – 100,000 111 10.74 3,528,777 1.39100,001 to less than 5% of issued shares 56 5.42 116,067,800 45.765% and above of issued shares 5 0.48 132,704,263 52.32
total 1,034 100.00 253,650,409 100.00
thirtY (30) largest shareholders as at 31 MaY 2017
no. ofname of shareholders shares held %
1. ABB Nominee (Tempatan) Sdn. Bhd. 56,337,750 22.21 - Pledged Securities Account for Distinct Continent Sdn. Bhd. (Adam Sani)
2. AllianceGroup Nominees (Tempatan) Sdn. Bhd. 23,000,000 9.07 - Pledged Securities Account for Berjaya Corporation Berhad
3. ABB Nominee (Tempatan) Sdn. Bhd. 22,270,500 8.78 - Pledged Securities Account for Alpretz Capital Sdn. Bhd.
4. Cartaban Nominees (Asing) Sdn. Bhd. 15,796,013 6.23 -ExemptanforLGTBankAG(Foreign)
5. RHBNominees(Tempatan)Sdn.Bhd. 15,300,000 6.03 - Bank of China (Malaysia) Berhad Pledged Securities Account for Distinct Continent Sdn. Bhd.
6. Alpretz Capital Sdn. Bhd. 11,764,313 4.64
7. RHBNominees(Tempatan)Sdn.Bhd. 11,552,367 4.55 - Bank of China (Malaysia) Berhad Pledged Securities Account for Distinct Continent Sdn. Bhd. (OKB)
8. RHBNominees(Tempatan)Sdn.Bhd. 10,000,000 3.94 - Bank of China (Malaysia) Berhad Pledged Securities Account for Berjaya Corporation Berhad
9. Maybank Nominees (Tempatan) Sdn. Bhd. 8,250,000 3.25 - Pledged Securities Account for Berjaya Corporation Berhad
10. Affin Hwang Nominees (Tempatan) Sdn. Bhd. 6,300,000 2.48 - Pledged Securities Account for Berjaya Corporation Berhad
178
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
thirtY (30) largest shareholders as at 31 MaY 2017 (cont’d.)
no. ofname of shareholders shares held % 11. Kenanga Nominees (Tempatan) Sdn. Bhd. 6,000,000 2.37 - Pledged Securities Account for Alpretz Capital Sdn. Bhd.
12. CIMB Group Nominees (Tempatan) Sdn. Bhd. 5,800,000 2.29 - Pledged Securities Account for Berjaya Corporation Berhad
13. Inter-PacificEquityNominees(Asing)Sdn.Bhd. 5,100,000 2.01 - Berjaya Philippines Inc.
14. Lembaga Tabung Angkatan Tentera 5,002,000 1.97
15. Inter-PacificEquityNominees(Tempatan)Sdn.Bhd. 5,000,000 1.97 - IPM for Alpretz Capital Sdn. Bhd.
16. Phoon Ching Heong 3,995,554 1.58
17. Kenanga Nominees (Tempatan) Sdn. Bhd. 3,750,000 1.48 - Pledged Securities Account for Khoo Chun Keong
18. MIDFAmanahInvestmentNominees(Tempatan)Sdn.Bhd. 3,250,000 1.28 - Pledged Securities Account for Berjaya Corporation Berhad
19. Berjaya Corporation Berhad 3,000,000 1.18
20. Chew Soo Lin 2,340,834 0.92
21. Inter-PacificEquityNominees(Tempatan)Sdn.Bhd. 2,000,000 0.79 - Inter Pacific Capital Sdn. Bhd.
22. Kenanga Nominees (Tempatan) Sdn. Bhd. 2,000,000 0.79 - Pledged Securities Account for Alpretz Capital Sdn. Bhd.
23. UOBKayHianNominees(Asing)Sdn.Bhd. 1,502,132 0.59 - Pledged Securities Account for Chew Soo Lin
24. Citigroup Nominees (Tempatan) Sdn. Bhd. 1,428,288 0.56 -UBSAGSGforPhoonChingHeong
25. HLB Nominees (Asing) Sdn. Bhd. 1,414,475 0.56 - Southern Dynamic Consultants Limited
26. Syed Sirajuddin Putra Jamalullail 1,350,041 0.53
27. E-FosSdn.Bhd. 1,267,875 0.50
28. Maybank Nominees (Tempatan) Sdn. Bhd. 1,188,155 0.47 - Pledged Securities Account for Stuart Saw Teik Siew
29. CIMB Group Nominees (Tempatan) Sdn. Bhd. 1,000,000 0.39 - Pledged Securities Account for Berjaya Corporation Berhad
30. Kenanga Nominees (Tempatan) Sdn. Bhd. 1,000,000 0.39 - Pledged Securities Account for Ong Kar Beau
analysis of shareholdings (cont’d.)
179
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
LIST Of pROpeRTIeSfor financial year ended 28 february 2017
location description existing Usetenure /expiry date
age ofbuilding
Yearsapprox areas
sq Metre
net book Value
as at 28 February
2017rM’mil
date ofacquisition
1 Lot No. 1, Section 63, Town of Kuala Lumpur, WilayahPersekutuan
Office building,hotel apartment building andbuilding underconstruction
Registeredoffice, officeblock for rentand hotel apartments for letting
Leasehold (60 years - expiring2038) renewable for a further30 years
Office building
(31),Hotel
apartment (20)
18,701.20 59.51 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)
30 297.00 0.09 1987
3 Lot 2224 HS(M) 1/1987,PT1443, Bukit Kayu Hitam, Mukim Sungai Laka, Daerah Kubang Pasu, Kedah Darul Aman
A single storeywarehouse annexedtoadouble storeyshoppingcomplexand 30 units ofsingle storeylock-up shops andancillary building
DutyFreeshopping complexand warehouse
Leasehold (60 years - expiring2072)
29 20,234.00 2.51 1987
4 Lot 127-142 & 169-174, PT 1889-1904 & 1931-1936, HS(M)135/1989-150/1989&177/1989-82/1989, Bandar Baru Laka Temin, Mukim Sungai Laka, Daerah Kubang Pasu, Kedah Darul Aman
22 units singlestorey terrace house
Staff quarters Leasehold (99 years - expiring2088)
24 3,216.00 0.38 1996
5 Lot 475, Seksyen 1, BandarBatuFerringhi, 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
Rentedoutandpartly vacant
Leasehold (60 years - expiring2053 and 2057)
19 3,127,220.00 41.92 1993 & 1997
180
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
location description existing Usetenure /expiry date
age ofbuilding
Yearsapprox areas
sq Metre
net book Value
as at 28 February
2017rM’mil
date ofacquisition
7 Lot 44 Premises No.42/1/2&3, Kompleks MunshiAbdullah, Jalan Munshi Abdullah, 75100 MelakaDarul Azim
4&1/2storeyshophouse
Business and office premises
Leasehold (99 years - expiring2084)
32 130.00 0.41 1992
8 Lot 4720,Mukim Titi Tinggi, 2 Jalan Baru Sadao, 02100 Padang Besar, Perlis Darul Sunnah
Store Store Leasehold (60 years - expiring2054)
23 9,474.00
10.82
1994
9 Lot 3548, Mukim Titi Tinggi, 2 Jalan Baru Sadao, 02100 Padang Besar, Perlis Darul Sunnah
Warehouseannexedtoasinglestorey shopping complex
DutyFreeComplexandwarehouse
Leasehold (60 years - expiring2050)
25 14,658.00 1990
10 Lot 2063, Mukim Titi Tinggi, Padang Besar, 30BangunanPKENPs, Jalan Besar, 02100 Padang Besar, Perlis Darul Sunnah
Shop Shop Freehold 30 223.00 0.18 1990
11 Shop Lot Nos 47 & 48, Mukim Titi Tinggi, Padang Besar, 3D & 4D Kompleks ArkedNiagaPKENPs, 02100 Padang Besar, Perlis Darul Sunnah
Shop Shop Leasehold (99 years - expiring2090)
27 58.00 0.23 1990
12 PN 108045, Lot 4858, Mukim Pengkalan Hulu, District of Hulu Perak, PerakDarulRidzuan
DutyFreeComplex DutyFreeComplex
Leasehold (60 years - expiring2050)
27 10,116.00 9.15 1990
13 Lot No. 5017, Mukim Kapar, District of Klang, SelangorDarulEhsan
Industrial premises Factories,officeand ancillary buildings
Freehold 13 - 32 12,140.55 11.66 1982
list of properties (cont’d.)
181
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
list of properties (cont’d.)
location description existing Usetenure /expiry date
age ofbuilding
Yearsapprox areas
sq Metre
net book Value
as at 28 February
2017rM’mil
date ofacquisition
14 Lot No PT 54753, Mukim Kapar, District of Klang, SelangorDarulEhsan
Industrial premises Factory,officeand warehouse
Freehold 14 - 39 24,281.00 15.98 1979
15 Lot no PT 6731, Kawasan Perindustrian Berat Gurun, Mukim Gurun, District of Kuala Muda, Kedah Darul Aman
Industrial premises Vacant Leasehold (60 years)
10 43,541.33 2.74 2005
16 8 PersiaranKampung Jawa, No Hakmilik 6711,Lot 9891, Mukim 12, Daerah Barat Daya, Pulau Pinang Darul Mutiara
Factorylandandbuilding
Business and office premises
Leasehold (99 years expiring2113)
19 4,355.00
5.32
2002
17 Pajakan Negeri No 3839, Lot no 11618, Mukim 12, Daerah Barat Daya, Pulau Pinang Darul Mutiara
Factoryland Business and office premises
Leasehold (99 years expiring2111)
N/A 1,106.00 2001
18 PS 1641-A, Kawasan PerindustrianPulau Sebang, 78000 Alor Gajah, Melaka.
A single-storey open-sided detached factory
Factory Leasehold (99 years expiringon23 Oct2100)
1 2,323.04 2.36 2017
182
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
notice is herebY giVen thattheTwenty-EighthAnnualGeneralMeeting(“28th AGM”) of atlan holdings bhd. will beheldattheLilyRoom-1stFloor,TheZonAllSuitesResidencesOnThePark,161-D,JalanAmpang,50450KualaLumpuronWednesday,26July2017at11.30a.m.forthefollowingpurposes:-
agenda
as ordinary business:-
1. ToreceivetheAuditedFinancialStatements for thefinancialyearended28February2017togetherwiththeDirectors’andAuditors’Reportthereon.
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) Jeneral Tan Sri Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad (B); and
b) Mr. Ong Bok Siong.
Dato’ShagulHamidBinK.R.Williams@AbdullahwhoretiresbyrotationpursuanttoArticle78of theCompany’sConstitution,hasexpressedhis intentionnot toseekre-election and hence, he will retain office until the conclusion of the 28th AGM.
3. To re-elect Tuan Mohd Jaffar Bin Awang (Ismail) who retires in accordance with Article 85 of the Company’s Constitution and being eligible, has offered himself for re-election.
4. Tore-appointEn.MohdSharifBinHjYusofwhoretiresattheconclusionofthe28th AGM of the Company, as a Director of the Company.
5. Tore-appointMessrs.Ernst&YoungasAuditorsoftheCompanyfortheensuingyearandtoauthorisetheDirectorstofixtheirremuneration.
as special business:-
6. To consider and if thought fit, to pass the following resolutions, with or without any modifications,asOrdinaryResolutions:-
i) ordinary resolution Payment of directors’ Fees
“THATtheDirectors’feesofRM253,000/-forthefinancialyearended28February2017 be and is hereby approved.”
ii) ordinary resolution Payment of benefits payable to the directors
“THAT the benefit payable to the Directors of the Company up to an amount of RM200,000/-fortheperiodfrom31January2017untilthenextAnnualGeneralMeeting(“AGM”)oftheCompanyortheexpirationoftheperiodwithinwhichthenextAGMisrequiredtobeheld,whicheverisearlier,beandisherebyapproved.”
NOTICe Of ANNUAL GeNeRAL meeTING
(Please refer to note 2)
resolution 1resolution 2
resolution 3
resolution 4
resolution 5
resolution 6
resolution 7
183
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
notice of annual general meeting (cont’d.)
iii) ordinary resolution authority to issue and allot shares
“THAT subject always to the Companies Act, 2016 (“Act”), the Company’s Constitution, theListingRequirementsofBursaMalaysiaSecuritiesBerhadandapprovalsoftherelevantGovernmentaland/orregulatoryauthorities,theDirectorsbeandareherebyempowered to issue and allot shares in the Company pursuant to Sections 75 and 76 of 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 ofsharesissuedpursuanttothisResolutiondoesnotexceed10%ofthetotalissuedshare 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 shallcontinuetobeinforceuntiltheconclusionofthenextAnnualGeneralMeeting(“AGM”)oftheCompanyortheexpirationoftheperiodwithinwhichthenextAGMis required to be held, whichever is earlier, unless such authority is revoked or varied by resolution passed by the shareholders in general meeting.”
iv) ordinary resolution Mandate for Yang amat Mulia tengku abdul rahman ibni sultan haji ahmad shah
al-Mustain billah, dk ii., ssaP who has served as an independent non-executive director of the company for a cumulative term of more than nine (9) years, to continue to act as an independent non-executive director of the company
“THATapprovalbeandisherebygiventoYangAmatMuliaTengkuAbdulRahmanIbni Sultan Haji Ahmad Shah Al-Mustain Billah, DK II., SSAP, who has served as anIndependentNon-ExecutiveDirectoroftheCompanyforacumulativetermofmorethannine(9)years,tocontinuetoactasanIndependentNon-ExecutiveDirector of the Company in compliance with the recommendation of Malaysian Code on Corporate Governance 2012.”
7. 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,
chUa siew chUan (Maicsa 0777689)thUM sook FUn (Mia 24701)Company Secretaries
Date: 30 June 2017
resolution 8
resolution 9
184
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
notes: -
1) information for shareholders/Proxies
1.1 AmemberentitledtoattendandvoteattheMeetingisentitledtoappointmorethanone(1)proxytoattendandvoteinhisorherstead.Whereamemberappointstwoormoreproxies,theappointmentsshallbe invalid unless he or she specifies the proportions of his or her shareholdings to be represented by each proxy.
1.2 AproxymaybutneednottobeamemberoftheCompany.Thereshallbenorestrictionastothequalificationoftheproxy.AproxyappointedtoattendtheMeetingshallhavethesamerightsasthemembertospeakand vote at the Meeting.
1.3 Theinstrumentappointingaproxyshallbeinwritingunderthehandoftheappointororhisattorneydulyauthorised 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 WhereamemberoftheCompanyisanauthorisednomineeasdefinedundertheSecuritiesIndustry(CentralDepositories)Act,1991(“SICDA”),itmayappointatleastone(1)proxyinrespectofeachSecuritiesAccountit holds with ordinary shares of the Company standing to the credit of the said Securities Account.
1.5 Where amember of theCompany is an ExemptAuthorisedNominee (“EAN”)which holds ordinaryshares in the Company for multiple beneficial owners in one (1) Securities Account (“Omnibus Account”), thereshallbenolimittothenumberofproxieswhichtheEANmayappointinrespectofeachOmnibusAccountitholds.AnEANreferstoanadditionalnomineedefinedundertheSICDAwhichisexemptedfrom compliance with the provisions of subsection 25A(1) of the SICDA.
1.6 TheinstrumentappointingaproxymustbedepositedattheCompany'sregisteredofficeat17thFloor,Menara Atlan, 161B, Jalan Ampang, 50450 Kuala Lumpur not less than 48 hours before the time for holding the meeting or any adjournment thereof.
1.7 Forthepurposeofdeterminingwhoshallbeentitledtoattend,speakandvoteatthismeeting,theCompanyshall be requesting Bursa Malaysia Depository Sdn Bhd to make available to the Company pursuant to Article56(b)oftheConstitutionoftheCompanyandParagraph7.16(2)oftheListingRequirements,aRecordofDepositorsasat20July2017(“GeneralMeetingRecordofDepositors”)andaDepositorwhosenameappearsonsuchRecordofDepositorsshallbeentitledtoattend,speakandvoteatthemeetingorappointproxytoattend,speakandvoteinhis/herstead.
1.8 Pursuant toParagraph8.29A(1)of theMainMarket ListingRequirementsofBursaMalaysia SecuritiesBerhad, all resolutions set out in this notice will be put to vote by way of a poll.
2) audited Financial statements for the financial year ended 28 February 2017
This Agenda item is meant for discussion only, as the provision of Section 340(1)(a) of the Companies Act, 2016 (“Act”)doesnot requirea formalapproval for theAuditedFinancialStatements fromtheshareholdersof theCompany and hence, Agenda 1 is not put forward for voting.
notice of annual general meeting (cont’d.)
185
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
notice of annual general meeting (cont’d.)
3) re-election of directors and retirement of director
Article78oftheCompany’sConstitutionstatesthatone-third(1/3)oftheDirectorsshallretirefromofficeandshall be eligible for re-election at each annual general meeting (“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.
Article 85 of the Company’s Constitution states that any Director who is appointed either to fill a casual vacancy orasanadditiontotheexistingDirectors,shallholdofficeuntilthenextAGMandshallbeeligibleforre-electionbut shall not be taken into account in determining the Directors who are to retire by rotations at that meeting.
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) EvaluationontheeffectivenessoftheIndividualDirectors,theBoardasawholeandallBoardCommittees;and
(II) ForIndependentNon-ExecutiveDirectors(“INEDs”)only,thelevelofindependencedemonstratedbytheINEDsandtheirabilitytoactinthebestinterestoftheCompany.
InlinewithRecommendation3.1oftheMalaysianCodeonCorporateGovernance2012(“MCCG2012”),theBoardhasconductedaseparateassessmentofindependenceoftheINEDs,theevaluationcriteriaadoptedaswellas the process of assessment by the Board have been duly elaborated in the Corporate Governance Statement of theAnnualReport2017oftheCompany.
Dato’ ShagulHamidBinK.R.Williams@Abdullah (“Dato’ Shagul”)whowasappointedasDirectoron30December 2004 will retire in accordance with Article 78 of the Company’s constitution. He will not seek for re-election and hence, he will retain office until the conclusion of the forthcoming 28th AGM.
Save for Dato’ Shagul who will retire at the conclusion of the 28th AGM, the Board approved the NC’s recommendation for the re-election of the retiring Directors pursuant to Article 78 and 85 of the Company’s Constitution at the forthcoming AGM of the Company. At the relevant Board meeting, all the retiring Directors had abstained from deliberation as well as decision on their own eligibility to stand for re-election.
4) re-appointment of director En.MohdSharifBinHjYusofwasre-appointedasaDirectoroftheCompanyattheTwenty-SeventhAGMheld
on 20 July 2016 pursuant to Section 129 of the Companies Act, 1965 to hold office until the conclusion of this AGM.Resolution4,ifpassed,willenablehimtocontinuehisofficeasaDirectoroftheCompanyfollowingtheconclusion of this AGM. The Act (which repealed the Companies Act, 1965) no longer requires the continuation in office by a director over 70 years of age to be subject to shareholders’ approval at each AGM. Accordingly, if Resolutionispassed,En.MohdSharifBinHjYusof’scontinuationinofficewillthereafterbesubjecttoretirementby rotation pursuant to the Company’s Constitution.
186
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
5) re-appointment of auditors
TheBoardhadatitsmeetingheldon8June2017approvedtherecommendationbytheAuditandRiskManagementCommittee(“ARMC”)onthere-appointmentofMessrs.Ernst&YoungasAuditorsoftheCompany.TheBoardandARMCcollectivelyagreedthatMessrs.Ernst&Young.hasmettherelevantcriteriaprescribedbyParagraph15.21ofMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad.
TheARMChave assessed the suitability and independence of the ExternalAuditors and recommended there-appointmentofMessrs.Ernst&YoungasExternalAuditorsoftheCompanyforthefinancialyearending28February2018.TheBoardhasinturnreviewedtherecommendationoftheARMCandrecommendedthesamebetabledtotheshareholdersforapprovalattheforthcomingAGMoftheCompanyunderResolution5.TheevaluationcriteriaadoptedaswellastheprocessofassessmentbytheARMCandBoard,respectively,havebeendulyelaboratedintheCorporateGovernanceStatementoftheAnnualReport2017oftheCompany.
6) Payment of directors’ fees and benefits made payable to the directors
Section 230(1) of the Act which came into effect on 31 January 2017, 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.
In this respect, the Board wishes to seek for shareholders’ approval at the 28th AGM for the payment of Directors’ fees and benefit payable to the Directors: -
i) Resolution6ontheproposedDirectors’feesofRM253,000/-inrespectofthefinancialyearended28February2017;
ii) Resolution7onthebenefitspayabletotheNon-ExecutiveDirectorspursuanttoSection230(1)(b)oftheActfortheapplicableperiodfrom31January2017tothenextAGM(“RelevantPeriod”).Thebenefitscompriseof benefits in kind and the meeting allowance, which will only be accorded based on actual attendance of meetings by the Directors.
7) authority to issue and allot shares
TheproposedResolution8isprimarilytoseekfortherenewalofageneralmandatetogiveflexibilitytotheBoardofDirectorstoissueandallotsharesupto10%oftheissuedsharecapital(excludingtreasuryshares)ofthe Company for the time being, at any time in their absolute discretion without convening a general meeting (hereinafter referred to as the “General Mandate”).
The Company has been granted a general mandate by its shareholders at the last AGM held on 20 July 2016 (hereinafter referred to as the “Previous Mandate”) and it will lapse at the conclusion of the 28th 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 generalmeeting,willexpireattheconclusionofthenextAGMoftheCompany.
TheGeneralMandatewillprovideflexibilitytotheCompanyforanypossiblefundraisingactivities,includingbutnot limited to further placing of shares, for purpose of funding future investment project(s), acquisitions, working capitaland/orsettlementofbankingfacilities.
notice of annual general meeting (cont’d.)
187
ATLAN HOLDINGS BHD.(173250-W) ANNUAL REPORT 2017
notice of annual general meeting (cont’d.)
8) Mandate for Yang amat Mulia tengku abdul rahman ibni sultan haji ahmad shah al-Mustain billah, dkii., ssaP to continue to act as independent non-executive directors
PursuanttotheRecommendation3.3oftheMalaysianCodeonCorporateGovernance2012,itrecommendsthat shareholders’ approval must be sought in the event that the Company intends to retain the Independent Non-ExecutiveDirectorswhohaveservedinthatcapacityformorethan9years.
TheNominationCommitteehasattheannualassessmentassessedtheindependenceofYangAmatMuliaTengkuAbdulRahmanIbniSultanHajiAhmadShahAl-MustainBillah,DKII.,SSAPwhohadservedmorethan9years.ThisDirectorhasremainedobjectiveandindependentinexpressinghisviewsandinparticipatingindeliberationand decision making of the Board and Board Committees. His length of services on the Board does not in any wayinterferewithhisexerciseofindependentjudgementandabilitytoactinthebestinterestsoftheCompany.Inaddition,YangAmatMuliaTengkuAbdulRahman IbniSultanHajiAhmadShahAl-MustainBillah,DKII.,SSAP had individually confirmed and declared in writing that he is Independent Director and he has satisfied allthecriteriaofanIndependentDirectorsetoutinParagraph1.01oftheMainMarketListingRequirementsofBursa Malaysia Securities Berhad. The Board has therefore recommended that the approval of the shareholders besoughttore-appointYangAmatMuliaTengkuAbdulRahmanIbniSultanHajiAhmadShahAl-MustainBillah,DKII.,SSAPasIndependentNon-ExecutiveDirector.
ThefulldetailsoftheBoard’sjustificationstoretainYangAmatMuliaTengkuAbdulRahmanIbniSultanHajiAhmad Shah Al-Mustain Billah, DKII., SSAP as Independent Director is set out in the Statement on Corporate GovernanceintheCompany’sAnnualReport.
TheResolution9,ifpassed,willenabletheCompanytoretainYangAmatMuliaTengkuAbdulRahmanIbniSultanHajiAhmadShahAl-MustainBillah,DKII.,SSAPasIndependentNon-ExecutiveDirector.
Personal data privacy:
Bysubmittinganinstrumentappointingaproxy(ies)and/orrepresentative(s)toattend,speakandvoteattheAnnualGeneralMeeting(“AGM”)and/oranyadjournmentthereof,amemberoftheCompany(i)consentstothecollection,use and disclosure of the member’s personal data by the Company (or its agents) for the purpose of the processing andadministrationbytheCompany(oritsagents)ofproxiesandrepresentativesappointedfortheAGM(includingany adjournment thereof) and the preparation and compilation of the attendance lists, minutes and other documents relating to the AGM (including any adjournment thereof), and in order for the Company (or its agents) to comply with anyapplicablelaws,listingrules,regulationsand/orguidelines(collectively,the“Purposes”),(ii)warrantsthatwherethememberdiscloses thepersonaldataof themember’sproxy(ies)and/or representative(s) to theCompany (or itsagents),thememberhasobtainedthepriorconsentofsuchproxy(ies)and/orrepresentative(s)forthecollection,useanddisclosurebytheCompany(oritsagents)ofthepersonaldataofsuchproxy(ies)and/orrepresentative(s)forthePurposes, 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(PursuanttoParagraph8.27(2)oftheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad)
Asatdateofthisnotice,therearenoindividualswhoarestandingforelectionasDirectors(excludingtheaboveDirectorswho are standing for re-election or re-appointment) at this forthcoming 28th AGM.
This page has been intentionally left blank
I/We ____________________________________________________NRICNo./CompanyNo. _________________________________ (full name in block letters)
of ______________________________________________________________________________________________________________(full address)
being a member of atlan holdings bhd (173250-w) hereby appoint _________________________________________________
______________________________________________________ of _______________________________________________________
or failing him, _______________________________________________ of _________________________________________________orfailing*him/her,theChairmanofthemeetingas*my/ourproxytovotefor*me/uson*my/ourbehalfattheTwenty-EighthAnnualGeneralMeetingoftheCompanytobeheldattheLilyRoom-1stFloor,TheZonAllSuitesResidencesOnThePark,161-D,JalanAmpang,50450KualaLumpuronWednesday,26July2017at11.30a.m.andatanyadjournmentthereof.
Pleaseindicateyourvotebya(X)intherespectiveboxofeachresolution.Ifnospecificdirectionastovotingisgiven,theproxywillvoteorabstainfromvotingontheresolutionsathis/herdiscretion.
no. resolutions For against
as ordinarY bUsiness:-
Resolution1 To re-elect Jeneral Tan Sri Dato’ Sri Abdullah Bin Ahmad @ Dollah Bin Amad (B) as Director of the Company
Resolution2 To re-elect Mr. Ong Bok Siong as Director of the Company
Resolution3 To re-elect Tuan Mohd Jaffar Bin Awang (Ismail) as Director of the Company
Resolution4 Tore-appointEn.MohdSharifBinHjYusofasDirectoroftheCompany
Resolution5 Tore-appointMessrsErnst&YoungasAuditorsoftheCompany
as sPecial bUsiness:-
Resolution6 OrdinaryResolution-PaymentofDirectors’fees
Resolution7 OrdinaryResolution-PaymentofbenefitspayabletotheDirectors
Resolution8 OrdinaryResolution-AuthoritytoIssueandAllotShares
Resolution9 OrdinaryResolution-MandateforYangAmatMuliaTengkuAbdulRahmanIbniSultanHaji Ahmad Shah Al-Mustain Billah, DK II., SSAP to continue to act as an Independent Non-ExecutiveDirectoroftheCompany
* 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.
Aswitness*my/ourhand(s)this_____________dayof_____________________,2017.
__________________________________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 Listing Requirements, a Record of Depositors as at 20 July 2017 (“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 Main Market Listing Requirements of Bursa Malaysia Securities Berhad, all resolutions set out in the Notice of 28th 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
✄CDS Account No.
No. of Shares Held
Foldthisflapforsealing
Then fold here
1st fold here
THE COMPANY SECRETARIES
atlan holdings bhd(CompanyNo.:173250-W)
17thFloor,MenaraAtlan161B, 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 Laporan Tahunan
2017
Annual Report 2017
laporan tahunan