Corporate Social Responsibility - MalaysiaStock.Biz...Corporate Social Responsibility The Group is committed to managing our business in a socially responsible manner which is aligned

l Annual Report 201144

45Annual Report 2011 l


Corporate Social Responsibility

The Group is committed to managing our business in a socially responsible manner which is aligned with our business strategy.

Our position as one of the leaders in designing, manufacturing, marketing and distribution of fashionable leather goods, apparel and accessories brings with it many responsibilities. We recognise that it is equally important to measure the impact of our activities on our customers, employees, shareholders, communities and the environment.

In particular, we are committed to ensuring that BONIA engages with and makes a positive contribution to the local communities.

We believe that a firm commitment to Corporate Social Responsibility (CSR) activities forms the basis of good corporate citizenship and promotes good corporate governance. As part of our commitment to CSR, the Group has been involved in various activities during the financial year.

THE WORKPLACE

We believe that our people are our most important asset in helping us to attain our objectives. With a constantly growing workforce, it is imperative that we continue to invest in our staff to meet the demands of our rapid progress. Training programmes and specialised courses are conducted regularly to upgrade the skills and improve competency levels of our employees. Apart from in-house training activities, our employees are also encouraged to attend external courses sponsored by the Group. The Group also promotes staff appreciation and recognition effort such as long service awards, appreciation dinners, birthday celebrations, festive gatherings, as well as family and sport events.

In July 2011, the Group held a three-day management camp on “Systematic Process for Strategic Alignment and Teambuilding”. During the camp, the Group’s Mission and Vision 2015 were set out.

Under the 3R Mission, the Group will focus on three main areas:

• Recognition - to be recognized as an international luxury brand with excellent customer satisfaction

• Resources - to build, recognize and reward our valued human capital• Responsibilities - to provide sound return to stakeholders and fulfil community social

responsibilities

The Group also outlined its Vision 2015, of which one of the objectives is to be recognised in the region as the preferred employer and create a workforce of passion and accountability.



Corporate Social Responsibility (cont’d)

THE COMMUNITY

During the year under review, the Group contributed a total of RM195,400 in monetary assistance to various community projects, charitable organizations and local communities. The main beneficiaries of the Group’s contributions are the following organizations:

• Malaysian Aeon Foundation (Contributions to Japan Tsunami Victims) ;• Malam Sentuhan Kasih Nur Ramandhan (Charity Dinner);• Persatuan SLE Malaysia (Help People To Live With Systemic Lupus Erythematosus);• Malaysia Red Crescent Society (“Hope Of Japan” Charity Fundraiser); • Olympic Council Malaysia (Donation For Funding Of The Malaysian Volleyball Association

Programmes 2011); • Persatuan Insan Istimewa Cheras Selangor (Medical & Welfare Fund);• MRCA (18th Anniversary Celebration Charity Dinner);• Sam Wei Keong Temple Fund, Melaka;• The Federation of Ka Yin Chu Association of Malaysia;• Persatuan Tarian Naga & Singa Long Yee Tangkak Ledang, Johor Bahru; and Parent-Teacher

Associations of several schools.

The Group continues to place a special emphasis on the education sector in line with our belief that education plays a key role in realising our Government’s vision to create a knowledge-based society. As such, it has continued to make contributions to schools and other education-related activities. Contributions were also made to various health organizations and charities. Our BONIA Club members also contributed to the Malaysian Aeon Foundation via the ‘Waoh’ Coin Box charity.

THE MARKETPLACE

The Group has built a good reputation as a manufacturer and distributor of quality products and provider of excellent customer service. In view of our commitment to providing only the best for our customers, quality remains the main emphasis of all our production and management systems, and stringent controls are carried out right from the initial raw material stage to the final stage before finished goods are delivered.

THE ENVIRONMENT

The Group believes it has a part to play in contributing towards a greener environment. Through various efforts and initiatives, we have continued to implement key energy saving measures, such as maintaining air-conditioning on a need-to-use basis, switching off non-essential lighting and equipment during non-operating hours, creating awareness among our staff on the recycling of waste materials, and continuous improvements in our manufacturing process. As part of our efforts to promote more eco-lifestyle products, we have introduced a range of eco-friendly handbags made from genuine leather tanned with vegetable dyes using traditional Italian techniques. Unlike chemical dyes, which pollute the earth, vegetable dyes are easily disposed of and recycled into fertilizers.

The Group recognizes that healthy lifestyles and safeguarding a healthy planet are closely related. During the year, health talks by the Taiwan Buddhist Tzu Chi Foundation to promote “Save The Environment & Planet” campaign were held in April and June 2011. In addition, once-a-week vegetarian lunches and sharing sessions were also organized by our Group Finance Director to promote a healthier lifestyle.



RM

’000

30 June 2007 30 June 2008 30 June 2009 30 June 2010 30 June 2011

Revenue (RM’000) 246,346 300,189 314,891 360,099 461,381

Profit before Tax (RM’000) 37,112 38,334 29,515 45,455 56,546

Profit after Tax and Non-controlling interests (RM’000) 28,203 27,948 20,607 33,547 39,152

Total Shareholders’ Equity (RM’000) 136,734 164,095 177,477 203,804 232,062

Net Basic EPS (sen) * 16.0 14.1 10.2 16.6 19.4

Gross Dividend (%) 6.0 10.0 8.0 10.0 10.0

* Comparitive EPS has been restated to take into account the effect of the bonus issue and subdivision of ordinary share of RM1.00 each into RM0.50 each on 23 April 2007.

Five-Year Group Financial Highlights

500,000

400,000

350,000

300,000

250,000

200,000

150,000

100,000

50,000

–

2007 2008 2009 2010 2011

Revenue

Total Shareholders’ Equity

Profit before Tax

Net Basic EPS

Profit after Tax and Non-controlling interests

Gross DividendR

M’0

00

60,000

50,000

45,000

40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

–

2007 2008 2009 2010 2011

RM

’000

40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

–

2007 2008 2009 2010 2011

12.0

10.0

8.0

6.0

4.0

2.0

–

%

2007 2008 2009 2010 2011

20.0

18.0

16.0

14.0

12.0

10.0

8.0

6.0

4.0

2.0

–

Sen

2007 2008 2009 2010 2011

RM

’000

250,000

200,000

150,000

100,000

50,000

–

2007 2008 2009 2010 2011


Event Highlights

BONIA UNVEILS BONIA NERO

In November 2010, BONIA unveiled its premium label for men, boasting high quality shirts with sartorial details aptly named ‘Nero’- meaning black in Italian. This collection is a significant leap from the essential Red and Silver Labels, extending from casual to formal evening wear with its elegant, body-skimming cuts.

Nero was chosen because black symbolizes prestige which is reflective of the quality, craftsmanship and target audience the shirts

are tailored for. In conjunction with the launch, BONIA invited renowned local fashion consultant, Peter Lum to comment on the collection and provide advice on how to “Dress for Success”.

VALENTINO RUDY SPONSORS MISS TOURISM INTERNATIONAL 2010/2011

With 55 delegates from countries around the world vying for the coveted crown of Miss Tourism International, this event marked the biggest number of participants in an international pageant held in Malaysia.

Held in Sunway Resort Hotel on 31 December 2010, the pageant finale saw Ms Nathalie Den Dekker of the Netherlands winning the most prestigious award of Miss Tourism International 2010/2011 as well as Ms Elegance Valentino Rudy.

CARLO RINO AS THE MAIN SPONSOR FOR JAY CHOU THE ERA WORLD TOUR 2011, INDOOR STADIUM BUKIT JALIL, 4 & 5 MARCH 2011

Sweet and unforgettable moments with Carlo Rino and Jay Chou continue to linger in the minds of millions of Jay Chou fans and Carlo Rino customers. Carlo Rino was the main sponsor of this hugely successful event in Malaysia.

By prioritizing its customers, Carlo Rino had opened great opportunities to Carlo Rino Boutique shoppers with an exclusive contest for 20 lucky winners to win 2 Jay Chou concert tickets each to witness the exciting event at the Indoor Stadium Bukit Jalil on the 4 March 2011. In total, 10 lucky shoppers won 2 concert tickets each, and another 10 lucky shoppers won 2 concert tickets each plus a chance to attend the after-concert celebration party with Jay Chou as well as take a much treasured group photograph with the pop star.

BONIA PARFUMS WORKSHOP

In conjunction with the launch of its first ever range of scents for men and women, BONIA held a fragrance workshop titled “The Art and Science of Perfumery” especially for members of the media on 5 April 2011. The fragrances are aptly named ‘BONIA pour FEMME’ and ‘BONIA pour HOMME’ and are distributed exclusively via BONIA boutiques across Malaysia.

The scents were conceptualized together with one of the world’s thoroughbreds of perfumery, ‘Atelier des Parfums’, based at the French Riviera, near Grasse, also known as the world’s perfume capital. ‘Le Nez’ (‘the Nose’) and creator of BONIA’s inaugural perfumes, Olivier Funel is a state-certified ‘Master Parfumeur’ and the fourth generation and current owner of Atelier des Parfums, France.


Event Highlights (cont’d)

MALAYSIA INTERNATIONAL SHOE FESTIVAL 2011

Carlo Rino participated in the Malaysia International Shoe Festival from the 7 - 10 April 2011 held in PWTC, that is believed to have attracted over 100,000 visitors over the three days. Occupying a promotional booth at the premier area, it was the talk of the town, covered by both local and international media and attracting shoes lovers from all walks of life.

As no selling was allowed on the promotional floor, Carlo Rino distributed some 5,000 postcards with a drawback of 20% discount applicable for shoes at Carlo Rino boutiques.

SBPRC CENTENNIAL CELEBRATION

The Santa Barbara Polo & Racquet Club (SBPRC), licensed under the Bonia Group, celebrated its 100-year anniversary at West Boulevard Oasis in the Sunway Pyramid shopping mall on 16 April this year. To mark the occasion, SBPRC held a carnival with various outdoor games and activities along with a special band and dance performances to entertain the crowd. More than 5,000 people attended our Centennial Carnival. Profits from the carnival were donated to SPCA.

During the event, lucky draw winners were selected from a year-long promotion held at every SBPRC counter and boutique starting from June 2010 for customers who had spent a minimum of RM100. RM100,000 worth of prizes were given away. The grand prize was a fully paid vacation to the United States of America and a visit to the Santa Barbara Polo & Racquet Club in Santa Barbara, California – the birthplace of the brand.

INNOVATIVE LEADERSHIP IN GLOBALIZATION AWARD

BONIA bagged an award on 4 May 2011 from the Malaysian Institute of Directors for “Innovative Leadership in Globalization”. The award was presented by the Prime Minister Dato’ Sri Najib Tun Razak during the Corporate Leaders’ Banquet 2011 organized by Limkokwing University of Creative Technology. Receiving the award on behalf of BONIA was the Group Managing Director Mr Albert Chiang. The Malaysian Institute of Directors is the only professional institute of company directors in the country.

The award represents another proud corporate milestone for BONIA. By winning such an acclaimed award BONIA is encouraged to reach new heights of success for its future endeavors.



SAVILE ROW LAUNCHES 1ST STAND ALONE BOUTIQUE

The Savile Row Co, a London based apparel house launched its first standalone boutique at the Sunway Pyramid shopping mall in May 2011. Strategically located on the Ground Floor at Lot 1.41, the boutique features high quality apparels for both men and women, along with men’s shoes, bags and accessories.

Mr PS Lee of VR Directions Sdn Bhd (a subsidiary under Bonia Group) & Mr Jeffrey Doltis of The Savile Row London also signed a license agreement for Savile Row London for all products in Malaysia, Singapore and Indonesia.

SEMBONIA GREEN QUEEN

The Sembonia Goes Green Queen roadshow was held on 9 - 15 May 2011 at the Mid Valley Concourse. The event saw the introduction of stylish reusable Sembonia Ecobags, reflecting the trend towards being more eco-green and natural in premium lifestyle products.

The roadshow was aimed at not only showing the new Sembonia Spring/Summer collection but also helping to promote a more eco-friendly lifestyle.

BONIA LAUNCHES FACEBOOK

BONIA officially launched its Facebook on 1 June 2011 at http://www.facebook.com/BoniaFashion. In conjunction with the launch, a ‘BONIA Fashionista Pose Photo Contest’ was held from June 15 June to 31 July.

For the contest, participants had to submit a photo posing with any BONIA product together with a brief caption/theme for the photo. The Grand prize was an Ipad2 plus RM1000 BONIA cash vouchers. Cash vouchers worth a total of RM5100 were given to the winners.

BONIA LAUNCHES BRIANNA ECO HANDBAGS

BONIA launched the BONIA Natural boutique in Suria KLCC on 16 June 2011. This new concept boutique has been designed to give our customers a natural and fresh shopping experience. In conjunction with the launch, the company took the opportunity to introduce the latest collection from its Brianna eco handbags range.

Driven by a passion for leather and with almost four decades of experience in the selection, design and production of leather wear, BONIA continues to research and develop new processes, methods and means of producing the finest quality leather. Since the early days, the company has practiced eco-friendly processes by using vegetable dye in place of chemical based ones in some of our products.


BONIA SPONSORS PRIZES FOR “DAD, YOU’RE THE GREATEST” CONTEST

BONIA participated in “Dad, You’re the Greatest“, a message writing contest organized by the New Straits Times in conjunction with Fathers’ Day on 19 June 2011. The contest invited NST readers to write a special message to their fathers. The Grand Prize winner received a BONIA Lusso Premio luggage while the Second and Third Prize winners received a BONIA black full-grain leather briefcase and a BONIA dark brown jacquard-trimmed leather messenger bag respectively. 10 Consolation Prize winners were given a BONIA leather wallet each.

SBPRC AT FIP POLO WORLD CUP 2011

On 25 June 2011, Santa Barbara Polo & Racquet Club (SBPRC) was the main sponsor for the committee and staff uniforms of the Royal Malaysian Polo Association (RMPA) during the Asian-Australasian-African Championships Zone D Playoffs in the FIP (Federation of International Polo) Polo World Cup 2011. The company also outfitted the Malaysian Polo team and sponsored RM100,000 in retail value of merchandise to RMPA.

His Majesty, the Sultan of Pahang and his son, HRH Tengku Mahkota Pahang (tournament chairman) who are avid polo players, were present at the event as well as the Prime Minister, Dato’ Sri Najib Tun Razak, who was the official guest.

BONIA EXTENDS ITS STORES WORLDWIDE

Another BONIA boutique recently opened in Jakarta, Indonesia further marking the ongoing success of BONIA in the global market. Opened in July 2011, the 882 square foot store is conveniently located in Grand Indonesia Shopping Town - West Mall, in the heart of Jakarta. The boutique showcases ladies handbags and shoes, men’s shoes and accessories.

CARLO RINO 1ST BOWLING COMPETITION

The Carlo Rino First Bowling Competition was held on 5 August 2011 at Cosmic Bowl Mid Valley -allowing all staff under the Carlo Rino Group of Companies to take part and have a fun day out together as one big family.

The objective of organizing this event was mainly to benefit staff by providing them a fun and leisurely environment after working hours, bringing them closer to each another.


FINANCIAL STATEMENTS056 Directors’ Report060 Statement By Directors060 Statutory Declaration061 Independent Auditors’ Report063 Statements Of Financial Position065 Statements Of Comprehensive Income066 Statements Of Changes In Equity068 Statements Of Cash Flows070 Notes To The Financial Statements


Directors’ Report

The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 30 June 2011.

PRINCIPAL ACTIVITIES

The Company is principally an investment holding and management company. The principal activities of the subsidiaries are set out in Note 10 to the financial statements.

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

RESULTS GroupRM’000

CompanyRM’000

Profit for the financial year attributable to:Owners of the parent 39,152 17,531Non-controlling interests 3,452 –

42,604 17,531

DIVIDENDS

Dividends paid, declared or proposed since the end of the previous financial year were as follows:

RM’000

In respect of financial year ended 30 June 2010: An interim tax exempt dividend of 5% or 2.5 sen per ordinary share, paid on 18 August 2010 5,039 A final tax exempt dividend of 1% or 0.5 sen per ordinary share, paid on 23 December 2010 1,008 A final dividend of 4% or 2.0 sen per ordinary share, less tax of 25%, paid on 23 December 2010 3,024

9,071

In respect of financial year ended 30 June 2011: An interim dividend of 5% or 2.5 sen per ordinary share, less tax of 25%, paid on 23 June 2011 3,779

The Directors have proposed a final dividend of 5% or 2.5 sen per ordinary share, less tax of 25%, amounting to RM3,779,472 in respect of the financial year ended 30 June 2011, subject to the approval of members at the forthcoming Annual General Meeting.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements.

OPTIONS GRANTED OVER UNISSUED SHARES

No options were granted to any person to take up unissued shares of the Company during the financial year.

ISSUE OF SHARES AND DEBENTURES

The Company has not issued any new shares or debentures during the financial year.


Directors’ Report (cont’d)

DIRECTORS

The Directors who have held for office since the date of the last report are:

Chiang Sang Sem (Group Executive Chairman cum Chief Executive Officer)Chiang Fong Yee (Alternate Director to Mr. Chiang Sang Sem)Chiang Heng Kieng (Group Managing Director)Chiang Sang Bon (Group Executive Director)Chiang Fong Tat (Group Executive Director)Chong Chin Look (Group Finance Director)Datuk Ng Peng Hong @ Ng Peng Hay (Independent Non-Executive Director)Dato’ Shahbudin Bin Imam Mohamad (Non-Independent Non-Executive Director)Lim Fong Boon (Independent Non-Executive Director)Chong Sai Sin (Independent Non-Executive Director)

DIRECTORS’ INTERESTS

The Directors holding office at the end of the financial year and their beneficial interests in the ordinary shares of the Company and of its related corporations during the financial year ended 30 June 2011, as recorded in the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act, 1965, were as follows:

Number of ordinary shares of RM0.50 eachBalance

as at1.7.2010 Bought Sold

Balance as at

30.6.2011

Shares in the Company

Direct interests

Chiang Sang Sem 2,367,000 – – 2,367,000Chiang Fong Yee 856,300 – – 856,300Chiang Sang Bon 305,000 – – 305,000Chiang Fong Tat 599,000 – – 599,000Chong Chin Look 500,000 – – 500,000

Indirect interests

Chiang Sang Sem 62,109,226 – – 62,109,226Chiang Fong Yee 10,000 – – 10,000Chiang Heng Kieng 69,000 – – 69,000Chiang Sang Bon 59,000 – – 59,000Chiang Fong Tat 25,000 – – 25,000

By virtue of his interest in the ordinary shares of the Company, Chiang Sang Sem is also deemed to be interested in the ordinary shares of all the subsidiaries to the extent the Company has an interest.

None of the other Directors holding office at the end of the financial year held any interest in ordinary shares of the Company or of its related corporations during the financial year.


DIRECTORS’ BENEFITS

Since the end of the previous financial year, none of the Directors have received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by the Directors as shown in the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest except for any benefit which may be deemed to have derived by virtue of the remuneration received and receivable by certain Directors from the related corporations in their capacity as Directors of those related corporations.

There were no arrangements during and at the end of the financial year, to which the Company is a party, which had the object of enabling Directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY

(I) AS AT THE END OF THE FINANCIAL YEAR

(a) Before the 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 provision for doubtful debts and have satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and

(ii) to ensure that any current assets other than debts, which were unlikely to realise their book values in the ordinary course of business had been written down to their estimated realisable values.

(b) In the opinion of the Directors, the results of the operations of the Group and of the Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature.

(II) FROM THE END OF THE FINANCIAL YEAR TO THE DATE OF THIS REPORT

(c) The Directors are not aware of any circumstances:

(i) which would render the amounts written off for bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any material extent; and

(ii) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; and

(iii) which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

(d) In the opinion of the Directors:

(i) there has not arisen any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made; and

(ii) no contingent or other liability has become enforceable, or is likely to become enforceable, within the period of twelve (12) months after the end of the financial year, which will or may affect the ability of the Group or of the Company to meet their obligations as and when they fall due.




OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY (cont’d)

(III) AS AT THE DATE OF THIS REPORT

(e) There are no charges on the assets of the Group and of the Company which have arisen since the end of the financial year to secure the liabilities of any other person.

(f) There are no contingent liabilities of the Group and of the Company which have arisen since the end of the financial year.

(g) The Directors are not aware of any circumstances not otherwise dealt with in the report or financial statements which would render any amount stated in the financial statements of the Group and of the Company misleading.

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

Significant events during the financial year are disclosed in Note 38 to the financial statements.

SIGNIFICANT EVENTS SUBSEQUENT TO THE REPORTING DATE

Significant events subsequent to the reporting date are disclosed in Note 39 to the financial statements.

AUDITORS

The auditors, BDO, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the Directors.

…................................................ …................................................Chiang Sang Sem Chiang Heng KiengGroup Executive Chairman Group Managing Directorcum Chief Executive Officer

Kuala Lumpur24 October 2011


In the opinion of the Directors, the financial statements set out on pages 63 to 152 have been drawn up in accordance with applicable approved Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 30 June 2011 and of the financial performance and cash flows of the Group and of the Company for the financial year then ended.

On behalf of the Board,

..................................................... .....................................................Chiang Sang Sem Chiang Heng KiengGroup Executive Chairman cum Chief Executive Officer

Group Managing Director


Statutory Declaration

I, Chong Chin Look, being the Group Finance Director primarily responsible for the financial management of Bonia Corporation Berhad, do solemnly and sincerely declare that the financial statements set out on pages 63 to 152 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by )the abovenamed at Kuala Lumpur this )24 October 2011 ) Chong Chin Look

Before me:S.IDERAJU (No.W451)

Commissioner for OathsKuala Lumpur

Statement By Directors


Independent Auditors’ Reportto the members of Bonia Corporation Berhad

REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of Bonia Corporation Berhad, which comprise the statements of financial position as at 30 June 2011 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 63 to 152.

DIRECTORS’ RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia, and for such internal control as the Directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

AUDITORS’ RESPONSIBILITY

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

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

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

OPINION

In our opinion, the financial statements have been properly drawn up in accordance with applicable approved Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 30 June 2011 and of the financial performance and cash flows of the Group and of the Company for the financial year then ended.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

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

(b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 10 to the financial statements.

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

(d) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.


Independent Auditors’ Reportto the members of Bonia Corporation Berhad (cont’d)

OTHER REPORTING RESPONSIBILITIES

The supplementary information set out in Note 41 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (‘MIA Guidance’) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

OTHER MATTERS

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

BDO Hiew Kim LoongAF: 0206 2858/08/12 (J)Chartered Accountants Chartered Accountant



Statements Of Financial Positionas at 30 June 2011

Note

Group Company

2011RM’000

2010(Restated)

RM’0002011

RM’0002010

RM’000

ASSETS

Non-current assets

Property, plant and equipment 7 71,130 62,544 16,403 17,274Investment properties 8 12,753 12,127 – –Intangible assets 9 68,848 4,876 – –Investments in subsidiaries 10 – – 143,870 81,531Investments in associates 11 426 112 – –Other investments 12 950 575 – –Deferred tax assets 13 735 808 – –

154,842 81,042 160,273 98,805Current assets

Inventories 14 81,464 57,869 – –Trade and other receivables 15 76,680 54,709 24,693 24,562Current tax assets 4,227 2,943 3,418 2,376Cash and cash equivalents 16 56,037 70,017 491 10,244

218,408 185,538 28,602 37,182

TOTAL ASSETS 373,250 266,580 188,875 135,987


Group Company

Note2011

RM’000

2010(Restated)

RM’0002011

RM’0002010

RM’000

EQUITY AND LIABILITIES

Equity attributable to owners of the parent

Share capital 17 100,786 100,786 100,786 100,786Reserves 18 131,276 103,018 31,721 27,040

232,062 203,804 132,507 127,826Non-controlling interests 14,925 2,349 – –

TOTAL EQUITY 246,987 206,153 132,507 127,826

LIABILITIES

Non-current liabilities

Borrowings 19 32,926 18,936 18,431 4,240Deferred tax liabilities 13 7,411 244 36 57Trade and other payables 22 6,151 – 6,151 –

46,488 19,180 24,618 4,297Current liabilities

Trade and other payables 22 53,138 26,679 29,765 3,689Borrowings 19 18,317 10,399 1,985 175Current tax liabilities 8,320 4,169 – –

79,775 41,247 31,750 3,864

TOTAL LIABILITIES 126,263 60,427 56,368 8,161

TOTAL EQUITY AND LIABILITIES 373,250 266,580 188,875 135,987

The accompanying notes form an integral part of the financial statements.

Statements Of Financial Positionas at 30 June 2011 (cont’d)


Statements Of Comprehensive Incomefor the financial year ended 30 June 2011

Group Company

Note2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Revenue 25 461,381 360,099 39,167 23,632Cost of sales 26 (194,232) (154,639) – –

Gross profit 267,149 205,460 39,167 23,632Other operating income 4,472 8,860 918 22,268Selling and distribution expenses (122,860) (103,039) – –General and administrative expenses (87,439) (62,830) (16,746) (19,704)Finance costs 27 (4,649) (2,993) (1,403) (222)Share of loss of associates (127) (3) – –

Profit before tax 28 56,546 45,455 21,936 25,974Tax expense 29 (13,942) (12,252) (4,405) (3,766)

Profit for the financial year 42,604 33,203 17,531 22,208Other comprehensive income: Foreign currency translations 2,323 (1,173) – –

Total comprehensive income 44,927 32,030 17,531 22,208

Profit attributable to:Owners of the parent 39,152 33,547 17,531 22,208Non-controlling interests 3,452 (344) – –

42,604 33,203 17,531 22,208

Total comprehensive income attributable to:Owners of the parent 41,108 32,374 17,531 22,208Non-controlling interests 3,819 (344) – –

44,927 32,030 17,531 22,208

Earnings per ordinary share attributable to equity holders of the Company (sen) 30 19.42 16.64



Statements Of Changes In Equityfor the financial year ended 30 June 2011

GROUP Note

Sharecapital

RM’000

SharepremiumRM’000

Exchangetranslation

reserveRM’000

Retainedearnings RM’000

Total attributable

to owners of the parent

RM’000

Non-controlling

interestsRM’000

Totalequity

RM’000

Balance as at 30 June 2009 100,786 476 2,562 73,653 177,477 3,072 180,549

Profit/(Loss) for the financial year – – – 33,547 33,547 (344) 33,203Foreign currency translations – – (1,173) – (1,173) – (1,173)

Total comprehensive income – – (1,173) 33,547 32,374 (344) 32,030

Transactions with owners:

Additional acquisition of shares from a minority shareholder – – – – – (356) (356)

Dividends paid 31 – – – (6,047) (6,047) – (6,047)Dividend paid to non-controlling

interests of a subsidiary – – – – – (23) (23)

Total transactions with owners: – – – (6,047) (6,047) (379) (6,426)


Profit for the financial year – – – 39,152 39,152 3,452 42,604Foreign currency translations – – 1,956 – 1,956 367 2,323

Total comprehensive income – – 1,956 39,152 41,108 3,819 44,927

Transactions with owners

Acquisition of subsidiaries 33(a) – – – – – 12,276 12,276Disposal of share to non-

controlling interests of a subsidiary – – – – – 89 89

Dividends paid 31 – – – (12,850) (12,850) – (12,850)Dividend paid to non-controlling

interests of subsidiaries – – – – – (3,608) (3,608)

Total transactions with owners – – – (12,850) (12,850) 8,757 (4,093)




Statements Of Changes In Equityfor the financial year ended 30 June 2011 (cont’d)

Note

Share capital

RM’000

Share premiumRM’000

Retained earnings RM’000

Total equity

RM’000

COMPANY

Balance as at 30 June 2009 100,786 476 10,403 111,665

Profit for the financial year – – 22,208 22,208

Total comprehensive income – – 22,208 22,208


Dividends paid 31 – – (6,047) (6,047)

Total transactions with owners – – (6,047) (6,047)


Profit for the financial year – – 17,531 17,531

Total comprehensive income – – 17,531 17,531


Dividends paid 31 – – (12,850) (12,850)

Total transactions with owners – – (12,850) (12,850)




Note

Group Company

2011RM’000

2010RM’000

2011RM’000

2010RM’000

CASH FLOWS FROM OPERATING ACTIVITIES

Profit before tax 56,546 45,455 21,936 25,974

Adjustments for:Amortisation of trademarks 9 646 3 – –Bad debts written off 712 359 – –Depreciation of property, plant and equipment 7 14,475 13,468 926 1,118Dividend income – – (37,216) (21,725)Fair value adjustments on investment properties 8 (626) – – –(Gain)/Loss on disposal of:

- property, plant and equipment, net (115) (89) – –- subsidiaries (36) (10) (500) (17,835)- an associate 11 – (53) – 110

Goodwill written off 9 232 – – –Impairment losses on:

- investment in subsidiaries – – 524 1,715- trade and other receivables 3,219 3,877 3,248 4,174- an associate 1 – 1 –- property, plant and equipment 7 212 – – –

Impairment losses on other receivables no longer required – (3,836) – (4,182)Interest expense 2,413 1,512 703 167Accretion of non current other payable 678 – 678 –Interest income (421) (221) (300) (86)Inventories written off 14 2,362 75 – –Profit received from trust fund accounts (312) (467) (83) (164)Property, plant and equipment written off 7 225 863 – –Share of loss of associates 127 3 – –Unrealised (gain)/loss on foreign currency translations, net (52) 108 (29) 118Waiver of debts owing from a subsidiary – – – 2,700

Operating profit/(loss) before changes in working capital 80,286 61,047 (10,112) (7,916)Changes in working capital: Inventories (10,072) 2,180 – – Trade and other receivables (9,824) (7,076) – – Trade and other payables 10,928 4,012 1,078 2,430

Cash generated from/(used in) operations 71,318 60,163 (9,034) (5,486)Tax paid (18,687) (10,631) – –Tax refunded 1,587 687 1,142 499

Net cash from/(used in) operating activities 54,218 50,219 (7,892) (4,987)

Statements Of Cash Flowsfor the financial year ended 30 June 2011


Note

Group Company

2011RM’000

2010RM’000

2011RM’000

2010RM’000

CASH FLOWS FROM INVESTING ACTIVITIES

Interest received 421 221 300 86Dividend received – – 30,606 16,294(Increase)/Decrease in fixed deposits pledged to licensed banks (801) 13 – –Acquisition of additional shares in subsidiaries – – (500) (1,265)Acquisition of subsidiaries 33(c) (50,845) – (55,154) –Additional acquisition of share from a minority shareholder – (356) – –Acquisition of an associate 11 (441) (115) – –Other investment (350) – – –Proceed from disposal of:

- a subsidiary 10(ii) 125 100 500 100- an associate 11 – 126 – 126- property, plant and equipment 373 462 – –

Profit received from trust fund accounts 312 467 83 164Purchase of property, plant and equipment 7(a) (19,949) (7,776) (55) (82)Purchase of trademarks 9 (7) (1) – –(Advances to)/Repayments from subsidiaries – – (3,354) 2,549Repayments to/(Advances from) subsidiaries – – 23,265 (240)Advances to an associate (1) (2) – (2)

Net cash (used in)/from investing activities (71,163) (6,861) (4,309) 17,730

CASH FLOWS FROM FINANCING ACTIVITIES

Interest paid (2,413) (1,512) (703) (167)Dividends paid to shareholders (12,850) (6,047) (12,850) (6,047)Dividends paid to minority shareholders (3,608) (23) – –Drawdowns of term loans 20,325 4,601 16,000 4,000Repayments of hire-purchase and lease creditors (986) (718) (158) (298)Repayments of term loans (5,174) (576) – –Net financing/(repayment) of trust receipts 39 (874) – –Drawdowns of bankers’ acceptances 12,521 899 – –Repayments of bankers’ acceptances (7,218) (11,185) – –

Net cash from/(used in) financing activities 636 (15,435) 2,289 (2,512)

Net (decrease)/increase in cash and cash equivalents (16,309) 27,923 (9,912) 10,231Effect of exchange rate changes on cash and cash equivalents 1,035 (59) – –Cash and cash equivalents at beginning of the financial year 67,205 39,341 10,227 (4)

Cash and cash equivalents at end of the financial year 16(e) 51,931 67,205 315 10,227


Statements Of Cash Flowsfor the financial year ended 30 June 2011 (cont’d)


1. CORPORATE INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad.

The registered office of the Company is located at Lot 10, The Highway Centre, Jalan 51/205, 46050, Petaling Jaya, Selangor Darul Ehsan. The principal place of business of the Company is located at No. 62, Jalan Kilang Midah, Taman Midah, Cheras, 56000 Kuala Lumpur.

The financial statements are presented in Ringgit Malaysia (‘RM’), which is also the Company’s functional currency. All financial information presented in RM has been rounded to the nearest thousand, unless otherwise stated.

The financial statements were authorised for issue in accordance with a resolution by the Board of Directors on 24 October 2011.

2. PRINCIPAL ACTIVITIES

The Company is principally an investment holding and management company. The principal activities of the subsidiaries are set out in Note 10 to the financial statements.

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

3. BASIS OF PREPARATION

The financial statements of the Group and of the Company have been prepared in accordance with applicable approved Financial Reporting Standards (‘FRSs’) and the provisions of the Companies Act, 1965 in Malaysia.

4. SIGNIFICANT ACCOUNTING POLICIES

4.1 Basis of accounting

The financial statements of the Group and of the Company have been prepared under the historical cost convention except as otherwise stated in the financial statements.

The preparation of financial statements requires the Directors to make estimates and assumptions that affect the reported amounts of assets,

liabilities, revenue and expenses and disclosure of contingent assets and liabilities. In addition, the Directors are also required to exercise their judgement in the process of applying the Group’s accounting policies. The areas involving such judgements, estimates and assumptions are disclosed in Note 6 to the financial statements. Although these estimates and assumptions are based on the Directors’ best knowledge of events and actions, actual results could differ from those estimates.

4.2 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and all its subsidiaries. Subsidiaries are entities (including special purposes entities) over which the Company has the power to govern the financial operating policies, generally accompanied by a shareholding giving rise to the majority of the voting rights, as to obtain benefits from their activities.

Subsidiaries are consolidated from the date on which control is transferred to the Group up to the effective date on which control ceases, as appropriate.

Intragroup balances, transactions, income and expenses are eliminated on consolidation. Unrealised gains arising from transactions with associates and joint ventures are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no impairment.

Notes To The Financial Statements30 June 2011


4. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

4.2 Basis of consolidation (cont’d)

The financial statements of the subsidiaries are prepared for the same reporting period as that of the Company, using consistent accounting policies. Where necessary, accounting policies of subsidiaries are changed to ensure consistency with the policies adopted by the other entities in the Group.

Non-controlling interests represents the equity in subsidiaries that are 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. Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Non-controlling interests in the acquiree may be initially measured either at fair value or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets. The choice of measurement basis is made on an combination-by-combination basis. Subsequent to initial recognition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity.

The Group has applied the revised FRS 3 Business Combinations in accounting for business combinations from 1 July 2010 onwards. The change in accounting policy has been applied prospectively in accordance with the transitional provisions provided by the Standard.

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 consideration paid or received is recognised directly in equity and attributed to owners of the parent.

When the Group losses control of a subsidiary, the profit or loss on disposal is calculated as the difference between:

(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest; and

(ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests.

Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investments retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under FRS 139 Financial Instruments: Recognition and Measurement or, where applicable, the cost on initial recognition of an investment in associate or jointly controlled entity.

4.3 Business combinations

Business combinations from 1 July 2010 onwards

Business combinations are accounted for by applying the acquisition method of accounting.

Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured at their fair value at the acquisition date, except that:

(a) deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with FRS 112 Income Taxes and FRS 119 Employee Benefits respectively;

(b) liabilities or equity instruments related to the replacements by the Group of an acquiree’s share-based payment awards are measured in accordance with FRS 2 Share-based Payment; and

(c) assets (or disposal groups) that are classified as held for sale in accordance with FRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.

Notes To The Financial Statements30 June 2011 (cont’d)



4.3 Business combinations (cont’d)

Business combinations from 1 July 2010 onwards (cont’d)

Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the serviced are received.

In a business combination achieved in stages, previously held equity interests in the acquiree are re-measured to fair value at the acquisition date and any corresponding gain or loss is recognised in profits or loss.

The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.

Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill in the statement of financial position. The accounting policy for goodwill is set out in Note 4.8(a). In instances where the latter amount exceeds the former, the excess is recognised as a gain on bargain purchase in profit or loss on the acquisition date.

Business combinations before 1 July 2010

Under the purchase method of accounting, the cost of business combination is measured at the aggregate of fair values at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued plus any costs directly attributable to the business combination.

At the acquisition date, the cost of business combination is allocated to identifiable assets acquired, liabilities assumed and contingent liabilities in the business combination which are measured initially at their fair values at the acquisition date. The excess of the cost of business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities is recognised as goodwill (see Note 4.8(a) to the financial statements on goodwill). If the cost of business combination is less than the interest in the net fair value of the identifiable assets, liabilities and contingent liabilities, the Group will:

(a) reassess the identification and measurement of the acquiree’s identifiable assets, liabilities and contingent liabilities and the measurement of the cost of the business combination; and

(b) recognise immediately in profit or loss any excess remaining after that reassessment.

When a business combination includes more than one exchange transaction, any adjustment to the fair values of the subsidiary’s identifiable assets, liabilities and contingent liabilities relating to previously held interests of the Group is accounted for as a revaluation.

4.4 Property, plant and equipment and depreciation

All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that is directly attributable to the acquisition of the asset.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Group is obligated to incur when the asset is acquired, if applicable.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the asset and which has different useful life, is depreciated separately.

After initial recognition, property, plant and equipment, except for freehold land and properties under construction, are stated at cost less any accumulated depreciation and any accumulated impairment losses.





4.4 Property, plant and equipment and depreciation (cont’d)

Freehold land has unlimited useful life and is not depreciated. Properties under construction are not depreciated until such time when the asset is available for use. Leasehold land is depreciated over the leasehold period of ninety-six (96) years.

Depreciation is calculated to write off the cost of the assets to their estimated residual value on a straight line basis over their estimated useful lives. The principal depreciation rates are as follows:

Buildings 2%Plant and machinery 15% - 20%Furniture, fittings and counter fixtures 10% - 33�%Office equipment 10% - 50%Renovation 10% - 33�%Electrical installations 10% - 15%Motor vehicles 20%

At the end of each reporting period, the carrying amount of an item of property, plant and equipment is assessed for impairment when events or changes in circumstances indicate that its carrying amount may not be recoverable. A write down is made if the carrying amount exceeds the recoverable amount (see Note 4.9 to the financial statements on impairment of non-financial assets).

The residual values, useful lives and depreciation method are reviewed at the end of each reporting period to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment. If expectations differ from previous estimates, the changes are accounted for as a change in an accounting estimate.

The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any, and the carrying amount is included in profit

or loss.

4.5 Leases and hire purchase

(a) Finance leases and hire purchase

Assets acquired under finance leases and hire purchase which transfer substantially all the risks and rewards of ownership to the Group are recognised initially at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease. The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the leases, if this is practicable to determine; if not, the Group’s incremental borrowing rate is used. Any initial direct costs incurred by the Group are added to the amount recognised as an asset. The assets are capitalised as property, plant and equipment and the corresponding obligations are treated as liabilities. The property, plant and equipment capitalised are depreciated on the same basis as owned assets.

The minimum lease payments are apportioned between the finance charges and the reduction of the outstanding liability. The finance charges are recognised in the income statements over the period of the lease term so as to produce a constant periodic rate of interest on the remaining lease and hire-purchase liabilities.

(b) Operating leases

A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

Lease payments under operating leases are recognised as an expense on a straight-line basis over the lease term.



4.5 Leases and hire purchase (cont’d)

(c) Leases of land and buildings

For leases of land and buildings, the land and buildings elements are considered separately for the purpose of lease classification and these leases are classified as operating or finance leases in the same way as leases of other assets.

The minimum lease payments including any lump-sum upfront payments made to acquire the interest in the land and buildings are allocated between the land and the buildings elements in proportion to the relative fair values of the leasehold interests in the land element and the buildings element of the lease at the inception of the lease.

For a lease of land and buildings in which the amount that would initially be recognised for the land element is immaterial, the land and buildings are treated as a single unit for the purpose of lease classification and is accordingly classified as a finance or operating lease. In such a case, the economic life of the buildings is regarded as the economic life of the entire leased asset.

Following the adoption of Amendment to FRS 117 Leases contained in the Improvements to FRSs (2009), the Group reassessed the classification of land elements of unexpired leases on the basis of information existing at the inception of those leases. Consequently, the Group retrospectively reclassified certain prepaid lease payments for land as disclosed in Notes 7 and 40 to the financial statements.

4.6 Investment properties

Investment properties are properties which are held to earn rentals yields or for capital appreciation or for both and are not occupied by the Group. Investment properties also include properties that are being constructed or developed for future use as investment properties. Investment properties are initially measured at cost, which includes transaction costs. After initial recognition, investment properties are stated at fair value.

If the Group determines that the fair value of an investment property under construction is not reliably determinable but expects the fair value of the property to be reliably determinable when construction is complete, the Group shall measure that investment property under construction at cost until either its fair value becomes reliably determinable or construction is completed (whichever is earlier). Once the Group is able to measure reliably the fair value of an investment property under construction that has previously been measured at cost, the Group shall measure that property at its fair value.

The fair values of investment properties are the prices at which the properties could be exchanged between knowledgeable, willing parties in an arm’s length transaction. The fair values of investment properties reflect market conditions at the end of the reporting period, without any deduction for transaction costs that may be incurred on sale or other disposal.

Fair values of investment properties are arrived at by reference to market evidence of transaction prices for similar properties. It is performed by registered independent valuers with appropriate recognised professional qualification and has recent experience in the location and category of the investment properties being valued.

A gain or loss arising from a change in the fair value of investment properties is recognised in profit or loss for the period in which it arises.

Investment properties are derecognised when either they have been disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The gains or losses arising from the retirement or disposal of investment property is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the asset and is recognised in profit or loss in the period of the retirement or disposal.

4.7 Investments

(a) Subsidiaries

A subsidiary is an entity in which the Group and the Company have power to control the financial and operating policies so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group and the Company have such power over another entity.





4.7 Investments (cont’d)

(a) Subsidiaries (cont’d)

An investment in subsidiary, which is eliminated on consolidation, is stated in the Company’s separate financial statements at cost less impairment losses, if any. Investments accounted for at cost shall be accounted for in accordance with FRS 5 Non Current Assets Held for Sale and Discounted Operations when they are classified as held for sale in accordance with FRS 5.

When control of a subsidiary is lost as a result of a transaction, event or other circumstance, the Group would derecognise all assets, liabilities and non-controlling interests at their carrying amount and to recognise the fair value of the consideration received. Any retained interest in the former subsidiary is recognised at its fair value at the date control is lost. The resulting difference is recognised as a gain or loss in profit or loss.

(b) Associates

An associate is an entity over which the Group and the Company have significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

In the Company’s separate financial statements, an investment in associate is stated at cost less impairment losses, if any. An investment in associate is accounted for in the consolidated financial statements using the equity method of accounting. The investment

in associate in the consolidated statement of financial position is initially recognised at cost and adjusted thereafter for the post acquisition change in the Group’s share of net assets of the investments.

The interest in the associate is the carrying amount of the investment in the associate under the equity method together with any long term interest that, in substance, form part of the Group’s net interest in the associate.

The Group’s share of the profit or loss of the associate during the financial year is included in the consolidated financial statements, after

adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. Distributions received from the associate reduce the carrying amount of the investment. Adjustments to the carrying amount may also be necessary for changes in the Group’s proportionate interest in the associate arising from changes in the associate’s equity that have not been recognised in the associate’s profit or loss. Such changes include those arising from the revaluation of property, plant and equipment and from foreign exchange translation differences. The Group’s share of those changes is recognised directly in equity of the Group.

Unrealised gains and losses on transactions between the Group and the associate are eliminated to the extent of the Group’s interest in the associate.

When the Group’s share of losses in the associate equal to or exceeds its interest in the associate, the carrying amount of that interest is

reduced to nil and the Group does not recognise further losses unless it has incurred legal or constructive obligations or made payments on its behalf.

The most recent available financial statements of the associates are used by the Group in applying the equity method. Where the end of the reporting periods of the financial statements are not coterminous, the share of results is arrived at using the latest audited financial statements for which the difference in the end of the reporting periods is no more than three (3) months. Adjustments are made for the effects of any significant transactions or events that occur between the intervening period.

Upon disposal of such investment, the difference between the net disposal proceeds and its carrying amount is included in profit or loss.




4.8 Intangible assets

(a) Goodwill

Goodwill recognised in a business combination is an asset at the acquisition date and is initially measured at cost being the excess of the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer’s previously held equity interest (if any) in the entity over net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.

After initial recognition, goodwill is measured at cost less accumulated impairment losses, if any. Goodwill is not amortised but instead tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount may be impaired. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill arising on acquisition of an associate is the excess of cost of investment over the Group’s share of the net fair value of net assets of the associates’ identifiable assets, liabilities and contingent liabilities at the date of acquisition.

Goodwill relating to the associate is included in the carrying amount of the investment and is not amortised. The excess of the Group’s share of the net fair value of the associate’s identifiable assets and liabilities over the cost of investment is included as income in the determination of the Group’s share of the associate’s profit or loss in the period in which the investment is acquired.

(b) Other intangible assets

Other intangible assets are recognised only when the identifiability, control and future economic benefit probability criteria are met.

The Group recognises at the acquisition date separately from goodwill, an intangible asset of the acquire, irrespective of whether the asset had been recognised by the acquiree before the business combination.

Intangible assets are initially measured at cost. The cost of intangible assets recognised in a business combination is their fair values as

at the date of acquisition.

After initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite useful lives are amortised on a straight line basis over the estimated economic useful lives and are assessed for any indication that the asset may be impaired. If any such indication exists, the entity shall estimate the recoverable amount of the asset. The amortisation period and the

amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year end. The amortisation expense on intangible assets with finite useful lives is recognised in profit or loss and is included within the general and administrative expenses line item.

An intangible asset has an indefinite useful life when based on the analysis of all the relevant factors; there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows to the Group. Intangible assets with indefinite useful lives are tested for impairment annually and wherever there is an indication that the carrying amount may be impaired. Such intangible assets are not amortised. Their useful lives are reviewed each period to determine whether events and circumstances continue to support the indefinite useful life assessment for the asset. If they do not, the change in the useful life assessment from indefinite to finite is accounted for as a change in accounting estimate in accordance with FRS 108 Accounting Policies, Changes in Accounting Estimates and Errors.

Expenditure on an intangible item that are initially recognised as an expense is not recognised as part of the cost of an intangible asset at a later date.

An intangible asset is derecognised on disposal or when no future economic benefits are expected from its use. The gain or loss arising from the derecognition determined as the difference between the net disposal proceeds, if any, and the carrying amount of the asset is recognised in profit or loss when the asset is derecognised.




4.8 Intangible assets (cont’d)

(c) Trademarks

Trademarks acquired have finite useful lives and are carried at cost less any accumulated amortisation and any accumulated impairment losses. Amortisation is calculated using the straight-line method to allocate the cost of trademarks over their estimated useful lives of seven (7) to twenty six (26) years. Cost of renewing trademarks is recognised in profit or loss as incurred.

4.9 Impairment of non-financial assets

The carrying amounts of assets, except for financial assets (excluding investments in subsidiaries and associates), inventories, deferred tax assets and investment properties measured at fair value, are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.

Goodwill and intangible assets that have an indefinite useful life are tested annually for impairment or more frequently if events or changes in circumstances indicate that the goodwill or intangible asset might be impaired.

The recoverable amount of an asset is estimated for an individual asset. Where it is not possible to estimate the recoverable amount of the individual asset, the impairment test is carried out on the cash generating unit (‘CGU’) to which the asset belongs. Goodwill acquired in a business combination is from the acquisition date, allocated to each of the Group’s CGU or groups of CGU that are expected to benefit from the synergies of the combination giving rise to the goodwill irrespective of whether other assets or liabilities of the acquiree are assigned to those units or groups of units.

Goodwill acquired in a business combination shall be tested for impairment as part of the impairment testing of CGU to which it relates. The CGU to which goodwill is allocated shall represent the lowest level within the Group at which the goodwill is monitored for internal management purposes and not larger than an operating segment determined in accordance with FRS 8.

The recoverable amount of an asset or CGU is the higher of its fair value less cost to sell and its value in use.

In estimating the value in use, the estimated future cash inflows and outflows to be derived from continuing use of the asset and from its ultimate disposal are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the future cash flow estimates have not been adjusted. An impairment loss is recognised in profit or loss when the carrying amount of the asset or the CGU, including the goodwill or intangible asset, exceeds the recoverable amount of the asset or the CGU. The total impairment loss is allocated, first, to reduce the carrying amount of any goodwill allocated to the CGU and then to the other assets of the CGU on a pro-rata basis of the carrying amount of each asset in the CGU. The impairment loss is recognised in profit or loss immediately.

An impairment loss on goodwill is not reversed in subsequent periods. An impairment loss for other assets is reversed if, and only if, there has been a change in the estimates used to determine the assets’ recoverable amount since the last impairment loss was recognised.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Such reversals are recognised as income immediately in profit or loss.

4.10 Inventories

Inventories are stated at the lower of cost and net realisable value.

Cost is determined using the weighted average method. The cost of consumables and raw materials comprises all costs of purchase plus the cost of bringing the inventories to their present location and condition. The cost of work-in-progress and finished goods includes the cost of raw materials, direct labour, other direct cost and a proportion of production overheads based on normal operating capacity of the production facilities.

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



4.11 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one enterprise and a financial liability or equity instrument of another enterprise.

A financial asset is any asset that is cash, an equity instrument of another enterprise, a contractual right to receive cash or another financial asset from another enterprise, or a contractual right to exchange financial assets or financial liabilities with another enterprise under conditions that are potentially favourable to the Group.

A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another enterprise, or a contractual obligation to exchange financial assets or financial liabilities with another enterprise under conditions that are potentially unfavourable to the Group.

Financial instruments are recognised on the statement of financial position when the Group has become a party to the contractual provisions of the instrument. At initial recognition, a financial instrument is recognised at fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issuance of the financial instrument.

An embedded derivative is separated from the host contract and accounted for as a derivative if, and only if the economic characteristics and risks of the embedded derivative is not closely related to the economic characteristics and risks of the host contract, a separate instrument with the same terms as the embedded derivative meets the definition of a derivative, and the hybrid instrument is not measured at fair value through profit or loss.

(a) Financial assets

A financial asset is classified into the following four categories after initial recognition for the purpose of subsequent measurement:

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

Financial assets at fair value through profit or loss comprise financial assets that are held for trading (i.e. financial assets acquired principally for the purpose of resale in the near term), derivatives (both, freestanding and embedded) and financial assets that were specifically designated into this classification upon initial recognition.

Subsequent to initial recognition, financial assets classified as at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in the fair value of financial assets classified as at fair value through profit or loss are recognised in profit or loss. Net gains or losses on financial assets classified as at fair value through profit or loss exclude foreign exchange gains and losses, interest and dividend income. Such income is recognised separately in profit or loss as components of other income or other operating losses.

However, derivatives that is linked to and must be settled by delivery of unquoted equity instruments that do not have a quoted market price in an active market are recognised at cost.

(ii) Held-to-maturity investments

Financial assets classified as held-to-maturity comprise non-derivative financial assets with fixed or determinable payments and fixed maturity that the Group has the positive intention and ability to hold to maturity.

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





4.11 Financial instruments (cont’d)

(a) Financial assets (cont’d)

(iii) Loans and receivables

Financial assets classified as loans and receivables comprise non-derivative financial assets with fixed or determinable payments that are not quoted in an active market

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

(iv) Available-for-sale financial assets

Financial assets classified as available-for-sale comprise non-derivative financial assets that are designated as available for sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss.

Subsequent to initial recognition, financial assets classified as available-for-sale are measured at fair value. Any gains or losses arising from changes in the fair value of financial assets classified as available-for-sale are recognised directly in other comprehensive income, except for impairment losses and foreign exchange gains and losses, until the financial asset is derecognised, at which time the cumulative gains or losses previously recognised in other comprehensive income are recognised in profit or loss. However, interest calculated using the effective interest method is recognised in profit or loss whilst dividends on available-for-sale equity instruments are recognised in profit or loss when the Group’s right to receive payment is established.

Cash and cash equivalents include cash and bank balances, bank overdrafts, deposits and other short term, highly liquid investments with original maturities of three (3) months or less, which are readily convertible to cash and are subject to insignificant risk of changes in value.

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

A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or marketplace convention.

(b) Financial liabilities

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. A financial liability is classified into the following two categories after initial recognition for the purpose of subsequent measurement:

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

Financial liabilities at fair value through profit or loss comprise financial liabilities that are held for trading, derivatives (both, freestanding and embedded) and financial liabilities that were specifically designated into this classification upon initial recognition.

Subsequent to initial recognition, financial liabilities classified as at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in the fair value of financial liabilities classified as at fair value through profit or loss are recognised in profit or loss. Net gains or losses on financial liabilities classified as at fair value through profit or loss exclude foreign exchange gains and losses, interest and dividend income. Such income is recognised separately in profit or loss as components of other income or other operating losses.



4. SIGNIFICANT ACCOUNTING POLICIES (cont’d

4.11 Financial instruments (cont’d)

(b) Financial liabilities (cont’d)

(ii) Other financial liabilities

Financial liabilities classified as other financial liabilities comprise non-derivative financial liabilities that are neither held for trading nor initially designated as at fair value through profit or loss.

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

A financial liability is derecognised when, and only when, it is extinguished, i.e. when the obligation specified in the contract is discharged or cancelled or expired. An exchange between an existing borrower and lender of debt instruments with substantially different terms are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability.

The difference between the carrying amount of a financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.

The Group designates corporate guarantees given to banks for credit facilities granted to subsidiaries as insurance contracts as defined in FRS 4 Insurance Contracts. The Group recognises these insurance liabilities when there is a present obligation, legal or constructive, as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

(c) Equity

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

Ordinary shares are recorded at the nominal value and proceeds in excess of the nominal value of shares issued, if any, are accounted for as share premium. Both ordinary shares and share premium are classified as equity. Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax benefit. Otherwise, they are charged to profit or loss.

Dividends to shareholders are recognised in equity in the period in which they are declared.

The Group measures a liability to distribute non-cash assets as a dividend to the owners of the Company at the fair value of the assets to be distributed. The carrying amount of the dividend is remeasured at each reporting date and at the settlement date, with any changes recognised directly in equity as adjustments to the amount of the distribution. On settlement of the transaction, the Group recognises the difference, if any, between the carrying amount of the assets distributed and the carrying amount of the liability in profit or loss.

If the Company reacquires its own equity instruments, the consideration paid, including any attributable transaction costs is deducted from equity as treasury shares until they are cancelled. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments. Where such shares are issued by resale, the difference between the sales consideration and the carrying amount is shown as a movement in equity.

Following the adoption of FRS 139 during the financial year, the Group reassessed the classification and measurement of financial assets and financial liabilities as at 1 January 2010. Consequently, the Group reclassified and remeasured the financial assets and financial liabilities as disclosed in Note 5.1(c) and Note 12 to the financial statements.




4.12 Impairment of financial assets

The Group assesses whether there is any objective evidence that a financial asset is impaired at the end of each reporting period.

(a) Loans and receivables

The Group collectively considers factors such as the probability of bankruptcy or significant financial difficulties of the receivable, and default or significant delay in payments to determine whether there is objective evidence that an impairment loss on loans and receivables has occurred. Other objective evidence of impairment include historical collection rates determined on an individual basis and observable changes in national or local economic conditions that are directly correlated with the historical default rates of receivables.

If any such objective evidence exists, the amount of impairment loss is measured as the difference between the financial 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 loans and receivables are reduced through the use of an allowance account.

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

(b) Available-for-sale financial assets

The Group collectively considers factors such as 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 as objective evidence that available-for-sale financial assets are impaired.

If any such objective evidence exists, an amount comprising the difference between the financial asset’s cost (net of any principal

payment and amortisation) and current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to profit to loss.

Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the subsequent periods. Instead, any increase in the fair value subsequent to the impairment loss is recognised in other comprehensive income.

Impairment losses on available-for-sale debt investments are subsequently reversed in profit or loss if the 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.

4.13 Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualified asset is capitalised as part of the cost of the asset until when substantially all the activities necessary to prepare the asset for its intended use or sale are complete, after which such expense is charged to profit or loss. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. Capitalisation of borrowing cost is suspended during extended periods in which active development is interrupted.

The amount of borrowing costs eligible for capitalisation is the actual borrowing costs incurred on the borrowing during the period less any investment income on the temporary investment of the borrowing.

All other borrowing cost is recognised in profit or loss in the period in which they are incurred.

4.14 Income taxes

Income taxes include all domestic and foreign taxes on taxable profit. Income taxes also include other taxes such as withholding taxes which are payable by foreign subsidiaries and associates on distributions to the Group and Company and real property gains taxes payable on disposal of properties.




4.14 Income taxes (cont’d)

Taxes in the income statement comprise current tax and deferred tax.

(a) Current tax

Current tax is the amount of income taxes payable or receivable in respect of the taxable profit or loss for a period.

Current taxes for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that have been enacted or substantively enacted by the end of the reporting period.

(b) Deferred tax

Deferred tax is recognised in full using the liability method on temporary differences arising between the carrying amount of an asset or liability in the statements of financial position and its tax base.

Deferred tax is recognised for all temporary differences, unless the deferred tax arises from goodwill or the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of transaction, affects neither accounting profit nor taxable profit.

A deferred tax asset is recognised only to the extent that it is probable that taxable profits will be available against which the deductible

temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amount of a deferred tax asset is reviewed at the end of each reporting period. If it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised, the carrying amount of the deferred tax asset will be reduced accordingly. When it becomes probable that sufficient taxable profit will be available, such reductions will be reversed to the extent of the taxable profits.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same taxation authority on either:

(i) the same taxable entity; or

(ii) different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Deferred tax will be recognised as income or expense and included in profit or loss for the period unless the tax relates to items that are credited or charged, in the same or a different period, directly to equity, in which case the deferred tax will be charged or credited directly to equity.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the

liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the reporting period.

4.15 Contingent liabilities and contingent assets

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Group does not recognise a contingent liability but discloses its existence in the financial statements.

A contingent asset is a possible asset that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group. The Group does not recognise contingent assets but discloses its existence where inflows of economic benefits are probable, but not virtually certain.




4.15 Contingent liabilities and contingent assets (cont’d)

In the acquisition of subsidiaries by the Group under business combinations, contingent liabilities assumed are measured initially at their fair value at the acquisition date, irrespective of the extent of any non-controlling interest.

4.16 Employee benefits

(a) Short term employee benefits

Wages, salaries, social security contributions, paid annual leave, paid sick leave, bonuses and non-monetary benefits are recognised as an expense in the financial year when employees have rendered their services to the Group.

Short term accumulating compensated absences such as paid annual leave are recognised as an expense when employees render services that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

Bonuses are recognised as an expense when there is a present, legal or constructive obligation to make such payments, as a result of past events and when a reliable estimate can be made of the amount of the obligation.

(b) Defined contribution plans

The Company and its subsidiaries incorporated in Malaysia make contributions to a statutory provident fund and foreign subsidiaries make contributions to their respective countries’ statutory pension schemes. The contributions are recognised as a liability after deducting any contribution already paid and as an expense in the period in which the employees render their services.

4.17 Foreign currencies

(a) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Ringgit Malaysia, which is the Company’s functional and presentation currency.

(b) Foreign currency transactions and balances

Transactions in foreign currencies are converted into Ringgit Malaysia at rates of exchange ruling at the transaction dates. Monetary assets and liabilities in foreign currencies at the end of the reporting period are translated into Ringgit Malaysia at rates of exchange ruling at that date. All exchange differences arising from the settlement of foreign currency transactions and from the translation of foreign currency monetary assets and liabilities are included in profit or loss in the period in which they arise. Non-monetary items initially denominated in foreign currencies, which are carried at historical cost are translated using the historical rate as of the date of acquisition, and non-monetary items which are carried at fair value are translated using the exchange rate that existed when the values were determined for presentation currency purposes.

(c) Foreign operations

Financial statements of foreign operations are translated at financial year end exchange rates with respect to the assets and liabilities, and at exchange rates at the dates of the transactions with respect to profit or loss. All resulting translation differences are recognised as a separate component of equity.

In the consolidated financial statements, exchange differences arising from the translation of net investment in foreign operations are taken to equity. When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognised in profit or loss as part of the gain or loss on disposal.



4.17 Foreign currencies (cont’d)

(c) Foreign operations (cont’d)

Exchange differences arising on a monetary item that forms part of the net investment of the Company in a foreign operation shall be recognised in profit or loss in the separate financial statements of the Company or the foreign operation, as appropriate. In the consolidated financial statements, such exchange differences shall be recognised initially as a separate component of equity and recognised in profit or loss upon disposal of the net investment.

Goodwill and fair value adjustments to the assets and liabilities arising from the acquisition of a foreign operation are treated as assets and liabilities of the acquired entity and translated at the exchange rate ruling at the end of the reporting date.

4.18 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable net of discounts and rebates.

Revenue is recognised to the extent that it is probable that the economic benefits associated with the transaction will flow to the Group, and the amount of revenue and the cost incurred or to be incurred in respect of the transaction can be reliably measured and specific recognition criteria have been met for each of the Group’s activities as follows:

(a) Sales of goods

Revenue from sale of goods is recognised when significant risk and rewards of ownership of the goods has been transferred to the customer and where the Group retains neither continuing managerial involvement over the goods, which coincides with the delivery of goods and acceptance by customers.

(b) Dividend income

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

(c) Interest income

Interest income is recognised as it accrues, using the effective interest method unless collectibility is in doubt.

(d) Rental income

Rental income is recognised on an accrual basis unless collectibility is in doubt.

(e) Royalty income

Royalty income is recognised on an accrual basis in accordance with the substance of the trademark license agreement.

4.19 Provisions

Provisions are recognised when there is a present obligation, legal or constructive, as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group or the Company expects a provision to be reimbursed (for example, under an insurance contract), the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain.

Where the effect of the time value of money is material, the amount of a provision will be discounted to its present value at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision will be reversed.





4.19 Provisions (cont’d)

Provisions are not recognised for future operating losses. If the Group has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a provision.

4.20 Operating segments

Operating segments are defined as components of the Group that:

(a) engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group); and

(b) whose operating results are regularly reviewed by the Group’s chief operating decision maker (i.e. the Group’s Chief Executive Officer) in making decisions about resources to be allocated to the segment and assessing its performance; and

(c) for which discrete financial information is available.

An operating segment may engage in business activities for which it has yet to earn revenues.

The Group reports separately information about each operating segment that meets any of the following quantitative thresholds:

(a) Its reported revenue, including both sales to external customers and intersegment sales or transfers, is ten (10) per cent or more of the combined revenue, internal and external, of all operating segments.

(b) The absolute amount of its reported profit or loss is ten (10) per cent or more of the greater, in absolute amount of:

(i) the combined reported profit of all operating segments that did not report a loss; and

(ii) the combined reported loss of all operating segments that reported a loss.

(c) Its assets are ten (10) per cent or more of the combined assets of all operating segments.

Operating segments that do not meet any of the quantitative thresholds may be considered reportable, and separately disclosed, if the management believes that information about the segment would be useful to users of the financial statements.

Total external revenue reported by operating segments shall constitute at least seventy five (75) percent of the Group’s revenue. Operating segments identified as reportable segments in the current financial year in accordance with the quantitative threshold would result in a restatement of prior period segment data for comparative purposes.

4.21 Earnings per share

(a) Basic

Basic earnings per ordinary share for the financial year is calculated by dividing the profit for the financial year attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding during the financial year.

(b) Diluted

Diluted earnings per ordinary share for the financial year is calculated by dividing the profit for the financial year attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding during the financial year adjusted for the effects of dilutive potential ordinary shares.


5. ADOPTION OF NEW FRSs AND AMENDMENT TO FRSs

5.1 New FRS adopted during the current financial year

(a) FRS 7 Financial Instruments: Disclosures and the consequential amendments resulting from FRS 7 are mandatory for annual financial periods beginning on or after 1 January 2010. FRS 7 replaces the disclosure requirements of the existing FRS 132 Financial Instruments: Disclosure and Presentation.

This Standard applies to all risks arising from a wide array of financial instruments and requires the disclosure of the significance of financial instruments for the Group’s financial position and performance.

(b) FRS 123 Borrowing Costs and the consequential amendments resulting from FRS 123 are mandatory for annual periods beginning on or after 1 January 2010.

This Standard removes the option of immediately recognising as an expense borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset. However, capitalisation of borrowing costs is not required for assets measured at fair value, and inventories that are manufactured or produced in large quantities on a repetitive basis, even if they take a substantial period of time to get ready for use or sale.

There is no impact upon adoption of this Standard during the financial year.

(c) FRS 139 Financial Instruments: Recognition and Measurement and the consequential amendments resulting from FRS 139 are mandatory for annual financial periods beginning on or after 1 January 2010.

This Standard establishes the principles for the recognition and measurement of financial assets and financial liabilities including circumstances under which hedge accounting is permitted.

Following the adoption of FRS 139 during the financial year, the Group reassessed the classification and measurement of financial assets and financial liabilities as at 1 July 2010.

There is no impact upon adoption of this Standard during the financial year other than those disclosed in Note 12(a) to the financial statements.

(d) Amendments to FRS 2 Share-based Payment: Vesting Conditions and Cancellations are mandatory for annual financial periods beginning on or after 1 January 2010.

These amendments clarify that vesting conditions comprise service conditions and performance conditions only. Cancellations by parties other than the Group are accounted for in the same manner as cancellations by the Group itself and features of a share-based payment that are non-vesting conditions are included in the grant date fair value of the share-based payment.

There is no impact upon adoption of these amendments during the financial year.

(e) Amendments to FRS 1 First-time Adoption of Financial Reporting Standards and FRS 127 Consolidated and Separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate is mandatory for annual periods beginning on or after 1 January 2010.

These amendments allow first-time adopters to use a deemed cost of either fair value or the carrying amount under previous accounting practice to measure the initial cost of investments in subsidiaries, jointly controlled entities and associates in the separate financial statements. The cost method of accounting for an investment has also been removed pursuant to these amendments.




5. ADOPTION OF NEW FRSs AND AMENDMENT TO FRSs (cont’d)

5.1 New FRS adopted during the current financial year (cont’d)

(f) IC Interpretation 9 Reassessment of Embedded Derivatives is mandatory for annual financial periods beginning on or after 1 January 2010.

This Interpretation prohibits the subsequent reassessment of embedded derivatives unless there is a change in the terms of the host contract that significantly modifies the cash flows that would otherwise be required by the host contract.

There is no impact upon adoption of this Interpretation during the financial year.

(g) IC Interpretation 10 Interim Financial Reporting and Impairment is mandatory for annual financial periods beginning on or after 1 January 2010.

This Interpretation prohibits the reversal of an impairment loss recognised in a previous interim period in respect of goodwill or an investment in either an equity instrument or a financial asset carried at cost.


(h) IC Interpretation 11 FRS 2 – Group and Treasury Share Transactions is mandatory for annual periods beginning on or after 1 January 2010.

This Interpretation requires share-based payment transactions in which the Company receives services from employees as consideration for its own equity instruments to be accounted for as equity-settled, regardless of the manner of satisfying the obligations to the employees.

If the Company grants rights to its equity instruments to the employees of its subsidiaries, this Interpretation requires the Company to recognise the equity reserve for the obligation to deliver the equity instruments when needed whilst the subsidiaries shall recognise the remuneration expense for the services received from employees.

If the subsidiaries grant rights to equity instruments of the Company to its employees, this Interpretation requires the Company to account for the transaction as cash-settled, regardless of the manner the subsidiaries obtain the equity instruments to satisfy its obligations.

There is no impact upon adoption of this Interpretation during the financial year. The Group would like to draw attention to the withdrawal of this Interpretation for annual periods beginning on or after 1 January 2011 as disclosed in Note 5.2(d) to the financial statements.

(i) IC Interpretation 13 Customer Loyalty Programmes is mandatory for annual periods beginning on or after 1 January 2010.

This Interpretation requires the separation of award credits as a separately identifiable component of sales transactions involving the award of free or discounted goods or services in the future. The fair value of the consideration received or receivable from the initial sale shall be allocated between the award credits and the other components of the sale.

If the Group supplies the awards itself, the consideration allocated to the award credits shall only be recognised as revenue when the award credits are redeemed. If a third party supplies the awards, the Group shall assess whether it is acting as a principal or agent in the transaction.

If the Group is acting as the principal in the transaction, it shall measure its revenue as the gross consideration allocated to the award credits. If the Group is acting as an agent, it shall measure its revenue as the net amount retained on its own account, and recognise

the net amount as revenue when the third party becomes obliged to supply the awards and entitled to receive the consideration for doing so.







(j) IC Interpretation 14 FRS 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction is mandatory for annual periods beginning on or after 1 January 2010.

This Interpretation applies to all post-employment defined benefits and other long-term employee defined benefits. This Interpretation clarifies that an economic benefit is available if the Group can realise it at some point during the life of the plan or when the plan liabilities are settled, and that it does not depend on how the Group intends to use the surplus.

A right to refund is available to the Group in stipulated circumstances and the economic benefit available shall be measured as the amount of the surplus at the end of the reporting period less any associated costs. If there are no minimum funding requirements, the economic benefit available shall be determined as a reduction in future contributions as the lower of the surplus in the plan and the present value of the future service cost to the Group. If there is a minimum funding requirement for contributions relating to the future accrual of benefits, the economic benefit available shall be determined as a reduction in future contributions at the present value of the estimated future service cost less the estimated minimum funding required in each financial year.


(k) FRS 101 Presentation of Financial Statements is mandatory for annual periods beginning on or after 1 January 2010.

FRS 101 sets out the overall requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their content.

This Standard introduces the titles ‘statement of financial position’ and ‘statement of cash flows’ to replace the current titles ‘balance sheet’ and ‘cash flow statement’ respectively. A new statement known as the ‘statement of comprehensive income’ is also introduced in this Standard whereby all non-owner changes in equity are required to be presented in either one statement of comprehensive income or in two statements (i.e. a separate income statement and a statement of comprehensive income).

This Standard also introduces a new requirement to present a statement of financial position as at the beginning of the earliest comparative period if there are applications of retrospective restatements that are defined in FRS 108, or when there are reclassifications of items in the financial statements.

Additionally, FRS 101 requires the disclosure of reclassification adjustments and income tax relating to each component of other comprehensive income, and the presentation of dividends recognised as distributions to owners together with the related amounts per share in the statement of changes in equity or in the notes to the financial statements.

This Standard introduces a new requirement to disclose information on the objectives, policies and processes for managing capital based on information provided internally to key management personnel as defined in FRS 124 Related Party Disclosures. Additional disclosures are also required for puttable financial instruments classified as equity instruments.

Following the adoption of this Standard, the Group has reflected the new format of presentation and additional disclosures warranted in the primary financial statements and relevant notes to the financial statements.

(l) Amendments to FRS 139, FRS 7 and IC Interpretation 9 are mandatory for annual periods beginning on or after 1 January 2010.

These amendments permit reclassifications of non-derivative financial assets (other than those designated at fair value through profit or loss upon initial recognition) out of the fair value through profit or loss category in rare circumstances. Reclassifications from the available-for-sale category to the loans and receivables category are also permitted provided there is intention and ability to hold that financial asset for the foreseeable future. All of these reclassifications shall be subjected to subsequent reassessments of embedded derivatives.

These amendments also clarify the designation of one-sided risk in eligible hedged items and streamline the terms used throughout the Standards in accordance with the changes resulting from FRS 101.






(m) Amendments to FRS 132 Financial Instruments: Presentation is mandatory for annual periods beginning on or after 1 January 2010.

These amendments require certain puttable financial instruments, and financial instruments that impose an obligation to deliver to counterparties a pro rata share of the net assets of the entity only on liquidation to be classified as equity.

Puttable financial instruments are defined as financial instruments that give the holder the right to put the instrument back to the issuer for cash, or another financial asset, or are automatically put back to the issuer upon occurrence of an uncertain future event or the death or retirement of the instrument holder.


(n) Improvements to FRSs (2009) that are mandatory for annual periods beginning on or after 1 January 2010.

Amendment to FRS 5 Non-current Assets Held for Sale and Discontinued Operations clarifies that the disclosure requirements of this Standard specifically apply to non-current assets (or disposal groups) classified as held for sale or discontinued operations. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 8 clarifies the consistency of disclosure requirement for information about profit or loss, assets and liabilities. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 107 Statement of Cash Flows clarifies the classification of cash flows arising from operating activities and investing activities. Cash payments to manufacture or acquire assets held for rental to others and subsequently held for sale, and the related cash receipts, shall be classified as cash flows from operating activities. Expenditures that result in a recognised asset in the statement of financial position are eligible for classification as cash flows from investing activities. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 108 clarifies that only Implementation Guidance issued by the MASB that are integral parts of FRSs is mandatory. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 110 Events after the Reporting Period clarifies the rationale for not recognising dividends declared after the reporting period but before the financial statements are authorised for issue. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 116 Property, Plant and Equipment removes the definition pertaining the applicability of this Standard to property that is being constructed or developed for future use as investment property but do not yet satisfy the definition of ‘investment property’ in FRS 140 Investment Property. This amendment also replaces the term ‘net selling price’ with ‘fair value less costs to sell’, and clarifies that proceeds arising from routine sale of items of property, plant and equipment shall be recognised as revenue in accordance with FRS 118 Revenue rather than FRS 5. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 117 Leases removes the classification of leases of land and of buildings, and instead, requires assessment of classification based on the risks and rewards of the lease itself. The reassessment of land elements of unexpired leases shall be made retrospectively in accordance with FRS 108. As at 1 July 2010, the Group has carrying amount of prepaid lease payments for land of RM216,000 (see Note 40 to the financial statements) that has been reclassified as land held in accordance with FRS 116 upon adoption of this amendment.

Amendment to FRS 118 clarifies reference made on the term ‘transaction costs’ to the definition in FRS 139. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 119 Employee Benefits clarifies the definitions in this Standard by consistently applying settlement dates within twelve (12) months in the distinction between short-term employee benefits and other long-term employee benefits. This amendment also provides additional explanations on negative past service cost and curtailments. There is no impact upon adoption of this amendment during the financial year.




(n) Improvements to FRSs (2009) that are mandatory for annual periods beginning on or after 1 January 2010. (cont’d)

Amendment to FRS 120 Accounting for Government Grants and Disclosure of Government Assistance streamlines the terms used in this Standard in accordance with the new terms used in FRS 101. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 123 clarifies that interest expense calculated using the effective interest rate method described in FRS 139 qualifies for recognition as borrowing costs. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 127 Consolidated and Separate Financial Statements clarifies that investments measured at cost shall be accounted for in accordance with FRS 5 when they are held for sale in accordance with FRS 5. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 128 Investments in Associates clarifies that investments in associates held by venture capital organisations, or mutual funds, unit trusts and similar entities shall make disclosures on the nature and extent of any significant restrictions on the ability of associates to transfer funds to the investor in the form of cash dividends, or repayment of loans or advances. This amendment also clarifies that impairment loss recognised in accordance with FRS 136 Impairment of Assets shall not be allocated to any asset, including goodwill, that forms the carrying amount of the investment. Accordingly, any reversal of that impairment loss shall be recognised in accordance with FRS 136. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 129 Financial Reporting in Hyperinflationary Economies streamlines the terms used in this Standard in accordance with the new terms used in FRS 101. This amendment also clarifies that assets and liabilities that are measured at fair value are exempted from the requirement to apply historical cost basis of accounting. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 131 Interests in Joint Ventures clarifies that venturers’ interests in jointly controlled entities held by venture capital organisations, or mutual funds, unit trusts and similar entities shall make disclosures on related capital commitments. This amendment also clarifies that a listing and description of interests in significant joint ventures and the proportion of ownership interest held in jointly controlled entities shall be made. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 136 clarifies the determination of allocation of goodwill to each cash-generating unit whereby each unit shall not be larger than an operating segment as defined in FRS 8 before aggregation. This amendment also requires additional disclosures if the fair value less costs to sell is determined using discounted cash flow projections. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 138 Intangible Assets clarifies the examples provided in this Standard in measuring the fair value of an intangible asset acquired in a business combination. This amendment also removes the statement on the rarity of situations whereby the application of the amortisation method for intangible assets results in a lower amount of accumulated amortisation than under the straight line method. There is no impact upon adoption of this amendment during the financial year.

Amendment to FRS 140 clarifies that properties that are being constructed or developed for future use as investment property are within the definition of ‘investment property’. This amendment further clarifies that if the fair value of such properties cannot be reliably determinable but it is expected that the fair value would be readily determinable when construction is complete, the properties shall be measured at cost until either its fair value becomes reliably determinable or construction is completed, whichever is earlier. There is no impact upon adoption of this amendment during the financial year.

(o) Amendments to FRS 132 is mandatory for annual periods beginning on or after 1 January 2010 and 1 March 2010 in respect of the transitional provisions in accounting for compound financial instruments and classification of rights issues respectively.

These amendments remove the transitional provisions in respect of accounting for compound financial instruments issued before 1 January 2003 pursuant to FRS 1322004 Financial Instruments: Disclosure and Presentation. Such compound financial instruments shall be classified into its liability and equity components when FRS 139 first applies.





(o) Amendments to FRS 132 is mandatory for annual periods beginning on or after 1 January 2010 and 1 March 2010 in respect of the transitional provisions in accounting for compound financial instruments and classification of rights issues respectively. (cont’d)

The amendments also clarifies that rights, options or warrants to acquire a fixed number of the Group’s own equity instruments for a fixed amount of any currency shall be classified as equity instruments rather than financial liabilities if the Group offers the rights, options or warrants pro rata to all of its own existing owners of the same class of its own non-derivative equity instruments.


(p) Amendments to FRS 139 is mandatory for annual periods beginning on or after 1 January 2010.

These amendments remove the scope exemption on contracts for contingent consideration in a business combination. Accordingly, such contracts shall be recognised and measured in accordance with the requirements of FRS 139.


(q) IC Interpretation 12 Service Concession Arrangements is mandatory for annual periods beginning on or after 1 July 2010.

This Interpretation applies to operators for public-to-private service concession arrangements, whereby infrastructure within the scope of this Interpretation shall not be recognised as property, plant and equipment of the operator. The operator shall recognise and measure revenue in accordance with FRS 111 Construction Contracts and FRS 118 for the services performed. The operator shall also account for revenue and costs relating to construction or upgrade services in accordance with FRS 111.

Consideration received or receivable by the operator for the provision of construction or upgrade services shall be recognised at its fair value. If the consideration consists of an unconditional contractual right to receive cash or another financial asset from the grantor, it shall be classified as a financial asset. Conversely, if the consideration consists of a right to charge users of the public service, it shall be classified as an intangible asset.


(r) FRS 1 First-time Adoption of Financial Reporting Standards is mandatory for annual periods beginning on or after 1 July 2010.

This Standard supersedes the existing FRS 1 and shall be applied when the Group adopts FRSs for the first time via the explicit and unreserved statement of compliance with FRSs. An opening FRS statement of financial position shall be prepared and presented at the date of transition to FRS, whereby:

(i) All assets and liabilities shall be recognised in accordance with FRSs;(ii) Items of assets and liabilities shall not be recognised if FRSs do not permit such recognition;(iii) Items recognised in accordance with previous GAAP shall be reclassified in accordance with FRSs; and(iv) All recognised assets and liabilities shall be measured in accordance with FRSs.

All resulting adjustments shall therefore be recognised directly in retained earnings at the date of transition to FRSs.

There is no impact upon adoption of this Standard during the financial year.

(s) FRS 3 Business Combinations is mandatory for annual periods beginning on or after 1 July 2010.

This Standard supersedes the existing FRS 3 and now includes business combinations involving mutual entities and those achieved by way of contract alone. Any non-controlling interest in an acquiree shall be measured at fair value or as the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.





(s) FRS 3 Business Combinations is mandatory for annual periods beginning on or after 1 July 2010. (cont’d)

The time limit on the adjustment to goodwill due to the arrival of new information on the crystallisation of deferred tax benefits shall be restricted to the measurement period resulting from the arrival of the new information. Contingent liabilities acquired arising from present obligations shall be recognised, regardless of the probability of outflow of economic resources.

Acquisition-related costs shall be accounted for as expenses in the periods in which the costs are incurred and the services are received. Consideration transferred in a business combination, including contingent consideration, shall be measured and recognised at fair value at acquisition date. Any changes in the amount of consideration to be paid will no longer be adjusted against goodwill but recognised in profit or loss.

In business combinations achieved in stages, the acquirer shall remeasure its previously held equity interest at its acquisition date fair value and recognise the resulting gain or loss in profit or loss.

The revised FRS 3 has been applied prospectively in accordance with its transitional provisions. Assets and liabilities that arose from business combinations whose acquisition dates were before 1 July 2010 are not adjusted.

During the financial year, the newly acquired subsidiary was accounted for in accordance with this new Standard as disclosed in Note 33 to the financial statements.

(t) FRS 127 Consolidated and Separate Financial Statements is mandatory for annual periods beginning on or after 1 July 2010.

This Standard supersedes the existing FRS 127 and replaces the current term ‘minority interest’ with the new term ‘non-controlling interest’ which is defined as the equity in a subsidiary that is not attributable, directly or indirectly, to a parent. Accordingly, total comprehensive income shall be attributed to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. If the Group loses control of a subsidiary, any gains or losses are recognised in profit or loss and any investment retained in the former subsidiary shall be remeasured at its fair value at the date when control is lost.

According to its transitional provisions, the revised FRS 127 has been applied prospectively, and does not impact the Group’s consolidated financial statements in respect of transactions with non-controlling interest, attribution of losses to non-controlling interest, and disposal of subsidiaries before 1 July 2010. These changes would only affect future transactions with non-controlling interest.

As at the end of the reporting period, the Group has reclassified RM14,925,000 as non-controlling interests and remeasured the non-controlling interests prospectively in accordance with the transitional provisions of FRS 127.

(u) Amendments to FRSs that are mandatory for annual periods beginning on or after 1 July 2010.

Amendments to FRS 2 Share-based Payments clarify that transactions in which the Group acquired goods as part of the net assets acquired in a business combination or contribution of a business on the formation of a joint venture are excluded from the scope of this Standard. There is no impact upon adoption of these amendments during the financial year.

Amendments to FRS 5 clarify that non-current asset classified as held for distribution to owners acting in their capacity as owners are within the scope of this Standard. The amendment also clarifies that in determining whether a sale is highly probable, the probability of shareholders’ approval, if required in the jurisdiction, shall be considered. In a sale plan involving loss of control of a subsidiary, all assets and liabilities of that subsidiary shall be classified as held for sale, regardless of whether the Group retains a non-controlling interest in its former subsidiary after the sale. Discontinued operations information shall also be presented. Non-current asset classified as held for distribution to owners shall be measured at the lower of its carrying amount and fair value less costs to distribute. There is no impact upon adoption of these amendments during the financial year.






(u) Amendments to FRSs that are mandatory for annual periods beginning on or after 1 July 2010. (cont’d)

Amendments to FRS 138 clarify that the intention of separating an intangible asset is irrelevant in determining the identifiability of the intangible asset. In a separate acquisition and acquisition as part of a business combination, the price paid by the Group reflects the expectations of the Group of an inflow of economic benefits, even if there is uncertainty about the timing or the amount of the inflow. Accordingly, the probability criterion is always considered to be satisfied for separately acquired intangible assets. The useful life of a reacquired right recognised as an intangible asset in a business combination shall be the remaining contractual period of the contract in which the right was granted, and do not include renewal periods. In the case of a reacquired right in a business combination, if the right is subsequently reissued to a third party, the related carrying amount shall be used in determining the gain or loss on reissue. There is no impact upon adoption of these amendments during the financial year.

Amendments to IC Interpretation 9 clarify that embedded derivatives in contracts acquired in a business combination, combination of entities or business under common controls, or the formation of a joint venture are excluded from this Interpretation. There is no impact upon adoption of these amendments during the financial year.

(v) IC Interpretation 16 Hedges of a Net Investment in a Foreign Operation is mandatory for annual periods beginning on or after 1 July 2010.

This Interpretation applies to hedges undertaken on foreign currency risk arising from net investments in foreign operations and the Group wishes to qualify for hedge accounting in accordance with FRS 139.

Hedge accounting is applicable only to the foreign exchange differences arising between the functional currency of the foreign operation and the functional currency of any parent (immediate, intermediate or ultimate parent) of that foreign operation. An exposure to foreign currency risk arising from a net investment in a foreign operation may qualify for hedge accounting only once in the consolidated financial statements.

Hedging instruments designated in the hedge of a net investment in a foreign operation may be held by any companies within the Group, as long as the designation, documentation and effectiveness requirements of FRS 139 are met. There is no impact upon adoption of this Interpretation during the financial year.

(w) IC Interpretation 17 Distributions of Non-cash Assets to Owners is mandatory for annual periods beginning on or after 1 July 2010.

This Interpretation applies to non-reciprocal distributions of non-cash assets by the Group to its owners in their capacity as owners, as well as distributions that give owners a choice of receiving either non-cash assets or a cash alternative. This Interpretation also applies to distributions in which all owners of the same class of equity instruments are treated equally.

The liability to pay a dividend shall be recognised when the dividend is appropriately authorised and is no longer at the discretion of the Group. The liability shall be measured at the fair value of the assets to be distributed. If the Group gives its owners a choice of receiving either a non-cash asset or a cash alternative, the dividend payable shall be estimated by considering the fair value of both alternatives and the associated probability of the owners’ selection.

At the end of each reporting period, the carrying amount of the dividend payable shall be remeasured and any changes shall be recognised in equity. At the settlement date, any difference between the carrying amounts of the assets distributed and the carrying amount of the dividend payable shall be recognised in profit or loss. The new accounting policy (see Note 4.11(c)) has been applied prospectively. There is no impact upon adoption of this Interpretation during the financial year.



5.2 New FRSs that have been issued, but not yet effective and not yet adopted

(a) Amendment to FRS 1 Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters is mandatory for annual periods beginning on or after 1 January 2011.

This amendment permits a first-time adopter of FRSs to apply the exemption of not restating comparatives for the disclosures required in Amendments to FRS 7.

The Group does not expect any impact on the financial statements arising from the adoption of this amendment.

(b) Amendments to FRS 1 Additional Exemptions for First-time Adopters are mandatory for annual periods beginning on or after 1 January 2011.

These amendments permit a first-time adopter of FRSs to apply the exemption of not restating the carrying amounts of oil and gas assets determined under previous GAAP.

The Group does not expect any impact on the financial statements arising from the adoption of these amendments.

(c) Amendments to FRS 7 Improving Disclosures about Financial Instruments are mandatory for annual periods beginning on or after 1 January 2011.

These amendments require enhanced disclosures of fair value of financial instruments based on the fair value hierarchy, including the disclosure of significant transfers between Level 1 and Level 2 of the fair value hierarchy as well as reconciliations for fair value measurements in Level 3 of the fair value hierarchy.

By virtue of the exemption provided under paragraph 44G of FRS 7, the impact of applying these amendments on the financial statements upon first adoption of FRS 7 as required by paragraph 30(b) of FRS 108 are not disclosed.

(d) Amendments to FRS 2 Group Cash-settled Share-based Payment Transactions are mandatory for annual periods beginning on or after 1 January 2011.

These amendments clarify the scope and the accounting for group cash-settled share-based payment transactions in the separate financial statements of the entity receiving the goods or services when that entity has no obligation to settle the share-based payment transaction.

Consequently, IC Interpretation 8 Scope of FRS 2 and IC Interpretation 11 have been superseded and withdrawn.

The Group does not expect any impact on the financial statements arising from the adoption of these amendments. The effects of adopting IC Interpretation 11 have been disclosed in Note 5.1(h) to the financial statements.

(e) IC Interpretation 4 Determining whether an Arrangement contains a Lease is mandatory for annual periods beginning on or after 1 January 2011.

This Interpretation requires the determination of whether an arrangement is, or contains, a lease based on an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset and whether the arrangement conveys a right to use the asset. This assessment shall be made at the inception of the arrangement and subsequently reassessed if certain condition(s) in the Interpretation is met.

The Group does not expect any impact on the financial statements arising from the adoption of this Interpretation because there are no arrangements dependent on the use of specific assets in the Group.




5.2 New FRSs that have been issued, but not yet effective and not yet adopted (cont’d)

(f) IC Interpretation 18 Transfers of Assets from Customers is mandatory for annual periods beginning on or after 1 January 2011.

This Interpretation applies to agreements in which an entity receives from a customer an item of property, plant and equipment that must be used to either connect the customer to a network or to provide the customer with ongoing access to a supply of goods or services. The entity receiving the transferred item is required to assess whether the transferred item meets the definition of an asset set out in the Framework. The credit entry would be accounted for as revenue in accordance with FRS 118.

The Group does not expect any impact on the financial statements arising from the adoption of this Interpretation because there are no such arrangements in the Group.

(g) Improvements to FRSs (2010) that are mandatory for annual periods beginning on or after 1 January 2011.

Amendments to FRS 1 clarify that FRS 108 does not apply to changes in accounting policies made upon adoption of FRSs until after the first FRS financial statements have been presented. If changes in accounting policies or exemptions in this FRS are used, an explanation of such changes together with updated reconciliations shall be made in each interim financial report. Entities whose operations are subject to rate regulation are permitted the use of previously revalued amounts as deemed cost. The Group does not expect any impact on the financial statements arising from the adoption of these amendments.

Amendments to FRS 3 clarify that for each business combination, the acquirer shall measure at the acquisition date non-controlling interests that consists of the present ownership interests and entitle holders to a proportionate share of the entity’s net assets in the event of liquidation. Un-replaced and voluntarily replaced share-based payment transactions shall be measured using the market-based measurement method in accordance with FRS 2 at the acquisition date. The Group does not expect any impact on the consolidated financial statements arising from the adoption of these amendments.

Amendments to FRS 7 clarify that quantitative disclosures of risk concentrations are required if the disclosures made in other parts of the financial statements are not readily apparent. The disclosure on maximum exposure to credit risk is not required for financial instruments whose carrying amount best represents the maximum exposure to credit risk. The Group expects to improve the disclosures on maximum exposure to credit risk upon adoption of these amendments.

Amendments to FRS 101 clarify that a statement of changes in equity shall be presented as part of a complete set of financial statements. The Group does not expect any impact on the financial statements arising from the adoption of these amendments.

Amendments to FRS 121 The Effects of Changes in Foreign Exchange Rates clarify that the accounting treatment for cumulative foreign exchange differences in other comprehensive income for the disposal or partial disposal of a foreign operation shall be applied prospectively. The Group does not expect any impact on the financial statements arising from the adoption of these amendments.

Amendments to FRS 128 clarify that the accounting treatment for the cessation of significant influence over an associate shall be applied prospectively. The Group does not expect any impact on the consolidated financial statements arising from the adoption of these amendments.

Amendments to FRS 131 clarify that the accounting treatment for the cessation of joint control over an entity shall be applied prospectively. The Group does not expect any impact on the consolidated financial statements arising from the adoption of these amendments.

Amendments to FRS 132 clarify that contingent consideration from a business combination that occurred before the effective date of the revised FRS 3 of 1 July 2010 shall be accounted for prospectively. The Group does not expect any impact on the financial statements arising from the adoption of these amendments.

Amendments to FRS 134 clarify that updated information on significant events and transactions since the end of the last annual reporting period shall be included in the Group’s interim financial report. Although the Group does not expect any impact on the financial statements arising from the adoption of these amendments, it is expected that additional disclosures would be made in the quarterly interim financial statements of the Group.





(g) Improvements to FRSs (2010) that are mandatory for annual periods beginning on or after 1 January 2011. (cont’d)

Amendments to FRS 139 clarify that contingent consideration from a business combination that occurred before the effective date of the revised FRS 3 of 1 July 2010 shall be accounted for prospectively. The Group does not expect any impact on the financial statements arising from the adoption of these amendments.

Amendments to IC Interpretation 13 clarify that the fair value of award credits takes into account, amongst others, the amount of the discounts or incentives that would otherwise be offered to customers who have not earned award credits from an initial sale. The Group does not expect any impact on the financial statements arising from the adoption of these amendments.

(h) Amendments to IC Interpretation 14 FRS 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction are mandatory for annual periods beginning on or after 1 July 2011.

These amendments clarify that if there is a minimum funding requirement for contributions relating to future service, the economic benefit available as a reduction in future contributions shall include any amount that reduces future minimum funding requirement contributions for future service because of the prepayment made.

The Group does not expect any impact on the financial statements arising from the adoption of these amendments.

(i) IC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments is mandatory for annual periods beginning on or after 1 July 2011.

This Interpretation applies to situations whereby equity instruments are issued to a creditor to extinguish all or part of a recognised financial liability. Such equity instruments shall be measured at fair value, and the difference between the carrying amount of the financial liability extinguished and the consideration paid shall be recognised in profit or loss.

The Group does not expect any impact on the financial statements arising from the adoption of this Interpretation.

(j) FRS 124 Related Party Disclosures and the consequential amendments to FRS 124 are mandatory for annual periods beginning on or after 1 January 2012.

This revised Standard simplifies the definition of a related party and eliminates certain inconsistencies within the superseded version. In addition to this, transactions and balances with government-related entities are broadly exempted from the disclosure requirements of the Standard.

The Group expects to reduce related party disclosures in respect of transactions and balances with government-related entities upon adoption of this Standard.

(k) IC Interpretation 15 Agreements for the Construction of Real Estate is mandatory for annual periods beginning on or after 1 January 2012.

This Interpretation applies to the accounting for revenue and associated expenses by entities undertaking construction or real estate directly or via subcontractors. Within a single agreement, the Group may contract to deliver goods or services in addition to the construction of real estate. Such an agreement shall therefore, be split into separately identifiable components.

An agreement for the construction of real estate shall be accounted for in accordance with FRS 111 if the buyer is able to specify the major structural elements of the design of the real estate before construction begins and/or specify major structural changes once construction is in progress. Accordingly, revenue shall be recognised by reference to the stage of completion of the contract.

An agreement for the construction of real estate in which buyers only have limited ability to influence the design of the real estate or to specify only minor variations to the basic designs is an agreement for the sale of goods in accordance with FRS 118. Accordingly, revenue shall be recognised by reference to the criteria in paragraph 14 of FRS 118 (e.g. transfer of significant risks and rewards, no continuing managerial involvement nor effective control, reliable measurement, etc.).






(k) IC Interpretation 15 Agreements for the Construction of Real Estate is mandatory for annual periods beginning on or after 1 January 2012. (cont’d)

The Group does not expect any impact on the financial statements arising from the adoption of this Interpretation.

6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Group’s and the Company’s accounting policies, reported amounts of assets, liabilities, income and expenses, and disclosures made. They are assessed on an ongoing basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances.

6.1 Critical judgements made in applying accounting policies

The followings are judgements made by management in the process of applying the Group’s accounting policies that have the most significant effect on the amounts recognised in the financial statements.

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

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

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

(b) Contingent liabilities

The determination of treatment of contingent liabilities is based on management’s view of the expected outcome of the contingencies for matters in the ordinary course of business.

6.2 Key sources of estimation uncertainty

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

(a) Impairment of goodwill on consolidation

The Group determines whether goodwill on consolidation is impaired at least on an annual basis. This requires an estimation of the value-in-use of the subsidiaries to which goodwill is allocated. Estimating a value-in-use amount requires management to make an estimate of the expected future cash flows from the subsidiaries and also to choose a suitable discount rate in order to calculate the present value of those cash flows. Further details are disclosed in Note 9(a) to the financial statements.


6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (cont’d)

6.2 Key sources of estimation uncertainty (cont’d)

(b) Taxation

(i) Deferred tax assets

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

(ii) Income taxes

Significant judgement is required in determining the capital allowances, deductibility of certain expenses and taxability of certain income during the estimation of the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group and the Company recognise tax liabilities based on estimates of whether additional taxes will be due. Where the final tax outcome is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

(c) Depreciation of property, plant and equipment

The cost of property, plant and equipment is depreciated on a straight-line basis over the assets’ estimated useful lives. Management estimates the useful lives of these property, plant and equipment as disclosed in Note 4.4 to the financial statements. These are common life expectancies applied in the industry which the Group operates. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, and therefore future depreciation charges could be revised.

(d) Impairment of receivables

The Group makes impairment of receivables based on an assessment of the recoverability of receivables. Impairment is applied to receivables where events or changes in circumstances indicate that the carrying amounts may not be recoverable. The management specifically analyses historical bad debt, customer concentration, customer creditworthiness, current economic trends and changes in customer payment terms when making a judgement to evaluate the adequacy of impairment of receivables. Where expectations differ from the original estimates, the differences will impact the carrying amount of receivables.

(e) Write down for obsolete or slow moving inventories

The Group writes down its obsolete or slow moving inventories based on an assessment of their estimated net selling price. Inventories are written down when events or changes in circumstances indicate that the carrying amounts may not be recoverable. The management specifically analyses fashion pattern, current economic trends and changes in customer preference when making a judgement to evaluate the adequacy of the write down for obsolete or slow moving inventories. Where expectations differ from the original estimates, the differences will impact the carrying amount of inventories.

(f) Fair values of borrowings

The fair values of borrowings are estimated by discounting future contractual cash flows at the current market interest rates available to the Group for similar financial instruments. It is assumed that the effective interest rates approximate the current market interest rates available to the Group based on its size and its business risk.

(g) Impairment of trademarks

The Group determines whether trademarks are impaired at least on an annual basis. This requires an estimation of the value-in-use of the trademarks. Estimating a value-in-use amount requires management to make an estimate of the expected future cash flows from royalty income and also to choose a suitable discount rate in order to calculate the present value of those cash flows. Further details are disclosed in Note 9(b) to the financial statements.




7. PROPERTY, PLANT AND EQUIPMENT

Group Balance as at

1.7.2010 (restated)

Acquisition of

subsidiaries Additions DisposalsWritten

off Impairment

Depreciation charge for

the yearReclassi-fication

Translation adjustments

Balance as at

30.6.2011RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Carrying amount

Freehold land 3,002 – – – – – – – – 3,002Leasehold land 216 – – – – – (3) – – 213Buildings on freehold land 31,759 – – – – – (761) – 195 31,193Buildings on long term

leasehold land 4,752 – 173 – – (212) (124) 4,085 – 8,674Plant and machinery 610 – 1,881 – – – (236) – (5) 2,250Plant and machinery under

hire-purchase and lease 25 – – – ––– (25) – – –

Furniture, fittings and counter fixtures 9,786 659 10,885 (107) (209) – (8,211)

–– 117 12,920

Office equipment 2,762 224 2,573 (29) (16) – (1,576) – 8 3,946Renovation 1,873 303 2,547 (45) – – (1,825) – 34 2,887Electrical installations 731 – 223 (14) – – (206) – (3) 731Motor vehicles 1,787 – 447 (63) – – (339) – (2) 1,830Motor vehicles under hire-

purchase and lease 1,156 803 1,668 – – – (1,169) – 41 2,499Properties under

construction 4,085 – 985 – – – – (4,085) – 985

62,544 1,989 21,382 (258) (225) (212) (14,475) – 385 71,130

At 30.6.2011 Group

CostRM’000

Accumulated depreciation

RM’000

Accumulated impairment

RM’000

Carrying amountRM’000

Freehold land 3,002 – – 3,002Leasehold land 277 (64) – 213Buildings on freehold land 37,651 (6,182) (276) 31,193Buildings on long term leasehold land 12,846 (1,716) (2,456) 8,674Plant and machinery 4,472 (2,222) – 2,250Plant and machinery under hire-purchase and lease 123 (123) – –Furniture, fittings and counter fixtures 49,426 (36,506) – 12,920Office equipment 14,093 (10,147) – 3,946Renovation 9,879 (6,992) – 2,887Electrical installations 1,501 (770) – 731Motor vehicles 3,585 (1,755) – 1,830Motor vehicles under hire-purchase and lease 7,702 (5,203) – 2,499Properties under construction 985 – – 985

145,542 (71,680) (2,732) 71,130



7. PROPERTY, PLANT AND EQUIPMENT (cont’d)

Group Balanceas at

1.7.2009 (restated)

RM’000Additions

RM’000Disposals

RM’000Written off

RM’000

Amortisation/Depreciation

charge for the yearRM’000

Translationadjustments

RM’000

Balanceas at

30.6.2010(restated)

RM’000

Carrying amount

Freehold land 3,002 – – – – – 3,002Leasehold land 219 – – – (3) – 216Buildings on freehold land 32,719 24 (73) – (764) (147) 31,759Buildings on long term leasehold land 4,875 – – – (123) – 4,752Plant and machinery 553 330 (38) – (227) (8) 610Plant and machinery under hire-

purchase and lease 49 – – – (24) – 25Furniture, fittings and counter fixtures 13,510 5,041 (28) (523) (8,144) (70) 9,786Office equipment 2,959 1,154 (92) (32) (1,196) (31) 2,762Renovation 2,978 625 (3) (308) (1,350) (69) 1,873Electrical installations 665 257 – – (177) (14) 731Motor vehicles 2,434 162 (139) – (647) (23) 1,787Motor vehicles under hire-purchase

and lease 1,612 368 – – (813) (11) 1,156Properties under construction 3,953 132 – – – – 4,085

69,528 8,093 (373) (863) (13,468) (373) 62,544

At 30.6.2010Group

CostRM’000

Accumulatedamortisation/ depreciation

RM’000

Accumulatedimpairment

RM’000

CarryingamountRM’000

Freehold land 3,002 – – 3,002Leasehold land 277 (61) – 216Buildings on freehold land 37,447 (5,412) (276) 31,759Buildings on long term leasehold land 8,309 (1,592) (1,965) 4,752Plant and machinery 2,597 (1,987) – 610Plant and machinery under hire-purchase and lease 123 (98) – 25Furniture, fittings and counter fixtures 36,742 (26,956) – 9,786Office equipment 10,522 (7,760) – 2,762Renovation 6,447 (4,574) – 1,873Electrical installations 1,312 (581) – 731Motor vehicles 3,847 (2,060) – 1,787Motor vehicles under hire-purchase and lease 4,352 (3,196) – 1,156Properties under construction 4,364 – (279) 4,085

119,341 (54,277) (2,520) 62,544




Company Balance as at

1.7.2010RM’000

AdditionsRM’000

Depreciation charge for

the yearRM’000

Balance as at

30.6.2011RM’000

Carrying amount

Freehold land 2,530 – – 2,530Buildings on freehold land 13,183 – (341) 12,842Furniture, fixtures and fittings 52 – (36) 16Office equipment 135 55 (50) 140Renovation 155 – (78) 77Electrical installations 23 – (12) 11Motor vehicles 747 – (230) 517Motor vehicles under hire-purchase 449 – (179) 270

17,274 55 (926) 16,403

At 30.6.2011

CostRM’000

Accumulateddepreciation

RM’000


Freehold land 2,530 – 2,530Buildings on freehold land 17,080 (4,238) 12,842Furniture, fixtures and fittings 351 (335) 16Office equipment 351 (211) 140Renovation 780 (703) 77Electrical installations 75 (64) 11Motor vehicles 2,053 (1,536) 517Motor vehicles under hire-purchase 856 (586) 270

24,076 (7,673) 16,403

Company Balanceas at

1.7.2009RM’000

AdditionsRM’000

Depreciationcharge for

the yearRM’000

Balanceas at

30.6.2010RM’000

Carrying amount

Freehold land 2,530 – – 2,530Buildings on freehold land 13,524 – (341) 13,183Furniture, fixtures and fittings 88 – (36) 52Office equipment 95 82 (42) 135Renovation 261 – (106) 155Electrical installations 34 – (11) 23Motor vehicles 977 – (230) 747Motor vehicles under hire-purchase 801 – (352) 449

18,310 82 (1,118) 17,274



At 30.6.2010

CostRM’000

Accumulateddepreciation

RM’000


Freehold land 2,530 – 2,530Buildings on freehold land 17,080 (3,897) 13,183Furniture, fixtures and fittings 351 (299) 52Office equipment 296 (161) 135Renovation 780 (625) 155Electrical installations 75 (52) 23Motor vehicles 1,151 (404) 747Motor vehicles under hire-purchase 1,758 (1,309) 449

24,021 (6,747) 17,274

(a) During the financial year, the Group and the Company made the following cash payments to purchase property, plant and equipment:

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Purchase of property, plant and equipment 21,382 8,093 55 82Financed by hire-purchase and lease arrangements (1,260) (185) – –Financed by term loans (173) (132) – –

Cash payments on purchase of property, plant and equipment 19,949 7,776 55 82

(b) As at end of reporting period, the carrying amount of property, plant and equipment under hire-purchase and lease arrangements of the Group and of the Company are as follows:

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Plant and machinery – 25 – –Motor vehicles 2,499 1,156 270 449

2,499 1,181 270 449

Details of the terms and conditions of the hire-purchase and lease arrangements are disclosed in Notes 20 and 37 to the financial statements.




(c) Net book value of property, plant and equipment pledged as securities for banking facilities granted to the Group and to the Company are as follows:

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Freehold land 3,002 3,002 2,530 2,530Leasehold land 213 216 – –Buildings on freehold land 31,125 31,689 12,842 13,183Buildings on long term leasehold land 2,916 3,074 – –

37,256 37,981 15,372 15,713

(d) An impairment loss of RM212,000 (2010: Nil) was recognised in the financial statements of the Group during the financial year due to the management is in view that the recoverable amount is lower than its carrying amount. The recoverable amount is based on indicative market value carried out by an independent professional valuer on an open market basis.

(e) During the financial year, the Group reassessed its long term leases of land in accordance with the Amendment to FRS 117 to the finance leases. The classification of prepaid lease payments for land as property, plant and equipment has been accounted for retrospectively.

8. INVESTMENT PROPERTIES

Group Balanceas at

1.7.2010RM’000

AdditionsRM’000

Fair valueadjustment

RM’000

Balanceas at

30.6.2011RM’000

Fair valueFreehold land, shoplots and clubhouse 6,377 – 208 6,585Long term leasehold land and shoplots 5,750 – 418 6,168

12,127 – 626 12,753

Group Balanceas at

1.7.2009RM’000

AdditionsRM’000

Fair valueadjustment

RM’000

Balanceas at

30.6.2010RM’000

Fair valueFreehold land, shoplots and clubhouse 6,377 – – 6,377Long term leasehold land and shoplots 5,750 – – 5,750

12,127 – – 12,127

The fair value of the investment properties of the Group was recommended by the Directors as at end of reporting period based on an indicative market value carried out by an independent professional valuer on an open market value basis.

Rental income of the Group derived from the investment properties amounted to RM495,000 (2010: RM389,000).



8. INVESTMENT PROPERTIES (cont’d)

Direct operating expenses arising from investment properties generating rental income during the financial year are as follows:

Group2011

RM’0002010

RM’000

Repairs and maintenance 6 7Quit rent and assessment 35 34

9. INTANGIBLE ASSETS

Group Balanceas at

1.7.2010RM’000

Acquisitionof

subsidiariesRM’000

AdditionsRM’000

Amortisationcharge for

the yearRM’000

Writtenoff during

the yearRM’000

Translationadjustment

RM’000

Balanceas at

30.6.2011RM’000

Carrying amount

Goodwill 4,871 33,720 – – (232) – 38,359Trademarks 5 30,912 7 (646) – 211 30,489

4,876 64,632 7 (646) (232) 211 68,848

At 30.6.2011

CostRM’000

Accumulatedamortisation

RM’000


RM’000


Goodwill 44,100 – (5,741) 38,359Trademarks 35,510 (5,021) – 30,489

79,610 (5,021) (5,741) 68,848

Group Balanceas at

1.7.2009RM’000

AdditionsRM’000

Amortisationcharge for

the yearRM’000

Balanceas at

30.6.2010RM’000

Carrying amount

Goodwill 4,871 – – 4,871Trademarks 7 1 (3) 5

4,878 1 (3) 4,876



9. INTANGIBLE ASSETS (cont’d)

At 30.6.2010

CostRM’000

Accumulatedamortisation

RM’000


RM’000


Goodwill 10,612 – (5,741) 4,871Trademarks 1,021 (1,016) – 5

11,633 (1,016) (5,741) 4,876

(a) Goodwill

Goodwill is tested for impairment on an annual basis by comparing the carrying amount with the recoverable amount. As the Directors are of the opinion that all the cash generating units (“CGU”) are held on a long-term basis, the value-in-use would best reflect its recoverable amount. The value-in-use is determined by discounting future cash flows over a three-year period. The future cash flows are based on management’s business plan, which is the best estimate of future performance. The ability to achieve the business plan targets is a key assumption in determining the recoverable amount for each CGU.

There remains a risk that the ability to achieve management’s business plan will be adversely affected due to unforeseen changes in the respective economies in which the CGUs operate and/or global economic conditions. Hence, in computing the value-in-use for each CGU, the management has applied a discount rate of 12.73% per annum and growth rates of 5% to 10% per annum depending on the products, markets and business plan of the subsidiaries.

The following describes each key assumption on which the management has based its cash flow projections for the purposes of the impairment test for goodwill:

(i) The discount rate was estimated based on the Group’s weighted average cost of capital.

(ii) Growth rate used has been based on historical trend of each segment taking into account industry outlook for that segment.

(iii) The profit margin applied to the projections are based on the historical profit margin trend for the individual CGU.

With regard to the assessment of value-in-use of the goodwill, the management believes that no reasonably possible change in any of the above key assumption would cause the carrying values of the CGU to materially exceed their recoverable amounts.

Goodwill of RM232,000 relating to the acquisitions of two (2) subsidiaries have been written off during the financial year due to declining business operations of these subsidiaries.

(b) Trademarks

Trademarks of RM30,912,000 relating to the acquisition of subsidiaries during the year represent the rights of using “Braun Buffel” trademark in various countries.

The Management has prepared a 25-year cash flow forecast and projections to support the carrying amounts of trademark. The said cash-flow forecast and projections is based on 25 years projected royalty income from year 2010 to year 2034 due to the Group owns the rights for use of the “Braun Buffel” trademark until 30 June 2034. Trademark of “Braun Buffel” is also amortised over 25 years until 30 June 2034.

The following describes each key assumption on which the management has based on its cash flows projections for the purpose of impairment

test for “Braun Buffel” trademark.

(i) The discount rate was estimated based on the Group’s weighted average cost of capital.

(ii) Growth rate used has been based on historical trend of royalty income received.



9. INTANGIBLE ASSETS (cont’d)

(b) Trademarks (cont’d)

As at 30 June 2011, the management assessed that the recoverable amounts of trademark, based on value in use calculations, exceeded their carrying amounts and thus, no impairment is required.

Other trademarks represent the registration cost of Bonia, Sembonia and Carlo Rino brands.

10. INVESTMENTS IN SUBSIDIARIES

Company2011

RM’0002010

RM’000

Unquoted shares - at cost 144,394 89,446Less: Impairment losses (524) (7,915)

143,870 81,531

An impairment loss on investments in subsidiaries amounting RM524,000 (2010: RM1,715,000) have been recognised during the financial year due to declining business operations and the net tangible assets of these subsidiaries were lower than the cost of investments.

The impairment losses is net of investment written off of RM7,415,000 (2010: Nil) during the financial year.

The details of the subsidiaries are as follows:

Interest in equityheld

Name of companyCountry of

incorporation2011

%2010

% Principal activities

Subsidiaries of Bonia Corporation Berhad

CB Marketing Sdn. Bhd. Malaysia 100 100 Designing, promoting and marketing of fashionable leather goods

CB Holdings (Malaysia) Sdn. Bhd. Malaysia 100 100 Property investment and management services

Ataly Industries Sdn. Bhd. Malaysia 100 100 Property investment

Luxury Parade Sdn. Bhd. Malaysia 100 100 Property investment

Eclat World Sdn. Bhd. Malaysia 100 100 Designing, promoting and marketing of fashionable men’s footwear

CB Franchising Sdn. Bhd. Malaysia 100 100 Franchising of leather goods and apparels

BCB Properties Sdn. Bhd. Malaysia 100 100 Property development

Long Bow Manufacturing Sdn. Bhd. Malaysia 100 100 Manufacturing and marketing of leather goods






incorporation2011

%2010


Subsidiaries of Bonia Corporation Berhad (cont’d)

De Marts Marketing Sdn. Bhd. Malaysia 100 100 Designing, promoting and marketing of fashionable ladies’ footwear

Mcore Sdn. Bhd. Malaysia 60 60 Marketing and distribution of fashionable leather goods

Future Classic Sdn. Bhd. Malaysia 100 100 Designing, promoting and marketing of fashionable leather goods

Daily Frontier Sdn. Bhd. Malaysia 100 100 Marketing, distribution and export of fashionable goods and accessories

Armani Context Sdn. Bhd. Malaysia 100 100 Interior design, advertising and promotion

Banyan Sutera Sdn. Bhd. Malaysia 100 100 Marketing and distribution of fashionable goods

* Active World Pte. Ltd. Singapore 100 100 Wholesaling and retailing of fashionable leather goods and apparels

*# Kin Sheng Group Limited Hong Kong 100 100 Investment holding

Dominion Directions Sdn. Bhd. Malaysia 100 100 Marketing and distribution of men’s apparel and accessories

SBFW Marketing Sdn. Bhd. Malaysia 100 100 Designing, promoting and marketing of fashionable ladies’ footwear

SBL Marketing Sdn. Bhd. Malaysia 100 100 Designing, promoting and marketing of fashionable leather goods

CRG Incorporated Sdn. Bhd. Malaysia 100 100 Investment holdings

SB Boutique Sdn. Bhd. Malaysia 100 100 Franchising of leather goods and apparels

New Series Sdn. Bhd. Malaysia – 100 Marketing and distribution of men’s apparels

Mcolours & Design Sdn. Bhd. Malaysia 100 100 Product design, research and development

Scarpa Marketing Sdn. Bhd. Malaysia 100 100 Wholesaling, retailing and marketing of fashionable footwear

Alpha Footwear Sdn. Bhd. Malaysia 100 100 Marketing, retailing and distribution of men’s and ladies’ footwear

* Jeco (Pte) Limited Singapore 70 – Intellectual property management

10. INVESTMENTS IN SUBSIDIARIES (cont’d)





incorporation2011

%2010


Subsidiaries of Dominion Directions Sdn. Bhd.

VR Directions Sdn. Bhd. Malaysia 75 75 Marketing and distribution of men’s apparel and accessories, and ladies’ apparel

SB Directions Sdn. Bhd. Malaysia 100 100 Marketing and distribution of fashionable accessories

Galaxy Hallmark Sdn. Bhd. Malaysia 100 100 Marketing and distribution of men’s apparels and accessories

New Series Sdn. Bhd. Malaysia 75 – Marketing and distribution of men’s apparels

Subsidiaries of CRG Incorporated Sdn. Bhd.

CR Boutique Sdn. Bhd. Malaysia 100 100 Franchising of leather goods and apparels

CRF Marketing Sdn. Bhd. Malaysia 100 100 Designing, promoting and marketing of fashionable ladies’ footwear

CRL Marketing Sdn. Bhd. Malaysia 100 100 Designing, promoting and marketing of fashionable leather goods

Apex Marble Sdn. Bhd. Malaysia – 60 Marketing and distribution of fashionable goods

Subsidiary of BCB Properties Sdn. Bhd.

Apex Marble Sdn. Bhd. Malaysia 60 – Marketing and distribution of fashionable goods

Subsidiaries of Active World Pte. Ltd.

* Jetbest Enterprise Pte. Ltd. Singapore 100 100 Wholesaling, retailing, importing and exporting of leather goods and accessories

* SCRL Pte. Ltd. Singapore 100 100 Wholesaling, retailing and marketing of fashionable footwear, carrywear and accessories

* SBLS Pte. Ltd. Singapore 100 100 Wholesaling, retailing and marketing of fashionable footwear, carrywear and accessories

* Active Franchise Pte. Ltd. Singapore 100 100 General wholesale trade including general importers and exporters






incorporation2011

%2010


Subsidiaries of Active World Pte. Ltd. (cont’d)

* Active Footwear Pte. Ltd. Singapore 100 – Marketing, retailing and distribution of fashionable footwear

** PT Active World Indonesia 100 – Investment holding

Subsidiaries of Kin Sheng Group Limited

^ Bonia (Shanghai) Commerce Limited China 100 100 Retailing, marketing, promoting, designing, importing and exporting of leather goods, apparels and accessories

* Guangzhou Jia Li Bao Leather Fashion Co. Ltd. China 100 100 Wholesaling, retailing, importing and exporting of leather goods and accessories

* Guangzhou Bonia Fashions China Co. Ltd. China 100 100 Manufacturing, marketing, retailing of fashionable leather goods, apparels and accessories

*# Kin Sheng International Trading Co. Limited Hong Kong 100 100 General trading and marketing of fashionable goods

Subsidiary of Jeco (Pte) Limited

* Lianbee-Jeco Pte. Ltd. Singapore 100 – Retailing, importing and exporting leather goods and general merchandise

Subsidiary of Lianbee-Jeco Pte. Ltd.

* Lianbee-Jeco (M) Sdn. Bhd. Malaysia 100 – Trading in leather goods and footwear

* Subsidiaries not audited by BDO.# Subsidiaries audited by BDO Member Firms.^ No auditors’ report on the financial statement of this subsidiary due to the subsidiary was dormant during the financial year and had completed

the application for voluntary deregistration procedures on 3 September 2011. ** No auditors’ report on the financial statements of this subsidiary was issued as it was newly incorporated during the financial year.




During the financial year:

(i) a wholly owned subsidiary of the Company, CRG Incorporated Sdn. Bhd. had disposed off 300,000 ordinary shares of RM1.00 each representing 60% equity interest in Apex Marble Sdn. Bhd. to another wholly owned subsidiary of the Company, BCB Properties Sdn. Bhd. for a cash consideration of RM2,500. The disposal does not have any impact to the Group’s financial statements.

(ii) the Company had disposed off 125,000 ordinary shares of RM1.00 each representing 25% equity interest in New Series Sdn. Bhd. (“NSSB”), a wholly owned subsidiary of the Company, to an existing shareholder and a director of VR Directions Sdn. Bhd.(“VRDSB”) and Dominion Directions Sdn. Bhd. (“DDSB”), for a total cash consideration of RM125,000. The remaining 75% equity interest in NSSB has been transferred to DDSB. The consideration for the transfer is at par value of the shares amounted RM375,000. The cost of investment of RM500,000 in NSSB had been fully impaired in previous years. The gain arising from the said disposal to the Group and the Company are RM36,000 and RM500,000 respectively.

(iii) the Company had acquired 350,000 ordinary shares of SGD1.00 each, representing 70% equity interest in Jeco (Pte) Limited, for a total cash consideration of SGD28,000,000 (approximately RM62,363,000). As a result of the acquisition, the Company had indirectly owned 70% equity interest in Lianbee-Jeco Pte. Ltd. and Lianbee-Jeco (M) Sdn. Bhd. respectively.

(iv) Active World Pte. Ltd., a wholly owned subsidiary of the Company had incorporated a wholly owned subsidiary, Active Footwear Pte. Ltd. in Singapore, with an authorised share capital of SGD1 comprising 1 ordinary share of SGD1.00 each, of which 1 share has been issued and fully paid up.

(v) Active World Pte. Ltd., a wholly owned subsidiary of the Company had incorporated a wholly owned subsidiary, PT Active World in Indonesia, with an authorised share capital of Rp13,660,800,000 comprising 1,600 ordinary shares of Rp8,538,000 each, of which 560 shares have been issued and fully paid up.

(vi) the Company further subscribed 499,998 newly issued shares of RM1.00 each at par in Alpha Footwear Sdn. Bhd..

In the previous financial year:

(i) Mcore Sdn. Bhd. (“Mcore”), a 60% owned subsidiary of the Company, had acquired 50,000 ordinary shares of RM1.00 each representing 10% equity interest in Apex Mable Sdn. Bhd. (“AMSB”) from a minority shareholder, for a total cash consideration of RM1. Subsequent to this acquisition, AMSB became a wholly owned subsidiary of Mcore.

(ii) the Company had disposed off its entire equity interest in Pasti Anggun Sdn. Bhd. for a total cash consideration of RM100,000. The gain arising from the said disposal to the Group and the Company are RM10,000 and RM100,000 respectively.

(iii) Active World Pte. Ltd., a wholly owned subsidiary of the Company, had incorporated a wholly owned subsidiary, Active Franchise Pte. Ltd. in Singapore, with an authorised share capital of SGD1 comprising 1 ordinary share of SGD1.00 each, of which 1 share has been issued and fully paid up.

(iv) DDSB, a wholly owned subsidiary of the Company, had acquired 50,000 ordinary shares of RM1.00 each representing 5% equity interest in VRDSB from a minority shareholder, for a total cash consideration of RM370,367. Subsequent to the acquisition, DDSB is now holding 75% equity interest in VRDSB.

(v) the Company had incorporated a wholly owned subsidiary, Alpha Footwear Sdn. Bhd. in Malaysia, with an authorised share capital of RM100,000 comprising 100,000 ordinary shares of RM1.00 each, of which 2 shares have been issued and fully paid up. The incorporation of the subsidiary does not have any material impact to the Group’s financial statements.

(vi) the Company further subscribed 500,000 newly issued shares of RM1.00 each at par in CR Boutique Sdn. Bhd. (“CRBSB”).

(vii) the Company had incorporated a wholly owned subsidiary, CRG Incorporated Sdn. Bhd. (“CRG”) in Malaysia, with an authorised share capital of RM100,000 comprising 100,000 ordinary shares of RM1.00 each, of which 2 shares have been issued and fully paid up. The incorporation of the subsidiary does not have any material impact to the Group’s financial statements.





In the previous financial year: (cont’d)

(viii) As a result of internal group reorganisation:

(a) CRG had acquired 300,000 ordinary shares of RM1.00 each representing 60% equity interest in AMSB from Mcore, for a total cash consideration of RM2,525. The remaining 200,000 ordinary shares of RM1.00 each representing 40% equity interest in AMSB was disposed off to an existing director of Mcore, for a total cash consideration of RM1,648. Subsequent to this disposal, the Group’s equity interest in AMSB was diluted from 100% to 60%.

(b) CRG had acquired 500,000 ordinary shares of RM1.00 each representing 100% equity interest in CRL Marketing Sdn. Bhd. (“CRLMSB”) from the Company, for a total consideration of RM10,337,488 by way of issuance of 10,337,488 new ordinary shares of RM1.00 each at RM1.00 per share of CRG.

(c) CRG had acquired 500,000 ordinary shares of RM1.00 each representing 100% equity interest in CRF Marketing Sdn. Bhd. (“CRFMSB”) from the Company, for a total consideration of RM4,995,385 by way of issuance of 4,995,385 new ordinary shares of RM1.00 each at RM1.00 per share of CRG.

(d) CRG had acquired 1,000,000 ordinary shares of RM1.00 each representing 100% equity interest in CRBSB from the Company, for a total consideration of RM4,402,598 by way of issuance of 4,402,598 new ordinary shares of RM1.00 each at RM1.00 per share of CRG.

The total gains arising from the above disposals for (b) to (d) to the Company is RM17,735,000.

(ix) the Company further subscribed 500,000 newly issued shares of RM1.00 each at par in SB Boutique Sdn. Bhd..

(x) the Company further subscribed 264,527 newly issued shares of RM1.00 each at par in CRG.

11. INVESTMENTS IN ASSOCIATES

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Unquoted equity shares, at cost 556 115 – –Share of post acquisition reserves, net of dividends received (130) (3) – –

426 112 – –

The details of the associates are as follows:

Name of CompanyCountry of

incorporation

Interest in equity held by the Group

Principal activities2011

%2010

%

Makabumi Sdn. Bhd. Malaysia 40 40 Dormant

Guangzhou Yong Yi Leather Fashions Co. Ltd. China 40 40 Marketing and distribution of fashionable leather goods


11. INVESTMENTS IN ASSOCIATES (cont’d)

In the previous financial year:

(i) the Company had disposed off its entire equity interest in BBA International Co. Ltd. (“BBA”) to the existing shareholders and directors of BBA, for a total cash consideration of THB1,236,139 (equivalent to RM126,162). The gain and loss arising from the said disposal to the Group and the Company are RM53,000 and RM110,000 respectively.

(ii) Guangzhou Jia Li Bao Leather Fashion Co. Ltd. (‘JLB’), a wholly owned subsidiary of the Company, has entered into an agreement with a third party, for a tenure of five (5) years with an option to renew for another five (5) years to expand its business in The People’s Republic of China. The said agreement has been carried out through a formation of an associate in The People’s Republic of China, Guangzhou Yong Yi Leather Fashion Co. Ltd. (‘Guangzhou Yong Yi’).

According to the agreement, JLB is required to contribute RMB1,200,000 representing 40% of the registered share capital of Guangzhou Yong Yi. JLB has contributed RMB240,000 (approximately RM115,000) during the financial year ended 30 June 2010. The balance of RMB960,000 (approximately RM441,000) was contributed during the financial year ended 30 June 2011.

The summarised financial information of the associates are as follows:

2011RM’000

2010RM’000

Assets and liabilities

Current assets 928 278Non-current assets 201 5

Total assets 1,129 283

Liabilities

Current liabilities 248 204

Total liabilities 248 204

Results

Revenue 1,168 – Loss for the year (318) (8)




12. OTHER INVESTMENTS

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

At cost

Unquoted

Non-current assets

Available-for-sale financial assets - Club memberships 950 – – –Other investments - Club memberships – 575 – –

Current assets

Subordinated bonds – 3,000 – 3,000

Less: Impairment loss – (3,000) – (3,000)

– – – –

950 575 – –

(a) The other investments have been classified into available-for-sale financial assets upon adoption of FRS 139 on 1 July 2010.

Addition of club memberships during the financial year amounted to RM350,000.

(b) The comparative figures have not been presented based on the new categorisation of financial assets resulting from the adoption of FRS 139 by virtue of the exemption given in FRS 7.44AA.

(c) The investments in unquoted subordinate bonds is in relation to the unsecured term loan amounting to RM30,000,000 previously obtained from a financial institution where a condition is imposed on the Company to subscribe for the subordinated bonds issued pursuant to the Primary Collateralised Loan Obligations Transactions and shall be limited to 10% of the principal term loan amount. The subordinated bonds are unquoted and are held until the maturity of the term loan on 3 June 2009. In 2009, the said term loan was fully settled and an impairment loss on unquoted subordinated bonds of RM3,000,000 had been recognised due to the default by obligors in the Primary Collateralised Loan Obligations Transactions. The said subordinated bonds were written off during the financial year.

13. DEFERRED TAX

(a) The deferred tax assets and liabilities are made up of the following:

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Balance as at 1 July 2010/2009 (564) (1,126) 57 24Acquisition of subsidiaries 6,748 – – –Recognised in profit or loss (Note 29) 492 562 (21) 33

Balance as at 30 June 2011/2010 6,676 (564) 36 57


13. DEFERRED TAX (cont’d)

(a) The deferred tax assets and liabilities are made up of the following: (cont’d)

Presented after appropriate offsetting as follows:

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Deferred tax assets, net (735) (808) – –Deferred tax liabilities, net 7,411 244 36 57

6,676 (564) 36 57

(b) The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows:

Deferred tax liabilities of the Group

Property,plant and

equipmentRM’000

Othertemporarydifferences

RM’000Offsetting

RM’000Total

RM’000

At 1 July 2010 306 – (62) 244Acquisition of subsidiaries 769 5,979 – 6,748Recognised in profit or loss 396 – 23 419

At 30 June 2011 1,471 5,979 (39) 7,411

At 1 July 2009 362 – (127) 235Recognised in profit or loss (56) – 65 9

At 30 June 2010 306 – (62) 244

Deferred tax assets of the Group

Unused tax losses and

unabsorbed capital

allowancesRM’000

Otherdeductibletemporarydifferences

RM’000Offsetting

RM’000Total

RM’000

At 1 July 2010 353 517 (62) 808Recognised in profit or loss (103) 7 23 (73)

At 30 June 2011 250 524 (39) 735

At 1 July 2009 233 1,255 (127) 1,361Recognised in profit or loss 120 (738) 65 (553)

At 30 June 2010 353 517 (62) 808




13. DEFERRED TAX (cont’d)

(b) The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows: (cont’d)

Deferred tax liabilities of the Company

Property,plant and

equipmentRM’000

OffsettingRM’000

TotalRM’000

At 1 July 2010 59 (2) 57Recognised in profit or loss (22) 1 (21)

At 30 June 2011 37 (1) 36

At 1 July 2009 24 – 24Recognised in profit or loss 35 (2) 33

At 30 June 2010 59 (2) 57

Deferred tax assets of the Company

Unabsorbedcapital

allowancesRM’000

OffsettingRM’000

TotalRM’000

At 1 July 2010 2 (2) –Recognised in profit or loss (1) 1 –

At 30 June 2011 1 (1) –

At 1 July 2009 – – –Recognised in profit or loss 2 (2) –

At 30 June 2010 2 (2) –

(c) The amount of temporary differences for which no deferred tax assets have been recognised in the statements of financial position are as follows:

Group2011

RM’0002010

RM’000

Unused tax losses 8,324 5,040Unabsorbed capital allowances 1,112 849Other deductible temporary differences 778 959

10,214 6,848

Deferred tax assets of certain subsidiaries have not been recognised in respect of these items as it is not probable that taxable profit of the subsidiaries will be available against which the deductible temporary differences can be utilised.


14. INVENTORIES

Group2011

RM’0002010

RM’000

At cost

Raw materials 5,349 4,412Work-in-progress 693 954Finished goods 75,291 52,350Consumables 131 153

81,464 57,869

The inventories of the Group is net of inventories written off of RM2,362,000 (2010: RM75,000).

15. TRADE AND OTHER RECEIVABLES

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Trade receivables

Third parties 60,579 38,789 – –Less: Impairment losses (3,238) (108) – –

57,341 38,681 – –Other receivables, deposits and prepayments

Amounts owing by subsidiaries – – 35,326 31,946Amount owing by an associate 195 194 195 194Other receivables 5,239 4,744 3,678 3,678Deposits 10,034 8,448 9 10Prepayments 7,852 6,622 – –

23,320 20,008 39,208 35,828Less: Impairment losses - subsidiaries – – (10,642) (7,394) - associate (195) (194) (195) (194) - other receivables (3,786) (3,786) (3,678) (3,678)

19,339 16,028 24,693 24,562

76,680 54,709 24,693 24,562

(a) Trade receivables are non-interest bearing and the normal trade credit terms granted by the Group and by the Company range from 30 to 120 days. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

(b) The impairment losses for trade receivables of the Group is net of bad debts written off of RM89,000 (2010: RM217,000).

(c) Amounts owing by subsidiaries are unsecured, interest-free and payable on demand in cash and cash equivalents.



15. TRADE AND OTHER RECEIVABLES (cont’d)

(d) Amount owing by an associate is unsecured, interest-free and payable on demand in cash and cash equivalents.

(e) Information on the financial risk of trade and other receivables is disclosed in Note 37 to the financial statements.

(f) The currency exposure profile of trade and other receivables are as follows:

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Ringgit Malaysia 48,401 40,221 21,596 20,747Brunei Dollar 57 48 – –Chinese Renminbi 1,257 889 – –Euro 369 496 – –Hong Kong Dollar 3,666 417 – 3,815Singapore Dollar 21,990 9,908 3,097 –U.S. Dollar 910 2,692 – –Japanese Yen 30 38 – –

76,680 54,709 24,693 24,562

(g) The ageing analysis of trade receivable of the Group are as follows:

Group2011

RM’0002010

RM’000

Neither past due nor impaired 53,416 38,195

Past due, not impaired121 to 150 days 1,535 19151 to 180 days 1,065 12181 to 210 days 573 33More than 211 days 752 422

3,925 486Past due and impaired 3,238 108

60,579 38,789

Receivables that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group.

None of the trade receivables of the Group that are neither past due nor impaired have been renegotiated during the financial year.

Receivables that are past due but not impaired

Trade receivables that are past due but not impaired mainly arose from customers where the Group has healthy business relationship with, whereby the management is of the opinion that the amount are recoverable based on past payments history.

The trade receivables of the Group that are past due but not impaired are unsecured in nature.



15. TRADE AND OTHER RECEIVABLES (cont’d)

(g) The ageing analysis of trade receivable of the Group are as follows: (cont’d)

Receivables that are past due and impaired

Trade receivables of the Group that are past due and impaired at the end of the reporting period are as follows:

Individually impaired 2011

RM’0002010

RM’000

Trade receivables, gross 3,238 108Less: Impairment loss (3,238) (108)

– –

The reconciliation of movement in the impairment loss are as follows:

Group2011

RM’0002010

RM’000

At 1 July 2010/2009 108 211Reclassification – 25Charge for the financial year (Note 28) 3,219 89Write off (89) (217)

At 30 June 2011/2010 3,238 108

Trade receivables that are individually determined to be impaired at the end of the reporting period relate to those debtors that exhibit significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

16. CASH AND CASH EQUIVALENTS

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Cash in hand and at banks 35,955 24,966 41 96Fixed deposits with licensed banks 7,778 7,709 – –Short term placements with licensed banks 8,400 5,200 450 –Placements with licensed banks 3,904 32,142 – 10,148

56,037 70,017 491 10,244



16. CASH AND CASH EQUIVALENTS (cont’d)

(a) Included in the fixed deposits with licensed banks of the Group is an amount of RM1,991,000 (2010: RM1,190,000) pledged to licensed banks as securities for banking facilities granted to certain subsidiaries.

(b) Placements with licensed banks represent monies deposit into the fixed income fund, which are not restricted to fixed maturity date.

(c) Information on financial risks of cash and cash equivalents is disclosed in Note 37 to the financial statements.

(d) The currency exposure profile of cash and cash equivalents are as follows:

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Ringgit Malaysia 31,135 52,330 491 10,244Chinese Renminbi 964 1,126 – –Hong Kong Dollar 1,843 1,381 – –Singapore Dollar 21,673 14,751 – –U.S. Dollar 284 300 – –Others 138 129 – –

56,037 70,017 491 10,244

(e) For the purpose of statements of cash flows, cash and cash equivalents comprise the following as at the end of reporting period:

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Cash and bank balances 35,955 24,966 41 96Fixed deposits with licensed banks 7,778 7,709 – –Short term placements with licensed banks 8,400 5,200 450 –Placements with licensed banks 3,904 32,142 – 10,148Less: Bank overdrafts included in bank borrowings (Note 19) (2,115) (1,622) (176) (17)

53,922 68,395 315 10,227

Less: Fixed deposits pledged to licensed banks (1,991) (1,190) – –

51,931 67,205 315 10,227




17. SHARE CAPITAL

Group and Company2011 2010

Numberof shares

’000 RM’000

Numberof shares

’000 RM’000

Ordinary shares of RM0.50 each:

Authorised 500,000 250,000 500,000 250,000

Issued and fully paid

Balance as at beginning and end of financial year 201,571 100,786 201,571 100,786

The holders of the ordinary shares are entitled to receive dividends as and when declared by the Company and are entitled to one vote per share at meetings of the Company. All ordinary shares rank pari passu with regard to the Company’s residual assets.

18. RESERVES

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Non-distributable

Share premium 476 476 476 476Exchange translation reserve 3,345 1,389 – –

3,821 1,865 476 476

Distributable

Retained earnings 127,455 101,153 31,245 26,564

131,276 103,018 31,721 27,040

(a) Exchange translation reserve

The exchange translation reserve is used to record foreign currency exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Group’s net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation.



18. RESERVES (cont’d)

(b) Retained earnings

Effective 1 January 2008, the Company is given the option to make an irrevocable election to move to a single tier system or continue to use its tax credit under Section 108 of the Income Tax Act 1967 for the purpose of dividend distribution until the tax credit is fully utilised or latest by 31 December 2013.

The Company has decided not to make this election and has sufficient tax credit under Section 108 of the Income Tax Act, 1967 and balance in the tax exempt account to frank the payment of dividends amounting to RM15,253,000 (2010: RM23,374,000) out of its retained profits as at 30 June 2011 without incurring additional tax liabilities. Retained earnings not covered by tax credit amounted to RM15,992,000 (2010: RM3,190,000). The Company has tax exempt accounts amounting to approximately RM11,132,000 (2010: RM6,403,000) available for distribution of tax exempt dividends. Certain subsidiaries have tax exempt accounts amounting to approximately RM4,202,000 (2010: RM3,932,000) available for distribution of tax exempt dividends out of their respective retained profits.

19. BORROWINGS

Note

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Current liabilities

Secured

Bank overdrafts 575 172 – –Bankers’ acceptances 1,120 400 – –Hire-purchase and lease creditors 20 781 606 142 158Term loans 21 2,861 953 1,667 –

5,337 2,131 1,809 158Unsecured

Bank overdrafts 1,540 1,450 176 17Bankers’ acceptances 11,401 6,818 – –Trust receipts 39 – – –

12,980 8,268 176 17

Total 18,317 10,399 1,985 175


Secured

Hire-purchase and lease creditors 20 1,312 831 98 240Term loans 21 31,614 18,105 18,333 4,000

Total 32,926 18,936 18,431 4,240


19. BORROWINGS (cont’d)

Note

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Total borrowings

Bank overdrafts 16 2,115 1,622 176 17Bankers’ acceptances 12,521 7,218 – –Hire-purchase and lease creditors 20 2,093 1,437 240 398Term loans 21 34,475 19,058 20,000 4,000Trust receipts 39 – – –

51,243 29,335 20,416 4,415

(a) Certain bank overdrafts and bankers’ acceptances of the Group and of the Company are secured by first fixed charges over certain freehold and long term leasehold land and buildings of the Company and its subsidiaries as disclosed in Note 7 to the financial statements.

(b) The currency exposure profile of borrowings are as follows:

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Ringgit Malaysia 49,241 27,215 20,416 4,415Singapore Dollar 2,002 2,120 – –

51,243 29,335 20,416 4,415

(c) Information on financial risks of borrowings is disclosed in Note 37 to the financial statements.

20. HIRE-PURCHASE AND LEASE CREDITORS

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Minimum hire-purchase and lease payments: - not later than one year 882 672 149 171 - later than one year and not later than five years 1,422 880 99 248

2,304 1,552 248 419Less: Future interest charges (211) (115) (8) (21)

Present value of hire-purchase and lease payments 2,093 1,437 240 398



Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Repayable as follows:

Current liabilities

- not later than one year 781 606 142 158


- later than one year and not later than five years 1,312 831 98 240

2,093 1,437 240 398

21. TERM LOANS

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Secured

Term loan I is repayable as follows: - 12 equal monthly instalments of RM48,652 each commencing January 2006 - 12 equal monthly instalments of RM50,216 each commencing January 2007 - 12 equal monthly instalments of RM52,585 each commencing January 2008 - 108 equal monthly instalments of RM54,461 each commencing January 2009 3,466 3,873 – –

Term loan II is repayable by 300 equal monthly instalments of SGD3,286 (RM7,885) each commencing January 2006 1,535 1,497 – –

Term loan III is repayable by 180 equal monthly instalments of RM26,307 each commencing October 2009 3,223 3,188 – –

Term loan IV is repayable as follows: - 24 equal monthly instalments of RM70,000 each commencing November 2010 - 36 equal monthly instalments of RM80,000 each commencing November 2012 - 36 equal monthly instalments of RM111,710 each commencing November 2015 6,251 6,500 – –

Term loan V is repayable by 95 equal monthly instalments of RM208,334 each and a final instalment of RM208,270 commencing November 2011 20,000 4,000 20,000 4,000

34,475 19,058 20,000 4,000


20. HIRE-PURCHASE AND LEASE CREDITORS (cont’d)


21. TERM LOANS (cont’d)

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Repayable as follows:

Current liabilities

- within one year 2,861 953 1,667 –


- more than one year and less than five years 16,342 7,273 10,000 1,875- more than five years 15,272 10,832 8,333 2,125

31,614 18,105 18,333 4,000

34,475 19,058 20,000 4,000

Term loans I, II, III and IV are secured by means of legal charge over freehold land, leasehold land and buildings of subsidiaries (Note 7) and guaranteed by the Company.

Term loan V is secured by means of legal charge over the freehold land and buildings of the Company. There are no fixed repricing periods for these loans.

22. TRADE AND OTHER PAYABLES

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Non-current:Other payable 6,151 – 6,151 –

Current:Trade payablesThird parties 16,262 10,774 – –

Other payables, deposits and accruals

Amounts owing to subsidiaries – – 23,299 37Other payables 8,387 3,772 1,807 38Deposits 1,177 1,011 – –Accruals 27,312 11,122 4,659 3,614

36,876 15,905 29,765 3,689

53,138 26,679 29,765 3,689




22. TRADE AND OTHER PAYABLES (cont’d)

(a) Non-current other payable of the Group and the Company represents deferred consideration for the acquisition of a subsidiary, Jeco (Pte) Limited during the financial year (Note 33). The amount is unsecured and interest-free. This amount is initially recognised at fair value based on method and assumptions disclosed in Note 36(d)(iv) to the financial statements.

(b) Trade payables are non-interest bearing and the normal credit terms granted to the Group range from 30 to 90 days.

(c) Amount owing to subsidiaries are unsecured, interest-free and payable on demand in cash and cash equivalents.

(d) Information on the financial risks of trade and other payables is disclosed in Note 37 to the financial statements.

(e) The currency exposure profile of trade and other payables are as follows:

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Ringgit Malaysia 26,347 17,841 27,898 3,689Chinese Renminbi 4,423 638 – –Hong Kong Dollar 1,114 691 – –Singapore Dollar 27,075 7,317 8,018 –U.S. Dollar 293 192 – –Others 37 – – –

59,289 26,679 35,916 3,689

23. COMMITMENTS

(a) Operating lease commitments

The Group had entered into non-cancellable lease arrangements for boutiques, offices and staff housing, resulting in future rental commitments. The Group has aggregate future minimum lease commitments as at the end of the reporting period as follows:

Group2011

RM’0002010

RM’000

Not later than one (1) year 19,421 11,375Later than one (1) year and not later than five (5) years 16,473 10,923

35,894 22,298

Certain lease rentals are subject to contingent rental which are determined based on a percentage of sales generated from boutiques.


23. COMMITMENTS (cont’d)

(b) Capital commitments

Group2011

RM’0002010

RM’000

Approved and contracted for:

Investment in an associate (Note 11) – 458

Property, plant and equipment: - leasehold land 642 – - building on freehold land 2,847 – - properties under construction 8,870 1,153 - others – 1,849

12,359 3,460

24. CONTINGENT LIABILITIES

Company - Unsecured

As at 30 June 2011, the Company has given corporate guarantees amounting to RM119,480,000 (2010: RM119,620,000) to financial institutions for banking facilities granted to and utilised by certain subsidiaries.

2011RM’000

2010RM’000

The amount of banking facilities utilised by the subsidiaries as at the financial year end:- secured borrowings 17,643 16,591- unsecured borrowings 15,106 9,549

32,749 26,140

The Directors are of the view that the chances of the financial institutions to call upon the corporate guarantees are remote. Accordingly, the Directors are of the view that the fair values of the above corporate guarantees for banking facilities of subsidiaries are negligible.




25. REVENUE

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Sale of goods 457,253 359,710 – –Rental income 495 389 1,951 1,907Royalties income 3,633 – – –Dividend income from unquoted investments in subsidiaries (gross) – – 37,216 21,725

461,381 360,099 39,167 23,632

26. COST OF SALES

Group2011

RM’0002010

RM’000

Inventories sold 194,232 154,639

27. FINANCE COSTS

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Accretion of non current other payable 678 – 678 –Bank charges 783 820 22 55Credit card charges 757 645 – –Genting World Card charges 18 16 – –Interest expense on:

- bank guarantee 30 18 1 1- bank overdrafts 126 62 – –- bankers’ acceptances 583 440 – –- hire-purchase and lease 111 93 13 24- term loans 1,489 881 689 142- trust receipts 67 17 – –- others 7 1 – –

4,649 2,993 1,403 222


28. PROFIT BEFORE TAX

Note

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Profit before tax is arrived at after charging:

Amortisation of trademarks 9 646 3 – –Auditors’ remuneration: - Statutory - Auditors of the ultimate holding company: - current year 256 230 35 28 - over provision in prior years (2) (1) (1) – - Other auditors: - current year 214 203 – – - under provision in prior years 1 13 – – - Non statutory - current year 23 5 10 5 - under provision in prior year 10 – – –Bad debts written off 712 359 – –

Depreciation of property, plant and equipment 7 14,475 13,468 926 1,118Directors’ remuneration: - Fees - payable by the Company 340 306 340 306 - payable by subsidiaries 247 260 – – - Emoluments other than fees - payable by the Company 6,879 5,154 6,879 5,154 - payable by subsidiaries 120 92 – –Goodwill written off 9 232 – – –Impairment loss on: - investments in subsidiaries 10 – – 524 1,715 - trade receivables 15(g) 3,219 89 – – - non-trade receivables – 3,788 3,248 4,174 - an associate 1 – 1 – - property, plant and equipment 7 212 – – –Inventories written off 14 2,362 75 – –Lease of office equipment 43 41 – –Loss on disposal of: - an associate 11 – – – 110 - property, plant and equipment 6 47 – –Property, plant and equipment written off 7 225 863 – –Realised loss on foreign currency transactions 570 776 – –Rental of premises 31,670 23,744 – –Unrealised loss on foreign currency translations 6 111 – 118Waiver of debts owing from a subsidiary – – – 2,700



28. PROFIT BEFORE TAX (cont’d)

Note

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Profit before tax is arrived at after charging: (cont’d)

And after crediting:

Dividend income from unquoted investments in subsidiaries (gross) 25 – – 37,216 21,725Fair value adjustment on investment properties 8 626 – – –Gain on disposal of: - property, plant and equipment 121 136 – – - subsidiaries 10 36 10 500 17,835 - an associate 11 – 53 – –Impairment losses no longer required - other receivable – 3,836 – – - a subsidiary – – – 4,182Interest income from: - fixed deposits with licensed banks 52 31 – – - short term placements with licensed banks 187 111 122 10 - others 182 79 178 76Profit received from trust fund accounts 312 467 83 164Realised gain on foreign currency transactions 536 348 6 1Rental income 13 3 1,952 1,907Unrealised gain on foreign currency translations 58 3 29 –

29. TAX EXPENSE

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Current tax expense based on profit for the financial year:Malaysian income tax 10,842 10,989 5,056 3,800Foreign income tax 3,373 638 – –

14,215 11,627 5,056 3,800

(Over)/Under provision in prior years:Malaysian income tax (780) (22) (630) (67)Foreign income tax 15 85 – –

13,450 11,690 4,426 3,733

Deferred tax (Note 13)Relating to origination and reversal of temporary differences 636 456 (5) 27

(Over)/Under provision in prior years (144) 106 (16) 6

492 562 (21) 33

Total tax expense 13,942 12,252 4,405 3,766



29. TAX EXPENSE (cont’d)

The Malaysian income tax is calculated at the statutory tax rate of 25% (2010: 25%) of the estimated taxable profits for the fiscal year.

Tax expense for other taxation authorities are calculated at the rates prevailing in those respective jurisdictions.

The numerical reconciliation between the tax expense and the product of accounting profit multiplied by the applicable tax rates of the Group and of the Company are as follows:

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Profit before tax 56,546 45,455 21,936 25,974

Tax at Malaysian statutory tax rate of 25% (2010: 25%) 14,137 11,364 5,484 6,494

Tax effect in respect of:Non-allowable expenses 1,808 2,138 2,235 2,609Depreciation on non-qualifying property, plant and equipment 651 736 196 269Lower tax rates in foreign jurisdiction (1,194) (14) – –Movements in deferred tax assets not recognised 841 (149) – –Non-taxable incomes (290) (1,369) (2,864) (5,545)Tax incentive and allowances (1,102) (623) – –

14,851 12,083 5,051 3,827

(Over)/Under provision of tax expense in prior years (765) 63 (630) (67)(Over)/Under provision of deferred tax in prior years (144) 106 (16) 6

13,942 12,252 4,405 3,766

Tax savings of the Group are as follows:

Group2011

RM’0002010

RM’000

Arising from utilisation of previously unrecognised tax losses 53 197




30. EARNINGS PER SHARE

Basic earnings per ordinary share for the financial year is calculated by dividing the profit for the financial year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the financial year.

2011 2010

Profit attributable to equity holders of the parent (RM’000) 39,152 33,547

Weighted average number of ordinary shares in issue (’000) 201,571 201,571

Basic earnings per ordinary share for profit for the financial year (sen) 19.42 16.64

Diluted earnings per ordinary share is not presented as there is no dilutive potential ordinary shares outstanding during the financial year.

31. DIVIDENDS

Group and Company2011 2010

Gross dividend

per shareSen

Amount of dividend

net of taxRM’000

Gross dividend

per shareSen

Amount of dividend

net of taxRM’000

Dividends paid:

Interim dividend paid in respect of the financial year ended 30 June 2011 2.5 3,779 – –

Interim tax exempt dividend paid in respect of the financial year ended 30 June 2010 2.5 5,039 – –

Final tax exempt dividend paid in respect of the financial year ended 30 June 2010 0.5 1,008 – –

Final dividend paid in respect of the financial year ended 30 June 2010 2.0 3,024 – –

First and final dividend paid in respect of the financial year ended 30 June 2009 – – 2.5 3,779

Special dividend paid in respect of the financial year ended 30 June 2009 – – 1.5 2,268

7.5 12,850 4.0 6,047

A final dividend in respect of the financial year ended 30 June 2011 of 5% or 2.5 sen per ordinary share, less tax of 25%, amounting to RM3,779,472 has been proposed by the Directors after the reporting period for shareholders’ approval at the forthcoming Annual General Meeting. The financial statements for the current financial year do not reflect this proposed dividends. This dividend, if approved by shareholders, will be accounted for as an appropriation of retained earnings in the financial year ending 30 June 2012.


32. EMPLOYEE BENEFITS

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Wages, salaries and bonuses 62,600 45,333 7,027 5,843Contributions to defined contribution plan 7,472 5,251 785 697Social security contributions 497 476 6 6Other benefits 8,602 6,931 68 92

79,171 57,991 7,886 6,638

33. ACQUISITION OF SUBSIDIARIES

On 20 December 2010 (the ‘acquisition date’), the Company acquired 70% issued and paid-up ordinary share capital of Jeco (Pte) Limited (“Jeco”), a company incorporated in Singapore which is engaged in the management and exploitation of intellectual property relating to bags, leather goods, accessories, and related products in Singapore and the Asia Pacific region for a cash consideration of SGD28,000,000.

Jeco has a wholly owned subsidiary namely, Lianbee-Jeco Pte. Ltd. (“LJ”), which in turn wholly owned Lianbee-Jeco (M) Sdn. Bhd. (“LBM”). LJ is principally engaged in the business of retailing, importing and exporting leather goods and general merchandise while LBM is principally engaged in trading in leather goods and footwear. (“Jeco Group”)

The Group acquired Jeco Group in order to complement and increase Bonia’ range of products offerings to provide a wider assortment to cater for the constant change and demands of the consumers in the fashion retail industry. Control was obtained by virtue of owning majority of the voting rights of Jeco Group.

(a) The fair value of the identifiable assets and liabilities of Jeco Group as at the date of acquisition are as follows:

RM’000

Property, plant and equipment 1,989Trademark 30,912Inventories 14,997Trade and other receivables 15,089Cash and bank balances 4,309

Total identifiable assets 67,296

Trade and other payables 12,994Borrowings 344Current tax payable 6,291Deferred tax liabilities 6,748

Total identifiable liabilities 26,377

Total identifiable net assets 40,919Non-controlling interest (12,276)Goodwill arising from acquisition (Note 9) 33,720

62,363



33. ACQUISITION OF SUBSIDIARIES (cont’d)

(a) The fair value of the identifiable assets and liabilities of Jeco Group as at the date of acquisition are as follows: (cont’d)

(i) The fair value of trade and other receivables of RM15,089,000 includes trade receivables of RM12,463,000.

(ii) Goodwill of RM33,720,000 comprises the value of the strengthening of the Group’s market position in the industry, and cost reduction synergies expected to arise from the acquisition.

(b) The consideration transferred for the acquisition of Jeco Group are as follows:

RM’000

Cash paid 55,154Deferred consideration recognised at fair value as at acquisition date 7,209

Total consideration transferred 62,363Fair value of equity interest in Jeco Group held by the Group immediately before the acquisition –

62,363

(i) A deferred consideration of SGD5 million was agreed upon as part of the Share Sale Agreement, which is approximately RM11,934,000 in relation to the acquisition of Jeco Group. The Group was allowed to spread out the balance of payment of SGD5 million for a further period of seven (7) years to facilitate the cash management purposes of the Group.

The fair value of the deferred consideration was estimated at RM7,209,000 at the date of acquisition.

(ii) Transaction costs related to the acquisition of RM1,108,000 have been recognised in profit or loss as general and administrative expenses.

(c) The effects of acquisition of Jeco Group on cash flows are as follows:

RM’000

Total consideration for 70% equity interest acquired 62,363Less: Deferred consideration (7,209)

Consideration settled in cash upon acquisition 55,154Less: Cash and cash equivalents of subsidiary acquired (4,309)

Net cash outflow of the Group on acquisition 50,845

Jeco Group has contributed RM54,829,000 of revenue and RM12,005,000 to the Group’s profit for the financial year from the acquisition date. Had the business combination taken place at the beginning of the financial year, the Group’s revenue would have been RM516,210,000 and the profit for the financial year would have been RM54,609,000.



34. RELATED PARTY DISCLOSURES

(a) Identities of related parties

Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

The Company has controlling related party relationship with its direct and indirect subsidiaries.

Related parties other than those disclosed elsewhere in the financial statements and their relationship with the Group are as follows:

Related party Relationship

Cassardi International Co. Ltd. A company in which a major shareholder of VR Directions Sdn. Bhd., a subsidiary, Boonnam Boonnamsap has substantial financial interests.

Long Bow Manufacturing (S) Pte. Ltd. A company in which a Director, who is also a major shareholder of the Company has substantial financial interests.

Bonia International Holdings Pte. Ltd. A company in which a Director, who is also a major shareholder of the Company has substantial financial interests.

BIH Franchising Limited A company in which a Director, who is also a major shareholder of the Company has substantial financial interests.

(b) In addition to the transactions and balances detailed elsewhere in the financial statements, the Group and the Company had the following transactions with related parties during the financial year:

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Rental income received/receivable from subsidiaries – – 1,952 1,907Gross dividends received from subsidiaries – – 37,216 21,725Management fees paid/payable to subsidiaries – – 794 740Purchases from Cassardi International Co. Ltd. 1,540 1,264 – –Royalty paid/payable to:

- Cassardi International Co. Ltd. 610 581 – –- Bonia International Holdings Pte. Ltd. – 1,375 – –- BIH Franchising Limited 1,403 – – –

Rental expense paid/payable to Long Bow Manufacturing (S) Pte. Ltd. 436 200 – –

The related party transactions described above were carried out in the normal course of business and have been established under negotiated and mutually agreed terms.

(c) Compensation of key management personnel

Key management personnel are those persons having the authority and responsibility for planning, directing and controlling the activities of the entity, directly and indirectly, including any director (whether executive or otherwise) of the Group.



34. RELATED PARTY DISCLOSURES (cont’d)

(c) Compensation of key management personnel (cont’d)

The remuneration of Directors and other key management personnel during the financial year was as follows:

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Short term employee benefits 11,755 10,143 6,526 5,354Contributions to defined contribution plans 1,324 1,104 715 625

13,079 11,247 7,241 5,979

35. OPERATING SEGMENTS

Bonia Corporation Berhad and its subsidiaries are principally engaged in designing, manufacturing, marketing, retailing, wholesaling and franchising of fashionable leather goods, accessories and apparel for the local and overseas markets, property development and investment holding.

The Group has arrived at three (3) reportable operating segments that are organised and managed separately according to the nature of products and services and specific expertise, which requires different business and marketing strategies. The reportable segments are summarised as follows:

Retailing Designing, promoting and marketing of fashionable apparels, footwear, accessories and leather goods.

Manufacturing Manufacturing and marketing of fashionable leather goods.

Investment and property development

Investment holding and rental and development of commercial properties.

The accounting policies of operating segments are the same as those described in the summary of significant accounting policies.

The Group evaluates performance on the basis of profit or loss from operations before tax not including non-recurring losses, such as goodwill written off.

Inter-segment revenue is priced along the similar lines as sales to external customers and is eliminated in the consolidated financial statements. These policies have been applied consistently throughout the current and previous financial years.

Segment assets exclude tax assets and assets used primarily for corporate purposes.

Segment liabilities exclude tax liabilities. Even though loans and borrowings arise from financing activities rather than operating activities, they are allocated to the segments based on relevant factors (e.g. funding requirement). Details are provided in the reconciliations from segment assets and liabilities to the position of the Group.



35. OPERATING SEGMENTS (cont’d)

2011

RetailingRM’000

ManufacturingRM’000

Investmentand propertydevelopment

RM’000Total

RM’000

RevenueTotal revenue 456,864 22,479 50,956 530,299Inter-segment revenue – (18,457) (50,461) (68,918)

Revenue from external customers 456,864 4,022 495 461,381

Interest income 109 – 312 421Finance costs (2,343) (501) (1,805) (4,649)

Net finance expense (2,234) (501) (1,493) (4,228)

Depreciation (11,758) (900) (1,817) (14,475)

Amortisation (646) – – (646)

Segment profit/(loss) before income tax 66,902 616 (10,740) 56,778

Share of losses of associates (127) – – (127)

Income tax expenses (15,799) (60) 1,917 (13,942)

Other material non-cash items:- impairment losses on trade and other receivables (3,219) – – (3,219)- bad debts written off (712) – – (712)- inventories written off (2,193) (169) – (2,362)

Investment in associates 426 – – 426

Additions to non-current assets other than financial instruments and deferred tax assets 84,539 351 3,120 88,010

Segment assets 270,434 23,156 74,272 367,862

Segment liabilities 58,282 9,529 42,721 110,532




2010

RetailingRM’000

ManufacturingRM’000

Investmentand propertydevelopment

RM’000Total

RM’000

RevenueTotal revenue 357,541 17,880 32,180 407,601Inter-segment revenue – (15,711) (31,791) (47,502)

Revenue from external customers 357,541 2,169 389 360,099

Interest income 121 1 99 221Finance costs (1,975) (532) (486) (2,993)

Net finance expense (1,854) (531) (387) (2,772)

Depreciation (10,724) (873) (1,871) (13,468)

Amortisation (3) – – (3)

Segment profit/(loss) before income tax 53,526 (272) (7,799) 45,455

Share of losses of associates (3) – – (3)

Income tax expenses (13,688) (4) 1,440 (12,252)

Other material non-cash items:- impairment losses on trade and other receivables (89) – (3,788) (3,877)- bad debts written off (359) – – (359)- inventories written off (75) – – (75)- impairment losses on other receivable no longer required – – 3,836 3,836

Investment in associates 112 – – 112

Additions to non-current assets other than financial instruments and deferred tax assets 7,193 309 591 8,093

Segment assets 179,631 23,026 60,060 262,717

Segment liabilities 28,623 10,954 16,437 56,014




Reconciliations of reportable segment revenues, profit or loss, assets and liabilities to the Group’s corresponding amounts are as follows:

2011RM’000

2010RM’000

Revenue

Total revenue for reportable segments 530,299 407,601Elimination of inter-segment revenues (68,918) (47,502)

Group’s revenue per consolidated statement of comprehensive income 461,381 360,099

Profit for the financial year

Total profit or loss for reportable segments 56,778 45,455Goodwill written off (232) –

Profit before tax 56,546 45,455Income tax expenses (13,942) (12,252)

Profit for the financial year 42,604 33,203

Assets

Total assets for reportable segments 367,862 262,717Investments in associates 426 112Tax assets 4,962 3,751

373,250 266,580

Liabilities

Total liabilities for reportable segments 110,532 56,014Tax liabilities 15,731 4,413

126,263 60,427

Geographical information

The Group operates mainly in Malaysia and Singapore.

In presenting information on the basis of geographical areas, segment revenue is based on the geographical location from which the sale transactions originated.




Geographical information (cont’d)

The composition of each geographical segment is as follows:

(i) Malaysia : Manufacturing, designing, promoting and marketing of fashionable apparel, footwear, accessories and leather goods, and development of commercial properties.

(ii) Singapore : Designing, promoting and marketing of fashionable apparels, footwear, accessories and leather goods.

Segment assets are based on geographical location of the Group’s assets. The non-current assets do not include financial instruments and deferred tax assets.

Revenue from external customers 2011RM’000

2010RM’000

Malaysia 304,995 268,938Singapore 124,316 62,711Others 32,070 28,450

461,381 360,099

Non-current assets 2011RM’000

2010RM’000

Malaysia 114,824 75,394Singapore 38,321 3,634Others 536 1,094

153,681 80,122

36. FINANCIAL INSTRUMENTS

(a) Capital management

The primary objective of the Group’s capital management is to ensure that entities of the Group would be able to continue as going concerns while maximising the return to shareholders through the optimisation of the debt and equity balance. The overall strategy of the Group remains unchanged from that in financial year ended 30 June 2010.

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 financial years ended 30 June 2011 and 30 June 2010.

The Group is not subject to any externally imposed capital requirements.



36. FINANCIAL INSTRUMENTS (cont’d)

(a) Capital management (cont’d)

The Group monitors capital using gearing ratios, i.e. gearing ratio and net gearing ratio. Gearing ratio represents borrowing divided by total capital whereas net gearing ratio represents borrowing less cash and cash equivalent divided by the total capital. Capital represents equity attributable to the owners of the parent.

Group Company2011

RM’0002010

RM’0002011

RM’0002010

RM’000

Borrowings 51,243 29,335 20,416 4,415Less: Cash and cash equivalents (56,037) (70,017) (491) (10,244)

(4,794) (40,682) 19,925 (5,829)

Total capital 232,062 203,804 132,507 127,826

Gearing ratio* 22% 14% 15% 3%

Net gearing ratio# – – 15% –

* without taking cash and cash equivalents into consideration # taking cash and cash equivalents into consideration

The Group will continue to be guided by prudent financial policies of which gearing is an important aspect.

(b) Financial instruments

Certain comparative figures have not been presented for 30 June 2010 by virtue of the exemption given in paragraph 44AA of FRS 7.

(i) Categories of financial instruments

GroupLoans and

receivables

Fair valuethrough

profit or lossAvailable

for saleHeld to

maturity Total2011 RM’000 RM’000 RM’000 RM’000 RM’000

Financial assetsOther investments – – 950 – 950Trade and other receivables 76,680 – – – 76,680Cash and cash equivalents 56,037 – – – 56,037

132,717 – 950 – 133,667




(b) Financial instruments (cont’d)

(i) Categories of financial instruments (cont’d)

OtherFinancial liabilities RM’000

Fair value through

profit or lossRM’000

TotalRM’000

Financial liabilitiesBorrowings 51,243 – 51,243Trade and other payables 59,289 – 59,289

110,532 – 110,532

Company2011

Loans andreceivables

RM’000

Fair valuethrough


Availablefor saleRM’000

Held tomaturityRM’000

TotalRM’000

Financial assetsOther receivables 24,693 – – – 24,693Cash and cash equivalents 491 – – – 491

25,184 – – – 25,184

OtherFinancial liabilities RM’000

Fair value through


TotalRM’000

Financial liabilitiesBorrowings 20,416 – 20,416Other payables 35,916 – 35,916

56,332 – 56,332




(c) Fair values of financial instruments

The fair values of financial instruments that are not carried at fair value and whose carrying amounts do not approximate its fair values are as follows:

Note

Group CompanyCarryingamountRM’000

Fairvalue

RM’000


Fairvalue

RM’000

2011

Recognised

Financial liabilities:Hire purchase and lease creditors 20 2,093 2,064 240 234

2010

Recognised

Financial liabilities:Hire purchase and lease creditors 20 1,437 1,386 398 377

(d) Methods and assumptions used to estimate fair value

The fair values of financial assets and financial liabilities are determined as follows:

i. Financial instruments that are not carried at fair value and whose carrying amounts are a reasonable approximation of fair value

The carrying amounts of financial assets and liabilities, such as trade and other receivables, trade and other payables and borrowings, are reasonable approximation of fair value, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the end of the reporting period.

ii. Hire purchase and lease creditors

The fair values of these borrowings are estimated based on the future contractual cash flows discounted at current market interest rates available for similar financial instrument and of the same remaining maturities.

iii. Other investment

The fair value of club membership is determined by reference to comparable market value of similar investment, which is a Level 2 fair value measurement.

iv. Non current other payable

The fair value of non current other payable is estimated by discounting expected future cash flows at discount rate of 12.73% per annum. The discount rate has been estimated based on the weighted average cost of capital of the Group.



37. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s financial risk management objective is to optimise value creation for shareholders whilst minimising the potential adverse impact arising from fluctuations in foreign currency exchange and interest rates and the unpredictability of the financial markets.

The Group operates within an established risk management framework and clearly defined guidelines that are regularly reviewed by the Board of Directors. Financial risk management is carried out through risk review programmes, internal control systems, insurance programmes and adherence to the Group financial risk management policies. The Group is exposed mainly to foreign currency risk, liquidity risk, interest rate risk and credit risk. Information on the management of the related exposures is detailed below.

(i) Credit risk

Cash deposits and trade receivables may give rise to credit risk which requires the loss to be recognised if a counter party fails to perform as contracted. The counter parties are major international institutions and reputable multinational organisations. It is the Group’s policy to monitor the financial standing of these counter parties on an ongoing basis to ensure that the Group is exposed to minimal credit risk.

The Group’s primary exposure to credit risk arises through its trade receivables. The Group’s trading terms with its customers are mainly on credit, except for boutique sales, where the transactions are done in cash term. The credit period is generally for a period of 60 days, extending up to 120 days for major customers. Each customer has a maximum credit limit and the Group seeks to maintain strict control over its outstanding receivables to minimise credit risk. Overdue balances are reviewed regularly by senior management.

Exposure to credit risk

At the end of the reporting period, the Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statements of financial position.

Information regarding credit exposure for trade and other receivables is disclosed in Note 15 to the financial statements.

Credit risk concentration profile

The Group determines concentration of credit risk by monitoring the country and industry sector profiles of its trade receivables on an ongoing basis. The credit risk concentration profile of the Group’s trade receivables at the end of the reporting period are as follows:

Group2011 2010

RM’000% ofTotal RM’000

% oftotal

By country:Malaysia 31,845 56 27,673 72Singapore 23,170 40 6,711 17Others 2,326 4 4,297 11

57,341 100 38,681 100

By industry sectors:Retailing 56,676 99 38,430 99Manufacturing 653 1 228 1Investment and property Development 12 # 23 #

57,341 100 38,681 100

# Amount is less than 1%



37. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)

(i) Credit risk (cont’d)

Financial assets that are neither past due nor impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 15 to the financial statements. Deposits with banks and other financial institutions that are neither past due nor impaired are placed with or entered into with reputable financial institutions or companies with high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 15 to the financial statements.

(ii) Liquidity and cash flow risk

Liquidity risk is the risk that the Group is unable to service its cash obligations in the future. To mitigate this risk, the management measures and forecasts its cash commitments, monitors and maintain a level of cash and cash equivalents deemed adequate to finance the Group’s operations and developments activities.

Analysis of financial instruments by remaining contractual maturities

The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the end of the reporting period based on contractual undiscounted repayment obligations.

On demandor withinone yearRM’000

One tofive years

RM’000

Overfive years

RM’000Total

RM’000

As at 30 June 2011

GroupFinancial liabilities:Trade and other payables 53,272 6,444 4,296 64,012Borrowings 20,263 24,270 17,012 61,545

Total undiscounted financial liabilities 73,535 30,714 21,308 125,557

As at 30 June 2011

CompanyFinancial liabilities:Other payables 29,900 6,444 4,296 40,640Borrowings 3,092 14,723 9,558 27,373

Total undiscounted financial liabilities 32,992 21,167 13,854 68,013




(iii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group’s and the Company’s exposure to interest rate risk relates primarily to their interest-bearing borrowings on floating rates. The Group does not use derivative financial instruments to hedge this risk.

Sensitivity analysis for interest rate risk

As at 30 June 2011, if interest rates at the date had been 50 basis points lower with all other variables held constant, post-tax profit for the year would have been RM138,000 higher and vice versa, arising mainly as a result of lower or higher interest expense on variable borrowings.

The following table set out the carrying amounts, the weighted average effective interest rate as at the end of the reporting period and the remaining maturities of the Group’s and the Company’s financial instruments that are exposed to interest rate risk:

Note

Weighted average

effective interest rate

%

Within1 year

RM’000

1 - 2 years

RM’000

2 - 3 years

RM’000

3 - 4 years

RM’000

4 - 5 years

RM’000

More than

5 yearsRM’000

TotalRM’000

GroupAt 30 June 2011

Fixed rate

Fixed deposits with licensed banks 16 0.79 7,778 – – – – – 7,778

Hire-purchase and lease creditors 20 5.06 (781) (574) (337) (298) (103) – (2,093)

Floating rate

Short term placements with licensed banks 16 2.54 8,400 – – – – – 8,400

Placements with licensed banks 16 3.18 3,904 – – – – – 3,904Bank overdrafts 19 6.70 (2,115) – – – – – (2,115)Bankers’ acceptances 19 4.34 (12,521) – – – – – (12,521)Trust receipt 19 6.75 (39) – – – – – (39)Term loans 21 5.38 (2,861) (3,807) (3,923) (4,007) (4,353) (15,524) (34,475)




(iii) Interest rate risk (cont’d)

Note

Weighted average


%

Within1 year

RM’000

1 - 2 years

RM’000

2 - 3 years

RM’000

3 - 4 years

RM’000

4 - 5 years

RM’000

More than

5 yearsRM’000

TotalRM’000

GroupAt 30 June 2010

Fixed rate

Fixed deposits with licensed banks 16 0.47 7,709 – – – – – 7,709

Hire-purchase and lease creditors 20 5.67 (606) (493) (290) (48) – – (1,437)

Floating rate

Short term placements with licensed banks 16 2.17 5,200 – – – – – 5,200

Placements with licensed banks 16 2.33 32,142 – – – – – 32,142Bank overdrafts 19 7.50 (1,622) – – – – – (1,622)Bankers’ acceptances 19 3.41 (7,218) – – – – – (7,218)Term loans 21 5.49 (953) (1,532) (1,807) (1,924) (2,010) (10,832) (19,058)

Note

Weighted average


%

Within1 year

RM’000

1 - 2 years

RM’000

2 - 3 years

RM’000

3 - 4 years

RM’000

4 - 5 years

RM’000

More than

5 yearsRM’000

TotalRM’000

CompanyAt 30 June 2011

Fixed rate

Hire-purchase and lease creditors 20 4.24 (142) (98) – – – – (240)

Floating rate

Short term placements with licensed banks 16 2.60 450 – – – – – 450

Bank overdrafts 19 8.35 (176) – – – – – (176)Term loan 21 4.85 (1,667) (2,500) (2,500) (2,500) (2,500) (8,333) (20,000)




Note

Weighted average


%

Within1 year

RM’000

1 - 2 years

RM’000

2 - 3 years

RM’000

3 - 4 years

RM’000

4 - 5 years

RM’000

More than

5 yearsRM’000

TotalRM’000

At 30 June 2010

Fixed rate

Hire-purchase and lease creditors 20 4.25 (158) (142) (98) – – – (398)

Floating rate

Placements with licensed banks 16 3.49 10,148 – – – – – 10,148Bank overdrafts 19 7.55 (17) – – – – – (17)Term loan 21 4.27 – (375) (500) (500) (500) (2,125) (4,000)

(iv) Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign

exchange rates.

Subsidiaries operating in Singapore, Hong Kong and China have assets and liabilities together with expected cash flows from anticipated transactions denominated in foreign currencies that give rise to foreign exchange exposures.

The Group maintains a natural hedge, where possible, by borrowing in the currency of the country in which the investment is located or by borrowing in currencies that match the future revenue stream to be generated from its investments.

The Group did not enter into any material forward foreign exchange contract in the current financial year. The currency exposure profile is as follows:

Group2011

RM’000

Company2011

RM’000

Ringgit Malaysia 3,948 (26,227)Singapore Dollar (SGD) 14,586 (4,920)Hong Kong Dollar (HKD) 4,395 –Chinese Renminbi (RMB) (2,202) –Others 1,458 –

22,185 (31,147)


(iii) Interest rate risk (cont’d)



(iv) Foreign currency risk (cont’d)

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible change in the SGD, HKD and RMB exchange rates against the respective functional currencies of the Group entities, with all other variables held constant.

Group2011

RM’000Profit net

of tax

Company2011

RM’000Profit net

of tax

SGD/RM - strengthen by 3% +438 -148- weaken by 3% -438 +148

HKD/RM - strengthen by 3% +132 –- weaken by 3% -132 –

RMB/RM - strengthen by 3% -66 –- weaken by 3% +66 –

38. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

Investments in subsidiaries

Investments in subsidiaries during the financial year are disclosed in Note 10 to the financial statements.

Material litigation

The Company’s 60% owned subsidiaries, Apex Sdn. Bhd. (“Apex”) and Mcore Sdn. Bhd. (“Mcore”) had filed a civil suit on 3 August 2011 against Leong Tat Yan. Apex and Mcore claimed against Leong Tat Yan for a sum of RM946,000 and RM2,250,000 respectively, being the proceeds of sale from the joint venture business owed by Leong Tat Yan.

Leong Tat Yan owns 40% of Apex and he is also a controlling shareholder of 388 Venture Corporation Sdn. Bhd. which owns 40% of Mcore.

There are losses of RM5,389,000 arising from the dispute of which management had made the necessary impairment. The losses includes impairment loss of trade receivables amounted to RM3,196,000 and inventories written off of RM2,193,000 (before non-controlling interest’s share of loss).

The said litigation is fixed for case management on 3 November 2011.



39. SIGNIFICANT EVENTS SUBSEQUENT TO END OF REPORTING PERIOD

(a) On 18 August 2011, the Company’s wholly owned subsidiary, Banyan Sutera Sdn. Bhd. incorporated a wholly owned subsidiary, PT Banyan Cemerlang in Indonesia, with an authorised share capital of Rp8,487,000,000 or equivalent to USD1,000,000 divided into 1,000 shares of Rp8,487,000 each or equivalent to USD1,000.00 each, of which Rp2,121,750,000 or equivalent to USD250,000.00 have been fully paid-up. The incorporation of this subsidiary does not have any material impact to the Group’s financial statements.

(b) On 25 August 2011, the Company acquired 2 ordinary shares of RM1.00 each, representing 100% equity interest in Vista Assets Sdn. Bhd., from third parties, with a total cash consideration of RM2.00. The acquisition does not have any material impact to the Group’s financial statements.

(c) On 26 August 2011, the Company’s wholly owned subsidiary, CRG incorporated a wholly owned subsidiary, CRV Sdn. Bhd. in Malaysia, with an authorised share capital of RM100,000 comprising 100,000 ordinary shares of RM1.00 each, of which all have been issued and fully paid-up. The incorporation of this subsidiary does not have any material impact to the Group’s financial statements.

(d) On 3 September 2011, the Company’s wholly owned sub-subsidiary, Bonia (Shanghai) Commerce Limited had completed the application for voluntary deregistration procedures. The deregistration does not have any material impact to the Group’s financial statements.

(e) On 12 September 2011, the Company incorporated a wholly owned subsidiary, Paris RCG Sdn. Bhd. in Malaysia, with an authorised share

capital of RM100,000 comprising 100,000 ordinary shares of RM1.00 each, of which 2 ordinary shares have been issued and fully paid-up. The incorporation of this subsidiary does not have any material impact to the Group’s financial statements.

(f) On 19 September 2011, the Company incorporated a wholly owned subsidiary, FR Gallery Sdn. Bhd. in Malaysia, with an authorised share capital of RM100,000 comprising 100,000 ordinary shares of RM1.00 each, of which 2 ordinary shares have been issued and fully paid-up. The incorporation of this subsidiary does not have any material impact to the Group’s financial statements.

(g) On 19 October 2011, the Company’s wholly owned subsidiary, Luxury Parade Sdn. Bhd. had entered into fifteen (15) sale and purchase agreements with Platinum Starhill Sdn. Bhd. for the acquisitions of freehold properties for a total consideration of RM44,287,000.



40. COMPARATIVES

Certain comparative figures have been restated due to the effects arising from the adoption of Amendment to FRS 117 Leases, which have resulted in retrospective adjustments. Leasehold land held by the Group for own use were reclassified from prepaid lease payments for land as previously reported, to property, plant and equipment - leasehold land.

As at 1 July 2009 As at 30 June 2010

As previously

reported

Effects on adoption of Amendment

to FRS 117 As restated

As previously

reported


to FRS 117 As restatedGroup RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Statement of financial position

Assets

Non-current assets

Property, plant and equipment 69,309 219 69,528 62,328 216 62,544Investment properties 12,127 – 12,127 12,127 – 12,127Prepaid lease payments for land 219 (219) – 216 (216) –Intangible assets 4,878 – 4,878 4,876 – 4,876Investment in an associate 73 – 73 112 – 112Other investments 596 – 596 575 – 575Deferred tax assets 1,361 – 1,361 808 – 808

88,563 – 88,563 81,042 – 81,042

Current assets

Inventories 60,685 – 60,685 57,869 – 57,869Trade and other receivables 48,821 – 48,821 54,709 – 54,709Current tax assets 2,555 – 2,555 2,943 – 2,943Cash and cash equivalents 44,138 – 44,138 70,017 – 70,017

156,199 – 156,199 185,538 – 185,538

TOTAL ASSETS 244,762 – 244,762 266,580 – 266,580



40. COMPARATIVES (cont’d)

Certain comparative figures have been restated due to the effects arising from the adoption of Amendment to FRS 117 Leases, which have resulted in retrospective adjustments. Leasehold land held by the Group for own use were reclassified from prepaid lease payments for land as previously reported, to property, plant and equipment - leasehold land. (cont’d)

As at 1 July 2009 As at 30 June 2010

As previously

reported


to FRS 117 As restated

As previously

reported


to FRS 117 As restatedGroup RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Statement of financial position

Equity attributable to owners of the parent

Share capital 100,786 – 100,786 100,786 – 100,786Reserves 76,691 – 76,691 103,018 – 103,018

177,477 – 177,477 203,804 – 203,804Non-controlling interests 3,072 – 3,072 2,349 – 2,349

180,549 – 180,549 206,153 – 206,153

LIABILITIES


Bank borrowings 15,576 – 15,576 18,936 – 18,936Deferred tax liabilities 235 – 235 244 – 244

15,811 – 15,811 19,180 – 19,180Current liabilities

Trade and other payables 22,964 – 22,964 26,679 – 26,679Bank borrowings 23,375 – 23,375 10,399 – 10,399Current tax liabilities 2,063 – 2,063 4,169 – 4,169

48,402 – 48,402 41,247 – 41,247

Total liabilities 64,213 – 64,213 60,427 – 60,427

Total equity and liabilities 244,762 – 244,762 266,580 – 266,580



40. COMPARATIVES (cont’d)

Certain comparative figures have been restated due to the effects arising from the adoption of Amendment to FRS 117 Leases, which have resulted in retrospective adjustments. Leasehold land held by the Group for own use were reclassified from prepaid lease payments for land as previously reported, to property, plant and equipment - leasehold land. (cont’d)

Group

Aspreviously

reportedRM’000

Effects onadoption ofAmendment

to FRS 117RM’000

AsrestatedRM’000

For the financial year ended 30 June 2010

Statements of comprehensive income (Note 28)

Depreciation of property, plant and equipment 13,465 3 13,468Amortisation of prepaid lease payments for land 3 (3) –

Statements of cash flows

Depreciation of property, plant and equipment 13,465 3 13,468Amortisation of prepaid lease payments for land 3 (3) –

41. SUPPLEMENTARY INFORMATION ON REALISED AND UNREALISED PROFITS OR LOSSES

The retained earnings as at the end of the reporting period may be analysed as follows:

2011Group

RM’000Company

RM’000

Total retained profits of Bonia Corporation Berhad and its subsidiaries:- Realised 176,868 31,252- Unrealised (581) (7)

Total share of retained profits from associated companies:- Realised (130) –

176,157 31,245Less: Consolidation adjustments (48,702) –

Total group/company retained profits as per financial statements 127,455 31,245

The supplementary information on realised and unreaslised profits or losses has been prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (‘MIA Guidance’) and the directive of Bursa Malaysia Securities Berhad.



Analysis Of Shareholdings as at 19 October 2011

ANALYSIS OF SHAREHOLDINGS

Authorised Share Capital: RM500,000,000Issued Share Capital: 201,571,850 Ordinary Shares Paid-up Share Capital: RM100,785,925Class of Shares: Ordinary Shares of RM0.50 eachVoting Right: 1 Vote per Ordinary Share

Size of ShareholdingsNo. of

Shareholders % No. of Shares %

Less than 100 43 3.23 1,810 *100 to 1,000 204 15.33 152,404 0.081,001 to 10,000 836 62.81 3,862,674 1.9210,001 to 100,000 195 14.65 5,897,044 2.92100,001 to less than 5% of issued shares 50 3.76 75,171,828 37.295% of issued shares and above 3 0.22 116,486,090 57.79

Total 1,331 100.00 201,571,850 100.00

* Negligible

SUBSTANTIAL SHAREHOLDERSas per the Register of Substantial Shareholder (Section 69L of the Companies Act 1965)

Name No. of Shares %

Permodalan Nasional Berhad 66,489,098 32.98Bonia Holdings Sdn Bhd 49,996,992 24.80

DIRECTORS’ SHAREHOLDINGS

Shareholdings Name Direct % Indirect %

Chiang Sang Sem 2,367,000 1.17 62,109,226 ̂ ^^ 30.81Chiang Fong Yee (Alternate Director to Mr Chiang Sang Sem) 856,300 0.42 10,000 ̂ *Chiang Heng Kieng – – 69,000 ̂ 0.03Chiang Sang Bon 305,000 0.15 59,000 ̂ ^ 0.03Chong Chin Look 500,000 0.25 – –Chiang Fong Tat 599,000 0.30 25,000 ̂ 0.01Datuk Ng Peng Hong @ Ng Peng Hay – – – –Dato’ Shahbudin Bin Imam Mohamad – – – –Lim Fong Boon – – – –Chong Sai Sin – – – –

^^^ Deemed interested through his substantial shareholdings in Bonia Holdings Sdn Bhd, Kontrak Kosmomaz Sdn Bhd, SGP Investment Pte Ltd, Golden Shine Finance Limited and through his spouse and children.^^ Deemed interested through his spouse and child.^ Deemed interested through his spouse.* Negligible


Analysis Of Shareholdings as at 19 October 2011 (cont’d)

THIRTY LARGEST SHAREHOLDERS as per the Record of Depositors

No. Name No. of Shares %

1. PERMODALAN NASIONAL BERHAD 66,489,098 32.982. BONIA HOLDINGS SDN BHD 31,351,992 15.553. AMSEC NOMINEES (TEMPATAN) SDN BHD

[Beneficiary: AmBank (M) Berhad for Bonia Holdings Sdn Bhd]18,645,000 9.25

4. HSBC NOMINEES (ASING) SDN BHD[Beneficiary: Exempt An for HSBC Private Bank (Suisse) S.A. (Spore TST Accl)]

9,897,600 4.91

5. CIMSEC NOMINEES (ASING) SDN BHD[Beneficiary: Exempt An for CIMB Securities (Singapore) Pte Ltd (Retail Clients)]

8,200,400 4.07

6. KONTRAK KOSMOMAZ SDN BHD 5,583,434 2.777. CITIGROUP NOMINEES (ASING) SDN BHD

[Beneficiary: GSCO for Truffle Hound Global Value LLC]5,000,000 2.48

8. SUDISAMA SDN BHD 4,702,600 2.339. LEE ENG CHENG 4,635,000 2.3010. LIM KWEE LIAN 4,326,200 2.1511. AVON MORE ALPS SDN BHD 4,044,200 2.0112. MAYBAN NOMINEES (ASING) SDN BHD

[Beneficiary: DBS Bank for Albizia Asean Opportunities Fund]3,754,400 1.86

13. HLB NOMINEES (ASING) SDN BHD[Beneficiary: Pledged Securities Account for SGP Investment Pte Ltd]

3,096,000 1.54

14. AMANAHRAYA TRUSTEES BERHAD [Beneficiary: Public Dividend Select Fund]

2,772,700 1.38

15. CHIANG SANG SEM 2,367,000 1.1716. NIK HATMAH BINTI NIK HASSAN 2,344,400 1.1617. DENVER CORPORATION SDN BHD 1,446,800 0.7218. HLB NOMINEES (ASING) SDN BHD

[Beneficiary: Pledged Securities Account for Golden Shine Finance Limited]1,200,000 0.60

19. OSK NOMINEES (ASING) SDN BERHAD[Beneficiary: Kim Eng Securities Pte Ltd for Exquisite Holdings Limited]

1,111,000 0.55

20. CHIANG FONG YEE 856,300 0.4221. CHONG SEE MOI 777,500 0.3822. BHLB TRUSTEE BERHAD

[Beneficiary: Exempt An For EPF Investment for Member Savings Scheme] 660,700 0.33

23. CHIANG HENG PANG 630,000 0.3124. ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD

[Beneficiary: Pledged Securities Account for Wong Yee Hui]615,300 0.31

25. CHIANG FONG TAT 599,000 0.3026. CHIANG BOON TIAN 588,000 0.2927. CHONG CHIN LOOK 500,000 0.2528. YONG TIAN LAI 474,000 0.2429. KWAN YOONG YU 413,898 0.2030. MILAN QUEST SDN BHD 400,000 0.20

Total 187,482,522 93.01


Location of Property Description TenureExisting

Use

Age of Building

(Year)

LandArea

(Sq Ft)

Net BookValue

RM’000

Dateof

Acquisition

ATALY INDUSTRIES SDN BHD

HS(D) No. 85704 Lot No. 20501No. 29, Jalan BudimanTaman Midah, Cheras56000 Kuala Lumpur

2-storey Terrace House

Freehold Hostel 29 1,540 98 21/05/1992

BONIA CORPORATION BERHAD

GRN 50053 Lot No. 50644No. 62, Jalan Kilang MidahTaman Midah, Cheras56000 Kuala Lumpur

6-storey Office cum

Warehouse

Freehold Office cumWarehouse

13 24,374 15,371 01/12/1998

CB HOLDINGS (MALAYSIA) SDN BHD

QT No. 85228 Lot No. 2794UG-51, Upper Ground FloorPlaza Phoenix Batu 6, Jalan Cheras56000 Kuala Lumpur

Shopping Complex Lot

Freehold Vacant 17 432 – 17/05/1993

PN No. 1339 Lot No. 385Unit 2B, 3.04 & 3.05KOMTAR Shopping Complex10000 Pulau Pinang

ShoppingComplex Lot

Leasehold (Expiringin 2084)

Office 25 1,806 1,475 29/08/1994

PN No. 1339 Lot No. 385Unit C2, 4.03B KOMTAR Shopping Complex10000 Pulau Pinang

Office Lot Leasehold (Expiringin 2092)

Store 25 1,134 252 31/12/1994

LONG BOW MANUFACTURING SDN BHD

Lot No. PT 428 HS (M) 387Lot 18, Merlimau Industrial EstatePhase ll 77300 MerlimauMelaka

Industrial Landand Building

Leasehold(Expiring in

2085)

Office cumFactory

25 135,100 2,902 07/02/1989

Lot No. PT 683 HS (D) 1499No. 1483, Jalan JasinTaman Bunga Muhibbah77300 Merlimau, Melaka

Single-StoreySemi-detached

House

Freehold Hostel 19 3,199 69 12/06/1992

List Of Propertiesheld by the Group as at 30 June 2011


List Of Propertiesheld by the Group as at 30 June 2011 (cont’d)


Use

Age of Building

(Year)

LandArea

(Sq Ft)

Net BookValue

RM’000

Dateof

Acquisition

GRN No. 57103 Lot No. 21085No. 60, Jalan Kilang MidahTaman Midah, Cheras56000 Kuala Lumpur

6-storey Industrial Buidling

Freehold R&D Centrecum

Warehouse

3 13,713 10,322 31/01/2008

LUXURY PARADE SDN BHD

HS(D) No. 72947 PT No. 3865No. 3, Jalan 8/146, The Metro CentreBandar Tasik Selatan57000 Sungai BesiKuala Lumpur

6-storey Shop-lot

Leasehold(Expiringin 2087)

Rented Out(Partially)

13 1,920 1,500 10/01/1995

HS(D) No. 72948 PT No. 3866No. 5, Jalan 8/146, The Metro CentreBandar Tasik Selatan57000 Sungai BesiKuala Lumpur

6-storey Shop-lot

Leasehold(Expiringin 2087)

Rented Out(Partially)

13 1,920 1,500 10/01/1995

Strata Geran 43528/M1/1/142PT 12201-12202Unit No. G61 The SummitPersiaran KewajipanUSJ 1, UEP-Subang Jaya46700 Subang JayaSelangor Darul Eshan

ShoppingComplex Lot

Freehold Rented Out

13 1,020 1,428 16/01/1995

HS(D) No. 182 PT SEK 4Unit No. G0.07, Plaza Bukit Mertajam566, Jalan Arumugam Pillai14000 Bukit Mertajam

ShoppingComplex Lot

Freehold Rented Out 13 1,038 778 19/03/1995

HS(D) No. 55098 PT 4Unit No. 1.48, Level 3Plaza Uncang EmasNo. 85, Jalan Loke Yew55200 Kuala Lumpur

ShoppingComplex Lot


Rented Out

14 1,098 988 26/05/1995

Strata Geran 61152/M1/1/2Strata Geran 61152/M1/B1/1The Club House Angkasa CondominiumNo. 5, Jalan Puncak GadingTaman Connaught, Cheras56000 Kuala Lumpur

Club House Freehold Rented Out(Partially)

5 7,599 3,000 03/02/2005



Use

Age of Building

(Year)

LandArea

(Sq Ft)

Net BookValue

RM’000

Dateof

Acquisition

Strata Geran 61152/M1/1/2154 Units of Parking BayAngkasa CondominiumMukim of PetalingDistrict of Wilayah PersekutuanWilayah Persekutuan

CondominiumCovered &Uncovered

Car Parks

Freehold Rented Out(Partially)

N.A – 1,379 20/06/2008

HS(D) No. 102556 PT82003rd, 4th, 5th & 6th Floor, Asmah TowerMukim of PetalingDistrict of Wilayah PersekutuanWilayah Persekutuan

Office Lot Freehold Office 6 28,540 6,250 06/01/2005

HS(D) No 76874-76878 PT 92-96Unit No L1-046 Plaza RakyatPudu, Kuala Lumpur

ShoppingComplex Lot


UnderConstruction

N.A. 524 – 23/05/1996

PN(WP) 10228, Lot No. 31627Jln Orkid DesaDesa Tun Razak, Cheras56000 Kuala Lumpur.

3-storeyDetached

Factory


Warehouse 1 13,595 4,258 15/01/2008

Strata Geran 61148/M2/1/235, 236, 237, 238Strata Geran 61148/M1/1/2, 3, 4, 5A-0-1, A-0-2, A-0-7, A-0-8, B-0-5, B-0-6, B-0-7, B-0-8Puncak Banyan CondoJalan 3/118B, Taman Sri Cendekia56000 Kuala Lumpur

8 unitShop Lots

Freehold Rented Out(Partially)

4 6,566 2,180 13/03/2009

Geran 61154 Lot 39891Parcel No. L7-01, L7-02, L7-03, L7-03A,L7-05, L7-06, L7-07, L7-08, L7-09, L7-10,L7-11, L7-12, L7-13, L7-13A, L7-15, L7-16, L7-17, Ikon ConnaughtMukim of PetalingDaerah Kuala LumpurNegeri Wilayah Persekutuan

17 unitOffice Suites

Freehold UnderConstruction

N.A. 18,747 985 11/05/2011

ACTIVE WORLD PTE LTD

Mukim 25 Lot No.U18781L158, Haig Road#16-01, Haig CourtSingapore 438794

Condominium Freehold Hostel 7 1,463 2,085 05/09/2005

List Of Propertiesheld by the Group as at 30 June 2011 (cont’d)


NOTICE IS HEREBY GIVEN THAT the Twentieth Annual General Meeting of the Company will be held at Perdana Ballroom, Bukit Jalil Golf & Country Resort, Jalan 3/155B, Bukit Jalil, 57000 Kuala Lumpur on Thursday, 8 December 2011 at 11.30 a.m. for the transaction of the following businesses:

1. To lay and discuss on the Directors’ Report and the Audited Financial Statements for the financial year ended 30 June 2011 together with the Auditors’ Report thereon.

To refer to Explanatory Note 1

2. To declare a Final Dividend of 5% less 25% Income Tax for the financial year ended 30 June 2011. Ordinary Resolution 1

3. To approve the payment of Directors’ fees for the financial year ended 30 June 2011. Ordinary Resolution 2

4. To re-elect the following Directors who retire pursuant to Article 96 of the Articles of Association of the Company:

(i) Mr Chiang Sang Sem Ordinary Resolution 3(ii) Mr Chong Chin Look Ordinary Resolution 4(iii) Datuk Ng Peng Hong @ Ng Peng Hay Ordinary Resolution 5

5. To re-appoint Messrs BDO as Auditors of the Company and to authorise the Directors to fix their remuneration. Ordinary Resolution 6

To consider and if thought fit, to pass the following resolution with or without amendments or modifications:

6. Authority to Issue Shares pursuant to Section 132D of the Companies Act, 1965 Ordinary Resolution 7

“THAT pursuant to Section 132D of the Companies Act, 1965, and subject to the approvals of the relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered to issue shares in the Company at any time and upon such terms and conditions, for such purposes as the Directors may, in their absolute discretion deem fit, provided that the aggregate number of shares issued in any one financial year of the Company does not exceed ten per centum (10%) of the issued share capital of the Company for the time being and that the Directors be and are hereby also empowered to obtain approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company”.

7. To transact any other ordinary business of the Company for which due notice shall have been given.

NOTICE OF DIVIDEND PAYMENT

NOTICE IS HEREBY GIVEN THAT, subject to the approval of the shareholders of the Company at the Twentieth Annual General Meeting, a Final Dividend of 5% less 25% Income Tax for the financial year ended 30 June 2011 will be paid on 29 December 2011 to the Depositors whose names appear in the Record of Depositors at the close of business on 19 December 2011.

Notice of Annual General Meeting


NOTICE OF DIVIDEND PAYMENT (cont’d)

A Depositor shall qualify for entitlement to the dividend only in respect of:

(a) shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 19 December 2011 in respect of ordinary transfers; and

(b) shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of the Bursa Malaysia Securities Berhad.

By Order of the Board

TING OI LINGCHOK KWEE WAHTAN KEAN WAICompany Secretaries

Petaling Jaya16 November 2011

Notes:

1. A member is entitled to appoint a proxy (or in the case of corporation, to appoint a representative) to attend and vote on his place. A proxy need not be a member of the Company.

2. The Proxy Form must be signed by the appointer or his attorney duly authorised in writing or in the case of a corporation, executed under its common seal or attorney duly authorised in that behalf.

3. All the Proxy Forms must be deposited at the Company’s Registered Office situated at Lot 10, The Highway Centre, Jalan 51/205, 46050 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time for holding the Meeting or at any adjournment thereof.

Explanatory Notes:

Item 1 of the AgendaTo lay and discuss on the Directors’ Report and the Audited Financial Statements for the financial year ended 30 June 2011 together with the Auditors’ Report thereon

Pursuant to Section 169 (1) of the Companies Act, 1965, this item is meant for discussion only. It does not require shareholders’ approval and henceforth, this item is not put forward for voting.

Item 6 of the AgendaAuthority to Issue Shares pursuant to Section 132D of the Companies Act, 1965

The proposed Ordinary Resolution 7 is for the purpose of granting a general mandate for renewal (“General Mandate”) and empowering the Directors of the Company, pursuant to Section 132D of the Companies Act, 1965 to issue new shares in the Company from time to time provided that aggregate number of shares issued pursuant to the General Mandate does not exceed ten per centum (10%) of the issued share capital of the Company for such purposes as the Directors consider would be in the interest of the Company. This would avoid any delay and cost involved in convening a general meeting to approve such an issue of shares. This authority will, unless revoked or varied by the Company at a general meeting, expire at the conclusion of the next annual general meeting or the expiration of the period within which the next annual general meeting is required by law to be held, whichever is the earlier.

As at the date of this Notice, no new shares in the Company were issued pursuant to the mandate granted to the Directors at the last annual general meeting held on 3 December 2010 and which will lapse at the conclusion of the forthcoming annual general meeting.

The General Mandate will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for the purpose of funding future investment project(s), working capital and/or acquisitions.

Notice of Annual General Meeting (cont’d)


1. The Directors who are standing for re-election at the Twentieth Annual General Meeting

The Directors standing for re-election pursuant to Article 96 of the Articles of Association of the Company are:

(i) Mr Chiang Sang Sem(ii) Mr Chong Chin Look(iii) Datuk Ng Peng Hong @ Ng Peng Hay

The profiles of the above Directors are set out in the section entitled “Profile of Directors” on pages 16 to 18. Their respective shareholdings in the Company and its subsidiaries are set out in the section entitled “Analysis of Shareholdings” on page 153.

2. The Details of Attendance of the Directors at the Board Meetings

The details of attendance of each Director at the Board Meetings are set out on page 20 .

3. The Date, Time and Place of the Annual General Meeting

The Twentieth Annual General Meeting of the Company will be held as follows:

Date Time Place

8 December 2011Thursday

11.30 a.m. Perdana BallroomBukit Jalil Golf & Country ResortJalan 3/155B, Bukit Jalil57000 Kuala Lumpur

Statement Accompanying The Notice Of Annual General MeetingPursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad


I/We __________________________________________________________________________________________________ (FULL NAME IN BLOCK LETTERS)

of ___________________________________________________________________________________________________________________________________

being a member/members of BONIA CORPORATION BERHAD hereby appoint _____________________________________________________________

_____________________________________________________________________________________(I/C No.: _____________________________________ ) of

____________________________________________________________________________________________________________________________________

__________________________________________________________________________________________________________________________ (ADDRESS)

or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf, at the Twentieth Annual General Meeting of the Company to be held at Perdana Ballroom, Bukit Jalil Golf & Country Resort, Jalan 3/155B, Bukit Jalil, 57000 Kuala Lumpur on Thursday, 8 December 2011 at 11.30 a.m. or at any adjournment thereof, as indicated below:

No. Resolutions For Against

1. Declaration of Final Dividend

2. Approval for the payment of Directors’ fees

3. Re-election of Mr Chiang Sang Sem as Director

4. Re-election of Mr Chong Chin Look as Director

5. Re-election of Datuk Ng Peng Hong @ Ng Peng Hay as Director

6. Re-appointment of Auditors, Messrs BDO

7. Authority to Issue Shares

Please indicate with a ( � ) in the appropriate box against the resolution how you wish your vote to be cast. If no specific direction as to voting is given, the proxy will vote or abstain at his discretion.

No. of Shares CDS Account No.

Signature/Seal of the Shareholder: _________________________________________ Date: ___________________________________

Notes:

1. A member is entitled to appoint a proxy (or in the case of a corporation, to appoint a representative) to attend and vote in his place. A proxy need not be a member of the Company.

2. The Proxy Form must be signed by the appointor or his attorney duly authorised in writing or in the case of a corporation, executed under its common seal or attorney duly authorised in that behalf.

3. All the Proxy Forms must be deposited at the Company’s Registered Office situated at Lot 10, The Highway Centre, Jalan 51/205, 46050 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time for holding the Meeting or at any adjournment thereof.

Proxy Form

Fold this flap for sealing

Fold here

Fold here

AFFIX STAMP

THE COMPANY SECRETARYBONIA CORPORATION BERHAD (223934-T)LOT 10, THE HIGHWAY CENTREJALAN 51/20546050 PETALING JAYASELANGOR DARUL EHSAN

www.bonia.com

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