Last checked at 29 Jul 2009 10:06
HIDONG ESTATE PLC
(Incorporated in England)
ANNUAL REPORT 2009
Contents
| Page | |
| Notice of meeting .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 1 |
| Corporate information .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 2 - 3 |
| Chairman's statement .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 4 |
| Report of the directors .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 5 - 10 |
| Directors' remuneration report .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 11 - 12 |
| Performance graph .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 12 |
| Statement of directors' responsibilities in respect of the report and the financial statements .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 13 |
| Independent auditors' report to the members of Hidong Estate Plc .. .. .. .. | 14 - 15 |
| Profit and loss account .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 16 |
| Balance sheet .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 17 |
| Statement of total recognised gains and losses .. .. .. .. .. .. .. .. .. .. .. | 18 |
| Reconciliation of movements in shareholders' funds .. .. .. .. .. .. .. .. .. | 18 |
| Cash flow statement .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 19 |
| Notes to the financial statements .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 20 - 28 |
| Comparative statistics .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 29 |
Notice of meeting
NOTICE IS HEREBY GIVEN that the EIGHTY SIXTH ANNUAL GENERAL MEETING of the Company will be held at the head office of the Company, Standard Chartered Bank Chambers, Beach Street, 10300 Penang, Malaysia on 28 September 2009 at 10:30 a.m. for the following purposes:-
1. To receive and consider the financial statements and the reports of the directors and auditors thereon for the year ended 31 March 2009.
2. To re-elect Mr. Chew Beow Soon who retires in accordance with article 108 of the Company's Articles of Association.
3. To appoint the auditors and to authorize the directors to fix their remuneration.
Ordinary Resolution:-
"That KPMG Audit Plc be and is hereby appointed auditors of the Company to hold office from the conclusion of this meeting until the conclusion of the next general meeting at which financial statements are laid before the Company, and that their remuneration be fixed by the directors."
4. To approve the Directors' remuneration report
Ordinary Resolution:-
"That the Directors' remuneration report for the year ended 31 March 2009 be and is hereby approved."
By order of the Board
GRACE SMITH
Secretary
Penang
29 July 2009
Notes
1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote instead of him. A proxy need not be a member of the Company. A form of proxy is enclosed for your completion and return.
2. A statement of all transactions of each director and, where applicable, of his family in the share capital of the Company will be available at the head office of the Company on any weekday during normal business hours from the date of this notice until the conclusion of the annual general meeting. There are no service contracts in existence with the directors.
3. Biographical details of the directors presenting themselves for re-election and re-appointment are set out on the following page. The Board has reviewed the performance of each individual director, including the directors presenting themselves for re-election and re-appointment, and concluded that each director has performed effectively and continues to demonstrate commitment to the role.
Corporate information
DIRECTORS
Chew Sing Guan (Chairman)
An executive director and chairman of the Company since 1983. A non-executive director of the managing agents and Malaysian registrars, Plantation Agencies Sdn. Berhad. Age 59.
Haji Zambri bin Haji Mahmud
A non-executive director of the Company since 1986. A director of several private limited companies involved in palm oil milling. Age 70.
Diong Chin Teck
A non-executive director of the Company since 2000. A director of several public limited companies, a few of which are quoted. Age 76.
Chew Beow Soon
A non-executive director of the Company since 2000. A director of several private limited companies. Age 60.
AUDIT COMMITTEE
Haji Zambri bin Haji Mahmud (Chairperson)
Chew Beow Soon (Member)
Diong Chin Teck (Member)
COMPANY SECRETARY
Grace Smith
HEAD OFFICE, MANAGING AGENTS
AND MALAYSIAN REGISTRARS
Plantation Agencies Sdn. Berhad
Standard Chartered Bank Chambers
Beach Street
P.O.Box 706
10790 Penang, Malaysia
REGISTERED OFFICE
34 Beckenham Road
Beckenham, Kent BR3 4TU
England
U.K. REGISTRARS
Capita Registrars Ltd
34 Beckenham Road
Beckenham, Kent BR3 4TU
England
AUDITORS
KPMG Audit Plc
8 Salisbury Square
London, EC4Y 8BB
LISTING
London Stock Exchange
Chairman's Statement
On behalf of the Board of Directors of Hidong Estate Plc, I am pleased to present to you the Annual Report and Financial Statements of the Company for the financial year ended 31 March 2009.
For the financial year ended 31 March 2009 the Company recorded a loss before tax of RM150,962 as compared to a profit before tax of RM173,882 in prior year. The loss is mainly attributable to the lower rate of bank interest received for the Company's cash deposit and impairment of the Company's quoted investments as at year end.
Pursuant to the Company's intention to seek a suitable alternative investment, the Company has received and studied several proposals but for various reasons it was decided in the last twelve months at least that it was more prudent to refrain from deploying the Company's present and relatively modest resources to any major investment. Nevertheless the search continues for the right investment that takes into account the uncertainties arising from the current flux of economic conditions globally. In the meantime, expenses are still being stringently controlled and minimised.
On behalf of the Board, once again I would like to express my sincere appreciation to the management and staff for their efforts and dedication to the Company. I would also like to take this opportunity to thank my fellow directors for their co-operation and stewardship, and shareholders for their faith and continued support.
CHEW SING GUAN
Chairman
Penang
29 July 2009
Report of the Directors
The directors present their eighty sixth report and financial statements of the Company for the financial year ended 31 March 2009.
PRINCIPAL ACTIVITIES AND REVIEW OF DEVELOPMENT OF BUSINESS
The principal activities of the Company which were in the production of natural rubber and oil palm fresh fruit bunches had ceased when the Company sold its land and plantations in 2006. Since then, the Board have been actively identifying suitable investments for the Company.
PRINCIPLE RISKS AND UNCERTAINTIES
The Company's assets after the disposal of the plantation and its other plant and equipment comprise of cash and bank deposits all of which earn interest and investments in listed equities. The financial risks involved are minimal and can be found in Note 14 to the financial statements.
RESULTS AND DIVIDEND
The Company made a net loss of RM217,223 for the current financial year as compared to a net profit of RM99,227 in the previous year. The directors do not recommend any final dividend to be paid for the current financial year (2008: RM Nil).
DIRECTORATE
The names of the directors who held office during the year together with brief biographical details are shown on page 2. In accordance with article 108 of the Company's Articles of Association, Chew Beow Soon will retire by rotation at the forthcoming annual general meeting and, being eligible, offers himself for re-election.
The directors do not have any service contract with the Company. Mr. Chew Sing Guan is a non-executive director of Plantation Agencies Sdn. Berhad who acted as the Malaysian Registrars and an agent to the Company in Malaysia.
DIRECTORS' INTEREST
The directors who held office at end of the financial year had the following interests in the ordinary shares of the Company.
| Number of Ordinary Shares of 10p each | ||||
| At 31 March 2009 | At 31 March 2008 | |||
| Beneficially Owned | Non-Beneficially Owned | Beneficially Owned | Non-Beneficially Owned | |
| Chew Sing Guan | 798,986 | 1,000 | 798,986 | 1,000 |
| Haji Zambri bin Haji Mahmud | Nil | 1,000 | Nil | 1,000 |
| Diong Chin Teck | Nil | 1,000 | Nil | 1,000 |
| Chew Beow Soon | Nil | 1,000 | Nil | 1,000 |
The Company has not received notification of any change in the above shareholdings between 1 April 2009 and the date of this report.
No directors had any interest either during or at the end of the year in any material contract or arrangement with the Company except as disclosed in note 15 to the financial statements. According to the register of directors' interest, no right to subscribe for shares in or debentures of the Company were granted to any of the directors or their immediate families, or exercised by them, during the financial year.
SUBSTANTIAL SHAREHOLDINGS
At the date of this report, substantial interest in the share capital of the Company, notified to the Company, were as follows:-
| No. of Ordinary Shares of 10p each | % | |
| Malayan Securities Trust Sdn Berhad | 798,986 | 46.63 |
| Thomas William George Charlton | 231,997 | 13.54 |
| Flairshare Limited | 132,000 | 7.70 |
| The Temerloh Rubber Estates Berhad | 88,442 | 5.16 |
Mr. Chew Sing Guan has notified an interest in the shares held by Malayan Securities Trust Sdn. Berhad. The directors are not aware of any other beneficial holding of 3% or more in the share capital of the Company.
PAYMENT TO SUPPLIERS
The Company does not follow any code or standard on payment practice. The Company's policy, in relation to all of its suppliers, is to make settlement according to the terms of payment agreed at the commencement of business with that supplier provided that the supplier has complied with the terms and conditions of the supply agreement.
TAXATION
The Company is tax resident in Malaysia.
CORPORATE GOVERNANCE
The Board of Hidong Estate Plc supports and will strive to maintain compliance with the principles of corporate governance advocated by the revised Combined Code on Corporate Governance issued by the Financial Reporting Council in July 2003 (the Code).
Internal Audit
The need of an internal audit has been reviewed by the directors. It was decided that the current size of the Company combined with the tight financial and management control exercised by the directors on a day to day basis negates such a need. The policy will be kept under review.
External Auditors
The Audit Committee assesses annually the effectiveness of the external audit process and has primary responsibility for making recommendation on the appointment, re-appointment or removal of the external auditors.
The external auditors did not provide any non audit services in this or the previous year.
Directors
The directors carry out their duties in a manner that will safeguard the shareholders' interests at all times. They are responsible for ensuring sound management of the Company and effective implementation and execution of its policies decisions and business strategies towards ensuring a successful continuity of the business.
The Board ordinarily meets four times a year. During the year ended 31 March 2009 the Board met on three occasions. Details of the directors' attendance at Board meetings during the financial year are as follows:
| Attendance | |
| Chew Sing Guan Haji Zambri bin Haji Mahmud Diong Chin Teck Chew Beow Soon | 3/3 3/3 3/3 3/3 |
The Board is guided by a formal schedule of matters specifically reserved to it for decision which includes future strategy, key business policies, material acquisitions and disposals, approval of interim financial statements, preliminary results and annual reports and financial statements. Directors have full and timely access to information and Board papers and reports relevant to the issues of meetings are circulated to Board members in advance of the meetings. Procedures are in place for directors to take independent professional advice in furtherance of their duties, if necessary, at the Company's expense. In addition, all directors have direct access to the advice and services of the Company Secretary.
The Board consists of the executive Chairman, Mr. Chew Sing Guan and three independent non-executive directors namely Tuan Haji Zambri bin Haji Mahmud, Mr. Diong Chin Teck and Mr. Chew Beow Soon. Although, Tuan Haji Zambri bin Haji Mahmud has been a non-executive director for more than twenty years, the Board is satisfied that he has continued to demonstrate his independence in terms of character and judgment. It is the Board's view that for a Company of this size it is not deemed necessary to separate the posts of chairman and chief executive officer. Furthermore, the Board is of the opinion that there is a strong independent element within the Board in the form of the three independent non-executive directors who provide a check and balance in the Board on decision making. For the same reasons, the Board is also of the view that it is not deemed necessary to appoint a senior independent director or to form a Nomination Committee. The Board is assisted by professionals (Managing Agents) who reports periodically to it. Important business matters are submitted to the Board for decision.
In accordance with the Articles of Association of the Company, all directors are subject to election by shareholders at the first Annual General Meeting after their appointment and thereafter subject for re-election at least once every three years. The Board has always complied with this requirement. The Board has chosen not to adopt the additional provision in the Code that non-executive directors who have served for more than nine years should be subject to annual re-election since the existing practice, which complies with Company law and the Articles, works well.
The directors received only a nominal fee for their services and there is no intention to change the way they are remunerated. Accordingly, the formation of a Remuneration Committee is not deemed to be necessary.
The Board has commenced a self-evaluation process for the performance evaluation of the Board, the Audit Committee and its individual directors. The assessment of the individual directors on the performance of the Board and the Audit Committee are collated for the Chairman's review and presented to the entire Board. Each director also assesses the individual performance of the other directors and the results are presented to the Chairman who then holds discussions with all the individual directors regarding their effectiveness. The performance of the Chairman is assessed collectively by the non-executive directors.
Relations with shareholders
The Board has through the years used the Annual Report and the Annual General Meeting to communicate with its shareholders. It is always ready to hold dialogues with interested investors to improve the Company's business activities.
Audit Committee
The Audit Committee comprises three independent non-executive directors namely Tuan Haji Zambri bin Haji Mahmud (Chairperson), Mr. Diong Chin Teck and Mr. Chew Beow Soon.
The Audit Committee is responsible for reviewing the Company's risk management, internal control and audit processes. The Audit Committee assists the Board in seeking to ensure that the financial and non-financial information supplied to the Board and shareholders presents a balanced assessment of the Company's position. The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee and all employees are directed to co-operate with any request made by the Committee.
The Committee is authorised by the Board to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise it considers necessary.
During the financial year ended 31 March 2009, the Audit Committee met three times and the attendances of the members of the Committee are as follows:
| Attendance | |
| Haji Zambri bin Haji Mahmud Diong Chin Teck Chew Beow Soon | 3/3 3/3 3/3 |
During the year the Audit Committee assisted the Board in reviewing the periodic operational and financial reports submitted by the Managing Agents. As part of its function, the Audit Committee reviewed the half-yearly interim report to shareholders and annual financial statements and announcements before submitting the same to the Board for approval. The Audit Committee also assisted the Board to review the system of internal control put in place by the Managing Agents to manage the operations of the Company.
Internal Controls
The Board is responsible for the Company's system of internal control and for reviewing its effectiveness, which it does on annual basis. Such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can provide only reasonable, but not absolute, assurance against material misstatement or loss. There is a continuous process for identifying, evaluating and managing the significant risks faced by the Company. This process was in place throughout the year under review and up to the date of approval of the annual report. The Board confirms that they have established procedures to provide internal control necessary to implement the guidance issued by the Turnbull committee.
The key procedures of the Company's internal controls are as follows:
The Board is responsible for the identification, evaluation and review of risks facing the business. Such risks are reviewed on a continuous basis and are carried out as part of the monthly reporting.
The day-to-day operation of the system of internal controls is delegated to the Managing Agents. The management and control procedures cover issues such as physical controls, segregation of duties, authorisation levels and comprehensive financial and operational reporting systems. Such procedures are documented for effective control and monitoring.
The Board holds periodic formal and informal discussions on the Company's affairs where all important business decisions are formally discussed and documented. The Board holds periodic board meetings to formally approve the financial reports submitted by the Managing Agents.
DISCLOSURE OF INFORMATION TO AUDITORS
The directors who held office at the date of approval of this directors' report confirm that, so far as they are each aware, there is no relevant audit information of which the Company's auditors are unaware and each directors has taken all the steps that they ought to have taken as a directors to make themselves aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
GOING CONCERN
Having undertaken all the appropriate procedures and assessing the performance and results, there is reasonable expectation that the Company will continue in operational existence for the foreseeable future and the Board has therefore continued to adopt the going concern basis in preparing the financial statements.
AUDITORS
Pursuant to Section 487 of the Companies Act 2006, the auditors will be deemed to be reappointed and KPMG Audit Plc will therefore continue in office.
CHEW SING GUAN HAJI ZAMBRI BIN HAJI MAHMUD
Chairman Director
Penang
29 July 2009
Directors' remuneration report
This report has been prepared in accordance with the Directors' Remuneration Report Regulation 2002. The report also meets the relevant requirement of the Listing Rules of the Financial Services Authority. As required by the Regulations, a resolution to approve the report will be proposed at the Annual General Meeting of the Company at which the financial statements will be approved.
The regulations require the auditors to report to the Company's members on the "auditable part" of the Directors' remuneration. The report has therefore been divided into 2 sections for audited and unaudited information.
Unaudited Information
Remuneration Policy
In accordance with the Company's Memorandum and Articles of Association, the directors received only a nominal fee for their services. The fees paid to the directors are not linked to performance and the Company has no intention to change the way the directors are remunerated in the future.
Share Options
As at 31 March 2009, no options were granted to the directors to subscribe for any shares in the Company.
Service contracts
There are no service contracts in existence with the directors as they received only a nominal fee for their services.
HIDONG ESTATE PLC
This graph shows the Company's performance, measured by total shareholder return, compared with the performance of the FTSE Small Cap Index, also measured by total shareholder return. This index has been selected for the comparison because it reflects the market sector in which the Company is reported.
The graph has been compiled on annual data at 31 March of each year.
http://www.rns-pdf.londonstockexchange.com/rns/4640W_-2009-7-29.pdf
Audited information
Aggregate Directors' remuneration
The total amounts for Directors' remuneration are as follows:
| 2009 | 2008 | |||
| RM | RM | |||
| Emoluments | 4,762 | 5,563 | ||
| 2009 | 2008 | |||
| RM | RM | |||
| Directors' emoluments - fee | ||||
| Executive Director | ||||
| Chew Sing Guan | 1,360 | 1,588 | ||
| Non - executive Directors | ||||
| Haji Zambri bin Haji Mahmud | 1,134 | 1,325 | ||
| Diong Chin Teck | 1,134 | 1,325 | ||
| Chew Beow Soon | 1,134 | 1,325 | ||
| 4,762 | 5,563 |
Approval
This report was approved by the Board of Directors on 29 July 2009 and signed on its behalf:
CHEW SING GUAN
Chairman
Statement of Directors' responsibilities
in respect of the report and
the financial statements
The directors are responsible for preparing the Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with UK Generally Accepted Accounting Practice.
The financial statements are required by the law to give a true and fair view of the state of the affairs of the Company and of the profit or loss for that period.
In preparing these financial statements, the directors are required to:
- Select suitable accounting policies and then apply them consistently;
- Make judgments and estimates that are reasonable and prudent;
- State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
- Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act, 1985. They have a general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Directors Report, Directors' Remuneration Report and Corporate Governance Statement that comply with that law and those regulations. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Independent auditors' report
to the members of Hidong Estate Plc
We have audited the financial statements of Hidong Estate Plc for the year ended 31 March 2009 which comprise the profit and loss account, the balance sheet, the statement of total recognised gains and losses, the reconciliation of movements in shareholders' funds, the cash flow statement and the related notes. These financial statements have been prepared under the accounting policies set out therein. We have also audited the information in the Directors' Remuneration Report that is described as being audited.
This report is made solely to the Company's members, as a body, in accordance with section 235 of the Companies Act 1985. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
The directors' responsibilities for preparing the Annual Report and the financial statements and the Directors' Remuneration Report in accordance with applicable law and UK Accounting Standards (UK Generally Accepted Accounting Practice) are set out in the Statement of the Directors' Responsibilities on Page 13.
Our responsibilities is to audit the financial statements and the part of the Directors' Remuneration Report to be audited in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements and the part of the Directors' Remuneration Report to be audited have been properly prepared in accordance with the Companies Act 1985. We also report to you whether in our opinion the information given in the Directors' Report is consistent with the financial statements. We also report to you if, in our opinion, the Company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding directors' remuneration and other transactions is not disclosed.
We review whether the statement on pages 5 to 10 reflects the Company's compliance with the nine provisions of the 2006 FRC Combined Code specified for our review by the Listing Rules of the Financial Services Authority and we report if it does not. We are not required to consider whether the Board's statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the Company's corporate governance procedures or its risk and control procedures.
We read the other information contained in the Directors' Report and consider whether it is consistent with the audited financial statements. We consider the implication for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements and the part of the Directors' Remuneration Report to be audited. It also includes an assessment of the significant estimates and judgments made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Company's circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements and the part of the Directors' Remuneration Report to be audited are free from material misstatement whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.
Opinion
In our opinion:
KPMG Audit Plc 8 Salisbury Square
Chartered Accountants London
Registered Auditor EC4Y 8BB
29 July 2009
Profit and loss account for the year ended
31 March 2009
| 2009 | 2008 | |||
| Note | RM | RM | ||
| Administrative expenses | (217,318) | (213,439) | ||
| Operating loss | (217,318) | (213,439) | ||
| Income from investments | 13,580 | 1,960 | ||
| (Loss)/profit on disposal of investments | (84,201) | 37,839 | ||
| Impairment of investments | (192,254) | - | ||
| Interest receivable on short term deposits | 329,231 | 347,522 | ||
| (Loss)/profit on ordinary activities before taxation | 2 | (150,962) | 173,882 | |
| Tax on (loss)/profit on ordinary activities | 3 | (66,261) | (74,655) | |
| (Loss)/retained profit for the year | 9 | (217,223) | 99,227 | |
| Basic and diluted (loss)/profit per 10p share | 4 | (12.68)sen | 5.79sen |
The results stated above all derived from continuing operations.
A note on historical gains and losses has not been included as part of the financial statements as there are no material differences between the (loss)/profit for the year stated above and the historical cost equivalents.
Balance sheet as at 31 March 2009
| 2009 | 2008 | |||
| Note | RM | RM | ||
| Fixed assets | ||||
| Investments | 5 | 545,100 | - | |
| Current assets | ||||
| Debtors | 6 |
42,066 |
485,489 | |
| Cash at bank and in hand | 12 | 9,994,780 | 10,408,724 | |
| 10,036,846 | 10,894,213 | |||
| Current liabilities | ||||
| Creditors | 7 |
(500,229) |
(615,290) | |
| (500,229) | (615,290) | |||
| Net current assets | 9,536,617 | 10,278,923 | ||
| Net assets | 10,081,717 | 10,278,923 | ||
| Financed by : Capital and reserves | ||||
| Called up share capital | 8 |
1,067,846 |
1,067,846 | |
| Fair value reserve | 9 | 20,017 | - | |
| Profit and loss account | 9 | 8,993,854 | 9,211,077 | |
| Shareholders' funds | 10,081,717 | 10,278,923 |
These financial statements were approved by the Board of Directors on 29 July 2009.
CHEW SING GUAN )
) Directors
)
HAJI ZAMBRI BIN HAJI MAHMUD )
Statement of total recognised gains and losses for the year ended 31 March 2009
| 2009 | 2008 | ||
| RM | RM | ||
| (Loss)/profit for the financial year | (217,223) | 99,227 | |
| Unrealised gains on investments | 20,017 | - | |
| Total recognised (losses)/gains for the year | (197,206) | 99,227 |
Reconciliation of movements in shareholders' funds for the year ended
31 March 2009
| 2009 | 2008 | ||
| RM | RM | ||
| (Loss)/retained profit for the year | (217,223) | 99,227 | |
| Other recognised gains and losses for the year | 20,017 | - | |
| Net (reduction in)/addition to shareholders' funds | (197,206) | 99,227 | |
| Opening shareholders' funds | 10,278,923 | 10,179,696 | |
| Closing shareholders' funds | 10,081,717 | 10,278,923 |
Cash flow statement for the year ended
31 March 2009
| 2009 | 2008 | |||
| Note | RM | RM | ||
| NET CASH INFLOW/(OUTFLOW) FROM | ||||
| OPERATING ACTIVITIES | 10 | 212,112 | (552,002) | |
| RETURNS ON INVESTMENTS AND SERVICING OF | ||||
| FINANCE | ||||
| Dividend received | 13,580 | 1,430 | ||
| Interest received | 329,231 | 347,522 | ||
| TAXATION | ||||
| Overseas tax paid | (167,329) | (61,820) | ||
| CAPITAL EXPENDITURE AND FINANCIAL | ||||
| INVESTMENTS | ||||
| Purchase of investments | (889,132) | (1,831,621) | ||
| Sale of investments | 87,594 | 1,869,460 | ||
| NET CASH OUTFLOW BEFORE | ||||
| MANAGEMENT OF LIQUID RESOURCES | (413,944) | (227,031) | ||
| MANAGEMENT OF LIQUID RESOURCES | ||||
| Decrease in short term deposits | 330,000 | 368,572 | ||
| (DECREASE)/INCREASE IN CASH | 11 | (83,944) | 141,541 |
Notes to the financial statements
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Company's financial statements.
1. ACCOUNTING POLICIES
(a) Accounting convention
The financial statements of the Company have been prepared under the historical cost convention, modified for the revaluation of fixed asset investments, and in accordance with applicable approved accounting standards.
(b) Foreign currencies
Transactions in foreign currencies are recorded in Ringgit Malaysia (RM) at rates ruling at the transaction dates. Assets and liabilities are reported at the rates prevailing at the balance sheet date except for share capital which remains at the historical rate. Exchange gains and losses are included in the profit and loss account. (c) Replanting cess refunds
Replanting cess receivable is included in the financial statements on an accrual basis.
(d) Employee Benefits
Short term benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees of the Company. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increases their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.
(e) Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the profit and loss account except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Temporary differences are not recognised for goodwill not deductible for tax purpose and the initial recognition of assets or liabilities that at the time of the transaction affects neither accounting nor taxable profit. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised.
(f) Loans and receivables
Short term debtors and creditors are classified as loans and receivables, as defined in Financial Reporting Standard 26 Financial instruments: recognition and measurement, and are measured at amortised cost less any provision for impairment.
(g) Income
Interest income is recognised on an accrual basis.
Dividend income is recognised when the right to receive payment is established.
(h) Cash and liquid resources
Cash for the purpose of the cash flow statement, comprises cash in hand and deposits repayable in demand less overdrafts payable on demand, if any. Liquid resources are current assets investments which are disposable without curtailing the business and are either readily convertible into known amounts of cash at or close to their carrying values or traded in an active market.
(i) Investments
The Company's investments are quoted equity investments and are classified as available-for-sale financial assets. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment loss are recognised directly in equity. All impairment losses are recognised in the profit and loss. Any cumulative loss recognised previously in equity is transferred to the profit and loss. The reversal of a previous impairment loss is recognised directly in equity.
When an investment is derecognised, the cumulative gain or loss in equity is transferred to the profit and loss.
2. NOTES TO THE PROFIT AND LOSS ACCOUNT
The (loss)/profit on ordinary activities before taxation is stated :
| 2009 | 2008 | ||
| RM | RM | ||
| After charging: | |||
| Directors' remuneration * | |||
| - Chew Sing Guan | 1,360 | 1,588 | |
| - Haji Zambri Bin Haji Mahmud | 1,134 | 1,325 | |
| - Diong Chin Teck | 1,134 | 1,325 | |
| - Chew Beow Soon | 1,134 | 1,325 | |
| Auditors' remuneration - Audit of these financial statements | 58,150 | 53,702 | |
| Loss on disposal of investments | 84,201 | - | |
| Impairment of investments | 192,254 | - | |
| and crediting: | |||
| Dividend income | 13,580 | 1,960 | |
| Gain on disposal of investments | - | 37,839 |
* Directors' remuneration totaling RM4,762 (2008: RM5,563) is in respect of directors' fees for duties performed outside the United Kingdom.
3. TAX ON (LOSS)/PROFIT ON ORDINARY ACTIVITIES
| 2009 | 2008 | ||
| RM | RM | ||
| Foreign taxation - current year | 66,261 | 69,896 | |
| - prior year | - | 4,759 | |
| 66,261 | 74,655 | ||
The current tax charge for the period is 20% (2008: 20%) which is lower than the standard rate of corporation tax in the UK of 28% (2008: 30%). The differences are explained below.
| Reconciliation of effective tax expense | |||
| 2009 | 2008 | ||
| RM | RM | ||
| Profit/(loss) before tax | (150,962) | 173,882 | |
| Current tax at 28% (2008: 30%) | (42,269) | 52,165 | |
| Expenses not deductible for tax purposes | 138,256 | 64,032 | |
| Income not subject to tax | (1,324) | (11,352) | |
| Lower tax rates on overseas earnings | (28,402) | (34,949) | |
| 66,261 | 69,896 |
4. BASIC AND DILUTED PROFIT/(LOSS) PER 10P SHARE
This is based on the loss after taxation of RM217,223 (2008: profit after tax of RM99,227) and 1,713,334 shares (2008: 1,713,334 shares) being the weighted average number of shares in issue.
5. INVESTMENTS
| 2009 | 2008 | ||
| RM | RM | ||
| At 1 April | - | - | |
| Additions | 889,132 | 1,831,621 | |
| Change in fair value | 20,017 | - | |
| Impairment | (192,254) | - | |
| Disposals | (171,795) | (1,831,621) | |
| At 31 March | 545,100 | - |
6. DEBTORS
| 2009 | 2008 | ||
| RM | RM | ||
| - Other debtors | 42,066 | 485,489 |
7. CREDITORS: Amounts falling due within one year
| 2009 | 2008 | ||
| RM | RM | ||
| - Other creditors | 67,847 | 81,840 | |
| - Taxation and social security | 432,382 | 533,450 | |
| 500,229 | 615,290 |
Included in taxation and social security is an amount of RM414,524 (2008: RM414,524) representing provision for real property gain tax arising from the sale of plantation.
8. SHARE CAPITAL
| 2009 | 2008 | ||
| RM | RM | ||
| Authorised | |||
| 2,000,000 shares of 10p each | 1,493,610 | 1,493,610 | |
| Issued and fully paid up | |||
| 1,713,334 shares of 10p each | 1,067,846 | 1,067,846 |
9. RESERVES
| Fair value reserve | Profit and loss account | ||
| RM | RM | ||
| At 1 April 2008 | - | 9,211,077 | |
| Loss for the year | - | (217,223) | |
| Unrealised gains on investments | 20,017 | - | |
| At 31 March 2009 | 20,017 | 8,993,854 |
10. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES
| 2009 | 2008 | ||
| RM | RM | ||
| Operating loss | (217,318) | (213,439) | |
| Decrease/(increase) in debtors | 443,423 | (353,736) | |
| (Decrease)/increase in creditors | (13,993) | 15,173 | |
| Net cash inflow/(outflow) from operating activities | 212,112 | (552,002) |
11. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
| 2009 | 2008 | ||
| RM | RM | ||
| (Decrease)/increase in cash in the year | (83,944) | 141,541 | |
| Decrease in liquid resources | (330,000) | (368,572) | |
| Movement in net funds in the year | (413,944) | (227,031) | |
| Net funds at 1 April | 10,408,724 | 10,635,755 | |
| Net funds at 31 March | 9,994,780 | 10,408,724 |
12. ANALYSIS OF NET FUNDS
| At 1 April, 2008 | Cash flow | At 31 March, 2009 | |||
| RM | RM | RM | |||
| Short term deposits | 10,230,000 | (330,000) | 9,900,000 | ||
| Cash at bank and in hand | 178,724 | (83,944) | 94,780 | ||
| 10,408,724 | (413,944) | 9,994,780 |
13. EMPLOYEES
| 2009 | 2008 | ||
| RM | RM | ||
| Wages and salaries | 4,762 | 5,563 | |
| Average number of staff | |||
| employed during the year | 4 | 4 |
14. FINANCIAL INSTRUMENTS
(a) Financial risk management objectives and policies
The Company's financial risk management policies seek to ensure that adequate financial resources are available for the development of the Company's business whilst managing its interest rate, foreign exchange, liquidity and credit risks. The Company operates within clearly defined guidelines that are approved by the Board of Directors and the Company's policy is not to engage in speculative transactions.
(b) Interest rate risk
The Company's primary interest rate risk relates to interest-earning assets as the Company had no long-term interest-bearing debts as at 31 March 2009. The investments in financial assets are mainly short term in nature and they are not held for speculative purposes but have been mostly placed in fixed deposits.
| Financial Assets | Effective interest rate per annum % | Total RM | Within 1 year RM |
| 2009 | |||
| Short term deposits | 3.33 | 9,900,000 | 9,900,000 |
| 2008 | |||
| Short term deposits | 3.40 | 10,230,000 | 10,230,000 |
(c) Foreign exchange risk
The Company operates in Malaysia and is only exposed to sterling pound currency for payments to UK companies for services rendered to the Company, which poses minimum risk.
(d) Liquidity risk
The Company actively manages its operating cash flows and availability of funds so as to ensure that all repayment and funding needs are met. As part of its overall prudent liquidity management, the Company maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements.
(e) Credit risk
The Company's maximum credit risk exposure is the fair value of its cash and cash equivalents, presented in note 12 of RM 9,994,780 and RM10,408,724 at 31 December 2008 and 2007 respectively. Bank balances are held with reputable and established financial institutions.
The Company's principal financial asset is cash and credit risk arises from cash and cash equivalents and short term deposits with banks and financial institutions. All of the Company's short term deposits are fully guaranteed by both Malaysian government and Malaysia Deposit Insurance Corporation effective from 16 October 2008 to 31 December 2010. It is the Company's policy to monitor the financial standing of these assets on an on going basis.
(f) Fair values
The fair values of financial assets and financial liabilities reported in the balance sheet approximate the carrying amounts of those assets and liabilities.
(g) Price risk
The Company is exposed to equity price risk in relation to its fixed asset investments, all of which are listed on the Malaysian Stock Exchange. A five percent increase in Malaysian equity prices at the reporting date would have increased equity by RM27,000 (2008: RM Nil); en equal change in the opposite direction would have decreased equity by RM27,000 (2008: RM Nil). The impact on the profit and loss would have been an increase of RM Nil (2008: RM Nil) or a decrease of RM 19,000 (2008: RM Nil) respectively.
(h) Cash flow risk
The Company's assets comprise of cash and bank deposits all of which earn interest. There is minimum risk on the cash flow. Cash flow monitoring is a high priority with the management.
(i) Capital management
The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company is not subject to externally imposed capital requirements. There were no changes in the Company's approach to capital management in the year.
15. RELATED PARTY TRANSACTIONS AND BALANCES
The significant related party transactions undertaken by the Company during the financial year are as follows:
| 2009 | 2008 | ||
| RM | RM | ||
| Agency fees, accounting fees and | |||
| compensation paid to | |||
| Plantation Agencies Sdn. Berhad, | |||
| a company in which a director of the | |||
| company is also a director | 27,720 | 27,720 | |
| Purchases and sales of quoted shares through | |||
| Mercury Securities Sdn. Bhd. ("MSSB"), | |||
| a company in which a director has | |||
| substantial financial interest | |||
| - Purchases of quoted shares | 889,132 | 1,831,621 | |
| - Sales of quoted shares | 87,594 | 1,869,460 | |
The terms and conditions for the above transactions are based on normal trade terms.
Related party balances
The amounts due from MSSB arose from related party transactions and the amount which remained outstanding at 31 March 2009 is RM Nil (2008: RM405,409).
In the opinion of the directors there is no controlling or ultimate controlling party at the year end.
Comparative statistics
| Year ended 31 March | 2009 | 2008 | 2007 | 2006 | 2005 |
| RM | RM | RM | RM | RM | |
| BALANCE SHEET ANALYSIS | |||||
| Called-up share capital | 1,067,846 | 1,067,846 | 1,067,846 | 1,067,846 | 1,067,846 |
| Reserves | 9,013,871 | 9,211,077 | 9,111,850 | 9,247,334 | 7,117,794 |
| Total shareholders' funds | 10,081,717 | 10,278,923 | 10,179,696 | 10,315,180 | 8,185,640 |
| Investments | 545,100 | - | - | - | - |
| Fixed assets | - | - | - | - | 7,677,932 |
| Net current assets | 9,536,617 | 10,278,923 | 10,179,696 | 10,315,180 | 1,070,894 |
| Provision for liabilities and charges | - | - | - | - | (563,186) |
| 10,081,717 | 10,278,923 | 10,179,696 | 10,315,180 | 8,185,640 | |
| PROFIT AND LOSS | |||||
| ACCOUNT ANALYSIS | |||||
| (Loss)/profit before interest, replanting | |||||
| expenditure and taxation | (480,193) | (173,640) | (413,410) | 219,730 | 380,081 |
| Profit on sale of plantation | - | - | - | 8,260,363 | - |
| Interest receivable | 329,231 | 347,522 | 347,926 | 75,973 | 25,833 |
| Replanting expenditure | - | - | - | (22,043) | (34,938) |
| Taxation | (66,261) | (74,655) | (70,000) | (572,435) | (81,397) |
| (Loss)/profit after taxation | (217,223) | 99,227 | (135,484) | 7,961,588 | 289,579 |
| Year ended 31 March | 2009 | 2008 | 2007 | 2006 | 2005 |
| RUBBER | |||||
| Average mature area - hectares | - | - | - | 177 | 177 |
| Production - kgs | - | - | - | 116,185 | 189,493 |
| Yield per hectare - kgs | - | - | - | 787 | 1,053 |
| Duty and research cess - sen/kg | - | - | - | 3.85 | 3.85 |
| Overall cost of production | |||||
| - sen/kg (FOB) | - | - | - | 414 | 324 |
| Average selling price - sen/kg (FOB) | - | - | 736 | 575 | 448 |
| OIL PALM | |||||
| Average mature area - hectares | - | - | - | 380 | 380 |
| Production - tonnes FFB | - | - | - | 3,942 | 3,775 |
| Yield per hectare - tonnes FFB | - | - | - | 10 | 10 |
| Cost of production | |||||
| - RM/tonne FFB (del.mill) | - | - | - | 193 | 213 |
| Average selling price | |||||
| - RM/tonne FFB (del.mill) | - | - | - | 260 | 380 |
| Proxy form | HIDONG ESTATE PLC | |||||||
| I/We | ||||||||
| of | ||||||||
| In Block | being a member(s) of HIDONG ESTATE PLC hereby appoint #Mr. Chew Sing Guan or failing him, Tuan | |||||||
| Capitals | Haji Zambri bin Haji Mahmud (directors of the Company) or failing him , | |||||||
| as my/our proxy to vote for me/us and on my/our behalf at the annual general meeting of the Company to be held on 28th day of September 2009 and at any adjournment thereof, in the manner indicated below:- | ||||||||
| Resolution relating to :- | For | Against | ||||||
| Please | 1. | To receive the audited financial statements for the year ended 31 March 2009. | ||||||
| indicate with X how you wish your vote | 2. | To re-elect as Director, Mr. Chew Beow Soon who retires pursuant to Article 108 of the Company's Articles of Association. | ||||||
| to be cast | 3. | To re-appoint Messrs KPMG as auditors of the Company and to authorise the Directors to fix their remuneration. | ||||||
| 4. | To approve the Directors' remuneration report for the year ended 31 March 2009. | |||||||
| Number of shares held ………………. | ||||||||
| Dated this ……………. day of ……………………… 2009 | Signature ………………………… | |||||||
Note :
1. # If it is desired to appoint another person as a proxy, these names should be deleted and the name of the proxy, who need not be a member of the Company, should be inserted in block capitals, and the alteration should be initialled.
2. This proxy to be valid, must be deposited at the head office of the Company, "Hidong Estate Plc, 3rd Floor, Standard Chartered Bank Chambers, Beach Street, 10300 Penang, Malaysia" not less than 48 hours before the time appointed for holding the meeting.
3. In the case of a corporation, the proxy must be executed under its common seal, or under the hand of a duly authorised officer. If executed under the hand of a duly authorised officer, evidence of such authority must be produced with the proxy form.
4. In the case of joint holders, the signature of any one joint holder is sufficient.
5. If neither "FOR" nor "AGAINST" is indicated above, the proxy will vote or abstain as he thinks fit.
6. To appoint more than one proxy you may photocopy this form. Please indicate the proxy holder's name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you). Please also indicate if the proxy instruction is one of multiple instructions being given. All forms must be signed and should be returned together in the same envelope.