Last checked at 29 Jul 2011 10:46
Hidong
Estate
PLC
(Incorporated in England)
Contents
Page | |
Notice of meeting .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 1 |
Corporate information .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 2 - 3 |
Chairman's statement .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 4 |
Report of the directors .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 5 - 9 |
Directors' remuneration report .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 10 - 11 |
Statement of directors' responsibilities in respect of the report and the financial statements .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. |
12 |
Independent auditors' report to the members of Hidong Estate Plc .. .. .. .. | 13 - 14 |
Profit and loss account .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 15 |
Balance sheet .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 16 |
Statement of total recognised gains and losses .. .. .. .. .. .. .. .. .. .. .. | 17 |
Reconciliation of movements in shareholders' funds .. .. .. .. .. .. .. .. .. | 17 |
Cash flow statement .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 18 |
Notes to the financial statements .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 19 - 27 |
Comparative statistics .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. | 28 |
Notice of meeting
NOTICE IS HEREBY GIVEN that the EIGHTY EIGHTH ANNUAL GENERAL MEETING of the Company will be held at the head office of the Company, Third Floor, Standard Chartered Bank Chambers, Beach Street, 10300 Penang, Malaysia on 26 September 2011 at 10:30 a.m. for the following purposes:-
1. To receive and consider the audited financial statements and the reports of the directors and auditors thereon for the year ended 31 March 2011.
2. To re-elect Mr. Diong Chin Teck who retires in accordance with article 108 of the Company's Articles of Association, and being eligible, offer himself for re-election.
3. To re-appoint the auditors and to authorise 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 2011 be and is hereby approved."
5. To transact any other business of which due notices shall have been given.
By order of the Board
GRACE SMITH
Secretary
28 July 2011
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 61.
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 72.
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 78.
Chew Beow Soon
A non-executive director of the Company since 2000. A director of several private limited companies. Age 62.
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
Third Floor, Standard Chartered Bank Chambers,
Beach Street, 10300 Penang, Malaysia.
P.O.Box 706,
10790 Penang, Malaysia.
REGISTERED OFFICE
Neville Registrars Limited
Neville House
18 Laurel Lane
Halesowen
West Midlands
B63 3DA
U.K. REGISTRARS
Neville Registrars Limited
Neville House
18 Laurel Lane
Halesowen
West Midlands
B63 3DA
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 2011.
For the financial year ended 31 March 2011 the Company recorded a profit before tax of RM149,312 as compared to a profit before tax of RM124,441 in prior year. The gain is mainly attributable to higher interest income and certain costs savings that the Company has been able to achieve.
The Company's assets remain largely liquid and in quoted investments which have shown positive returns in the last two years. Although the economic outlook remains uncertain, the Board shall continue to endeavour in identifying and undertaking business proposals that would be both viable and in the best interest of the shareholders. In the meantime, the management will continue to minimise costs and to ensure that the Company continues to maximise on its existing resources.
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, Malaysia
28 July 2011
Report of the directors
The directors present their eighty eighth report and financial statements of the Company for the financial year ended 31 March 2011.
PRINCIPAL ACTIVITIES AND REVIEW OF DEVELOPMENT OF BUSINESS
The original principal activities of the Company which were the production of natural rubber and oil palm fresh fruit bunches ceased when the Company sold its land and plantations in 2006. Since then, the Board has 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 cash and bank deposits all of which earn interest and investments in listed equities. The financial risks involved are minimal and disclosed in Note 14 to the financial statements.
RESULTS AND DIVIDEND
The Company made a profit after tax of RM91,600 for the current financial year as compared to RM96,675 in the previous year. The directors do not recommend any final dividend to be paid for the current financial year (2010 : 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, Mr. Diong Chin Teck 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.
SUBSTANTIAL SHAREHOLDINGS
At the date of this report, substantial interests in the share capital of the Company, as 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 | 234,997 | 13.72 |
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 by the 2008 Combined Code.
Internal Audit
The need for an internal audit function 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 2011 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, 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 the 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 judgement. 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 report 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 2011, 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 controls 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 of achieving 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 key elements of the Company's internal controls are as follows:
·; Risk assessment
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.
·; Control environment and control activities
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.
·; Information and communication
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 director has taken all the steps that they ought to have taken as a director 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 CHEW BEOW SOON
Chairman Director
Penang, Malaysia
28 July 2011
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 2011, 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 and they received only a nominal fee for their services.
Audited information
Aggregate Directors' remuneration
The total amounts for Directors' remuneration are as follows:
2011 | 2010 | |||
RM | RM | |||
Emoluments | 4,036 | 4,539 | ||
| 2011 | 2010 | ||
RM | RM | |||
Directors' emoluments - fee | ||||
Executive Director | ||||
Chew Sing Guan | 1,153 | 1,296 | ||
Non - executive Directors | ||||
Haji Zambri bin Haji Mahmud | 961 | 1,081 | ||
Diong Chin Teck | 961 | 1,081 | ||
Chew Beow Soon | 961 | 1,081 | ||
4,036 | 4,539 |
This report was approved by the Board of Directors on 28 July 2011 and signed on its behalf:
CHEW SING GUAN
Chairman
Statement of directors' responsibilities
in respect of the directors' report and
the financial statements
The directors are responsible for preparing the Directors' 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 they have elected to prepare the financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice).
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company 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 UK 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 adequate accounting records that are sufficient to show and explain the company's transactions and 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 2006. They have 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 Report of the Directors, Directors' Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.
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 2011 set out on pages 15 to 27. The financial reporting framework that has been applied in their preparation is applicable law and UK Accounting Standards (UK Generally Accepted Accounting Practice).
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. 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
As explained more fully in the Directors' Responsibilities Statement set out on page 12, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit, and to express an opinion on, the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the APB's web-site at www.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements
In our opinion the financial statements:
• give a true and fair view of the state of the Company's affairs as at 31 March 2011 and of its profit for the year then ended;
• have been properly prepared in accordance with UK Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion:
• the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; and
• the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
• the financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement with the accounting records and returns; or
• certain disclosures of directors' remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Under the Listing Rules we are required to review:
• the Directors' statement, set out on page 9, in relation to going concern; and
• pages 6 to 9 relating to the company's compliance with the nine provisions of the 2008 Combined Code specified for our review.
AE Burman (Senior Statutory Auditor)for and on behalf of KPMG Audit Plc, Statutory AuditorChartered Accountants8 Salisbury Square
London
EC4Y8BB
United Kingdom
28 July 2011
Profit and loss account for the year ended
31 March 2011
2011 | 2010 | |||
Note | RM | RM | ||
Administrative expenses | (156,053) | (216,098) | ||
Operating loss | (156,053) | (216,098) | ||
Income from investments | 26,575 | 11,156 | ||
Gain on disposal of investments | 18,828 | 106,187 | ||
Impairment of investments | (13,196) | - | ||
Interest receivable on short term bank deposits | 273,158 | 223,196 | ||
Profit on ordinary activities before taxation | 2 | 149,312 | 124,441 | |
Tax on profit on ordinary activities | 3 | (57,712) | (27,766) | |
| Retained profit for the year | 9 | 91,600 | 96,675 | |
Basic and diluted profit per 10p share | 4 | 5.35 sen | 5.64 sen |
The results stated above are 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 profit for the year stated above and the historical cost equivalents.
The notes on pages 19 to 27 form part of these financial statements.
Balance sheet as at 31 March 2011
2011 | 2010 | |||
Note | RM | RM | ||
Fixed assets | ||||
Investments | 5 | 1,180,516 | 767,342 | |
Current assets | ||||
Debtors |
6 |
30,781 |
83,667 | |
Cash at bank and in hand | 12 | 9,772,976 | 9,927,958 | |
9,803,757 | 10,011,625 | |||
Current liabilities | ||||
Creditors |
7 |
(455,738) |
(463,069) | |
(455,738) | (463,069) | |||
Net current assets | 9,348,019 | 9,548,556 | ||
Net assets | 10,528,535 | 10,315,898 | ||
Capital and reserves | ||||
Called up share capital |
8 |
1,067,846 |
1,067,846 | |
Fair value reserve | 9 | 278,560 | 157,523 | |
Profit and loss account | 9 | 9,182,129 | 9,090,529 | |
Shareholders' funds | 10,528,535 | 10,315,898 |
These financial statements were approved by the Board of Directors on 28 July 2011.
CHEW SING GUAN )
) Directors
)
CHEW BEOW SOON )
The notes on pages 19 to 27 form part of these financial statements.
Statement of total recognised gains and losses for the year ended 31 March 2011
2011 | 2010 | ||
RM | RM | ||
Profit for the financial year | 91,600 | 96,675 | |
Unrealised gains on investments | 121,037 | 137,506 | |
Total recognised gains for the year | 212,637 | 234,181 |
Reconciliation of movements in shareholders' funds for the year ended
31 March 2011
2011 | 2010 | ||
RM | RM | ||
Retained profit for the year | 91,600 | 96,675 | |
Other recognised gains and losses for the year | 121,037 | 137,506 | |
Net addition to shareholders' funds | 212,637 | 234,181 | |
Opening shareholders' funds | 10,315,898 | 10,081,717 | |
Closing shareholders' funds | 10,528,535 | 10,315,898 |
The notes on pages 19 to 27 form part of these financial statements.
Cash flow statement for the year ended 31 March 2011
2011 | 2010 | |||
Note | RM | RM | ||
| NET CASH OUTFLOW FROM | ||||
OPERATING ACTIVITIES | 10 | (164,568) | (206,055) | |
| RETURNS ON INVESTMENTS AND SERVICING OF | ||||
FINANCE | ||||
Dividend received | 26,575 | 11,156 | ||
Interest received | 322,520 | 155,774 | ||
| TAXATION | ||||
Overseas tax paid | (53,004) | (49,148) | ||
| CAPITAL EXPENDITURE AND FINANCIAL | ||||
| INVESTMENTS | ||||
Purchase of investments | (393,981) | (361,803) | ||
Sale of investments | 107,476 | 383,254 | ||
| NET CASH OUTFLOW BEFORE | ||||
| MANAGEMENT OF LIQUID RESOURCES | (154,982) | (66,822) | ||
| MANAGEMENT OF LIQUID RESOURCES | ||||
| Decrease in short term deposits | 200,000 | - | ||
| INCREASE/(DECREASE) IN CASH | 11 | 45,018 | (66,822) |
The notes on pages 19 to 27 form part of these financial statements.
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 (UK Generally Accepted Accounting Practices).
(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) 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.
(d) Taxation
The charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes.
1. ACCOUNTING POLICIES (Cont'd)
Taxation (Cont'd)
Deferred tax is recognised, without discounting, in respect of all timing differences between the treatment of certain items for taxation and accounting purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by FRS 19.
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.
(e) 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.
(f) Income
Interest income is recognised on an accrual basis.
Dividend income is recognised when the right to receive payment is established.
(g) Cash and liquid resources
Cash, for the purpose of the cash flow statement, comprises cash in hand and deposits repayable 0n 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.
(h) 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 account.
When an investment is derecognised, the cumulative gain or loss previously recognised in equity is recognised in the profit and loss account.
2. NOTES TO THE PROFIT AND LOSS ACCOUNT
The profit on ordinary activities before taxation is stated :
2011 | 2010 | ||
RM | RM | ||
After charging: | |||
Directors' remuneration * | |||
- Chew Sing Guan | 1,153 | 1,296 | |
- Haji Zambri Bin Haji Mahmud | 961 | 1,081 | |
- Diong Chin Teck | 961 | 1,081 | |
- Chew Beow Soon | 961 | 1,081 | |
Auditors' remuneration - Audit of these financial statements | 44,138 | 49,160 | |
Impairment of investments | 13,196 | - | |
Allowance for doubtful debts | - | 27,044 | |
and after crediting: | |||
Interest income | 273,158 | 223,196 | |
Dividend income | 26,575 | 11,156 | |
Gain on disposal of investments | 18,828 | 106,187 |
* Directors' remuneration totaling RM4,036 (2010 : RM4,539) is in respect of directors' fees for duties performed outside the United Kingdom.
3. TAX ON PROFIT ON ORDINARY ACTIVITIES
2011 | 2010 | ||
RM | RM | ||
| Foreign taxation - current year | 57,712 | 46,047 | |
| - prior years | - | (18,281) | |
57,712 | 27,766 | ||
3. TAX ON PROFIT ON ORDINARY ACTIVITIES (Cont'd)
The current tax charge for the year is higher (2010: lower) than the standard rate of corporation tax in the UK of 28% (2010 : 28%). The differences are explained below.
| Reconciliation of effective tax expense | |||
2011 | 2010 | ||
RM | RM | ||
| Profit before tax | 149,312 | 124,441 | |
| Current tax at 28% (2010 : 28%) | 41,807 | 34,843 | |
| Expenses not deductible for tax purposes | 47,389 | 60,507 | |
| Income not subject to tax | (8,399) | (30,884) | |
| Lower tax rates on overseas earnings | (23,085) | (18,419) | |
57,712 | 46,047 | ||
| Adjustments in respect of prior periods | - | (18,281) | |
57,712 | 27,766 |
4. BASIC AND DILUTED PROFIT PER ORDINARY SHARE OF 10P EACH
This is based on the profit after tax of RM91,600 (2010 : RM96,675) and 1,713,334 shares (2010 : 1,713,334 shares), being the weighted average number of shares in issue. The basic profit per ordinary share is calculated using a numerator of the net profit for the year and a denominator of the weighted average number of ordinary shares in issue for the year. There is no difference in 2011 or 2010 between the basic and diluted profit per share as there are no potentially dilutive shares, including share options and warrants, to convert.
5. INVESTMENTS
2011 | 2010 | ||
RM | RM | ||
| At beginning of year | 767,342 | 545,100 | |
| Additions | 393,981 | 361,803 | |
| Change in fair value | 121,037 | 167,076 | |
| Impairment | (13,196) | - | |
| Disposals | (88,648) | (306,637) | |
| At end of year | 1,180,516 | 767,342 |
6. DEBTORS
2011 | 2010 | ||
RM | RM | ||
| - Other debtors | 30,781 | 80,143 | |
| - Tax recoverable | - | 3,524 | |
30,781 | 83,667 |
7. CREDITORS: Amounts falling due within one year
2011 | 2010 | ||
RM | RM | ||
- Other creditors | 40,030 | 48,545 | |
- Taxation and social security | 415,708 | 414,524 | |
455,738 | 463,069 |
Included in taxation and social security is an amount of RM414,524 (2010 : RM414,524) representing a provision for the real property gain tax arising from the sale of the plantation in 2006.
8. SHARE CAPITAL
2011 | 2010 | ||
RM | RM | ||
| Authorised | |||
2,000,000 ordinary shares of 10p each | 1,493,610 | 1,493,610 | |
Issued and fully paid up | |||
1,713,334 ordinary shares of 10p each | 1,067,846 | 1,067,846 |
9. RESERVES
Fair value reserve | Profit and loss account | ||
RM | RM | ||
At 1 April 2010 | 157,523 | 9,090,529 | |
Profit for the year | - | 91,600 | |
Unrealised gains on investments | 121,037 | - | |
At 31 March 2011 | 278,560 | 9,182,129 |
10. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES
2011 | 2010 | ||
RM | RM | ||
| Operating loss | (156,053) | (216,098) | |
| Decrease in debtors | - | 29,345 | |
Decrease in creditors | (8,515) | (19,302) | |
Net cash outflow from operating activities | (164,568) | (206,055) |
11. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
2011 | 2010 | ||
RM | RM | ||
| Increase/(decrease) in cash in the year | 45,018 | (66,822) | |
Decrease in liquid resources | (200,000) | - | |
| Movement in net funds in the year | (154,982) | (66,822) | |
Net funds at 1 April | 9,927,958 | 9,994,780 | |
Net funds at 31 March | 9,772,976 | 9,927,958 |
12. ANALYSIS OF NET FUNDS
At 1 April 2010 | Cash flow | At 31 March 2011 | |||
RM | RM | RM | |||
Short term deposits | 9,900,000 | (200,000) | 9,700,000 | ||
Cash at bank and in hand | 27,958 | 45,018 | 72,976 | ||
9,927,958 | (154,982) | 9,772,976 |
13. EMPLOYEES
2011 | 2010 | ||
RM | RM | ||
Wages and salaries | 4,036 | 4,539 | |
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 2011. 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 |
2011 | |||
Short term deposits | 2.97 | 9,700,000 | 9,700,000 |
2010 | |||
Short term deposits | 2.39 | 9,900,000 | 9,900,000 |
(c) Foreign exchange risk
The Company operates in Malaysia and is only exposed to the sterling pound currency for payments made to UK companies for services rendered to the Company. This poses minimum risk as the level of these payments is not significant.
(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 readily 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 RM9,772,976 and RM9,927,958 at 31 March 2011 and 2010 respectively. Bank balances are held with reputable and established financial institutions.
The Company's principal financial asset is cash and bank deposits and credit risk arises from cash and cash equivalents and short term deposits with banks and financial institutions.
14. FINANCIAL INSTRUMENTS (Cont'd)
(e) Credit risk (Cont'd)
It is the Company's policy to monitor the financial standing of these institutions on an on going basis.
(f) Fair values
The fair values of financial assets and financial liabilities reported in the balance sheet approximate to 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 RM59,000 (2010 : RM38,000); an equal change in the opposite direction would have decreased equity by RM59,000 (2010: RM38,000).
(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 the 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 related party transactions undertaken by the Company during the financial year are as follows:
2011 | 2010 | ||
RM | RM | ||
| Agency fees, accounting fees and | |||
| compensation paid to | |||
Plantation Agencies Sdn. Berhad, | |||
a company in which Chew Sing Guan, director, | |||
of the company is also a director | 27,786 | 27,720 | |
15. RELATED PARTY TRANSACTIONS AND BALANCES (Cont'd)
| Purchases and sales of quoted shares through | 2011 | 2010 | |
| Mercury Securities Sdn. Bhd. ("MSSB"), | RM | RM | |
| a company in which, Chew Sing Guan, director, | |||
has a substantial financial interest | |||
- Purchases of quoted shares | 393,981 | 361,803 | |
- Sales of quoted shares | 107,476 | 383,254 | |
The terms and conditions for the above transactions are based on normal trade terms.
In the opinion of the directors there is no controlling or ultimate controlling party at the year end.
Comparative statistics
Year ended 31 March | 2011 | 2010 | 2009 | 2008 | 2007 |
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 | 9,460,689 | 9,248,052 | 9,013,871 | 9,211,077 | 9,111,850 |
Total shareholders' funds | 10,528,535 | 10,315,898 | 10,081,717 | 10,278,923 | 10,179,696 |
Investments | 1,180,516 | 767,342 | 545,100 | - | - |
Net current assets | 9,348,019 | 9,548,556 | 9,536,617 | 10,278,923 | 10,179,696 |
10,528,535 | 10,315,898 | 10,081,717 | 10,278,923 | 10,179,696 | |
PROFIT AND LOSS | |||||
ACCOUNT ANALYSIS | |||||
Loss before interest and taxation | (123,846) | (98,755) | (480,193) | (173,640) | (413,410) |
Interest receivable | 273,158 | 223,196 | 329,231 | 347,522 | 347,926 |
Taxation | (57,712) | (27,766) | (66,261) | (74,655) | (70,000) |
Profit/(loss) after taxation | 91,600 | 96,675 | (217,223) | 99,227 | (135,484) |