The main activities of the subsidiaries are presented in note 14 to the financial statements. The financial statements of the group and the company are also prepared on a historical basis. The consolidated financial statements comprise the financial statements of the company and its subsidiaries as of the balance sheet date.
The financial statements of the subsidiaries are prepared for the same reporting date as the Company. Any excess of the cost of the acquisition over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities represents goodwill. Any excess of the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition is recognized immediately in profit or loss.
Goodwill acquired in a business combination is initially measured at cost, being the amount by which the costs of the business combination exceed the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities.
Significant Accounting Policies (contd.)
- Summary of Significant Accounting Policies (contd.) (f) Leases (contd.)
- Summary of Significant Accounting Policies (contd.) (f) Leases (contd.)
- Summary of Significant Accounting Policies (contd.) (i) Employee Benefits
- Summary of Significant Accounting Policies (contd.) (k) Foreign Currencies
- Summary of Significant Accounting Policies (contd.) (l) Impairment of Non-Financial Assets
- Summary of Significant Accounting Policies (contd.) (n) Financial Instruments
- Summary of Significant Accounting Policies (contd.) (n) Financial Instruments (contd.)
Assets leased under operating leases are presented on the balance sheets according to the nature of the assets. Wages, salaries, paid annual leave, bonuses and non-monetary benefits are recognized as an expense in the year in which the related services are rendered by employees of the Group. The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”).
Exchange rate differences that arise on monetary items that form part of the group's net investment in a foreign company, where the monetary item is denominated in a currency other than the functional currency of the reporting entity or the foreign company, are recognized in the result for the period. Exchange rate differences that arise on monetary items that form part of the company's net investment in a foreign company, regardless of the currency of the monetary item, are recognized in the result in the company's accounts or in the individual annual accounts of the foreign company, depending on what is relevant. . Financial instruments are recognized in the balance sheet when the group has become a party to the instrument's contractual provisions.
All loans and borrowings are initially recognized at the fair value of the consideration received, less directly attributable transaction costs.
Significant Accounting Policies (contd.) 3 Changes in accounting policies
Standards issued but not yet effective
Standards issued but not yet effective (contd.)
Business Combinations (revised) and FRS 127: Consolidated and Separate Financial Statements (amended)
Business Combinations (revised) and FRS 127: Consolidated and Separate Financial Statements (amended) (contd.)
- Standards issued but not yet effective (contd.) Amendments to FRSs ‘Improvements to FRSs (2009)’
- Significant Accounting Estimates and Judgements
- Revenue
- Finance Cost
- Profit Before Tax
- Employee Benefits Expense
- Directors’ Remuneration
- Directors’ Remuneration (contd.)
- Income Tax Expense
- Income Tax Expense (contd.)
- Earnings Per Share (a) Basic
- Dividends
- Property, Plant and Equipment (contd.)
- Prepaid Land Lease Payments
- Investment Properties
Key assumptions about the future and other key sources of valuation uncertainty at the balance sheet date that have a significant risk of causing a material adjustment to the carrying amount of assets within the next financial year are discussed below. Deferred tax assets are recognized for all unused investment tax allowances (“ITA”) to the extent that it is probable that taxable profit will be available against which the ITA can be utilised. Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based on the likely timing and level of future taxable profits, together with future tax planning strategies.
Current income tax is calculated at the statutory tax rate of the estimated assessable profit for the year. The Company Tax charge for the year was reduced by RM3,964,000 due to the losses carried back by its subsidiaries. The Group has no potential ordinary issued shares for the year under review, therefore diluted earnings per share have not been presented.
At the forthcoming General Meeting, a first and final dividend for the financial year ending July 31, 2010, of 4% less 25% tax (3 sen net per ordinary share), will be proposed to shareholders for approval. Such dividend, if approved by the shareholders, will be included in stockholders' equity as an appropriation of retained earnings in the fiscal year ended July 31, 2011. Property, Plant and Equipment (continued). e) Included in the Group's tangible fixed assets are the following costs incurred and capitalized during the financial year:.
July 2010 Cost
July 2009 Cost
- Investment in Subsidiaries
- Investment in Subsidiaries (contd.)
- Intangible Assets
- Intangible Assets (contd.)
- Long Term Assets
- Inventories
- Trade and Other Receivables
- Trade and Other Receivables (contd.)
- Cash and Cash Equivalents
- Borrowings
- Borrowings (contd.)
- Hire Purchase Liabilities
- Trade and Other Payables
- Trade and Other Payables (contd.)
- Share Capital
- Share Capital (contd.) Treasury Shares
- Retained Earnings
- Deferred Tax
- Deferred Tax (contd.) Deferred tax assets of the Group
- Deferred Tax (contd.)
- Significant Related Party Transactions
- Significant Related Party Transactions (contd.)
- Commitments
- Commitments (contd.)
- Contingent Liabilities
- Comparative Figures
- Financial Instruments
Goodwill is tested for impairment on an annual basis by comparing the carrying amount with recoverable amount of the cash generating units (“CGUs”) based on value-in-use. Amount due from related companies represent companies in which certain directors and substantial shareholders of the Company have financial interests. Fixed deposit of the Group amounted to RM RM188,934) have been pledged to a bank as security for bank guarantee granted to a subsidiary and bankers’ acceptances as referred in Note 20.
The secured term loan and revolving credit of the Group is secured against the long leasehold land as referred to in Note 12 to the financial statements and plantation, buildings and watercraft as referred to in Note 11 to the financial statement and corporate guarantee of the Company. This amount relates to the acquisition cost of treasury shares net of the proceeds received upon their subsequent sale or issue. The shareholders of the Company, by an ordinary resolution held in a general meeting on 30 December 2009, renewed their approval of the Company's plan to buy back its own ordinary shares.
The directors of the Company are committed to enhancing the value of the Company for its shareholders and believe that the repurchase plan can be applied in the best interests of the Company and its shareholders. The shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act 1965. In accordance with the Finance Act 2007 which was gazetted on 28 December 2007, companies shall not be entitled to deduct tax on dividend paid, credited or distributed to its shareholders, and such dividends will be exempted from tax in the hands of the shareholders (“single tier system”).
The amendment to the tax law also provides for the section 108 balance to be locked in on 31 December 2007 in accordance with section 39 of the Finance Act 2007. Should the retained earnings balance of RM602,522 be distributed as dividends, the company may distribute such dividends according to the one-tier system. Affiliated companies are companies in which certain directors or substantial shareholders of the company or persons related to them have significant shares.
It is the Group's policy to also purchase materials, goods or services from related parties when the prices, fees or costs are competitive with prices, fees or costs obtained from third parties; by taking into account the availability of raw materials or resources, the reliability of the offer, delivery, services and quality of the material or goods. Significant related party transactions (continued). The sale of logs and timber-related products to related parties and other income received or to be received from related parties have been entered into in the normal course of business and have been concluded on mutually agreed terms. b) Remuneration of managers in key positions. The remuneration of directors and other key management personnel during the year was as follows: Included in the total key management personnel are:. Approved but not contracted for:. The above lease payments relate to the non-cancellable operational lease of land. Corporate guarantees given to banks for banking. The presentation and classification of items in the current year's financial statements are consistent with the previous financial period, except that certain comparative figures of the Company for the following accounts have been restated to be consistent with the current year's presentation as follows : Explanatory notes to the annual accounts. a) Financial risk management objectives and policies. The Group focuses on the unpredictability of the financial markets and strives to minimize potential negative effects on the Group's financial performance.
The Group's overall financial risk management policy seeks to ensure that sufficient financial resources are available for the development of the Group's businesses while managing its foreign exchange, interest rate, liquidity and credit risks.
July 2010 Fixed rate
Financial Instruments (contd.) (b) Interest Rate Risk (contd.)
July 2009 Fixed rate
- Financial Instruments (contd.) (c) Foreign Currency Risk
- Financial Instruments (contd.) (f) Fair Values
- Significant Events
- Segment Reporting
- Segment Reporting (contd.)
The Group is exposed to currency risk as a result of foreign currency transactions, mainly in US dollars, Japanese yen, Singapore dollars and Euro dollars. The Group enters into forward foreign exchange contracts to limit its exposure to foreign currency receipts and payments, when deemed necessary. The Group actively manages its debt maturity profile, operating cash flows and availability of funds in order to ensure that all refinancing, repayment and financing needs are met.
The Group seeks to control credit risk by establishing counterparty limits and ensuring that sales of products and services are made to customers with an appropriate credit history. The group considers the risk of material loss in case of non-performance by a financial party to be impossible. The fair value of long-term receivables and hire purchase liabilities are estimated by discounting future contractual cash flows at the current interest rate available to the Group and the Company for similar financial instruments.
The manufacturing segment is in the business of manufacturing and trading plywood, veneers, raw and laminated particles, sawn timber, finger jointing and supplying electricity for its manufacturing activities. Except as indicated above, no operating segments have been aggregated to form the above reportable operating segments. Segment performance is evaluated based on operating profit or loss which, in some respects as explained in the table below, is measured differently than operating profit or loss in the consolidated financial statements.
Group financing (including financing costs) and income taxes are managed on a group basis and are not allocated to operating segments. No segment analysis on a geographical basis is provided as the Group's operations were conducted entirely in Malaysia. The fixed asset information presented above consists of the following items as shown in the consolidated balance sheet.
Excluding the ordinary shares of RM1.00 each purchased by the Company and held as treasury shares based on the record of depositors on 29 October 2010. Excluding the ordinary shares of RM1.00 each purchased by the Company and of held as treasury shares based on the October 29, 2010 Record of Depositors.
Subur Tiasa Holdings Berhad
Subur Tiasa Holdings Berhad (341792-W)
