FARLIM GROUP (MALAYSIA) BHD. (82275-A) (Incorporated in Malaysia)
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FARLIM GROUP (MALAYSIA) BHD. (82275-A) (Incorporated in Malaysia) REPORTS AND FINANCIAL STATEMENTS 31ST DECEMBER 2009 Company No. 82275 - A FARLIM GROUP (MALAYSIA) BHD. (Incorporated in Malaysia) REPORTS AND FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31ST DECEMBER 2009 CONTENTS Page DIRECTORS’ REPORT 1 – 7 FINANCIAL STATEMENTS BALANCE SHEETS 8 – 9 INCOME STATEMENTS 10 STATEMENTS OF CHANGES IN EQUITY 11 CASH FLOW STATEMENTS 12 – 13 NOTES TO THE FINANCIAL STATEMENTS 14 – 71 STATEMENT BY DIRECTORS 72 STATUTORY DECLARATION 73 INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS 74 – 75 OF FARLIM GROUP (MALAYSIA) BHD. Company No. 82275 - A FARLIM GROUP (MALAYSIA) BHD. (Incorporated in Malaysia) DIRECTORS' REPORT The directors hereby submit their report together with the audited financial statements of Farlim Group (Malaysia) Bhd. (“the Company) and its subsidiaries (“the Group”) for the financial year ended 31st December 2009. PRINCIPAL ACTIVITIES The principal activities of the Company are that of property development and investment holding. The principal activities of the subsidiaries are set out in Note 39 to the financial statements. There have been no significant changes in the nature of these principal activities during the financial year. RESULTS Group Company RM RM Net profit for the financial year 5,693,089 4,806,964 Attributable to:- Equity holders of the Company 5,724,554 4,806,964 Minority interests (31,465) - 5,693,089 4,806,964 DIVIDEND No dividend was paid or declared by the Company since the end of the previous financial year. The directors do not recommend the payment of any dividend in respect of the financial year ended 31st December 2009. RESERVES AND PROVISIONS All material transfers to and from reserves and provisions during the financial year have been disclosed in the financial statements. BAD AND DOUBTFUL DEBTS Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts, and had satisfied themselves that all known bad debts had been written off and adequate allowance had been made for doubtful debts. 1 Company No. 82275 - A At the date of this report, the directors are not aware of any circumstances that would render the amount written off for bad debts, or the amount of the allowance for doubtful debts, in the financial statements of the Group and of the Company inadequate to any substantial extent. CURRENT ASSETS Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonable steps to ensure that any current assets, other than debts, which were unlikely to be realised in the ordinary course of business, their values as shown in the accounting records of the Group and of the Company had been written down to an amount that they might be expected to be realised. At the date of this report, the directors are not aware of any circumstances that would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading. VALUATION METHODS At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. CONTINGENT AND OTHER LIABILITIES At the date of this report, there does not exist:- (i) any charge on the assets of the Group and of the Company that has arisen since the end of the financial year which secures the liabilities of any other person, or (ii) any contingent liability in respect of the Group and of the Company that has arisen since the end of the financial year, other than as disclosed in Note 36 to the financial statements. In the opinion of the directors, no contingent liabilities or other liabilities of the Group and of the Company has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due. CHANGE OF CIRCUMSTANCES At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with in this report or the financial statements of the Group and of the Company, that would render any amount stated in the financial statements misleading. ITEMS OF AN UNUSUAL NATURE The results of the operations of the Group and of the Company for the financial year were not, in the opinion of the directors, substantially affected by any item, transaction or event of a material and unusual nature. 2 Company No. 82275 - A No item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made. ISSUE OF SHARES AND DEBENTURES During the financial year, the issued and paid-up ordinary share capital was increased from RM121,000,000/- to RM124,862,822/- by way of the issuance of a total 3,862,822 ordinary shares of RM1/- each arising from the conversion of a total of 3,862,822 Irredeemable Convertible Unsecured Loan Stocks of RM1/- nominal value each at a conversion price of RM1/- per ordinary share. The new ordinary shares issued during the financial year ranked pari passu in all respects with the existing ordinary shares of the Company. During the financial year, the Company did not issue any debentures. IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS (“ICULS”) Pursuant to the Proposed Debt Settlement Scheme, the Company issued 20,326,100 of 3 years 2% ICULS at a nominal amount of RM1/- each to all the Syndicated Lenders and Bilateral Lenders on 28th March 2008. One of the Bilateral Lenders had on the following dates issued conversion notices to convert the nominal value of ICULS into new ordinary shares of RM1/- each in the Company : i) On 28th March 2008, issued a conversion notice to convert 1,000,000 nominal value of ICULS into 1,000,000 new ordinary shares of RM1/- each. The new ordinary shares were issued on 11th April 2008, listed and quoted on 16th April 2008. ii) On 9th June 2009, issued a conversion notice to convert 1,162,822 nominal value of ICULS into 1,162,822 new ordinary shares of RM1/- each. The new ordinary shares were issued on 18th June 2009, listed and quoted on 26th June 2009. iii) On 17th June 2009, issued a conversion notice to convert 2,700,000 nominal value of ICULS into 2,700,000 new ordinary shares of RM1/- each. The new ordinary shares were issued on 26th June 2009, listed and quoted on 9th July 2009. The salient terms of the ICULS are disclosed in Note 19 to the financial statements. EMPLOYEES’ SHARE OPTION SCHEME The Farlim Group (Malaysia) Bhd.’s Employees’ Share Option Scheme (“ESOS”) was approved by the shareholders at the Extraordinary General Meeting held on 25th June 2003 and shall be in force for a period of ten (10) years from the date of implementation on 22nd September 2003. 3 Company No. 82275 - A The Company had been granted an exemption by the Companies Commission of Malaysia from having to disclose the details of option holders who have been granted options in aggregate of less than 70,000 options. The options shall be in force for a period of ten (10) years. The details of the option holders in aggregate of 70,000 options and above are set out below:- Options Exercisable (including directors) Over Ordinary Shares of RM1/- each Exercisable Excercisable at Additional at 1.1.2009 Exercisable Exercised Lapsed 31.12.2009 Tan Sri Dato' Seri Lim Gait Tong 525,000 - - - 525,000 Dato' Haji Mohd. Iqbal Bin Kuppa Pitchai Rawther 525,000 - - - 525,000 Ng Bock Tye 525,000 - - - 525,000 Lim Yat Koi @ Lim Yoke Kwai 525,000 - - - 525,000 Puan Sri Datin Seri Chin Chew Lin 455,000 - - - 455,000 Ng Hong Kiat @ Ng Han Kiat 375,000 - - - 375,000 Ooi Poh Tin 375,000 - - - 375,000 Tan Keng Hock 375,000 - - - 375,000 Lim Hock Eng 270,000 - - - 270,000 Lim Cheng Kee 230,000 - - - 230,000 Kwong Yook Faan 195,000 - - - 195,000 Chow Soey Mei 150,000 - - - 150,000 Heng Tin Giou 115,000 - - - 115,000 Cheng Cheang Teik 100,000 - - - 100,000 Iskandar Bin Wahab 100,000 - - - 100,000 Ong Yee Min 100,000 - - - 100,000 Hor Chee Keong 85,000 - - - 85,000 Lim Cheow Lin 85,000 - - - 85,000 Lee Liak Chin 85,000 - - - 85,000 Teh Lee Eng 85,000 - - - 85,000 Ng Chee Shin 70,000 - - - 70,000 The details of the ESOS are set out in Note 18(b) to the financial statements. DIRECTORS The names of the directors of the Company in office since the date of the last report and at the date of this report are:- Tan Sri Dato’ Seri Lim Gait Tong Dato’ Haji Mohd. Iqbal Bin Kuppa Pitchai Rawther Ng Bock Tye Puan Sri Datin Seri Chin Chew Lin Lim Yat Koi @ Lim Yoke Kwai Koay Seng Leong Dato’ Zainol Abidin Bin Dato’ Haji Salleh Ahmad Kamarudin Bin Ismail Datuk Dr. Chew Han Ching 4 Company No.