Financial Statements
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FINANCIAL STATEMENTS Directors’ Report 42 - 47 Statement by Directors 48 Statutory Declaration 48 Report of the Auditors 49 - 50 41 Balance Sheets 51 - 52 Income Statements 53 Consolidated Statement of Changes in Equity 54 - 55 Company Statement of Changes in Equity 56 Consolidated Cash Flow Statement 57 - 58 Company Cash Flow Statement 59 - 60 Notes to the Financial Statements 61 - 134 ANNUAL REPORT 2005 DIRECTORS’ REPORT The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 January 2005. PRINCIPAL ACTIVITIES The principal activities of the Company are provision of management services, investment holding and property development. The principal activities of the subsidiaries are described in Note 51 to the financial statements. There have been no significant changes in the nature of the principal activities during the financial year other than those activities that ceased consequent to the disposal and deregistration of subsidiaries as disclosed in Note 51 to the financial statements. RESULTS Group Company RM’000 RM’000 Profit after taxation 83,645 8,673 Minority interests 8,376 – Net profit attributable to shareholders 92,021 8,673 42 There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the statement of changes in equity. In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature. DIVIDENDS On 25 October 2004, the Company paid a final dividend of 5% less taxation on 594,219,322 ordinary shares of RM1.00 each less 5,112,500 treasury shares of RM1.00 each amounting to RM21,207,849 in respect of the previous financial year ended 31 January 2004. On 1 January 2005, the Company paid a yearly dividend of 5% net of taxation on 260,524,616 irredeemable convertible preference shares of RM0.10 each amounting to RM1,302,624. At the forthcoming Annual General Meeting, a final dividend in respect of the current financial year ended 31 January 2005 of 4% less taxation based on the issued and paid-up capital as at 31 January 2005 amounting to 598,844,934 ordinary shares of RM1.00 each amounting to RM17,246,734 have been proposed for shareholders' approval. The financial statements for the current financial year do not reflect the proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in shareholders' equity as an appropriation of retained profits in the financial year ending 31 January 2006. TALAM CORPORATION BERHAD (1120-H) DIRECTORS’ REPORT (Cont’d) 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’ (Dr.) Ir. Chan Ah Chye @ Chan Chong Yoon YAM Tengku Sulaiman Shah Al-Haj Ibni Al-Marhum Sultan Salahuddin Abdul Aziz Shah Al-Haj Datuk Ab Rauf bin Yusoh Lai Moo Chan Sulaiman Hew bin Abdullah Tsen Keng Yam Mohd. Alkaf bin Mohd. Kahar (resigned on 15 April 2005) DIRECTORS’ BENEFITS Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benefits by means of acquisition of shares in or debentures of the Company or any other body corporate. Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by directors as shown in Note 35 to the financial statements or the fixed salary of a full time employee of the Company) by reason of a contract made by the Company or a related corporation with any director or with a firm of which he is a member or with a company in which he has a substantial financial interest, other than those benefits which may deemed to have arisen by virtue of those contracts, agreements and transactions entered into in the ordinary course of business between the Company and its subsidiaries and companies in which the directors are deemed to have substantial financial interest and as disclosed in Note 44 to the financial statements. 43 DIRECTORS’ INTERESTS According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial year in ordinary shares, warrants and irredeemable convertible preference shares in the Company and its related corporations during the financial year were as follows: < ———————Number of Ordinary Shares of RM1.00 Each——————— > 1 February 31 January 2004 Bought Conversion Sold 2005 The Company Direct Interest Tan Sri Dato’ (Dr.) Ir Chan Ah Chye @ Chan Chong Yoon 75,254,762 2,707,800 12,230,806 (53,200,000) 36,993,368 YAM Tengku Sulaiman Shah Al-Haj Ibni Al-Marhum Sultan Salahuddin Abdul Aziz Shah Al-Haj 500 – – – 500 Mohd. Alkaf bin Mohd. Kahar 41,166 – – (36,100) 5,066 Lai Moo Chan 46,641 – – – 46,641 Sulaiman Hew bin Abdullah 42,906 – – – 42,906 ANNUAL REPORT 2005 DIRECTORS’ REPORT (Cont’d) DIRECTORS’ INTERESTS (Cont’d) < ———————Number of Ordinary Shares of RM1.00 Each——————— > 1 February 31 January 2004 Bought Conversion Sold 2005 The Company Indirect Interest Tan Sri Dato’ (Dr.) Ir Chan Ah Chye (1) @ Chan Chong Yoon 325,898,643 50,000 1,699,134 (25,944,500) 301,703,277 Mohd. Alkaf (2) bin Mohd. Kahar 125,000 – – – 125,000 (1) Deemed interested through his spouse, Puan Sri Datin Thong Nyok Choo and his daughter, Chan Siu Wei and by virtue of his direct and indirect interest in Kumpulan Europlus Berhad, Pengurusan Projek Bersistem Sdn. Bhd., Faircrest Sdn. Bhd. (In Liquidation) and Prosperous Inn Sdn. Bhd. pursuant to Section 6A of the Companies Act, 1965. (2) Deemed interested through his spouse, Lailatool Badriah Bt Mahmood and his daughters, Farah Marliza Bt Mohd Alkaf and Farah Azlina Bt Mohd Alkaf. < —————————5-Year 5% Irredeemable Convertible————————— > Preference Shares (“ICPS”) 1 February 31 January 2004 Bought Conversion Sold 2005 44 The Company Direct Interest Tan Sri Dato’ (Dr.) Ir. Chan Ah Chye @ Chan Chong Yoon 208,187,545 – (122,308,083) – 85,879,462 Mohd. Alkaf bin Mohd. Kahar 147,916 – – – 147,916 Lai Moo Chan 110,307 – – – 110,307 Indirect Interest Tan Sri Dato’ (Dr.) Ir. Chan Ah Chye (3) @ Chan Chong Yoon 59,267,338 3,017,000 (16,991,352) (7,361,250) 37,931,736 Mohd. Alkaf (4) bin Mohd. Kahar 312,500 – – – 312,500 (3) Deemed interested through his interest in Pengurusan Projek Bersistem Sdn. Bhd. and Faircrest Sdn. Bhd. (In Liquidation) pursuant to Section 6A of the Companies Act, 1965. (4) Deemed interested through his spouse, Lailatool Badriah Bt Mahmood and his daughters, Farah Marliza Bt Mohd Alkaf and Farah Azlina Bt Mohd Alkaf. Tan Sri Dato’ (Dr.) Ir. Chan Ah Chye @ Chan Chong Yoon, by virtue of his interests in shares of the Company is also deemed interested in shares of all the Company’s subsidiaries to the extent the Company has an interest. None of the other directors in office at the end of the financial year had any interest in shares, warrants and ICPS in the Company or its related corporations during the financial year. TALAM CORPORATION BERHAD (1120-H) DIRECTORS’ REPORT (Cont’d) ISSUE OF SHARES During the financial year, the Company increased its issued and paid-up share capital from RM607,913,678 to RM624,398,262 by way of issuance of the following: (i) 16,478,584 ordinary shares of RM1.00 each amounting to RM16,478,584 pursuant to the conversion of 7% Irredeemable Convertible Unsecured Loan Stocks ("ICULS") 2003/2005 as disclosed in Note 26; and (ii) 6,000 ordinary shares of RM1.00 each amounting to RM6,000 pursuant to the conversion of 7% ICULS 2003/2006 as disclosed in Note 26. The new ordinary shares rank pari passu in all respects with the existing ordinary shares of the Company except that they are not entitled to any dividends, allotments and/or other distributions unless the allotment of the new ordinary shares is made on or prior to the entitlement date of such dividends, rights, allotments and/ or other distributions. SHARE BUY BACK During the financial year, the Company: (a) repurchased its issued ordinary shares from the open market which were financed by internally generated funds. The number of ordinary shares repurchased during the financial year was 5,092,500 ordinary shares at prices ranging from RM1.07 to RM1.40 per share. The total consideration for the shares repurchased during the year including transaction costs was RM5,700,790. The shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act, 1965. 45 (b) sold the entire treasury shares held of 5,112,500 ordinary shares in the open market at prices ranging from RM1.12 to RM1.15 per share for a total consideration of RM5,862,000 thereby resulting in a gain of RM138,000 to the Company. The details of the Share Buy Back are as follows: Number of Ordinary Shares of RM1.00 Each Amount ‘000 RM’000 At 1 February 2004 20 23 Repurchased during the year 5,092 5,701 Less : Sold during the year (5,112) (5,724) At 31 January 2005 – – EMPLOYEES’ SHARE OPTION SCHEME The main features of Employees’ Share Option Scheme are as disclosed in Note 48 to the financial statements.