GPB Financial Statement 2014
GPB Financial Statement 2014
GPB Financial Statement 2014
Directors’ report 60 - 61
Statement by directors 62
Statutory declaration 62
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 December 2014.
Principal activities
The principal activities of the Company are investment holding and provision of management services to the subsidiaries.
The principal activities of the subsidiaries and associates of the Group are stated in Notes 16 and 17 to the financial
statements respectively.
There have been no significant changes in the nature of the principal activities during the financial year.
Results
Group Company
RM’000 RM’000
There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in
the financial statements.
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
No dividends were paid or declared since the end of the previous financial year. The directors do not recommend
the payment of any dividends in respect of the current financial year.
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:
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 the 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 the directors or
the fixed salary of a full-time employee of the Company as shown in Note 11 to the financial statements) 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.
Directors’ interests
According to the register of directors’ shareholdings, none of the directors who held office at the end of the financial
year, had any interest in shares in the Company or its related corporations during the financial year.
6 0 | G ol d e n P h a r o s B e r h a d (152205-W)
Other statutory information
(a) Before the statements of profit or loss and other comprehensive income and statements of financial position
of the Group and of the Company were made out, the directors took reasonable steps:
(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making
of provision for doubtful debts and satisfied themselves that there were no known bad debts and that
adequate provision had been made for doubtful debts; and
(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting
records in the ordinary course of business had been written down to an amount which they might be
expected so to realise.
(b) At the date of this report, the directors are not aware of any circumstances which would render:
(i) it necessary to write off any bad debts or the amount of the provision for doubtful debts in the financial
statements of the Group and of the Company inadequate to any substantial extent; and
(ii) the values attributed to the current assets in the financial statements of the Group and of the Company
misleading.
(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would
render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company
misleading or inappropriate.
(d) 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 which would render any amount stated
in the financial statements misleading.
(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial
year which secures the liabilities of any other person; or
(ii) any contingent liability of the Group or of the Company which has arisen since the end of the financial
year.
(i) no contingent or other liability 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 affect the ability of the
Group or of the Company to meet their obligations when they fall due; and
(ii) 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 or of the Company for the financial year in which this report is made.
Auditors
The auditors, Ernst & Young, have expressed their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the directors dated 15 April 2015
Dato’ Haji Abdul Rahman bin Bakar Dato’ Haji Osman bin Muda
We, Dato’ Haji Abdul Rahman bin Bakar and Dato’ Haji Osman bin Muda, being two of the directors of Golden
Pharos Berhad, do hereby state that, in the opinion of the directors, the accompanying financial statements set
out on pages 65 to 118 are drawn up in accordance with Malaysian Financial Reporting Standards, International
Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia so as to give a true and
fair view of the financial position of the Group and of the Company as at 31 December 2014 and of their financial
performance and cash flows for the year then ended.
The information set out in Note 37 to the financial statements have been prepared in accordance with the Guidance
on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant
to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.
Signed on behalf of the Board in accordance with a resolution of the directors dated 15 April 2015
Dato’ Haji Abdul Rahman bin Bakar Dato’ Haji Osman bin Muda
Statutory declaration
Pursuant to Section 169(16) of the Companies Act 1965
I, Suhairi bin Sulong, being the officer primarily responsible for the financial management of Golden Pharos Berhad,
do solemnly and sincerely declare that the accompanying financial statements set out on pages 65 to 118 are in
my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue
of the provisions of the Statutory Declarations Act 1960.
Before me,
6 2 | G ol d e n P h a r o s B e r h a d (152205-W)
Independent auditors’ report to the members of Golden Pharos Berhad
(Incorporated in Malaysia)
We have audited the financial statements of Golden Pharos Berhad, which comprise the statements of financial
position as at 31 December 2014 of the Group and of the Company, and statements of profit or loss and other
comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the
Company for the year then ended, and a summary of significant accounting policies and other explanatory
information, as set out on pages 65 to 118.
The directors of the Company are responsible for the preparation of financial statements so as to give a true and
fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards
and the requirements of the Companies Act 1965 in Malaysia. The directors are also responsible for such internal
control as the directors determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit
in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement
of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal
control relevant to the entity’s preparation of the financial statements that give a true and fair view in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the
Company as at 31 December 2014 and of their financial performance and cash flows for the year then ended in
accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the
requirements of the Companies Act 1965 in Malaysia.
In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the
Company and its subsidiaries have been properly kept in accordance with the provisions of the Act.
(b) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial
statements of the Company are in form and content appropriate and proper for the purposes of the preparation
of the consolidated financial statements and we have received satisfactory information and explanations
required by us for those purposes.
(c) The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification and
did not include any comment required to be made under Section 174(3) of the Act.
The supplementary information set out in Note 37 on page 118 is disclosed to meet the requirement of Bursa Malaysia
Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the
supplementary information in accordance with Guidance on Special Matter No.1, Determination of Realised and
Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirement,
as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities
Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the
MIA Guidance and the directive of Bursa Malaysia Securities Berhad.
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the
Companies Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for
the content of this report.
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Statements of profit or loss and other comprehensive income
For the financial year ended 31 December 2014
Group Company
Note 2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
The accompanying accounting policies and explanatory information form an integral part of the financial statements.
Group Company
Note 2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
Assets
Non-current assets
Property, plant and equipment 14 68,569 69,140 8,478 8,343
Goodwill 15 - - - -
Investments in subsidiaries 16 - - 45,021 45,021
Investments in associates 17 263 - - -
Deferred tax assets 18 211 429 - -
Investment securities 19 7,758 8,900 - -
76,801 78,469 53,499 53,364
Current assets
Inventories 20 13,054 18,672 - -
Trade and other receivables 21 14,581 16,601 3,304 20,322
Prepayments 3,614 5,026 254 5
Tax recoverable 785 1,751 - -
Cash and bank balances 22 19,883 5,973 632 242
51,917 48,023 4,190 20,569
Non-current liabilities
Retirement benefit obligations 24 6,000 5,120 236 168
Deferred tax liabilities 18 1,937 2,517 414 496
Borrowings 23 1,190 918 228 150
Other payables 25 - - 1 1
9,127 8,555 879 815
Total liabilities 41,934 53,324 30,600 37,478
The accompanying accounting policies and explanatory information form an integral part of the financial statements.
6 6 | G ol d e n P h a r o s B e r h a d (152205-W)
Statements of changes in equity
For the financial year ended 31 December 2014
Opening balance at 1 January 2014 73,168 67,273 625 21,242 (15,972) 6,546 200 (22,718)
Profit for the year 14,846 - - 14,846 - - - -
Other comprehensive income
- Fair value adjustment reserve 27 (1,230) - - - (1,230) (1,230) - -
Total comprehensive income 13,616 - - 14,846 (1,230) (1,230) - -
Closing balance at 31 December 2014 86,784 67,273 625 36,088 (17,202) 5,316 200 (22,718)
Opening balance at 1 January 2013 72,466 67,273 625 23,793 (19,225) 3,493 - (22,718)
Loss for the year (2,551) - - (2,551) - - - -
Other comprehensive income
- Fair value adjustment reserve 27 3,053 - - - 3,053 3,053 - -
Total comprehensive income 502 - - (2,551) 3,053 3,053 - -
Transaction with owner
Waiver of amount due to a corporate
shareholder 200 - - - 200 - 200 -
Closing balance at 31 December 2013 73,168 67,273 625 21,242 (15,972) 6,546 200 (22,718)
The accompanying accounting policies and explanatory information form an integral part of the financial statements.
Non-distributable
Equity
contribution
Equity, Share Share Accumulated Other from
2014 total capital premium losses reserve shareholder
Company Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
6 8 | G ol d e n P h a r o s B e r h a d
Opening balance at 1 January 2014 36,455 67,273 625 (31,643) 200 200
Total comprehensive income (9,366) - - (9,366) - -
Closing balance at 31 December 2014 27,089 67,273 625 (41,009) 200 200
(152205-W)
Opening balance at 1 January 2013 34,840 67,273 625 (33,058) - -
Total comprehensive income 1,415 - - 1,415 - -
Transaction with owner
Waiver of amount due to shareholder 27 200 - - - 200 200
Closing balance at 31 December 2013 36,455 67,273 625 (31,643) 200 200
The accompanying accounting policies and explanatory information form an integral part of the financial statements.
Statements of cash flows
For the financial year ended 31 December 2014
Group Company
Note 2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
Operating activities
Profit/(loss) before tax 20,395 (1,855) (9,448) 1,339
Adjustments for:
Dividend income
- Investments in subsidiaries 4 - - (8,726) (1,239)
- Investment securities 6 (169) (409) - -
Profit from Al-Mudharabah 7 (20) (9) - (1)
Finance costs 8 512 1,459 328 1,230
Depreciation of property, plant and
equipment 9 4,550 4,477 293 266
Impairment loss on inventories 9 33 - - -
Gain on disposal of property, plant
and equipment 7 (135) (33) - (1)
Gain on disposal of assets
classified as held for sale 7 - (35) - (35)
Property, plant and equipment
written off 9 22 13 1 6
Impairment loss on trade and other
receivables 9 582 514 16,465 -
Reversal of allowance for impairment
of trade and other receivables 7 - (31) - -
Reversal of allowance for impairment
of loss in a subsidiary 9 - - - (2,104)
Interest income 5 (323) (106) (27) (499)
Net unrealised foreign exchange gain 7 (48) (32) - -
Share of results of associate (263) - - -
Provision for retirement benefits 10 630 656 34 32
Provision for short-term
accumulating compensated
absences 10 97 86 25 21
Total adjustments 5,468 6,550 8,393 (2,324)
Group Company
Note 2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
Investing activities
Purchase of property, plant and equipment 14 (3,121) (1,611) (271) (32)
Proceeds from disposal of property,
plant and equipment 182 81 - 1
Placement of deposits in licensed banks 203 (42) - -
Proceed from disposal of assets
classified as held for sale - 42 - 42
Dividend received
- Investment securities 81 354 - -
- Investments in subsidiaries - - 8,726 1,285
Profit sharing and interest received 323 349 26 1
Net cash flows (used in)/from
investing activities (2,332) (827) 8,481 1,297
Financing activities
Drawdowns from borrowings 303 7,962 - -
Repayment of borrowings (2,852) (9,498) - -
Repayment of obligations under finance
leases (514) (351) (86) (80)
Cost of fund and interest paid (18) (18) (10) (13)
Net cash flows used in
financing activities (3,081) (1,905) (96) (93)
Net increase in cash
and cash equivalents 15,501 2,736 390 192
Cash and cash equivalents at
1 January 2,398 (338) 242 50
Cash and cash equivalents at
31 December 22 17,899 2,398 632 242
The accompanying accounting policies and explanatory information form an integral part of the financial statements.
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Notes to the financial statements
For the financial year ended 31 December 2014
1. Corporate information
The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on
the Main Market of Bursa Malaysia Securities Berhad. The registered office of the Company is located at Lot
PT 3071, Kawasan Perindustrian Chendering, 21080 Kuala Terengganu, Terengganu Darul Iman.
The principal place of business of the Company is located at 66-2 Taman Sri Intan, Jalan Sultan Omar, 20300
Kuala Terengganu, Terengganu Darul Iman.
The holding company is Terengganu Incorporated Sdn. Bhd., a company incorporated in Malaysia.
The principal activities of the Company are investment holding and provision of management services to the
subsidiaries. The principal activities of the subsidiaries and associates are set out in Notes 16 and 17 respectively.
There have been no significant changes in the nature of the principal activities during the financial year.
The financial statements of the Group and of the Company have been prepared in accordance with
Malaysian Financial Reporting Standards (“MFRS”), International Financial Reporting Standards (“IFRS”)
and the requirements of the Companies Act 1965 in Malaysia.
The financial statements of the Group and of the Company are prepared under the historical cost
convention except as disclosed in the summary of significant accounting policies.
The financial statements are presented in Ringgit Malaysia (“RM”) and all values are rounded to the
nearest thousand (RM’000) except when otherwise indicated.
The accounting policies adopted are consistent with those of the previous financial year except as follows:
On 1 January 2014, the Group and the Company adopted the following new and amended MFRS
and IC Interpretation mandatory for annual financial periods beginning on or after 1 January 2014.
Effective for
annual periods
Description beginning or after
The amendments clarify the meaning of “currently has a legally enforceable right to set-off” and
“simultaneous realisation and settlement”. These amendments are to be applied retrospectively. These
amendments have no impact on the Group, since none of the entities in the Group has any offsetting
arrangements.
These amendments provide an exception to the consolidation requirement for entities that meet the
definition of an investment entity under MFRS 10 Consolidated Financial Statements and must be applied
retrospectively, subject to certain transition relief. The exception to consolidation requires investment
entities to account for subsidiaries at fair value through profit or loss. These amendments have no impact
on the Group, since none of the entities in the Group qualifies to be an investment entity under MFRS 10.
Adoption of the above Amendments and IC Interpretation did not have any significant effect on the
financial performance and position of the Group and the Company.
The standards and interpretations that are issued but not yet effective up to the date of issuance of the
Group’s and the Company’s financial statements are disclosed below. The Group and the Company
intend to adopt these standards, if applicable, when they become effective.
Effective for
annual periods
Description beginning or after
Amendments to MFRS 119: Defined Benefit Plans: Employee Contribution 1 July 2014
Annual Improvements to MFRS 2010-2012 Cycle 1 July 2014
Annual Improvements to MFRS 2011-2013 Cycle 1 July 2014
Annual Improvements to MFRS 2012-2014 Cycle 1 January 2016
Amendments to MFRS 116 and MFRS 138: Clarification of Acceptable
Methods of Depreciation and Amortisation 1 January 2016
Amendments to MFRS 116 and MFRS 141: Agriculture: Bearer Plants 1 January 2016
Amendments to MFRS 10 and MFRS 128: Sale or Contribution of
Assets between an Investor and its Associate or Joint Venture 1 January 2016
Amendments to MFRS 11: Accounting for Acquisitions of Interests in Joint Operations 1 January 2016
Amendments to MFRS 127: Equity Method in Separate Financial Statements 1 January 2016
Amendments to MFRS 101: Disclosure Initiatives 1 January 2016
Amendments to MFRS 10, MFRS 12 and MFRS 128: Investment Entities:
Applying the Consolidation Exception 1 January 2016
MFRS 14 Regulatory Deferral Accounts 1 January 2016
MFRS 15 Revenue from Contracts with Customers 1 January 2017
MFRS 9 Financial Instruments 1 January 2018
The directors expect that the adoption of the above Amendments and standards will have no material
impact on the financial statements of the Group and the Company in the period of initial application
except as discussed below:
The directors of the Company do not anticipate that the application of these amendments will have
a significant impact on the Company’s financial statements.
Amendments to MFRS 116 and MFRS 138: Clarification of Acceptable Methods of Depreciation and
Amortisation
The amendments clarify that revenue reflects a pattern of economic benefits that are generated from
operating a business (of which the asset is part) rather than the economic benefits that are consumed
through the use of an asset. As a result, a revenue-based method cannot be used to depreciate property,
plant and equipment and may only be used in very limited circumstances to amortise intangible assets.
The amendments are effective prospectively for annual periods beginning on or after 1 January 2016,
with early adoption permitted. These amendments are not expected to have any impact to the Group
as the Group has not used a revenue-based method to depreciate its non-current assets.
7 2 | G ol d e n P h a r o s B e r h a d (152205-W)
2. Summary of significant accounting policies (continued)
The amendments to MFRS 101 include narrow-focus improvements in the following five areas:
- Materiality
- Disaggregation and subtotals
- Notes structure
- Disclosure of accounting policies
- Presentation of items of other comprehensive income arising from equity accounted investments
The Directors of the Company do not anticipate that the application of these amendments will have
a material impact on the Group’s and the Company’s financial statements.
Amendments to MFRS 10, MFRS 12 and MFRS 128: Investment Entities: Applying the Consolidation Exception
The amendments clarify that the exemption from presenting consolidated financial statements applies
to a parent entity that is a subsidiary of an investment entity, when the investment entity measures
all of its subsidiaries at fair value. The amendments further clarify that only a subsidiary that is not an
investment entity itself and provides support services to the investment entity is consolidated. In addition,
the amendments also provides that if an entity that is not itself an investment entity has an interest in
an associate or joint venture that is an investment entity, the entity may, when applying the equity
method, retain the fair value measurement applied by that investment entity associate or joint venture
to the investment entity associate’s or joint venture’s interests in subsidiaries.
MFRS 15 establishes a new five-step models that will apply to revenue arising from contracts with customers.
MFRS 15 will supersede the current revenue recognition guidance including MFRS 118 Revenue, MFRS
111 Construction Contracts and the related interpretations when it becomes effective.
The core principle of MFRS 15 is that an entity should recognise revenue which depict the transfer of
promised goods or services to customers in an amount that reflects the consideration to which the
entity expects to be entitled in exchange for those goods or services.
Under MFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e
when “control” of the goods or services underlying the particular performance obligation is transferred
to the customer.
Either a full or modified retrospective application is required for annual periods beginning on or after 1
January 2017 with early adoption permitted. The Directors anticipate that the application of MFRS 15
will have no impact on the amounts reported and disclosures made in the the Company’s financial
statements.
In November 2014, MASB issued the final version of MFRS 9 Financial Instruments which reflects all
phases of the financial instruments project and replaces MFRS 139 Financial Instruments: Recognition
and Measurement and all previous versions of MFRS 9. The standard introduces new requirements for
classification and measurement, impairment and hedge accounting. MFRS 9 is effective for annual
periods beginning on or after 1 January 2018, with early application permitted. Retrospective application
is required, but comparative information is not compulsory. The adoption of MFRS 9 will have an effect on
the classification and measurement of the Group’s financial assets, but no impact on the classification
and measurement of the Group’s financial liabilities.
The Annual Improvements to MFRS 2010-2012 Cycle include a number of amendments to various MFRS,
which are summarised below. The Directors of the Company do not anticipate that the application of
these amendments will have a significant impact on the Group’s and the Company’s financial statements.
Standards Descriptions
MFRS 3 Business Combinations The amendments to MFRS 3 clarifies that contingent consideration
classified as liabilities (or assets) should be measured at fair value
through profit or loss at each reporting date, irrespective of
whether the contingent consideration is a financial instrument
within the scope of MFRS 9 or MFRS 139. The amendments are
effective for business combinations for which the acquisition
date is on or after 1 July 2014.
MFRS 116 Property, Plant and The amendments remove inconsistencies in the accounting
Equipment and MFRS 138 for accumulated depreciation or amortisation when an item
Intangible Assets of property, plant and equipment or an intangible asset is revalued.
The amendments clarify that the gross carrying amount is
adjusted in a manner consistent with the revaluation of the
carrying amount of the asset and that accumulated depreciation/
amortisation is the difference between the gross carrying amount
and the carrying amount after taking into account accumulated
impairment losses.
MFRS 124 Related Party Disclosures The amendments clarify that a management entity providing
key management personnel services to a reporting entity is a
related party of the reporting entity. The reporting entity should
disclose as related party transactions the amounts incurred
for the service paid or payable to the management entity for
the provision of key management personnel services.
The Annual Improvements to MFRS 2011-2013 Cycle include a number of amendments to various MFRS,
which are summarised below. The Directors of the Company do not anticipate that the application
of these amendments will have a significant impact on the Group’s and the Company’s financial
statements.
Standards Descriptions
MFRS 13 Fair Value Measurement The amendments to MFRS 13 clarify that the portfolio exception in
MFRS 13 can be applied not only to financial assets and
financial liabilities, but also to other contracts within the scope of
MFRS 9 (or MFRS 139 as applicable).
7 4 | G ol d e n P h a r o s B e r h a d (152205-W)
2. Summary of significant accounting policies (continued)
The Annual Improvements to MFRS 2012-2014 Cycle include a number of amendments to various MFRS,
which are summarised below. The Directors of the Company do not anticipate that the application
of these amendments will have a significant impact on the Group’s and the Company’s financial
statements.
Standards Descriptions
MFRS 7 Financial Instruments: The amendment clarifies that a servicing contract that includes
Disclosures a fee can constitute continuing involvement in a financial asset.
An entity must assess the nature of the fee and arrangement
against the guidance for continuing involvement in MFRS 7 in
order to assess whether the disclosures are required.
The consolidated financial statements comprise the financial statements of the Company and its
subsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparation
of the consolidated financial statements are prepared for the same reporting date as the Company.
Consistent accounting policies are applied to like transactions and events in similar circumstances.
The Company controls an investee if and only if the Company has all the following:
(i) Power over the investee (i.e existing rights that give it the current ability to direct the relevant
activities of the investee);
(ii) Exposure, or rights, to variable returns from its investment with the investee; and
(iii) The ability to use its power over the investee to affect its returns.
When the Company has less than a majority of the voting rights of an investee, the Company considers
the following in assessing whether or not the Company’s voting rights in an investee are sufficient to
give it power over the investee:
(i) The size of the Company’s holding of voting rights relative to the size and dispersion of holdings
of the other vote holders;
(ii) Potential voting rights held by the Company, other vote holders or other parties;
(iii) Rights arising from other contractual arrangements; and
(iv) Any additional facts and circumstances that indicate that the Company has, or does not have,
the current ability to direct the relevant activities at the time that decisions need to be made,
including voting patterns at previous shareholders’ meetings.
Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases when
the Company loses control of the subsidiary. All intra-group balances, income and expenses and
unrealised gains and losses resulting from intra-group transactions are eliminated in full.
Losses within a subsidiary are attributed to the non-controlling interests even if that results in a deficit
balance.
Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control
over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s
interests and the non-controlling interests are adjusted to reflect the changes in their relative interests
in the subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of
the Company.
When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) the
aggregate of the fair value of the consideration received and the fair value of any retained interest and
(ii) the previous carrying amount of the assets and liabilities of the subsidiary and any non-controlling
interest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has been recognised
in other comprehensive income and accumulated in equity are reclassified to profit or loss or where
applicable, transferred directly to retained earnings. The fair value of any investment retained in the
former subsidiary at the date control is lost is regarded as the cost on initial recognition of the investment.
Business combinations
Acquisitions of subsidiaries are accounted for using the acquisition method. The cost of an acquisition
is measured as the aggregate of the consideration transferred, measured at acquisition date fair value
and the amount of any non-controlling interests in the acquiree. The Group elects on a transaction-by-
transaction basis whether to measure the non-controlling interests in the acquiree either at fair value
or at the proportionate share of the acquiree’s identifiable net assets. Transaction costs incurred are
expensed and included in administrative expenses.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the
acquisition date. Subsequent changes in the fair value of the contingent consideration which is deemed
to be an asset or liability, will be recognised in accordance with MFRS 139 either in profit or loss or as
a change to other comprehensive income. If the contingent consideration is classified as equity, it
will not be remeasured. Subsequent settlement is accounted for within equity. In instances where the
contingent consideration does not fall within the scope of MFRS 139, it is measured in accordance with
the appropriate MFRS.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and
pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives
in host contracts by the acquiree.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s
previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through
profit or loss.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred
and the amount recognised for non-controlling interests over the net identifiable assets acquired and
liabilities assumed. If this consideration is lower than fair value of the net assets of the subsidiary acquired,
the difference is recognised in profit or loss. The accounting policy for goodwill is set out in Note 2.7.
2.5 Subsidiaries
A subsidiary is an entity over which the Group has all the following:
(i) Power over the investee (i.e existing rights that give it the current ability to direct the relevant
activities of the investee);
(ii) Exposure, or rights, to variable returns from its investment with the investee; and
(iii) The ability to use its power over the investee to affect its returns.
In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost
less impairment losses. On disposal of such investments, the difference between net disposal proceeds
and their carrying amounts is included in profit or loss.
7 6 | G ol d e n P h a r o s B e r h a d (152205-W)
2. Summary of significant accounting policies (continued)
An associate is an entity in which the Group has significant influence. Significant influence is the power
to participate in the financial and operating policy decisions of the investee but is not control or joint
control over those policies.
On acquisition of an investment in associate, any excess of the cost of investment over the Group’s
share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill
and included in the carrying amount of the investment. Any excess of the Group’s share of the net fair
value of the identifiable assets and liabilities of the investee over the cost of investment is excluded
from the carrying amount of the investment and is instead included as income in the determination
of the Group’s share of the associate’s profit or loss for the period in which the investment is acquired.
An associate is equity accounted for from the date on which the investee becomes an associate.
Under the equity method, on initial recognition the investment in an associate is recognised at cost, and
the carrying amount is increased or decreased to recognise the Group’s share of the profit or loss and
other comprehensive income of the associate after the date of acquisition. When the Group’s share
of losses in an associate equal or exceeds its interest in the associate, the Group does not recognise
further losses, unless it has incurred legal or constructive obligations or made payments on behalf of
the associate.
Profits and losses resulting from upstream and downstream transactions between the Group and its
associate are recognised in the Group’s financial statements only to the extent of unrelated investors’
interests in the associate. Unrealised losses are eliminated unless the transaction provides evidence of
an impairment of the asset transferred.
The financial statements of the associates are prepared as of the same reporting date as the Company.
Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.
After application of the equity method, the Group applies MFRS 139 Financial Instruments: Recognition
and Measurement to determine whether it is necessary to recognise any additional impairment loss
with respect to its net investment in the associate. When necessary, the entire carrying amount of the
investment is tested for impairment in accordance with MFRS 136 Impairment of Assets as a single asset,
by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its
carrying amount. Any impairment loss is recognised in profit or loss. Reversal of an impairment loss is
recognised to the extent that the recoverable amount of the investment subsequently increases.
In the Company’s separate financial statements, investments in associates are accounted for at cost
less impairment losses. On disposal of such investments, the difference between net disposal proceeds
and their carrying amounts is included in profit or loss.
2.7 Goodwill
Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less any
accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition
date, allocated to the Group’s cash-generating units that are expected to benefit from the synergies
of the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to
those units.
The cash-generating units to which goodwill have been allocated is tested for impairment annually
and whenever there is an indication that the cash-generating unit may be impaired. Impairment
is determined for goodwill by assessing the recoverable amount of each cash- generating unit (or
group of cash-generating units) to which the goodwill relates. Where the recoverable amount of the
cash-generating unit is less than the carrying amount, an impairment loss is recognised in profit or loss.
Impairment losses recognised for goodwill are not reversed in subsequent periods.
Where goodwill forms part of a cash-generating unit and part of the operation within that cash- generating
unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying
amount of the operation when determining the gain or loss on disposal of the operation. Goodwill
disposed of in this circumstance is measured based on the relative fair values of the operations disposed
of and the portion of the cash-generating unit retained.
All items of property, plant and equipment are initially recorded at cost. The cost of an item of property,
plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits
associated with the item will flow to the Group and the cost of the item can be measured reliably.
Subsequent to recognition, property and equipment are measured at cost less accumulated depreciation
and any accumulated impairment losses. When significant parts of property and equipment are required
to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives
and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised
in the carrying amount of the plant and equipment as a replacement if the recognition criteria are
satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.
Freehold land has an unlimited useful life and therefore is not depreciated. Work-in progress is also not
depreciated as this asset is not available for use. Depreciation of other property, plant and equipment
is provided for on a straight-line basis to write off the cost of each asset to its residual value over the
estimated useful lives of the assets, at the following annual rates and useful life:
The carrying values of property, plant and equipment are reviewed for impairment when events or
changes in circumstances indicate that the carrying value may not be recoverable.
The residual value, useful life and depreciation method are reviewed at each financial year-end, and
adjusted prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included
in the profit or loss in the year the asset is derecognised.
The Group assesses at each reporting date whether there is an indication that an asset may be impaired.
If any such indication exists, or when an annual impairment assessment for an asset is required, the
Group makes an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use.
For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash-generating units (“CGU”)).
In assessing value in use, the estimated future cash flows expected to be generated by the asset are
discounted to their present value using a pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset. Where the carrying amount of an asset
exceeds its recoverable amount, the asset is written down to its recoverable amount. Impairment losses
recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount
of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of
the other assets in the unit or groups of units on a pro-rata basis.
7 8 | G ol d e n P h a r o s B e r h a d (152205-W)
2. Summary of significant accounting policies (continued)
An assessment is made at each reporting date as to whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. A previously recognised
impairment loss is reversed only if there has been a change in the estimates used to determine the
asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the
carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed
the carrying amount that would have been determined, net of depreciation, had no impairment loss
been recognised previously. Such reversal is recognised in profit or loss, unless the asset is measured at
revalued amount, in which case the reversal is treated as a revaluation increase. Impairment loss on
goodwill is not reversed in a subsequent period.
Financial assets are recognised in the statements of financial position when, and only when, the Group
and the Company become a party to the contractual provisions of the financial instrument.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of
financial assets not at fair value through profit or loss, directly attributable transaction costs.
The Group and the Company determine the classification of their financial assets at initial recognition,
and the categories include financial asset at fair value through profit or loss, held-to- maturity, loans
and receivables and available-for-sale financial assets.
The Group and the Company have classified their financial assets as loans and receivables and available-
for-sale financial assets.
Financial assets with fixed or determinable payments that are not quoted in an active market
are classified as loans and receivables.
Subsequent to initial recognition, loans and receivables are measured at amortised cost using the
effective interest method, less impairment. Gains and losses are recognised in profit or loss when
the loans and receivables are derecognised or impaired, and through the amortisation process.
Loans and receivables are classified as current assets, except for those having maturity dates
later than 12 months after the reporting date which are classified as non-current.
Available-for-sale are financial assets that are designated as available for sale or are not classified
as financial assets at fair value through profit or loss, loans and receivables or held-to-maturity
investments.
After initial recognition, available-for-sale financial assets are measured at fair value. Any gains
or losses from changes in fair value of the financial assets are recognised in other comprehensive
income, except that impairment losses, foreign exchange gains and losses on monetary instruments
and interest calculated using the effective interest method are recognised in profit or loss. The
cumulative gain or loss previously recognised in other comprehensive income is reclassified from
equity to profit or loss as a reclassification adjustment when the financial asset is derecognised.
Interest income calculated using the effective interest method is recognised in profit or loss. Dividends
on an available-for-sale financial assets are recognised in profit or loss when the Company’s right
to receive payment is established.
Investments in equity instruments whose fair value cannot be reliably measured are measured
at cost less impairment loss.
Available-for-sale financial assets are classified as non-current assets unless they are expected
to be realised within 12 months after the reporting date.
A financial asset is derecognised when the contractual right to receive cash flows from the asset
has expired. On derecognition of a financial asset in its entirety, the difference between the
carrying amount and the sum of the consideration received and any cumulative gain or loss
that had been recognised in other comprehensive income is recognised in profit or loss.
Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets
within the period generally established by regulation convention in the marketplace concerned.
All regular way purchases and sales of financial assets are recognised or derecognised on the
trade date i.e the date that the Group and the Company commit to purchase or sell the asset.
The Group and the Company assess at each reporting date whether there is any objective evidence
that a financial asset is impaired.
(a) Trade and other receivables and other financial assets carried at amortised cost
To determine whether there is objective evidence that an impairment loss on financial assets has
been incurred, the Group and the Company consider factors such as the probability of insolvency
or significant financial difficulties of the debtor and default or significant delay in payments. For
certain categories of financial assets, such as trade receivables, assets that are assessed not to
be impaired individually are subsequently assessed for impairment on a collective basis based on
similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could
include the Group’s and the Company’s past experience of collecting payments, an increase in
the number of delayed payments in the portfolio past the average credit period and observable
changes in national or local economic conditions that correlate with default on receivables.
If any such evidence exists, the amount of impairment loss is measured as the difference between
the asset’s carrying amount and the present value of estimated future cash flows discounted at
the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
The carrying amount of the financial asset is reduced by the impairment loss directly for all
financial assets with the exception of trade receivables, where the carrying amount is reduced
through the use of an allowance account. When a trade receivable becomes uncollectible, it
is written off against the allowance account.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can
be related objectively to an event occurring after the impairment was recognised, the previously
recognised impairment loss is reversed to the extent that the carrying amount of the asset does
not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit
or loss.
If there is objective evidence (such as significant adverse changes in the business environment
where the issuer operates, probability of insolvency or significant financial difficulties of the issuer)
that an impairment loss on financial assets carried at cost has been incurred, the amount of the
loss is measured as the difference between the asset’s carrying amount and the present value of
estimated future cash flows discounted at the current market rate of return for a similar financial
asset. Such impairment losses are not reversed in subsequent periods.
8 0 | G ol d e n P h a r o s B e r h a d (152205-W)
2. Summary of significant accounting policies (continued)
Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer
or obligor, and the disappearance of an active trading market are considerations to determine
whether there is objective evidence that investment securities classified as available-for-sale
financial assets are impaired.
If an available-for-sale financial asset is impaired, an amount comprising the difference between its
cost (net of any principal payment and amortisation) and its current fair value, less any impairment
loss previously recognised in profit or loss, is transferred from other comprehensive income and
recognised in profit or loss.
Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the
subsequent periods. Increase in fair value, if any, subsequent to impairment loss is recognised
in other comprehensive income. For available-for-sale debt investments, impairment losses are
subsequently reversed in profit or loss if an increase in the fair value of the investment can be
objectively related to an event occurring after the recognition of the impairment loss in profit or loss.
Cash and short-term deposits in the statements of financial position comprise cash at banks and on
hand and short-term deposits with a maturity of three months or less.
For the purpose of the statements of cash flows, cash and cash equivalents consist of cash and short-
term deposits, as defined above, net of outstanding bank overdraft.
2.13 Inventories
Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the
inventories to their present location and condition are accounted for as follows:
- Raw materials and consumable materials: purchase costs on a first-in first-out basis.
- Finished goods and work-in-progress: costs of direct materials and labour and a proportion of
manufacturing overheads based on normal operating capacity. These costs are assigned on a
first-in first-out basis.
Net realisable value is the estimated selling price in the ordinary course of business less estimated costs
of completion and the estimated costs necessary to make the sale.
2.14 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of economic resources will be required to settle the obligation
and the amount of the obligation can be estimated reliably.
Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is
no longer probable that an outflow of economic resources will be required to settle the obligation, the
provision is reversed. If the effect of the time value of money is material, provisions are discounted using
a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting
is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Financial liabilities are classified according to the substance of the contractual arrangements entered
into and the definitions of a financial liability.
Financial liabilities, within the scope of MFRS 139, are recognised in the statements of financial position
when, and only when, the Group and the Company become a party to the contractual provisions of
the financial instrument. Financial liabilities are classified as either financial liabilies at fair value through
profit or loss or other financial liabilities.
The Group and the Company have classified their financial liabilities as other financial liabilities.
The Group’s and the Company’s other financial liabilities include trade and other payables and loans
and borrowings.
Trade and other payables are recognised initially at fair value plus directly attributable transaction costs
and subsequently measured at amortised cost using the effective interest method.
Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently
measured at amortised cost using the effective interest method. Borrowings are classified as current
liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12
months after the reporting date.
For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are
derecognised, and through the amortisation process.
A financial liability is derecognised when the obligation under the liability is extinguished. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an exchange or modification is treated
as a derecognition of the original liability and the recognition of a new liability, and the difference in
the respective carrying amounts is recognised in profit or loss.
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated
statements of financial position if, and only if, there is a currently enforceable legal right to offset the
recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle
the liabilities simultaneously.
A financial guarantee contract is a contract that requires the issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due
in accordance with the tems of a debt instrument.
Financial guarantees are recognised initially as a liability at fair value, adjusted for transaction costs that
are directly attributable to the issuance of the guarantee. Subsequent to initial recognition, financial
guarantees are recognised as income in profit or loss over the period of the guarantee. If it is probable
that the liability will be higher than the amount initially recognised less amortisation, the liability is recorded
at the higher amount with the difference charged to profit or loss.
8 2 | G ol d e n P h a r o s B e r h a d (152205-W)
2. Summary of significant accounting policies (continued)
The cost of providing benefits under the defined benefit plans is determined separately for each
plan using the projected unit credit method.
Service costs which include current service costs, past service costs and gains or losses on non-
routine settlements are recognised as expense in profit or loss. Past service costs are recognised
when plan amendment or curtailment occurs.
Net interest on the net defined benefit liability or asset is the change during the period in the
net defined benefit liability or asset that arises from the passage of time which is determined by
applying the discount rate based on high quality corporate bonds to the net defined benefit
liability or asset. Net interest on the net defined benefit liability or asset is recognised as expense
or income in profit or loss.
Remeasurements comprising actuarial gains and losses, return on plan assets and any change in
the effect of the asset ceiling (excluding net interest on defined benefit liability) are recognised
immediately in other comprehensive income in the period in which they arise. Remeasurements
are recognised in retained earnings within equity and are not reclassified to profit or loss in
subsequent periods.
Plan assets are assets that are held by a long-term employee benefit fund or qualifying insurance
policies. Plan assets are not available to the creditors of the Group, nor can they be paid directly
to the Group. Fair value of plan assets is based on market price information. When no market
price is available, the fair value of plan assets is estimated by discounting expected future cash
flows using a discount rate that reflects both the risk associated with the plan assets and the
maturity or expected disposal date of those assets (or, if they have no maturity, the expected
period until the settlement of the related obligations).
The Group’s right to be reimbursed of some or all of the expenditure required to settle a defined
benefit obligation is recognised as a separate asset at fair value when and only when reimbursement
is virtually certain.
Termination benefits are payable when employment is terminated before the normal retirement
date or whenever an employee accepts voluntary redundancy in exchange for these benefits.
The Company recognises termination benefits when it is demonstrably committed to either to
terminate the employment of current employees according to the detailed plan without possibility
of withdrawal; or providing termination benefits as a result of an offer made to encourage
voluntary redundancy. In the case of an offer made to encourage voluntary redundancy, the
measurement of termination benefits is based on the number of employees expected to accept
the offer. Benefits falling due more than 12 months after the reporting date are discounted to
present value.
2.19 Leases
Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership
of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or,
if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to
the amount capitalised. Lease payments are apportioned between the finance charges and reduction
of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.
Finance charges are charged to profit or loss. Contingent rents, if any, are charged as expenses in the
periods in which they are incurred.
Leased assets are depreciated over the estimated useful lives of the assets. However, if there is no
reasonable certainty that the Group will obtain ownership by the end of the lease term, the assets are
depreciated over the shorter of the estimated useful lives and the lease terms.
Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over
the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction
of rental expense over the lease term on a straight-line basis.
Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to
the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences
when the activities to prepare the asset for its intended use or sale are in progress and the expenditures
and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially
completed for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period they are incurred. Borrowing costs
consist of interest and other costs that the Group and the Company incurred in connection with the
borrowing of funds.
2.21 Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group
and the revenue can be reliably measured. Revenue is measured at the fair value of consideration
received or receivable.
Revenue from sale of goods is recognised upon the transfer of significant risks and rewards of
ownership of the goods to the customer. Revenue is not recognised to the extent where there
are significant uncertainties regarding recovery of the consideration due, associated costs or
the possible return of goods.
Rental income is accounted for on a straight-line basis over the lease terms. The aggregate costs
of incentives provided to lessees are recognised as a reduction of rental income over the lease
term on a straight-line basis.
Dividend income is recognised when the Group’s right to receive payment is established.
Current tax assets and liabilities are measured at the amount expected to be recovered from
or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted by the reporting date.
Current taxes are recognised in profit or loss except to the extent that the tax relates to items
recognised outside profit or loss, either in other comprehensive income or directly in equity.
8 4 | G ol d e n P h a r o s B e r h a d (152205-W)
2. Summary of significant accounting policies (continued)
Deferred tax is provided using the liability method on temporary differences at the reporting
date between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes.
Deferred tax liabilities are recognised for all temporary differences, except:
- where the deferred tax liability arises from the initial recognition of goodwill or of an asset
or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; and
Deferred tax assets are recognised for all deductible temporary differences, carry forward of
unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will
be available against which the deductible temporary differences, and the carry forward of
unused tax credits and unused tax losses can be utilised except:
- where the deferred tax asset relating to the deductible temporary difference arises from
the initial recognition of an asset or liability in a transaction that is not a business combination
and, at the time of the transaction, affects neither the accounting profit nor taxable profit
or loss; and
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to
the extent that it is no longer probable that sufficient taxable profit will be available to allow all or
part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at
each reporting date and are recognised to the extent that it has become probable that future
taxable profit will allow the deferred tax assets to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to
the year when the asset is realised or the liability is settled, based on tax rates and tax laws that
have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss.
Deferred tax items are recognised in correlation to the underlying transaction either in other
comprehensive income or directly in equity and deferred tax arising from a business combination
is adjusted against goodwill on acquisition.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to
set off current tax assets against current tax liabilities and the deferred taxes relate to the same
taxable entity and the same taxation authority.
Revenue, expenses and assets are recognised net of the amount of sales tax except:
- Where the sales tax incurred in a purchase of assets or services is not recoverable from
the taxation authority, in which case the sales tax is recognised as part of the cost of
acquisition of the asset or as part of the expense item as applicable; and
- Receivables and payables that are stated with the amount of sales tax.
The net amount of sales tax recoverable from, or payable to, the taxation authority is included
as part of receivables or payables in the statements of financial position.
For management purposes, the Group is organised into operating segments based on their products
and services which are independently managed by the respective segment managers responsible for
the performance of the respective segments under their charge. The segment managers report directly
to the management of the Company who regularly review the segment results in order to allocate
resources to the segments and to assess the segment performance. Additional disclosures on each of
these segments are shown in Note 34, including the factors used to identify the reportable segments
and the measurement basis of segment information.
An equity instrument is any contract that evidences a residual interest in the assets of the Group and
the Company after deducting all of its liabilities. Ordinary shares are equity instruments.
Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction
costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in
the period in which they are declared.
2.25 Contingencies
A contingent liability or asset is a possible obligation or asset that arises from past events and whose
existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not
wholly within the control of the Group.
Contingent liabilities and assets are not recognised in the statements of financial position of the Group.
The Group measures its financial instruments, such as, derivatives, at fair value at each reporting date.
Also, fair values of financial instruments measured at amortised cost are disclosed in Note 31(b).
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is
based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
The principal or the most advantageous market must be accessible to by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would
use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability
to generate economic benefits by using the asset in its highest and best use or by selling it to another
market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximising the use of relevant observable inputs and minimising
the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierachy, described as follows, based on the lowest level input that is
significent to the fair value measurement as a whole:
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group
determines whether transfers have occurred between Levels in the hierarchy by re- assessing categorisation
(based on the lowest level input that is significant to the fair value measurement as a whole) at the
end of each reporting period.
8 6 | G ol d e n P h a r o s B e r h a d (152205-W)
2. Summary of significant accounting policies (continued)
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”).
The consolidated financial statements are presented in Ringgit Malaysia (“RM”), which is also
the Company’s functional currency.
Transactions in foreign currencies are measured in the respective functional currencies of the
Company and its subsidiaries and are recorded on initial recognition in the functional currencies
at exchange rates approximating those ruling at the transaction dates. Monetary assets and
liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the
reporting date. Non-monetary items denominated in foreign currencies that are measured at
historical cost are translated using the exchange rates as at the dates of the initial transactions.
The preparation of the Group’s financial statements requires management to make judgements, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the
disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and
estimates could result in outcomes that could require a material adjustment to the carrying amount of the
asset or liability affected in the future.
There were no significant judgements made in applying the accounting policies of the Group which
may have significant effects of the amounts recognised in the financial statements.
The key assumptions concerning the future and other key sources of estimation uncertainty at the
reporting date that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are discussed below.
The cost of plant and machinery for the manufacture of wood related products is depreciated
on a straight-line basis over the assets’ useful lives. Management estimates the useful lives of
these plant and machinery to be within 5 to 17 years. These are common life expectancies
applied in the industry. Changes in the expected level of usage and technological developments
could impact the economic useful lives and the residual values of these assets, therefore future
depreciation charges could be revised. The carrying amount of the Group’s plant and machinery
at the reporting date is disclosed in Note 14.
Deferred tax assets are recognised for all unabsorbed tax losses and unutilised capital allowances
to the extent that it is probable that taxable profit will be available against which the losses and
capital allowances can be utilised. Significant management judgement is required to determine
the amount of deferred tax assets that can be recognised, based upon the likely timing and
level of future taxable profits together with future tax planning strategies.
The Group assesses at each reporting date whether there is any objective evidence that a
financial asset is impaired. To determine whether there is objective evidence of impairment, the
Group considers factors such as the probability of insolvency or significant financial difficulties of
the debtor and default or significant delay in payments.
Where there is objective evidence of impairment, the amount and timing of future cash flows are
estimated based on historical loss experience for assets with similar credit risk characteristics. The
carrying amount of the Group’s loans and receivables at the reporting date is disclosed in Note 21.
The cost of defined benefit pension plan is determined using the actuarial valuations. The actuarial
valuation involves making assumptions about discount rates, future salary increases and mortality
rates. All assumptions are reviewed at each reporting date. The carrying amounts of the Group’s
and of the Company’s defined benefit plan at the reporting date and related assumptions are
disclosed in Note 24.
The Company assesses whether there are indicators of impairment for its investments in subsidiaries
and associates at each reporting date. The Company carried out the impairment test based on the
estimation of the higher of the value-in-use or the fair value less costs to sell of the cash generating
units (“CGU”) to which the investments in subsidiaries and associates belong to. Estimating the
recoverable amount requires the company to make an estimate of the expected future cash
flows from the CGU and also to determine a suitable discount rate in order to calculate the
present value of those cash flows.
The carrying amounts of the investments in subsidiaries and associates at the reporting date are
disclosed in Note 16 and Note 17 respectively.
4. Revenue
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
5. Interest income
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
Included in interest income from loans and receivables of the Company is interest of Nil(2013:RM498,000) on
amounts due from subsidiaries (Note 21).
6. Dividend income
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
8 8 | G ol d e n P h a r o s B e r h a d (152205-W)
7. Other income
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
8. Finance costs
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
Auditors’ remuneration:
- Current year 146 146 54 54
- Other services 65 65 65 65
Employee benefits expense (Note 10) 18,105 16,232 1,738 1,687
Non-executive directors’
remuneration excluding
benefits-in-kind (Note 11) 932 1,045 495 473
Depreciation of property, plant
and equipment (Note 14) 4,550 4,477 293 266
Property, plant and equipment written off 22 13 1 6
Impairment loss on trade and
other receivables (Note 21(a),(c)) 582 514 16,465 -
Sustainable forest management expenses 1,043 1,051 - -
Rental of equipment 11 22 8 11
Rental of land and buildings 397 326 74 71
Impairment loss on inventories 33 - - -
Reversal of allowance for impairment
loss in a subsidiary - - - (2,104)
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
The details of remuneration receivable by directors of the Company during the year are as follows:
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
Non-executive:
Fees 271 298 176 180
Other emoluments 661 747 319 293
Total directors’ remuneration
(excluding benefits-in-kind) 932 1,045 495 473
Estimated money value of benefits-in-kind 26 10 - -
Total non-executive directors’ remuneration
(including benefits-in-kind) 958 1,055 495 473
Total directors’ remuneration 958 1,055 495 473
The number of directors of the Company whose total remuneration during the financial year fell within the
following bands is analysed below:
Number of directors
2014 2013
Non-executive directors:
Below RM50,000 7 5
RM50,001 - RM100,000 - 1
RM200,001-RM250,000 1 1
9 0 | G ol d e n P h a r o s B e r h a d (152205-W)
12. Income tax expense/(benefit)
The major components of income tax expense/(benefit) for the years ended 31 December 2014 and 2013 are:
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
The reconciliation between tax expense/(benefit) and the product of accounting profit/(loss) multiplied by
the applicable corporate tax rate for the years ended 31 December 2014 and 2013 is as follows:
2014 2013
RM’000 RM’000
Group
2014 2013
RM’000 RM’000
Company
Current income tax is calculated at the statutory tax rate of 25% (2013: 25%) of the estimated assessable profit/
(loss) for the year. The domestic statutory tax rates will be reduced to 24% from the current year’s rate of 25%
effective Year of Assessment 2016. The computation of deferred tax as at 31 December 2014 has reflected
this change.
Tax savings during the financial year arising from:
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
Basic earnings/(loss) per share amounts are calculated by dividing profit/(loss) for the year net of tax, attributable
to owners of the parent by weighted average number of ordinary shares outstanding during the financial year.
The following reflect the profit/(loss) and share data used in the computation of basic and diluted earnings/
(loss) per share for the years ended 31 December:
Group
2014 2013
Profit/(loss) net of tax attributable to owners of the parent (RM’000) 14,846 (2,551)
The Group has no potential ordinary shares in issue as at the reporting date and therefore the basic and fully
diluted earnings/(loss) per share are the same.
9 2 | G ol d e n P h a r o s B e r h a d (152205-W)
14. Property, plant and equipment
Furniture,
fittings
Land and Plant and and Motor Infra-
buildings* machinery equipment vehicles stucture Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Group
Cost:
Group (continued)
Cost:
9 4 | G ol d e n P h a r o s B e r h a d (152205-W)
14. Property, plant and equipment (continued)
Furniture,
Land and fittings and Motor
building* Renovation equipment vehicles Total
RM’000 RM’000 RM’000 RM’000 RM’000
Company
Cost:
Company
Cost:
During the financial year, the Group and the Company acquired equipment and motor vehicles with an
aggregate cost of RM927,000 (2013: RM978,000) and RM158,000 (2013:RM Nil) respectively, by means of finance
lease. The cash flow on acquisition of property, plant and equipment of the Group and the Company were
amounted to RM3,121,000 (2013: RM1,611,000) and RM271,000 (2013: RM32,000) respectively.
The carrying amount of plant and machinery, equipment and motor vehicles held under finance leases at
the reporting date were RM417,000 (2013: RM332,000) and RM2,623,000 (2013: RM2,010,000), of the Company
and the Group respectively.
Assets pledged as securities
In addition to assets held under finance leases, the Group’s land and buildings, motor vehicles, furniture,
fittings, equipment and plant and machinery, with carrying amount of RM21,324,000 (2013: RM21,803,000) are
mortgaged to secure the Group’s bank borrowings (Note 23).
15. Goodwill
2014 2013
RM’000 RM’000
Cost:
At 1 January/31 December 613 613
Accumulated impairment:
At 1 January/31 December (613) (613)
At 31 December - -
Company
2014 2013
RM’000 RM’000
9 6 | G ol d e n P h a r o s B e r h a d (152205-W)
16. Investments in subsidiaries (continued)
Impairment assessment
Based on the Company’s impairment review, a reversal of impairment loss amounting to RMNil (2013: RM2,104,000)
has been recognised in profit or loss.
Country of Proportion (%) of
Names incorporation Principal activities ownership interest
2014 2013
Proportion (%)
Proportion (%) of ownership
of ownership interest held by
Country of Principal interest held non-controlling
Names incorporation activities by Group interest*
2014 2013 2014 2013
** This subsidiary holds 19% equity interest in Prestige Doors PLC, a company incorporated in the
United Kingdom.
2014 2013
The Group has not recognised losses relating to Konsortium Perumahan Rakyat Terengganu Sdn. Bhd. in prior
year where its share of losses exceeded the Group’s interest in this associate.
The summarised financial information of the associate, not adjusted for the proportion of ownership interest
held by the Group, is as follows:
2014 2013
RM’000 RM’000
Restated
(i) Summarised statement of financial position
Assets and liabilities
Total assets 17,335 14,872
Total liabilities (16,584) (15,546)
2014 2013
RM’000 RM’000
(ii) Summarised statement of comprehensive income
Results
Revenue 11,564 7,503
Profit for the year 1,425 775
(iii)
Reconciliation of the summarised financial information presented above to the carrying amount of the
Group’s interest in associate
2014 2013
RM’000 RM’000
(iv)
Unrecognised share of losses in the associate
2014 2013
RM’000 RM’000
9 8 | G ol d e n P h a r o s B e r h a d (152205-W)
18. Deferred tax
Recognised As at Recognised
As at in profit 31.12.2013/ in profit As at
1.1.2013 and loss 1.1.2014 and loss 31.12.2014
(Note 12) (Note 12)
RM’000 RM’000 RM’000 RM’000 RM’000
Group
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
Unutilised tax losses, unabsorbed capital allowances and unabsorbed reinvestment allowances
At the reporting date, the Group has unutilised tax losses, unabsorbed capital allowances and unabsorbed
reinvestment allowances of approximately RM181,597,000 (2013: RM181,338,000), RM14,004,000 (2013:
RM13,857,000) and RM2,601,000 (2013: RM2,601,000) respectively that are available for offset against future
taxable profits of the companies in which the losses arose, for which no deferred tax asset is recognised due
to uncertainty of its recoverability.
Section 44(5A) and Paragraph 75A of Schedule 3 of the Malaysia Income Tax Act 1967 which became effective
in Year of Assessment 2006 restricts the utilisation of unutilised tax losses and unabsorbed capital allowances
where there is a substantial change in the ordinary shareholder of a company. The test for determining whether
there is a substantial change in shareholders is carried out by comparing the shareholders on the last day of
the basis period in which the unabsorbed losses/capital allowances were ascertained with those on the first
day of the basis period in which the unabsorbed losses/capital allowances are to be utilised.
Pursuant to guidelines issued by the Malaysian tax authorities in 2008, the Ministry of Finance has exempted
all companies from the provision of Section 44(5A) and Paragraph 75A of Schedule 3 except dormant
companies.
Group
2014 2013
RM’000 RM’000
Non-current
Available-for-sale financial assets, at fair value
Quoted in Malaysia
- Equity instruments 6,720 7,697
- Unit trust
Amanah Saham Darul Iman (“ASDI”) 1,038 1,203
Total investment securities 7,758 8,900
20. Inventories
Group
2014 2013
RM’000 RM’000
Cost
Raw materials 11,862 17,448
Work-in-progress 305 296
Finished goods 232 350
Consumable materials 655 578
13,054 18,672
During the year, the Group has made a provision for impairment of inventories amounting to RM33,000
(2013: RMNil)
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
Trade receivables
Third parties 23,681 25,266 - -
Less: Allowance for impairment
Third parties (11,994) (11,440) - -
Trade receivables, net 11,687 13,826 - -
Other receivables
Amounts due from subsidiaries - - 79,301 79,878
Loans to subsidiaries - - 4,665 4,665
Amounts due from associates 5,113 5,487 - -
Deposits 2,076 1,968 24 24
Sundry receivables 8,554 8,608 7,014 6,990
15,743 16,063 91,004 91,557
Less: Allowance for impairment
Amounts due from subsidiaries - - (76,035) (59,570)
Loans to subsidiaries - - (4,665) (4,665)
Amounts due from associates (5,113) (5,487) - -
Sundry receivables (7,736) (7,801) (7,000) (7,000)
(12,849) (13,288) (87,700) (71,235)
Other receivables, net 2,894 2,775 3,304 20,322
1 0 0 | G ol d e n P h a r o s B e r h a d (152205-W)
21. Trade and other receivables (continued)
Trade receivables are non-interest bearing and are generally on 30 to 90 day (2013: 30 to 90 day)
terms. They are recognised at their original invoice amounts which represent their fair values on initial
recognition.
Included in trade receivables is an amount of RM4,995,000 (2013: RM4,995,000) due from affiliated
companies. Affiliated companies refer to companies related to Golden Pharos Berhad’s associates.
Group
2014 2013
RM’000 RM’000
Trade and other receivable that are neither past due nor impaired are creditworthy debtors with good
payment records with the Group.
None of the Group’s trade receivables that are neither past due nor impaired have been renegotiated
during the financial year.
The Group has trade receivables amounting to RM8,313,000 (2013: RM9,414,000) that are past due at
the reporting date but not impaired.
At the reporting date, trade receivables arising from export sales amounting to RM26,000 (2013: RM970,000)
have been arranged to be settled via letters of credit issued by reputable banks in countries where the
customers are based. The remaining balance of receivables that are past due but not impaired are
unsecured in nature.
Based on past experience and no adverse information to date, the directors of the Group are of the
opinion that no provision for impairment is necessary in respect of these balances as there has not been
a significant change in the credit quality and the balances are still considered fully recoverable.
The Group’s trade receivables that are impaired at the reporting date and the movement of the
allowance accounts used to record the impairment are as follows:
Group
Individually impaired
2014 2013
RM’000 RM’000
Group
2014 2013
RM’000 RM’000
Trade receivables that are individually determined to be impaired at the reporting date relate to debtors
that are in significant financial difficulties and have defaulted on payments. These receivables are not
secured by any collateral or credit enhancements.
Amounts due from subsidiaries are unsecured, non-interest bearing (2013: 3% per annum) and repayable
on demand. Loans to subsidiaries are unsecured, non-interest bearing (2013: 2.5% - 4.0% per annum)
and repayable on demand.
Amounts due from associates are unsecured, non-interest bearing and repayable on demand.
(c ) Other receivables
At the reporting date, the Group and the Company have provided allowances of RM12,849,000 (2013:
RM13,288,000) and RM87,700,000 (2013: RM71,235,000) respectively, for other receivables.
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
Cash at banks earn interest at floating rates based on daily bank deposit rates. Deposits are made for varying
periods of between one day to 365 days depending on the immediate cash requirements of the Group, and
earn interests at the respective deposit rates. The weighted average effective interest rate as at 31 December
2014 for the Group was 3.0% (2013: 3.0%) per annum.
Deposits with licensed banks of the Group amounting to RM600,000 (2013: RM600,000) are pledged as securities
for borrowings (Note 23).
1 0 2 | G ol d e n P h a r o s B e r h a d (152205-W)
22. Cash and bank balances (continued)
For the purpose of the statements of cash flows, cash and cash equivalents comprise the following at the
reporting date:
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
23. Borrowings
Group Company
Maturity 2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
Current
Secured:
Bankers’ acceptances on demand 303 2,853 - -
Obligations under finance
leases (Note 30 (b)) 2015/2014 565 423 88 93
Bank overdrafts (Note 22) on demand
- BLR + 1% per annum - 235 - -
- BFR + 1% per annum 950 1,753 - -
- BFR + 2% per annum - 349 - -
950 2,337 - -
1,818 5,613 88 93
Non-current
Secured:
Obligations under finance
leases (Note 30 (b)) 2016 - 2019 1,190 918 228 150
Total borrowings 3,008 6,531 316 243
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
Bank overdrafts
Secured:
- Base Lending Rate (“BLR”) + 1% per annum
- Base Financing Rate (“BFR”) + 1% per annum
- Base Financing Rate (“BFR”) + 2% per annum
Bank overdrafts are denominated in RM and are secured by a floating charge over certain property, plant
and equipment (Note 14), corporate guarantee provided by the Company (Note 25) and short-term deposits
in licensed banks (Note 22).
Bankers’ acceptances
The weighted average interest rates at the reporting date for bankers’ acceptances was 5.16%
(2013: 4.18%) per annum. The bankers’ acceptances are secured by corporate guarantee issued by the
holding company.
The amounts recognised in the statements of financial position are determined as follows:
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
Analysed as:
Current 281 629 - 34
Non-Current
Later than 1 year but not later than 2 years 698 478 - -
Later than 2 years but not later than 5 years 2,306 926 33 29
Later than 5 years 2,996 3,716 203 139
6,000 5,120 236 168
6,281 5,749 236 202
In calculating the defined benefit obligations and the related current service cost and past service cost using
the Projected Unit Credit Method for the Group and the Company, the following assumptions were used. The
assumptions were calculated on a weighted average basis.
1 0 4 | G ol d e n P h a r o s B e r h a d (152205-W)
24. Retirement benefit obligations (continued)
2014 2013
% %
The sensitivity of the defined benefit obligation to changes in the relevant actuarial assumptions is as follows:
Group Company
Defined benefit Defined benefit
obligation obligation
Increase Decrease Increase Decrease
RM’000 RM’000 RM’000 RM’000
2015
Discount rate (1% of movement) (315) 301 (22) 11
Expected rate of salary
increase (1% of movement) 485 (480) 18 (28)
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
Current
Trade payables
Third parties 4,096 3,981 - -
Other payables
Accruals 8,732 10,455 26 61
Sundry payables 2,929 2,358 775 695
Amount due to holding company 14,277 14,007 10,871 10,672
Amount due to a corporate shareholder 640 7,522 640 7,522
Amounts due to subsidiaries - - 17,321 17,586
26,578 34,342 29,633 36,536
30,674 38,323 29,633 36,536
Non-current
Other payable
Financial guarantee - - 1 1
Total trade and other payables 30,674 38,323 29,634 36,537
Add: Borrowings (Note 23) 3,008 6,531 316 243
Total financial liabilities carried
at amortised cost 33,682 44,854 29,950 36,780
These amounts are non-interest bearing. Trade payables are normally settled on 60 day (2013: 60 day)
terms.
These amounts are non-interest bearing. Other payables are normally settled on an average term of
three months (2013: average term of three months).
The amount due to holding company is unsecured, bear interest at 4% (2013: 4%) per annum and has
no fixed terms of repayment.
The amount due to a corporate shareholder relates to advances for working capital purposes named
as Al-Mudharabah.
These advances bear interest at 5% (2013: 5%) per annum, repayable within four (4) years (inclusive
of one (1) year grace period) starting from 13 July 2012 and are secured by the corporate guarantee
issued by the Company. In prior year, the Company has committed to an early settlement of these
advances in 2014 and in return, it has obtained approval for a waiver of interest as disclosed in Note
27 to the financial statements.
The amounts due to subsidiaries are unsecure, non-interest bearing (2013: 3% per annum) and repayable
on demand. The amounts due to subsidiaries are in relation to funds placed by certain subsidiaries in the
Pool Fund Account managed by the Company. The Fund is to be used for working capital requirements
by the companies within the Group.
This amount relates to a corporate guarantee provided by the Company to banks for RM303,000
(2013: RM651,000) borrowings (Note 23) taken by subsidiaries.
1 0 6 | G ol d e n P h a r o s B e r h a d (152205-W)
26. Share capital and share premium
Number of ordinary
share of RM0.50 each Amount
2014 2013 2014 2013
’000 ’000 RM’000 RM’000
Company
Number of
ordinary
share of
RM0.50 each |---------------Amount---------------|
Share Share Total share
capital capital capital
(Issued and (Issued and Share and share
fully paid) fully paid) premium premium
‘000 RM’000 RM’000 RM’000
The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary
shares carry one vote per share without restrictions and rank equally with regard to the Company’s residual assets.
Equity
contribution Reserve
from a Fair value arising
corporate adjustment from
shareholder reserve merger Total
RM‘000 RM‘000 RM’000 RM’000
Group
At 1 January 2013 - 3,493 (22,718) (19,225)
Other comprehensive income:
Available-for-sale financial assets
Loss on fair value changes - 3,053 - 3,053
Transaction with shareholders:
-Waiver of amount due to a corporate
shareholder 200 - - 200
At 31 December 2013 and 1 January 2014 200 6,546 (22,718) (15,972)
Other comprehensive income:
Available-for-sale financial assets
Gain on fair value changes - (1,230) - (1,230)
At 31 December 2014 200 5,316 (22,718) (17,202)
Company
Equity contribution from a corporate shareholder
2014 2013
RM’000 RM’000
At 1 January 200 -
Transaction with shareholders:
-Waiver of amount due to a shareholder - 200
At 31 December 200 200
Fair value adjustment reserve represents the cumulative fair value changes, net of tax, of available-
for-sale financial assets until they are disposed of or impaired.
Reserve arising on merger represents the difference between the nominal value of the shares issued as
consideration for the acquisition of Permint Timber Corporation Sdn. Bhd. and its subsidiary companies
and the nominal value of the shares transferred for these investments.
(a) In addition to the related party information disclosed elsewhere in the financial statements, the following
significant transactions between the Company and related parties took place at terms agreed between
the parties during the financial year:
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
1 0 8 | G ol d e n P h a r o s B e r h a d (152205-W)
29. Commitments
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
Capital expenditure
Approved and contracted for:
Plant and machinery - 397 - -
Motor vehicles - 226 - -
Approved but not contracted for:
Plant and machinery 1,991 2,355 - -
Motor vehicles 890 2,060 - -
2,881 5,038 - -
(b) Finance lease commitments
The Group and the Company have finance leases for certain items of plant and equipment and motor
vehicles (Note 14). These leases do not have terms of renewal, but have purchase options at nominal
values at the end of the lease term.
Future minimum lease payments under finance leases together with the present value of the net minimum
lease payments are as follows:
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
The hire purchase and lease liabilities bore an average interest rate at the reporting date of 5.9%
(2013: 7.3%) per annum. The Group and the Company have finance leases and hire purchase contracts
for certain items of plant and equipment and motor vehicles (see Note 23).
Legal claim
One (1) lawsuit had been filed in prior years by third parties against the Company for compensation claim
amounting to RM38,985 for alleged breach of contract.
(a) Fair value of financial instruments by classes that are not carried at fair value and whose carrying
amounts are not reasonable approximation of fair value.
Group Company
2014 2014
Carrying Fair Carrying Fair
Note amount value amount value
RM’000 RM’000 RM’000 RM’000
Financial liabilities:
Borrowings
(Non-current)
- Obligations under finance
leases 29 (b) 1,190 1,121 228 234
Group Company
2013 2013
Carrying Fair Carrying Fair
Note amount value amount value
RM’000 RM’000 RM’000 RM’000
Financial liabilities:
Borrowings
(Non-current)
- Obligations under finance
leases 29 (b) 918 1,024 150 162
Financial instruments that are not carried at fair value and whose carrying amounts are reasonable
approximation of fair value
The following are classes of financial instruments that are not carried at fair value and whose carrying
amounts are reasonable approximation of fair value:
Note
Trade and other receivables (current) 21
Borrowings (current) 23
Trade and other payables (current) 25
The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values
due to their short-term nature.
The carrying amounts of the current portion of borrowings are reasonable approximations of fair values
due to the insignificant impact of discounting.
Amounts due from/to subsidiaries and associates and loans to/from subsidiaries
The fair values of these financial instruments are estimated by discounting expected future cash flows
at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at
the reporting date.
Fair value is determined directly by reference to their published market bid price at the reporting date.
1 1 0 | G ol d e n P h a r o s B e r h a d (152205-W)
31. Fair value of financial instruments (continued)
Financial guarantee
Fair value is determined based on probability weighted discounted cash flow method. The probability
has been estimated and assigned for the following key assumptions:
- The likelihood of the guaranteed party defaulting within the guaranteed period;
- The exposure on the portion that is not expected to be recovered due to the guaranteed
party’s default;
- The estimated loss exposure if the party guaranteed were to default.
The table below analyses financial instrument, measured at fair value at the end of the reporting date,
by the level in the fair value hierarchy into which the fair value measurement is categorised:
Level 1
Note RM’000
Group
31 December 2014
Financial asset:
Investment securities : Available-for-sale 19 7,758
31 December 2013
Financial asset:
The Group and the Company are exposed to financial risks arising from their operations and the use of financial
instruments. The key financial risks include credit risk, liquidity risk, interest rate risk, foreign currency risk and
market price risk.
It is, and has been throughout the current and previous financial year, the Group’s policy that no derivatives
shall be undertaken except for the use as hedging instruments where appropriate and cost-efficient. The
Group and the Company do not apply hedge accounting.
The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned
financial risks and the objectives, policies and processes for the management of these risks.
(a) Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty
default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from
trade and other receivables. For other financial assets (including investment securities and cash and
bank balances), the Group and the Company minimise credit risk by dealing exclusively with high credit
rating counterparties.
The Group’s objective is to seek continual revenue growth while minimising losses incurred due to
increased credit risk exposure. The Group trades only with recognised and creditworthy third parties. It is
the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification
procedures. In addition, receivable balances are monitored on an ongoing basis with the result that
the Group’s exposure to bad debts is not significant.
The Group does not have any significant exposure to any individual customer or counterparty nor does
it have any major concertration of credit risk related to any financial instruments.
The Group determines concentrations of credit risk by monitoring the country and industry sector profile
of its trade receivables on an ongoing basis. The credit risk concentration profile of the Group’s trade
receivables at the reporting date are as follows:
Group
2014 2013
RM’000 % of total RM’000 % of total
By industry sectors:
Information regarding trade and other receivables that are neither past due nor impaired is disclosed
in Note 21. Deposits with banks and other financial institutions, and investment securities that are neither
past due nor impaired are placed with or entered into with reputable financial institutions or companies
with high credit ratings and no history of default.
Information regarding financial assets that are either past due or impaired is disclosed in Note 21.
Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations
due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from
mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s objective
is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit
facilities.
1 1 2 | G ol d e n P h a r o s B e r h a d (152205-W)
32. Financial risk management objectives and policies (continued)
The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the
reporting date based on contractual undiscounted repayment obligations.
2014
RM’000
On demand
or within One to
one year five years Total
Group
Financial liabilities:
Trade and other payables 30,674 - 30,674
Borrowings 1,908 1,322 3,230
Total undiscounted financial liabilities 32,582 1,322 33,904
Company
Trade and other payables 29,633 1 29,634
Borrowings 101 242 343
Total undiscounted financial liabilities 29,734 243 29,977
2013
RM’000
On demand
or within One to
one year five years Total
Group
Financial liabilities:
Trade and other payables 38,323 - 38,323
Borrowings 5,678 1,037 6,715
Total undiscounted financial liabilities 44,001 1,037 45,038
Company
Trade and other payables 36,536 1 36,537
Borrowings 93 170 263
Total undiscounted financial liabilities 36,629 171 36,800
Interest rate risk is the risk that the fair value or future cash flows of financial instrument will fluctuate because
of changes in market interest rates. As the Group and Company have no significant interest-bearing
financial assets, the Group’s and the Company’s income and operating cash flows are substantially
independent of changes in market interest rates.
The Group’s and the Company’s interest-bearing financial assets are mainly short term in nature and
have been mostly placed in fixed deposits.
The Group’s interest rate risk arises primarily from interest-bearing borrowings. Borrowings at floating rates
expose the Group to cash flow interest rate risk. The Group manages its interest rate exposure by maintaining
a mix of fixed and floating rate borrowings. Borrowings obtained at fixed rates expose the Group to fair
value interest rate risk. The information on maturity dates and effective interest rates of financial assets
and liabilities are disclosed in their respective notes.
Sensitivity analysis for interest rate risk
At the end of the reporting year, if Ringgit Malaysia (“RM”) interest rates had been 10 (2013: 10) basis
points higher with all other variables held constant, the Group’s profit net of tax would have been RM1,000
(2013: RM2,000) lower, arising mainly as a result of higher interest expense on floating rate loans and
borrowings. The assumed movement in basis points for interest rate sensitivity analysis is based on the
currently observable market environment.
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates.
The Group has transactional currency exposure arising from sales or purchases that are denominated
in a currency other than the respective functional currencies of Group entities, primarily RM. The foreign
currencies in which these transactions are denominated are mainly United States Dollars (“USD”).
The net unhedged financial assets and financial liabilities of the Group that are not denominated in their
functional currencies are as follows:
2014 2013
RM RM
Financial assets
Trade and other receivables 613,279 679,423
Market price risk is the risk that the fair value or future cash flows of the Group’s financial instruments will
fluctuate because of changes in market prices (other than interest or exchange rates).
The Group is exposed to equity price risk arising from its investment in quoted equity instruments. The quoted
equity instruments in Malaysia are listed on the Bursa Malaysia Securities Berhad. These instruments are
classified as available-for-sale financial assets. The Group does not have exposure to commodity price
risk, other than timber price.
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating
and healthy capital ratios in order to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions.
To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return
capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes
during the years ended 31 December 2014 and 31 December 2013.
The Group monitors capital using a gearing ratio, which is net of debt divided by total capital plus net debt. The
Group includes within net debt, loans and borrowings, trade and other payables, less cash and bank balances.
Capital includes equity attributable to the owners of the parent less fair value adjustment reserve.
Group Company
Note 2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
1 1 4 | G ol d e n P h a r o s B e r h a d (152205-W)
34. Segment information
For management purposes, the Group is organised into business units based on their products and services,
and has three reportable operating segments as follows:
(i) Harvesting, sawmilling and kiln drying of timber;
(iii) Others - include investment holding, marketing and distribution agent and trading of wooden doors,
none of which are of a sufficient size to be reported separately.
Except as indicated above, no operating segments have been aggregated to form the above reportable
operating segments.
Management monitors the operating results of its business units separately for the purpose of making decisions
about resource allocation and performance assessment. Segment performance is evaluated based on operating
profit or loss which, in certain respects as explained in the table below, is measured differently from operating
profit or loss in the consolidated financial statements. Group financing (including finance costs) and income
taxes are managed on a group basis and are not allocated to operating segments.
Revenue
External customers 74,830 47,971 31,317 30,937 207 232 - - 106,354 79,140
Inter-segment 20,356 24,127 - - 19,748 6,242 (40,104) (30,369) A - -
Total revenue 95,186 72,098 31,317 30,937 19,955 6,474 (40,104) (30,369) 106,354 79,140
1 1 6 | G ol d e n P h a r o s B e r h a d
Results
Interest income 237 71 52 27 34 8 - - 323 106
Dividend income 169 409 - - 17,247 3,740 (17,247) (3,740) A 169 409
(152205-W)
Depreciation and
amortisation 1,995 1,784 1,779 1,943 776 750 - - 4,550 4,477
Other non-cash expenses 572 626 421 259 16,781 371 (16,465) - B 1,309 1,256
Segment profit/(loss) 22,322 1,385 379 511 (1,955) 3,613 (351) (7,364) C 20,395 (1,855)
Assets
Additions to
non-current assets 2,500 1,363 1,118 1,195 430 31 - - D 4,048 2,589
Segment assets 121,179 119,216 22,303 23,182 110,865 128,439 (125,629) (144,345) E 128,718 126,492
Segment liabilities 47,914 53,069 7,352 8,268 166,352 173,531 (179,684) (181,544) F 41,934 53,324
34. Segment information (continued)
Notes Nature of adjustments and eliminations to arrive at amounts reported in the consolidated
financial statements
B Other non-cash expenses consist of the following items as presented in the respective notes to
the financial statements:
C The following items are (deducted from)/added to segment profit to arrive at “profit/(loss) before tax”
presented in the consolidated statement of profit or loss and other comprehensive income:
2014 2013
RM’000 RM’000
2014 2013
RM’000 RM’000
E The following items are deducted from segment assets to arrive at total assets reported in
the consolidated statement of financial position:
2014 2013
RM’000 RM’000
F The following items are added to/(deducted from) segment liabilities to arrive at total liabilities
reported in the consolidated statement of financial position:
2014 2013
RM’000 RM’000
Notes Nature of adjustments and eliminations to arrive at amounts reported in the consolidated
financial statements (continued)
Geographical information
Revenue
2014 2013
RM’000 RM’000
During the financial year, the Group has opened a tender to extract logs from 6 compartments covering
2,076 hectares in its concession area for a total logs sales proceeds of RM27.29 million. These 6 compartments
were part of 2,553 hectares land area from the Group’s concession that was awarded to Lembaga Tabung
Amanah Warisan Negeri Terengganu (“LTAWNT”) by the Terengganu State Land Office for mining purposes.
In return, the Group was given the right to extract and sell the logs therein.
The financial statements for the year ended 31 December 2014 were authorised for issue in accordance with
a resolution of the directors on 15 April 2015.
The breakdown of the retained earnings/(accumulated losses) of the Group and of the Company as at 31
December 2014 and 31 December 2013 into realised and unrealised losses is presented in accordance with the
directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010 and 20 December 2010, prepared
in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits
or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as
issued by the Malaysian Institute of Accountants.
Group Company
2014 2013 2014 2013
RM’000 RM’000 RM’000 RM’000
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