DXN Holdings Bhd. (Company No V) (Incorporated in Malaysia) and its subsidiaries Financial statements for the year ended 28 February 2011

Transcription

1 DXN Holdings Bhd. (Company No V) (Incorporated in Malaysia) and its subsidiaries Financial statements for the year ended 28 February 2011

2 1 DXN Holdings Bhd. (Company No V) (Incorporated in Malaysia) and its subsidiaries Directors report for the year ended 28 February 2011 The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the year ended 28 February Principal activities The principal activities of the Company are investment holding and provision of management services. The principal activities of its subsidiaries are set out in Note 7 to the financial statements. There have been no significant changes in the nature of these activities during the financial year except as disclosed in Note 7 to the financial statements. Results Profit for the year attributable to : Group RM Company RM Owners of the Company 41,462,662 24,913,917 Minority interests 363,084-41,825,746 24,913,917 Reserves and provisions There were no material transfers to or from reserves and provisions during the financial year except as disclosed in the financial statements.

3 Company No V 2 Dividends Since the end of the previous report, the Company paid: i) a fourth interim dividend of 3% less 25% tax per ordinary share totalling RM1,278,087 in respect of the financial year ended 28 February 2010 on 30 June 2010; ii) a first interim dividend of 4% less 25% tax and 4% tax exempt dividend per ordinary share totalling RM3,976,295 in respect of the financial year ended 28 February 2011 on 30 September 2010; iii) a second interim dividend of 5% less 25% tax and 6% tax exempt dividend per ordinary share totalling RM5,536,358 in respect of the financial year ended 28 February 2011 on 15 December 2010; iv) a third interim dividend of 3% less 25% tax and 9% tax exempt dividend per ordinary share totalling RM6,372,556 in respect of the financial year ended 28 February 2011 on 15 March 2011; and v) a fourth interim dividend of 8% tax exempt dividend per ordinary share totalling RM4,529,330 in respect of the financial year ended 28 February 2011 on 15 June The Directors do not recommend any final dividend to be paid for the financial year ended 28 February Directors of the Company Directors who served since the date of the last report are : Dato Dr. Lim Siow Jin Lim Boon Yee Datin Leong Bee Ling Lim Yew Lin Dato Seri DiRaja Tunku Abdul Hamid Thani Ibni Almarhum Sultan Badlishah Tengku Farith Rithauddeen Ooi Soo Kok Poo Ah An

4 Company No V 3 Directors interests The interests and deemed interests in the shares of the Company and of its related corporations (other than wholly-owned subsidiaries) of those who were Directors at year end (including the interests of the spouses and/or children of the Directors who themselves are not Directors of the Company) as recorded in the Register of Directors Shareholdings are as follows : The Company Number of ordinary shares of RM0.25 each Balance at Balance at Bought (Sold) Dato Dr. Lim Siow Jin Deemed interest - own 102,423,200 8,000,000 (500,000) 109,923,200 Lim Boon Yee Direct interest - own 47,676,200 - (10,000,000) 37,676,200 Deemed interest - own 2,044, ,044,900 Datin Leong Bee Ling Deemed interest - own 100,378,300 8,000,000 (500,000) 107,878,300 Lim Yew Lin Direct interest - own 1,453, ,000 (25,200) 2,288,300 Ooi Soo Kok Direct interest - own 15, ,000 Deemed interest - others * 70, ,000 Poo Ah An Direct interest - own 100, ,000 Deemed interest - others * 38, ,000 * In accordance with Section 134(12)(c) of the Companies Act, 1965, the interests of their children in the shares of the Company shall be treated as the interests of the Directors. By virtue of their interests in the shares of the Company, Dato Dr. Lim Siow Jin, Datin Leong Bee Ling and Mr. Lim Boon Yee are also deemed interested in the shares of the subsidiaries to the extent that the Company has an interest. None of the other Directors holding office at 28 February 2011 had any interest in the ordinary shares of the Company and of its related corporations during the financial year.

5 Company No V 4 Directors benefits Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements of the Company and its related corporations) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest other than : i) certain Directors who may be deemed to derive a benefit by virtue of those transactions entered in the ordinary course of business between the Company and certain related corporations with companies in which the Directors have a substantial financial interest; ii) the rental paid by a related corporation to a Director; and iii) the purchase of land by a related corporation from a Director as disclosed in Note 29 to the financial statements. There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. Issue of shares and debentures There were no changes in the issued and paid-up capital of the Company and no debentures were issued during the financial year. Options granted over unissued shares No options were granted to any person to take up unissued shares of the Company during the financial year. Other statutory information Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that : i) all known bad debts have been written off and adequate provision made for doubtful debts, and ii) any current assets which were unlikely to be realised in the ordinary course of business have been written down to an amount which they might be expected so to realise.

6 Company No V 5 Other statutory information (continued) At the date of this report, the Directors are not aware of any circumstances : i) that would render the amount written off for bad debts, or the amount of the provision for doubtful debts, in the Group and in the Company inadequate to any substantial extent, or ii) that would render the value attributed to the current assets in the financial statements of the Group and of the Company misleading, or iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate, or iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in the financial statements of the Group and of the Company misleading. At the date of this report, there does not exist : i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which secures the liabilities of any other person, and ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year. No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the companies to meet their obligations as and when they fall due. In the opinion of the Directors, the financial performance of the Group and of the Company for the financial year ended 28 February 2011 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of this report. Significant events and subsequent events Details of the significant events and subsequent events are disclosed in Note 35 to the financial statements.

7 Company No V 6 Auditors The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment. Signed on behalf of the Board of Directors in accordance with a resolution of the Directors :..... Lim Boon Yee..... Lim Yew Lin Penang, Date : 28 June 2011

8 7 DXN Holdings Bhd. (Company No V) (Incorporated in Malaysia) and its subsidiaries Consolidated statement of financial position as at 28 February 2011 Assets Note RM RM RM (Restated) (Restated) Property, plant and equipment 3 82,786,952 84,841,257 84,393,981 Prepaid lease payments 4 808,400 1,065, ,248 Intangible assets 5 8,331,202 11,762,940 14,182,883 Investment properties 6 22,284,855 7,612,750 6,063,511 Land held for property development 8 7,378,458 7,769,615 1,416,415 Investment in an associate 9-1,890,181 1,610,892 Other investments , ,000 8,519,176 Deferred tax assets 19 1,650,525 3,179,918 1,409,608 Total non-current assets 123,590, ,972, ,571,714 Property development costs 11 30,264,002 59,598,712 48,302,945 Receivables, deposits and prepayments 12 42,143,123 51,461,328 61,487,857 Inventories 13 49,386,962 33,302,305 35,697,611 Current tax assets 5,851,231 5,839,185 5,061,859 Assets classified as held for sale 14-1,389, ,436 Cash and cash equivalents 15 41,613,697 42,465,708 48,207,970 Total current assets 169,259, ,056, ,732,678 Total assets 292,849, ,029, ,304,392

9 Company No V 8 Consolidated statement of financial position as at 28 February 2011 (continued) Equity Note RM RM RM (Restated) (Restated) Share capital 16 60,191,000 60,191,000 60,191,000 Reserves ,208, ,995, ,299,287 Total equity attributable to owners of the Company 215,399, ,186, ,490,287 Minority interests 3,049, Total equity 218,449, ,186, ,490,287 Liabilities Borrowings 18 16,066,639 11,338,330 92,168,193 Deferred tax liabilities , , ,419 Total non-current liabilities 16,512,745 11,590,210 92,633,612 Payables and accruals 20 41,263,907 33,044,680 34,756,937 Borrowings 18 13,890,765 68,526,228 11,455,778 Current tax liabilities 2,732,264 3,681,750 1,967,778 Total current liabilities 57,886, ,252,658 48,180,493 Total liabilities 74,399, ,842, ,814,105 Total equity and liabilities 292,849, ,029, ,304,392 The notes on pages 25 to 111 are an integral part of these financial statements.

10 9 DXN Holdings Bhd. (Company No V) (Incorporated in Malaysia) and its subsidiaries Consolidated statement of comprehensive income for the year ended 28 February 2011 Continuing operations Note RM RM Revenue ,339, ,917,403 Other operating income 7,865,985 13,167,974 Changes in work-in-progress and manufactured inventories 2,729, ,969 Raw materials and trading inventories used (66,164,726) (65,370,624) Property development expenses (16,658,762) (20,608,154) Staff costs 23 (25,805,041) (25,835,352) Depreciation and amortisation (6,932,121) (6,886,599) Other operating expenses (118,980,578) (113,475,681) Results from operating activities 22 55,393,745 41,649,936 Finance costs 24 (852,768) (4,929,596) Operating profit 54,540,977 36,720,340 Share of profit of equity accounted associate, net of tax 63, ,289 Profit before tax 54,604,076 36,999,629 Income tax expense 25 (12,778,330) (8,576,041) Profit for the year 41,825,746 28,423,588 Other comprehensive income, net of tax Foreign currency translation difference for foreign operations (4,266,547) (142,736) Total comprehensive income for the year 37,559,199 28,280,852

11 Company No V 10 Consolidated statement of comprehensive income for the year ended 28 February 2011 (continued) Profit attributable to : Note RM RM Owners of the Company 41,462,662 28,423,588 Minority interests 363,084 - Profit for the year 41,825,746 28,423,588 Total comprehensive income attributable to : Owners of the Company 37,209,067 28,280,852 Minority interests 350,132 - Total comprehensive income for the year 37,559,199 28,280,852 Basic earnings per ordinary share (sen) The notes on pages 25 to 111 are an integral part of these financial statements.

12 11 DXN Holdings Bhd. (Company No V) (Incorporated in Malaysia) and its subsidiaries Consolidated statement of changes in equity for the year ended 28 February 2011 Note Attributable to owners of the Company Non-distributable Distributable Share Share Translation Treasury Retained Minority Total capital premium reserve shares earnings Total interests equity RM RM RM RM RM RM RM RM At 1 March ,191,000 1,779,620 (3,222,124) (5,182,032) 123,923, ,490, ,490,287 Total comprehensive (expense)/income for the year - - (142,736) - 28,423,588 28,280,852-28,280,852 Treasury shares acquired (2,723,077) - (2,723,077) - (2,723,077) Dividends (6,861,816) (6,861,816) - (6,861,816) At 28 February ,191,000 1,779,620 (3,364,860) (7,905,109) 145,485, ,186, ,186,246

13 Company No V 12 Consolidated statement of changes in equity for the year ended 28 February 2011 (continued) Note Attributable to owners of the Company Non-distributable Distributable Share Share Translation Treasury Retained Minority Total capital premium reserve shares earnings Total interests equity RM RM RM RM RM RM RM RM At 1 March As previously stated 60,191,000 1,779,620 (3,364,860) (7,905,109) 145,485, ,186, ,186,246 - Effect of adoption FRS ,764 88,764-88,764 At 1 March 2010, restated 60,191,000 1,779,620 (3,364,860) (7,905,109) 145,574, ,275, ,275,010 Acquisition of a subsidiary ,699,745 2,699,745 Total comprehensive (expense)/income for the year - - (4,253,595) - 41,462,662 37,209, ,132 37,559,199 Treasury shares acquired (920,932) - (920,932) - (920,932) Dividends (17,163,296) (17,163,296) - (17,163,296) At 28 February ,191,000 1,779,620 (7,618,455) (8,826,041) 169,873, ,399,849 3,049, ,449,726 Note 16 Note 17 Note 17 Note 17 Note 17 The notes on pages 25 to 111 are an integral part of these financial statements.

14 13 DXN Holdings Bhd. (Company No V) (Incorporated in Malaysia) and its subsidiaries Consolidated statement of cash flows for the year ended 28 February 2011 Cash flows from operating activities Note RM RM (Restated) Profit before tax from continuing operations 54,604,076 36,999,629 Adjustments for : Amortisation of prepaid lease payments 4 129, ,002 Amortisation of intangible assets 5 654, ,214 Depreciation of property, plant and equipment 3.3 5,866,836 6,041,854 Depreciation of investment properties 6 281,302 77,529 Gain on disposal of : - plant and equipment (399,760) (551,808) - assets classified as held for sale (388,672) (1,055,564) - investment properties (185,581) (159,121) - other investments - (1,623) - logging concession rights (236,765) (586,000) - prepaid lease payments (379,216) - - a subsidiary B - (331,539) Written off : - other intangible assets - 182,905 - plant and equipment 81,374 92,364 Interest income (515,666) (809,064) Dividend income - (750) Share of profit after tax of equity accounted associate (63,099) (279,289) Interest expense ,768 4,929,596 Negative goodwill on acquisition of a subsidiary A - (98,374) Impairment loss : - goodwill 5 474, ,188 - other investments 500,000 7,644,361 - plant and equipment 834,172 - Operating profit before changes in working capital 62,110,062 53,537,510

15 Company No V 14 Consolidated statement of cash flows for the year ended 28 February 2011 (continued) Note RM RM Changes in working capital : Inventories (377,458) 2,996,328 Property development costs 2,878,421 (16,045,758) Receivables, deposits and prepayments 7,331,059 9,087,010 Payables and accruals 1,745,619 (3,453,899) Cash generated from operations 73,687,703 46,121,191 Income tax paid (12,666,075) (9,682,010) Proceeds from disposal of logging concession rights 2,902,450 1,862,000 Net cash from operating activities 63,924,078 38,301,181 Cash flows from investing activities Disposal of land held for development 8 391,157 - Purchase of land held for development 8 - (8,767,884) Acquisition of intangible assets (205,052) (345,473) Acquisition of investment properties (23,747) - Proceeds from disposal of investment properties 207, ,000 Acquisition of a subsidiary, net of cash acquired A 2,057, ,433 Disposal of a subsidiary, net cash outflow B - (333,891) Acquisition of property, plant and equipment C (5,156,348) (2,912,211) Proceeds from disposal of plant and equipment 606,860 1,159,791 Proceeds from disposal of other investments - 26,438 Interest received 515, ,064 Dividend received Proceeds from disposal of assets classified as held for sale 1,778,009 2,030,000 Proceeds from disposal of prepaid lease payments 407,558 - Net cash from/(used in) investing activities 579,219 (7,566,983)

16 Company No V 15 Consolidated statement of cash flows for the year ended 28 February 2011 (continued) Cash flows from financing activities Note RM RM Utilisation of short term borrowings, net 773, ,000 Drawdown of term loan 23,923,323 8,743,100 Repayment of term loans (14,332,373) (2,761,998) Purchase of treasury shares (920,932) (2,723,077) Repayment of finance lease liabilities (469,585) (887,455) Dividends paid (12,494,941) (5,157,615) Withdrawal/(Placement) of pledged fixed deposits 3,755,613 (333,919) Interest paid (852,768) (4,929,596) Repayment of collateralised loan obligations (55,000,000) (30,000,000) Net cash used in financing activities (55,618,360) (37,091,560) Net increase/(decrease) in cash and cash equivalents 8,884,937 (6,357,362) Cash and cash equivalents at 1 March 32,107,056 38,288,295 Effect of exchange differences on cash and cash equivalents (1,557,928) 176,123 Cash and cash equivalents at 28 February D 39,434,065 32,107,056

17 Company No V 16 Consolidated statement of cash flows for the year ended 28 February 2011 (continued) NOTES A. Analysis of acquisition of a subsidiary During the financial year ended 28 February 2011, the Company via its wholly-owned subsidiary, DXN International Holding Limited ( DXNIHL ), acquired an additional 12.25% equity interest in DXN International (Thailand) Company Limited ( DXN Thailand ). DXNIHL regards DXN Thailand as its subsidiary by virtue of having board control and being the single largest shareholder in DXN Thailand. During the previous financial year ended 28 February 2010, the Company via its whollyowned subsidiary, DXNIHL, acquired the entire equity interest in Daehsan Europe Kft. The fair value of assets acquired and liabilities assumed are as follows : Non-current assets Note RM RM Property, plant and equipment 3 162,320 - Investment properties 6 3,240,144 - Intangible assets 5 157,018 - Current assets Inventories 992, ,218 Receivables, deposits and prepayments 60, ,501 Cash and cash equivalents 2,698, ,713 Current liabilities Short term borrowing (44,819) - Payables and accruals (1,805,253) (1,121,778) Current tax liability (167,700) - Net assets acquired 5,293, ,654 Minority interests (2,699,745) - Carrying value as associate at the date of acquisition (1,953,280) - Negative goodwill - (98,374) Total purchase consideration, satisfied in cash 640,591 9,280 Less : Cash and cash equivalents acquired (2,698,044) (275,713) Net cash inflow on acquisition 2,057, ,433

18 Company No V 17 Consolidated statement of cash flows for the year ended 28 February 2011 (continued) NOTES (continued) A. Analysis of acquisition of a subsidiary The acquisition of DXN Thailand (2010 : Daehsan Europe Kft) did not have a material impact to the consolidated revenue and consolidated profit for the financial year ended 28 February 2011/2010. B. Analysis of disposal of a subsidiary During the previous financial year ended 28 February 2010, the Company via its whollyowned subsidiary, DXNIHL disposed of the entire equity interest in DXN International (Kenya) Limited for cash consideration of RM1,816. The carrying amount of assets disposed and liabilities relieved are as follows : Non-current assets Note 2010 RM Property, plant and equipment 91,317 Deferred tax assets ,896 Current assets Inventories 153,195 Receivables, deposits and prepayments 46,293 Cash and cash equivalents 335,707 Current liability Payables and accruals (1,142,131) (329,723) Gain on disposal of investment in a subsidiary 331,539 Consideration received, satisfied by cash 1,816 Less : Cash and cash equivalents disposed (335,707) Net cash outflow on disposal (333,891) The disposal of DXN International (Kenya) Limited did not have a material impact to the consolidated revenue and consolidated profit for the financial year ended 28 February 2010.

19 Company No V 18 Consolidated statement of cash flows for the year ended 28 February 2011 (continued) NOTES (continued) C. Acquisition of property, plant and equipment During the financial year ended 28 February 2011, the Group acquired property, plant and equipment with an aggregate cost of RM5,427,464 (2010 : RM3,232,877) of which RM271,116 (2010 : RM261,065) was acquired by means of finance lease and RM Nil (2010 : RM80,600) remained unpaid at reporting period. The balance of RM5,156,348 (2010 : RM2,912,211) was made by cash payments. D. Cash and cash equivalents Cash and cash equivalents included in the consolidated statement of cash flows comprise the following consolidated amounts : Note RM RM Short term deposits with licensed banks 15 5,376,227 - Fixed deposits with licensed banks (net of pledged deposits) 2,222,924 12,916 Cash and bank balances 15 31,858,729 36,541,362 Bank overdrafts 18 (23,815) (4,447,222) 39,434,065 32,107,056 The notes on pages 25 to 111 are an integral part of these financial statements.

20 19 DXN Holdings Bhd. (Company No V) (Incorporated in Malaysia) Statement of financial position as at 28 February 2011 Assets Note RM RM Property, plant and equipment 3 9,848,195 10,184,736 Intangible assets 5 415, ,901 Investment properties 6 6,222,484 6,281,738 Investment in subsidiaries 7 45,166,606 45,167,256 Other investments , ,000 Total non-current assets 62,002,528 62,994,631 Receivables, deposits and prepayments 12 72,386,619 69,864,711 Current tax assets 612, ,010 Cash and cash equivalents 15 1,673,632 7,204,463 Total current assets 74,672,690 77,727,184 Total assets 136,675, ,721,815

21 Company No V 20 Statement of financial position as at 28 February 2011 (continued) Equity Note RM RM Share capital 16 60,191,000 60,191,000 Reserves 17 23,934,071 17,104,382 Total equity 84,125,071 77,295,382 Liabilities Borrowings ,486 5,902,166 Deferred tax liability , ,300 Total non-current liabilities 869,286 6,040,466 Payables and accruals 20 51,528,642 7,215,630 Borrowings ,219 50,170,337 Total current liabilities 51,680,861 57,385,967 Total liabilities 52,550,147 63,426,433 Total equity and liabilities 136,675, ,721,815 The notes on pages 25 to 111 are an integral part of these financial statements.

22 21 DXN Holdings Bhd. (Company No V) (Incorporated in Malaysia) Statement of comprehensive income for the year ended 28 February 2011 Continuing operations Note RM RM Revenue 21 33,752,864 28,766,636 Other operating income 1,884,212 3,589,773 Staff costs 23 (7,022,541) (7,679,595) Depreciation and amortisation (643,671) (723,627) Other operating expenses (435,375) (9,773,774) Results from operating activities 22 27,535,489 14,179,413 Finance costs 24 (1,271,776) (5,526,338) Profit before tax 26,263,713 8,653,075 Income tax expense 25 (1,349,796) (649,210) Profit for the year and total comprehensive income for the year 24,913,917 8,003,865 The notes on pages 25 to 111 are an integral part of these financial statements.

23 22 DXN Holdings Bhd. (Company No V) (Incorporated in Malaysia) Statement of changes in equity for the year ended 28 February 2011 Note Non-distributable Distributable Share Share Treasury Retained capital premium shares earnings Total equity RM RM RM RM RM At 1 March ,191,000 1,779,620 (5,182,032) 22,087,822 78,876,410 Treasury shares acquired (2,723,077) - (2,723,077) Total comprehensive income for the year ,003,865 8,003,865 Dividends (6,861,816) (6,861,816) At 28 February 2010/ 1 March ,191,000 1,779,620 (7,905,109) 23,229,871 77,295,382 Treasury shares acquired (920,932) - (920,932) Total comprehensive income for the year ,913,917 24,913,917 Dividends (17,163,296) (17,163,296) At 28 February ,191,000 1,779,620 (8,826,041) 30,980,492 84,125,071 Note 16 Note 17 Note 17 The notes on pages 25 to 111 are an integral part of these financial statements.

24 23 DXN Holdings Bhd. (Company No V) (Incorporated in Malaysia) Statement of cash flows for the year ended 28 February 2011 Cash flows from operating activities Note RM RM Profit before tax from continuing operations 26,263,713 8,653,075 Adjustments for : Depreciation of property, plant and equipment 3 313, ,770 Amortisation of intangible assets 5 270, ,400 Depreciation of investment properties 6 59,254 50,457 Subsidiaries written off Interest income (1,689,734) (2,576,762) Dividend income (25,000,063) (18,750,000) Plant and equipment written off 47,276 - (Gain)/Loss on disposal of plant and equipment (280) 76,635 Impairment loss on other investments 500,000 7,650,000 Interest expense 24 1,271,776 5,526,338 Operating profit before changes in working capital 2,037,019 1,302,918 Changes in working capital : Receivables, deposits and prepayments (2,521,908) 33,279,378 Payables and accruals 39,644, ,834 Cash generated from operations 39,159,768 34,719,130 Income tax paid (329,725) (210,002) Dividends received 24,000,063 18,000,000 Net cash from operating activities 62,830,106 52,509,128 Cash flows from investing activities Acquisition of investment properties 6 - (3,542,050) Acquisition of intangible assets 5 (175,197) (34,440) Acquisition of property, plant and equipment A (32,151) (6,169,466) Subscription of shares in subsidiaries 7 (10) (177,304) Interest received 1,689,734 2,576,762 Proceeds from disposal of property, plant and equipment 8, ,000 Net cash from/(used in) investing activities 1,490,510 (7,196,498)

25 Company No V 24 Statement of cash flows for the year ended 28 February 2011 (continued) Cash flows from financing activities Note RM RM Repayment of collaterised loan obligations (55,000,000) (30,000,000) Repayment of term loans (55,961) (56,568) Purchase of treasury shares (920,932) (2,723,077) Dividends paid (12,494,941) (5,157,615) Repayment of finance lease liabilities (107,837) (99,745) Interest paid (1,271,776) (5,526,338) Net cash used in financing activities (69,851,447) (43,563,343) Net (decrease)/increase in cash and cash equivalents (5,530,831) 1,749,287 Cash and cash equivalents at 1 March 7,204,463 5,455,176 Cash and cash equivalents at 28 February 15 1,673,632 7,204,463 NOTE A. Acquisition of property, plant and equipment During the financial year ended 28 February 2011, the Company acquired property, plant and equipment with an aggregate cost of RM32,151 (2010 : RM6,309,466) of which RM Nil (2010 : RM140,000) was acquired by means of finance lease. The balance of RM32,151 (2010 : RM6,169,466) was made by cash payments. The notes on pages 25 to 111 are an integral part of these financial statements.

26 25 DXN Holdings Bhd. (Company No V) (Incorporated in Malaysia) and its subsidiaries Notes to the financial statements DXN Holdings Bhd. is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad. The addresses of the registered office and principal place of business are as follows : Registered office Suite 2-1, 2 nd Floor Menara Penang Garden 42-A, Jalan Sultan Ahmad Shah Penang Principal place of business Wisma DXN 213, Lebuhraya Sultan Abdul Halim Alor Setar Kedah Darul Aman The consolidated financial statements as at and for the year ended 28 February 2011 comprise the Company and its subsidiaries (together referred to as the Group) and the Group s interest in an associate. The principal activities of the Company are investment holding and provision of management services. The principal activities of its subsidiaries are set out in Note 7 to the financial statements. These financial statements were authorised for issue by the Board of Directors on 28 June Basis of preparation (a) Statement of compliance These financial statements of the Group and of the Company have been prepared in accordance with Financial Reporting Standards ( FRSs ), generally accepted accounting principles and the Companies Act, 1965 in Malaysia.

27 Company No V Basis of preparation (continued) (a) Statement of compliance (continued) The Group and the Company have not applied the following accounting standards, amendments and interpretations that have been issued by the Malaysian Accounting Standards Board ( MASB ) but are not yet effective for : FRSs, Interpretations and amendments effective for annual periods beginning on or after 1 July 2010 FRS 1, First-time Adoption of Financial Reporting Standards (revised) FRS 3, Business Combinations (revised) FRS 127, Consolidated and Separate Financial Statements (revised) Amendments to FRS 2, Share-based Payment * Amendments to FRS 5, Non-current Assets Held for Sale and Discontinued Operations Amendments to FRS 138, Intangible Assets IC Interpretation 12, Service Concession Agreements * IC Interpretation 16, Hedges of a Net Investment in a Foreign Operation IC Interpretation 17, Distribution of Non-cash Assets to Owners * Amendments to IC Interpretation 9, Reassessment of Embedded Derivatives FRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2011 Amendments to FRS 1, First-time Adoption of Financial Reporting Standards - Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters - Additional Exemption for First-time Adopters Amendments to FRS 2, Group Cash-settled Share Based Payment Transactions * Amendments to FRS 7, Financial Instruments : Disclosures - Improving Disclosures about Financial Instruments IC Interpretation 4, Determining whether an arrangement contains a Lease IC Interpretation 18, Transfers of Assets from Customers * Improvements to FRSs (2010) FRSs, Interpretation and amendments effective for annual periods beginning on or after 1 July 2011 IC Interpretation 19, Extinguishing Financial Liabilities with Equity Instruments Amendments to IC Interpretation 14, Prepayments of a Minimum Funding Requirement # FRSs, Interpretation and amendments effective for annual periods beginning on or after 1 January 2012 FRS 124, Related Party Disclosures (revised) IC Interpretation 15, Agreements for the Construction of Real Estate

28 Company No V Basis of preparation (continued) (a) Statement of compliance (continued) The Group and the Company plan to apply the abovementioned standards, amendments and interpretations: from the annual period beginning 1 March 2011 for those standards, amendments or interpretations that will be effective for annual periods beginning on or after 1 July 2010 and 1 January 2011, except for those marked * which are not applicable to the Group and to the Company; and from the annual period beginning 1 March 2012 for those standards, amendments or interpretations that will be effective for annual periods beginning on or after 1 July 2011 and 1 January 2012, except for those marked # which are not applicable to the Group and to the Company. The initial application of a standard, an amendment or an interpretation, which will be applied prospectively or which requires extended disclosures, is not expected to have any financial impacts to the current and prior periods financial statements upon their first adoption. Material impacts of initial application of a standard, an amendment or as interpretation which will be applied retrospectively, are disclosed below : IC Interpretation 15, Agreements for the Construction of Real Estate IC Interpretation 15 replaces the existing FRS , Property Development Activities and provides guidance on how to account for revenue from construction of real estate. The adoption of IC Interpretation 15 will result in a change in accounting policy which will be applied retrospectively whereby the recognition of revenue from all property development activities of the Group will change from the percentage of completion method to the completed method. The Management is currently assessing the impact of the adoption of this interpretation. Following the announcement by the MASB on 1 August 2008, the Group s and the Company s financial statements will be prepared in accordance with the International Financial Reporting Standards (IFRS) framework for annual periods beginning on 1 January The change of the financial reporting framework is not expected to have any significant impact on the financial position and performance of the Group and of the Company. (b) Basis of measurement The financial statements have been prepared on the historical cost basis except as disclosed in the financial statements.

29 Company No V Basis of preparation (continued) (c) Functional and presentation currency These financial statements are presented in Ringgit Malaysia ( RM ), which is the Company s functional currency. (d) Use of estimates and judgements The preparation of financial statements in conformity with FRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements other than those disclosed below and in the following notes : Note Other receivables Note 32 - Contingent liabilities Property development The Group recognises property development revenue and expenses in profit or loss by using the stage of completion method. The stage of completion is determined by the proportion that property development costs incurred for work performed to date against the estimated total property development costs. Significant judgement is required in determining the stage of completion, the extent of the property development costs incurred, the estimated total property development revenue and costs, as well as the recoverability of the development projects. In making the judgement, the Group evaluates based on past experiences and by relying on the work of specialists, where necessary. 2. Significant accounting policies The accounting policies set out below have been applied consistently to the periods presented in these financial statements, and have been applied consistently by the Group entities other than as disclosed in the following notes : Note 2(b) - Financial instruments Note 2(f) - Leased assets Note 2(v) - Operating segments

30 Company No V Significant accounting policies (continued) (a) Basis of consolidation (i) Subsidiaries Subsidiaries are entities, including unincorporated entities, controlled by the Group. Control exists when the Group has the ability to exercise its power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. Subsidiaries are consolidated using the purchase method of accounting. Under the purchase method of accounting, the financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Investments in subsidiaries are measured in the Company s statement of financial position at cost less any impairment losses, unless the investments are classified as held for sale. (ii) Associates Associates are entities, including unincorporated entities, in which the Group has significant influence, but not control, over the financial and operating policies. Investments in associates are accounted for in the consolidated financial statements using the equity method less any impairment losses. The consolidated financial statements include the Group s share of the profit or loss and other comprehensive income of the equity accounted associates, after adjustments if any, to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. When the Group s share of losses exceeds its interest in an associate, the carrying amount of that interest (including any long-term investments) is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee. Investments in associates are measured in the Company s statement of financial position at cost less any impairment losses. (iii) Changes in Group composition The Group treats all changes in group composition as equity transactions between the Group and its minority interest holders. Any difference between the Group s share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserves.

31 Company No V Significant accounting policies (continued) (a) Basis of consolidation (continued) (iv) Minority interests Minority interests at the end of reporting period, being the portion of the net identifiable assets of subsidiaries attributable to equity interests that are not owned by the Company, whether directly or indirectly through subsidiaries, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Minority interests in the results of the Group are presented on the face of the consolidated statement of comprehensive income as an allocation of the comprehensive income for the year between minority interests and the owners of the Company. Where losses applicable to the minority exceed the minority s interest in the equity of a subsidiary, the excess, and any further losses applicable to the minority, are charged against the Group s interest except to the extent that the minority has a binding obligation to, and is able to, make additional investment to cover the losses. If the subsidiary subsequently reports profits, the Group s interest is allocated with all such profits until the minority s share of losses previously absorbed by the Group has been recovered. (v) Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group s interest in the investees. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. (b) Financial instruments Arising from the adoption of FRS 139, Financial Instruments: Recognition and Measurement, with effect from 1 March 2010, financial instruments are categorised and measured using accounting policies as mentioned below. Before 1 March 2010, different accounting policies were applied. Significant changes to the accounting policies are discussed in Note 36. (i) Initial recognition and measurement A financial asset or a financial liability is recognised in the statements of financial position when, and only when, the Group or the Company becomes a party to the contractual provisions of the instrument. A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument.

32 Company No V Significant accounting policies (continued) (b) Financial instruments (continued) (i) Initial recognition and measurement (continued) An embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only if, it is not closely related to the economic characteristics and risks of the host contract and the host contract is not categorised at fair value through profit or loss. The host contract, in the event an embedded derivative is recognised separately, is accounted for in accordance with policy applicable to the nature of the host contract. (ii) Financial instrument categories and subsequent measurement The Group and the Company categorise financial instruments as follows: Financial assets (a) Financial assets at fair value through profit or loss Fair value through profit or loss category comprises financial assets that are held for trading, including derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or financial assets that are specifically designated into this category upon initial recognition. Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values cannot be reliably measured are measured at cost. Other financial assets categorised as fair value through profit or loss are subsequently measured at their fair values with the gain or loss recognised in profit or loss. (b) Loans and receivables Loans and receivables category comprises debt instruments that are not quoted in an active market. Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the effective interest method.

33 Company No V Significant accounting policies (continued) (b) Financial instruments (continued) (ii) Financial instrument categories and subsequent measurement (continued) Financial assets (continued) (c) Available-for-sale financial assets Available-for-sale category comprises investment in equity and debt securities instruments that are not held for trading. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost. Other financial assets categorised as available-for-sale are subsequently measured at their fair values with the gain or loss recognised in other comprehensive income, except for impairment losses, foreign exchange gains and losses arising from monetary items and gains and losses of hedged items attributable to hedge risks of fair value hedges which are recognised in profit or loss. On derecognition, the cumulative gain or loss recognised in other comprehensive income is reclassified from equity into profit or loss. Interest calculated for a debt instrument using the effective interest method is recognised in profit or loss. All financial assets, except for those measured at fair value through profit or loss, are subject to review for impairment (see Note 2(j)(i)). Financial liabilities All financial liabilities are subsequently measured at amortised cost other than those categorised as fair value through profit or loss. Fair value through profit or loss category comprises financial liabilities that are held for trading, derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or financial liabilities that are specifically designated into this category upon initial recognition. Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values cannot be reliably measured are measured at cost. Other financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair values with the gain or loss recognised in profit or loss.

34 Company No V Significant accounting policies (continued) (b) Financial instruments (continued) (iii) Financial guarantee contracts 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 original or modified terms of a debt instrument. Financial guarantee contracts are classified as financial liability and are amortised to profit or loss using a straight-line method over the contractual period or, when there is no specified contractual period, recognised in profit or loss upon discharge of the guarantee. When settlement of a financial guarantee contract becomes probable, an estimate of the obligation is made. If the carrying value of the financial guarantee contract is lower than the obligation, the carrying value is adjusted to the obligation amount and accounted for as a provision. (iv) Regular way purchase or sale of financial assets A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned. A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade date accounting. Trade date accounting refers to: (a) the recognition of an asset to be received and the liability to pay for it on the trade date, and (b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of a receivable from the buyer for payment on the trade date. (v) Derecognition A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profit or loss. A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

35 Company No V Significant accounting policies (continued) (c) Foreign currency (i) Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currency of the Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the functional currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies are not translated at the end of reporting date except for those that are measured at fair value, are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in profit or loss, except for difference arising on the retranslation of available-for-sale equity instruments or a financial instrument designated as a hedge of currency risk, which are recognised in other comprehensive income. (ii) Operations denominated in functional currencies other than Ringgit Malaysia The assets and liabilities of operations denominated in functional currencies other than RM, including goodwill and fair value adjustments arising on acquisition, are translated to RM at exchange rates at the end of the reporting period, except for goodwill and fair value adjustments arising from business combinations before 1 January 2006 which are reported using the exchange rates at the dates of the acquisitions. The income and expenses of foreign operations, are translated to RM at exchange rates at the dates of the transactions. Foreign currency differences are recognised in other comprehensive income and accumulated in the translation reserve. When a foreign operation is disposed of, in part or in full, the relevant amount in the translation reserve is transferred to profit or loss as part of the profit or loss on disposal. In the consolidated financial statements, when settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and are presented in the translation reserve within equity.