Profit for the financial year 157, ,481

Transcription

1 Directors Report 1 The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December Principal activities The Company is principally engaged in investment holding and the provision of management services to its subsidiaries, whilst the principal activities of the subsidiaries are as stated in Note 38 to the financial statements. There has been no significant change in the nature of these activities during the financial year. Ultimate holding company The Company is a subsidiary of TA Enterprise Berhad, of which is incorporated in Malaysia and regarded by the Directors as the Company s ultimate holding company, during the financial year and until the date of this report. Subsidiaries The details of the Company s subsidiaries are disclosed in Note 38 to the financial statements. Results Group RM 000 Company RM 000 Profit for the financial year 157, ,481 Reserves and provisions There were no material transfers to or from reserves and provisions during the financial year under review, except as disclosed in the financial statements. 74 TA Global Berhad Annual Report

2 Directors Report 2 Dividends Since the end of the previous financial period, the amount of dividends paid by the Company in respect of the financial year ended 31 December 2015 as reported in the Directors Report of that year, a final single tier ordinary dividend of 0.25 sen per ordinary share totalling RM13,304,305 declared on 25 April 2016 and paid on 15 July The final ordinary dividends recommended by the Directors in respect of the financial year ended 31 December 2016 is 0.40 sen per ordinary share totalling RM21,286,896 to be approved by shareholders of the Company at the forthcoming Annual General Meeting. Directors of the Company Directors who served during the financial year until the date of this report are: Datuk Tiah Thee Kian Datin Tan Kuay Fong Zainab Binti Ahmad Dato Sri Mohamed Bin Abid U Chin Wei Leong Kam Weng Christopher Koh Swee Kiat Datin Rahmah Binti Mahmood Khoo Poh Kimmy TA Global Berhad Annual Report 75

3 Directors Report 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 financial year end (including the interests of the spouses 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 At Number of ordinary shares Bought/ Sold/ Transfer* Transfer* At Datuk Tiah Thee Kian - direct interest 653,955,320 6,262, ,086,182* 394,131,938 - others # 6,929, ,086,182* - 273,015,982 Datin Tan Kuay Fong - direct interest 6,755, ,755,200 - others # 654,129, ,348,982^ 266,086,182* 660,392,720 Zainab Binti Ahmad 200, ,000 Dato Sri Mohamed Bin Abid - direct interest 529, ,880 - others # 15, ,360 U Chin Wei 156, ,000 Leong Kam Weng - direct interest 60, ,000 - others # 66, ,000 Christopher Koh Swee Kiat 94, ,200 Datin Rahmah Binti Mahmood 105, ,000 Khoo Poh Kimmy - direct interest 636, ,000 - others # 500, ,000 - ^ Included are transfer of 266,086,182 ordinary shares during the financial year 76 TA Global Berhad Annual Report

4 Directors Report 4 Directors interests (continued) Deemed interests in the Company Number of ordinary shares At Bought Sold At Datuk Tiah Thee Kian 3,202,334, ,202,334,270 Datin Tan Kuay Fong 3,202,334, ,202,334,270 Holding company TA Enterprise Berhad ( TAE ) Datuk Tiah Thee Kian - direct interest 530,716,200 13,296, ,012,600 - others # 6,314, ,314,000 Datin Tan Kuay Fong - direct interest 5,296, ,296,000 - others # 531,734,200 13,296, ,030,600 Dato Sri Mohamed Bin Abid - direct interest 100, ,000 Christopher Koh Swee Kiat 16, ,000 Khoo Poh Kimmy - direct interest 430, ,000 - others # 200, ,000 - # Indirect interest held through spouse and children. By virtue of their interests in the shares of the Company, Datuk Tiah Thee Kian and Datin Tan Kuay Fong are also deemed to have interest in the shares of the subsidiaries during the financial year to the extent that TA Global Berhad has an interest. Directors benefits Since the end of the previous financial period, no Director of the Company has received nor become entitled to receive any benefit (other than a benefit included in the aggregate amount of remuneration received or due and receivable by Directors as shown in the financial statements or the fixed salary of a full time employee of the 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 certain Directors who have significant financial interests in companies which traded with certain companies within the Group in the ordinary course of business as disclosed in the Note 37 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. TA Global Berhad Annual Report 77

5 Directors Report 5 Issue of shares and debentures There were no changes in the authorised, issued and paid-up capital of the Company during the financial year. There were no debentures 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. Indemnity and Insurance costs During the financial year, the Company effected a Group Directors & Officers Insurance Policy under TA Enterprise Berhad, covering TA Enterprise Berhad and its subsidiaries. The total apportioned amount of insurance effected for the Directors under the Company was RM1,375. Other statutory information Before the financial statements 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. 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) iii) iv) that would render the value attributed to the current assets in the financial statements of the Group and of the Company misleading, or 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 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, or ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year. 78 TA Global Berhad Annual Report

6 Directors Report 6 Other statutory information (continued) 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 Group and of the Company 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 31 December 2016 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 after the financial year end The significant and subsequent events of the Group and of the Company are as disclosed in Note 42 to the financial statements. Auditors The auditors, KPMG PLT (converted from a conventional partnership, KPMG, on 27 December 2016), have indicated their willingness to accept re-appointment. The auditors remuneration is disclosed in Note 27 to the financial statements. Signed on behalf of the Board of Directors in accordance with a resolution of the Directors: Dato Sri Mohamed Bin Abid Director Khoo Poh Kimmy Director Kuala Lumpur Date: 21 April 2017 TA Global Berhad Annual Report 79

7 Statements Of Financial Position AS AT 31 December Group Company Note RM 000 RM 000 RM 000 RM 000 Assets Property, plant and equipment 3 2,131,954 2,039,900 25,594 25,821 Investment properties 4 606, , Land held for property development 5 900, , Intangible assets 6 318, , Investment in subsidiaries ,401,316 2,401,316 Investment in associates 8 14,446 14, Investment in joint ventures 9 229, , Investment in securities , , , ,570 Deferred tax assets 11 81,184 74, Receivables , Total non-current assets 4,573,255 4,481,554 2,748,338 2,751,899 Property development costs 5 208, , Investment in securities , , Inventories 12 51,476 53, Receivables , ,239 1,471,655 1,343,025 Derivatives Tax recoverable 25,248 18,541 6,497 3,857 Cash and bank balances , ,140 16,334 61,942 Total current assets 1,793, ,977 1,494,486 1,408,824 Total assets 6,366,637 5,464,531 4,242,824 4,160, TA Global Berhad Annual Report

8 Statements Of Financial Position 8 AS AT 31 December 2016 (continued) Group Company Note RM 000 RM 000 RM 000 RM 000 Equity Share capital 15 2,660,862 2,660,862 2,660,862 2,660,862 Reserves , , , ,519 Total equity attributable to owners of the Company 3,015,643 2,788,771 3,105,558 2,991,381 Preference shares issued by subsidiaries 17 57,988 57, Total equity 3,073,631 2,846,759 3,105,558 2,991,381 Liabilities Deferred tax liabilities , , Borrowings 18 1,302, , , ,487 Payables 19 9,070 8, Total non-current liabilities 1,548,738 1,021, , ,487 Borrowings 18 1,275,462 1,281, , ,218 Payables , , , ,815 Income tax payable 19,454 4,602 2, Derivatives 20 3,908 2, Total current liabilities 1,744,268 1,596, , ,855 Total liabilities 3,293,006 2,617,772 1,137,266 1,169,342 Total equity and liabilities 6,366,637 5,464,531 4,242,824 4,160,723 The notes on pages 91 to 220 are an integral part of these financial statements. TA Global Berhad Annual Report 81

9 Statements of Profit or Loss FOR THE FINANCIAL YEAR ENDED 9 Group Company Note Year ended to Year ended to RM 000 RM 000 RM 000 RM 000 Revenue , ,854 63,507 36,841 Other income 22 37,195 48,011 19,685 5,599 Cost of inventories (39,423) (41,447) - - Cost of properties and construction materials sold 23 (20,110) (37,037) - - Hotel operation costs (excluding personnel costs) (135,325) (113,746) - - Personnel costs 24 (190,273) (140,815) (27,272) (9,244) Depreciation 3, 4 (80,803) (71,365) (946) (947) Foreign exchange gain/(loss), net 26 27,914 (64,235) 36,815 39,294 Other expenses (81,908) (60,828) (8,143) (19,635) Operating profit 110,917 51,392 83,646 51,908 Finance income 27 43,346 40,026 80,988 31,476 Finance costs 28 (64,302) (57,046) (30,665) (21,617) Share of results in investment in associates, net of tax (169) Share of results in joint ventures, net of tax 56,692 46, Profit before tax 146,484 80, ,969 61,767 Income tax 29 11,171 (38,910) (6,488) (2,651) Profit for the financial year/ period ,655 42, ,481 59,116 Profit attributable to: Equity holders of the Company 157,655 42, ,481 59,116 Basic earnings per ordinary share (sen) TA Global Berhad Annual Report

10 Statements of Profit or Loss and Other Comprehensive Income FOR THE FINANCIAL YEAR ENDED Group Company Year ended to Year ended to RM 000 RM 000 RM 000 RM 000 Profit for the financial year/period 157,655 42, ,481 59,116 Other comprehensive income: Items that will be reclassified subsequently to profit or loss: Net gain on foreign currency translation differences 42, , Net gain on exchange differences recognised in equity 30,957 25, Available-for-sale financial assets - Net fair value gain 9, Reclassification to profit or loss (574) Income tax effect Other comprehensive income for the financial year/period 82, , Total comprehensive income for the financial year/period 240, , ,481 59,116 Total comprehensive income attributable to: Equity holders of the Company 240, , ,481 59,116 The notes on pages 91 to 220 are an integral part of these financial statements. TA Global Berhad Annual Report 83

11 Statement Of Changes In Equity FOR THE FINANCIAL YEAR ENDED 11 Note / Attributable to owners of the Company / / Non-distributable / Distributable Share capital Merger deficit Availablefor-sale reserve Exchange translation reserve Exchange differences recognised in equity Capital redemption reserve Retained earnings Total Preference shares issued by subsidiaries RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Group At 1 February ,660,862 (926,077) 3,071 92,675 63, ,034 2,557,343 57,988 2,615,331 Total comprehensive income for the period - Profit for the period ,033 42,033-42,033 - Other comprehensive income ,593 25, , ,612 Total equity ,593 25,641-42, , ,645 Contributions by and distributions to owners of the Company Dividend to owners of the Company (53,217) (53,217) - (53,217) Total transactions with owners of the Company (53,217) (53,217) - (53,217) At 31 December ,660,862 (926,077) 3, ,268 89, ,850 2,788,771 57,988 2,846,759 Note 15 Note 16 Note 16 Note 16 Note 16 Note 16 Note TA Global Berhad Annual Report

12 Statement Of Changes In Equity 12 FOR THE FINANCIAL YEAR ENDED (continued) Note / Attributable to owners of the Company / / Non-distributable / Distributable Share capital Merger deficit Availablefor-sale reserve Exchange translation reserve Exchange differences recognised in equity Capital redemption reserve Retained earnings Total Preference shares issued by subsidiaries RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 RM 000 Group At 1 January ,660,862 (926,077) 3, ,268 89, ,850 2,788,771 57,988 2,846,759 Total comprehensive income for the year - Profit for the year , , ,655 - Other comprehensive income - - 8,974 42,590 30, ,521-82,521 Total equity - - 8,974 42,590 30, , , ,176 Contributions by and distributions to owners of the Company Dividend to owners of the Company (13,304) (13,304) - (13,304) Total transactions with owners of the Company (13,304) (13,304) - (13,304) At 31 December ,660,862 (926,077) 12, , , ,201 3,015,643 57,988 3,073,631 Note 15 Note 16 Note 16 Note 16 Note 16 Note 16 Note 16 The notes on pages 91 to 220 are an integral part of these financial statements. TA Global Berhad Annual Report 85

13 Statement Of Changes In Equity FOR THE FINANCIAL YEAR ENDED 13 Attributable to owners of the Company Distributable Share Retained capital earnings Total equity RM 000 RM 000 RM 000 Company At 1 February ,660, ,620 2,985,482 Profit and total comprehensive income for the period - 59,116 59,116 Contributions by and distributions to owners of the Company - Dividend to owners of the Company - (53,217) (53,217) At 31 December 2015/1 January ,660, ,519 2,991,381 Profit and total comprehensive income for the year - 127, ,481 Contributions by and distributions to owners of the Company - Dividend to owners of the Company - (13,304) (13,304) At 31 December ,660, ,696 3,105,558 Note 15 Note 16 The notes on pages 91 to 220 are an integral part of these financial statements. 86 TA Global Berhad Annual Report

14 STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED TA Global Berhad Annual Report 87

15 STATEMENTS OF CASH FLOWS 15 FOR THE FINANCIAL YEAR ENDED (continued) Group Company Year ended to Year ended to RM 000 RM 000 RM 000 RM 000 Cash flows from operating activities (continued) Realised fair value gain on derivatives (13,782) (1,844) - - Realised fair value loss on held for trading investment Interest income (73,390) (53,077) (80,988) (31,417) Interest expense 64,302 57,046 30,665 21,577 Financial guarantee income - - (1,241) (4,913) Gross dividend from subsidiaries - - (39,986) (23,458) Share of profit in joint ventures (56,692) (46,436) - - Gross dividends from quoted and unquoted investments (2,331) (5,438) - - Operating profit/(loss) before changes in working capital 138, ,285 (11,435) (4,082) Changes in working capital: Property development costs (22,647) 6, Receivables 348, ,981 (51) (25) Inventories 1,645 (422) - - Payables 63,061 6,497 8,889 (19,508) Net amount due from/to related companies 9,206 15,313 21,485 (17,675) Amount due from associated companies - (614) - - Cash generated from/(used in) operations 538, ,360 18,888 (41,290) Taxes paid (20,097) (59,718) (7,275) (1,073) Interest p aid (9) Interest received 4,612 15, Net cash from/(used in) operating activities 523, ,993 11,658 (42,159) 88 TA Global Berhad Annual Report

16 STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED TA Global Berhad Annual Report 89

17 STATEMENTS OF CASH FLOWS 17 FOR THE FINANCIAL YEAR ENDED (continued) Group Company Year ended to Year ended to RM 000 RM 000 RM 000 RM 000 Net increase/(decrease) in cash and cash equivalents 258,457 97,872 (45,965) 39,783 Effect of exchange rate fluctuation on cash held 6,267 8, Cash and cash equivalents at beginning of financial year/period 227, ,277 61,942 22,159 Cash and cash equivalents at end of financial year/period 492, ,671 16,334 61,942 Cash and cash equivalents Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial position amounts: Group Company Note RM 000 RM 000 RM 000 RM 000 Cash and bank balances , ,140 16,334 61,942 Less: Deposit pledged for bank guarantees 14 (419,641) (192,469) , ,671 16,334 61,942 The notes on pages 91 to 220 are an integral part of these financial statements. 90 TA Global Berhad Annual Report

18 Notes To The Financial Statements 18 TA Global Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad. The address of the principal place of business and registered office is as follows: Principal place of business and registered office 34 th Floor, Menara TA One No. 22, Jalan P. Ramlee Kuala Lumpur The consolidated financial statements of the Company as at and for the financial year ended 31 December 2016 comprise the Company and its subsidiaries (together referred to as the Group and individually referred to as Group entities ) and Group s interests in joint ventures and associates. The financial statements of the Company as at and for the financial year ended 31 December 2016 do not include other entities. The Company is principally engaged in investment holding and the provision of management services to its subsidiaries, whilst the principal activities of the subsidiaries are as stated in Note 38 to the financial statements. There has been no significant change in the nature of these activities during the financial year. The holding company during the financial year was TA Enterprise Berhad, a company incorporated in Malaysia and listed on the Main Market of Bursa Malaysia Securities Berhad. The financial statements were authorised for issue by the Board of Directors on 21 April Basis of preparation (a) Statement of compliance The financial statements of the Group and the Company have been prepared in accordance with Financial Reporting Standards ( FRS ) and the requirements of the Companies Act, 1965 in Malaysia. TA Global Berhad Annual Report 91

19 Notes To The Financial Statements Basis of preparation (continued) (a) Statement of compliance (continued) The following are accounting standards, amendments and interpretations that have been issued by the Malaysian Accounting Standards Board ( MASB ) but have not been adopted by the Group and the Company: FRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2017 Amendments to FRS 12, Disclosure of Interests in Other Entities (Annual Improvements to FRS Standards Cycle) Amendments to FRS 107, Statement of Cash Flows Disclosure Initiative Amendments to FRS 112, Income Taxes Recognition of Deferred Tax Assets for Unrealised Losses FRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2018 FRS 9, Financial Instruments (2014) IC Interpretation 22, Foreign Currency Transactions and Advance Consideration Amendments to FRS 1, First-time Adoption of Financial Reporting Standards (Annual Improvements to FRS Standards Cycle) Amendments to FRS 2, Share-based Payment Classification and Measurement of Share-based Payment Transactions Amendments to FRS 4, Insurance Contracts Applying FRS 9 Financial Instruments with FRS 4 Insurance Contracts Amendments to FRS 128, Investments in Associates and Joint Ventures (Annual Improvements to FRS Standards Cycle) Amendments to FRS 140, Investment Property Transfers of Investment Property FRSs, Interpretations and amendments effective for a date yet to be confirmed Amendments to FRS 10, Consolidated Financial Statements and FRS 128, Investments in Associates and Joint Ventures Sale or Contribution of Assets between an Investor and its Associate or Joint Venture The Group and the Company fall within the scope of IC Interpretation 15, Agreements for the Construction of Real Estate. Therefore, the Group is currently exempted from adopting the Malaysian Financial Reporting Standards ( MFRSs ) and is referred to as a Transitioning Entity. The Group and the Company plan to apply the abovementioned accounting standards, amendments and interpretations: from the annual period beginning on 1 January 2017 for those amendments that are effective for annual periods beginning on or after 1 January TA Global Berhad Annual Report

20 Notes To The Financial Statements Basis of preparation (continued) (a) Statement of compliance (continued) The initial application of the abovementioned standards, amendments or interpretations are not expected to have any material financial impacts to the current period and prior period financial statements of the Group and the Company The Group and the Company s financial statements for annual period beginning on 1 January 2018 will be prepared in accordance with the MFRSs issued by the MASB and International Financial Reporting Standards ( IFRSs ). The initial application of MFRSs will result in a change in accounting policy. The Group is currently assessing the financial impact that may arise from the adoption of MFRSs. (b) Basis of measurement The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2. (c) Functional and presentation currency These financial statements are presented in Ringgit Malaysia ( RM ), which is the Company s functional currency. All financial information is presented in RM and has been rounded to the nearest thousand, unless otherwise stated. (d) Use of estimates and judgements The preparation of the 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 year in which the estimates are revised and in any future years affected. TA Global Berhad Annual Report 93

21 Notes To The Financial Statements P 1. Basis of preparation (continued) (d) Use of estimates and judgements (continued) 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 in the following notes: Note 6 Impairment on intangible assets Determining whether goodwill is impaired requires estimation of recoverable amount of cash generating unit to which goodwill has been allocated. The recoverable amount calculation includes discounting future cash flows expected to be generated from continuous use of unit and a suitable discount rate applied to determine the present value. Details of the impairment assessment are provided in Note 6. Note 7 Impairment on investment in subsidiaries Assessment of impairment on investment in subsidiaries requires management judgement and assumption in determining whether there are any indications for impairment. If there are indications of impairment, the recoverable amounts are estimated based on the future cash flows from subsidiaries after considering the past experience and actual operating results. Note 10 Valuation on investment in securities The determination of fair value of investments in securities is subjective and involved significant judgement and uncertainties due to the use of assumptions and certain unobservable inputs. Impairment loss is estimated when there is significant or prolonged decline in the fair value below the asset s cost. Note 13 Impairment on receivables Impairment on receivables is individually assessed whereby judgement by management is required in the estimation of the amount and timing of future cash flows including estimation of recoveries from collaterals in determination of impairment losses. Note 41 Contingent liabilities Contingent liability is disclosed whereby the outflows of economic benefits are not probable and amount cannot be estimated reliably. Disclosures are made based on materiality threshold and management judgement on the latest available information. Details of the contingencies are provided in Note TA Global Berhad Annual Report

22 Notes To The Financial Statements 2. Significant accounting policies The accounting policies set out below have been applied consistently to the years presented in these financial statements and have been applied consistently by Group entities, unless otherwise stated. (a) Basis of consolidation (i) Subsidiaries Subsidiaries are entities, including structured entities, controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Potential voting rights are considered when assessing control only when such rights are substantive. The Group also considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee s return. Investments in subsidiaries are measured in the Company s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investment includes transaction costs. (ii) Business combinations Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which control is transferred to the Group. For new acquisitions, the Group measures the cost of goodwill at the acquisition date as: the fair value of the consideration transferred; plus the recognised amount of any non-controlling interests in the acquiree; plus if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. TA Global Berhad Annual Report 95

23 Notes To The Financial Statements Significant accounting policies (continued) (a) Basis of consolidation (continued) (ii) Business combinations (continued) When the excess is negative, a gain on bargain purchase is recognised immediately in profit or loss. For each business combination, the Group elects whether it measures the noncontrolling interests in the acquiree either at fair value or at the proportionate share of the acquiree s identifiable net assets at the acquisition date. Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. (iii) Acquisitions of non-controlling interests The Group accounts for all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity transactions between the Group and its non-controlling 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. (iv) Loss of control Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former subsidiary, any non-controlling interests and the other components of equity related to the former subsidiary from the consolidated statement of financial position. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the former subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained. 96 TA Global Berhad Annual Report

24 Notes To The Financial Statements 2. Significant accounting policies (continued) (a) Basis of consolidation (continued) (v) 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, unless it is classified as held for sale or distribution. The cost of the investment includes transaction costs. The consolidated financial statements include the Group s share of the profit or loss and other comprehensive income of the 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 associate. When the Group ceases to have significant influence over an associate, any retained interest in the former associate at the date when significant influence is lost is measured at fair value and this amount is regarded as the initial carrying amount of a financial asset. The difference between the fair value of any retained interest plus proceeds from the interest disposed of and the carrying amount of the investment at the date when equity method is discontinued is recognised in the profit or loss. When the Group s interest in an associate decreases but does not result in a loss of significant influence, any retained interest is not remeasured. Any gain or loss arising from the decrease in interest is recognised in profit or loss. Any gains or losses previously recognised in other comprehensive income are also reclassified proportionately to profit or loss if that gain or loss would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities. Investments in associates are measured in the Company s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of the investment includes transaction costs. TA Global Berhad Annual Report 97

25 Notes To The Financial Statements Significant accounting policies (continued) (a) Basis of consolidation (continued) (vi) Joint arrangements Joint arrangements are arrangements of which the Group has joint control, established by contracts requiring unanimous consent for decisions about the activities that significantly affect the arrangements returns. Joint arrangements are classified and accounted for as follows: A joint arrangement is classified as joint operation when the Group or the Company has rights to the assets and obligations for the liabilities relating to an arrangement. The Group account for each of its share of the assets, liabilities and transactions, including its share of those held or incurred jointly with the other investors, in relation to the joint operation. A joint arrangement is classified as joint venture when the Group has rights only to the net assets of the arrangements. The Group accounts for its interest in the joint venture using the equity method. Investments in joint venture are measured in the Company s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investment includes transaction costs. (vii) Non-controlling interests Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly to the equity holders of the Company, 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. Non-controlling interests in the results of the Group is presented in the consolidated statement of profit or loss and other comprehensive income as an allocation of the profit or loss and the comprehensive income for the year between non-controlling interests and owners of the Company. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance. 98 TA Global Berhad Annual Report

26 Notes To The Financial Statements Significant accounting policies (continued) (a) Basis of consolidation (continued) (viii) 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 associates and joint ventures 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) Foreign currency (i) Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of 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 retranslated at the end of the 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 differences 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. In the consolidated financial statements, when settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely to occur 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 foreign currency translation reserve ( FCTR ) in equity. TA Global Berhad Annual Report 99

27 Notes To The Financial Statements Significant accounting policies (continued) (b) Foreign currency (continued) (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. The income and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, 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 FCTR in equity. However, if the operation is a nonwholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the FCTR related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss. (c) Financial instruments (i) Initial recognition and measurement A financial asset or a financial liability is recognised in the statement 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. 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. 100 TA Global Berhad Annual Report

28 Notes To The Financial Statements Significant accounting policies (continued) (c) Financial instruments (continued) (ii) Financial instrument categories and subsequent measurement The Group and the Company categorised 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 as an 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) Held-to-maturity investments Held-to-maturity investments category comprises debt instruments that are quoted in an active market and the Group or the Company has the positive intention and ability to hold them to maturity. Financial assets categorised as held-to-maturity investments are subsequently measured at amortised cost using the effective interest method. (c) 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. TA Global Berhad Annual Report 101

29 Notes To The Financial Statements Significant accounting policies (continued) (c) Financial instruments (continued) (ii) Financial instrument categories and subsequent measurement (continued) Financial assets (continued) (d) 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(l)(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 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 equity instruments that do not have a quoted price in an active market for identical instruments whose fair values otherwise 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. 102 TA Global Berhad Annual Report

30 Notes To The Financial Statements 2. Significant accounting policies (continued) (c) 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. Fair value arising from financial guarantee contracts are classified as deferred income and is 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) (b) the recognition of an asset to be received and the liability to pay for it on the trade date, and 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 control of the asset is not retained or substantially all of the risks and rewards of ownership of the financial asset are transferred to another party. 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. TA Global Berhad Annual Report 103

31 Notes To The Financial Statements Significant accounting policies (continued) (c) Financial instruments (continued) (v) Derecognition (continued) A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged, 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. (vi) Offsetting Financial assets and liabilities are offset and the net amount presented on the statements of financial position when there is a legally enforceable right to offset the amounts and the intention to settle on a net basis or realise the asset and settle the liability simultaneously. Income and expense are presented on a net basis only when permitted by accounting standards. (d) Property, plant and equipment (i) Recognition and measurement Items of property, plant and equipment are measured at cost less any accumulated depreciation and any accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self-constructed assets also includes the cost of materials and direct labour. For qualifying assets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs. Cost also may include transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. 104 TA Global Berhad Annual Report

32 2. Significant accounting policies (continued) (d) Property, plant and equipment (continued) Notes To The Financial Statements 32 (i) Recognition and measurement (continued) The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and is recognised net within other income and other expenses respectively in profit or loss. (ii) Subsequent costs The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Group or the Company, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised to profit or loss. The costs of the dayto-day servicing of property, plant and equipment are recognised in profit or loss as incurred. (iii) Depreciation Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed, and if a component has a useful life that is different from the remainder of that asset, then that component is depreciated separately. Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment from the date that they are available for use. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Freehold land is not depreciated. Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use. The estimated useful lives for the current and comparative periods are as follows: Leasehold land years Buildings years Renovations 3-10 years Furniture and fittings 3-10 years Motor vehicles 5 years Office equipment and computers 3-10 years Depreciation methods, useful lives and residual values are reviewed at end of the reporting period, and adjusted as appropriate. TA Global Berhad Annual Report 105