--------------------------------------------------------------------------------------------------------------------------------------- MATERIAL DIFFERENCE BETWEEN UNAUDITED FINANCIAL STATEMENTS AND AUDITED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 28 FEBRUARY 2011 --------------------------------------------------------------------------------------------------------------------------------------- This announcement has been prepared by the Company and its contents have been reviewed by the Company s Sponsor, Collins Stewart Pte. Limited for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited, ( SGX-ST ). Collins Stewart Pte. Limited has not independently verified the contents of this announcement. This announcement has not been examined or reviewed by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this announcement, including the correctness of any of the statements or opinions made, or reports contained in this announcement. The contact person for the Sponsor is Mr. Alex Tan, Managing Director, Corporate Finance, Collins Stewart Pte. Limited at 77 Robinson Road #21-02 Singapore 068896, telephone (65) 6854-6160. The Board of Directors of Duty Free International Limited (the Company ) and together with its subsidiary companies, the ( ) refers to the announced unaudited financial results for the year ended 28 February 2011 ( FY2011 ) dated 28 April 2011 (the Unaudited Results ). The Board wishes to announce that pursuant to Rule 704(5) of the Catalist Rules, there is a material difference between the audited financial results of the for the financial year ended 28 February 2011 (the Audited Results ) and the Unaudited Results. The difference was mainly due to the change in classification of the s warrants as equity instead of derivative liabilities. In the unaudited annual financial results, warrants issued were classified as derivative liabilities which were stated at fair value at each balance sheet date with the changes in fair value charged to profit or loss. Subsequent to the announcement, the Company has reassessed the accounting for these warrants and concluded that the warrants meet the criteria for presentation as equity. Accordingly, a reclassification was made in the audited financial statements to reclassify the warrants as equity, with a corresponding reversal of the loss from changes in fair value charged to profit or loss. Certain other reclassifications were also made as described in the following pages. A comparison of the Audited Results and Unaudited Results is set out as follows: 1
Consolidated Income Statement For the year ended 28 February 2011 Revenue 573,322 573,322 - Changes in inventories and completed properties 3,126 3,126 - Inventories purchased and materials consumed (399,619) (399,619) - Other income 31,121 31,375 (254) A Depreciation (10,053) (10,053) - Rental of premises (15,748) (15,748) - Employee benefits expenses (41,025) (41,025) - Utilities, royalty and maintenance expenses (14,530) (14,532) 2 A Allowance for doubtful receivables (172) (172) - Commission expenses (1,782) (2,113) 331 A Inventories written down (77) (77) - Promotional expenses (2,368) (2,543) 175 A Professional fees (1,457) (1,457) - Gain arising from changes in fair values of biological assets 769 769 - Gain on disposal of a subsidiary 14,414 14,414 - Cost of reverse acquisition written off (40,785) (40,785) - Loss on fair value changes of warrants - (10,736) 10,736 B Other operating expenses (26,184) (25,930) (254) A Operating profit 68,952 58,216 10,736 Financial expenses (10,865) (10,865) Profit before tax 58,087 47,351 10,736 Income tax expenses (19,992) (19,992) Profit for the financial year 38,095 27,359 10,736 Attributable to: Equity holders of the Company 36,978 26,242 10,736 Non-controlling interests 1,117 1,117 38,095 27,359 10,736 Earnings per share attributable to equity holders of the Company (cent) Basic 4.23 3.00 1.23 Diluted 4.23 3.00 1.23 2
Statement of Financial Position As at 28 February 2011 Assets Non-current assets Property, plant and equipment 243,002 243,002 - Land held for development 305 305 - Biological assets 3,386 3,386 - Land use rights 23,062 23,062 - Goodwill 49,670 49,670 - Other receivables 253 253 - Deferred tax assets 6,353 6,353-326,031 326,031 Current assets Inventories 114,613 114,613 - Tax recoverable 539 539 - Trade and other receivables 16,039 16,039 - Prepayments 2,779 2,779 - Cash and bank balances 91,937 91,937-225,907 225,907 Total assets 551,938 551,938 Equity and liabilities Current liabilities Provisions 547 547 - Income tax payable 3,528 3,528 - Borrowings 107,910 107,910 - Trade and other payables 120,302 120,302 - Derivative liabilities 8 43,298 (43,290) B 232,295 275,585 (43,290) Net current liabilities (6,388) (49,678) 43,290 Non-current liabilities Deferred tax liabilities 6,200 6,200 - Borrowings 759 759-6,959 6,959 Total liabilities 239,254 282,544 3
Statement of Financial Position (Cont d) As at 28 February 2011 Net assets 312,684 269,394 43,290 Equity attributable to owners of the parent Share capital 494,081 493,157 924 C Share premium 2,778 2,778 - Treasury shares - - - Other reserves (108,698) (140,328) 31,630 B & C Accumulated losses (77,258) (87,994) 10,736 B 310,903 267,613 43,290 Non-controlling interests 1,781 1,781 - Total equity 312,684 269,394 43,290 Total equity and liabilities 551,938 551,938 4
Consolidated Cash Flow Statement For the year ended 28 February 2011 Cash flows from operating activities Profit before tax 58,087 47,351 10,736 B Adjustments for: - Allowances for doubtful receivables 172 172 - Amortisation of land use rights 702 702 - Bad debts written off 69 69 - Cost of reverse acquisition written off 40,785 40,785 - Loss on fair value changes of warrants - 10,736 (10,736) B Deposit forfeited (6) - (6) Deposit written off 14 14 - Depreciation 10,053 10,053 - Finance costs 10,865 10,865 - Gain arising from changes in fair values of biological assets (769) (769) - Gain on disposal of a subsidiary (14,414) (14,414) - Gain on disposal of land use rights (1,531) (1,530) (1) Gain on disposal of property, plant and equipment (4,666) (4,667) 1 Interest income (499) (499) - Inventories written off 275 275 - Net unrealised foreign exchange loss 634 634 - Property, plant and equipment written off 162 161 1 Provision for short term accumulating compensated absences 31 31 - Reversal of inventories written down (821) (821) - Reversal of impairment losses for property, plant and equipment (3,334) (3,334) - Reversal of impairment losses for land use rights (767) (767) - Write-back of allowance for doubtful receivables (39) (39) - Write down of inventories 77 77 - Operating profit before working capital changes 95,080 95,085 (5) Decrease/(increase) in receivables 3,189 (3,598) 6,787 D Increase in inventories (2,658) (2,658) - (Decrease)/increase in payables (19,058) 5,188 (24,246) B & D Cash generated from operations 76,553 94,017 (17,464) Interest paid (5,206) (5,206) - Taxes paid (18,870) (18,240) (630) A Net cash generated from operating activities 52,477 70,571 (18,094) 5
Consolidated Cash Flow Statement (Cont d) For the year ended 28 February 2011 Cash flows from investing activities Additions of biological assets (449) (449) - Interest received 499 499 - Acquisition of subsidiaries (23,940) (23,940) - Proceeds from disposal of a subsidiary 14,786 14,786 - Proceeds from disposal of land use rights 1,557 1,557 - Proceeds from disposal of property, plant and equipment 8,321 8,321 - Purchase of property, plant and equipment (6,717) (7,338) 621 A Net cash used in investing activities (5,943) (6,564) 621 Cash flows from financing activities Acquisition of non-controlling interests (26,261) (26,263) 2 Proceeds from term loans 76,152 76,152 - Repayment of term loans (50,508) (50,508) - Changes in amount due to ultimate holding company 5,333 5,333 - Changes in amounts due from related companies 808-808 D Changes in amounts due to related companies 16,496-16,496 D Increase in amounts due to DFZ shareholders 169-169 D Increase in fixed deposits (188) (145) (43) Purchase of treasury shares (5) (5) - Repayment of other short term borrowings (1,127) (1,126) (1) Net repayment of hire purchase and lease financing (252) (252) - Dividends paid (42,518) (42,518) - Net cash used in financing activities (21,901) (39,332) 17,431 Net increase in cash and cash equivalents 24,633 24,675 (42) Effects of foreign exchange rate changes 15 15 - Cash and cash equivalents at beginning of the year 55,638 55,638 - Cash and cash equivalents at end of the year 80,286 80,328 (42) Cash and cash equivalents carried forward consists of: Deposits with licensed banks 72,031 72,031 - Less: Pledged deposits (10,174) (10,132) (42) 61,857 61,899 (42) Cash and bank balances 19,906 19,906 - Bank overdrafts (1,477) (1,477) - 80,286 80,328 (42) 6
Net Asset Value per Share As at 28 February 2011 Results Results Difference Net asset value (RM 000) 310,903 267,613 43,290 Number of ordinary shares in issue ( 000) 1,114,124 1,114,124 - Net asset value per ordinary share (RM cents) 27.91 24.02 3.89 Notes A B C D Reclassification of expense items. Due to change in reclassification of warrants from derivative liability to equity. The fair values changes in warrants which were being recognised in profit or loss, were now being reversed out. Being an adjustment of amount of warrants issued in relation to the mandatory general offer for DFZ Capital Berhad shares held by non-controlling interests, which should have been recognised as additional share capital from issuance of shares. Being reclassification of amount due from/to related companies which are non-trade in nature from operating activities to financing activities. 7