TIDMHID
RNS Number : 8833G
Hidong Estate PLC
26 July 2019
HIDONG ESTATE PLC
Company Number: 00188390
Annual Report 2019
Contents
Page
Notice of meeting .. .. .. .. .. .. .. .. .. .. .. ..
.. .. .. .. .. .. .. .. .. .. .. 1 - 2
Corporate information .. .. .. .. .. .. .. .. .. .. ..
.. .. .. .. .. .. .. .. .. .. 3 - 4
Chairman's statement .. .. .. .. .. .. .. .. .. .. ..
.. .. .. .. .. .. .. .. .. .. 5
Strategic report .. .. .. .. .. .. .. .. .. .. .. .. ..
.. .. .. .. .. .. .. .. .. .. .. 6 - 7
Report of the directors .. .. .. .. .. .. .. .. .. ..
.. .. .. .. .. .. .. .. .. .. .. 8 - 14
Directors' remuneration report .. .. .. .. .. .. .. .. 15 -
.. .. .. .. .. .. .. .. .. .. 16
Statement of directors' responsibilities in respect of
the annual report and the financial statements .. .. ..
.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. 17 -
.. .. .. .. 18
Independent auditor's report to the members of Hidong 19 -
Estate Plc .. .. .. .. 24
Profit and loss account .. .. .. .. .. .. .. .. .. ..
.. .. .. .. .. .. .. .. .. .. .. 25
Balance sheet .. .. .. .. .. .. .. .. .. .. .. .. .. ..
.. .. .. .. .. .. .. .. .. .. 26
Statement of Other Comprehensive Income.. .. .. .. ..
.. .. .. .. .. .. .. .. 27
Statement of Changes in Equity .. .. .. .. .. .. .. ..
.. .. . .. .. .. .. .. .. .. .. .. 28
Cash flow statement .. .. .. .. .. .. .. .. .. .. .. ..
.. .. .. .. .. .. .. .. .. .. 29
Notes to the financial statements .. .. .. .. .. .. .. 30 -
.. .. .. .. .. .. .. .. .. .. 37
Comparative statistics .. .. .. .. .. .. .. .. .. .. ..
.. .. .. .. .. .. .. .. .. .. 38
Terms of Reference for the Audit Committee .. .. .. .. 39 -
.. .. .. .. .. .. .. .. 40
Proxy form .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..
.. .. .. .. .. .. .. .. .. .. 41
Notice of meeting
NOTICE IS HEREBY GIVEN that the NINETY-SIXTH ANNUAL GENERAL
MEETING of the Company will be held at the head office of the
Company, 3(rd) Floor, 2 Lebuh Pantai, 10300 George Town, Penang,
Malaysia on Monday, 23 September 2019 at 10:30 a.m. for the
following purposes:-
1. To receive and consider the audited financial statements and
the reports of the directors and auditors thereon for the year
ended 31 March 2019.
2. To re-elect Mr. Diong Chin Teck who retires in accordance
with article 108 of the Company's Articles of Association, and
being eligible, offers himself for re-election.
3. To re-appoint the auditors and to authorise the directors to fix their remuneration.
Ordinary Resolution:-
"THAT Mazars LLP be and is hereby appointed auditors of the
Company to hold office from the conclusion of this meeting until
the conclusion of the next general meeting at which financial
statements are laid before the Company, and that their remuneration
be fixed by the directors."
4. To approve the Directors' Remuneration Report
Ordinary Resolution:-
"THAT the Directors' Remuneration Report for the year ended 31
March 2019 be and is hereby approved."
5. To approve the Directors' Remuneration Policy
Ordinary Resolution:-
"THAT the Directors' Remuneration Policy be and is hereby
approved."
6. To approve the following resolutions as Ordinary Resolutions :-
(a) "THAT authority be and is hereby given to Mr Diong Chin Teck
who has served as an independent non-executive director of the
Company for a cumulative term of more than nine (9) years to
continue to act as an independent non-executive director of the
Company."
(b) "THAT authority be and is hereby given to Mr Chew Beow Soon
who has served as an independent non-executive director of the
Company for a cumulative term of more than nine (9) years to
continue to act as an independent non-executive director of the
Company"
7. To transact any other business of which due notices shall have been given.
By order of the Board
Lim Kim Teck
Secretary
26 July 2019
Notes
1. A member entitled to attend and vote at the meeting is
entitled to appoint one or more proxies to attend and vote instead
of him. A proxy need not be a member of the Company. A form of
proxy is enclosed for your completion and return.
2. A statement of all transactions of each director and, where
applicable, of his family in the share capital of the Company will
be available at the head office of the Company on any weekday
during normal business hours from the date of this notice until the
conclusion of the annual general meeting. There are no service
contracts in existence with the directors.
3. Biographical details of the directors presenting themselves
for re-election and re-appointment are set out on the following
page. The Board has reviewed the performance of each individual
director, including the directors presenting themselves for
re-election and re-appointment, and concluded that each director
has performed effectively and continues to demonstrate commitment
to the role.
Corporate information
DIRECTORS
Chew Sing Guan (Chairman)
An executive director and chairman of the Company since 1983. A
non-executive director of the managing agents and Malaysian
registrars, Plantation Agencies Sdn. Berhad. Male aged 69.
Diong Chin Teck
A non-executive director of the Company since 2000. A director
of several public limited companies, a few of which are quoted.
Male aged 86.
Chew Beow Soon
A non-executive director of the Company since 2000. A director
of several private limited companies. Male aged 70.
AUDIT COMMITTEE
Diong Chin Teck (Chairperson)
Chew Beow Soon (Member)
COMPANY SECRETARY
Lim Kim Teck
HEAD OFFICE, MANAGING AGENTS
AND MALAYSIAN REGISTRARS
Plantation Agencies Sdn. Berhad
3(rd) Floor,
2, Lebuh Pantai,
10300 George Town, Penang, Malaysia.
P.O.Box 706,
10790 Penang, Malaysia.
REGISTERED OFFICE
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen
West Midlands
B62 8HD
U.K. REGISTRARS
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen
West Midlands
B62 8HD
AUDITOR
Mazars LLP
45 Church Street
Birmingham
West Midlands
B3 2RT
United Kingdom
LISTING
London Stock Exchange
Chairman's statement
On behalf of the Board of Directors, I am pleased to present to
you the Annual Report and Audited Financial Statements of Hidong
Estate Plc for the financial year ended 31 March 2019.
The Company recorded profit before tax of RM197,135 (2018:
RM230,643) for the financial year ended 31 March 2019. The gain is
mainly attributable to interest income.
The Malaysian economy registered a growth of 4.7% during the
final quarter of 2018, bringing the total GDP for the year to 4.7%.
The Malaysian economy is expected to experience moderate growth in
2019 due to challenging external factors. The uncertainties in the
US' monetary policies, the slowdown in China's economic growth and
the ongoing unresolved trade tension between the US and China also
affected global economy and thus Malaysia economy.
The trade war will be seriously contagious, spreading beyond the
two involved parties. The global supply chain and financial markets
are major transmission mechanisms that can propagate the shock
across the world economy. While everyone will suffer, Asia will
take the worst hit, given its high degree of supply chain
integration with China's manufacturing and assembly operations.
Therefore, the Company will always remain vigilant of the
developments that could affect our local and global economies.
The Board remained prudent and continued its disciplined
approach by maintaining the Company's assets in liquid form and
controlling costs at the same time. With this, the Company
maintains sufficient levels of cash or readily convertible
investments to quickly respond to opportunities should they
eventualise and at the same time, creating long-term sustainable
value and enhanced returns to all our stakeholders.
Lastly, I wish to thank our valued shareholders for their
steadfast support and loyalty and my appreciation also goes to
fellow Board members and management for their co-operation,
dedication and contribution to the Company.
CHEW SING GUAN
Chairman
Penang, Malaysia
26 July 2019
Strategic report
The original principal activities of the Company, which were the
production of natural rubber and oil palm fresh fruit bunches,
ceased when the Company sold its land and plantations in 2006.
Since then, the Board has been actively identifying suitable
investments for the Company.
The Company's assets after the disposal of the plantation and
its other plant and equipment comprise cash and bank deposits, all
of which earn interest, and investments in listed equities. The
income generated from deposits and investments as well as any gain
from disposal of investments serve to increase shareholders' funds
and it is the strategy adopted by the Company to preserve and grow
value for shareholders.
PERFORMANCE INDICATORS
The Company's performance in its investment activities are
highlighted as follows:
2019 2018
RM RM
Consistent dividend income
derived from investments
Income from investments 54,297 59,357 in 2019.
Higher gain on disposal
of investments in equities
Gain on disposal of investments 9,894 7,591 in 2019.
Interest receivable on Consistent returns from
short interest on short term
term bank deposits 388,627 407,932 bank deposits.
All performance measures are in line with management's
expectations.
PRINCIPAL RISKS AND UNCERTAINTIES
As the Company's assets comprise cash and bank deposits and
investments in listed equities, the financial risks involved are
minimal though it is acknowledged that values will fluctuate over
time. The principal risks and the steps the Company has taken to
manage these risks are disclosed in note 12 to the financial
statements.
All of the Company's day-to-day management and administrative
functions are outsourced to third parties. As a result, the Company
has no employees other than a single director, or internal
operations. The Company has therefore not reported further in
respect of these provisions in this Annual Report.
VIABILITY STATEMENT
As at the end of the financial year, the Company's assets
comprise approximately 90.4% (2018: 88.7%) in cash and deposits and
9.4% (2018: 10.5%) in quoted equity investments which are highly
liquid in nature. The directors believe that, taking into account
the Company's strong solvency position, highly liquid assets and
measures taken to manage the principal risks, the Company will be
able to continue its investment activities and meet its liabilities
as they fall due for the period up to 31 March 2022, being the
period considered by the directors in their assessment for the next
three years. In their assessment the directors also believe that,
should the need arise, the Company will be able to raise new
finance through borrowings to fund new investments it may identify
as the Company currently does not have any borrowings.
Reporting on certain matters is considered to be impractical for
the entity and as a result have not been specifically commented
upon. These include environmental matters and community issues.
Specifically in relation to carbon dioxide emissions the activities
of the company are such that its emissions are negligible.
Approval
This report was approved by the Board of Directors on 26 July
2019 and signed on its behalf:
CHEW SING GUAN CHEW BEOW SOON
Chairman Director
Penang, Malaysia
Report of the directors
The directors present their Annual Report of the Company for the
financial year ended 31 March 2019.
RESULTS AND DIVID
The Company made a profit after tax of RM108,528 for the current
financial year as compared to RM137,963 in the previous year. The
directors do not recommend any final dividend to be paid for the
current financial year (2018: RM Nil).
DIRECTORS
The names and sex of the directors who held office during the
year together with brief biographical details are shown on page 3.
In accordance with article 108 of the Company's Articles of
Association, Mr. Diong Chin Teck will retire by rotation at the
forthcoming annual general meeting and, being eligible, offers
himself for re-election.
Qualifying third party indemnity provisions are not in place in
respect of the Company's directors.
The directors do not have any service contract with the Company.
Mr. Chew Sing Guan is a non-executive director of Plantation
Agencies Sdn. Berhad who acted as the Malaysian Registrars and an
agent to the Company in Malaysia.
SUBSTANTIAL SHAREHOLDINGS
At the date of this report, substantial interests in the share
capital of the Company, as notified to the Company, were as
follows:-
No. of ordinary shares of
10p each %
Malayan Securities Trust Sdn.
Berhad 798,986 46.63
Thomas William George Charlton 234,997 13.72
Flairshare Limited 132,000 7.70
The Temerloh Rubber Estates
Berhad 88,442 5.16
Mr. Chew Sing Guan has notified an interest in the shares held
by Malayan Securities Trust Sdn. Berhad. The directors are not
aware of any other beneficial holding of 3% or more in the share
capital of the Company.
The Directors Chew Beow Soon and Diong Chin Teck each hold 1,000
ordinary shares.
EFFECT OF THE WITHDRAWAL OF THE UNITED KINGDOM FROM THE EUROPEAN
UNION
The directors do not anticipate that the withdrawal of Britain
from the European Union will have any material impact on the
business of the company.
TAXATION
The Company is tax resident in Malaysia.
PAYMENT TO SUPPLIERS
The Company does not follow any code or standard on payment
practice. The Company's policy, in relation to all of its
suppliers, is to make settlement according to the terms of payment
agreed at the commencement of business with that supplier provided
that the supplier has complied with the terms and conditions of the
supply agreement.
CORPORATE GOVERNANCE
As at the date of this report the Company is not in full
compliance with the following provisions of the UK Corporate
Governance Code (2014): C3.2, C3.4, C3.5, C3.6 and C3.8 due to its
size, the nature of its current activities which is investment
holding and the small volume of transactions conducted per year.
Areas of non-compliance with the Corporate Governance code are
appropriately disclosed in the succeeding paragraphs.
Internal Audit
The need for an internal audit function has been reviewed by the
directors. It was decided that the current size of the Company,
nature of its activities and small volume of transactions combined
with the tight financial and management control exercised by the
directors on a day-to-day basis negates such a need. The policy
will be kept under review. The absence of an internal audit
function is not in compliance with provision C.3.6 of the UK
Corporate Governance Code.
External Auditor
The Audit Committee assesses annually the effectiveness of the
external audit process and has primary responsibility for making
recommendation on the appointment, re-appointment or removal of the
external auditor.
The current external auditor was appointed in 2017 and have been
re-appointed annually since then. The Company last conducted a
tender for external auditors in 2017. Due to the nature of the
Company it was not felt necessary to tender the audit in accordance
with the Corporate Governance Code.
The external auditors did not provide any non-audit services in
this or the previous year.
Directors
The directors carry out their duties in a manner that will
safeguard the shareholders' interests at all times. They are
responsible for ensuring sound management of the Company and
effective implementation and execution of its policies, decisions
and business strategies towards ensuring a successful continuity of
the business.
The Board ordinarily meets three times a year. During the year
ended 31 March 2019 the Board met on three occasions. Details of
the directors' attendance at Board meetings during the financial
year are as follows:
Attendance
Chew Sing Guan 3/3
Diong Chin Teck 3/3
Chew Beow Soon 3/3
Haji Zambri bin Haji Mahmud 1/3
(retired on 24 September 2018)
Directors (Cont'd)
The Board is guided by a formal schedule of matters specifically
reserved to it for decision making which includes future strategy,
key business policies, material acquisitions and disposals,
approval of interim financial statements, annual reports and
financial statements. Directors have full and timely access to
information and Board papers and reports relevant to the issues of
meetings are circulated to Board members in advance of the
meetings. Procedures are in place for directors to take independent
professional advice in the furtherance of their duties, if
necessary, at the Company's expense. In addition, all directors
have direct access to the advice and services of the Company
Secretary.
The Board consists of the executive Chairman, Mr. Chew Sing Guan
and two independent non-executive directors namely Mr. Diong Chin
Teck and Mr. Chew Beow Soon. Even though both two non-executive
directors have been in post for more than nine years, the Board is
satisfied that they have continued to demonstrate independence in
terms of character and judgement.
In non-compliance with provision A.2.1 and A.3.1 of the
Corporate Governance code it is the Board's view that for a Company
of this size it is not deemed necessary to separate the posts of
chairman and chief executive officer. Furthermore, the Board is of
the opinion that there is a strong independent element within the
Board in the form of the two independent non-executive directors
who provide a check and balance in the Board on decision making.
For the same reasons, even though this is not in compliance with
provision A.4.1 and B.2.1 of the Corporate Governance code, the
Board is also of the view that it is not deemed necessary to
appoint a senior independent director or to form a Nomination
Committee. The Board is assisted by professionals (Managing Agents)
who report periodically to it. Important business matters are
submitted to the Board for decision.
In addition, in non-compliance with the Corporate Governance
Code, Mr. Chew Sing Guan is a non-executive director of Plantation
Agencies Sdn. Berhad who acted as the Malaysian Registrars and an
agent to the Company in Malaysia.
In accordance with the Articles of Association of the Company,
all directors are subject to election by shareholders at the first
Annual General Meeting after their appointment and thereafter
subject for re-election at least once every three years. The Board
has always complied with this requirement. The Board has chosen not
to adopt provision B.7.1 of the Code that non-executive directors
who have served for more than nine years should be subject to
annual re-election since the existing practice, which complies with
Company law and the Articles, works well. However, the Company will
seek shareholders' approval for independent non-executive directors
who have served for more than nine years to continue to act as
independent non-executive directors of the Company.
The Company has not complied with provisions D.1.1 to D.1.5 of
the Corporate Governance code relating to remuneration schemes for
directors as the directors received only a nominal fee for their
services and there is no intention to change the way they are
remunerated. Accordingly, the formation of a Remuneration Committee
is not deemed to be necessary and the Company has not complied with
provisions D.2.1 and D.2.2 of the Corporate Governance code.
The Directors evaluate the performance of the Board, the Audit
Committee and its individual directors. The assessment of the
individual directors on the performance of the Board and the Audit
Committee are collated for the Chairman's review and presented to
the entire Board. Each director also assesses the individual
performance of the other directors and the results are presented to
the Chairman who then holds discussions with all the individual
directors regarding their effectiveness. The performance of the
Chairman is assessed collectively by the non-executive
directors.
Relations with shareholders
The Board has through the years used the Annual Report and the
Annual General Meeting to communicate with its shareholders. It is
always ready to hold dialogues with interested investors to improve
the Company's business activities.
Audit Committee
The Audit Committee comprises two independent non-executive
directors, Mr. Diong Chin Teck (Chairperson) and Mr. Chew Beow
Soon. The terms of reference of the Audit Committee are set out on
page 39 and 40 of this Annual Report.
The Audit Committee is responsible for reviewing the Company's
risk management, internal control and audit processes. The Audit
Committee assists the Board in seeking to ensure that the financial
and non-financial information supplied to the Board and
shareholders presents a fair, balanced and understandable
assessment of the Company's position and performance. The Committee
is authorised by the Board to investigate any activity within its
terms of reference. It is authorised to seek any information it
requires from any employee and all employees are directed to
co-operate with any request made by the Committee. Any staff may,
in confidence, raise concerns about possible improprieties in
matters of the Company to the Chairman of the Audit Committee who
is empowered to carry out investigation of such matter and take
appropriate follow-up action.
The Committee is authorised by the Board to obtain outside legal
or other independent professional advice and to secure the
attendance of outsiders with relevant experience and expertise it
considers necessary.
During the financial year ended 31 March 2019, the Audit
Committee met three times and the attendances of the members of the
Committee are as follows:
Attendance
Diong Chin Teck 3/3
Chew Beow Soon 3/3
Haji Zambri bin Haji Mahmud 1/3
(retired on 24 September
2018)
During the year the Audit Committee assisted the Board in
reviewing the periodic operational and financial reports submitted
by the Managing Agents. As part of its function in discharging its
responsibilities, the Audit Committee carried out the
following:
- reviewed the half-yearly interim report to shareholders before
submitting the same to the Board for approval and announcement;
- reviewed the system of internal controls put in place by the
Managing Agents to manage the operations of the Company;
- reviewed the external auditor's scope of work and audit plans for the year; and
- discussed the findings of the external auditor in respect of
the audit of the annual financial statements before submitting the
same to the Board for approval and announcement.
Significant risk areas
The Company's assets mainly comprise cash and investments in
listed equities and this portfolio of cash and listed investments
is considered to be the key driver of operations and performance
results of the Company. The Audit Committee considered cash and
listed investments to be at low risk of significant misstatements
and not to be subject to a significant level of judgement. However,
due to their high materiality in the context of the financial
statements as a whole, the Audit Committee agreed with the
auditor's view that they are considered to be the area which had
the greatest effect on the overall audit of the financial
statements. The Audit Committee are satisfied that the risks
surrounding cash and listed investments are adequately mitigated
due to the fact that they are:
- comfortable with the processes and controls in place to record
investment transactions and to value the portfolio;
- comfortable with the processes and controls in place
surrounding the treasury function and the bank reconciliation
process; and
- the valuation of listed investments can be agreed to externally quoted prices.
Internal Controls
The Board is responsible for the Company's system of internal
control and for reviewing its effectiveness, which it does on an
annual basis. Such a system is designed to manage, rather than
eliminate, the risk of failure of achieving business objectives and
can provide only reasonable, but not absolute, assurance against
material misstatement or loss. There is a continuous process for
identifying, evaluating and managing the significant risks faced by
the Company. This process was in place throughout the year under
review and up to the date of approval of the annual report.
The key elements of the Company's internal controls are as
follows:
-- Risk assessment
The Board is responsible for the identification, evaluation and
review of risks facing the business. Such risks are reviewed on a
continuous basis and are carried out as part of the monthly
reporting.
-- Control environment and control activities
The day-to-day operation of the system of internal controls is
delegated to the Managing Agents. The management and control
procedures cover issues such as physical controls, segregation of
duties, authorisation levels and comprehensive financial and
operational reporting systems. Such procedures are documented for
effective control and monitoring.
-- Information and communication
The Board holds periodic formal and informal discussions on the
Company's affairs where all important business decisions are
formally discussed and documented. The Board holds periodic board
meetings to formally approve the financial reports submitted by the
Managing Agents.
DISCLOSURE OF INFORMATION TO AUDITOR
The directors who held office at the date of approval of this
directors' report confirm that, so far as they are each aware,
there is no relevant audit information of which the Company's
auditor is unaware and each director has taken all the steps that
they ought to have taken as a director to make themselves aware of
any relevant audit information and to establish that the Company's
auditor is aware of that information.
GOING CONCERN
Having undertaken all the appropriate procedures and assessing
the financial position as at the year end, performance and results
for the financial year, the directors have a reasonable expectation
that the Company has adequate resources to continue in operational
existence for the foreseeable future. Thus they continue to adopt
the going concern basis of accounting in preparing the annual
financial statements.
CONTROLLING SHAREHOLDER
In May 2014 the Listing Rules were amended to include new
requirements relating to controlling shareholders. The revised
Listing Rules require that premium listed companies with
"controlling shareholders" (defined as a shareholder who
individually or with any of their concert parties exercises or
controls 30% or more of the votes able to be cast on all or
substantially all the matters at the Company's general meeting)
must enter into a relationship agreement containing specific
independence provisions.
The independence provisions required by the Listing Rules are
that:
(i) transactions and arrangements with the controlling
shareholder (and/or any of its associates) will be conducted at
arm's length and on normal commercial terms;
(ii) neither the controlling shareholder nor any of its
associates will take any action that would have the effect of
preventing the Company from complying with its obligations under
the Listing Rules; and
(iii) neither the controlling shareholder nor any of its
associates will propose or procure the proposal of a shareholder
resolution which is intended or appears to be intended to
circumvent the proper application of the Listing Rules.
By virtue of his interest in the shares held by Malayan
Securities Trust Sdn. Berhad which has 46.63% shareholding in the
Company, Mr. Chew Sing Guan is a controlling shareholder. The Board
notes that the current activities of the Company comprise placing
deposits with financial institutions and investments in listed
equities. The administrative affairs of the Company are handled by
a managing agent and total expenditure for the year amounted to
less than 3% of net assets of the Company. In view of the nature of
the Company's activities and the small volume of transactions
conducted, the Board considers that there is negligible risk of any
transaction or arrangement being conducted by the Company with the
controlling shareholder to the latter's advantage. Nevertheless,
the Board is discussing to put in place an undertaking with the
controlling shareholder to comply with the Listing Rules.
MATTERS COVERED IN THE STRATEGIC REPORT AND FINANCIAL
STATEMENTS
As permitted by Paragraph 1A of Schedule 7 to the Large and
Medium Sized Companies and Groups (Accounts and Reports)
Regulations 2008 certain matters which are required to be disclosed
in the Directors' Report have been omitted as they are included in
the Strategic Report on pages 6-7 and in note 12 of the Financial
Statements. These matters relate to the future developments of the
Company which have been disclosed in the Strategic Report, and
financial risk management which has been disclosed in note 12 of
the Financial Statements.
AUDITOR
As recommended by the Audit Committee, a resolution for the
re-appointment of Mazars LLP as auditor to the Company will be
proposed at the 2019 Annual General Meeting.
Approval
This report was approved by the Board of Directors on 26 July
2019 and signed on its behalf:
CHEW SING GUAN CHEW BEOW SOON
Chairman Director
Penang, Malaysia
Directors' Remuneration Report
On behalf of the Board of Directors, I am pleased to present the
Directors' Remuneration Report for the year ended 31 March
2019.
This report has been prepared in accordance with the legislation
relating to the reporting of Directors' remuneration and complies
with the sections 420 to 421 of the Companies Act 2006 and of
Schedule 8 of SI 2008/410 Large and medium-sized companies and
groups (Accounts and Directors' Report) Regulation 2008, as
amended. The report also meets the relevant requirement of the
Listing Rules of the Financial Conduct Authority. In accordance
with the Act, this report is divided into a section on Directors'
Remuneration Policy and a second section on the annual Report on
Directors' Remuneration, which details the remuneration paid to the
Directors during the financial year under review.
Shareholders will be asked to vote separately on the Directors'
Remuneration Policy and the Report on Directors' Remuneration at
the Annual General Meeting of the Company at which the financial
statements will be approved.
The regulations require the auditor to report to the Company's
members on the "auditable part" of the Directors' Remuneration
Report. The report has therefore been divided into 2 sections for
audited and unaudited information.
Unaudited Information
Directors' Remuneration Policy
In accordance with the Company's Memorandum and Articles of
Association, the directors received only a nominal fee for their
services. The fees paid to the directors are not linked to
performance and the Company has no intention to change the way the
directors are remunerated in the future.
Share Options
As at 31 March 2019, no options were granted to the directors to
subscribe for any shares in the Company.
Service contracts
There are no service contracts in existence with the directors
and they received only a nominal fee for their services.
Audited information
Aggregate Directors' remuneration
The total amounts for Directors' remuneration are as
follows:
2019 2018
RM RM
Emoluments 3,867 4,560
====== ======
2019 2018
RM RM
Directors' emoluments - fee
Executive Director
Chew Sing Guan 1,253 1,302
Non-executive Directors
Haji Zambri bin Haji Mahmud 526 1,086
Diong Chin Teck 1,044 1,086
Chew Beow Soon 1,044 1,086
------ ------
3,867 4,560
====== ======
Approval
This report was approved by the Board of Directors on 26 July
2019 and signed on its behalf:
CHEW SING GUAN
Chairman
Statement of directors' responsibilities in respect of the
Annual Report and the financial statements
The directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law they have
elected to prepare the financial statements in accordance with UK
Accounting Standards, including FRS 102 The Financial Reporting
Standard applicable in the UK and Republic of Ireland.
Under Company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Company and of the profit or
loss of the Company for that period. In preparing these financial
statements, the directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- state whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the financial statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 2006. They
have general responsibility for taking such steps as are reasonably
open to them to safeguard the assets of the Company and to prevent
and detect fraud and other irregularities.
Under applicable law and regulations, the directors are also
responsible for preparing a Strategic Report, Directors' Report,
Directors' Remuneration Report and Corporate Governance Statement
that complies with that law and those regulations.
Responsibility statement of the directors in respect of the
annual financial report
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Company taken as a whole; and
-- the Strategic Report and Directors' Report include a fair
review of the development and performance of the business and the
position of the issuer, together with a description of the
principal risks and uncertainties faced.
We consider the Annual Report and accounts, taken as a whole, is
fair, balanced and understandable and provides the information
necessary for shareholders to assess the Company's position and
performance, business model and strategy.
CHEW SING GUAN
Chairman
Penang, Malaysia
26 July 2019
Independent auditor's report to the members of Hidong Estate
Plc
Opinion
We have audited the financial statements of Hidong Estate Plc
(the 'company') for the year ended 31 March 2019 which comprise the
Profit & Loss Account, the Balance Sheet, the Statement of
Other Comprehensive Income, the Statement of Changes in Equity, the
Cash Flow Statement and notes to the financial statements,
including a summary of significant accounting policies. The
financial reporting framework that has been applied in their
preparation is applicable law and United Kingdom Accounting
Standards, including FRS 102 "The Financial Reporting Standard
applicable in the UK and Republic of Ireland" (United Kingdom
Generally Accepted Accounting Practice).
In our opinion, the financial statements:
-- give a true and fair view of the state of the company's
affairs as at 31 March 2019 and of its profit for the year then
ended;
-- have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
-- have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the company
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard, as applied to public interest entities and
we have fulfilled our other ethical responsibilities in accordance
with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
The impact of uncertainties due to Britain exiting the European
Union on our audit
The Directors' view on the impact of Brexit is disclosed on page
8.
The terms on which the Britain may withdraw from the European
Union, are not clear, and it is therefore not currently possible to
evaluate all the potential implications to company's trade,
customers, suppliers and the wider economy.
We considered the impact of Brexit on the company as part of our
audit procedures, applying a standard firm wide approach in
response to the uncertainty associated with the company's future
prospects and performance.
However, no audit should be expected to predict the unknowable
factors or all possible implications for the company and this is
particularly the case in relation to Brexit.
Conclusions relating to principal risks, going concern and
viability statement
We have nothing to report in respect of the following
information in the annual report, in relation to which the ISAs
(UK) require us to report to you whether we have anything material
to add or draw attention to:
-- the disclosures in the annual report set out on page 6 that
describe the principal risks and explain how they are being managed
or mitigated;
-- the directors' confirmation set out on page 17 in the annual
report that they have carried out a robust assessment of the
principal risks facing the company, including those that would
threaten its business model, future performance, solvency or
liquidity;
-- the directors' statement set out on page 12 and 13 in the
financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting in
preparing the financial statements and the directors'
identification of any material uncertainties to the company's
ability to continue to do so over a period of at least twelve
months from the date of approval of the financial statements;
-- whether the directors' statement relating to going concern
required under the Listing Rules in accordance with Listing Rule
9.8.6R(3) is materially inconsistent with our knowledge obtained in
the audit; or
-- the directors' explanation set out on page 7 in the annual
report as to how they have assessed the prospects of the company,
over what period they have done so and why they consider that
period to be appropriate, and their statement as to whether they
have a reasonable expectation that the company will be able to
continue in operation and meet its liabilities as they fall due
over the period of their assessment, including any related
disclosures drawing attention to any necessary qualifications or
assumptions.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
We summarise below the key audit matter in arriving at our audit
opinion above, together with an overview of the principal audit
procedures performed to address that matter and, where relevant,
key observations arising from those procedures.
This matter together with our findings were communicated to
those charge with governance though our Audit Completion
Report.
The risk Our response
Existence and valuation of cash Our procedures over the existence
and listed investments and valuation of the company's
The company's portfolio of listed portfolio of cash and listed
investments, cash deposits and investments included, but
cash balance makes up 99.8% of were not limited to, the
total assets by value and is considered following:
to be the key driver of operations * Reviewing and assessing the processes and adequacy of
and performance results. controls in place to record investment transactions
Cash or listed investments are and to value the portfolio;
not considered to be subject to
a significant level of judgment
because they comprise liquid and, * agreeing the valuation of all listed investments to
in the case of investments, quoted, externally quoted prices; and
investments which are valued using
current bid price under FRS 102.
However, due to their significance * agreeing all cash and listed investment holdings to
in the context of the financial third party confirmations.
statements as a whole, they are
considered to be the areas which
had the greatest effect on our Based on the procedures performed
overall audit strategy and allocation above, we did not identify
of resources in planning and completing any material misstatements
our audit. in relation to the existence
or valuation of cash and
listed investments.
-------------------------------------------------------------
Our application of materiality
The scope of our audit was influenced by our application of
materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating
the effect of misstatements, both individually and on the financial
statements as a whole.
Based on our professional judgement the level of overall
materiality we set for the financial statements is outlined
below:
Overall materiality RM 123,123
How we determined it Materiality has been determined with
reference to a benchmark of total assets,
of which it represents 1%.
---------------------------------------------
Rationale for benchmark We used total assets to calculate our
applied materiality as, in our view, this is
the most relevant measure of the underlying
financial performance of the company.
---------------------------------------------
Performance materiality RM 86,186
---------------------------------------------
Reporting threshold RM 3,694
---------------------------------------------
An overview of the scope of our audit
As part of designing our audit, we determined materiality and
assessed the risk of material misstatement in the financial
statements. In particular, we looked at where the directors made
subjective judgements such as making assumptions on significant
accounting estimates.
We gained an understanding of the legal and regulatory framework
applicable to the company and the industry in which it operates. We
considered the risk of acts by the company which were contrary to
the applicable laws and regulations including fraud. We designed
our audit procedures to respond to those identified risks,
including non-compliance with laws and regulations (irregularities)
that are material to the financial statements.
We focused on laws and regulations that could give rise to a
material misstatement in the financial statements, including, but
not limited to, the Companies Act 2006.
We tailored the scope of our audit to ensure that we performed
sufficient work to be able to give an opinion on the financial
statements as a whole. We used the outputs of a risk assessment,
our understanding of the company's accounting processes and
controls and its environment and considered qualitative factors in
order to ensure that we obtained sufficient coverage across all
financial statement line items.
Our tests included, but were not limited to, obtaining evidence
about the amounts and disclosures in the financial statements
sufficient to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by
irregularities including fraud, review of minutes of directors'
meetings in the year and enquiries of management. As a result of
our procedures, we did not identify any Key Audit Matters relating
to irregularities, including fraud.
The primary responsibility for the prevention and detection of
irregularities including fraud rests with both those charge with
governance and management. As with any audit, there remained a risk
of non-detection of irregularities, as these may involve collusion,
forgery, intentional omissions, misrepresentations or the override
of internal controls.
The risks of material misstatement that had the greatest effect
on our audit, including the allocation of our resources and effort,
are discussed under "Key audit matters" within this report.
Due to 100% of the company's activities residing in Malaysia,
the audit work is undertaken primarily by a component auditor under
the direction of the statutory auditor, Mazars LLP. In relation to
the Key Audit Matter, additional work was performed by the
statutory auditor as appropriate.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report other than the financial statements and our auditor's report
thereon. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
In this context, we also have nothing to report in regard to our
responsibility to specifically address the following items in the
other information and to report as uncorrected material
misstatements of the other information where we conclude that those
items meet the following conditions:
-- Fair, balanced and understandable (set out on page 11) - the
statement given by the directors that they consider the annual
report and financial statements taken as a whole is fair, balanced
and understandable and provides the information necessary for
shareholders to assess the company's performance, business model
and strategy, is materially inconsistent with our knowledge
obtained in the audit; or
-- Audit committee reporting (set out on page 11) - the section
describing the work of the audit committee does not appropriately
address matters communicated by us to the audit committee; or
-- Directors' statement of compliance with the UK Corporate
Governance Code (set out on page 9) - the parts of the directors'
statement required under the Listing Rules relating to the
company's compliance with the UK Corporate Governance Code
containing provisions specified for review by the auditor in
accordance with Listing Rule 9.8.10R(2) do not properly disclose a
departure from a relevant provision of the UK Corporate Governance
Code.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, the part of the directors' remuneration report
to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the Strategic Report and the
Directors' Report for the financial year for which the financial
statements are prepared is consistent with the financial statements
and those reports have been prepared in accordance with applicable
legal requirements;
-- the information about internal control and risk management
systems in relation to financial reporting processes and about
share capital structures, given in compliance with rules 7.2.5 and
7.2.6 in the Disclosure Rules and Transparency Rules sourcebook
made by the Financial Conduct Authority (the FCA Rules), is
consistent with the financial statements and has been prepared in
accordance with applicable legal requirements; and
-- information about the company's corporate governance code and
practices and about its administrative, management and supervisory
bodies and their committees complies with rules 7.2.2, 7.2.3 and
7.2.7 of the FCA Rules.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the company and
its environment obtained in the course of the audit, we have not
identified material misstatements in:
-- the Strategic Report or the Directors' Report; or
-- the information about internal control and risk management
systems in relation to financial reporting processes and about
share capital structures, given in compliance with rules 7.2.5 and
7.2.6 of the FCA Rules.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept by the
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the financial statements and the part of the directors'
remuneration report to be audited are not in agreement with the
accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit; or
-- a corporate governance statement has not been prepared by the company.
Responsibilities of Directors
As explained more fully in the directors' responsibilities
statement set out on page 17, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Other matters which we are required to address
Following the recommendation of the audit committee, we were
appointed by the Board of Directors on the 25 September 2017 to
audit the financial statements for the year ended 31 March 2019 and
subsequent financial periods. The period of total uninterrupted
engagement is 3 years, covering the years ended 31 March 2017 to 31
March 2019.
The non-audit services prohibited by the FRC's Ethical Standard
were not provided to the company and we remain independent of the
company in conducting our audit.
Our audit opinion is consistent with the additional report to
the audit committee.
Use of the audit report
This report is made solely to the company's members as a body in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our
audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body
for our audit work, for this report, or for the opinions we have
formed.
Louis Burns (Senior Statutory Auditor)
for and on behalf of Mazars LLP
Chartered Accountants and Statutory Auditor
45 Church Street
Birmingham
B3 2RT
United Kingdoms
Date:
Profit and loss account for the year ended
31 March 2019
2019 2018
Note RM RM
Administrative expenses (245,790) (236,646)
Operating loss (245,790) (236,646)
Income from investments 54,297 59,357
Interest receivable and similar income 388,628 407,932
---------- ----------
Profit on ordinary activities before
taxation 2 197,135 230,643
Tax on profit on ordinary activities 3 (88,607) (92,680)
---------- ----------
Profit for the financial year 108,528 137,963
========== ==========
Basic and diluted profit per 10p share 4 6.33 sen 8.05 sen
========== ==========
The results stated above are all derived from continuing
operations.
Company Number: 00188390
The notes on pages 30 to 37 form part of these financial
statements.
Balance sheet as at 31 March 2019
Note 2019 2018
RM RM
Fixed assets
Investments 5 1,161,795 1,286,452
Current assets
Debtors 19,313 105,528
Deposits 10 11,000,000 10,700,000
Cash at bank and in hand 11 131,181 182,032
11,150,494 10,987,560
=========== ===========
Current liabilities
Creditors: amounts falling due within
one year 6 (516,631) (500,532)
----------- -----------
(516,631) (500,532)
=========== ===========
Net current assets 10,633,863 10,487,028
Net assets 11,795,658 11,773,480
=========== ===========
Capital and reserves
Called up share capital 7 1,067,846 1,067,846
Fair value reserve 8 306,984 403,228
Profit and loss reserve 8 10,420,828 10,302,406
Shareholders' funds 11,795,658 11,773,480
=========== ===========
These financial statements were approved by the Board of
Directors on 26 July 2019.
CHEW SING GUAN )
) Directors
)
CHEW BEOW SOON )
Company Number: 00188390
The notes on pages 30 to 37 form part of these financial
statements.
Statement of Other Comprehensive Income for the year ended 31
March 2019
2019 2018
RM RM
Profit for the financial year 108,528 137,963
Other Comprehensive Income
Unrealised (loss)/gain on investments (88,493) 104,130
Change in fair value during the period
on disposal of investments 2,143 7,591
---------- --------
Total Comprehensive Income for the year 22,178 249,684
========== ========
The notes on pages 30 to 37 form part of these financial
statements.
Statement of Changes in Equity for the year ended 31 March
2019
Called up Profit
share capital Fair value and loss
reserve reserve Total equity
RM RM RM RM
At 1 April 2017 1,067,846 328,790 10,127,160 11,523,796
Comprehensive income for
the year
Profit for the year - - 137,963 137,963
Other comprehensive income
for the year
Unrealised gain on investments - 104,130 - 104,130
Change in fair value during
the period on disposal of
investments - 7,591 - 7,591
-------------- -------------- -------------- --------------
Total comprehensive income
for the year - 111,721 137,963 249,684
Transfer realised gains on
investments - (37,283) 37,283 -
-------------- -------------- -------------- --------------
At 31 March 2018 1,067,846 403,228 10,302,406 11,773,480
At 1 April 2018 1,067,846 403,228 10,302,406 11,773,480
Comprehensive income for
the year
Profit for the year --108,528 108,528
Other comprehensive income
for the year
Unrealised loss on investments -(88,493) -(88,493)
Change in fair value during
the period on disposal of
investments - 2,143 - 2,143
-------------- -------------- -------------- --------------
Total comprehensive income
for the year - (86,350) 108,528 22,178
Transfer realised gains on
investments - (9,894) 9,894 -
-------------- -------------- -------------- --------------
At 31 March 2019 1,067,846 306,984 10,420,828 11,795,658
The notes on pages 30 to 37 form part of these financial
statements.
Cash flow statement for the year ended
31 March 2019
Note 2019 2018
RM RM
Cash flows from operating activities
Profit for the year 108,528 137,963
Adjustments for:
Interest receivable and similar income (388,628) (407,932)
Income from investments (54,297) (59,357)
Impairment loss on investments 23,019 1,300
Taxation 3 88,607 92,680
---------- ----------
(222,771) (235,346)
Increase in other creditors 13,000 27,845
(209,771) (207,501)
Tax paid (85,508) (109,473)
---------- ----------
Net cash used in operating activities (295,279) (316,974)
---------- ----------
Cash flows from investing activities
Dividend received 54,297 53,525
Interest received 474,842 327,951
Purchase of investments (1,505) (100,932)
Sale of investments 16,794 72,190
(Increase)/decrease in deposits 10 (300,000) 81
---------- ----------
Net cash from investing activities 244,428 352,815
---------- ----------
Cash flows from financing activities - -
Net (decrease)/increase in cash and
cash equivalents (50,851) 35,841
========== ==========
Cash and cash equivalents at 1 April 182,032 146,191
Cash and cash equivalents at 31 March 11 131,181 182,032
The notes on pages 30 to 37 form part of these financial
statements
Notes to the financial statements
The following accounting policies have been applied consistently
in dealing with items which are considered material in relation to
the Company's financial statements.
1 ACCOUNTING POLICIES
The Company was incorporated in England and Wales.
These financial statements were prepared in accordance with
Financial Reporting Standard 102 The Financial Reporting Standard
applicable in the UK and Republic of Ireland ("FRS 102"). The
presentation currency of these financial statements is Ringgit
Malaysia (RM).
The Company is not part of a larger group and does not prepare
consolidated financial statements.
The accounting policies set out below have, unless otherwise
stated, been applied consistently to all periods presented in these
financial statements.
(a) Measurement convention
The financial statements are prepared on the historical cost
basis except certain financial instruments measured at fair
value.
(b) Going concern
Having undertaken all the appropriate procedures and assessing
the financial position as at the year end, performance and results
for the financial year, the directors have a reasonable expectation
that the Company has adequate resources to continue in operational
existence for the foreseeable future. Thus they continue to adopt
the going concern basis of accounting in preparing the annual
financial statements.
(c) Foreign currency
Transactions in foreign currencies are recorded in Ringgit
Malaysia (RM) at rates ruling at the transaction dates. Assets and
liabilities are reported at the rates prevailing at the balance
sheet date except for share capital which remains at the historical
rate. Exchange gains and losses are included in the profit and loss
account.
(d) Employee benefits
Short term benefits
Wages, salaries, bonuses and social security contributions are
recognised as an expense in the year in which the associated
services are rendered by employees of the Company. Short term
accumulating compensated absences, such as paid annual leave, are
recognised when services are rendered by employees that increase
their entitlement to future compensated absences and short term
non-accumulating compensated absences, such as sick leave, are
recognised when the absences occur.
Notes (continued)
1 ACCOUNTING POLICIES (continued)
(e) Taxation
The Company is tax resident in Malaysia.
The charge for taxation is based on the profit for the year and
takes into account taxation deferred because of timing differences
between the treatment of certain items for taxation and accounting
purposes.
Deferred tax is recognised, without discounting, in respect of
all timing differences between the treatment of certain items for
taxation and accounting purposes which have arisen but not reversed
by the balance sheet date, except as otherwise required by Section
29 of FRS102.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the asset can be utilised.
(f) Financial instruments
The Company has chosen to apply the recognition and measurement
provisions of IFRS 9 (as adopted for use in the EU) and the
disclosure requirements of FRS 102 in respect of financial
instruments.
Trade and other debtors are recognised initially at transaction
price less attributable transaction costs. Trade and other
creditors are recognised initially at transaction price plus
attributable transaction costs. Subsequent to initial recognition
they are measured at amortised cost using the effective interest
method, less any impairment losses in the case of trade
debtors.
The accounting policy for the Company's investments in quoted
equity investments have been disclosed in accounting policy
(i).
(g) Income
Interest income is recognised on an accrual basis.
Dividend income is recognised when the right to receive payment
is established.
(h) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand.
Notes (continued)
1 ACCOUNTING POLICIES (continued)
(i) Investments
The Company measures its quoted equity investments at fair
value. Gains or losses are subsequently recognised in other
comprehensive income.
2 NOTES TO THE PROFIT AND LOSS ACCOUNT
The profit on ordinary activities before taxation is stated:
2019 2018
RM RM
After charging:
Directors' remuneration *
- Chew Sing Guan 1,253 1,302
- Haji Zambri Bin Haji Mahmud 526 1,086
- Diong Chin Teck 1,044 1,086
- Chew Beow Soon 1,044 1,086
Impairment loss on investments 23,019 1,300
Auditor's remuneration
- Audit of these financial statements 112,617 131,621
and after crediting:
Interest income 388,628 407,932
Dividend income 54,297 59,357
* Directors' remuneration totalling RM3,867 (2018: RM4,560) is
in respect of directors' fees for duties performed outside the
United Kingdom.
Notes (continued)
3 TAX ON PROFIT ON ORDINARY ACTIVITIES
2019 2018
RM RM
Foreign taxation
- current year 88,607 93,008
- prior year - (328)
------- -------
88,607 92,680
======= =======
The current tax charge for the year is higher than (2018: higher
than) the standard rate of corporation tax in the Malaysia of 24%
(2018: 24%). The differences are explained below.
2019 2018
RM RM
Profit before tax 197,135 230,643
--------- ---------
Current tax at 24% (2018: 24%) 47,312 55,354
Expenses not deductible for tax
purposes 54,326 51,900
Income not subject to tax (13,031) (14,246)
(Over)/Underprovided in prior year - (328)
--------- ---------
88,607 92,680
========= =========
The income tax is calculated at the Malaysian statutory rate of
24% (2018: 24%) of the estimated taxable profit for the fiscal
year.
4 BASIC AND DILUTED PROFIT PER ORDINARY SHARE OF 10P EACH
This is based on the profit after tax of RM108,528 (2018:
RM137,963) and 1,713,334 shares (2018: 1,713,334 shares), being the
weighted average number of shares in issue. The basic profit per
ordinary share is calculated using a numerator of the net profit
for the year and a denominator of the weighted average number of
ordinary shares in issue for the year. There is no difference in
2019 or 2018 between the basic and diluted profit per share as
there are no potentially dilutive shares, including share options
and warrants, to convert.
Notes (continued)
5 INVESTMENTS
2019 2018
RM RM
At beginning of year 1,286,452 1,141,457
Additions 1,505 106,764
Change in fair value (109,368) 110,421
Disposals (16,794) (72,190)
At end of year 1,161,795 1,286,452
========== ==========
6 CREDITORS: Amounts falling due within one year
2019 2018
RM RM
- Other creditors 96,000 83,000
- Corporation tax creditor 6,107 3,008
- Taxation and social security 414,524 414,524
-------- --------
516,631 500,532
======== ========
Taxation and social security consists of an amount of RM414,524
(2018: RM414,524) representing a liability for the real property
gain tax arising from the sale of the plantation in 2006.
7 SHARE CAPITAL
2019 2018
RM RM
Authorised
2,000,000 ordinary shares of 10p
each 1,493,610 1,493,610
========== ==========
Issued and fully paid up
1,713,334 ordinary shares of 10p
each 1,067,846 1,067,846
========== ==========
8 RESERVES
Fair value reserve
The fair value reserve relates to the cumulative fair value
adjustments to investments.
Profit and loss reserve
The profit and loss reserve comprises of the cumulative profits
of the Company.
Notes (continued)
9 EMPLOYEES
2019 2018
RM RM
Wages and salaries 1,253 1,302
====== ======
Average number of staff
employed during the year 1 1
====== ======
10 DEPOSITS
2019 2018
RM RM
Deposits 11,000,000 10,700,000
=========== ===========
Deposits represent cash held on deposit with maturity periods
ranging from 1 to 6 months and with penalties payable for early
withdrawal.
11 CASH AT BANK AND IN HAND
2019 2018
RM RM
Cash at bank and in hand 131,181 182,032
======== ========
12 FINANCIAL INSTRUMENTS
(a) Financial risk management objectives and policies
The Company's financial risk management policies seek to ensure
that adequate financial resources are available for the development
of the Company's business whilst managing its interest rate,
foreign exchange, liquidity and credit risks. The Company operates
within clearly defined guidelines that are approved by the Board of
directors and the Company's policy is not to engage in speculative
transactions.
Notes (continued)
(b) Interest rate risk
The Company's primary interest rate risk relates to
interest-earning assets as the Company had no long-term
interest-bearing debts as at 31 March 2019. The investments in
financial assets are mainly short term in nature and they are not
held for speculative purposes but have been mostly placed in fixed
deposits.
Effective interest Within 1
rate per annum Total year
Financial Assets % RM RM
2019
Short term deposits 3.89 11,000,000 11,000,000
2018
Short term deposits 3.82 10,700,000 10,700,000
(c) Foreign exchange risk
The Company operates in Malaysia and is only exposed to the
sterling pound currency for payments made to UK companies for
services rendered to the Company. This poses minimum risk as the
level of these payments are not significant.
(d) Liquidity risk
The Company actively manages its operating cash flows and
availability of funds so as to ensure that all repayment and
funding needs are met. As part of its overall prudent liquidity
management, the Company maintains sufficient levels of cash or
readily convertible investments to meet its working capital
requirements.
(e) Credit risk
The Company's maximum credit risk exposure is the fair value of
its deposits, presented in note 10 of RM11,000,000 and RM10,700,000
at 31 March 2019 and 2018 respectively. Bank balances are held with
reputable and established financial institutions.
The Company's principal financial asset is cash and short term
deposits and credit risk arises from cash and short term deposits
with banks and financial institutions.
It is the Company's policy to monitor the financial standing of
these institutions on an on-going basis.
(f) Fair values
The fair values of financial assets and financial liabilities
reported in the balance sheet approximate to the carrying amounts
of those assets and liabilities.
(g) Price risk
The Company is exposed to equity price risk in relation to its
fixed asset investments, all of which are listed on the Malaysian
Stock Exchange. A five percent increase in Malaysian equity prices
at the reporting date would have increased equity by RM58,000
(2018: RM64,000); an equal change in the opposite direction would
have decreased equity by RM58,000 (2018: RM64,000). Price risk is
mitigated by regular review of investments by management.
Notes (continued)
(h) Cash flow risk
The Company's assets comprise cash and short term deposits all
of which earn interest. There is minimum risk on the cash flow.
Cash flow monitoring is a high priority with the management.
(i) Capital management
The Company's policy is to maintain a strong capital base so as
to maintain investor, creditor and market confidence and to sustain
the future development of the business. The Company is not subject
to externally imposed capital requirements. There were no changes
in the Company's approach to capital management in the year.
13. RELATED PARTY TRANSACTIONS AND BALANCES
The related party transactions undertaken by the Company during
the financial year are as follows:
Purchases and sales of quoted shares
through 2019 2018
Mercury Securities Sdn. Bhd. ("MSSB"), RM RM
a company in which, Chew Sing Guan,
director,
has a substantial financial interests
* Purchase of quoted shares - 100,933
======= ========
* Sale of quoted shares 16,794 72,190
======= ========
Agency fees payable to Plantation
Agencies Sdn. Berhad, a company in
which Chew Sing Guan is also a Director 26,400 26,400
======= ========
The terms and conditions for the above transactions are based on
normal trade terms.
In the opinion of the directors, as referred to on page 13, Chew
Sing Guan is considered to be a controlling shareholder. However
there is no ultimate controlling party at the year end.
Comparative statistics - non audited
Year ended 31 March 2019 2018 2017 2016 2015
RM RM RM RM RM
BALANCE SHEET ANALYSIS
Called-up share capital 1,067,846 1,067,846 1,067,846 1,067,846 1,067,846
Reserves 10,727,812 10,705,634 10,455,950 10,222,815 10,200,606
----------- ----------- ----------- ----------- -----------
Total shareholders' funds 11,795,658 11,773,480 11,523,796 11,290,661 11,268,452
----------- ----------- ----------- ----------- -----------
Investments 1,161,795 1,286,452 1,141,457 1,070,883 1,102,280
Net current assets 10,633,863 10,487,028 10,382,339 10,219,778 10,166,172
11,795,658 11,773,480 11,523,796 11,290,661 11,268,452
PROFIT AND LOSS
ACCOUNT ANALYSIS
Loss before interest and
taxation (191,493) (177,289) (154,077) (241,530) (164,839)
Interest receivable 388,628 407,932 407,013 404,845 359,721
Taxation (88,607) (92,680) (89,281) (113,238) (67,851)
Profit after taxation 108,528 137,963 163,655 50,077 127,031
----------- ----------- ----------- ----------- -----------
Terms of Reference for the Audit Committee
1. Members
The members of the Committee shall be at least two non-executive
directors. A majority of the members shall be independent
non-executive directors.
2. Quorum
The quorum of the Committee shall be two members.
3. Chairman
The members of the Committee shall elect a Chairman from among
their number.
4. Secretary
The secretary of the Committee shall be the secretary of the
Company or any other person so appointed by the Committee.
5. Meetings
The Committee shall meet not less than three times a year. Other
Board members shall also have the right of attendance. The external
auditors may request a meeting if they consider that one is
necessary.
6. Authority
The Committee is authorised by the Board to investigate any
activity within its terms of reference. It is authorised to seek
any information it requires from any employee and all employees are
directed to co-operate with any request made by the Committee.
The Committee is authorised by the Board to obtain outside legal
or other independent professional advice and to secure the
attendance of outsiders with relevant experience and expertise if
it considers this necessary.
7. Duties
The duties of the Committee shall be to:
-- consider the appointment of the external auditor, the audit
fee, and any questions of resignation or dismissal;
-- discuss and agree with the external auditors their audit
plan, scope and extent of the audit;
-- review the external auditor's management letter and management's response;
-- review from time to time the cost effectiveness of the audit;
-- review the Company's half-yearly and annual financial
statements and announcement before submission to the Board for
approval;
-- review the Company's system of internal control (including
financial, operational compliance and risk management) and make
recommendations to the Board;
-- review the proposed statement on the directors' review of the
Company's system of internal control (including financial,
operational compliance and risk management) prior to endorsement by
the Board;
-- review the Company's operating, financial and accounting policies and practices;
-- consider other matters as defined by the Board or such other
matters as the Committee considers appropriate.
8. Minutes
The minutes of meetings of the Committee shall be circulated to
all members of the Board.
Proxy form HIDONG ESTATE PLC
I/We
-----------------------------------------------------------
of
---------------------------------------------------------------
In Block being a member(s) of HIDONG ESTATE PLC hereby appoint
#Mr. Chew Sing Guan or failing him,
Capitals
as my/our proxy to vote for me/us and on my/our behalf
at the annual general meeting of the Company to be
held on 23(rd) day of September 2019 and at any adjournment
thereof, in the manner indicated below:-
Please indicate Resolution relating to :- For Against
how you
wish your
vote to
be cast
-----------------------------------------------------------------------------
1. To receive and consider the
audited financial statements
and the reports of the directors
and auditors thereon for the
year ended 31 March 2019.
------------------------------------- ------- ------------
2. To re-elect Mr. Diong Chin Teck
who retires in accordance with
article 108 of the Company's
Articles of Association, and
being eligible, offers himself
for re-election.
------------------------------------- -------------------------------------- ------- ------------
3. To re-appoint Mazars LLP as
auditors and authorise the directors
to fix their remuneration.
------------------------------------- -------------------------------------- ------- ------------
4. To approve the Directors'
Remuneration
Report for the year ended 31
March 2019.
------------------------------------- -------------------------------------- ------- ------------
5. To approve the Directors'
Remuneration
Policy.
------------------------------------- -------------------------------------- ------- ------------
6. To approve the following
non-executive
directors who have served as
independent non-executive
directors
for a cumulative term of more
than nine (9) years to continue
to act as independent
non-executive
directors of the Company:-
* Mr. Diong Chin Teck
* Mr. Chew Beow Soon
------------------------------------- -------------------------------------- ------- ------------
Number of shares held ...................
Signature .................................
Note :
1. # If it is desired to appoint another person as a proxy,
these names should be deleted and the name of the proxy, who need
not be a member of the Company, should be inserted in block
capitals, and the alteration should be initialled.
2. This proxy to be valid, must be deposited at the head office
of the Company, "Hidong Estate Plc, 3(rd) Floor, 2 Lebuh Pantai,
10300 George Town, Penang, Malaysia" not less than 48 hours before
the time appointed for holding the meeting.
3. In the case of a corporation, the proxy must be executed
under its common seal, or under the hand of a duly authorised
officer. If executed under the hand of a duly authorised officer,
evidence of such authority must be produced with the proxy
form.
4. In the case of joint holders, the signature of any one joint holder is sufficient.
5. If neither "FOR" nor "AGAINST" is indicated above, the proxy
will vote or abstain as he thinks fit.
6. To appoint more than one proxy you may photocopy this form.
Please indicate the proxy holder's name and the number of shares in
relation to which they are authorised to act as your proxy (which,
in aggregate, should not exceed the number of shares held by you).
Please also indicate if the proxy instruction is one of multiple
instructions being given. All forms must be signed and should be
returned together in the same envelope.
Please fold across the line and close
To:
HIDONG ESTATE PLC (990786-V)
THIRD FLOOR,
2 lebuh pantai,
10300 GEORGE TOWN,
Penang, Malaysia
Please fold across the line and close
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR UNRRRKRABUAR
(END) Dow Jones Newswires
July 26, 2019 06:05 ET (10:05 GMT)
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