CONTENTS ■

064 085 092

Corporate Directors’ Notice of 28th
Governance Responsibility Annual General
Overview Statement Meeting
Statement

076 086 094

Report of the List of Properties Statement
Audit & Risk Accompanying
Management Notice of 28th
Committee Annual General
Meeting

080 089
Statement on Analysis of
Risk Management & Shareholdings
Internal Control
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Corporate Governance
Overview Statement

The Board of Directors of Bonia Corporation Berhad (“Board”), in recognising the importance of corporate governance, is committed to ensure
that the Group carries out its business operations with integrity, transparency and professionalism.

The Board is pleased to provide the following statement, which outlines the practices adopted by the Company in compliance with the Principles
and Recommendations set out in the Malaysian Code on Corporate Governance 2017 (“MCCG”) to protect and enhance all aspects of the
shareholders’ value.

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS

I. Board Responsibilities

Roles and responsibilities of the Board

The Board plays pivotal role in leading and managing the Group with the ultimate objective of realising long-term shareholders’ value.
The collective responsibilities and roles of the Board, among others, are to:
• review and adopt the overall strategic plans and programmes for the Group
• oversee and evaluate the conduct of businesses of the Company and of the Group
• identify principal risks and ensure implementation of appropriate internal controls and mitigation measures
• establish a succession plan
• develop and implement a shareholder communication policy for the Company
• review the adequacy and the integrity of the management information and internal control systems of the Group
• provide oversight and monitoring of environmental, social and governance aspects of business in the Group which underpin
sustainability

Chairman of the Board

Prior to 01 September 2018, the then Group Executive Chairman cum Chief Executive Officer provided leadership for the Board and
ensured that the Board was able to perform its responsibilities effectively. He also promoted effective communication to shareholders
and other stakeholders of the objectives, strategies and policies of Bonia Group.

The Senior Independent Non-Executive Chairman, Dato’ Mohamed Khadar Bin Merican assumed his role in September 2018 to continue
to establish and monitor good corporate governance practices and procedures and promotes the highest standards of integrity and
corporate governance throughout the Group and particularly at Board level.

Separation of roles of Chairman, CEO and/or Managing Director

Separation of the positions of the Chairman and Group CEO helps to promote accountability and facilitates division of responsibilities
between them. Each of them plays a distinctive role but complementing each other to ensure balance of power and authority. The
presence of the Independent Non-Executive Directors whom are independent from the management and major shareholders of the
Company, free from any business dealing and other relationships that could materially interfere with the exercise of their independent
judgement, assures a check and balance to the Board. Together with the Executive Directors who possess intimate knowledge of the
Group’s rapidly evolving businesses, the Board is constituted of individuals who are committed to business integrity and professionalism
in all their activities.
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Corporate Governance Overview Statement
(Cont’d)

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (cont’d)

I. Board Responsibilities (Cont’d)

Roles and responsibilities of Company Secretaries

The Board is supported by suitably qualified and competent Company Secretaries to provide sound governance advice, ensure adherence
to rules and procedures, and advocate adoption of corporate governance best practices.

Our Company Secretaries assist the Board in strengthening good governance practices and processes within Bonia Group. They
provide counsel to the Board on the governance matters, board’s statutory duties, board procedures, disclosure obligations and listing
requirements. Regular updates on matters relating to new statutory and regulatory requirements and corporate governance were received
from the Company Secretaries. They also keep the Board informed of those communications received from the relevant regulatory or
governmental authorities.
 
The Directors have full access to the information within the Group as well as the advice and services of the Company Secretaries, the
Internal and External Auditors, and other independent professionals in carrying out their duties and if necessary, at the Company’s
expenses.

Board charter and Board reserved matters

The Board Charter, sets out the roles, responsibilities, processes and functions of the Board is published on the Company’s corporate
website at http://ir.bonia.com/ under the Corporate Governance section, and subject to periodic review and update to ensure compliance
with regulatory requirements.

Subject to the limitations imposed by the applicable laws and/or the Company’s Constitution, the Board may from time to time delegate
responsibility for specified matters to individual Board members, Board committees or the management. However, objective and strategy
determination are reserved for decision by the Board and covers such areas as key corporate policies and standards, major financial
and other resources allocations, material corporate or financial exercises, significant investments, acquisitions or disposals, declaration
of dividend as well as the key risks affecting the Group.

Code of conduct and ethics and Whistleblowing Policy

The Board observes the “Code of Ethics for Company Directors” as prescribed by the Suruhanjaya Syarikat Malaysia which provides
guidance on the standards of conduct and prudent business practices as well as standards of ethical behavior to the Directors. The
“Code of Ethics for Company Directors” is published on the corporate website of the Company at http://ir.bonia.com/ under the Corporate
Governance section. Any non-compliance, allegation or concern on the relevant issues can be reported confidentially to the Senior
Independent Non-Executive Director to enable prompt corrective actions to be taken where appropriate.

Bonia’s code of conduct and ethics for employees are provided in its Employee Handbook. All concerns or complaints relating to the
Group can be channeled to Bonia HR Department.

The Company has formalised its Whistleblowing Policy for Bonia Group and the same is published on the Company’s corporate website
at http://ir.bonia.com/ under the Corporate Governance section.

II. Board Composition

Size and Composition of the Board

Our Company is led by an experienced and diverse Board. Prior to 01 September 2018, there were 6 Executive Directors, 3 Independent
Non-Executive Directors and an Alternate Director on the Board. To further reinforce independence, the Board was restructured on 01
September 2018 to be chaired by the newly joined Senior Independent Non-Executive Director. He is supported by 4 Executive Directors,
2 Non-Executive Non-Independent Directors, 2 Independent Non-Executive Directors and 2 Alternate Directors.

In conclusion, out of a total of 9 members on Board, only 4 members have executive functions. Although the number of independent
directors is less than half of the Board (3 over 9), the Board is of the view that the number of its Independent Directors is adequate at
present to provide the necessary check and balance to the Board’s decision-making process.
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Corporate Governance Overview Statement
(Cont’d)

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (cont’d)

II. Board Composition (Cont’d)

Independence

The Board regards independence as an important element for ensuing objectivity and fairness in Board’s decision-making. In order to
uphold independence, the Board undertakes annual assessment on its Independent Directors judging from events that would affect
the ability of the Independent Directors to continue bringing independent and objective judgment to Board deliberations, the criteria
of independent directors under regulatory definition, as well as their duty not to act contrary to the interest of the Company and of the
Group.

For those Independent Director(s) who has served the Company for a cumulative term of 9 years or more, the Board’s independence test
will be extended to check if his independence has been compromised by his length of service, and whether he is still able to exercise
independent judgement and demonstrate objectivity in his deliberations in the best interest of the Company and of the Group.
 
If the assessment results are satisfactory, the Board will proceed to seek shareholders’ approval on its intention to retain those individual
Independent Director(s) who has served the Company for a cumulative term of 9 years or more.

Appointment/Election of directors

Pursuant to the Constitution of the Company, at least 1/3 of the Directors including the Managing Director (if any) are required to retire
from office by rotation annually and shall be eligible for re-election at each annual general meeting (“AGM”). Any Director appointed to
fill the casual vacancy shall retire and seek re-election by the shareholders at the next AGM to be held following his appointment.

Upon the recommendations of the NRC, the Board as a whole will determine and nominate individuals for election to the Board by the
shareholders, for filling vacant board seats that may occur between AGMs or as an addition to the existing Directors. Nominees for
directorship will be selected with due consideration be given to each candidate’s integrity, competence, experience, achievements and
commitments regardless of age, gender or ethnicity.

Gender Diversity

The Board will remain mindful of Principle of the MCCG on the gender diversity policy for boardroom. In relation to the Group’s diversity,
the following was achieved since 01 September 2018:
• there are 2 female Directors (1 Independent Non-Executive Director, and 1 Alternate Director) on our Board who serve to bring
value to the Board discussions from different perspectives and approaches; and
• an internal statistical report revealed that women hold approximately 30% of the senior management positions in the Group.

Board Committees

The Board may from time to time establish appropriate committees and delegate specific duties to such committees as the Board deems
fit. Such committees shall operate within their own defined charters that are approved by the Board.

Reports on committees’ meetings and activities are submitted to the Board at the next regularly scheduled meeting of the Directors
for their evaluation and consideration. However, the ultimate responsibility for the final decision on the matters concerned, lies with the
entire Board.

(i) Audit & Risk Management Committee (“ARC”)

The primary objectives of the ARC are to assist the Board in examining the Group’s financial reporting, risk management and
internal control system, internal and external audit processes, related party transactions, and conflict of interests situation, and
to submit to the Board its recommendations and/or reports on matters within its purview or other matters of the Group referred
to it by the Board, for the Board’s consideration.

The summary of activities of the ARC are set out in the Report of the Audit & Risk Management Committee of this Annual Report.
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Corporate Governance Overview Statement
(Cont’d)

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (cont’d)

II. Board Composition (Cont’d)

(ii) Nomination & Remuneration Committee (“NRC”)

The NRC is tasked to assist the Board in:

• Board performance - to assess and recommend to the Board the candidature of directors and boardroom diversity,
appointment of directors to board committees, review of the Board’s succession plans and training programmes, and to
carry out periodic review on the composition and size of the Board, including the performance of individual Directors, and
the independence of Independent Directors so to assess the appropriateness and effectiveness of the Board as a whole;
and
• Board remuneration - to carry out periodic review on the remuneration policies and procedures to attract, retain and
motivate Directors. The remuneration package should be aligned with the business strategy and long-term objectives of
the Company and of the Group as well as to reflect the Board’s responsibilities, expertise and complexity of the Company’s
activities.
 
Prior to 01 September 2018, the NRC consisted of 3 Independent Non-Executive Directors namely Dato’ Shahbudin Bin Imam
Mohamad, Datuk Ng Peng Hong @ Ng Peng Hay and Chong Sai Sin.

On 01 September 2018, the NRC was restructured to be chaired by the newly joined Senior Independent Non-Executive Director
namely Dato’ Mohamed Khadar Bin Merican. Other members of the NRC are Lim Saw Imm (Independent Non-Executive Director)
and Chong Sai Sin (Independent Non-Executive Director).

Lim Saw Imm is the Chairman of ARC of which Dato’ Mohamed Khadar Bin Merican and Chong Sai Sin are also members. This
common membership across Board committees helps to ensure effective governance across the committees.

During the FY2019, the NRC members met 3 times, with the following record of attendance:

NRC member No. of meetings attended/held

Dato’ Mohamed Khadar Bin Merican (1)
1/1
Lim Saw Imm (1) 1/1
Chong Sai Sin 3/3
Dato’ Shahbudin Bin Imam Mohamad (2) 2/2
Datuk Ng Peng Hong @ Ng Peng Hay (2)
2/2

Note:
(1)
Appointed as NRC member with effect from 01 September 2019
(2)
Ceased as NRC member with effect from 01 September 2019

The responsibilities of the NRC are set out in the Nomination & Remuneration Committee Charter duly approved by the Board, a
copy of which is posted on the Company’s corporate website at http://ir.bonia.com/ under the Corporate Governance section.
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Corporate Governance Overview Statement
(Cont’d)

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (cont’d)

II. Board Composition (Cont’d)

The NRC’s annual work plan for the FY2019 focused on 3 key areas as follows:

Performance evaluation on the Board The NRC carried out Board and committees assessments by individual directors,
as a whole, the Committees of the self and peer assessments together with an assessment of independence of
Board, each of the individual Board Independent Directors for the purposes of evaluating the performance of the
Member, and the independence of the Board as a whole, the Committees of the Board, each of the individual Board
Independent Directors member, and the independence of the Independent Directors.

The following key evaluation criteria have been carefully reviewed during the
assessments:
• Performance of the Board and Board Committees - composition, structure,
processes, principal responsibilities, succession planning and governance
matters; and
• Performance of each individual Board member, and independence
of Independent Directors - competency, integrity, skills, experience,
commitment, contribution, conflict of interest and independence as guided
by the Main Market Listing Requirements of Bursa Malaysia Securities
Berhad (“MMLR”).

No major concerns were identified in the evaluation result and the NRC was
satisfied with the overall performance of the parties under review, particularly
the term of office and performance of the ARC and each of its members where
they have carried out their duties efficiently and effectively in accordance with
the ARC Charter.

Election, re-election, re-appointment The NRC gave its full support to Directors concerned to be elected/re-elected/
and retention of Board members re-appointed/retained at the Company’s 27th AGM after going through detailed
assessments on the quality, contribution and/or independence of such Directors.

Fees and remuneration package of After taking into consideration the annual performance of the Directors as well as
Directors the financial condition of the Group, the NRC was of its view that the Directors’
emoluments other than fees for the FY2018 was fair and justified, and also
proposed for: (i) Directors’ Fees of Bonia Corporation Berhad and its subsidiaries
of RM1,945,798 for the FY2018 to be divided amongst the Directors in such
manner as they might determine, and (ii) Directors’ Benefits by Bonia Corporation
Berhad up to an amount of RM90,000 for the period from 27 November 2018
until the AGM 2019 of the Company to be held in November 2019, to reward
the Board members.

All activities and recommendations of the NRC were reported and accepted by Board. The Board was also satisfied with the
overall performance of the NRC, ARC, the Board and individual Directors as well as the independence of Independent Directors
via its performance evaluations conducted at Board level.
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Corporate Governance Overview Statement
(Cont’d)

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (cont’d)

II. Board Composition (Cont’d)

Board Commitment

All Board members are committed to devote sufficient time to carry out their responsibilities effectively. The Directors shall notify the
Chairman of the Board before accepting any new directorship with an indication of time that will be spent on the new appointment.
Acceptance of such new directorship shall not result in a conflict with the discharge of the Directors’ duties to the Company.

The Directors meet as and when necessary, on dates selected and upon notice as provided by the Company’s Constitution, to deliberate
and consider various matters of the Group within the scope of the Board.

The following are the details of attendance of the Directors on Board during the FY2019 at all Board meetings held during the financial
year:

Director Attendance Percentage

Dato’ Mohamed Khadar Bin Merican (1)
4/4 100%
Chiang Sang Sem (2) 5/5 100%
Dato’ Sri Chiang Fong Tat 5/5 100%
Dato’ Sri Chiang Fong Seng 5/5 100%
Chong Chin Look 5/5 100%
Datuk Chiang Heng Kieng (3) 5/5 100%
Dato’ Sri Chiang Fong Yee (4) 5/5 100%
Lim Saw Imm (1)
4/4 100%
Chong Sai Sin 5/5 100%
Chiang May Ling (Alternate Director to Chiang Sang Sem) (5) 4/4 100%
Chiang Fong Chyen (Alternate Director to Datuk Chiang Heng Kieng) (5) 4/4 100%
Datuk Ng Peng Hong @ Ng Peng Hay (6)
1/1 100%
Dato’ Shahbudin Bin Imam Mohamad (6) 1/1 100%
Chiang Sang Bon (6) 1/1 100%

Notes:
(1)
Appointed as Director on 01 September 2018
(2)
Resigned as Group Executive Chairman cum Chief Executive Officer, and re-designated as “Founder cum Executive Director” on 01 September
2018. Subsequently, re-designated as “Founder, Group CEO and Group Executive Director” on 02 October 2018
(3)
Resigned as Group Managing Director, and re-designated as Non-Independent Non-Executive Director on 01 September 2018
(4)
Resigned as Alternate Director to Chiang Sang Sem, and appointed as Non-Independent Non-Executive Director on 01 September 2018
(5)
Appointed as Alternate Director on 01 September 2018
(6)
Resigned as Director on 01 September 2018

Supply of Information

Prior to Board meetings, the Chairman sets the board agenda and ensures that board members are furnished with comprehensive data
and information of a quality in a timely manner to enable them to discharge their duties and responsibilities efficiently and effectively.
Proposals are supported with management papers and be presented to the Board for evaluation and consideration. The Board’s
deliberations, dissenting views (if any) and decisions are recorded in the minutes of meeting. All the Directors observe the requirements
that they do not participate in the discussions or decision-making of the matters in which they are interested in. Urgent matters that
require immediate attention of the Board may be resolved via directors’ resolutions in writing to speed up the decision-making process.
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Corporate Governance Overview Statement
(Cont’d)

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (cont’d)

II. Board Composition (Cont’d)

Continuous Professional Development

Induction programmes will be conducted for all newly appointed Board members and Company Secretaries including, where appropriate,
visits to the Group’s business and meeting with the management to facilitate their understanding of the Group’s businesses and
operations.

During the FY2019, the continuous training programmes attended by the existing Directors and the Company Secretaries are as
follows:

Designation Name Particulars of the training programmes

Directors Dato’ Mohamed Khadar • Shaping the Future of Retailing with Better Strategy, Data
Bin Merican Analytics and Customer Experience
• Briefing on the Digital Environment
• Briefing on Cybersecurity
• Briefing on AI, Machine Learning, Blockchain and 5G
• The Future of Retailing
• Cybersecurity in the Boardroom
Chiang Sang Sem • Asia Pacific Leather Fair
Dato’ Sri Chiang Fong Tat • Archidex 2018
Dato’ Sri Chiang Fong Seng • The Future of Enterprise - Globalised Thinking
• Lineapelle International Leather Fair
• The 2nd Asia New Retail Forum 2019
• National Achievers Congress 2019
• Malaysia SME Business Summit 2019
Chong Chin Look • BDO Seminar - MFRS 9, 15 and 16
• BDO Tax Budget Seminar - Keeping Ahead of Tax Reforms
• Standard Chartered - Global Research Briefing 2019 Global
Outlook
• Corporate Sustainability - Materiality Assessment Workshop
Datuk Chiang Heng Kieng • KLSCCCI Council Member’s Brainstorming Workshop for Year
2018-2021
• Seminar on Investing in China - Challenges & Opportunities
for Malaysian Companies
• International Branding Showcase 2018
• Sunway Malls Business Partners Meeting & Cashless
Revolution
• Malaysia SME Business Summit 2019
Dato’ Sri Chiang Fong Yee • 16th Edition Franchise & License Expo Indonesia
• International Branding Showcase 2018
• 2019 International Franchise Show
Lim Saw Imm • SIDC: Getting more out of Digital Marketing Global Business
Insight Series
• Corporate Directors Conference: King on Governance, Value
Creation in the Era of Seismic Disruption
• ICDM: Effective Boards in a VUCA World
• PwC Budget 2019 Seminar
• Bursa’s Breakfast Series: Non-Financials: Does it Matter?
• BCSD Malaysia breakfast talk #3: Sustainability & Business
• MIA Engagement of AC on Integrated Reporting
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Corporate Governance Overview Statement
(Cont’d)

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (cont’d)

II. Board Composition (Cont’d)

Designation Name Particulars of the training programmes

Directors Chong Sai Sin • Sustainability Engagement Series for Directors/Chief Executive
Officers
• National Tax Conference 2018
• Implementation and Enforcement of the New Practice Review
Framework
• International Professional Practices Framework for Audit
Committee
• Engagement Session with Public Practitioners: Strengthening
the Profession Together
• CAANZ-MICPA Audit Forum – Tech & Audit: A Practitioners
New Reality
• Practical Auditing Methodology for SMPs
• Practical Issues, Problems and Pitfalls in Registering A
Perkongsian Liabiliti Terhad (Limited Liability Partnership)
• 2019 Budget Seminar
• Case Study Workshop for Independent Directors: Towards
Boardroom Excellence
• MICPA Morning Talk – Listing on the Leading Entrepreneur
Accelerator Platform (LEAP) Market
Chiang May Ling • Take Your Business to Greater Heights – Share Structure
Planning 2.0
• Selangor Smart City & Digital Economy Convention 2018
• Alibaba Global Course – To Make It Easy To Do Business
Anywhere
• APLF – Leather & Materials+ 2019
• Fashion Access Trade Show
• Sustainable Supply Chains – A Circular Approach
• Sustainable Fashion Conference
• Alibaba Netpreneur Training: Malaysia
• Grow Your Business With Digital Marketing
• Malaysia SME Business Summit 2019
Chiang Fong Chyen • 124th China Import and Export Fair
• The 12th Remax World Expo & The 6th iPrint 3D Expo
• Malaysia SME Business Summit 2019
Company Secretaries Chok Kwee Wah • Introduction to MBRS
Tan Kean Wai • Online Training on “Introduction to MBRS”
• Key Amendments to Listing Requirements Arising From The
Companies Act 2016
• Cyber Security Awareness Training

The Board and the Company Secretaries will continue to assess their own training needs and undergo relevant training and development
programmes to enhance their skills and knowledge and to keep abreast with new developments in the business environment.
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Corporate Governance Overview Statement
(Cont’d)

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (cont’d)

III. Remuneration

Board and Senior Management Remuneration Policies and Procedures

The objective of the Company’s policy on Directors’ remuneration is to ensure the level of remuneration is sufficient to attract and retain
high caliber Directors to run the Group successfully. For Executive Directors who are also the top senior management of the Group,
they are subject to both fixed and performance-linked reward system. The fixed component consists of salary and other contractual
entitlements whereas the performance-linked component includes a discretionary bonus based on the individual performance and
financial performance of the Group. For Non-Executive Directors, the level of remuneration reflects the levels of experience, expertise
and responsibilities undertaken by the individual Director concerned.

Directors’ fees are paid to both Executive and Non-Executive Directors of Bonia Corporation Berhad by the Company and several of its
local and foreign subsidiaries upon approval granted by the shareholders at AGMs. Apart from it, Independent Non-Executive Directors
receive yearly fixed allowance for their membership of the Audit & Risk Management Committee and Nomination & Remuneration
Committee, and attendance allowance for each general meeting, Board and/or Committee Meeting they attended. Executive Directors
are not entitled to such attendance allowance. Any fee payable by the Company to the Alternate Directors shall be deducted from their
principal directors’ remuneration.

The remuneration of all Directors are reviewed by the NRC, and thereafter by the Board on an annual basis prior to tabling for the approval
of the shareholders of the Company.
 
The details of the fees and remuneration of Directors of the Company during the FY2019 received/receivable from the Company and/
or its subsidiaries are as follows:

The Company The subsidiaries of the Company

Salaries & Benefits- Other Company Salaries & Benefits- Other Subsidiaries
Directors on Board Fees bonuses in-kind emoluments total Fees bonuses in-kind emoluments total
during the FY2019 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Executive Directors
Chiang Sang Sem (2) 35 28 – 8 71 331 472 – 281 1,084
Dato’ Sri Chiang Fong Tat 60 – – 7 67 18 565 – 253 836
Dato’ Sri Chiang Fong Seng 60 – – 7 67 336 990 – 239 1,565
Chong Chin Look 60 – – 7 67 310 605 – 247 1,162
Chiang May Ling (5) 25 – – 3 28 5 53 – 13 71
(Alternate Director to
Chiang Sang Sem)
Chiang Sang Bon (6) 10 – – 1 11 2 – – 6 8
Total 250 28 – 33 311 1,002 2,685 – 1,039 4,726
Non-Executive Directors
Dato’ Mohamed Khadar 83 – 5 17 105 – – – – –
Bin Merican (1)
Lim Saw Imm (1) 50 – 5 17 72 – – – – –
Chong Sai Sin 60 – 9 20 89 – – – – –
Datuk Chiang Heng Kieng (3) 45 – – 5 50 18 – – 165 183
Dato’ Sri Chiang Fong Yee (4) 60 – – 7 67 7 263 – 108 378
Chiang Fong Chyen (5) 15 – – 2 17 5 127 – 33 165
(Alternate Director to
Datuk Chiang Heng Kieng)
Datuk Ng Peng Hong 10 – 1 125 136 15 – – – 15
@ Ng Peng Hay (6)
Dato’ Shahbudin 10 – 5 125 140 – – – – –
Bin Imam Mohamad (6)
Total 333 – 25 318 676 45 390 – 306 741
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Corporate Governance Overview Statement
(Cont’d)

PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (cont’d)

III. Remuneration (Cont’d)

Notes:
(1)
Appointed as Director on 01 September 2018
(2)
Resigned as Group Executive Chairman cum Chief Executive Officer, and re-designated as “Founder cum Executive Director” on 01 September
2018. Subsequently, re-designated as “Founder, Group CEO and Group Executive Director” on 02 October 2018
(3)
Resigned as Group Managing Director, and re-designated as Non-Independent Non-Executive Director on 01 September 2018
(4)
Resigned as Alternate Director to Chiang Sang Sem, and appointed as Non-Independent Non-Executive Director on 01 September 2018
(5)
Appointed as Alternate Director on 01 September 2018
(6)
Resigned as Director on 01 September 2018

Pursuant to Section 230(1) of the Companies Act 2016 (“CA2016”), the fees of the directors, and any benefits payable to the directors
including any compensation for loss of employment of a director or former director of a listed company and its subsidiaries, shall be
approved at a general meeting. Suruhanjaya Syarikat Malaysia further clarified that “benefits” as prescribed in Section 230(1) of the
CA2016 that requires shareholders’ approval are those benefits that are arose from the appointment to the office of a director. Accordingly,
the proposed fees and benefits payable to the Directors of the Company shall be tabled at the forthcoming AGM for the consideration
of the shareholders.

PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT

I. Audit & Risk Management Committee

The ARC

The ARC shall examine the Group’s matters pertaining to the financial reporting, risk management and internal control, internal and
external audit processes, related party transactions, and conflict of interests situation, and reports its recommendations to the Board
for their consideration.

Prior to 01 September 2018, all the 3 members of the ARC were Independent Non-Executive Directors and it was chaired by the then
Senior Independent Non-Executive Director namely Datuk Ng Peng Hong @ Ng Peng Hay who was not the Chairman of the Board. On
01 September 2018, Lim Saw Imm, a newly appointed Independent Non-Executive Director took up the chair of the ARC. She is not
the Chairman of the Board and is supported by the other 2 Independent Non-Executive Directors as members of the ARC.
 
Relationship with the External Auditors

The Board, via the ARC, has established a transparent and appropriate relationship with the Group’s External Auditors. In the course of
audit of the Group’s operations, the External Auditors highlighted to the ARC and the Board, matters that require their attention.

Financial Reporting

The Board aims to present a balanced and meaningful assessment of performance and prospects of the Group in all of its financial
reports. The unaudited and audited financial statements of the Group which are drawn up in compliance with the provisions of the
Companies Act 2016 and the applicable Malaysian Financial Reporting Standards and International Financial Reporting Standards, and
are released to the public within the stipulated time frame, reinforce the Board’s commitment to ensure the accuracy, completeness and
timely dissemination thereof for greater accountability and transparency.

The Directors’ Responsibility Statement made pursuant to Paragraph 15.26(a) of the Main Market Listing Requirements of Bursa Malaysia
Securities Berhad in relation to the Financial Statements is presented in the appropriate section of this Annual Report.
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Corporate Governance Overview Statement
(Cont’d)

PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT (cont’d)

I. Audit & Risk Management Committee (Cont’d)

Independence of External Auditors

The independence of External Auditors is essential to the provision of an objective opinion on the truth and fairness of the financial
statements. As such, the ARC is mandated to ensure continuing objectivity and independence of the External Auditors. The ARC
performs annual review on the External Auditors on a number of criteria including, but not limit to:
• the independence of the external audit firm from the Group and their ability to maintain independence throughout the engagement;
• there being no conflict of interest situations that could affect the independence of the External Auditors;
• the external audit firm’s compliance with Malaysian regulations and ethical guidance relating to rotation of audit partner and
succession planning;
• professional competency, experience and integrity of key personnel;
• the thoroughness of audit approach and methodology;
• audit budget;
• the provision of non-audit services by the External Auditors (if any) shall not cause an impairment to the objectivity and independence
of the audit firm; and
• effective control of multi-geographical audit process.

Subject to satisfactory performance and the recommendation of the ARC, the Board will recommend the re-appointment of the External
Auditors to shareholders at the AGM. If the ARC does not recommend the incumbent audit firm, a tender process will be carried out by
the ARC and executive management to select a new audit firm.

II. Risk Management and Internal Control Framework

Responsibilities of the Board

The Board acknowledges their responsibilities for the Group’s risk management and system of internal controls covering not only financial
controls but also operational and compliance controls. The ARC which comprises all Independent Non-Executive Directors, assists the
Board to oversee the Company’s risk management framework and policies.

The Board takes necessary steps to identify, assess and monitor key business risks, and constantly review and enhance its internal
control system to manage such risks with objective to safeguard the shareholders’ investments and the Group’s assets.

The Statement on Risk Management & Internal Control in this Annual Report provides an overview on the state of risk management and
internal controls within the Group.

Independence of Internal Auditors

During the ARC and the Board’s annual review on the outsourced Internal Auditors of the Company namely M/s RMS Corporate
Management Sdn. Bhd. (“RMS”), both the ARC and the Board were satisfied that:
• the internal audit personnel assigned to handle the internal audit function of Bonia Group for year 2018/2019 were free from any
relationship and no conflict of interest with the Group;
• the key personnel who involved in the internal audit function of Bonia Group were equipped with the necessary skills and knowledge
to carry out their duties and responsibilities; and
• RMS has carried out the internal audit function in accordance with the professional, and of Bonia Group’s recognised framework.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

75
Corporate Governance Overview Statement
(Cont’d)

PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS

I. Communication with Stakeholders

Corporate Disclosure

The Company recognises the importance of keeping its shareholders, investors and stakeholders informed of the Group’s performance
and corporate developments. The Board maintains a high level of transparency and accountability in its disclosure procedures by
observing the corporate disclosure framework under Bursa Malaysia Securities Berhad’s Main Market Listing Requirements and other
regulatory bodies to provide timely and material information of the Group to the public at large to facilitate their decision-making process.
The Board also refers to the “Corporate Disclosure Guide” issued by Bursa Malaysia Securities Berhad to address the gaps (if any) and
to enhance the quality of its disclosure practices.

Pertinent and updated information of the Group is disseminated vide media conferences, press releases, corporate reports, circulars
and announcements from time to time. The Board also leverages on its website www.bonia.com to provide quick access to information
on the Group to its stakeholders. Alternatively, the Group’s latest announcements on financial reports and corporate developments can
be retrieved from the Bursa Malaysia Securities Berhad’s website at www.bursamalaysia.com.

II. Conduct of General Meetings

General meetings

General Meeting is a crucial mechanism in shareholders communication and remains the principal forum for dialogue with shareholders
of the Company. At the general meetings, the shareholders, their appointed proxies or authorised corporate representatives have direct
access to the Board and senior management and are given the opportunity to discuss about the resolutions being proposed or about
the Group’s businesses and operations in general.

Pursuant to Paragraph 8.29A of the MMLR, all resolutions set out in the notice of any general meeting, or in any notice of resolution
which may properly be moved and is intended to be moved at any general meeting of the Company, shall be voted by poll based on
the principle of “one share one vote”, and the Company shall appoint at least 1 scrutineer to validate the votes cast at the general
meeting. The mandatory poll voting ensures fairness, transparency and effective representation of the members in general meetings of
the Company.

Shareholders are able to find out the voting result at the respective general meetings, on the website of the Company at http://ir.bonia.
com/ as well as the Company’s announcements to Bursa Malaysia Securities Berhad at www.bursamalaysia.com.
 
To ensure that shareholders are given sufficient notice and time to consider the resolutions that will be discussed and decided at an
AGM, the Company serves a longer notice period of 28 days or more to its shareholders to enable outstation or overseas shareholders
in particular to participate fully in the AGM. All the Directors of the Company shall attend the AGM and to provide meaningful response
to the questions raise by the shareholders, their appointed proxies or authorised corporate representatives.

CONCLUSION

The Board is satisfied that the Company has substantially complied with the Principles and Recommendations set out in the MCCG throughout
the FY2019. Where a specific Practice of the MCCG has not been observed during the financial period under review, the departure has been
explained in the Corporate Governance Report of the Company.

This statement is made in accordance with a resolution of the Board of Directors of Bonia Corporation Berhad dated 01 October 2019.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

76

Report of the Audit &

Risk Management Committee

The Board of Directors of Bonia Corporation Berhad (“Board”) is pleased to present the Report of the Audit & Risk Management Committee
(“ARC”) for the FY2019.

RESPONSIBILITIES OF THE ARC

The responsibilities of the ARC are set out in the Audit & Risk Management Committee Charter duly approved by the Board, a copy of which
is posted on the corporate website of the Company at http://ir.bonia.com/ under the Corporate Governance section.

Being a delegated body of the Board, the ARC is empowered to investigate any matter within its purview at the cost of the Company. Information
pertaining to the Group is made available to the ARC members to ease their investigation role, and the ARC received full support from the Board
members, Company Secretaries, Internal and External Auditors as well as the staff of the Group in discharging its duties during the FY2019.

All members of the ARC undertook continuous professional development to keep themselves abreast of relevant developments in accounting
and auditing standards, practices and rules.

MEMBERSHIP AND MEETINGS

Prior to 01 September 2018, the ARC consisted of 3 Independent Non-Executive Directors, namely Datuk Ng Peng Hong @ Ng Peng Hay,
Dato’ Shahbudin Bin Imam Mohamad and Chong Sai Sin.

On 01 September 2018, the ARC was restructured to be chaired by a newly joined Independent Non-Executive Director, namely Lim Saw
Imm. Other members of the ARC are Dato’ Mohamed Khadar Bin Merican (Senior Independent Non-Executive Director) and Chong Sai Sin
(Independent Non-Executive Director). They possess a wide range of necessary skills to discharge their duties. All members were financially
literated and were able to understand matters under the purview of the ARC including the financial reporting process.

During the FY2019, the ARC members met 5 times, with the following record of attendance:

ARC member No. of meetings attended/held

Lim Saw Imm (1)
4/4
Dato’ Mohamed Khadar Bin Merican (1) 4/4
Chong Sai Sin 5/5
Datuk Ng Peng Hong @ Ng Peng Hay (2) 1/1
Dato’ Shahbudin Bin Imam Mohamad (2)
1/1

Note:
(1)
Appointed as ARC member with effect from 01 September 2019
(2)
Ceased as ARC member with effect from 01 September 2019

Other regular attendees at the ARC meetings included the invited Executive Directors, senior or middle management, and representatives from
the Internal or External Auditors, to assist the ARC’s discussions and consideration of reports, and to answer questions in relation to internal
or external audit reviews and improvement recommendations. The ARC Chairman will then report on key issues discussed at each meeting to
the Board for their further considerations and deliberations. A private discussion between the ARC and the External Auditors was held in the
FY2019 to provide additional opportunity for open dialogue and feedback without the presence of the Executive Directors and management.

KEY AREAS OF FOCUS FOR THE ARC

The ARC’s annual work plan for the FY2019 focused on 5 key areas covering the: (i) financial reporting, (ii) risk management and internal control,
(iii) internal audit, (iv) external audit, (v) related party transactions, and conflict of interest.

Financial reporting The ARC reviewed the quarterly reports and year-end financial statements before recommending to the
Board for consideration and approval, and concluded that the going concern assumption, changes in or
implementation of accounting policies and practices, significant audit adjustments, and major judgemental
areas made by the management in those quarterly reports and year-end financial statements, were in
compliance with approved accounting standards, regulatory and other legal requirements for financial
reporting, and those reports were fair and reasonable in reflecting the Group’s business performance.
 BONIA CORPORATION BERHAD
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77
Report of the Audit & Risk Management Committee
(Cont’d)

KEY AREAS OF FOCUS FOR THE ARC (cont’d)

Risk management The ARC assessed the risk profile, risk appetite, levels of tolerance of the Group, challenged and tested
and internal control on the adequacy and integrity of the internal control system in place to manage the selected areas
representing significant risks, considered the findings and recommendations made by the Internal and
External Auditors and management’s response or actions to mitigate control deficiencies, and concluded
that the risk management and internal control system of the Group is continuously being enhanced to
safeguard the shareholders’ investments and the Group’s assets.

Internal audit The ARC assessed the internal audit plan, audit methodology, remuneration, scope of works and reports
presented by the Internal Auditors, considered the management’s response and follow up actions thereto
to ensure significant findings are adequately addressed by the management. The ARC concluded that the
internal audit processes duly completed by the Internal Auditors in FY2019 were adequate, added value
and improved the efficiency of the operations of the Group.

External audit Prior to the commencement of annual audit, the ARC reviewed the audit plan, audit strategy, scope of
work, independence, objectivity and remuneration proposed by the External Auditors. Thereafter, the
ARC discussed with the External Auditors their audit findings, audit reports, management letters and
management’s response to the concerns raised by the External Auditors. It was concluded that the audit
processes carried out by the External Auditors were comprehensive and added credibility to Company’s
financial statements which allowed the stakeholders of the Group to use them with greater confidence.

Related party transactions, In accordance with the threshold and provisions specified in Chapter 10 of the Main Market Listing
and conflict of interest Requirements of Bursa Malaysia Securities Berhad (“BMSB”), and the methods and procedures to govern
the requirements of related party transactions (“RPT”) and recurrent related party transactions (“RRPT”)
duly established by the Company, the ARC identified, tracked and monitored the potential and existing
RPT and RRPT of the Group. Due consideration being given to the nature and class of such transactions
that are supposed to be consistent with the ordinary course of the Group’s business, undertaken on an
arm’s length basis at the prevailing prices or market rates and are based on usual and fair commercial
terms not more favorable to related parties than those generally available to the public, or otherwise in
accordance with the applicable industry norms. Where there is no market value for a particular transaction,
the transaction will be on a willing buyer willing seller basis or the nearest equivalent. These transactions are
also not prejudicial to the interest of the shareholders of the Company and not detrimental to its minority
shareholders. The ARC also reviewed the appropriateness of the relevant announcements to BMSB,
Circular to Shareholders and disclosure made in the Annual Report of the Company.

After making all the necessary enquiries to the management and Directors of the Company, the ARC
reported to the Board that they have no knowledge of the existence of any conflict of interest within the
Group during the FY2019.

THE INTERNAL AUDIT FUNCTION

The Group has outsourced its internal audit function to M/s RMS Corporate Management Sdn. Bhd. (“RMS”), a professional firm that has
adequate resources and appropriate standing to undertake its activities independently and objectively to provide reasonable assurance to the
ARC regarding the adequacy and effectiveness of risk management, internal control and governance systems. The Internal Auditors report
directly to the ARC. All RMS personnel assigned to undertake internal audit on Bonia Group are free from any relationships or conflicts of
interest which could impair their objectivity and independence. They are competent and experienced, and are able to access information of the
Group for them to carry out the audit function in accordance with the Group’s “Risk Management And Internal Control Framework” effectively.

RMS adopts a risk-based methodology in its work and undertakes regular risk and vulnerability assessment on the business units (operational
and non-operational) within the Group, highlights significant weaknesses and makes appropriate recommendations for improvement to ensure
proper, economic and effective use of resources of the Group.
BONIA CORPORATION BERHAD
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78
Report of the Audit & Risk Management Committee
(Cont’d)

THE INTERNAL AUDIT FUNCTION (cont’d)

The “Internal Audit Planning Memorandum for Financial Years 2019 and 2020” presented by RMS was reviewed and approved by the ARC
and endorsed by the Board in August 2018. Subsequently, 4 audit visits to the targeted business units that represented the key risk areas
were carried out. During the audit visits, the representatives of the Internal Auditors had tested the efficiency and effectiveness of the risk
management and internal control system of those business units, benchmarked them against the industry practices and suggested appropriate
processes and procedures to mitigate the control deficiencies. The relevant findings, management’s response and/or recommendations were
reported to the ARC, and thereafter to the Board in their quarterly meetings held. The fee incurred for the FY2019 in relation to the internal
audit function is RM52,000.

THE EXTERNAL AUDITORS

The ARC places great importance on the quality and effectiveness of the audit services of the External Auditors and considers the appointment
or re-appointment (as the case may be) of the External Auditors annually.

The following areas are essential upon evaluating the performance of the External Auditors for the FY2019:

Independence and The ARC received a written assurance from the External Auditors confirming that they are, and have been,
objectivity independent throughout the conduct of the audit engagement in accordance with the terms of all relevant
professional and regulatory requirements.

The External Auditors also informed the ARC that:

• M/s BDO PLT is seeking for its re-appointment at the forthcoming 28th AGM of the Company; and
• Chan Wai Leng is the Lead Audit Partner responsible for the Group’s audit for FY2019, and will
continue her role should M/s BDO PLT be re-appointed External Auditors of the Company.

Effectiveness The ARC met with the Executive Directors and management to obtain their feedback pertaining to
the effectiveness of the External Auditors, judging from the thoroughness of their audit approach and
methodology, the competency, experience and integrity of their key personnel, and the quality of the
audit delivery.

Audit and In relation to the audit services provided for the FY2019, the shareholders of the Company have granted
Non-Audit Fees their approval for the Board to determine the remuneration of the External Auditors at the Company’s 27th
AGM held on 26 November 2018.

During the FY2019, the External Auditors also rendered non-audit services to the Group including the
review of the Company’s Statement on Risk Management & Internal Control, and agreed upon procedures
of subsidiaries gross sales statements to landlords.

After due consideration, both the ARC and the Board were of the view that the following audit and non-audit
fees incurred for the FY2019 are fair and reasonable, and the provision of the non-audit services to the Group
did not impair, or was not perceived to impair the independence and objectivity of the External Auditors:

Fee incurred Audit Fee (RM’000) Non-Audit Fee (RM’000)

The Company 74 16
The subsidiaries of the Company
- Continuing Operations 288 20
- Discontinued Operations 24 Nil

The performance evaluation on the External Auditors duly conducted on 01 October 2019 demonstrated a satisfactory result to the ARC and
recommendation was made to the Board for the re-appointment of the External Auditors. The Board has accepted this recommendation and
a resolution for the re-appointment will be put to the shareholders at the forthcoming 28th AGM of the Company.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

79
Report of the Audit & Risk Management Committee
(Cont’d)

RECURRENT RELATED PARTIES TRANSACTIONS OF REVENUE OR TRADING NATURE (“RRPT”)

During the FY2019, the ARC also closely monitored all the RRPT undertook by Bonia Group and concluded that those RRPT were conducted
on arm’s length basis, under normal commercial terms consistent with the Group’s business practices, on terms not more favourable to the
related parties than those generally available to the public and were not to the detriment of the minority shareholders of the Company.

The class and nature of the RRPT of Bonia Group are tabulated as follows:

Estimated aggregate value

during the validity period of Actual
the Proposed RRPT Mandate aggregate
pursuant to Circular to value
Shareholders dated 26.10.2018 transacted
duly approved at the 27th AGM during the
Transacting Transacting held on 26.11.2018 FY2019
RRPT No. party related party Nature of transactions RM’000 RM’000
1. Bonia Group Long Bow • Payment of office and 2,000 1,010
Manufacturing (S) warehouse rental to LMS
Pte. Ltd. (“LMS”)
2. Bonia Group Speciale Eyewear • Purchase of eyewear 500 201
Sdn. Bhd. from SESB
(“SESB”)
3. Bonia Group Bonia International • Payment of Bonia, 3,000 1,160
Holdings Pte. Ltd. Carlo Rino, Sembonia
(“BIH”) and CR2 trademarks
royalties to BIH
4. Bonia Group Speciale Eyewear • Sell of bags and 200 41
Sdn. Bhd. accessories to SESB
(“SESB”)
5. Bonia Group Bonia International • Payment of fixed 100 3
Holdings Pte. Ltd. Carlo Rino, and CR2
(“BIH”) trademarks royalties
for licenced territories
and licensed products
to BIH

Note:
RRPT 1 to 5 - Actual value transacted up to 30 June 2019 did not exceed the estimated aggregate value during the validity period of the shareholders’ mandate
obtained on 26 November 2018 by 10%
- Interested related party - As mentioned in the notes of Sections 3.2 and 4 of Part B of the Company’s Circular to Shareholders dated 26 October
2018

CONCLUSION

The Board is of the view that the ARC and all its members have discharged their duties and responsibilities effectively during the FY2019 and
the new ARC members will strive to maximise the quality of the risk management, internal control and governance framework of the Group.

This statement is made in accordance with a resolution of the Board of Directors of Bonia Corporation Berhad dated 01 October 2019.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

80

Statement on Risk Management &

Internal Control

The Board of Directors of Bonia Corporation Berhad (“Board”) is pleased to present its Statement on Risk Management & Internal Control for
the FY2019, which has been prepared pursuant to Paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia Securities
Berhad (“MMLR”) and as guided by the Statement on Risk Management & Internal Control: Guidelines for Directors of Listed Issuers (“SRMIC
Guidelines”). This statement outlines the nature and state of risk management and internal controls of the Group (comprising the Company and
its subsidiaries) during the FY2019. The associated companies of the Group have not been dealt with as part of the Group for the purposes
of applying these guidelines.

BOARD RESPONSIBILITIES AND ASSURANCE

Cognisant of the importance of the Group’s risk management and internal control system to safeguard the shareholders’ investment and the
Group’s assets, the Board strives to apply a risk-sensitive approach in identifying, evaluating and managing significant risks that may affect the
Group’s businesses. The Group’s internal control system encompasses all types of control including those of a strategic, operational, reporting and
compliance nature, and it is being closely monitored and adjusted to be consistent with the risk appetite and tolerance levels set by the Board.

The management assists the Board in embedding risk management and internal control system in all aspects of the Group’s activities. They
play a key role in ensuring the sanctioned practices, processes and procedures to address current and emerging risks are appropriately
implemented throughout the Group, and to promptly report any significant deficiencies and weaknesses of the control environment to alleviate
and manage such risks.

In view of the limitations that are inherent in any systems of risk management and internal control, the Group’s system of risk management and
internal control is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable
but not absolute assurance against material misstatement or loss.

For the FY2019, the Board has received assurance from its: (i) Founder, Group CEO and Group Executive Director, and (ii) Group Finance Director
where, to the best of their knowledge, the Group’s risk management and internal control systems are operating adequately and effectively in
all material aspects, based on the Risk Management and Internal Control Framework adopted by the Group.

The Board confirms that there is a continuous process in place to identify, evaluate and manage the significant risks that may affect the
achievement of business objectives. The process which has been instituted throughout the Group is updated and reviewed from time to time
to suit the changes in the business environment and this ongoing process has been in place for the whole FY2019 and up to the date of
issuance of the Company’s Annual Report FY2019.

 
 BONIA CORPORATION BERHAD
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81
Statement on Risk Management & Internal Control
(Cont’d)

RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK (“RMICF”)

Group’s Objectives

The Group’s RMICF is geared to achieve its objectives that support Bonia’s mission set forth in the following 4 categories:

• These are high-level goals, aligned with and suppor

ng the
Strategic Group’s mission
objec
ves

• These pertain to effec

veness and efficiency of the Group's
Opera
ons opera
ons, including opera
onal and financial performance
objec
ves goals, and safeguard assets against loss

BONIA
• These pertain to internal and external financial and non-
MISSION
Repor
ng financial repor
ng and may emcompass reliability,
meliness,
objec
ves transparency, or other terms as set forth by regulators,
recognised standard se ers, or the Group's policies

• These pertain to adherence to laws and regula

ons to which
Compliance the Group is subject
objec
ves

The aforesaid objectives are set by the Board after taking into consideration on the Group’s risk appetite and tolerance level.

Risk Management and Internal Control

Risk management and internal control shall become the concern of every individual in Bonia Group and the relevant approach shall be consistent
with the recommendations made by the:
• Enterprise Risk Management - Integrated Framework; and Internal Control - Integrated Framework, issued by the Committee of Sponsoring
Organisations of the Treadway Commission (COSO); and
• Statement on Risk Management & Internal Control - Guidelines for Directors of Listed Issuers,
that involve the identification, assessment and management of risks, as well as the formalisation and implementation of effective and efficient
control processes to provide reasonable assurance regarding the achievement of the Group’s objectives in all levels of its activities.
BONIA CORPORATION BERHAD
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82
Statement on Risk Management & Internal Control
(Cont’d)

The Directors, management and staff of Bonia Group are guided by the following risk management and control processes in identifying,
assessing, responding, controlling, communicating and monitoring of risks on an ongoing basis:

Events Identification
All existing and potential events affecting the achievement of the Group’s objectives must be identified, distinguishing between risks and
opportunities. Opportunities are channelled back to management’s strategy or objective-setting processes

Risks Assessment
Identified risks are analysed to form a basis for determining how they should be managed, and are assessed on an inherent and a residual basis
using qualitative techniques followed by more quantitative analysis of the most important risks through risk matrix analysis

Impact Risk Management Actions

Significant Considerable Must manage Extensive
management and monitor management
required risks essential
Moderate Risks may be Management Management
worth accepting effort effort
with monitoring worthwhile required
Minor Accept Accept, but Manage and
risks monitor risks monitor risks
Low Medium High
Likelihood

Risks Response
The risk management strategy to response to risks can be: avoiding, accepting, reducing, sharing, transferring, monitoring and/or controlling the
risks, and involves developing a set of actions to align risks with the Group’s risk tolerances and risk appetite

Control Activities
Control activities through policies and procedures that contribute to the mitigation of risks to the achievement of objectives to acceptable levels,
shall be developed and deployed on a timely and appropriate manner

Information & Communication

Relevant information shall be communicated in a form and timeframe that enables all people within the Group to carry out their responsibilities.
Effective communication also occurs in a broader sense, flowing down, across and up the Group so to ensure personnel receive clear
communications regarding their roles and responsibilities in risk management and internal control processes

Monitoring
The risk management and internal control processes shall be closely monitored, and modifications be made as necessary. Monitoring is
accomplished through ongoing management activities, separate evaluations, or both
 BONIA CORPORATION BERHAD
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83
Statement on Risk Management & Internal Control
(Cont’d)

THE REPORTING AND REVIEW MECHANISM

The Board adopts a two-tier review mechanism to evaluate the adequacy and integrity of the risk management system and internal control
processes of the Group. The first aspect of the review is undertaken by the Management while the second aspect constitutes the independent
review by the ARC with the assistance of the Internal Auditors. Risk profiles and tolerance levels, significant audit findings, audit issues highlighted
in the preceding internal audit reports together with the follow up actions are being considered at length by all parties concerned.

The Board solicits feedback on the effectiveness of risk management system and internal control processes from the ARC and seeks continuous
improvement in its RMICF to close gaps and/or mitigate deficiencies.

Second-tier review

First-tier review

Management
Management are tasked to implement the policies and procedures on risk management and internal control sanctioned by the Board. Major day-to-
day risk management and internal control issues shall be communicated to the Risk Management Working Committee for evaluations and actions

Risk Management Working Committee (“RMC”)

RMC comprises Executive Directors of Bonia with the other members who should have in-depth knowledge of the operation and/or financial
aspects of risk management and internal control being selected from the Management to resolve the major day-to-day risk management and
internal control issues duly reported by the Management. RMC also undertakes the first-tier review on the efficiency and effectiveness of the Group’s
risk management and internal control processes on a regular basis with issues that require the attention of the Board be communicated to the ARC
for further deliberations

Internal Auditors
The Internal Auditors is an independent function that reports directly to the Audit & Risk Management Committee, and thereafter to the Board.
It performs internal audit on various activities within the Group based on the Internal Audit Plan approved by the ARC by adopting risk-based
methodology, recommends the best practices to enhance the quality of the risk management, internal control and governance systems of the
Group, and provide reasonable assurance to the ARC on the efficiency and effectiveness of such systems

Audit & Risk Management Committee (“ARC”)

The ARC is composed of Independent Directors of Bonia. It conducts second-tier risk management assessments, review internal control processes
and evaluate the adequacy and integrity of the risk management, internal control and governance systems of the Group independently on a regular
basis, and reports to the Board of Bonia for further evaluations and actions

Board of Directors
The Board sets business objectives for the Group, establishes risk profiles, determines and adjusts risk appetite and tolerance levels, ensures
appropriate policies and procedures are in place to manage those significant risks within the Group, performs regular checks on the health of the
Group’s risk management, internal control and governance systems, and seeks continuous improvement to close gaps and/or mitigate deficiencies
BONIA CORPORATION BERHAD
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84
Statement on Risk Management & Internal Control
(Cont’d)

KEY RISKS ASSESSMENT AND INTERNAL CONTROL PROCESSES

The Board undertook a detailed assessment of the risks of Bonia Group. Key risks were identified, analysed, and categorised as follows:

Strategic Risks Operational Risks

• Growth strategy • Boutiques/outlets management
• Competition • Supply chain management
• Branding/image • Resources management
• Strategic investment • Information Technology
• Sustainability • Quality control

BONIA
GROUP
Financial Risks Hazard Risks
• Liquidity • Employee safety and health
• Cost of capital • Office/factory/boutique/
• Credit risk outlet safety and health
• Foreign exchange risk • Natural disasters

These inherent risks may have an adverse impact on the Group’s business operations, financial condition and its growth momentum. The risks
above are not exhaustive and new risks emerge from time to time. The Board will constantly review its risk profiles to include those new risks
that may be significant to the Group.

The key elements of the Group’s risk management system and internal control processes are described below:
• There are proper documentations to define the responsibilities and functions of the Board and each of its committees.
• Internal policies and procedures are in place, which are updated as and when necessary.
• There is an organisation structure with clearly defined lines of responsibility, limits of authority and accountability aligned to business and
operations requirements which supports the maintenance of a strong control environment.
• There is a clearly defined delegation of responsibilities to the Management of operating units who ensure that appropriate risk management
and control procedures are in place. The Group identifies the key risks by line of business and key functional activities.
• There are procedures for investment appraisal covering the acquisition or disposal of any business, application of capital expenditure
and approval on borrowing, with post implementation reviews be conducted and reported.
• Actual performances would be reviewed against budgeted results on a quarterly basis, allowing timely response and corrective actions
to be taken to mitigate risks.
• Comprehensive management accounts and reports are prepared monthly for effective monitoring and decision-making.
• Regular meetings are held and attended by directors and senior management to discuss and report on operational performance,
business strategies, key operating statistics, legal and regulatory matters of each business unit where plans and targets are established
for business planning and budgeting process.
• Review of quarterly and annual financial reports by the Audit & Risk Management Committee (ARC) and the Board.
• Working committees are established (as and when required) as part of the stewardship team to conduct study on various business
processes and functions to identify key elements that are vital to achieve Group’s mission and goals.
• Given the strategic plans of the Group, the risk profiles, risk appetite and tolerance level would be adjusted where necessary to add
value to the risk management and control system and for mitigative actions.

 
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85
Statement on Risk Management & Internal Control
(Cont’d)

REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS

Pursuant to Paragraph 15.23 of the MMLR, the External Auditors have reviewed this Statement on Risk Management & Internal Control. As
set out in their terms of engagement, the procedures were performed in accordance with Audit and Assurance Practice Guide 3: Guidance for
Auditors on Engagements To Report On The Statement on Risk Management and Internal Control Included In the Annual Report (“AAPG3”),
issued by Malaysian Institute of Accountants. AAPG3 does not require the External Auditors to consider whether the Statement on Risk
Management & Internal Control covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the risk management
system and internal control processes of the Group. AAPG3 also does not require the External Auditors to consider whether the processes
described to deal with material internal control aspects of any significant problems disclosed in the Annual Report FY2019 would, in fact, remedy
the problems. Based on their procedures performed, the External Auditors have reported to the Board that nothing has come to their attention
that causes them to believe that this Statement on Risk Management & Internal Control is not prepared, in all material respects, in accordance
with the disclosures required by Paragraphs 41 and 42 of the SRMIC Guidelines, nor is it factually inaccurate.

CONCLUSION

The Board is of the view that the Group’s system of risk management and internal controls is generally satisfactory and has not resulted in
any material loss, contingency or uncertainty. The Board and Management will continue to take necessary measures to strengthen the control
environment and monitor the health of the risk management and internal controls processes of the Group.

This statement is made in accordance with a resolution of the Board of Directors of Bonia Corporation Berhad dated 01 October 2019.

Directors’ Responsibility
Statement

Pursuant to the Companies Act 2016 (“CA2016”) and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Directors
have prepared the Consolidated Financial Statements of the Group and of the Company for the FY2019 that gave a true and fair view of the
financial position of the Group and of the Company as at the end of the financial year as well as their financial performance for the financial year
in accordance with the applicable Malaysian Financial Reporting Standards, the International Financial Reporting Standards and the relevant
provisions of CA2016.

In preparing the said Consolidated Financial Statements, the Directors have:

• adopted suitable accounting policies and then applied them consistently;
• made judgements and estimates that are reasonable and fair;
• ensured that applicable accounting standards have been followed, subject to any material departures disclosed and explained in the
financial statements;
• prepared the financial statements on a going concern basis.

The Directors are responsible for ensuring that the Group and the Company keep proper accounting records which disclose with reasonable
accuracy at any time the financial position of the Group and of the Company and to enable them to ensure that the financial statements are
in compliance with CA2016.

The Directors have a general responsibility for taking such steps that are reasonably available to them to maintain a sound risk management
framework and internal control system to safeguard the shareholders’ investment and the assets of the Group and of the Company and to
prevent and detect fraud and other irregularities.

This statement is made in accordance with a resolution of the Board of Directors of Bonia Corporation Berhad dated 01 October 2019.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

86

LIST OF
PROPERTIES
held by the Group as at 30 June 2019

Age of Carrying
Existing Building Area Amount Date of
Description Tenure Use (Year) (Sq Ft) RM’000 Acquisition

ATALY INDUSTRIES SDN. BHD.

Property 1: HS(D) 85704 PT No. 20501 (2-storey Terrace House) Freehold Vacant 37 1,540 650 21/05/1992
Address: No. 29, Jalan Budiman, Taman Midah, Cheras,
56000 Kuala Lumpur

CB HOLDINGS (MALAYSIA) SDN. BHD.

Property 1: QT No. 85228 Lot No. 2794 (Shopping Complex Lot) Freehold Vacant 25 432 200 17/05/1993
Address: UG-31, Upper Ground Floor, Cheras Sentral Mall,
Batu 6, Jalan Cheras, 56000 Kuala Lumpur

Property 2: PN No. 1339 Lot No. 385 (Shopping Complex Lot) Leasehold Vacant 33 1,806 500 29/08/1994
Address: Unit 2B, 3.04 & 3.05, KOMTAR Shopping Complex, 10000 Pulau Pinang (Expiring
in 2084)

Property 3: PN No. 1339 Lot No. 385 (Office Lot) Leasehold Vacant 33 1,134 150 31/12/1994
Address: Unit C2, 4.03B, KOMTAR Shopping Complex, 10000 Pulau Pinang (Expiring
in 2092)

LONG BOW MANUFACTURING SDN. BHD.

Property 1: PM 1471 Lot No. 8417 (Industrial Land and Building) Leasehold Office cum 33 135,100 4,175 07/02/1989
Address: Lot 18, Merlimau Industrial Estate, Phase ll, 77300 Merlimau, Melaka (Expiring Factory
in 2085)

Property 2: Lot No. PT 683 HS (D) 1499 (Single-Storey Semi-detached House) Freehold Hostel 26 3,199 126 12/06/1992
Address: No. 1483, Jalan Jasin, Tmn Bunga Muhibbah, 77300 Merlimau, Melaka

Property 3: GRN No. 57103 Lot No. 21085 (6-storey Industrial Building) Freehold R&D 11 13,713 8,634 31/01/2008
Address: No. 60, Jalan Kilang Midah, Taman Midah, Cheras, 56000 Kuala Lumpur Centre cum
Warehouse

Property 4: PM 454 Lot 3226 (Industrial Land) Leasehold Vacant N.A 85,917 646 08/02/2011
Address: Mukim Sempang, Daerah Jasin Negeri Malaka (Expiring
in 2081)

LUXURY PARADE SDN. BHD.

Property 1: HS(D) No. 182 PT15 SEK 4 (Shopping Complex Lot) Freehold Rented Out 21 1,038 785 19/03/1995
Address: Unit No. G0.07, Plaza Bukit Mertajam, 566, Jalan Arumugam Pillai,
14000 Bukit Mertajam, Pulau Pinang

Property 2: PN48698, Lot 539, Seksyen 91A (Shopping Complex Lot) Leasehold Rented Out 22 1,098 900 26/05/1995
Address: Unit No. 1.48, Level 3, Viva Home Shopping Mall, 85, (Expiring
Jalan Loke Yew, 55200 Kuala Lumpur in 2110)

Property 3: Strata Geran 61152/M1/1/2 and 61152/M1/B1/1 (Club House) Freehold Rented Out 13 7,599 1,000 03/02/2005
Address: The Club House, Angkasa Condominium, No. 5, Jalan Puncak Gading, (Partially)
Taman Connaught, Cheras, 56000 Kuala Lumpur

Property 4: Strata Geran 61152/M1/1/2 (Condominium Covered & Uncovered Car Parks)
154 Units of Parking Bay, Angkasa Condominium, No. 5, Jalan Puncak Gading, Freehold Rented Out N.A – – 20/06/2008
Taman Connaught, Cheras, 56000 Kuala Lumpur (Partially)
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

87
LIST OF PROPERTIES
held by the Group as at 30 June 2019
(Cont’d)

Age of Carrying
Existing Building Area Amount Date of
Description Tenure Use (Year) (Sq Ft) RM’000 Acquisition

LUXURY PARADE SDN. BHD. (Cont’d) Freehold Rented Out 14 7,135 1,750 25/10/2013
Property 5: HS(D) No. 102556 PT8200 (Office Lot)
Address: 2nd Floor, Asmah Tower, Lot 18112, Jalan Cerdas, Taman Connaught,
Cheras, 56000 Kuala Lumpur

Property 6: HS(D) No. 102556 PT8200 (Office Lot) Freehold Vacant 14 21,405 5,250 06/01/2005
Address: 3rd, 4th & 5th Floor, Asmah Tower, Lot 18112, Jalan Cerdas,
Taman Connaught, Cheras, 56000 Kuala Lumpur

Property 7: HS(D) No. 102556 PT8200 (Office Lot) Freehold Rented Out 14 7,135 1,750 06/01/2005
Address: 6th Floor, Asmah Tower, Lot 18112, Jalan Cerdas, Taman Connaught,
Cheras, 56000 Kuala Lumpur

Property 8: HS(D) No. 102556 PT8200 (Office Lot) Freehold Vacant 14 14,270 3,560 11/04/2011
Address: 8th Floor & 9th Floor (Penthouse), Asmah Tower, Lot 18112,
Jalan Cerdas, Taman Connaught, Cheras, 56000 Kuala Lumpur

Property 9: HS(D) No 76874-76878 PT 92 - 96 (Shopping Complex Lot) Leasehold Under N.A. 524 – 23/05/1996
Address: Unit No L1-046, Plaza Rakyat Pudu, Kuala Lumpur (Expiring Construction
in 2081)

Property 10: PN(WP) 10228, Lot No. 31627 (3-storey Detached Factory) Leasehold Warehouse 9 13,595 3,578 15/01/2008
Address: No. 5, Jln Orkid Desa, Desa Tun Razak, Cheras, 56000 Kuala Lumpur (Expiring
in 2085)

Property 11: Geran 61154 Lot 39891 (1 unit Office Suite) Freehold Office 5 801 657 02/08/2017
Address: Parcel No. L5-06, Ikon Connaught, Lot 160, Jalan Cerdas,
Taman Connaught, Cheras, 56000 Kuala Lumpur

Property 12: Geran 61154 Lot 39891 (3 unit Office Suites) Freehold Office 5 2,163 1,369 01/10/2014
Address: Parcel No. L6-03A, L6-05, L6-06 Ikon Connaught, Lot 160,
Jalan Cerdas, Taman Connaught, Cheras, 56000 Kuala Lumpur

Property 13: Geran 61154 Lot 39891 (17 unit Office Suites ) Freehold Office 5 18,747 9,564 11/05/2011
Address: Parcel No. L7-01, L7-02, L7-03, L7-03A,L7-05, L7-06, L7-07,
L7-08, L7-09, L7-10, L7-11,L7-12, L7-13, L7-13A, L7-15, L7-16, L7-17
Ikon Connaught, Lot 160, Jalan Cerdas, Taman Connaught,
Cheras, 56000 Kuala Lumpur

Property 14: Geran 61154 Lot 39891 (8 unit Office Suites) Freehold Office 5 15,347 8,236 13/06/2012
Address: Parcel No. L8-01, L8-02, L8-03, L8-03A,L8-05, L8-06, L8-07, L8-08
Ikon Connaught, Lot 160, Jalan Cerdas, Taman Connaught,
Cheras, 56000 Kuala Lumpur

Property 15: HS(D) No. 131905 PT No. 49975 (6-storey Office Building) Freehold Office and 5 65,574 28,362 19/10/2011
Address: Block A, Platinum Cheras, Jalan Cheras Zen 1A, Warehouse
Cheras, 43200 Selangor Darul Ehsan

Property 16: HS(D) No. 131905 PT No. 49975 (6-storey Office Building) Freehold Office and 5 32,838 14,042 19/10/2011
Address: Block B, Platinum Cheras, Jalan Cheras Zen 1A, Warehouse
Cheras, 43200 Selangor Darul Ehsan

Property 17: HS(D) No. 131905 PT No. 49975 (Covered Car Parks)
231 Units of Parking Bay, Block A & B, Platinum Cheras, Jalan Cheras Zen 1A, Freehold – N.A – 3,241 21/11/2014
Cheras, 43200 Selangor Darul Ehsan
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

88
LIST OF PROPERTIES
held by the Group as at 30 June 2019
(Cont’d)

Age of Carrying
Existing Building Area Amount Date of
Description Tenure Use (Year) (Sq Ft) RM’000 Acquisition

MAHA ASIA CAPITAL SDN. BHD.

Property 1: Geran 27239 Lot 457 Seksyen 67 (Land with Single-storey Detached House) Freehold Rented Out N.A. 15,109 24,000 29/10/2013
Address: No.10, Jalan Delima, 55100 Kuala Lumpur

SBG HOLDINGS SDN. BHD.

Property 1: GRN 50053 Lot No. 50644 (6-storey Office cum Warehouse) Freehold Office cum 21 24,374 12,840 04/12/2018
Address: No. 62, Jalan Kilang Midah, Taman Midah, Warehouse
Cheras, 56000 Kuala Lumpur

PT ACTIVE WORLD
Property 1: Komplek Rukan Cordoba Blok D23 & D25 (3-storey Shop-office) Leasehold Office and 15 4,037 1,328 27/06/2011
Address: Jalan Marina Indah, Pantai Indah Kapuk, Jakarta Utara, Indonesia (Expiring Warehouse
in 2032)

Property 2: Pakuwon Center Superblok, Tanjungan City 19th Floor, init M-9 (Office Suites) Leasehold Rented Out 2 2,777 2,750 25/09/2012
Address: Tunjungan Plaza (City) Jalan Embong Malang, Keluruhan Kedung, (Individual
Surabaya Indonesia title not
Jalan Embong Malang, Kelurahan Kedung Dora, Kecamatan Tegalsari, yet issued)
Surabaya Indonesia

Property 3: Waterplace Residence, Pakuwan Indah Tower TK B-02 (3 1/2-storey Shop-office) Leasehold Rented Out 10 2,260 1,138 24/10/2012
Address: Kelurahan Babatan, Kecamatan Wiyung, Surabaya Indonesia (Individual
title not
yet issued)

PT BANYAN CEMERLANG Leasehold Rented Out 2 9,935 3,632 25/08/2015

Property 1: Boutique Office Lot 5 (6-storey Boutique Office + 2-storey Basement) (Individual
Address: No. 3 Komplek Cengkareng Business Centre, Jl.Atang Sanjaya, title not
No. 21, Rt:004 Rw:006 Kelurahan Benda, yet issued)
Kecamatan Benda Kelurahan Benda, Kecamatan Benda Kotamadya
Tangerang, Banten 15125 Indonesia

Property 2: Boutique Office Lot 5 (6-storey Boutique Office + 2-storey Basement) Leasehold Rented Out 2 9,935 3,632 25/08/2015
Address: No. 5 Komplek Cengkareng Business Centre, Jl.Atang Sanjaya, (Individual
No. 21, Rt:004 Rw:006 Kelurahan Benda, title not
Kecamatan Benda Kotamadya Tangerang, Banten 15125 Indonesia yet issued)

PT JECO INVESTMENT INDONESIA Leasehold Vacant 2 9,935 3,512 22/03/2016

Property 1: Boutique Office Lot 5 (6-storey Boutique Office + 2-storey Basement) (Individual
Address: No. 2 Komplek Cengkareng Business Centre, Jl.Atang Sanjaya, title not
No. 21, Rt:004 Rw:006 Kelurahan Benda, yet issued)
Kecamatan Benda Kotamadya Tangerang, Banten 15125 Indonesia
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

89

ANALYSIS OF
SHAREHOLDINGS
as at 30 September 2019

Class of shares: Ordinary shares

Number of issued shares: 806,287,400 (inclusive of 16,882,400 treasury shares)
Voting rights: 1 vote per ordinary share held on a poll
1 vote per shareholder/proxy/corporate representative on a show of hands
Number of shareholders: 4,881
Remark: The Analysis of Shareholdings is based on the issued shares of the Company after deducting 16,882,400
treasury shares

DISTRIBUTION OF SHAREHOLDINGS

Number of Number of
shareholders ordinary shares held Percentage (%)
Size of shareholdings Malaysian Foreign Malaysian Foreign Malaysian Foreign
Less than 100 42 1 1,119 72 0.00 0.00
101 to 1,000 474 10 276,328 6,300 0.04 0.00
1,001 to 10,000 2,215 25 12,999,405 178,600 1.65 0.02
10,001 to 100,000 1,819 25 59,764,452 984,700 7.57 0.12
100,001 to less than 5% of issued shares 240 26 202,713,528 46,924,788 25.68 5.94
5% and above of issued shares 2 2 313,917,068 151,638,640 39.77 19.21

Total 4,792 89 589,671,900 199,733,100 74.70 25.30

Grand Total 4,881 789,405,000 100.00

Note:
The above information is based on the Record of Depositors as at 30 September 2019 provided by Bursa Malaysia Depository Sdn. Bhd. and the number of holders
reflected is in reference to CDS account numbers

REGISTER OF SUBSTANTIAL SHAREHOLDERS

Shareholdings
Name Direct Percentage (%) Indirect Percentage (%)
Bonia Holdings Sdn. Bhd. 202,875,868 25.70 – –
Freeway Team Sdn. Bhd. 111,041,200 14.07 – –
Milingtonia Limited 80,819,140 10.24 – –
Albizia Asean Opportunies Fund 67,180,000 8.51 – –
Chiang Sang Sem 17,381,600 2.20 378,033,004 (1)
47.89

Note:
(1)
Deemed interested by virtue of: (i) shares held through his substantial shareholdings in Bonia Holdings Sdn. Bhd., Freeway Team Sdn. Bhd. and Kontrak
Kosmomaz Sdn. Bhd., (ii) shares held in trust by Able Wealth Assets Ltd (the shareholder of Able Wealth Assets Ltd is HSBC International Trustee Ltd,
the trustee of a trust, the beneficiaries of which are Chiang Sang Sem and his family members), and (iii) his spouse and children’s direct interests in the
Company
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

90
ANALYSIS OF SHAREHOLDINGS
as at 30 September 2019
(Cont’d)

DIRECTORS’ SHAREHOLDINGS IN BONIA CORPORATION BERHAD

Shareholdings
Name Direct Percentage (%) Indirect Percentage (%)
Dato’ Mohamed Khadar Bin Merican 40,000 0.00 (3) – –
Chiang Sang Sem 17,381,600 2.20 378,033,004 (1) 47.89
Dato’ Sri Chiang Fong Tat 2,069,400 0.26 100,000 (2) 0.01
Dato’ Sri Chiang Fong Seng 4,227,800 0.54 – –
Chong Chin Look – – – –
Datuk Chiang Heng Kieng – – 176,000 (2) 0.02
Dato’ Sri Chiang Fong Yee 5,250,000 0.67 – –
Lim Saw Imm – – – –
Chong Sai Sin – – – –
Chiang May Ling 700,000 0.09 – –
  (Alternate Director to Chiang Sang Sem)
Chiang Fong Chyen 800,000 0.10 – –
  (Alternate Director to Datuk Chiang Heng Kieng)

Notes:
(1)
Deemed interested by virtue of: (i) shares held through his substantial shareholdings in Bonia Holdings Sdn. Bhd., Freeway Team Sdn. Bhd. and Kontrak
Kosmomaz Sdn. Bhd., (ii) shares held in trust by Able Wealth Assets Ltd (the shareholder of Able Wealth Assets Ltd is HSBC International Trustee Ltd,
the trustee of a trust, the beneficiaries of which are Chiang Sang Sem and his family members), and (iii) his spouse and children’s direct interests in the
Company
(2)
Deemed interested by virtue of his spouse’s direct interest in the Company
(3)
Negligible

DIRECTORS’ SHAREHOLDINGS IN JECO (PTE) LIMITED (70%-owned subsidiary of Bonia Corporation Berhad)

Shareholdings
Name Direct Percentage (%) Indirect Percentage (%)
Chiang Sang Sem – – 50,000 (1) 10.00
Dato’ Sri Chiang Fong Seng – – 50,000 (2) 10.00

Notes:
(1)
Deemed interested by virtue of his spouse and a child’s substantial shareholdings in BBS (S) International Pte. Ltd., a corporate shareholder holding 10%
of the total number of issued shares of Jeco (Pte) Limited
(2)
Deemed interested by virtue of his substantial shareholding in BBS (S) International Pte. Ltd., a corporate shareholder holding 10% of the total number of
issued shares of Jeco (Pte) Limited
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

91
ANALYSIS OF SHAREHOLDINGS
as at 30 September 2019
(Cont’d)

30 LARGEST SHAREHOLDERS

No. of
No. Name of Shareholders shares held Percentage (%)
1. Bonia Holdings Sdn. Bhd. 202,875,868 25.70
2. Freeway Team Sdn. Bhd. 111,041,200 14.07
3. Maybank Nominees (Asing) Sdn. Bhd. 80,819,140 10.24
Beneficiary: Pledged Securities Account for Milingtonia Limited
4. CIMB Group Nominees (Asing) Sdn. Bhd. 70,819,500 8.97
Beneficiary: Exempt An for DBS Bank Ltd
5. HSBC Nominees (Asing) Sdn. Bhd. 23,034,400 2.92
Beneficiary: Exempt An for The HongKong And Shanghai Banking Corporation Limited
6. Kontrak Kosmomaz Sdn. Bhd. 22,333,736 2.83
7. Urusharta Jamaah Sdn. Bhd. 18,749,300 2.38
8. Chiang Sang Sem 15,380,800 1.95
9. Citigroup Nominees (Tempatan) Sdn. Bhd. 10,375,000 1.31
Beneficiary: Kumpulan Wang Persaraan (Diperbadankan)
10. Amanahraya Trustees Berhad 6,692,700 0.85
Beneficiary: Public Islamic Opportunities Fund
11. Citigroup Nominees (Tempatan) Sdn. Bhd. 6,155,400 0.78
Beneficiary: Employees Provident Fund Board
12. Chiang Heng Pang 5,501,600 0.70
13. Cartaban Nominees (Asing) Sdn. Bhd. 5,273,400 0.67
Beneficiary: SSBT Fund F9LJ For Fidelity Global Intrinsic Value Investment Trust
14. Affin Hwang Nominees (Asing) Sdn. Bhd. 4,612,000 0.58
Beneficiary: Exempt An for DBS Vickers Securities (Singapore) Pte Ltd
15. Cimsec Nominees (Tempatan) Sdn. Bhd. 4,227,800 0.54
Beneficiary: CIMB Bank for Chiang Fong Seng
16. Chiang Boon Tian 4,078,000 0.52
17. Alliancegroup Nominees (Tempatan) Sdn. Bhd. 4,000,000 0.51
Beneficiary: Pledged securities account for Wong Yee Hui
18. Chong See Moi 3,950,600 0.50
19. Oui Kee Seng 3,400,000 0.43
20. Cimsec Nominees (Tempatan) Sdn. Bhd. 2,999,992 0.38
Beneficiary: CIMB for Kwan Yoong Yu
21. Chiang Fong Yee 2,746,700 0.35
22. Public Nominees (Tempatan) Sdn. Bhd. 2,684,500 0.34
Beneficiary: Pledged securities account for Chee Lai Hock
23. Chong Cheong Leong 2,575,500 0.33
24. Yong Siew Moi 2,550,000 0.32
25. RHB Nominees (Asing) Sdn. Bhd. 2,520,000 0.32
Beneficiary: Exempt An for RHB Securities Singapore Pte Ltd
26. Chiang Fong Yee 2,503,300 0.32
27. Cartaban Nominees (Asing) Sdn. Bhd. 2,503,000 0.32
Beneficiary: BBH and Co Boston for Fidelity Low-Priced Stock Fund
28. UOB Kay Hian Nominees (Tempatan) Sdn. Bhd. 2,307,700 0.29
Beneficiary: Pledged securities account for Teo Siew Lai
29. Alliancegroup Nominees (Tempatan) Sdn. Bhd. 2,182,100 0.28
Beneficiary: Pledged securities account for Lee Swee Kiat & Sons Sdn. Bhd.
30. Chiang Fong Tat 2,069,400 0.26

Total 630,962,636 79.93

Note:
The above information is based on the Record of Depositors as at 30 September 2019 provided by Bursa Malaysia Depository Sdn. Bhd. and without aggregating
securities from different securities accounts belonging to the same person
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

92

Notice of 28th
Annual general Meeting

NOTICE IS HEREBY GIVEN THAT the Twenty-Eighth Annual General Meeting of Bonia Corporation Berhad will be held at Le Quadri Hotel,
Block E (Grand Ballroom), South Wing, No. 1, Jalan Menara Gading 1, UCSI Heights, Taman Connaught, 56000 Cheras, Kuala Lumpur, Wilayah
Persekutuan, Malaysia on Thursday, 28 November 2019 at 9.30 am to transact the following businesses, with or without modifications thereto:

AGENDA

ORDINARY BUSINESS

1. To lay the Audited Financial Statements for the financial year ended 30 June 2019 together with the Please refer to
reports of the Directors and Auditors thereon. Explanatory Note 1

2. To re-elect the following Directors who retire pursuant to the Constitution of the Company and being
eligible, have offered themselves for re-election:

2.1 Chong Sai Sin (Clause 86) Ordinary Resolution 1

2.2 Chiang Sang Sem (Clause 86) Ordinary Resolution 2
2.3 Chong Chin Look (Clause 86) Ordinary Resolution 3

3. To re-appoint Messrs BDO PLT as Auditors of the Company for the financial year ending 30 June 2020
and to authorise the Board of Directors to fix their remuneration. Ordinary Resolution 4

4. To approve the Directors’ fees of Bonia Corporation Berhad and its subsidiaries of RM1,629,673 for
the financial year ended 30 June 2019 to be divided amongst the Directors in such manner as they
may determine. Ordinary Resolution 5

5. To approve the Directors’ fees of Bonia Corporation Berhad and its subsidiaries not exceeding
RM1,688,000 for the financial year ending 30 June 2020 to be divided amongst the Directors in such
manner as they may determine, with payment of the fees to be made semi-annually in arrears at the
end of each half-year. Ordinary Resolution 6

6. To approve the Directors’ benefits of Bonia Corporation Berhad up to an amount of RM105,000 for
the period from 29 November 2019 until the next Annual General Meeting. Ordinary Resolution 7

SPECIAL BUSINESS

To consider and if thought fit, to pass the following resolutions:

7. Retention of Independent Non-Executive Director

“THAT subject to the passing of Ordinary Resolution No.1, Chong Sai Sin shall continue to serve as an
Independent Non-Executive Director of the Company notwithstanding that his tenure as an independent
director has exceeded a cumulative term of 9 years.” Ordinary Resolution 8

8. Approval for Allotment of shares or Grant of rights

“THAT the Directors be and are hereby empowered, pursuant to Sections 75 and 76 of the Companies
Act 2016, to allot and issue not more than 10% of the total number of issued shares of the Company
(excluding treasury shares, if any) at any time, upon such terms and conditions and for such purposes
as the Directors in their absolute discretion deem fit or in pursuance of offers, agreements or options
to be made or granted by the Directors while this approval is in force, and that the Directors be and are
hereby further authorised to make or grant offers, agreements or options which would or might require
shares to be allotted and issued after the expiration of the approval hereof, and that the Directors be
and are also empowered to obtain the approval for the listing of and quotation for the additional shares
so allotted and issued on the Bursa Malaysia Securities Berhad.” Ordinary Resolution 9
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

93
Notice of 28th Annual general Meeting
(Cont’d)

Proposed renewal of shareholders’ mandate to enable Bonia Corporation Berhad to purchase

9.
up to 10% of its total number of issued shares (“Proposed Share Buy-Back”)

“THAT subject to all the applicable laws and regulations, the Directors be and are hereby authorised to
purchase the ordinary shares of the Company through the stock exchange of Bursa Malaysia Securities
Berhad at any time upon such terms and conditions as the Directors in their absolute discretion deem
fit and in the interests of the Company provided that the aggregate number of shares purchased (which
are to be treated as treasury shares) does not exceed 10% of the total number of issued shares of the
Company; and the funds allocated for the purchase of shares shall not exceed its retained profits for
the time being.

THAT the Directors be and are hereby further authorised to deal with the treasury shares in their absolute
discretion pursuant to Section 127(7) of the Companies Act 2016.

THAT such authority shall continue to be in force until the conclusion of the next annual general meeting
of the Company following the general meeting at which the Proposed Share Buy-Back was passed
at which time it will lapse, unless by an ordinary resolution passed at that meeting, the authority is
renewed either unconditionally or subject to conditions; or the expiration of the period within which the
next annual general meeting after that date is required by law to be held; or the revocation or variation
by ordinary resolution passed by the shareholders of the Company in a general meeting, whichever
occurs first.

AND THAT the Board of Directors be and is hereby authorised to do all such acts and things (including
executing such documents as may be required) in the said connection and to delegate all or any of
the powers herein vested in them to any Director(s) or any officer(s) of the Company to give effect to
the aforesaid share buy-back in the best interest of the Company.” Ordinary Resolution 10

10. To transact any other ordinary business for which due notice has been given.

By Order of the Board

CHONG CHIN LOOK (MIA 8043)
CHOK KWEE WAH (MACS 00550)
TAN KEAN WAI (MAICSA 7056310)
Company Secretaries

30 October 2019
Kuala Lumpur

Notes:
1. Only a depositor whose name appears on the Record of Depositors as at 18 November 2019 shall be entitled to attend, participate, speak and vote at this
Meeting as well as for appointment of any person as his proxy(ies) to exercise all or any of his rights to attend, participate, speak and vote at the Meeting
on his stead.
2. Where a member appoints more than 1 proxy, the appointments shall be invalid unless he specifies the proportions of his shareholdings to be represented
by each proxy. However, a member shall not, subject to Paragraphs (3) and (4) below, be entitled to appoint more than 2 proxies to attend and vote at the
Meeting.
3. Where a member is an exempt authorised nominee (EAN) as defined under the Securities Industry (Central Depositories) Act 1991 which holds ordinary
shares in the Company for multiple beneficial owners in 1 securities account (omnibus account), there is no limit to the number of proxies which the EAN
may appoint in respect of each omnibus account it holds.
4. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least 1 proxy but not
more than 2 proxies in respect of each securities account it holds which is credited with ordinary shares of the Company. The appointment of 2 proxies in
respect of any particular securities account shall be invalid unless the authorised nominee specifies the proportion of its shareholding to be represented by
each proxy.
5. Where a member entitled to vote on a resolution has appointed more than 1 proxy, the proxies shall only be entitled to vote on any question at the Meeting
on poll provided that the member specifies the proportion of his holdings to be represented by each proxy.
6. Where a member is a corporation, it may also by resolution of its directors or other governing body authorising a person or persons to act as its representative
or representatives to exercise all or any of its rights to attend, participate, speak and vote at the Meeting on its stead.
7. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a
corporation, either under the corporation’s common seal or under the hand of an officer or attorney duly authorised. The instrument appointing a proxy
shall be deemed to confer authority on the appointed proxy to demand or join in demanding a poll.
The instrument appointing a proxy or proxy form and the power of attorney or other authority, if any, under which it is signed or a copy of that power or
authority, certified by an advocate and solicitor or where the member is a body corporate, the copy of the power or authority may also be certified by an
authorised officer of that member, shall be deposited at the office of the Share Registrar of the Company, Bina Management (M) Sdn. Bhd. at Lot 10, The
Highway Centre, Jalan 51/205, 46050 Petaling Jaya, Selangor Darul Ehsan, Malaysia, not less than 48 hours before the time appointed for holding the
Meeting or adjourned Meeting at which the person named in the instrument proposes to vote or in the case of a poll, not less than 24 hours before the
time appointed for the taking of the poll as may be provided or permitted under the applicable laws, and in default the instrument of proxy or proxy form
shall not be treated as valid. Faxed, photocopied, and electronically scanned copies of the duly executed Proxy Form are not acceptable.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

94
Notice of 28th Annual general Meeting
(Cont’d)

Explanatory Notes:
1. Pursuant to Paragraph 8.29A of the Main Market Listing Requirements, all the resolutions set out in this Notice will be put to vote by poll.
2. Item 1 of the Agenda - This item is meant for discussion only as the provision of Section 340 of the Companies Act 2016 does not require a formal approval
of shareholders for the Audited Financial Statements. Henceforth, this item is not put forward for voting.
3. Items 2 and 7 of the Agenda - The resolutions, if approved, will authorise the continuity in office of the Directors. An annual assessment on the effectiveness
of the Directors (including the independence of Independent Non-Executive Directors) has been undertaken for the financial year ended 30 June 2019 and
the result was satisfactory to the Board.
4. Item 3 of the Agenda - BDO (AF0206), being the Auditors of the Company for the financial year ended 30 June 2019, was converted from a conventional
partnership into a limited liability partnership and assumed its present name, BDO PLT (LLP0018825-LCA & AF0206) since January 2019, and they have
expressed their willingness to continue in office.
5. Items 4, 5 and 6 of the Agenda - Pursuant to Section 230(1) of the Companies Act 2016, the fees of the directors, and any benefits payable to the directors
including compensation for loss of employment of a director or former director of a listed company and its subsidiaries, shall be approved at a general
meeting.
The resolutions, if approved, will authorise:
(i) the payment of the Directors’ fees to the Directors of Bonia Corporation Berhad by the Company and several of its local and foreign subsidiaries;
and
(ii) the payment of the Directors’ benefits to the Independent Non-Executive Directors of Bonia Corporation Berhad by the Company for the period
from 29 November 2019 until the next AGM in year 2020 that are derived from:
(a) the fixed allowance for membership of the Audit & Risk Management Committee and Nomination & Remuneration Committee of RM20,000
per person per financial year; and
(b) the estimated meeting allowance based on the number of scheduled and unscheduled meetings (where necessary) of the Board and Board
committees of RM500 per day of meeting.
6. Item 8 of the Agenda - The resolution, if approved, will renew the existing mandate granted by the shareholders of the Company at the preceding annual
general meeting held on 26 November 2018, and to empower the Directors to allot and issue up to 10% of the total number of issued shares (excluding
treasury shares, if any) of the Company from time to time for such purposes as the Directors consider would be in the best interest of the Company. This
is to provide flexibility and avoid any delay and cost in convening a general meeting for such issuance of shares for any possible fund raising activities,
including but not limited to further placing of shares, for the purpose of funding current or future investment projects, working capital, repayment of bank
borrowings, acquisitions and/or so forth. The authorisation, unless revoked or varied by a resolution of the Company, will expire at the conclusion of the
annual general meeting held next after the approval was given; or at the expiry of the period within which the next annual general meeting is required by
law to be held after the approval was given, whichever is the earlier.
As at the date of this Notice, no new shares in the Company were issued pursuant to the existing mandate which will lapse at the conclusion of the
forthcoming annual general meeting.
7. Item 9 of the Agenda - The details of the proposal are set out in the Circular to Shareholders dated 30 October 2019 and is published at the Company’s
website at http://ir.bonia.com/

STATEMENT ACCOMPANYING NOTICE OF

TWENTY-EIGHTH ANNUAL GENERAL MEETING (“28th AGM”)
[Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“MMLR”)]

Details of individuals who are standing for election as Directors

No individual is seeking election as a Director at the forthcoming 28th AGM of the Company.

Statement relating to general mandate for issue of securities in accordance with Paragraph 6.03(3) of the MMLR

The details of the general mandate are set out in Item 6 of the Explanatory Notes of the Notice of 28th AGM dated 30 October 2019.
 PROXY FORM
BONIA CORPORATION BHD (223934-T)

I/We

NRIC/Passport/Company No. Tel No.

CDS Account No. Number of share held:

Address:

being a member of BONIA CORPORATION BERHAD (223934-T) hereby appoint:

1. Name of Proxy NRIC/Passport No.

Address

Number of shares represented

2. Name of Proxy NRIC/Passport No.

Address

Number of shares represented

or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf, at the Twenty-Eighth Annual General Meeting
of the Company to be held at Le Quadri Hotel, Block E (Grand Ballroom), South Wing, No. 1, Jalan Menara Gading 1, UCSI Heights, Taman
Connaught, 56000 Cheras, Kuala Lumpur, Wilayah Persekutuan, Malaysia on Thursday, 28 November 2019 at 9.30 am or at any adjournment
thereof, in the manner as indicated below:

No. Resolutions For Against

1. Ordinary Resolution 1 Re-election of Chong Sai Sin as Director
2. Ordinary Resolution 2 Re-election of Chiang Sang Sem as Director
3. Ordinary Resolution 3 Re-election of Chong Chin Look as Director
4. Ordinary Resolution 4 Re-appointment of Messrs BDO PLT as Auditors and to authorise the Directors
to fix their remuneration
5. Ordinary Resolution 5 Approval for Directors’ Fees for financial year ended 30 June 2019
6. Ordinary Resolution 6 Approval for Directors’ Fees for financial year ending 30 June 2020
7. Ordinary Resolution 7 Approval for Directors’ Benefits
8. Ordinary Resolution 8 Retention of Chong Sai Sin as Independent Non-Executive Director
9. Ordinary Resolution 9 Approval for Allotment of shares or Grant of rights
10. Ordinary Resolution 10 Proposed Share Buy-Back

Please indicate with an “X” or “√” in the space provided above how you wish your votes to be cast. If no specific direction as to voting is given,
the proxy will vote or abstain at his/her discretion.

Signature/Seal of the Shareholder(s): Date:

Notes:
1. Only a depositor whose name appears on the Record of Depositors as at 18 November 2019 shall be entitled to attend, participate, speak and vote at this
Meeting as well as for appointment of any person as his proxy(ies) to exercise all or any of his rights to attend, participate, speak and vote at the Meeting
on his stead.
2. Where a member appoints more than 1 proxy, the appointments shall be invalid unless he specifies the proportions of his shareholdings to be represented
by each proxy. However, a member shall not, subject to Paragraphs (3) and (4) below, be entitled to appoint more than 2 proxies to attend and vote at the
Meeting.
3. Where a member is an exempt authorised nominee (EAN) as defined under the Securities Industry (Central Depositories) Act 1991 which holds ordinary
shares in the Company for multiple beneficial owners in 1 securities account (omnibus account), there is no limit to the number of proxies which the EAN
may appoint in respect of each omnibus account it holds.
4. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least 1 proxy but not
more than 2 proxies in respect of each securities account it holds which is credited with ordinary shares of the Company. The appointment of 2 proxies in
respect of any particular securities account shall be invalid unless the authorised nominee specifies the proportion of its shareholding to be represented by
each proxy.
5. Where a member entitled to vote on a resolution has appointed more than 1 proxy, the proxies shall only be entitled to vote on any question at the Meeting
on poll provided that the member specifies the proportion of his holdings to be represented by each proxy.
6. Where a member is a corporation, it may also by resolution of its directors or other governing body authorising a person or persons to act as its representative
or representatives to exercise all or any of its rights to attend, participate, speak and vote at the Meeting on its stead.
7. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a
corporation, either under the corporation’s common seal or under the hand of an officer or attorney duly authorised. The instrument appointing a proxy
shall be deemed to confer authority on the appointed proxy to demand or join in demanding a poll.
The instrument appointing a proxy or proxy form and the power of attorney or other authority, if any, under which it is signed or a copy of that power or
authority, certified by an advocate and solicitor or where the member is a body corporate, the copy of the power or authority may also be certified by an
authorised officer of that member, shall be deposited at the office of the Share Registrar of the Company, Bina Management (M) Sdn. Bhd. at Lot 10, The
Highway Centre, Jalan 51/205, 46050 Petaling Jaya, Selangor Darul Ehsan, Malaysia, not less than 48 hours before the time appointed for holding the
Meeting or adjourned Meeting at which the person named in the instrument proposes to vote or in the case of a poll, not less than 24 hours before the
time appointed for the taking of the poll as may be provided or permitted under the applicable laws, and in default the instrument of proxy or proxy form
shall not be treated as valid. Faxed, photocopied, and electronically scanned copies of the duly executed Proxy Form are not acceptable.
✄
Fold this flap for sealing

Then fold here

AFFIX
STAMP

To:
The Share Registrar of BONIA CORPORATION BERHAD
Bina Management (M) Sdn. Bhd.
Lot 10, The Highway Centre, Jalan 51/205
46050 Petaling Jaya, Selangor Darul Ehsan, Malaysia
Tel: +603 - 77843922

1st fold here

CONTENTS ■

098 106 118 124

Directors’ Independent Auditors’ Consolidated Notes to
Report Report to the Statement of the Financial
members of Changes in Equity Statements
Bonia Corporation
Berhad

105 114 120

Statement Statements Statement
by Directors of Financial of Changes in Equity
Position

105 116 121

Statutory Statements of Statements of
Declaration Profit or Loss Cash Flows
and Other
Comprehensive
Income
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

98

DIRECTORS’
BONIA CORPORATION BERHAD
(Incorporated in Malaysia)
REPORT
DIRECTORS’ REPORT

The Directors hereby submit their report and the audited financial statements of the Group and of the Company for the
financial year ended 30 June 2019.

PRINCIPAL ACTIVITIES

The Company is principally an investment holding and management company. The principal activities and the details
of the subsidiaries and associates are set out in Notes 10 and 11 to the financial statements. There have been no
significant changes in the nature of these activities during the financial year ended 30 June 2019.

RESULTS

Group Company
RM’000 RM’000

Profit for the financial year from continuing operations 23,408 27,450
Profit for the financial year from discontinued operations (147) -

Profit for the financial year 23,261 27,450

Profit for the financial year attributable to:

Owners of the Company:
- from continuing operations 18,175 27,450
- from discontinued operations (147) -

18,028 27,450

Non-controlling interests 5,233 -

23,261 27,450

DIVIDENDS

On 13 November 2018, the Company completed the distribution via a dividend-in-specie of its then entire shareholding
in CRG Incorporated Berhad (“CRG”) and its rights to CRG’s 805,651,400 ordinary shares (equivalent to CRG’s issued
share capital of RM68,000,000) to the entitled shareholders of the Company on the basis of one (1) CRG share for
every one (1) share of the Company held on 1 November 2018 (“Entitlement date”) from its retained earnings as
detailed in the Company’s Circular to Shareholders in relation to the “Proposed Listing of CRG Incorporated Sdn. Bhd.
and its subsidiaries on the LEAP Market of Bursa Malaysia Securities Berhad” dated 8 May 2018.

On 29 August 2019, the Board of Directors declared a single tier interim dividend of 0.5 sen per ordinary share of
approximately RM3,947,000 in respect of the financial year ended 30 June 2019, to be paid on 10 October 2019 to the
shareholders of the Company whose names appear in the Record of Depositors on 18 September 2019. The dividend
will be accounted for in the equity as an appropriation of retained earnings in the financial year ending 30 June 2020.

The Directors do not recommend any final dividend in respect of the financial year ended 30 June 2019.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

99
DIRECTORS’ REPORT
(Cont’d)

OPTIONS GRANTED OVER UNISSUED SHARES

No options were granted to any person to take up unissued shares of the Company during the financial year ended 30
June 2019.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year ended 30 June 2019.

ISSUE OF SHARES AND DEBENTURES

The Company did not issue any new shares or debentures during the financial year ended 30 June 2019.

TREASURY SHARES

During the financial year, the Company repurchased 15,098,400 of its issued ordinary shares from the stock exchange
of Bursa Malaysia Securities Berhad (“BMSB”) and held the same as treasury shares at an average buy-back price of
RM0.285 per ordinary share. The total consideration (including transaction costs) of RM4,304,000 paid for the
repurchases was financed by internally generated funds.

As at 30 June 2019, the Company held 15,734,400 (2018: 636,000) treasury shares out of its total issued shares of
806,287,400 ordinary shares. Such treasury shares are recorded at a carrying amount of RM4,659,000 (2018:
RM355,000). Further relevant details are disclosed in Note 19 to the financial statements.

DIRECTORS OF BONIA CORPORATION BERHAD

The Directors who have held office during the financial year and up to the date of this report are as follows:
Dato’ Mohamed Khadar Bin Merican (1) - Senior Independent Non-Executive Chairman
Chiang Sang Sem (2) - Founder, Group CEO and Group Executive Director
Dato’ Sri Chiang Fong Tat - Group Executive Director
Dato’ Sri Chiang Fong Seng - Group Executive Director
Chong Chin Look - Group Finance Director
Datuk Chiang Heng Kieng (3) - Non-Independent Non-Executive Director
Dato’ Sri Chiang Fong Yee (4) - Non-Independent Non-Executive Director
Lim Saw Imm (1) - Independent Non-Executive Director
Chong Sai Sin - Independent Non-Executive Director
Chiang May Ling (1) - Alternate Director to Chiang Sang Sem
Chiang Fong Chyen (1) - Alternate Director to Datuk Chiang Heng Kieng
Datuk Ng Peng Hong @ Ng Peng Hay (5) - Senior Independent Non-Executive Director
Dato’ Shahbudin Bin Imam Mohamad (5) - Independent Non-Executive Director
Chiang Sang Bon (5) - Group Executive Director
(1)
Appointed during the financial year
(2)
Resigned as Group Executive Chairman cum Chief Executive Officer, re-designated as “Founder cum Executive
Director”, and further re-designated as “Founder, Group CEO and Group Executive Director” during the financial
year
(3)
Resigned as Group Managing Director, and re-designated as Non-Independent Non-Executive Director during the
financial year
(4)
Resigned as Alternate Director to Chiang Sang Sem, and appointed as Non-Independent Non-Executive Director
during the financial year
(5)
Resigned during the financial year
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

100
DIRECTORS’ REPORT
(Cont’d)

DIRECTORS OF SUBSIDIARIES OF BONIA CORPORATION BERHAD

Pursuant to Section 253 of the Companies Act 2016, the Directors of the subsidiaries of Bonia Corporation Berhad
during the financial year and up to the date of this report are as follows:
Chiang Sang Sem Yeow Kim Thai Liao Tien Fook
Dato’ Sri Chiang Fong Yee (2) & (5) Chew Siew Moy Liao Tian Sze
Datuk Chiang Heng Kieng Ong May Chiun Chiang Boon Tian
Chiang Sang Bon Chan Fook Hong (2) & (4) Chiang Fong Xiang
Dato’ Sri Chiang Fong Tat Lee Poh Seong Woen Sun Ing (2)
Dato’ Sri Chiang Fong Seng Siow Huey Loong Christiane Brunk
Chong Chin Look Chiang Sang Ling Tan Kim Eng
Datin Sri Tan Loo Yin Yap Khiam Fai (2) Christina (5)
Datin Sri Lo Kin Yee (5) Lau Yu Huat (2) Koh Boom Pin (2)
Chiang May Ling Bong Kwai Chin Susan Silvia Gretz (1)
Chiang Fong Chyen Lim Ting Fong Ong Boon Huat (2) & (5)
Chiang Sang Yau Ting Oi Ling Tan Feng Nee (3)
Lee Eng Cheng Manimaran Kanapathi Chong See Moi (3)
Datuk Ng Peng Hong Chong Chie Hoe (1) & (5)
@ Ng Peng Hay (1) & (5)
(1)
Appointed during the financial year
(2)
Resigned/ceased during the financial year
(3)
Appointed after the financial year
(4)
Resigned/ceased after the financial year
(5)
Director of former subsidiary(ies) that was/were demerged from Bonia Corporation Berhad during the financial year

DIRECTORS’ INTERESTS

According to the Register of Directors’ shareholdings, the interests of the Directors in office at the end of the financial
year in the ordinary shares of the Company and its related corporations (other than wholly-owned subsidiaries) during
the financial year ended 30 June 2019 were as follows:
Number of ordinary shares
Balance
as at Balance
1.7.2018/date Sold/ as at
of appointment* Additions Transferred 30.6.2019
The Company
Direct interests
Dato’ Mohamed Khadar Bin Merican 40,000* - - 40,000
Chiang Sang Sem 17,049,900 331,700 - 17,381,600
Dato’ Sri Chiang Fong Tat 2,069,400 - - 2,069,400
Dato’ Sri Chiang Fong Seng 4,227,800 - - 4,227,800
Dato’ Sri Chiang Fong Yee 5,250,000 - - 5,250,000
Chiang May Ling 700,000* - - 700,000
Chiang Fong Chyen 800,000* - - 800,000

Indirect interests
Chiang Sang Sem 377,109,704 923,300 - 378,033,004
Dato’ Sri Chiang Fong Tat 100,000 - - 100,000
Datuk Chiang Heng Kieng 176,000 - - 176,000
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

101
DIRECTORS’ REPORT
(Cont’d)

DIRECTORS’ INTERESTS (continued)

According to the Register of Directors’ shareholdings, the interests of the Directors in office at the end of the financial
year in the ordinary shares of the Company and its related corporations (other than wholly-owned subsidiaries) during
the financial year ended 30 June 2019 were as follows: (continued)

Number of ordinary shares

Balance Balance
as at Sold/ as at
1.7.2018 Additions Transferred 30.6.2019

Subsidiary company - Jeco (Pte) Limited

Indirect interests

Chiang Sang Sem 50,000 - - 50,000

Dato’ Sri Chiang Fong Seng 50,000 - - 50,000

By virtue of his substantial interests in the Company, Chiang Sang Sem is also deemed to be interested in the ordinary
shares of all the subsidiaries to the extent that the Company has an interest.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, none of the Directors have received or become entitled to receive any
benefit (other than those benefits included in the aggregate amount of remuneration received or due and receivable by
the Directors as shown in the financial statements) 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 except for any benefit which may be deemed to have been derived by virtue of the
remuneration received and receivable by certain Directors from related corporations in their capacity as Directors or
full-time employees of those related corporations and those transactions entered into in the ordinary course of business
with companies in which certain Directors of the Company and subsidiaries have substantial interests as disclosed in
Note 36 to the financial statements.

There were no arrangements during and at the end of the financial year, to which the Company is a party, which had
the object of enabling the Directors to acquire benefits by means of the acquisition of shares in or debentures of the
Company or any other body corporate.

DIRECTORS’ REMUNERATION

The details of Directors’ remuneration are disclosed in Note 36(c) to the financial statements.

INDEMNITY AND INSURANCE FOR DIRECTORS, OFFICERS AND AUDITORS

The Company maintains a corporate liability insurance for the Directors and officers of the Group throughout the
financial year, which provides appropriate insurance cover for the Directors and officers of the Group. The amount of
insurance premium paid by the Group and the Company for the financial year ended 30 June 2019 was RM8,730.

There were no indemnity given to or insurance effected for the auditors of the Group and of the Company during the
financial year.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

102
DIRECTORS’ REPORT
(Cont’d)

OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY

(I) AS AT THE END OF THE FINANCIAL YEAR

(a) Before the financial statements of the Group and of the Company were prepared, the Directors took
reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the
making of provision for doubtful debts and have satisfied themselves that all known bad debts
had been written off and that adequate provision had been made for doubtful debts; and

(ii) to ensure that any current assets other than debts, which were unlikely to realise their book values
in the ordinary course of business had been written down to their estimated realisable values.

(b) In the opinion of the Directors, the results of the operations of the Group and of the Company during
the financial year ended 30 June 2019 have not been substantially affected by any item, transaction or
event of a material and unusual nature except for the effects arising from the following as disclosed in
Notes 26 and 31 to the financial statements respectively.

(i) net reversal of impairment losses on trade and other receivables, resulting in an increase in the
Group’s profit for the financial year by RM2,951,000;

(ii) reversal of provision for loss on demerger of CRG Group, resulting in an increase in the Group’s
profit for the financial year by RM2,868,000;

(iii) impairment losses on goodwill on consolidation, resulting in a decrease in the Group’s profit for
the financial year by RM2,671,000;

(iv) reversal of impairment losses on amounts owing by subsidiaries, resulting in an increase in the
Company’s profit for the financial year by RM14,325,000; and

(v) impairment losses on costs of investments in subsidiaries, resulting in a decrease in the

Company’s profit for the financial year by RM8,060,000.

(II) FROM THE END OF THE FINANCIAL YEAR TO THE DATE OF THIS REPORT

(c) The Directors are not aware of any circumstances:

(i) which would render the amounts written off for bad debts or the amount of the provision for
doubtful debts in the financial statements of the Group and of the Company inadequate to any
material extent;

(ii) which would render the values attributed to current assets in the financial statements of the Group
and of the Company misleading; and

(iii) which have arisen which would render adherence to the existing method of valuation of assets
or liabilities of the Group and of the Company misleading or inappropriate.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

103
DIRECTORS’ REPORT
(Cont’d)

OTHER STATUTORY INFORMATION REGARDING THE GROUP AND THE COMPANY (continued)

(II) FROM THE END OF THE FINANCIAL YEAR TO THE DATE OF THIS REPORT (continued)

(d) In the opinion of the Directors:

(i) there has not arisen any item, transaction or event of a material and unusual nature likely to
affect substantially the results of the operations of the Group and of the Company for the
financial year ended 30 June 2019 in which this report is made; and

(ii) no contingent or other liability has become enforceable, or is likely to become enforceable,
within the period of twelve (12) months after the end of the financial year which would or may
affect the ability of the Group or of the Company to meet their obligations as and when they
fall due.

(III) AS AT THE DATE OF THIS REPORT

(e) There are no charges on the assets of the Group and of the Company which have arisen since the end
of the financial year to secure the liabilities of any other person.

(f) There are no contingent liabilities of the Group and of the Company which have arisen since the end of
the financial year.

(g) The Directors are not aware of any circumstances not otherwise dealt with in this report or the financial
statements which would render any amount stated in the financial statements of the Group and of the
Company misleading.

SUBSIDIARIES

Details of subsidiaries are set out in Note 10 to the financial statements.

On 13 November 2018, CRG Incorporated Berhad and its subsidiaries (“CRG Group”) ceased to be direct/indirect
subsidiaries of Bonia Corporation Berhad as disclosed in Note 40 to the financial statements.

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

Significant events during the financial year are disclosed in Note 40 to the financial statements.

SIGNIFICANT EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD

Significant events subsequent to the end of the reporting period are disclosed in Note 41 to the financial statements.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

104
DIRECTORS’ REPORT
(Cont’d)

AUDITORS

The auditors, BDO PLT (LLP0018825-LCA & AF 0206), have expressed their willingness to continue in office.

Details of auditors’ remuneration are set out in Notes 26 and 31 to the financial statements.

BDO PLT (LLP0018825-LCA & AF 0206) was registered on 2 January 2019 and with effect from that date, BDO (AF
0206), a conventional partnership, was converted to a limited liability partnership.

Signed on behalf of the Board in accordance with a resolution of the Directors.

..................................................... .....................................................
Chiang Sang Sem Chong Chin Look
(or his alternate, Chiang May Ling) Group Finance Director
Founder, Group CEO and
Group Executive Director

Kuala Lumpur
1 October 2019
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

105

BONIA CORPORATION BERHAD

STATEMENT BY
(Incorporated in Malaysia) DIRECTORS
STATEMENT BY DIRECTORS

In the opinion of the Directors, the financial statements set out on pages 114 to 260 have been drawn up in accordance
with
BONIAMalaysian Financial Reporting
CORPORATION BERHAD Standards, International Financial Reporting Standards, and the provisions of the
Companies Act
(Incorporated in 2016 in Malaysia so as to give a true and fair view of the financial position of the Group and of the
Malaysia)
Company as at 30 June 2019 and of the financial performance and cash flows of the Group and of the Company for the
STATEMENT BYended.
financial year then DIRECTORS

In
Onthe opinion
behalf of Board,
of the the Directors, the financial statements set out on pages 114 to 260 have been drawn up in accordance
with Malaysian Financial Reporting Standards, International Financial Reporting Standards, and the provisions of the
Companies Act 2016 in Malaysia so as to give a true and fair view of the financial position of the Group and of the
Company as at 30 June 2019 and of the financial performance and cash flows of the Group and of the Company for the
financial year then ended.

On behalf of the Board,

..................................................... .....................................................
Chiang Sang Sem Chong Chin Look
(or his alternate, Chiang May Ling) Group Finance Director
Founder, Group CEO and
Group Executive Director

Kuala Lumpur
1.....................................................
October 2019 .....................................................
Chiang Sang Sem Chong Chin Look
(or his alternate, Chiang May Ling) Group Finance Director
Founder, Group DECLARATION
STATUTORY CEO and
Group Executive Director

Kuala
1
Lumpur
I, Chong
October 2019
of Bonia Corporation
STATUTORY
Chin Look (MIA 8043), being the Group Finance Director primarily responsible for the financial management
Berhad, do solemnly and sincerely declare that the financial statements set out on pages 114 to
DECLARATION
260 are, to the best of my knowledge and belief, correct and I make this solemn declaration
the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.
conscientiously believing
STATUTORY DECLARATION

Subscribed and solemnly declared by )

I,
theChong Chin Look
abovenamed (MIALumpur
at Kuala 8043), being
this the Group) Finance Director primarily responsible for the financial management
of Bonia Corporation
1 October 2019 Berhad, do solemnly and sincerely
) declare that Chin
Chong the financial
Look statements set out on pages 114 to
260 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing
the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.
Before me:
Subscribed and solemnly declared by )
the abovenamed at Kuala Lumpur this )
1 October 2019for Oaths
Commissioner ) Chong Chin Look
Kuala Lumpur
Before me:

Commissioner for Oaths

Kuala Lumpur
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

106

INDEPENDENT AUDITORS’ REPORT

INDEPENDENT
TO THE MEMBERSAUDITORS’
OF REPORT
BONIA TO THE MEMBERS OF
CORPORATION BERHAD
BONIA CORPORATION BERHAD
(incorporated in Malaysia)
(Incorporated in Malaysia)

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Bonia Corporation Berhad, which comprise the statements of
financial position as at 30 June 2019 of the Group and of the Company, and the statements of profit or loss
and other comprehensive income, statements of changes in equity and statements of cash flows of the
Group and of the Company for the financial year then ended, and notes to the financial statements,
including a summary of significant accounting policies, as set out on pages 114 to 260.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of
the Group and of the Company as at 30 June 2019, and of their financial performance and their cash flows
for the financial year then ended in accordance with Malaysian Financial Reporting Standards, International
Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

Basis for Opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International
Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’
Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence and Other Ethical Responsibilities

We are independent of the Group and of the Company in accordance with the By-Laws (on Professional
Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International
Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and
we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.

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 Group and of the Company for the current year. These matters
were addressed in the context of our audit of the financial statements of the Group and of the Company
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

107
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF BONIA CORPORATION BERHAD
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
(incorporated in malaysia)
BONIA CORPORATION BERHAD (continued)
(Incorporated in Malaysia) (Cont’d)

Key Audit Matters (continued)

Key Audit Matters of the Group

1. Impairment assessment of the carrying amounts of goodwill on consolidation, trademarks and

other intangible assets

As disclosed in Note 9 to the financial statements, the net carrying amounts of goodwill on consolidation,
trademarks, and other intangible assets of the Group amounted to RM47,872,000, RM34,417,000, and
RM934,000 respectively as at 30 June 2019.

Goodwill on consolidation, trademarks and other intangible assets are assessed for impairment by the
Group at least on an annual basis. To determine if there is any impairment loss required on goodwill on
consolidation, trademarks, and other intangible assets, management used a Value in Use model to
compute the present values of forecasted future cash flows for the respective Cash Generating Units
(“CGUs”).

We focused on the impairment assessment of the carrying amounts of goodwill on consolidation,

trademarks, and other intangible assets because the determination of whether or not an impairment
loss is necessary involves significant judgement by the Directors about the future results and cash flows
of the business, including forecast growth in future revenue and operating profit margins as well as
determining an appropriate discount factor and growth rates.

Our audit procedures included the following:

(a) assessed the reasonableness of the key assumptions used by management in the cash flows forecasts
and projections;

(b) verified the pre-tax discount rate used by management for each of the CGU by comparing to market
data and the weighted average cost of capital of the Group;

(c) assessed the cash flows projections against recent performance and compared the current period’s
actual results with previous forecasts to assess the historical accuracy of the forecasts; and

(d) performed sensitivity analysis of our own to stress test the key assumptions used by management in
the impairment models.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

108
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF BONIA CORPORATION BERHAD
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
(incorporated in malaysia)
BONIA CORPORATION BERHAD (continued)
(Incorporated
(Cont’d) in Malaysia)

Key Audit Matters (continued)

Key Audit Matters of the Group (continued)

2. Carrying amount of inventories at lower of cost and net realisable value

As disclosed in Note 14 to the financial statements, the Group held RM93,118,000 of inventories at the
end of the reporting period.

We focused on the audit risk that the carrying amount of inventories may not be stated at the lower of
cost and net realisable value, the determination of which requires the management to exercise
significant judgement in estimating the net realisable value of the inventories.

In estimating the net realisable value of inventories, management considers the inventories’ ageing,
fashion pattern, current economic trends, expectation of future prices and changes in customer
preference of the respective inventories.

Our audit procedures included the following:

(a) discussed with management and obtained an understanding of the process implemented by
management over the determination of the lower of cost and net realisable value of inventories;

(b) tested the weighted average costing of inventories; and

(c) tested inventories for sales subsequent to the year end to supporting documentation and assessed
that the carrying amount of inventories is at the lower of cost and net realisable value.

3. Recoverability of trade receivables

As at 30 June 2019, the net carrying amount of trade receivables of the Group was RM35,915,000, as
disclosed in Note 15 to the financial statements.

The Group has impaired trade receivables of RM17,424,000 during the financial year.

We determined this to be a key audit matter because it requires management to exercise significant
judgements in determining the probability of default by trade receivables as well as the use of
appropriate forward-looking information.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

109
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF BONIA CORPORATION BERHAD
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
BONIA CORPORATION BERHAD (continued)
(incorporated in malaysia)
(Incorporated in Malaysia) (Cont’d)

Key Audit Matters (continued)

Key Audit Matters of the Group (continued)

3. Recoverability of trade receivables (continued)

Our audit procedures included the following:

(a) assessed the adequacy of credit impaired assessment performed by management on overdue and
large receivables;

(b) recomputed the probability of default using historical data and forward-looking information
adjustment applied by the Group;

(c) recomputed the correlation coefficient between forward-looking factors used by the Group and
historical credit losses to determine the appropriateness of the forward-looking information used
by the Group; and

(d) inquiries of management to assess the rationale underlying the relationship between the forward-
looking information and expected credit losses.

Key Audit Matters of the Company

1. Impairment assessment of the carrying amounts of costs of investments in subsidiaries

As disclosed in Note 10 to the financial statements, the net carrying amounts of costs of investments in
subsidiaries amounted to RM206,972,000 as at 30 June 2019.

Management used forecasted future cash flows and a Value in Use model to compute the present value
of forecasted future cash flows for the subsidiaries/Cash Generating Units (“CGUs”) to determine if
there is any impairment loss required on the costs of investments in subsidiaries.

We focused on the impairment assessment of the carrying amounts of the costs of investments in
subsidiaries as the determination of whether or not an impairment loss is necessary involves significant
judgements and estimates by the Directors about the future results and key assumptions applied to
cash flow projections of the subsidiaries/CGUs in determining their recoverable amounts. These key
assumptions include forecast growth in future revenues and operating profit margins, as well as
determining an appropriate pre-tax discount rate and growth rates.

Our audit procedures included the following:

(a) compared cash flows projections against recent performance and assessed the reasonableness of
the key assumptions used by management in the cash flows projections by comparing to actual
historical operating profit margins and growth rates;
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

110
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF BONIA CORPORATION BERHAD
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
(incorporated in malaysia)
BONIA CORPORATION BERHAD (continued)
(Incorporated
(Cont’d) in Malaysia)

Key Audit Matters (continued)

Key Audit Matters of the Company (continued)

1. Impairment assessment of the carrying amounts of costs of investments in subsidiaries

(continued)

Our audit procedures included the following: (continued)

(b) compared prior period projections to actual outcomes to assess the reliability of management’s
forecasting process;

(c) verified the pre-tax discount rate used for each subsidiary by comparing to the weighted average
cost of capital of the Group and relevant risk factors; and

(d) performed sensitivity analysis to stress test the key assumptions used by management in the
impairment model.

2. Impairment assessment of amounts owing by subsidiaries

As at 30 June 2019, the net carrying amounts owing by subsidiaries of the Company amounted to
RM31,666,000, as disclosed in Note 15 to the financial statements.

We determined this to be a key audit matter because it requires management to exercise significant
judgements in determining the probability of default by subsidiaries, appropriate forward-looking
information, significant increase in credit risk and estimated cash flows recoverable in worst-case
scenarios.

Our audit procedures included the following:

(a) assessed the probability of default applied by the Company against external market sources of
data;

(b) assessed the appropriateness of the indicators of significant increase in credit risk applied by
management and the resultant basis for classification of exposure into respective stages; and

(c) assessed management’s basis in determining cash flows recoverable in worst-case scenarios, where
applicable.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

111
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF BONIA CORPORATION BERHAD
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
(incorporated in malaysia)
BONIA CORPORATION BERHAD (continued)
(Incorporated in Malaysia) (Cont’d)

Information Other than the Financial Statements and Auditors’ Report Thereon

The Directors of the Company are responsible for the other information. The other information comprises
the information included in the annual report, but does not include the financial statements of the Group
and of the Company and our auditors’ report thereon.

Our opinion on the financial statements of the Group and of the Company does not cover the other
information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Group and of the Company, our responsibility
is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in
the audit or otherwise appears to be materially misstated.

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.

Responsibilities of the Directors for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements of the Group and
of the Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards,
International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.
The Directors are also responsible for such internal control as the Directors determine is necessary to
enable the preparation of financial statements of the Group and of the Company that are free from material
misstatement, whether due to fraud or error.

In preparing the financial statements of the Group and of the Company, the Directors are responsible for
assessing the ability of the Group and of the Company 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 Group or the Company or to cease operations, or have no realistic
alternative but to do so.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements of the Group
and of the Company as a whole are free from material misstatement, whether due to fraud or error, and
to issue an auditors’ 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 approved standards on auditing in
Malaysia and International Standards on Auditing 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.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

112
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF BONIA CORPORATION BERHAD
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
(incorporated in malaysia)
BONIA CORPORATION BERHAD (continued)
(Incorporated
(Cont’d) in Malaysia)

Auditors’ Responsibilities for the Audit of the Financial Statements (continued)

As part of an audit in accordance with approved standards on auditing in Malaysia and International
Standards on Auditing, we exercise professional judgement and maintain professional scepticism
throughout the audit. We also:

(a) Identify and assess the risks of material misstatement of the financial statements of the Group and
of the Company, whether due to fraud or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.

(b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the internal control of the Group and of the Company.

(c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Directors.

(d) Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the ability of the Group or of the Company to continue
as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditors’ report to the related disclosures in the financial statements of the Group
and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our auditors’ report. However, future
events or conditions may cause the Group or the Company to cease to continue as a going concern.

(e) Evaluate the overall presentation, structure and content of the financial statements of the Group
and of the Company, including the disclosures, and whether the financial statements of the Group
and of the Company represent the underlying transactions and events in a manner that achieves fair
presentation.

(f) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial statements of the Group.
We are responsible for the direction, supervision and performance of the group audit. We remain
solely responsible for our audit opinion.

We communicate with the Directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

113
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF BONIA CORPORATION BERHAD
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
(incorporated in malaysia)
BONIA CORPORATION BERHAD (continued)
(Incorporated in Malaysia) (Cont’d)

Auditors’ Responsibilities for the Audit of the Financial Statements (continued)

We also provide the Directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Directors, we determine those matters that were of most
significance in the audit of the financial statements of the Group and of the Company for the current year
and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act 2016 in Malaysia, we report that the subsidiaries
of which we have not acted as auditors, are disclosed in Note 10 to the financial statements.

Other Matters

This report is made solely to the members of the Company, as a body, in accordance with Section 266 of
the Companies Act 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other
person for the content of this report.

BDO PLT Chan Wai Leng

LLP0018825-LCA & AF 0206 02893/08/2021 J
Chartered Accountants Chartered Accountant

Kuala Lumpur
1 October 2019
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

114

STATEMENTS OF
BONIA CORPORATION BERHAD
(Incorporated in Malaysia)
FINANCIAL
STATEMENTS POSITION
OF FINANCIAL POSITION
ASAT
AS AT3030JUNE
JUNE 2019
2019

Group Company
2019 2018 2019 2018
Note RM’000 RM’000 RM’000 RM’000

ASSETS

Non-current assets

Property, plant and equipment 7 119,775 134,671 - 13,045

Investment properties 8 51,647 21,442 - -
Intangible assets 9 83,223 86,254 - -
Investments in subsidiaries 10 - - 206,972 199,676
Interests in associates 11 531 749 - -
Other investments 12 1,203 1,222 - -
Deferred tax assets 13 1,770 1,354 - -
Other receivables 15 6,310 8,569 18,724 -

264,459 254,261 225,696 212,721

Current assets

Inventories 14 93,118 105,363 - -

Trade and other receivables 15 64,553 83,236 13,121 21,991
Current tax assets 3,271 3,521 93 -
Cash and bank balances 16 89,169 84,029 1,377 7,132
Short term funds 17 18,301 27,293 3,174 6,328

268,412 303,442 17,765 35,451

Assets of disposal groups classified as

held for sale/held for distribution 10, 26 - 121,020 - 68,500

TOTAL ASSETS 532,871 678,723 243,461 316,672

 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

115
STATEMENTS OF FINANCIAL POSITION
BONIA CORPORATION BERHAD
(Incorporated in Malaysia) (Cont’d)

STATEMENTS OF FINANCIAL POSITION

AS AT 30 JUNE 2019 (continued)

Group Company
2019 2018 2019 2018
Note RM’000 RM’000 RM’000 RM’000

EQUITY AND LIABILITIES

Equity attributable to owners

of the parent

Share capital 18 201,572 201,572 201,572 201,572

Reserves 19 174,664 239,365 40,559 85,587

376,236 440,937 242,131 287,159

Non-controlling interests 10(d) 19,910 25,018 - -

TOTAL EQUITY 396,146 465,955 242,131 287,159

LIABILITIES

Non-current liabilities

Borrowings 20 35,024 58,162 - 16,301

Other payable 24 5,067 4,820 - -
Provision for restoration costs 23 1,316 1,700 - -
Deferred tax liabilities 13 7,505 7,400 1 -

48,912 72,082 1 16,301

Current liabilities

Trade and other payables 24 38,302 62,110 1,329 6,669

Borrowings 20 21,008 38,143 - 6,508
Provision for restoration costs 23 1,341 897 - -
Contract liabilities 25 23,551 - - -
Current tax liabilities 3,611 2,918 - 35

87,813 104,068 1,329 13,212

Liabilities of disposal groups classified

as held for sale/held for distribution 26 - 36,618 - -

TOTAL LIABILITIES 136,725 212,768 1,330 29,513

TOTAL EQUITY AND

LIABILITIES 532,871 678,723 243,461 316,672

The accompanying notes form an integral part of the financial statements.

BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

116

STATEMENTS OF PROFIT OR LOSS

BONIA CORPORATION BERHAD
AND OTHER COMPREHENSIVE INCOME
(Incorporated in Malaysia)
STATEMENTS OF PROFIT
FOR THE FINANCIAL OR LOSS
YEAR AND30
ENDED OTHER
JUNECOMPREHENSIVE
2019 INCOME
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

Group Company
2019 2018 2019 2018
Note RM’000 RM’000 RM’000 RM’000

Continuing operations
Revenue 29 462,259 440,493 22,230 97,551

Cost of sales 30 (212,081) (172,690) - -

Gross profit 250,178 267,803 22,230 97,551

Other operating income 11,773 12,386 20,088 5,720

Selling and distribution expenses (132,954) (143,004) - -

General and administrative expenses (85,614) (99,151) (10,986) (19,791)

Finance costs (4,773) (6,334) (3,777) (1,417)

Share of profit of an associate, net of tax 11 202 430 - -

Profit before tax 31 38,812 32,130 27,555 82,063

Tax expense 32 (15,404) (11,002) (105) (491)

Profit for the financial year from continuing

operations 23,408 21,128 27,450 81,572

Discontinued operations
(Loss)/Profit for the financial year from
discontinued operations, net of tax 26 (147) 3,772 - -

Profit for the financial year 23,261 24,900 27,450 81,572

27,459
Other comprehensive income, net of tax
Items that may be reclassified
subsequently to profit or loss

Continuing operations
Fair value loss on available-for-sale financial
assets - (28) - -
Reclassification of exchange translation
reserve to profit or loss upon deregistration
of foreign subsidiaries (92) (177) - -
Gain on revaluation of properties upon
transfer from property, plant and equipment
to investment properties 2,337 184 - -
Foreign currency translations 3,578 (1,803) - -
5,823 (1,824) - -
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

117
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
BONIA CORPORATION BERHAD
(Cont’d)
(Incorporated in Malaysia)
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (continued)

Group Company
2019 2018 2019 2018
Note RM’000 RM’000 RM’000 RM’000
Other comprehensive income, net of tax
Items that may be reclassified
subsequently to profit or loss (continued)
Discontinued operations
Reclassification of exchange translation
reserve to profit or loss upon demerger/
deregistration of foreign subsidiaries 26 (50) (183) - -
Foreign currency translations 26 304 (364) - -

254 (547) - -

Total other comprehensive income, net of tax 6,077 (2,371) - -

Total comprehensive income 29,338 22,529 27,450 81,572
Profit attributable to:
Owners of the parent
Continuing operations 18,175 16,013 27,450 81,572
Discontinued operations (147) 3,772 - -
18,028 19,785 27,450 81,572
Non-controlling interests
Continuing operations 10(d) 5,233 5,115 - -
23,261 24,900 27,450 81,572
Total comprehensive income
attributable to:
Owners of the parent
Continuing operations 23,695 14,853 27,450 81,572
Discontinued operations 107 3,225 - -
23,802 18,078 27,450 81,572
Non-controlling interests
Continuing operations 5,536 4,451 - -
29,338 22,529 27,450 81,572
Earnings per ordinary share attributable
to equity holders of the Company (sen)
Basic and Diluted:
Continuing operations 33 2.26 1.99
Discontinued operations 33 (0.02) 0.46
2.24 2.45

The accompanying notes form an integral part of the financial statements.

BONIA CORPORATION BERHAD
(Incorporated in Malaysia)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

Non-distributable Total
Available- Exchange Distributable attributable Non- 118
Share Treasury for-sale translation Revaluation Retained to owners of controlling Total
capital shares reserve reserve reserve earnings the parent interests equity
Group Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
ANNUAL REPORT 2019

Balance as at 1 July 2017 201,572 (355) (65) 13,622 - 218,156 432,930 22,337 455,267

Profit for the financial year - - - - - 19,785 19,785 5,115 24,900

Fair value loss on available-for-sale
BONIA CORPORATION BERHAD

financial assets - - (28) - - - (28) - (28)

Gain on revaluation of a property upon
transfer from property, plant and
equipment to investment property - - - - 184 - 184 - 184
Reclassification of exchange translation
reserve to profit or loss upon
deregistration of foreign subsidiaries - - - (360) - - (360) - (360)
Foreign currency translations - - - (1,503) - - (1,503) (664) (2,167)
CHANGES IN EQUITY

Total comprehensive income - - (28) (1,863) 184 19,785 18,078 4,451 22,529
Transactions with owners
Dividends paid 34 - - - - - (10,071) (10,071) - (10,071)
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

Dividends paid to non-controlling

interests of subsidiaries 10(e) - - - - - - - (1,770) (1,770)
Total transactions with owners - - - - - (10,071) (10,071) (1,770) (11,841)
Balance as at 30 June 2018 201,572 (355) (93) 11,759 184 227,870 440,937 25,018 465,955
CONSOLIDATED STATEMENT OF
BONIA CORPORATION BERHAD
(Incorporated in Malaysia)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (continued)
Non-distributable Total
Available- Exchange Distributable attributable Non-
Share Treasury for-sale translation Revaluation Retained to owners of controlling Total
capital shares reserve reserve reserve earnings the parent interests equity
Group Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Balance as at 1 July 2018, as previously
reported 201,572 (355) (93) 11,759 184 227,870 440,937 25,018 465,955
Effects of adoption of MFRS 9 5.1 - - 93 - - (15,639) (15,546) (1,403) (16,949)
Effects of adoption of MFRS 15 5.1 - - - - - (653) (653) (156) (809)
Balance as at 1 July 2018, as restated 201,572 (355) - 11,759 184 211,578 424,738 23,459 448,197

Profit for the financial year - - - - - 18,028 18,028 5,233 23,261

Gain on revaluation of properties upon
transfer from property, plant and
equipment to investment properties - - - - 2,337 - 2,337 - 2,337
Reclassification of exchange translation
reserve to profit or loss upon demerger/
deregistration of foreign subsidiaries - - - (142) - - (142) - (142)
Foreign currency translations - - - 3,579 - - 3,579 303 3,882
Total comprehensive income - - - 3,437 2,337 18,028 23,802 5,536 29,338
Transactions with owners
Dividend-in-specie 34 - - - - - (68,000) (68,000) - (68,000)
Repurchase of treasury shares 19(d) - (4,304) - - - - (4,304) - (4,304)
Dividends paid to non-controlling
interests of subsidiaries 10(e) - - - - - - - (9,085) (9,085)
Total transactions with owners - (4,304) - - - (68,000) (72,304) (9,085) (81,389)
Balance as at 30 June 2019 201,572 (4,659) - 15,196 2,521 161,606 376,236 19,910 396,146

The accompanying notes form an integral part of the financial statements.

(Cont’d)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
119
ANNUAL REPORT 2019
BONIA CORPORATION BERHAD
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

120

STATEMENT OF
BONIA CORPORATION BERHAD
(Incorporated in Malaysia)
CHANGES
STATEMENT IN INEQUITY
OF CHANGES EQUITY
FOR THE
FOR THEFINANCIAL
FINANCIALYEAR
YEAR ENDED
ENDED 30 JUNE
30 JUNE 2019 2019

Share Treasury Retained Total

capital shares earnings equity
Note RM’000 RM’000 RM’000 RM’000
Company

Balance as at 1 July 2017 201,572 (355) 14,441 215,658

Profit for the financial year - - 81,572 81,572

Other comprehensive income, net of tax - - - -

Total comprehensive income - - 81,572 81,572

Transaction with owners

Dividends paid 34 - - (10,071) (10,071)

Total transaction with owners - - (10,071) (10,071)

Balance as at 30 June 2018, as previously

reported 201,572 (355) 85,942 287,159
Effects of adoption of MFRS 9 5.1 - - (174) (174)

Balance as at 1 July 2018, as restated 201,572 (355) 85,768 286,985

Profit for the financial year - - 27,450 27,450

Other comprehensive income, net of tax - - - -

Total comprehensive income - - 27,450 27,450

Transactions with owners

Dividend-in-specie 34 - - (68,000) (68,000)

Repurchase of treasury shares 19(d) - (4,304) - (4,304)

Total transactions with owners - (4,304) (68,000) (72,304)

Balance as at 30 June 2019 201,572 (4,659) 45,218 242,131

The accompanying notes form an integral part of the financial statements.

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121

BONIA CORPORATION BERHAD

STATEMENTS OF
(Incorporated in Malaysia) CASH FLOWS
STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

Group Company
2019 2018 2019 2018
Note RM’000 RM’000 RM’000 RM’000
CASH FLOWS FROM
OPERATING ACTIVITIES
Profit before tax from:
Continuing operations 38,812 32,130 27,555 82,063
Discontinued operations 26 501 6,459 - -
39,313 38,589 27,555 82,063
Adjustments for:
Accretion of non-current other payable - 33 - -
Fair value adjustment on non-current
amount owing by a subsidiary - - 3,146 -
Amortisation of trademarks 9 1,387 1,389 - -
Amortisation of other intangible assets 9 1,079 2,496 - -
Bad debts written off 17 42 65 29
Depreciation of property, plant and
equipment 7, 26 14,376 16,212 153 367
Dividend income 29 - - (21,619) (95,875)
Fair value adjustments on investment
properties 8 1,558 (4,306) - -
Fair value loss on long term investments 28 - - -
Fair value gain on short term funds (342) (297) (226) (128)
Loss/(Gain) on deregistration of foreign
subsidiaries 92 (330) - -
Gain on disposal of investment in an
associate - (1) - (1)
Gain on disposals of property, plant
and equipment, net 26, 31 (188) (274) (2,155) (2)
Impairment losses on:
- trade and other receivables 15, 26 1,591 2,320 - -
- amounts owing by subsidiaries 15 - - 23 9,721
- costs of investments in subsidiaries 10 - - 8,060 5,820
- property, plant and equipment 7 872 1,313 - -
- goodwill on consolidation 9 2,671 2,014 - -
Interest expense and profit payment on
borrowings 26, 31 4,868 7,058 631 1,417
Interest income and distribution income
from cash and bank balances and short
term funds 26, 31 (1,925) (2,199) (231) (479)
Inventories written off 14 - 55 - -
Loss on dissolution of a subsidiary 10 - - 4 -
Loss on disposal of other investment 2 2 - -
Over-provision of restoration costs 23 (23) - - -
Potential loss on proposed demerger
of CRG Group - 4,345 - -
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STATEMENTS OF CASH FLOWS
BONIA CORPORATION BERHAD
(Cont’d)
(Incorporated in Malaysia)
STATEMENTS OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (continued)
Group Company
2019 2018 2019 2018
Note RM’000 RM’000 RM’000 RM’000
CASH FLOWS FROM
OPERATING ACTIVITIES
(continued)
Adjustments for: (continued)
Property, plant and equipment written off 7, 26 1,779 825 - -
Reversal of impairment losses on:
- trade and other receivables 15 (4,542) (568) - -
- amounts owing by subsidiaries 15 - - (14,325) (4,843)
Reversal of provision for loss on demerger
of CRG Group 10 (2,868) - - -
Share of profit of an associate 11 (202) (430) - -
Unrealised (gain)/loss on foreign
exchange, net 26, 31 (837) 2,733 - (5)
Unwinding of discount on provision
for restoration costs 23 189 33 - -
Waiver of debts by subsidiaries - - (3,050) -
Waiver of debts by a third party - (80) - -
Operating profit/(loss) before changes in
working capital 58,895 70,974 (1,969) (1,916)
Changes in working capital:
Inventories 7,301 5,156 - -
Trade and other receivables 16,726 6,577 (50) (58)
Trade and other payables (21,609) (21,542) (1,899) (21)
Contract liabilities 22,437 - - -
Cash generated from/(used in) operations 83,750 61,165 (3,918) (1,995)
Tax paid (15,827) (16,309) (233) (504)
Tax refunded 1,515 4,215 - 87
Net cash from/(used in) operating
activities 69,438 49,071 (4,151) (2,412)
CASH FLOWS FROM
INVESTING ACTIVITIES
Acquisition of additional shares in a
subsidiary 10 - - (2,010) -
Proceeds from dissolution of a subsidiary 10 - - 310 -
(Repayments to)/Advances from subsidiaries - - (1,568) 583
(Repayments to)/Advances from associates (48) 198 150 480
Demerger of CRG Group, net of cash 10 (15,314) - - -
Dividends received from subsidiaries - - 10,600 18,465
Dividend received from an associate - 360 - 360
Interest received 1,925 2,199 231 479
Withdrawal/(Placement) of short term funds 9,334 (22,054) 3,380 (1,258)
 BONIA CORPORATION BERHAD
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STATEMENTS OF CASH FLOWS
BONIA CORPORATION BERHAD
(Cont’d)
(Incorporated in Malaysia)
STATEMENTS OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019 (continued)
Group Company
2019 2018 2019 2018
Note RM’000 RM’000 RM’000 RM’000
CASH FLOWS FROM INVESTING
ACTIVITIES (continued)
Purchase of property, plant and equipment 7(a) (10,119) (11,582) (28) (3)
Proceeds from disposal of other investment 8 13 - -
Proceeds from disposal of an associate - 1 - 1
Proceeds from disposals of investment
properties 3,600 - - -
Proceeds from disposals of property,
plant and equipment 207 1,081 15,075 2
Withdrawals of deposits pledged with licensed
bank 811 39 - -
Net cash (used in)/from investing
activities (9,596) (29,745) 26,140 19,109
CASH FLOWS FROM
FINANCING ACTIVITIES
Interest paid and profit paid on
borrowings (4,868) (7,058) (631) (1,417)
Dividends paid to owners of the parent 34 - (10,071) - (10,071)
Dividends paid to non-controlling interests 10(e) (9,085) (1,770) - -
Drawdowns of term loans and term financing-i 1,539 5,444 - -
Repayments of term loans and term financing-i (47,195) (20,618) (22,809) (4,378)
Repayments of hire purchase and
lease creditors (179) (181) - -
Repurchase of treasury shares 19(d) (4,304) - (4,304) -
Net financing of trust receipts (744) (831) - -
Net repayments of bankers’ acceptances (3,060) (2,568) - -
Net (withdrawal)/drawdown of revolving credit (1,200) 1,200 - -
Net cash used in financing activities (69,096) (36,453) (27,744) (15,866)
Net (decrease)/increase in cash and cash
equivalents (9,254) (17,127) (5,755) 831
Effects of exchange rate changes on
cash and cash equivalents 1,226 (2,209) - -
Cash and cash equivalents at
beginning of financial year 95,655 114,991 7,132 6,301
Cash and cash equivalents at end of
financial year 16(c) 87,627 95,655 1,377 7,132

The accompanying notes form an integral part of the financial statements.

BONIA CORPORATION BERHAD
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124

NOTES TO THE
BONIA CORPORATION BERHAD
(Incorporated in Malaysia)
FINANCIAL
NOTES STATEMENTS
TO THE FINANCIAL STATEMENTS
30 JUNE
30 JUNE2019
2019

1. CORPORATE INFORMATION

Bonia Corporation Berhad (“the Company”) is a public limited liability company, incorporated and domiciled in
Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad.

The registered office of the Company was located at No.5-1, Jalan Radin Bagus 9, Bandar Baru Sri Petaling,
57000 Kuala Lumpur, Wilayah Persekutuan, Malaysia.

The principal place of business of the Company is located at Level 6, Ikon Connaught, Lot 160, Jalan Cerdas,
Taman Connaught, Cheras, 56000 Kuala Lumpur, Wilayah Persekutuan, Malaysia.

The consolidated financial statements for the financial year ended 30 June 2019 comprise the Company and its
subsidiaries and the interests of the Group in associates. These financial statements are presented in Ringgit
Malaysia (“RM”), which is also the functional currency of the Company. All financial information presented in
RM has been rounded to the nearest thousand, unless otherwise stated.

The financial statements were authorised for issue in accordance with a resolution by the Board of Directors on
1 October 2019.

2. PRINCIPAL ACTIVITIES

The Company is principally an investment holding and management company. The principal activities and the
details of the subsidiaries and associates are set out in Notes 10 and 11 to the financial statements. There have
been no significant changes in the nature of these activities during the financial year ended 30 June 2019.

3. BASIS OF PREPARATION

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian
Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards (“IFRSs”) and the
provisions of the Companies Act 2016 in Malaysia.

The accounting policies adopted are consistent with those of the previous financial year except for the effects of
the adoption of new MFRSs during the financial year. The new MFRSs and amendments to MFRSs adopted
during the financial year are disclosed in Note 5 to the financial statements.

The Group and the Company applied MFRS 15 Revenue from Contracts with Customers and MFRS 9 Financial
Instruments for the first time during the current financial year, using the cumulative effect method as at 1 July
2018. Consequently, the comparative information were not restated and are not comparable to the financial
information of the current financial year.
 BONIA CORPORATION BERHAD
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125
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES

4.1 Basis of accounting

The financial statements of the Group and of the Company have been prepared under the historical cost
convention except as otherwise stated in the financial statements.

The preparation of financial statements in conformity with MFRSs and IFRSs requires the Directors to
make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and
expenses and disclosure of contingent assets and contingent liabilities. In addition, the Directors are also
required to exercise their judgement in the process of applying the accounting policies. The areas
involving such judgements, estimates and assumptions are disclosed in Note 6 to the financial statements.
Although these estimates and assumptions are based on the Directors’ best knowledge of events and
actions, actual results could differ from those estimates.

4.2 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and all its
subsidiaries. Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if and only if the Group has:

(a) Power over the investee;

(b) Exposure, or rights, to variable returns from its involvement with the investee; and

(c) The ability to use its power over the investee to affect its returns.

If the Group has less than a majority of the voting or similar rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether it has power over an investee, including:

(a) The contractual arrangement with the other vote holders of the investee;

(b) Rights arising from other contractual agreements; and

(c) The voting rights of the Group and potential voting rights.

Intragroup balances, transactions, income and expenses are eliminated on consolidation. Unrealised gains
arising from transactions with associates and joint ventures are eliminated against the investment to the
extent of the interest of the Group in the investee. Unrealised losses are eliminated in the same way as
unrealised gains, but only to the extent that there is no impairment.

The financial statements of the subsidiaries are prepared for the same reporting period as that of the
Company, using consistent accounting policies. Where necessary, accounting policies of subsidiaries are
changed to ensure consistency with the policies adopted by the Group.
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126
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.2 Basis of consolidation (continued)

Non-controlling interests represent equity in subsidiaries that are not attributable, directly or indirectly, to
owners of the parent, and is presented separately in the consolidated statement of profit or loss and other
comprehensive income and within equity in the consolidated statement of financial position, separately
from equity attributable to owners of the Company. Profit or loss and each component of other
comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total
comprehensive income is attributed to non-controlling interests even if this results in the non-controlling
interests having a deficit balance.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there
are changes to one or more of the three elements of control. Subsidiaries are consolidated from the date
on which control is transferred to the Group up to the effective date on which control ceases, as appropriate.
Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the financial year
are included in the statement of profit or loss and other comprehensive income from the date the Group
gains control until the date the Group ceases to control the subsidiary.

Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control
are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling
and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary.
Any difference between the amount by which the non-controlling interest is adjusted and the fair value of
consideration paid or received is recognised directly in equity and attributed to owners of the parent.

If the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference
between:

(a) the aggregate of the fair value of the consideration received and the fair value of any retained
interest; and

(b) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary
and any non-controlling interests.

Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted
for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same manner as
would be required if the relevant assets or liabilities were disposed of. The fair value of any investments
retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial
recognition for subsequent accounting under MFRS 9 Financial Instruments or, where applicable, the
cost on initial recognition of an investment in an associate or a joint venture.
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127
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.3 Business combinations

Business combinations are accounted for by applying the acquisition method of accounting.

Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are
measured at their fair value at the acquisition date, except that:

(a) deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements
are recognised and measured in accordance with MFRS 112 Income Taxes and MFRS 119
Employee Benefits respectively;

(b) liabilities or equity instruments related to share-based payment transactions of the acquiree or the
replacements by the Group of an acquiree’s share-based payment transactions are measured in
accordance with MFRS 2 Share-based Payment at the acquisition date; and

(c) assets (or disposal groups) that are classified as held for sale in accordance with MFRS 5 Non-
current Assets Held for Sale and Discontinued Operations are measured in accordance with that
Standard.

Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the
services are received.

Any contingent consideration payable is recognised at fair value at the acquisition date. Measurement
period adjustments to contingent consideration are dealt with as follows:

(a) If the contingent consideration is classified as equity, it is not remeasured and settlement is
accounted for within equity.

(b) Other contingent consideration that:

(i) is within the scope of MFRS 9 shall be measured at fair value at each reporting date and
changes in fair value shall be recognised in profit or loss in accordance with MFRS 9.

(ii) is not within the scope of MFRS 9 shall be measured at fair value at each reporting date and
changes in fair value shall be recognised in profit or loss.

In a business combination achieved in stages, previously held equity interests in the acquiree are re-
measured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or
loss.

Components of non-controlling interests in the acquiree that are present ownership interests and entitle
their holders to a proportionate share of the entity’s net assets in the event of liquidation are initially
measured at the present ownership instruments’ proportionate share in the recognised amounts of the
acquiree’s identifiable net assets. All other components of non-controlling interests shall be measured at
their acquisition-date fair values, unless another measurement basis is required by MFRSs. The choice of
measurement basis is made on a combination-by-combination basis. Subsequent to initial recognition, the
carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the
non-controlling interests’ share of subsequent changes in equity.
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128
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.3 Business combinations (continued)

Any excess of the sum of the fair value of the consideration transferred in the business combination, the
amount of non-controlling interest in the acquiree (if any), and the fair value of the previously held equity
interest of the Group in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets
and liabilities is recorded as goodwill in the statement of financial position. The accounting policy for
goodwill is set out in Note 4.8(a) to the financial statements. In instances where the latter amount exceeds
the former, the excess is recognised as a gain on bargain purchase in profit or loss on the acquisition date.

4.4 Property, plant and equipment and depreciation

All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that
is directly attributable to the acquisition of the asset.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when the cost is incurred and it is probable that the future economic benefits associated
with the subsequent costs would flow to the Group and the Company and the cost of the asset could be
measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-
to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Cost also
comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is
located for which the Group is obligated to incur when the asset is acquired, if applicable.

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total
cost of the asset and which has a different useful life, is depreciated separately.

After initial recognition, property, plant and equipment except for freehold land and properties under
construction, are stated at cost less any accumulated depreciation and any accumulated impairment losses.

Properties under construction represent buildings under extension work or construction and are stated at
cost.

Depreciation is calculated to write off the cost of the assets to their residual values on a straight line basis
over their estimated useful lives. The principal annual depreciation rates are as follows:

Buildings 2%
Electrical installations 10% - 15%
Furniture, fittings and counter fixtures 10% - 33⅓%
Motor vehicles 20%
Office equipment 10% - 50%
Plant and machinery 15% - 20%
Renovation 10% - 33⅓%

Freehold land has unlimited useful life and is not depreciated. Properties under construction are not
depreciated until such time when the asset is available for use. Leasehold land is depreciated over the
leasehold period of seventy-one (71) to ninety-six (96) years.
 BONIA CORPORATION BERHAD
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129
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.4 Property, plant and equipment and depreciation (continued)

At the end of each reporting period, the carrying amount of an item of property, plant and equipment is
assessed for impairment when events or changes in circumstances indicate that its carrying amount may
not be recoverable. A write-down is made if the carrying amount exceeds the recoverable amount (see
Note 4.9 to the financial statements on impairment of non-financial assets).

The residual values, useful lives and depreciation method are reviewed at the end of each reporting period
to ensure that the amount, method and period of depreciation are consistent with previous estimates and
the expected pattern of consumption of the future economic benefits embodied in the items of property,
plant and equipment. If expectations differ from previous estimates, the changes are accounted for as a
change in an accounting estimate.

The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no
future economic benefits are expected from its use or disposal. The difference between the net disposal
proceeds, if any, and the carrying amount is included in profit or loss.

4.5 Leases and hire purchase

(a) Finance leases and hire purchase

Assets acquired under finance leases and hire purchase which transfer substantially all the risks
and rewards of ownership to the Group are recognised initially at amounts equal to the fair value
of the leased assets or, if lower, the present value of minimum lease payments, each determined at
the inception of the lease. The discount rate used in calculating the present value of the minimum
lease payments is the interest rate implicit in the leases, if this is practicable to determine; if not,
the incremental borrowing rate of the Group is used. Any initial direct costs incurred by the Group
are added to the amount recognised as an asset. The assets are capitalised as property, plant and
equipment and the corresponding obligations are treated as liabilities. The property, plant and
equipment capitalised are depreciated on the same basis as owned assets.

The minimum lease payments are apportioned between finance charges and the reduction of the
outstanding liability. The finance charges are recognised in profit or loss over the period of the
lease term so as to produce a constant periodic rate of interest on the remaining lease and hire
purchase liabilities.

(b) Operating leases

A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards
incidental to ownership.

Lease payments under operating leases are recognised as an expense on a straight line basis over
the lease term.
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130
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.5 Leases and hire purchase (continued)

(c) Leases of land and buildings

For leases of land and buildings, the land and buildings elements are considered separately for the
purpose of lease classification and these leases are classified as operating or finance leases in the
same way as leases of other assets.

The minimum lease payments including any lump-sum upfront payments made to acquire the
interest in the land and buildings are allocated between the land and the buildings elements in
proportion to the relative fair values of the leasehold interests in the land element and the buildings
element of the lease at the inception of the lease.

For a lease of land and buildings in which the amount that would initially be recognised for the
land element is immaterial, the land and buildings are treated as a single unit for the purpose of
lease classification and is accordingly classified as a finance or operating lease. In such a case, the
economic life of the buildings is regarded as the economic life of the entire leased asset.

4.6 Investment properties

Investment properties are properties which are held to earn rental yields or for capital appreciation or for
both and are not occupied by the Group. Investment properties also include properties that are being
constructed or developed for future use as investment properties. Investment properties are initially
measured at cost, which includes transaction costs. After initial recognition, investment properties are
stated at fair value.

If the Group determines that the fair value of an investment property under construction is not reliably
determinable but expects the fair value of the property to be reliably determinable when construction is
complete, the Group shall measure that investment property under construction at cost until either its fair
value becomes reliably determinable or construction is completed (whichever is earlier). Once the Group
is able to measure reliably the fair value of an investment property under construction that has previously
been measured at cost, the Group shall measure that property at its fair value.

The fair value of investment properties reflect among other things, rental income from current leases and
other assumptions that market participants would use when pricing investment properties under current
market conditions.

Fair values of investment properties are based on valuations by registered independent valuers with
appropriate recognised professional qualification and has recent experience in the location and category
of the investment properties being valued.

A gain or loss arising from a change in the fair value of investment properties is recognised in profit or
loss for the period in which it arises.

Investment properties are derecognised when either they have been disposed of or when they are
permanently withdrawn from use and no future economic benefit is expected from their disposal. The
gains or losses arising from the retirement or disposal of investment property is determined as the
difference between the net disposal proceeds, if any, and the carrying amount of the asset and is recognised
in profit or loss in the period of the retirement or disposal.
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131
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.7 Investments

(a) Subsidiaries

A subsidiary is an entity in which the Group and the Company are exposed, or have rights, to
variable returns from its involvement with the subsidiary and have the ability to affect those returns
through its power over the subsidiary.

An investment in subsidiary, which is eliminated on consolidation, is stated in the separate financial

statements of the Company at cost. Put options written over non-controlling interests on the
acquisition of subsidiary shall be included as part of the cost of investment in the separate financial
statements of the Company. Subsequent changes in the fair value of the written put options over
non-controlling interests shall be recognised in profit or loss. Investments accounted for at cost
shall be accounted for in accordance with MFRS 5 Non-current Assets Held for Sale and
Discontinued Operations when they are classified as held for sale or held for distribution (or
included in a disposal group that is classified as held for sale or held for distribution) in accordance
with MFRS 5.

When control of a subsidiary is lost as a result of a transaction, event or other circumstance, the
Group would derecognise all assets, liabilities and non-controlling interests at their carrying
amount and to recognise the fair value of the consideration received. Any retained interest in the
former subsidiary is recognised at its fair value at the date control is lost. The resulting difference
is recognised as a gain or loss in profit or loss.

(b) Associates

An associate is an entity over which the Group and the Company have significant influence and
that is neither a subsidiary nor an interest in a joint arrangement. Significant influence is the power
to participate in the financial and operating policy decisions of the investee but is neither control
nor joint control over those policies.

In the separate financial statements of the Company, an investment in associate is stated at cost less
impairment losses.

An investment in associate is accounted for in the consolidated financial statements using the equity
method of accounting. The investment in associate in the consolidated statement of financial
position is initially recognised at cost and adjusted thereafter for the post acquisition change in the
share of net assets of the investments of the Group.

The interest in an associate is the carrying amount of the investment in the associate under the
equity method together with any long term interest that, in substance, form part of the net
investment in the associate of the Group.
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132
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.7 Investments (continued)

(b) Associates (continued)

The share of the profit or loss of the associate by the Group during the financial year is included in
the consolidated financial statements, after adjustments to align the accounting policies with those
of the Group, from the date that significant influence commences until the date that significant
influence ceases. Distributions received from the associate reduce the carrying amount of the
investment. Adjustments to the carrying amount could also be necessary for changes in the
proportionate interest of the Group in the associate arising from changes in the associate’s equity
that have not been recognised in the associate’s profit or loss. Such changes include those arising
from the revaluation of property, plant and equipment and from foreign exchange translation
differences. The share of those changes by the Group is recognised directly in equity of the Group.

Unrealised gains and losses on transactions between the Group and the associate are eliminated to
the extent of the interest of the Group in the associate to the extent that there is no impairment.

When the share of losses of the Group in the associate equals to or exceeds its interest in the
associate, the carrying amount of that interest is reduced to nil and the Group does not recognise
further losses unless it has incurred legal or constructive obligations or made payments on its
behalf.

The most recent available financial statements of the associate are used by the Group in applying
the equity method. When the end of the reporting periods of the financial statements are not
coterminous, the share of results is arrived at using the latest financial statements for which the
difference in end of the reporting periods is no more than three (3) months. Adjustments are made
for the effects of any significant transactions or events that occur between the intervening periods.

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 interest of the Group in an associate decreases but does not result in a loss of significant
influence, any retained interest is not re-measured. 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 the 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.
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133
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.8 Intangible assets

(a) Goodwill

Goodwill recognised in a business combination is an asset at the acquisition date and is initially
measured at cost being the excess of the sum of the consideration transferred, the amount of any
non-controlling interest in the acquiree and the fair value of the acquirer’s previously held equity
interest (if any) in the entity over net of the acquisition-date amounts of the identifiable assets
acquired and the liabilities assumed. If, after reassessment, the interest of the Group in the fair
value of the acquiree’s identifiable net assets exceeds the sum of the consideration transferred, the
amount of any non-controlling interest in the acquiree and the fair value of the acquirer’s previously
held equity interest in the acquiree (if any), the excess is recognised immediately in profit or loss
as a bargain purchase gain.

After initial recognition, goodwill is measured at cost less accumulated impairment losses, if any.
Goodwill is not amortised but instead tested for impairment annually or more frequently if events
or changes in circumstances indicate that the carrying amount could be impaired. Objective events
that would trigger a more frequent impairment review include adverse industry or economic trends,
significant restructuring actions, significantly lowered projections of profitability, or a sustained
decline in the acquiree’s market capitalisation. Gains and losses on the disposal of an entity include
the carrying amount of goodwill relating to the entity sold.

Goodwill arising on acquisition of an associate is the excess of cost of investment over the share
of the net fair value of net assets of the associates’ identifiable assets and liabilities by the Group
at the date of acquisition.

Goodwill relating to the associate is included in the carrying amount of the investment and is not
amortised. The excess of the share of the net fair value of the associate’s identifiable assets and
liabilities by the Group over the cost of investment is included as income in the determination of
the share of the associate’s profit or loss by the Group in the period in which the investment is
acquired.

(b) Other intangible assets

Other intangible assets are recognised only when the identifiability, control and future economic
benefit probability criteria are met.

The Group recognises at the acquisition date separately from goodwill, an intangible asset of the
acquiree, irrespective of whether the asset had been recognised by the acquiree before the business
combination.

Intangible assets are initially measured at cost. The cost of intangible assets recognised in a
business combination is their fair values as at the date of acquisition.
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134
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.8 Intangible assets (continued)

(b) Other intangible assets (continued)

After initial recognition, intangible assets are carried at cost less any accumulated amortisation and
any accumulated impairment losses. The useful lives of intangible assets are assessed to be either
finite or indefinite. Intangible assets with finite lives are amortised on a straight line basis over the
estimated economic useful lives and are assessed for any indication that the asset could be impaired.
If any such indication exists, the entity shall estimate the recoverable amount of the asset. The
amortisation period and the amortisation method for an intangible asset with a finite useful life are
reviewed at least at the end of each reporting period. The amortisation expense on intangible assets
with finite lives is recognised in profit or loss and is included within the other operating expenses
line item.

An intangible asset has an indefinite useful life when based on the analysis of all the relevant
factors, there is no foreseeable limit to the period over which the asset is expected to generate net
cash inflows to the Group. Intangible assets with indefinite useful lives are tested for impairment
annually and wherever there is an indication that the carrying amount may be impaired. Such
intangible assets are not amortised. Their useful lives are reviewed at the end of each reporting
period to determine whether events and circumstances continue to support the indefinite useful life
assessment for the asset. If they do not, the change in the useful life assessment from indefinite to
finite is accounted for as a change in accounting estimate in accordance with MFRS 108 Accounting
Policies, Changes in Accounting Estimates and Errors.

Expenditure on an intangible item that are initially recognised as an expense is not recognised as
part of the cost of an intangible asset at a later date.

An intangible asset is derecognised on disposal or when no future economic benefits are expected
from its use. The gain or loss arising from the derecognition is determined as the difference between
the net disposal proceeds, if any, and the carrying amount of the asset and is recognised in profit
or loss when the asset is derecognised.

Trademarks

Acquired trademarks that have finite useful lives are carried at cost less accumulated amortisation
and any accumulated impairment losses. Amortisation is calculated using the straight line method
to allocate the cost of trademarks over their estimated useful lives of ten (10) to forty (40) years.
Cost of renewing trademarks is recognised in profit or loss as incurred.

Trademarks with indefinite useful lives are tested for impairment annually and wherever there is
an indication that the carrying amount may be impaired.

Other intangible assets

Acquired other intangible assets that have finite useful lives are carried at cost less accumulated
amortisation and any accumulated impairment losses. Amortisation is calculated using the straight
line method to allocate the cost of other intangible assets over their estimated useful lives of two
(2) to six (6) years.
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135
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.9 Impairment of non-financial assets

The carrying amounts of assets, except for financial assets (excluding investments in subsidiaries and
interests in associates), inventories, deferred tax assets, investment properties measured at fair value and
non-current assets (or disposal groups) held for sale or held for distribution, are reviewed at the end of
each reporting period to determine whether there is any indication of impairment. If any such indication
exists, the asset’s recoverable amount is estimated.

Goodwill and intangible assets that have an indefinite useful life are tested annually for impairment or
more frequently if events or changes in circumstances indicate that the goodwill or intangible asset might
be impaired.

The recoverable amount of an asset is estimated for an individual asset. Where it is not possible to estimate
the recoverable amount of the individual asset, the impairment test is carried out on the cash generating
unit (“CGU”) to which the asset belongs. Goodwill acquired in a business combination is from the
acquisition date, allocated to each of the CGU or groups of CGU of the Group that are expected to benefit
from the synergies of the combination giving rise to the goodwill irrespective of whether other assets or
liabilities of the acquiree are assigned to those units or groups of units.

Goodwill acquired in a business combination shall be tested for impairment as part of the impairment
testing of CGU to which it relates. The CGU to which goodwill is allocated shall represent the lowest
level within the Group at which the goodwill is monitored for internal management purposes and not
larger than an operating segment determined in accordance with MFRS 8 Operating Segments.

The recoverable amount of an asset or CGU is the higher of its fair value less cost to sell and its value in
use.

In estimating value in use, the estimated future cash inflows and outflows to be derived from continuing
use of the asset and from its ultimate disposal are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset
for which the future cash flow estimates have not been adjusted. An impairment loss is recognised in
profit or loss when the carrying amount of the asset or the CGU, including the goodwill or intangible
asset, exceeds the recoverable amount of the asset or the CGU. The total impairment loss is allocated,
first, to reduce the carrying amount of any goodwill allocated to the CGU and then to the other assets of
the CGU on a pro-rata basis of the carrying amount of each asset in the CGU. The impairment loss is
recognised in profit or loss immediately.

An impairment loss on goodwill is not reversed in subsequent periods. An impairment loss for other assets
is reversed if, and only if, there has been a change in the estimates used to determine the assets’
recoverable amount since the last impairment loss was recognised.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortisation, if no impairment
loss had been recognised. Such reversals are recognised as income immediately in profit or loss.
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136
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.10 Inventories

Inventories are stated at the lower of cost and net realisable value.

Cost is determined using the weighted average method. Cost of consumables and raw materials comprises
all costs of purchase plus other costs incurred in bringing the inventories to their present location and
condition. The cost of work-in-progress and finished goods includes the cost of raw materials, direct
labour, other direct cost and a proportion of production overheads based on normal operating capacity of
the production facilities.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated
costs of completion and the estimated costs necessary to make the sale.

4.11 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one enterprise and a financial
liability or equity instrument of another enterprise.

A financial asset is any asset that is cash, an equity instrument of another enterprise, a contractual right to
receive cash or another financial asset from another enterprise, or a contractual right to exchange financial
assets or financial liabilities with another enterprise under conditions that are potentially favourable to the
Group.

A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset
to another enterprise, or a contractual obligation to exchange financial assets or financial liabilities with
another enterprise under conditions that are potentially unfavourable to the Group.

Financial instruments are recognised on the statements of financial position when the Group has become
a party to the contractual provisions of the instrument. At initial recognition, an entity shall measure a
financial asset (unless it is a trade receivable that does not contain a significant financing component) or
financial liability at its fair value plus or minus, in the case of a financial asset or financial liability not at
fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue
of the financial asset or financial liability.

An embedded derivative is recognised separately from the host contract where the host contract is not a
financial asset, and accounted for separately if, and only if, the derivative is not closely related to the
economic characteristics and risks of the host contract and the host contract is not measured 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 the policy applicable to the nature of the host contract.

(a) Financial assets

Current financial year - Accounting policies applied from 1 July 2018

When financial assets are initially recognised, they are measured at fair value, plus, in the case of
financial assets not at Fair Value Through Profit or Loss (“FVTPL”), directly attributable transaction
costs.
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137
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.11 Financial instruments (continued)

(a) Financial assets (continued)

Current financial year - Accounting policies applied from 1 July 2018 (continued)

The Group determines the classification of financial assets upon initial recognition. The measurement
for each classification of financial assets are as below:

(i) Financial assets measured at amortised cost

Financial assets that are debt instruments are measured at amortised cost if they are held within
a business model whose objective is to collect contractual cash flows and have contractual terms
which give rise on specific dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding.

Subsequent to initial recognition, financial assets are measured at amortised cost using the
effective interest method. Gains and losses are recognised in profit or loss through the
amortisation process. Financial assets are carried net of impairment losses, if any.

(ii) Financial assets measured at fair value

Financial assets that are debt instruments are measured at Fair Value Through Other
Comprehensive Income (“FVTOCI”), if they are held within a business model whose objectives
are to collect contractual cash flows and selling the financial assets, and have contractual terms
which give rise on specific dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding.

Subsequently to initial recognition, financial assets that are debt instruments are measured at
fair value. Any gains or losses arising from the changes in fair value are recognised in other
comprehensive income, except for impairment losses, exchange differences and interest income
which are recognised in profit or loss. The cumulative gain or loss previously recognised in
other comprehensive income is reclassified from equity to profit or loss as a reclassification
adjustment when the financial asset is derecognised.

Financial assets that are debt instruments which do not satisfy the requirements to be measured
at amortised cost or FVTOCI are measured at FVTPL.

Equity instruments are classified as financial assets measured at FVTPL if they are held for
trading or are designated as such upon initial recognition. Equity instruments are classified as
held for trading if they are acquired principally for sale in the near term or are derivatives that
do not meet the hedge accounting criteria (including separated embedded derivatives). The
Group had elected an irrevocable option to designate its equity instruments not held for trading
other than investments in subsidiaries and associates at initial recognition as financial assets
measured at FVTPL.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

138
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.11 Financial instruments (continued)

(a) Financial assets (continued)

Current financial year - Accounting policies applied from 1 July 2018 (continued)

The Group determines the classification of financial assets upon initial recognition. The measurement
for each classification of financial assets are as below: (continued)

(ii) Financial assets measured at fair value (continued)

Subsequent to initial recognition, financial assets that are equity instruments are measured at
fair value. Any gains or losses arising from the changes in fair value are recognised in profit or
loss. Dividends on equity instruments are recognised in profit or loss when the Group’s right to
receive payment is established.

A financial asset is derecognised when the contractual right to receive cash flows from the asset has
expired. On derecognition of a financial asset in its entirety, the difference between the carrying
amount and the sum of the consideration received is recognised in profit or loss.

Cash and bank balances are measured at amortised cost. Cash and cash equivalents consist of cash
on hand, balances and deposits with banks and highly liquid investments which have an insignificant
risk of changes in fair value with original maturities of three (3) months or less and are used by the
Group and the Company in the management of their short term commitments. For the purpose of the
statements of cash flows, cash and cash equivalents are presented net of bank overdrafts and pledged
deposits.

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 marketplace
convention.

A regular way purchase or sale of financial assets shall be recognised and derecognised, as
applicable, using trade date accounting.

Previous financial year - Accounting policies applied until 30 June 2018

A financial asset is classified into the following four (4) categories after initial recognition for the
purpose of subsequent measurement:

(i) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss comprise financial assets that are held for
trading (i.e. financial assets acquired principally for the purpose of resale in the near term),
derivatives (both, freestanding and embedded) and financial assets that were specifically
designated into this classification upon initial recognition.
 BONIA CORPORATION BERHAD
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139
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.11 Financial instruments (continued)

(a) Financial assets (continued)

Previous financial year - Accounting policies applied until 30 June 2018 (continued)

(i) Financial assets at fair value through profit or loss (continued)

Subsequent to initial recognition, financial assets classified as fair value through profit or loss
are measured at fair value. Any gains or losses arising from changes in the fair value of financial
assets classified as fair value through profit or loss are recognised in profit or loss.

However, derivatives that is linked to and must be settled by delivery of unquoted equity
instruments that do not have a quoted market price in an active market are recognised at cost.

(ii) Held-to-maturity investments

Financial assets classified as held-to-maturity comprise non-derivative financial assets with

fixed or determinable payments and fixed maturity that the Group has the positive intention and
ability to hold to maturity.

Subsequent to initial recognition, financial assets classified as held-to-maturity are measured at

amortised cost using the effective interest method. Gains or losses on financial assets classified
as held-to-maturity are recognised in profit or loss when the financial assets are derecognised
or impaired, and through the amortisation process.

(iii) Loans and receivables

Financial assets classified as loans and receivables comprise non-derivative financial assets
with fixed or determinable payments that are not quoted in an active market.

Subsequent to initial recognition, financial assets classified as loans and receivables are
measured at amortised cost using the effective interest method. Gains or losses on financial
assets classified as loans and receivables are recognised in profit or loss when the financial
assets are derecognised or impaired, and through the amortisation process.

(iv) Available-for-sale financial assets

Financial assets classified as available-for-sale comprise non-derivative financial assets that are
designated as available-for-sale or are not classified as loans and receivables, held-to-maturity
investments or financial assets at fair value through profit or loss.

Subsequent to initial recognition, financial assets classified as available-for-sale are measured

at fair value. Any gains or losses arising from changes in the fair value of financial assets
classified as available-for-sale are recognised directly in other comprehensive income, except
for impairment losses and foreign exchange gains and losses, until the financial asset is
derecognised, at which time the cumulative gains or losses previously recognised in other
comprehensive income are recognised in profit or loss. However, interest calculated using the
effective interest method is recognised in profit or loss whilst dividends on available-for-sale
equity instruments are recognised in profit or loss when the right of the Group to receive
payment is established.
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140
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.11 Financial instruments (continued)

(a) Financial assets (continued)

Previous financial year - Accounting policies applied until 30 June 2018 (continued)

Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly
liquid investments which have an insignificant risk of changes in fair value with original maturities
of three (3) months or less, and are used by the Group and the Company in the management of their
short term commitments. For the purpose of the statements of cash flows, cash and cash equivalents
are presented net of bank overdrafts and pledged deposits.

A financial asset is derecognised when the contractual right to receive cash flows from the financial
asset has expired. On derecognition of a financial asset in its entirety, the difference between the
carrying amount and the sum of consideration received (including any new asset obtained less any
new liability assumed) and any cumulative gain or loss that had been recognised directly in other
comprehensive income shall be recognised in profit or loss.

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 marketplace
convention.

A regular way purchase or sale of financial assets shall be recognised and derecognised, as
applicable, using trade date accounting.

(b) Financial liabilities

Current financial year - Accounting policies applied from 1 July 2018

Financial liabilities are classified according to the substance of the contractual arrangements entered
into and meet the definition of a financial liability.

Financial liabilities are recognised in the statements of financial position when, and only when, the
Group becomes a party to the contractual provisions of the financial instrument. Financial liabilities
are classified as either financial liabilities at FVTPL or financial liabilities at amortised cost.

(i) Financial liabilities measured at FVTPL

Financial liabilities at FVTPL include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at FVTPL.

Financial liabilities are classified as held for trading if they are acquired for the purpose of
selling in the near term. This includes derivatives entered into by the Group that does not meet
the hedge accounting criteria. Derivative liabilities are initially measured at fair value and
subsequently stated at fair value, with any resultant gains or losses recognised in profit or loss
except for when the Group’s own credit risk increases or decreases and which is recognised in
other comprehensive income. Net gains or losses on derivatives include exchange differences.
 BONIA CORPORATION BERHAD
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141
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.11 Financial instruments (continued)

(b) Financial liabilities (continued)

Current financial year - Accounting policies applied from 1 July 2018 (continued)

(ii) Financial liabilities measured at amortised cost

Other financial liabilities are recognised initially at fair value plus directly attributable
transaction costs and subsequently measured at amortised cost using the effective interest
method.

For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities
are derecognised and through the amortisation process.

A financial liability is derecognised when, and only when, it is extinguished, i.e. when the obligation
specified in the contract is discharged or cancelled or expired. An exchange between an existing
borrower and lender of debt instruments with substantially different terms are accounted for as an
extinguishment of the original financial liability and the recognition of a new financial liability.
Similarly, a substantial modification of the terms of an existing financial liability is accounted for as
an extinguishment of the original financial liability and the recognition of a new financial liability.

The difference between the carrying amount of a 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.

Previous financial year - Accounting policies applied until 30 June 2018

Financial instruments are classified as liabilities or equity in accordance with the substance of the
contractual arrangement. A financial liability is classified into the following two (2) categories after
initial recognition for the purpose of subsequent measurement:

(i) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss comprise financial liabilities that are held
for trading, derivatives (both, freestanding and embedded) and financial liabilities that were
specifically designated into this classification upon initial recognition.

Subsequent to initial recognition, financial liabilities classified as fair value through profit or
loss are measured at fair value. Any gains or losses arising from changes in the fair value of
financial liabilities classified as fair value through profit or loss are recognised in profit or loss.

(ii) Other financial liabilities

Financial liabilities classified as other financial liabilities comprise non-derivative financial

liabilities that are neither held for trading nor initially designated as at fair value through profit
or loss.

Subsequent to initial recognition, other financial liabilities are measured at amortised cost using
the effective interest method. Gains or losses on other financial liabilities are recognised in
profit or loss when the financial liabilities are derecognised and through the amortisation
process.
BONIA CORPORATION BERHAD
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142
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.11 Financial instruments (continued)

(b) Financial liabilities (continued)

Previous financial year - Accounting policies applied until 30 June 2018 (continued)

A financial liability is derecognised when, and only when, it is extinguished, i.e. when the obligation
specified in the contract is discharged or cancelled or expired. An exchange between an existing
borrower and lender of debt instruments with substantially different terms are accounted for as an
extinguishment of the original financial liability and the recognition of a new financial liability.
Similarly, a substantial modification of the terms of an existing financial liability is accounted for as
an extinguishment of the original financial liability and the recognition of a new financial liability.

Any difference between the carrying amount of a 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.

4.12 Financial guarantee contract

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.

The Group designates corporate guarantees given to banks for credit facilities granted to subsidiaries as
insurance contracts as defined in MFRS 4 Insurance Contracts. The Group recognises these corporate
guarantees as insurance liabilities when there is a present obligation, legal or constructive, as a result of
a past event, when it is probable that an outflow of resources embodying economic benefits would be
required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

At the end of each reporting period, the Group assesses whether its recognised insurance liabilities, if any,
are adequate, using current estimates of future cash flows under its insurance contracts. If this assessment
shows that the carrying amount of the insurance liabilities is inadequate, the entire deficiency shall be
recognised in profit or loss.

Recognised insurance liabilities, if any, are only removed from the statement of financial position when,
and only when, it is extinguished via a discharge, cancellation or expiration.
 BONIA CORPORATION BERHAD
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143
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.13 Equity

An equity instrument is any contract that evidences a residual interest in the assets of the Group and the
Company after deducting all of its liabilities. Ordinary shares are classified as equity instruments.

Ordinary shares are recorded at the proceeds received at issuance and classified as equity. Transaction
costs directly related to the issuance of equity instrument are accounted for as a deduction from equity,
net of any related income tax benefit. Otherwise, they are charged to profit or loss.

Interim dividends to shareholders are recognised in equity in the period in which they are declared. Final
dividends are recognised upon the approval of shareholders in a general meeting.

The Group measures a liability to distribute non-cash assets as a dividend to the owners of the Company
at the fair value of the assets to be distributed. The carrying amount of the dividend is remeasured at the
end of each reporting period and at the settlement date, with any changes recognised directly in equity as
adjustments to the amount of the distribution.

On settlement of the transaction, the Group recognises the difference, if any, between the carrying amount
of the assets distributed and the carrying amount of the liability in profit or loss.

When the Group repurchases its own shares, the shares repurchased would be accounted for using the
treasury stock method.

Where the treasury stock method is applied, the shares repurchased and held as treasury shares shall be
measured and carried at the cost of repurchase on initial recognition and subsequently. It shall not be
revalued for subsequent changes in the fair value or market price of the shares.

The carrying amount of the treasury shares shall be offset against equity in the statement of financial
position. To the extent that the carrying amount of the treasury shares exceeds the share premium account,
it shall be considered as a reduction of any other reserves as may be permitted by the Companies Act 2016
in Malaysia.

No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the own equity
instruments of the Company. If such shares are issued by resale, any difference between the sales
consideration and the carrying amount is shown as a movement in equity.

4.14 Impairment of financial assets

Current financial year - Accounting policies applied from 1 July 2018

The Group applies the simplified approach to measure expected credit loss (“ECL”). This entails
recognising a lifetime expected loss allowance for all trade receivables.

Expected credit losses are based on the difference between the contractual cash flows due in accordance
with the contract and all the cash flows that the Group expects to receive. The estimate of expected cash
shortfall shall reflect the cash flows expected from collateral and other credit enhancements that are part
of the contractual terms. The shortfall is then discounted at an approximation to the asset’s original
effective interest rate of the asset.
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144
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.14 Impairment of financial assets (continued)

Current financial year - Accounting policies applied from 1 July 2018 (continued)

The Group considers credit loss experience and observable data such as current changes and futures
forecasts in economic conditions of the Group’s industry to estimate the amount of expected impairment
loss. The methodology and assumptions, including any forecasts of future economic conditions, are
reviewed regularly.

Impairment for trade receivables that do not contain a significant financing component are recognised
based on the simplified approach within MFRS 9 using the lifetime expected credit losses.

In measuring the expected credit losses on trade receivables, the probability of non-payment by the trade
receivables is adjusted by forward-looking information and multiplied by the amount of the expected loss
arising from default to determine the lifetime expected credit loss for the trade receivables. For trade
receivables, which are reported net, such impairments are recorded in a separate impairment account with
the loss being recognised in the statements of profit or loss and other comprehensive income. On
confirmation that the trade receivable would not be collectible, the gross carrying value of the asset would
be written off against the associated impairment.

Impairment for other receivables and amounts owing by related parties are recognised based on the general
approach within MFRS 9 using the forward-looking expected credit loss model. The methodology used
to determine the amount of the impairment is based on whether there has been a significant increase in
credit risk since initial recognition of the financial asset. For those in which the credit risk has not
increased significantly since initial recognition of the financial asset, twelve-month expected credit losses
along with gross interest income are recognised. For those in which credit risk has increased significantly,
lifetime expected credit losses along with the gross interest income are recognised. At the end of the
reporting period, the Group assesses whether there has been a significant increase in credit risk for
financial assets by comparing the risk for default occurring over the expected life with the risk of default
since initial recognition. For those that are determined to be credit impaired, lifetime expected credit losses
along with interest income on a net basis are recognised.

The probability of non-payment by other receivables and amounts owing by related parties are adjusted
by forward-looking information and multiplied by the amount of the expected loss arising from default to
determine the twelve-month or lifetime expected credit loss for other receivables and amounts owing by
related parties.

The carrying amount of the financial asset is reduced through the use of an allowance for impairment loss
account and the amount of the impairment loss is recognised in profit or loss. When a financial asset
becomes uncollectible, it is written off against the allowance for impairment loss account.
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145
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.14 Impairment of financial assets (continued)

Previous financial year - Accounting policies applied until 30 June 2018

The Group assesses whether there is any objective evidence that a financial asset is impaired at the end of
each reporting period.

(a) Loans and receivables

The Group collectively considers factors such as the probability of bankruptcy or significant
financial difficulties of the receivable, and default or significant delay in payments by the
receivable, to determine whether there is objective evidence that an impairment loss on loans and
receivables has occurred. Other objective evidence of impairment include historical collection rates
determined on an individual basis and observable changes in national or local economic conditions
that are directly correlated with the historical default rates of receivables.

If any such objective evidence exists, the amount of impairment loss is measured as the difference
between the financial asset’s carrying amount and the present value of estimated future cash flows
discounted at the financial asset’s original effective interest rate. The impairment loss is recognised
in profit or loss.

The carrying amount of loans and receivables is reduced through the use of an allowance account.

If in a subsequent period, the amount of the impairment loss decreases and it objectively relates to
an event occurring after the impairment was recognised, the previously recognised impairment loss
is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at
the reversal date. The amount of impairment reversed is recognised in profit or loss.

(b) Available-for-sale financial assets

The Group collectively considers factors such as significant or prolonged decline in fair value
below cost, significant financial difficulties of the issuer or obligor, and the disappearance of an
active trading market as objective evidence that available-for-sale financial assets are impaired.

If any such objective evidence exists, an amount comprising the difference between the financial
asset’s cost (net of any principal payment and amortisation) and current fair value, less any
impairment loss previously recognised in profit or loss, is transferred from equity to profit or loss.

Impairment losses in respect of unquoted equity instrument that is carried at cost is recognised in
profit or loss and is measured as the difference between the financial asset’s carrying amount and
the present value of estimated future cash flows discounted at the current market rate of return for
a similar financial asset.

Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the
subsequent periods. Instead, any increase in the fair value subsequent to the impairment loss is
recognised in other comprehensive income.

Impairment losses on available-for-sale debt investments are subsequently reversed in profit or loss
if the increase in the fair value of the investment can be objectively related to an event occurring
after the recognition of the impairment loss in profit or loss.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

146
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.15 Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying
asset is capitalised as part of the cost of the asset until when substantially all the activities necessary to
prepare the asset for its intended use or sale are complete, after which such expense is charged to profit
or loss. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its
intended use or sale. Capitalisation of borrowing cost is suspended during extended periods in which
active development is interrupted.

The amount of borrowing costs eligible for capitalisation is the actual borrowing costs incurred on the
borrowing during the period less any investment income on the temporary investment of the borrowing.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

4.16 Income taxes

Income taxes include all domestic and foreign taxes on taxable profit. Income taxes also include other
taxes, such as withholding taxes, which are payable by foreign subsidiaries and associates on distributions
to the Group and Company, and real property gains taxes payable on the disposal of properties.

Taxes in the statements of profit or loss and other comprehensive income comprise current tax and
deferred tax.

(a) Current tax

Current tax expenses are determined according to the tax laws of each jurisdiction in which the
Group operates and include all taxes based upon the taxable profits (including withholding taxes
payable by foreign subsidiaries on distribution of retained earnings to companies in the Group),
and real property gains taxes payable on disposal of properties.

(b) Deferred tax

Deferred tax is recognised in full using the liability method on temporary differences arising
between the carrying amount of an asset or liability in the statement of financial position and its
tax base.

Deferred tax is recognised for all temporary differences, unless the deferred tax arises from
goodwill or the initial recognition of an asset or liability in a transaction which is not a business
combination and at the time of transaction, affects neither accounting profit nor taxable profit.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits
would be available against which the deductible temporary differences, unused tax losses and
unused tax credits can be utilised. The carrying amount of a deferred tax asset is reviewed at the
end of each reporting period. If it is no longer probable that sufficient taxable profits would be
available to allow the benefit of part or all of that deferred tax asset to be utilised, the carrying
amount of the deferred tax asset would be reduced accordingly. When it becomes probable that
sufficient taxable profits would be available, such reductions would be reversed to the extent of the
taxable profits.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

147
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.16 Income taxes (continued)

(b) Deferred tax (continued)

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off
current tax assets against current tax liabilities and when the deferred income taxes relate to the
same taxation authority on either:

(i) the same taxable entity; or

(ii) different taxable entities which intend either to settle current tax liabilities and assets on a
net basis, or to realise the assets and settle the liabilities simultaneously, in each future period
in which significant amounts of deferred tax liabilities or assets are expected to be settled or
recovered.

Deferred tax would be recognised as income or expense and included in profit or loss for the period
unless the tax relates to items that are credited or charged, in the same or a different period, directly
to equity, in which case the deferred tax would be charged or credited directly to equity.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year
when the asset is realised or the liability is settled, based on the announcement of tax rates and tax
laws by the Government in the annual budgets which have the substantive effect of actual
enactment by the end of each reporting period.

4.17 Contract liabilities

Contract liabilities represent the Group’s obligation to transfer goods or services to customers for which
the Group has received the consideration or has billed to the customer. The contract liabilities of the Group
represents deferred revenue where the Group has billed or collected the payment or consideration in
advance before the goods are delivered or services are provided to the customers. Contract liabilities are
recognised as revenue when performance obligations are satisfied.

4.18 Provisions

Provisions are recognised when there is a present obligation, legal or constructive, as a result of a past
event, and when it is probable that an outflow of resources embodying economic benefits would be
required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where
the Group expects a provision to be reimbursed (for example, under an insurance contract), the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain.

If the effect of the time value of money is material, the amount of a provision would be discounted to its
present value at a pre-tax rate that reflects current market assessments of the time value of money and the
risks specific to the liability.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best
estimate. If it is no longer probable that an outflow of resources embodying economic benefits would be
required to settle the obligation, the provision would be reversed.

Provisions are not recognised for future operating losses. If the Group has a contract that is onerous, the
present obligation under the contract shall be recognised and measured as a provision.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

148
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.18 Provisions (continued)

Provision for restoration costs

Provision for restoration costs is included in the carrying amounts of property, plant and equipment. This
provision is recognised in respect of the obligation of the Group to restore leased outlets to its original
state upon the expiry of tenancy agreements.

4.19 Contingent liabilities and contingent assets

A contingent liability is a possible obligation that arises from past events whose existence would be
confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control
of the Group or a present obligation that is not recognised because it is not probable that an outflow of
resources would be required to settle the obligation. A contingent liability also arises in extremely rare
cases where there is a liability that cannot be recognised because it cannot be measured reliably. The
Group does not recognise a contingent liability but discloses its existence in the financial statements.

A contingent asset is a possible asset that arises from past events whose existence would be confirmed by
the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Group.
The Group does not recognise a contingent asset but discloses its existence where the inflows of economic
benefits are probable, but not virtually certain.

In the acquisition of subsidiaries by the Group under business combinations, contingent liabilities assumed
are measured initially at their fair value at the acquisition date.

4.20 Employee benefits

(a) Short term employee benefits

Wages, salaries, social security contributions, paid annual leave, paid sick leave, bonuses and non-
monetary benefits are measured on an undiscounted basis and are expensed when employees
rendered their services to the Group.

Short term accumulating compensated absences such as paid annual leave are recognised as an
expense when employees render services that increase their entitlement to future compensated
absences. Short term non-accumulating compensated absences such as sick leave are recognised
when the absences occur and they lapse if the current period’s entitlement is not used in full and
do not entitle employees to a cash payment for unused entitlement on leaving the Group.

Bonuses are recognised as an expense when there is a present legal or constructive obligation to
make such payments, as a result of past events and when a reliable estimate can be made of the
amount of the obligation.

(b) Defined contribution plans

The Company and its subsidiaries incorporated in Malaysia make contributions to a statutory
provident fund and foreign subsidiaries make contributions to their respective countries’ statutory
pension schemes. The contributions are recognised as a liability after deducting any contributions
already paid and as an expense in the period in which the employees render their services.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

149
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.21 Foreign currencies

(a) Functional and presentation currency

Items included in the financial statements of each of the entities of the Group are measured using
the currency of the primary economic environment in which the entity operates (“the functional
currency”). The consolidated financial statements are presented in Ringgit Malaysia, which is the
functional and presentation currency of the Company.

(b) Foreign currency translations and balances

Transactions in foreign currencies are converted into functional currency at rates of exchange ruling
at the transaction dates. Monetary assets and liabilities in foreign currencies at the end of each
reporting period are translated into functional currency at rates of exchange ruling at that date. All
exchange differences arising from the settlement of foreign currency transactions and from the
translation of foreign currency monetary assets and liabilities are included in profit or loss in the
period in which they arise. Non-monetary items initially denominated in foreign currencies, which
are carried at historical cost, are translated using the historical rate as of the date of acquisition, and
non-monetary items, which are carried at fair value are translated using the exchange rate that
existed when the values were determined for presentation currency purposes.

(c) Foreign operations

Financial statements of foreign operations are translated at end of the reporting period exchange
rates with respect to their assets and liabilities, and at exchange rates at the dates of the transactions
with respect to the statement of profit or loss and other comprehensive income. All resulting
translation differences are recognised as a separate component of equity.

In the consolidated financial statements, exchange differences arising from the translation of net
investment in foreign operations are taken to equity. When a foreign operation is partially disposed
of or sold, exchange differences that were recorded in equity are recognised in profit or loss as part
of the gain or loss on disposal.

Exchange differences arising on a monetary item that forms part of the net investment of the
Company in a foreign operation shall be recognised in profit or loss in the separate financial
statements of the Company or the foreign operation, as appropriate. In the consolidated financial
statements, such exchange differences shall be recognised initially as a separate component of
equity and recognised in profit or loss upon disposal of the net investment.

Goodwill and fair value adjustments to the assets and liabilities arising from the acquisition of a
foreign operation are treated as assets and liabilities of the acquired entity and translated at the
exchange rate ruling at the end of each reporting period.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

150
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.22 Revenue recognition

Current financial year - Accounting policies applied from 1 July 2018

Revenue is measured based on the consideration specified in a contract with a customer in exchange for
transferring goods or services to a customer, excluding amounts collected on behalf of third parties. The
Group recognises revenue when (or as) it transfers control over a product or service to customer. An asset
is transferred when (or as) the customer obtains control of the asset.

The Group transfers control of a good or service at a point in time unless one of the following over time
criteria is met:

(a) the customer simultaneously receives and consumes the benefits provided as the Group performs;

(b) the Group’s performance creates or enhances an asset that the customer controls as the asset is
created or enhanced; or

(c) the Group’s performance does not create an asset with an alternative use and the Group has an
enforceable right to payment for performance completed to date.

Revenue is measured at the fair value of consideration received or receivable. The following describes
the performance obligations in contracts with customers:

(a) Sale of goods

Revenue from sales of goods is recognised at a point in time when the goods have been transferred
to the customer and coincides with the delivery of goods and acceptance by customers.

(b) Management fee

Management fee is recognised at a point in time when management services is rendered.

(c) Royalty income

Royalty income is recognised over the period of the respective royalty arrangement.

Revenue recognition not in relation to performance obligations is described below:

(a) Dividend income

Dividend income is recognised when the shareholder’s right to receive payment is established.

(b) Interest income

Interest income is recognised as it accrues, using the effective interest method.

 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

151
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.22 Revenue recognition (continued)

Current financial year - Accounting policies applied from 1 July 2018 (continued)

Revenue recognition not in relation to performance obligations is described below: (continued)

(c) Rental income

Rental income is accounted for on a straight line basis over the lease term of an ongoing lease.

Previous financial year - Accounting policies applied until 30 June 2018

Revenue is measured at the fair value of the consideration received or receivable, net of discounts and
rebates.

Revenue is recognised to the extent that it is probable that the economic benefits associated with the
transaction would flow to the Group, and the amount of revenue and the cost incurred or to be incurred in
respect of the transaction can be reliably measured and specific recognition criteria have been met for
each of the activities of the Group as follows:

(a) Sale of goods

Revenue from sale of goods is recognised when the significant risk and rewards of ownership of
the goods has been transferred to the customer and where the Group does not have continuing
managerial involvement over the goods, which coincides with the delivery of goods and acceptance
by customers.

(b) Dividend income

Dividend income is recognised when the right to receive payment is established.

(c) Rental income

Rental income is accounted for on a straight line basis over the lease term of an ongoing lease.

(d) Royalty income

Royalty income is recognised on an accrual basis in accordance with the substance of the relevant
agreements.

(e) Other income

Interest income

Interest income is recognised as it accrues, using the effective interest method.

BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

152
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.23 Operating segments

Operating segments are defined as components of the Group that:

(a) engages in business activities from which it could earn revenues and incur expenses (including
revenues and expenses relating to transactions with other components of the Group);

(b) whose operating results are regularly reviewed by the chief operating decision maker of the Group,
particularly in making decisions about resources to be allocated to the segment and assessing its
performance; and

(c) for which discrete financial information is available.

An operating segment may engage in business activities for which it has yet to earn revenues.

The Group reports separately information about each operating segment that meets any of the following
quantitative thresholds:

(a) Its reported revenue, including both sales to external customers and intersegment sales or transfers,
is ten percent (10%) or more of the combined revenue, internal and external, of all operating
segments.

(b) The absolute amount of its reported profit or loss is ten percent (10%) or more of the greater, in
absolute amount of:

(i) the combined reported profit of all operating segments that did not report a loss; and

(ii) the combined reported loss of all operating segments that reported a loss.

(c) Its assets are ten percent (10%) or more of the combined assets of all operating segments.

Operating segments that do not meet any of the quantitative thresholds may be considered reportable, and
separately disclosed, if the management believes that information about the segment would be useful to
users of the financial statements.

Total external revenue reported by operating segments shall constitute at least seventy-five percent (75%)
of the revenue of the Group. Operating segments identified as reportable segments in the current financial
year in accordance with the quantitative thresholds would result in a restatement of prior period segment
data for comparative purposes.
 BONIA CORPORATION BERHAD
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153
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.24 Earnings per share

(a) Basic

Basic earnings per ordinary share for the financial year is calculated by dividing the profit for the
financial year attributable to equity holders of the parent by the weighted average number of
ordinary shares outstanding during the financial year.

(b) Diluted

Diluted earnings per ordinary share for the financial year is calculated by dividing the profit for the
financial year attributable to equity holders of the parent by the weighted average number of
ordinary shares outstanding during the financial year adjusted for the effects of dilutive potential
ordinary shares.

4.25 Fair value measurements

The fair value of an asset or a liability, except for lease transactions is determined as the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement assumes that the transaction to sell the
asset or transfer the liability takes place either in the principal market or in the absence of a principal
market, in the most advantageous market.

The Group measures the fair value of an asset or a liability by taking into account the characteristics of
the asset or liability if market participants would take these characteristics into account when pricing the
asset or liability. The Group has considered the following characteristics when determining fair value:

(a) The condition and location of the asset; and

(b) Restrictions, if any, on the sale or use of the asset.

The fair value measurement for a non-financial asset takes into account the ability of the market participant
to generate economic benefits by using the asset in its highest and best use or by selling it to another
market participant that would use the asset in its highest and best use.

The fair value of a financial or non-financial liability or an entity’s own equity instrument assumes that:

(a) A liability would remain outstanding and the market participant transferee would be required to
fulfil the obligation. The liability would not be settled with the counterparty or otherwise
extinguished on the measurement date; and

(b) An entity’s own equity instrument would remain outstanding and the market participant transferee
would take on the rights and responsibilities associated with the instrument. The instrument would
not be cancelled or otherwise extinguished on the measurement date.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

154
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.26 Non-current assets (or disposal groups) held for sale or held for distribution and discontinued
operations

(a) Non-current assets (or disposal groups) held for sale or held for distribution

Non-current assets (or disposal groups) are classified as held for sale if their carrying amounts would
be recovered principally through a sale transaction rather than through continuing use. For this to be
the case, the assets (or disposal groups) shall be available for immediate sale in their present
condition subject only to terms that are usual and customary for sales of such assets (or disposal
groups) and its sale must be highly probable. The probability of shareholders’ approval (if required
in the jurisdiction) is considered as part of the assessment of whether the sale is highly probable.

The sale is expected to qualify for recognition as a completed sale within one (1) year from the date
of classification. However, an extension of the period required to complete the sale does not preclude
the assets (or the disposal groups) from being classified as held for sale if the delay is caused by
events or circumstances beyond the control of the Group and there is sufficient evidence that the
Group remains committed to its plan to sell the assets (or disposal groups).

A non-current asset (or disposal group) is classified as held for distribution to owners when the entity
is committed to distribute the asset (or disposal group) to the owners. For this to be the case, the
assets must be available for immediate distribution in their present condition and the distribution
must be highly probable. For the distribution to be highly probable, actions to complete the
distribution must have been initiated and should be expected to be completed within one (1) year
from the date of classification. Actions required to complete the distribution should indicate that it
is unlikely that significant changes to the distribution will be made or that the distribution will be
withdrawn. The probability of shareholders’ approval (if required in the jurisdiction) should be
considered as part of the assessment of whether the distribution is highly probable.

When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets
and liabilities of that subsidiary are classified as held for sale when the criteria described above are
met, regardless of whether the Group retains a non-controlling interest in its former subsidiary after
the sale or otherwise.

Immediately before the initial classification as held for sale or held for distribution, the carrying
amounts of the assets (or the disposal groups) are measured in accordance with applicable MFRSs.
On initial classification as held for sale or held for distribution, non-current assets (other than
investment properties, deferred tax assets, employee benefits assets, and financial assets carried at
fair value) are measured at the lower of their carrying amount before the initial classification as held
for sale or held for distribution and fair value less costs to sell or fair value less costs to distribute
respectively. The differences, if any, are recognised in profit or loss as impairment loss.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

155
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

4.26 Non-current assets (or disposal groups) held for sale or held for distribution and discontinued
operations (continued)

(a) Non-current assets (or disposal groups) held for sale or held for distribution (continued)

Non-current assets (or the disposal groups) held for sale or held for distribution are classified as
current assets in the statement of financial position and are stated at the lower of carrying amount
immediately before initial classification and fair value less costs to sell or cost to distribute and are
not depreciated. Any cumulative income or expense recognised directly in equity relating to the non-
current assets (or disposal groups) classified as held for sale or held for distribution is presented
separately.

If an asset (or disposal group) is being classified as asset (or disposal group) held for sale or held for
distribution but subsequently, the criteria for such classification is not met, it will cease to be
classified as non-current asset (or disposal group) and will be measured at the lower of:

(i) Its carrying amount before the asset (or disposal group) was classified as held for sale or held
for distribution, adjusted for any depreciation, amortisation or revaluation that would have
been recognised had the asset (or disposal group) not been classified as held for sale or held
for distribution; and

(ii) Its recoverable amount at the date of the subsequent decision not to sell or distribute.

(b) Discontinued operations

A component of the Group is classified as a discontinued operation when the criteria to be classified
as held for sale or held for distribution have been met or it has been disposed of, and such a
component represents a separate major line of business or geographical area of operations, is part of
a single co-ordinated plan to dispose of a separate major line of business or geographical area of
operations or is a subsidiary acquired exclusively with a view to resale. When an operation is
classified as discontinued operation, the comparative statement of profit or loss and other
comprehensive income is re-presented as if the operation had been discontinued from the beginning
of the comparative period.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

156
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

5. ADOPTION OF NEW MFRSs AND AMENDMENTS TO MFRSs

5.1 New MFRSs adopted during the financial year

The Group and the Company adopted the following Standards of the MFRS Framework that were issued
by the Malaysian Accounting Standards Board (“MASB”) during the financial year:

Title Effective Date

Amendments to MFRS 1 Annual Improvements to MFRS Standards 2014 - 2016 1 January 2018
Cycle
MFRS 15 Revenue from Contracts with Customers 1 January 2018
Clarification to MFRS 15 1 January 2018
MFRS 9 Financial Instruments (IFRS as issued by IASB in July 2014) 1 January 2018
Amendments to MFRS 2 Classification and Measurement of Share-based 1 January 2018
Payment Transactions
Amendments to MFRS 128 Annual Improvements to MFRS Standards 2014 - 1 January 2018
2016 Cycle
IC Interpretation 22 Foreign Currency Transactions and Advance Consideration 1 January 2018
Amendments to MFRS 140 Transfers of Investment Property 1 January 2018
Amendments to MFRS 4 Applying MFRS 9 Financial Instruments with MFRS 4 See MFRS 4
Insurance Contracts Paragraphs 46 and
48

Adoption of the above Standards did not have any material effect on the financial performance or position
of the Group and of the Company. The impact on the adoption of MFRS 9 and MFRS 15 on the financial
statements of the Group and of the Company are described in the following sections.

(a) MFRS 9 Financial Instruments

MFRS 9 replaces MFRS 139 Financial Instruments: Recognition and Measurement for annual
periods beginning on or after 1 January 2018, encompassing all three aspects of the accounting for
financial instruments: classification and measurement; impairment; and hedge accounting.

The Group adopted MFRS 9 with an initial application date of 1 July 2018. The Group has not
restated the comparative information, which continues to be reported under MFRS 139. Differences
arising from the adoption of MFRS 9 have been recognised directly in retained earnings and other
components of equity.

(i) Classification of financial assets and financial liabilities

The Group and the Company classify their financial assets into the following measurement
categories depending on the business model of the Group and the Company for managing the
financial assets and the terms of contractual cash flows of the financial assets:

- Those to be measured at amortised cost; and

- Those to be measured subsequently at fair value either through other comprehensive income
or through profit or loss.
 BONIA CORPORATION BERHAD
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157
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

5. ADOPTION OF NEW MFRSs AND AMENDMENTS TO MFRSs (continued)

5.1 New MFRSs adopted during the financial year (continued)

(a) MFRS 9 Financial Instruments (continued)

(i) Classification of financial assets and financial liabilities (continued)

The following summarises the key changes:

- The Available-For-Sale (“AFS”), Held-To-Maturity (“HTM”) and Loans and Receivables

(“L&R”) financial asset categories were removed.
- A new financial asset category measured at Amortised Cost (“AC”) was introduced. This
applies to financial assets with contractual cash flow characteristics that are solely
payments of principal and interest and held in a business model whose objective is achieved
by collecting contractual cash flows.
- A new financial asset category measured at Fair Value Through Other Comprehensive
Income (“FVTOCI”) was introduced. This applies to debt instruments with contractual cash
flow characteristics that are solely payments of principal and interest and held in a business
model whose objective is achieved by both collecting contractual cash flows and selling
financial assets.
- A new financial asset category for non-traded equity investments measured at FVTOCI
was introduced.

MFRS 9 largely retains the existing requirements in MFRS 139 for the classification of
financial liabilities.

However, under MFRS 139 all fair value changes of liabilities designated as FVTPL are
recognised in profit or loss, whereas under MFRS 9 these fair value changes are generally
presented as follows:

- Amount of change in the fair value that is attributable to changes in the credit risk of the
liability is presented in Other Comprehensive Income; and
- The remaining amount of change in the fair value is presented in profit or loss.

(ii) Impairment of financial assets

The adoption of MFRS 9 has fundamentally changed the accounting for impairment losses for
financial assets of the Group and of the Company by replacing the incurred loss approach of
MFRS 139 with a forward-looking expected credit loss approach. MFRS 9 requires the Group
and the Company to record an allowance for expected credit losses for all debt financial assets
not held at fair value through profit or loss.

Expected credit losses are based on the difference between the contractual cash flows due in
accordance with the contract and all the cash flows that the Group and the Company expects to
receive. The estimate of expected cash shortfall shall reflect the cash flows expected from
collateral and other credit enhancements that are part of the contractual terms. The shortfall is
then discounted at an approximation to the asset’s original effective interest rate of the asset.

Impairment for trade receivables that do not contain a significant financing component are
recognised based on the simplified approach within MFRS 9 using the lifetime expected credit
losses.
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158
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

5. ADOPTION OF NEW MFRSs AND AMENDMENTS TO MFRSs (continued)

5.1 New MFRSs adopted during the financial year (continued)

(a) MFRS 9 Financial Instruments (continued)

(ii) Impairment of financial assets (continued)

During this process, the probability of non-payment by the trade receivables is adjusted by
forward-looking information and multiplied by the amount of the expected loss arising from
default to determine the lifetime expected credit loss for the trade receivables. For trade
receivables, which are reported net, such impairments are recorded in a separate impairment
account with the loss being recognised in the consolidated statement of profit or loss and other
comprehensive income. On confirmation that the trade receivable would not be collectible, the
gross carrying value of the asset would be written off against the associated impairment.

Impairment for other receivables and amounts owing by related parties are recognised based
on the general approach within MFRS 9 using the forward-looking expected credit loss model.
The methodology used to determine the amount of the impairment is based on whether there
has been a significant increase in credit risk since initial recognition of the financial asset. For
those in which the credit risk has not increased significantly since initial recognition of the
financial asset, twelve-month expected credit losses along with gross interest income are
recognised. For those in which credit risk has increased significantly, lifetime expected credit
losses along with the gross interest income are recognised. For those that are determined to be
credit impaired, lifetime expected credit losses along with interest income on a net basis are
recognised.

(iii) Classification and measurement

The following table summarises the reclassification and measurement of the financial assets
and financial liabilities of the Group and of the Company as at 1 July 2018:

Classification Carrying amount

Existing New Existing New
under under under under
MFRS 139 MFRS 9 MFRS 139 MFRS 9
Group RM’000 RM’000

Financial assets

Other investments AFS FVTPL 1,222 1,222

Trade and other receivables, net
of prepayment L&R AC 84,474 69,499
Cash and bank balances L&R AC 84,029 84,029
Short term funds FVTPL FVTPL 27,293 27,293

Financial liabilities

Trade and other payables OFL* AC 66,930 66,930

Borrowings OFL* AC 96,305 96,305
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

159
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

5. ADOPTION OF NEW MFRSs AND AMENDMENTS TO MFRSs (continued)

5.1 New MFRSs adopted during the financial year (continued)

(a) MFRS 9 Financial Instruments (continued)

(iii) Classification and measurement (continued)

The following table summarises the reclassification and measurement of the financial assets and
financial liabilities of the Group and of the Company as at 1 July 2018: (continued)

Classification Carrying amount

Existing New Existing New
under under under under
MFRS 139 MFRS 9 MFRS 139 MFRS 9
Company RM’000 RM’000

Financial assets

Trade and other receivables, net of

prepayment L&R AC 21,991 21,817
Cash and bank balances L&R AC 7,132 7,132
Short term funds FVTPL FVTPL 6,328 6,328

Financial liabilities

Trade and other payables OFL* AC 6,669 6,669

Borrowings OFL* AC 22,809 22,809

*
Other Financial Liabilities at Amortised Cost.

The following tables are reconciliations of the carrying amount of the statements of financial
position of the Group and of the Company from MFRS 139 to MFRS 9 as at 1 July 2018:

Existing under New under

MFRS 139 MFRS 9
Carrying Carrying
amount amount
as at 30 June Reclassi- Remeas- as at 1 July
2018 fication urement 2018
RM’000 RM’000 RM’000 RM’000
Group

Other investments - AFS 1,222 (1,222) - -

Other investments - FVTPL - 1,222 - 1,222

Trade and other receivables:

Opening balance 91,805 - - 91,805
Increase in impairment loss - - (14,975) (14,975)

Total trade and other receivables 91,805 - (14,975) 76,830

BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

160
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

5. ADOPTION OF NEW MFRSs AND AMENDMENTS TO MFRSs (continued)

5.1 New MFRSs adopted during the financial year (continued)

(a) MFRS 9 Financial Instruments (continued)

(iii) Classification and measurement (continued)

The following tables are reconciliations of the carrying amount of the statements of financial
position of the Group and of the Company from MFRS 139 to MFRS 9 as at 1 July 2018:
(continued)

Existing under New under

MFRS 139 MFRS 9
Carrying Carrying
amount amount
as at 30 June Reclass- Remeas- as at 1 July
2018 ification urement 2018
RM’000 RM’000 RM’000 RM’000
Group

Deferred tax assets:

Opening balance 1,354 - - 1,354
Increase in impairment loss - - 970 970

Total deferred tax assets 1,354 - 970 2,324

Assets of disposal groups

classified as held for
sale/distribution:
Opening balance 121,020 - - 121,020
Increase in impairment loss - - (3,313) (3,313)
Related tax impact - - 198 198
Total assets of disposal groups
classified as held for
sale/distribution 121,020 - (3,115) 117,905

Retained earnings:
Opening balance 227,870 - - 227,870
Increase in impairment loss:
- trade and other receivables - - (13,285) (13,285)
- assets of disposal groups
classified as held for
sale/distribution - - (3,313) (3,313)
Related tax impact - - 1,052 1,052
Reclassification from AFS
reserve - (93) - (93)

Total retained earnings 227,870 (93) (15,546) 212,231

 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

161
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

5. ADOPTION OF NEW MFRSs AND AMENDMENTS TO MFRSs (continued)

5.1 New MFRSs adopted during the financial year (continued)

(a) MFRS 9 Financial Instruments (continued)

(iii) Classification and measurement (continued)

The following tables are reconciliations of the carrying amount of the statements of financial
position of the Group and of the Company from MFRS 139 to MFRS 9 as at 1 July 2018:
(continued)

Existing under New under

MFRS 139 MFRS 9
Carrying Carrying
amount amount
as at 30 June Reclass- Remeas- as at 1 July
2018 ification urement 2018
RM’000 RM’000 RM’000 RM’000
Group

Non-controlling interests:
Opening balance 25,018 - - 25,018
Increase in impairment loss - - (1,690) (1,690)
Related tax impact - - 287 287

Total non-controlling interests 25,018 - (1,403) 23,615

Deferred tax liabilities:

Opening balance 7,400 - - 7,400
Increase in impairment loss - - (171) (171)

Total deferred tax liabilities 7,400 - (171) 7,229

Company

Amounts owing by subsidiaries:

Opening balance 54,134 - - 54,134
Increase in impairment loss - - (174) (174)
Total amounts owing by
subsidiaries 54,134 - (174) 53,960

Retained earnings:
Opening balance 85,942 - - 85,942
Increase in impairment loss
- amounts owing by subsidiaries - - (174) (174)

Total retained earnings 85,942 - (174) 85,768

BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

162
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

5. ADOPTION OF NEW MFRSs AND AMENDMENTS TO MFRSs (continued)

5.1 New MFRSs adopted during the financial year (continued)

(b) MFRS 15 Revenue from Contracts with Customers

MFRS 15 establishes a comprehensive framework for revenue recognition and measurement. It

replaces MFRS 118 Revenue, MFRS 111 Construction Contracts, and related Interpretations. Under
MFRS 15, revenue is recognised when a customer obtains control of the goods or services. Revenue
will be recognised at an amount that reflects the consideration to which an entity expects to be entitled
in exchange for transferring goods or services to a customer. Determining the timing of the transfer of
control, at a point in time or over time, requires significant judgement.

The Group adopted MFRS 15 using the modified retrospective method (without practical expedients),
with the effect of initially applying this Standard at the date of initial application of 1 July 2018. The
cumulative effect of initially applying MFRS 15 is recognised at the date of initial application as an
adjustment to the opening balance of retained earnings. Therefore, the comparative information was
not restated and continues to be reported under MFRS 111, MFRS 118 and related Interpretations.

The following table summarises the impact, net of tax, of transition to MFRS 15 on retained earnings
at 1 July 2018.

Impact on adopting
MFRS 15 on
1 July 2018
Group RM’000

Retained earnings
Performance obligations not satisfied (677)
Related tax 24

Impact at 1 July 2018 (653)

The following summarises the impact of adopting MFRS 15 on the statement of financial position of
the Group as at 30 June 2018 for each of the line items affected.

(i) Statement of financial position of the Group as at 30 June 2018

As As restated
previously Reclass- Adjust- under
reported ification ments MFRS 15
RM’000 RM’000 RM’000 RM’000

Assets
Deferred tax assets 1,354 - 35 1,389
Inventories 105,363 - 270 105,633
Others 572,006 - - 572,006

Total assets 678,723 - 305 679,028

 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

163
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

5. ADOPTION OF NEW MFRSs AND AMENDMENTS TO MFRSs (continued)

5.1 New MFRSs adopted during the financial year (continued)

(b) MFRS 15 Revenue from Contracts with Customers (continued)

(i) Statement of financial position of the Group as at 30 June 2018 (continued)

As As restated
previously Reclass- Adjust- under
reported ification ments MFRS 15
RM’000 RM’000 RM’000 RM’000

Equity
Retained earnings 227,870 - (653) 227,217
Non-controlling interests 25,018 - (156) 24,862
Others 213,067 - - 213,067

Total equity 465,955 - (809) 465,146

Liabilities
Trade and other payables 66,930 (24,406) - 42,524
Contract liabilities - 24,406 1,114 25,520
Others 145,838 - - 145,838

Total liabilities 212,768 - 1,114 213,882

Total equity and liabilities 678,723 - 305 679,028

The following summarises the impact of adopting MFRS 15 on the statement of financial position of
the Group as at 30 June 2019 and its statement of profit or loss and other comprehensive income for
the financial year then ended for each of the line items affected.

(ii) Statement of financial position of the Group as at 30 June 2019

Amounts
without
adoption of
As reported Adjustments MFRS 15
RM’000 RM’000 RM’000

Assets
Deferred tax assets 1,770 (33) 1,737
Inventories 93,118 (240) 92,878
Others 437,983 - 437,983

Total assets 532,871 (273) 532,598

BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

164
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

5. ADOPTION OF NEW MFRSs AND AMENDMENTS TO MFRSs (continued)

5.1 New MFRSs adopted during the financial year (continued)

(b) MFRS 15 Revenue from Contracts with Customers (continued)

(ii) Statement of financial position of the Group as at 30 June 2019 (continued)

Amounts
without
Reclass- Adjust- adoption of
As reported ification ments MFRS 15
RM’000 RM’000 RM’000 RM’000

Equity
Retained earnings 161,606 - 622 162,228
Exchange translation reserve 15,196 - 3 15,199
Non-controlling interests 19,910 - 135 20,045
Others 199,434 - - 199,434

Total equity 396,146 - 760 396,906

Liabilities
Deferred tax liabilities 7,505 - 17 7,522
Trade and other payables 43,369 22,501 - 65,870
Contract liabilities 23,551 (22,501) (1,050) -
Others 62,300 - - 62,300

Total liabilities 136,725 - (1,033) 135,692

Total equity and liabilities 532,871 - (273) 532,598

(iii) Statement of profit or loss and other comprehensive income of the Group for the financial year
ended 30 June 2019
Amounts
without
adoption of
As reported Adjustments MFRS 15
RM’000 RM’000 RM’000

Revenue 462,259 (58,744) 403,515

Cost of sales (212,081) 58,707 (153,374)
Income tax expense (15,404) (15) (15,419)
Others (211,513) - (211,513)

Profit for the financial year 23,261 (52) 23,209

Total comprehensive income for

the financial year 29,338 3 29,341

There is no impact of adopting MFRS 15 on the statement of profit or loss and other
comprehensive income of the Company for the financial year ended 30 June 2019.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

165
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

5. ADOPTION OF NEW MFRSs AND AMENDMENTS TO MFRSs (continued)

5.2 New MFRSs that have been issued, but only effective for annual periods beginning on or after 1
January 2019

The following are Standards of the MFRS Framework that have been issued by the Malaysian Accounting
Standards Board (“MASB”) but have not been early adopted by the Group and the Company:

Title Effective Date

MFRS 16 Leases 1 January 2019

IC Interpretation 23 Uncertainty over Income Tax Treatments 1 January 2019
Amendments to MFRS 128 Long-term Interests in Associates and Joint Ventures 1 January 2019
Amendments to MFRS 9 Prepayment Features with Negative Compensation 1 January 2019
Amendments to MFRS 3 Annual Improvements to MFRS Standards 2015 - 2017 1 January 2019
Cycle
Amendments to MFRS 11 Annual Improvements to MFRS Standards 2015 - 2017 1 January 2019
Cycle
Amendments to MFRS 112 Annual Improvements to MFRS Standards 2015 - 2017 1 January 2019
Cycle
Amendments to MFRS 123 Annual Improvements to MFRS Standards 2015 - 2017 1 January 2019
Cycle
Amendments to MFRS 119 Plan Amendment, Curtailment or Settlement 1 January 2019
Amendments to References to the Conceptual Framework in MFRS Standards 1 January 2020
Amendments to MFRS 3 Definition of a Business 1 January 2020
Amendments to MFRS 101 and MFRS 108 Definition of Material 1 January 2020
MFRS 17 Insurance Contracts 1 January 2021
Amendments to MFRS 10 and MFRS 128 Sale or Contribution of Assets between an Deferred
Investor and its Associate or Joint Venture

The Group and the Company are in the process of assessing the impact of implementing these Standards,
since the effects would only be observable for future financial years.

6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated by the management of the Group and are based on historical
experience and other factors, including expectations of future events that are believed to be reasonable under the
circumstances.

The management makes estimates and assumptions concerning the future. The resulting accounting estimates will,
by definition, rarely equal the related actual results. To enhance the information content of the estimates, certain
key variables that are anticipated to have a material impact to the Group’s and the Company’s results and financial
position are tested for sensitivity to changes in the underlying parameters. The estimates and assumptions that may
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year are outlined below:

(a) Impairment assessment of the carrying amounts of goodwill on consolidation, trademarks and other
intangible assets

Goodwill on consolidation, trademarks and other intangible assets are assessed for impairment by the Group
at least on an annual basis. To determine if there is any impairment loss required on goodwill on consolidation,
trademarks, and other intangible assets, management used a Value in Use model to compute the present values
of forecasted future cash flows for the respective Cash Generating Units (“CGUs”).
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

166
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)

(a) Impairment assessment of the carrying amounts of goodwill on consolidation, trademarks and other
intangible assets (continued)

Management focused on the impairment assessment of the carrying amounts of goodwill on consolidation,
trademarks, and other intangible assets because the determination of whether or not an impairment loss is
necessary involves significant judgement by the Directors about the future results and cash flows of the
business, including forecast growth in future revenue and operating profit margins as well as determining
an appropriate discount factor and growth rates.

(b) Carrying amount of inventories at lower of cost and net realisable value

Management focused on the risk that the carrying amount of inventories may not be stated at the lower of
cost and net realisable value, the determination of which requires the management to exercise significant
judgement in estimating the net realisable value of the inventories.

In estimating the net realisable value of inventories, management considers the inventories’ ageing, fashion
pattern, current economic trends, expectation of future prices and changes in customer preference of the
respective inventories.

(c) Recoverability of trade receivables

Recoverability of trade receivables requires management to exercise significant judgements in determining

the probability of default by trade receivables as well as the use of appropriate forward-looking information.

(d) Impairment assessment of the carrying amounts of costs of investments in subsidiaries

Management used forecasted future cash flows and a Value in Use model to compute the present value of
forecasted future cash flows for the subsidiaries/Cash Generating Units (“CGUs”) to determine if there is
any impairment loss required on the costs of investments in subsidiaries.

The determination of whether or not an impairment loss is necessary involves significant judgements and
estimates by the Directors about the future results and key assumptions applied to cash flow projections of
the subsidiaries/CGUs in determining their recoverable amounts. These key assumptions include forecast
growth in future revenues and operating profit margins, as well as determining an appropriate pre-tax
discount rate and growth rates.

(e) Impairment assessment of amounts owing by subsidiaries

Impairment assessment of amounts owing by subsidiaries requires management to exercise significant

judgements in determining the probability of default by subsidiaries, appropriate forward-looking
information, significant increase in credit risk and estimated cash flows recoverable in worst-case scenarios.
7. PROPERTY, PLANT AND EQUIPMENT

Group Revaluation
Reclassification upon
Balance to investment transfer to Depreciation Balance
as at properties Written investment charge for the Translation as at
1.7.2018 Additions Disposals (Note 8) Impairment off properties financial year adjustments 30.6.2019
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Carrying amount

Freehold land 3,002 - - (52) - - - - - 2,950

Leasehold land 849 - - - - - - (13) - 836
Buildings on freehold
land 92,889 204 - (9,408) - - 2,597 (2,161) - 84,121
Buildings on long term
leasehold land 14,090 - - (1,488) 13 - - (390) 178 12,403
Electrical installations 247 38 - - - (141) - (74) - 70
Furniture, fittings and
counter fixtures 13,954 4,054 (7) - (770) (722) - (5,080) (6) 11,423
Motor vehicles 188 671 (3) - - - - (161) - 695
Motor vehicles under
hire purchase and lease 175 - - - - - - (26) - 149
Office equipment 4,369 1,240 (6) - (78) (63) - (2,045) 48 3,465
Plant and machinery 303 92 - - - (171) - (74) - 150
Renovation 4,505 2,554 - - (37) (328) - (3,244) 63 3,513
Properties under
construction 100 - - - - (100) - - - -

134,671 8,853 (16) (10,948) (872) (1,525) 2,597 (13,268) 283 119,775
(Cont’d)
NOTES TO THE FINANCIAL STATEMENTS
167
ANNUAL REPORT 2019
BONIA CORPORATION BERHAD
7. PROPERTY, PLANT AND EQUIPMENT (continued)
168
Group ----------------------------- At 30.6.2019 -----------------------------

(Cont’d)
Accumulated Accumulated Carrying
Cost depreciation impairment amount
ANNUAL REPORT 2019

RM’000 RM’000 RM’000 RM’000

Freehold land 2,950 - - 2,950

Leasehold land 1,006 (170) - 836
BONIA CORPORATION BERHAD

Buildings on freehold land 99,148 (15,027) - 84,121

Buildings on long term leasehold land 15,194 (2,460) (331) 12,403
Electrical installations 420 (350) - 70
Furniture, fittings and counter fixtures 49,250 (36,213) (1,614) 11,423
Motor vehicles 1,028 (333) - 695
Motor vehicles under hire purchase and lease 2,529 (2,380) - 149
Office equipment 20,472 (16,733) (274) 3,465
Plant and machinery 3,120 (2,970) -
NOTES TO THE FINANCIAL STATEMENTS

150
Plant and machinery under hire purchase and lease 97 (97) - -
Renovation 26,188 (22,656) (19) 3,513

221,402 (99,389) (2,238) 119,775

7. PROPERTY, PLANT AND EQUIPMENT (continued)

Group Reclass- Reclass- Revalua- Deprecia-

ification ification tion tion
to as assets upon charge Transla-
Balance investment held for transfer to for the tion Balance
as at properties distribution Reclassi- Impair- Written investment financial adjust- as at
1.7.2017 Additions Disposals (Note 8) (Note 26) fication ment off property year ments 30.6.2018
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Carrying
amount

Freehold land 3,002 - - - - - - - - - - 3,002

Leasehold land 3,425 - - - (2,525) - - - - (51) - 849
Buildings on
freehold land 116,330 670 - - (21,510) - - - - (2,601) - 92,889
Buildings on long
term leasehold
land 12,587 - - - (1,536) 4,336 (179) - - (398) (720) 14,090
Electrical
installations 528 43 (16) - (160) - - (17) - (131) - 247
Furniture, fittings
and counter
fixtures 21,749 6,152 (351) - (5,655) (29) (959) (369) - (6,618) 34 13,954
Motor vehicles 41 11 (36) - - 334 - - - (159) (3) 188
Motor vehicles
under hire
purchase and
lease 477 130 (1) - - (409) - - - (22) - 175
Office equipment 5,850 2,082 (310) - (869) (4) - (73) - (2,273) (34) 4,369
Plant and
machinery 392 59 - - (17) - - - - (132) 1 303
Renovation 7,151 2,105 (93) - (223) - (175) (366) - (3,827) (67) 4,505
Properties under
construction 11,593 425 - (7,884) - (4,228) - - 194 - - 100

183,125 11,677 (807) (7,884) (32,495) - (1,313) (825) 194 (16,212) (789) 134,671
(Cont’d)
NOTES TO THE FINANCIAL STATEMENTS
169
ANNUAL REPORT 2019
BONIA CORPORATION BERHAD
7. PROPERTY, PLANT AND EQUIPMENT (continued)
170
Group ----------------------------- At 30.6.2018 -----------------------------

(Cont’d)
Accumulated Accumulated Carrying
Cost depreciation impairment amount
ANNUAL REPORT 2019

RM’000 RM’000 RM’000 RM’000

Freehold land 3,002 - - 3,002

Leasehold land 1,006 (157) - 849
BONIA CORPORATION BERHAD

Buildings on freehold land 108,170 (15,005) (276) 92,889

Buildings on long term leasehold land 19,891 (3,399) (2,402) 14,090
Electrical installations 595 (348) - 247
Furniture, fittings and counter fixtures 52,803 (37,279) (1,570) 13,954
Motor vehicles 783 (595) - 188
Motor vehicles under hire purchase and lease 2,955 (2,780) - 175
Office equipment 20,162 (15,749) (44) 4,369
Plant and machinery 3,322 (3,007) (12)
NOTES TO THE FINANCIAL STATEMENTS

303
Plant and machinery under hire purchase and lease 98 (98) - -
Renovation 25,528 (20,852) (171) 4,505
Properties under construction 100 - - 100

238,415 (99,269) (4,475) 134,671

 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

171
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

7. PROPERTY, PLANT AND EQUIPMENT (continued)

Company Balance Depreciation Balance

as at charge for the as at
1.7.2018 Additions Disposals financial year 30.6.2019
RM’000 RM’000 RM’000 RM’000 RM’000
Carrying amount

Freehold land 2,530 - (2,530) - -

Building on freehold land 10,450 - (10,308) (142) -
Office equipment 65 28 (82) (11) -

13,045 28 (12,920) (153) -

Company Balance Depreciation Balance

as at charge for the as at
1.7.2017 Additions financial year 30.6.2018
RM’000 RM’000 RM’000 RM’000
Carrying amount

Freehold land 2,530 - - 2,530

Building on freehold land 10,792 - (342) 10,450
Office equipment 87 3 (25) 65

13,409 3 (367) 13,045

---------------- At 30.6.2018 -----------------

Accumulated Carrying
Cost depreciation amount
RM’000 RM’000 RM’000

Freehold land 2,530 - 2,530

Building on freehold land 17,080 (6,630) 10,450
Furniture, fixtures and fittings 60 (60) -
Motor vehicle under hire purchase and lease 425 (425) -
Office equipment 338 (273) 65
Renovation 534 (534) -

20,967 (7,922) 13,045

BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

172
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

7. PROPERTY, PLANT AND EQUIPMENT (continued)

(a) During the financial year, the Group and the Company made the following cash payments to purchase
property, plant and equipment:

Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000

Purchase of property,
plant and equipment
- continuing operations 8,853 11,677 28 3
- discontinued operations 1,531 - - -
Unsettled and remained as
other payables (400) (316) - -
Financed by hire purchase
and lease arrangement
(Note 20) - (78) - -
Provision for restoration
costs capitalised (Note 23) 135 299 - -

Cash payments on
purchase of property,
plant and equipment 10,119 11,582 28 3

(b) As at the end of the reporting period, the carrying amount of property, plant and equipment pledged as
securities for banking facilities granted to the Group and the Company as disclosed in Notes 20(a) and 22
to the financial statements are as follows:

Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000

Freehold land - 2,530 - 2,530

Leasehold land 190 193 - -
Buildings on freehold land 65,469 90,224 - 10,450
Buildings on long term
leasehold land 3,985 4,094 - -
Furniture, fixtures and
fittings - 100 - -
Others - 46 - -

69,644 97,187 - 12,980

(c) In the previous financial year 2018, borrowing costs associated with properties under construction of the
Group of RM423,000 were capitalised at 10.8% per annum.

(d) As at the end of the previous reporting period, the title deeds for leasehold land and buildings of a subsidiary
with a total carrying amount of RM1,567,000 were in the process of being transferred and registered in the
name of the subsidiary. During the financial year, the abovementioned leasehold land and buildings were
transferred to investment properties as disclosed in Note 8 to the financial statements.
8. INVESTMENT PROPERTIES

Group Reclassification
from property, Reclassification
Balance plant and from assets held Balance
as at equipment for sale Fair value Translation as at
1.7.2018 (Note 7) (Note 26) Disposals adjustment adjustment 30.6.2019
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At fair value
Freehold land, shoplots and clubhouse 6,453 9,460 24,000 - (968) - 38,945
Long term leasehold land and shoplots 14,989 1,488 - (3,600) (590) 415 12,702

21,442 10,948 24,000 (3,600) (1,558) 415 51,647

Group Reclassification
from property, Reclassification
Balance plant and as assets held Balance
as at equipment for sale Fair value Translation as at
1.7.2017 (Note 7) (Note 26) adjustment adjustment 30.6.2018
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At fair value
Freehold land, shoplots and clubhouse 26,948 - (24,000) 3,505 - 6,453
Long term leasehold land and shoplots 7,596 7,884 - 801 (1,292) 14,989

34,544 7,884 (24,000) 4,306 (1,292) 21,442

(Cont’d)
NOTES TO THE FINANCIAL STATEMENTS
173
ANNUAL REPORT 2019
BONIA CORPORATION BERHAD
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

174
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

8. INVESTMENT PROPERTIES (continued)

(a) As at the end of reporting period, an amount of RM12,310,000 (2018: RM4,168,000) of investment
properties have been pledged as securities for banking facilities granted to the Group as disclosed in Note
22 to the financial statements.

(b) As at the end of reporting period, rental income of the Group derived from the investment properties
amounted to RM1,263,000 (2018: RM1,053,000).

(c) The amounts of direct expenses recognised in profit or loss during the financial year are as follows:
Group
2019 2018
RM’000 RM’000
Income generating units
Repairs and maintenance 1 2
Quit rent and assessment 211 221

Non-income generating units

Repairs and maintenance 47 -
Quit rent and assessment 13 -

(d) The fair value of investment properties of the Group are categorised as follows:
Level 1 Level 2 Level 3 Total
RM’000 RM’000 RM’000 RM’000
2019
Freehold land, shoplots and clubhouse - - 38,945 38,945
Long term leasehold land and shoplots - - 12,702 12,702
- - 51,647 51,647

2018
Freehold land, shoplots and clubhouse - - 6,453 6,453
Long term leasehold land and shoplots - - 14,989 14,989
- - 21,442 21,442

(i) There were no transfers between Level 1 and Level 2 fair value measurements during the financial
years ended 30 June 2019 and 30 June 2018.

(ii) As at 30 June 2019, the valuation of investment properties at Level 3 fair value amounting to
RM51,647,000 (2018: RM21,442,000) were recommended by the Directors based on an indicative
market value from the valuation exercise carried out on an open market value basis by external and
independent property valuers, having appropriate recognised professional qualifications and recent
experience in the location and category of property being valued.

The valuations were made based on the comparison method that makes reference to recent sales
transactions of similar properties in the same locality on a price per square feet basis. Adjustments
are then made for differences in location, size, facilities available, market conditions and other
factors in order to arrive at a common basis.

(iii) The fair value measurements of the investment properties are based on the highest and best use
which does not differ from their actual use. The investment properties of the Group are mainly used
to generate rental income.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

175
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

8. INVESTMENT PROPERTIES (continued)

(e) As at the end of the reporting period, the title deeds for investment properties of subsidiaries with carrying
amounts of RM1,435,000 (2018: RM780,000) are in the process of being transferred and registered in the
names of the subsidiaries.

9. INTANGIBLE ASSETS

Group Balance Amortisation Balance

as at charge for the Translation as at
1.7.2018 financial year Impairment adjustment 30.6.2019
RM’000 RM’000 RM’000 RM’000 RM’000
Carrying amount
Goodwill 49,074 - (2,671) 1,469 47,872
Trademarks 35,218 (1,387) - 586 34,417
Other intangible assets 1,962 (1,079) - 51 934

86,254 (2,466) (2,671) 2,106 83,223

--------------------------- At 30.6.2019 --------------------------

Accumulated Accumulated Carrying
Cost amortisation impairment amount
RM’000 RM’000 RM’000 RM’000

Goodwill 58,298 - (10,426) 47,872

Trademarks 51,381 (16,964) - 34,417
Other intangible assets 8,004 (7,070) - 934

117,683 (24,034) (10,426) 83,223

Group Balance Amortisation Balance

as at charge for the Translation as at
1.7.2017 financial year Impairment adjustment 30.6.2018
RM’000 RM’000 RM’000 RM’000 RM’000
Carrying amount
Goodwill 47,910 - (2,014) 3,178 49,074
Trademarks 37,601 (1,389) - (994) 35,218
Other intangible assets 4,634 (2,496) - (176) 1,962
90,145 (3,885) (2,014) 2,008 86,254

--------------------------- At 30.6.2018 --------------------------

Accumulated Accumulated Carrying
Cost amortisation impairment amount
RM’000 RM’000 RM’000 RM’000

Goodwill 56,829 - (7,755) 49,074

Trademarks 50,539 (15,321) - 35,218
Other intangible assets 7,758 (5,796) - 1,962

115,126 (21,117) (7,755) 86,254

BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

176
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

9. INTANGIBLE ASSETS (continued)

(a) Goodwill

For the purpose of impairment testing, the recoverable amount of the Cash Generating Units (“CGU”) is
determined based on a “value-in-use” calculation. The value-in-use of the CGU is determined by
discounting the future cash flows to be generated from continuing use of the CGU. The value-in-use is
derived based on management’s cash flow projections for three (3) financial years from 2020 to 2022.

The key assumptions used in the value-in-use calculations are as follows:

(i) The anticipated average annual revenue growth rates used in the cash flow projections of the CGU
ranged from 1% to 6% (2018: 4% to 5%) per annum.

(ii) Profit margins are projected based on the historical profit margin achieved for the products.

(iii) Pre-tax discount rate of 11.4% (2018: 9.1%) was applied over the projection periods in determining
the recoverable amount of the CGU. The discount rate used is pre-tax and reflects the overall
weighted average cost of capital of the Group.

Based on these assumptions, an impairment loss of RM2,671,000 (2018: RM2,014,000) was recognised
in relation to goodwill as the recoverable amount determined is lower than the carrying amount of the
CGU.

With regard to the assessment of value-in-use of the goodwill, the management believes that no
reasonably possible change in any of the above key assumptions would cause the carrying amounts of the
CGU to materially exceed their recoverable amounts.

(b) Trademarks

(i) Trademarks with finite useful life mainly represent the “Braun Buffel” trademark in the Asia Pacific
Region.

For the purpose of impairment testing, the recoverable amount of the Cash Generating Units (“CGU”)
is determined based on a “value-in-use” calculation. The value-in-use of the CGU is determined by
discounting the future cash flows to be generated from continuing use of the CGU. The value-in-use
is derived based on management’s cash flow projections for three (3) financial years from 2020 to
2022.

The key assumptions used in the value-in-use calculations are as follows:

(i) The anticipated average annual revenue growth rates used in the cash flow projections of the
CGU ranged from 1% to 6% (2018: 5%) per annum.

(ii) Profit margins are projected based on the historical profit margin achieved for the products.

(iii) Pre-tax discount rate of 11.4% (2018: 9.1%) was applied over the projection periods in
determining the recoverable amount of the CGU. The discount rate used is pre-tax and reflects
the overall weighted average cost of capital of the Group.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

177
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

9. INTANGIBLE ASSETS (continued)

(b) Trademarks (continued)

(ii) Included in trademarks are the rights of using “Braun Buffel” trademark in various countries
worldwide (“BB Global Trademark”) amounting to RM9,018,000 (2018: RM8,741,000). The BB
Global Trademark has an indefinite useful life.

The BB Global Trademark is tested for impairment annually. The recoverable amount of the BB
Global Trademark was determined based on a value-in-use calculation. The 3-year cash flow forecast
and projection used in the value-in-use calculation was based on the following key assumptions:

(i) The anticipated average annual revenue growth rate used in the cash flow projections of the
CGU is 12% (2018: 5%) per annum.

(ii) Profit margins are projected based on the historical profit margin achieved for the products.

(iii) Pre-tax discount rate of 11.2% (2018: 9.1%) was applied over the projection periods in
determining the recoverable amount of the CGU.

Based on these assumptions, the Directors are of the view that no impairment loss is required as the
recoverable amount determined is higher than the carrying amount of the CGU.

With regard to the assessment of value-in-use of the trademarks, the management believes that no
reasonably possible change in any of the above key assumptions would cause the carrying amounts to
materially exceed its recoverable amount.

(c) Other intangible assets represent customer contract and relationship acquired through the acquisition of
IBB Pte. Ltd. in the previous financial years.

10. INVESTMENTS IN SUBSIDIARIES

Company
2019 2018
RM’000 RM’000

Unquoted shares - at cost 228,710 214,541

Less: Impairment losses (21,738) (14,865)

206,972 199,676

(a) The details of the subsidiaries, incorporated in Malaysia except otherwise stated, are as follows:

Effective interest
in equity
2019 2018
Name of company % % Principal activities
Subsidiaries of Bonia Corporation Berhad
CB Marketing Sdn. Bhd. (“CBM”) 100 100 Designing, promoting and
marketing of fashionable leather
goods
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

178
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

10. INVESTMENTS IN SUBSIDIARIES (continued)

(a) The details of the subsidiaries, incorporated in Malaysia except otherwise stated, are as follows: (continued)

Effective interest
in equity
2019 2018
Name of company % % Principal activities

Subsidiaries of Bonia Corporation Berhad (continued)

CB Holdings (Malaysia) Sdn. Bhd. 100 100 Property investment and management
(“CBH”) services

Eclat World Sdn. Bhd. 100 100 Designing, promoting and marketing
of fashionable men’s footwear

CB Franchising Sdn. Bhd. (“CBF”) 100 100 Retailing of leather goods and
apparels

BCB Properties Sdn. Bhd. 100 100 Property development

Long Bow Manufacturing Sdn. Bhd. 100 100 Manufacturing and marketing of
(“LBM”) leather goods
De Marts Marketing Sdn. Bhd. (“DMM”) 100 100 Designing, promoting and marketing
of fashionable ladies’ footwear
Mcore Sdn. Bhd. (“Mcore”) 60 60 Marketing and distribution of
fashionable leather goods
Future Classic Sdn. Bhd. (“FCSB”) (3) & (8) 100 100 Dormant
(In members’ voluntary winding-up)
Daily Frontier Sdn. Bhd. (“DFSB”) 100 100 Marketing, distribution and export of
fashionable goods and accessories

Armani Context Sdn. Bhd. 100 100 Dormant

(“ACSB”) (3) & (8)
(In members’ voluntary winding-up)

Banyan Sutera Sdn. Bhd. (“BSSB”) 100 100 Marketing and distribution of
fashionable goods

Active World Pte. Ltd. (“AWPL”) (1) 100 100 Wholesaling and retailing of
(Incorporated in Singapore) fashionable leather goods and
apparels

Kin Sheng Group Limited (“KSGL”) (5) - 100 Investment holding

(Incorporated in Hong Kong)
Dominion Directions Sdn. Bhd. (“DDSB”) 100 100 Marketing and distribution of men’s
apparel and accessories

CRG Incorporated Berhad (“CRG”) (4) - 100 Investment holding

Scarpa Marketing Sdn. Bhd. (“SMSB”) (6) - 100 Dormant

 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

179
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

10. INVESTMENTS IN SUBSIDIARIES (continued)

(a) The details of the subsidiaries, incorporated in Malaysia except otherwise stated, are as follows: (continued)

Effective interest
in equity
2019 2018
Name of company % % Principal activities

Subsidiaries of Bonia Corporation Berhad (continued)

Ataly Industries Sdn. Bhd. 100 100 Property investment

Luxury Parade Sdn. Bhd. (“LPSB”) 100 100 Property investment

Maha Asia Capital Sdn. Bhd. (“MAC”) 100 100 Property investment

Alpha Footwear Sdn. Bhd. 100 100 Marketing, retailing and

distribution of men’s and
ladies’ footwear
Jeco (Pte) Limited (“Jeco”) (1) 70 70 Intellectual property
(Incorporated in Singapore) management
Vista Assets Sdn. Bhd. (“VASB”) 100 100 Intellectual property
management
FR Gallery Sdn. Bhd. (“FRSB”) (3) & (8) 100 100 Dormant
(In members’ voluntary winding-up)
LBJR Marketing Sdn. Bhd. (“LBJR”) 100 100 Marketing and distribution of
fashionable goods and
accessories

SBG Holdings Sdn. Bhd. 100 100 Investment holding and

management services
Podium Retail Sdn. Bhd. (“PRSB”) 100 100 Marketing and distribution of
fashionable goods,
accessories and beauty
products
Subsidiaries of Dominion Directions Sdn. Bhd.

VR Directions Sdn. Bhd. (“VRD”) 75 75 Marketing and distribution of

men’s apparels and
accessories, and ladies’
apparels

SB Directions Sdn. Bhd. 100 100 Manufacturing and marketing

of fashionable goods

Galaxy Hallmark Sdn. Bhd. (“GHSB”) 100 100 Marketing and distribution of
men’s apparels and
accessories

New Series Sdn. Bhd. (“NSSB”) (3) & (7) 90 90 Dormant

(In members’ voluntary winding-up)
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

180
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

10. INVESTMENTS IN SUBSIDIARIES (continued)

(a) The details of the subsidiaries, incorporated in Malaysia except otherwise stated, are as follows: (continued)

Effective interest
in equity
2019 2018
Name of company % % Principal activities

Subsidiary of Banyan Sutera Sdn. Bhd.

PT Banyan Cemerlang (“PTBC”) (2) 100 100 Wholesaling of fashionable

(Incorporated in Indonesia) goods and accessories

Subsidiaries of CRG Incorporated Berhad

CR Boutique Sdn. Bhd. (4) - 100 Retailing of women footwear,

handbags and accessories

CRF Marketing Sdn. Bhd. (“CRF”) (4) - 100 Designing, promoting and
marketing of women footwear

CRL Marketing Sdn. Bhd. (“CRL”) (4) - 100 Designing, promoting and
marketing of women handbags
and accessories

CRI Sdn. Bhd. (“CRI”) (4) - 100 Investment holding

CRV Sdn. Bhd. (“CRV”) (4) - 100 Marketing and distribution of

fashionable goods and
accessories, and provision of
management services

PT CRI Mitra Sejati (“PTCMS”) (4) - 100 Wholesale import of fashionable

(Incorporated in Indonesia) goods and accessories

CRR Vietnam Co., Ltd (“CRR”) (4) - 100 Management consultancy

(Incorporated in Vietnam) activities and to implement the
right of import, distribution,
wholesales of goods

Subsidiary of BCB Properties Sdn. Bhd.

Apex Marble Sdn. Bhd. (“AMSB”) 60 60 Marketing and distribution of

fashionable goods

Subsidiary of Daily Frontier Sdn. Bhd.

Daily Frontier (Vietnam) Company 100 100 Wholesaling, retailing, importing

Limited (1) and exporting of fashionable
(Incorporated in Vietnam) products, accessories and
cosmetics
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

181
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

10. INVESTMENTS IN SUBSIDIARIES (continued)

(a) The details of the subsidiaries, incorporated in Malaysia except otherwise stated, are as follows: (continued)

Effective interest
in equity
2019 2018
Name of company % % Principal activities

Subsidiaries of SBG Holdings Sdn. Bhd.

SBL Marketing Sdn. Bhd. 100 100 Designing, promoting and

marketing of fashionable leather
goods

SBFW Marketing Sdn. Bhd. 100 100 Designing, promoting and

marketing of fashionable goods,
footwear and accessories

SB Boutique Sdn. Bhd. 100 100 Retailing of leather goods and

apparels

SB International Sdn. Bhd. 100 100 Marketing and distribution of

fashionable goods and accessories

SBA Marketing Sdn. Bhd. 100 100 Marketing and distribution of

fashionable goods and accessories

SBM Marketing Sdn. Bhd. 100 100 Designing, promoting and

marketing of fashionable men’s
footwear

Subsidiaries of Active World Pte. Ltd.

Jetbest Enterprise Pte. Ltd. (1) 100 100 Wholesaling, retailing, importing
(Incorporated in Singapore) and exporting of leather goods and
accessories

SCRL Pte. Ltd. (“SCRL”) (3) & (8) 100 100 Dormant
(Incorporated in Singapore)

SBLS Pte. Ltd. (1) 100 100 Wholesaling, retailing and

(Incorporated in Singapore) marketing of fashionable footwear,
carrywear and accessories

Active Franchise Pte. Ltd. (1) 100 100 General wholesale trade including
(Incorporated in Singapore) general importers and exporters

PT Active World (“PTAW”) (2) 100 100 Investment holding

(Incorporated in Indonesia)
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

182
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

10. INVESTMENTS IN SUBSIDIARIES (continued)

(a) The details of the subsidiaries, incorporated in Malaysia except otherwise stated, are as follows: (continued)

Effective interest
in equity
2019 2018
Name of company % % Principal activities

Subsidiaries of Jeco (Pte) Limited

Lianbee-Jeco Pte. Ltd. (“LJPL”) (1) 70 70 Retailing, importing and

(Incorporated in Singapore) exporting leather goods and
general merchandise

Lianbee-Jeco (M) Sdn. Bhd. 70 70 Trading in leather products

BB Global Holdings Pte. Ltd. (“BBGH”) (1) 35.7 35.7 Intellectual property
(Incorporated in Singapore) management company

IBB Pte. Ltd. (“IBB”) (1) 70 70 General wholesale trade,

(Incorporated in Singapore) including general importers
and exporters

PT Jeco Investment Indonesia (“PTJII”) (1) 70 70 Investment holding

(Incorporated in Indonesia)

(1)
Audited by BDO PLT Member Firms
(2)
Audited by firms of auditors other than BDO PLT
(3)
Consolidated based on its management accounts for the financial year ended 30 June 2019. The
financial statements of this subsidiary is not required to be audited as it is in the progress of members’
voluntary winding-up or striking off
(4)
Demerged from the Group during the financial year
(5)
Deregistered and dissolved during the financial year
(6)
Completed the members’ voluntary winding-up process during the financial year
(7)
Completed the members’ voluntary winding-up process after the financial year
(8)
Members’ voluntary winding-up or striking off process commenced after the financial year

(b) During the financial year ended 30 June 2019:

(i) The cost of investment in MAC of RM500,000 ceased to be classified as assets held for sale as
disclosed in Note 40 to the financial statements.

(ii) The deregistration and dissolution of KSGL has been completed, which resulted in a loss on
dissolution of RM92,000 in the financial statements of the Group. No gain or loss was recognised
on the dissolution of KSGL by the Company as it was fully impaired in previous financial years.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

183
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

10. INVESTMENTS IN SUBSIDIARIES (continued)

(b) During the financial year ended 30 June 2019: (continued)

(iii) The members’ voluntary winding-up process of SMSB has been completed.

The loss on dissolution of SMSB during the financial year was as follows:

Group Company
RM’000 RM’000

Consideration received 310 310

Cost of investment, net of impairment loss - (314)
Net assets deconsolidated (310) -

Loss on dissolution - (4)

The carrying amounts of net assets of SMSB as at the date of dissolution was as follows:

2019
RM’000

Cash and bank balances 310

Net assets deconsolidated 310

Loss on dissolution of the Group -

Consideration received 310

Less: Cash and bank balances deconsolidated (310)

Net cashflow on dissolution -

(iv) NSSB has been placed under members’ voluntary winding-up.

(v) The Company increased its cost of investment of RM2,010,000 in the share capital of CBF.

(vi) Amounts owing by certain subsidiaries amounting to RM9,160,009 and RM4,000,008 have been
capitalised as additional costs of investments of the Company in the subsidiaries namely BSSB and
VASB, respectively.

(vii) Amount owing by a subsidiary namely PTBC amounting to IDR16,464,780,000 (approximately

RM4,627,000) has been capitalised as additional cost of investment of BSSB in PTBC.

(viii) Amount owing by a subsidiary namely PTCMS amounting to IDR11,064,704,000 (approximately

RM3,528,000) has been capitalised as additional cost of investment of CRG in PTCMS.

(ix) Amount owing by a subsidiary namely DFV amounting to VND19,800,750,000 (approximately

RM3,589,000) has been capitalised as additional cost of investment of DFSB in DFV.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

184
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

10. INVESTMENTS IN SUBSIDIARIES (continued)

(b) During the financial year ended 30 June 2019: (continued)

(x) On 13 November 2018, the Company completed the distribution via a dividend-in-specie of its then
entire shareholding in CRG and its rights to CRG’s 805,651,400 ordinary shares (equivalent to
CRG’s issued share capital of RM68,000,000) to the entitled shareholders of the Company on the
basis of one (1) CRG share for every one (1) share of the Company held on 1 November 2018
(“Entitlement date”) from its retained earnings as detailed in the Company’s Circular to
Shareholders in relation to the “Proposed Listing of CRG Incorporated Sdn. Bhd. and its
subsidiaries on the LEAP Market of Bursa Malaysia Securities Berhad” dated 8 May 2018.

This corporate exercise has resulted in the demerger of CRG Group from the Group on the even
date.

The loss on demerger of CRG Group during the financial year is as follows:
Group
RM’000

Dividend-in-specie 68,000
Net assets deconsolidated (69,380)
Reclassification of exchange translation reserve to profit or loss (97)
Actual loss (1,477)
Potential loss recognised 4,345
Over-provision of loss on demerger of CRG Group 2,868

Company
RM’000

Dividend-in-specie 68,000
Costs of investment, net of impairment loss (68,000)
-

The carrying amounts of net assets of CRG Group as at date of demerger was as follows:
13.11.2018
RM’000

Property, plant and equipment 32,657

Deferred tax assets 633
Inventories 25,670
Trade and other receivables 18,446
Cash and bank balances 15,314
Current tax assets 1,022
Borrowings (15,610)
Provision for restoration costs (650)
Trade and other payables (7,747)
Current tax liabilities (355)
Net assets deconsolidated 69,380

(xi) Impairment losses on the costs of investments in certain subsidiaries amounting to RM8,060,000
(2018: RM5,820,000) have been recognised due to their recoverable amounts being lower than their
carrying amounts.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

185
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

10. INVESTMENTS IN SUBSIDIARIES (continued)

(c) In the previous financial year:

(i) The cost of investment in CRG of RM68,000,000 was classified as assets held for distribution
pursuant to the proposed demerger as disclosed in Note 40 to the financial statements.

(ii) The cost of investment in MAC of RM500,000 was classified as assets held for sale pursuant to the
proposed disposal as disclosed in Note 40 to the financial statements.

(iii) Bruno Magli South East Asia Pte. Ltd. and Active Footwear Pte. Ltd. were struck off from the
register of the Accounting and Corporate Regulatory Authority (“ACRA”) Singapore.

(iv) The deregistration and dissolution of Kin Sheng International Trading Co. Limited and CRG Viet
Nam Company Limited were completed.

(v) An application for deregistration of KSGL from the register of the Companies Registry, Hong Kong
(“CRHK”), was submitted and pending approval from the relevant authorities.

(vi) SMSB was placed under members’ voluntary winding-up.

(vii) The issued and paid-up capital of the following direct subsidiaries was increased as follows:

(i) LPSB increased its issued and paid-up capital through capitalisation of amount owing by
LPSB to the Company of RM44,400,000 and the same be applied for an allotment and
issuance of 44,400,000 ordinary shares of RM1.00 each credited as fully paid in the share
capital of LPSB to the Company.

(ii) CBH increased its issued and paid-up capital through capitalisation of amount owing by CBH
to the Company of RM2,999,999 and the same be applied for an allotment and issuance of
2,999,999 ordinary shares of RM1.00 each credited as fully paid in the share capital of CBH
to the Company.

(iii) LBM increased its issued and paid-up capital through capitalisation of amount owing by
LBM to the Company of RM6,499,999 and the same be applied for an allotment and issuance
of 6,499,999 ordinary shares of RM1.00 each credited as fully paid in the share capital of
LBM to the Company.

(iv) LBJR increased its issued and paid-up capital through capitalisation of amount owing by
LBJR to the Company of RM3,500,000 and the same be applied for an allotment and
issuance of 3,500,000 ordinary shares of RM1.00 each credited as fully paid in the share
capital of LBJR to the Company.

(v) DMM increased its issued and paid-up capital through capitalisation of amount owing by
DMM to the Company of RM1,999,998 and the same be applied for an allotment and
issuance of 1,999,998 ordinary shares of RM1.00 each credited as fully paid in the share
capital of DMM to the Company.

(vi) PRSB increased its issued and paid-up capital through capitalisation of amount owing by
PRSB to the Company of RM3,999,996 and the same be applied for an allotment and
issuance of 3,999,996 ordinary shares of RM1.00 each credited as fully paid in the share
capital of PRSB to the Company.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

186
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

10. INVESTMENTS IN SUBSIDIARIES (continued)

(c) In the previous financial year: (continued)

(vii) The issued and paid-up capital of the following direct subsidiaries was increased as follows:
(continued)

(vii) DFSB increased its issued and paid-up capital through capitalisation of amount owing by
DFSB to the Company of RM3,580,000 and the same be applied for an allotment and
issuance of 3,580,000 ordinary shares of RM1.00 each credited as fully paid in the share
capital of DFSB to the Company.

(viii) CBM increased its issued and paid-up capital through capitalisation of amount owing by
CBM to the Company of RM9,997,741 and the same be applied for an allotment and issuance
of 1,408,450 ordinary shares of RM7.0984 each credited as fully paid in the share capital of
CBM to the Company.

(ix) CRG increased its issued and paid-up capital through capitalisation of amount owing by CRG
to the Company of RM48,000,000 and the same be applied for an allotment and issuance of
48,000,000 ordinary shares of RM1.00 each credited as fully paid in the share capital of CRG
to the Company.

(x) AWPL increased its issued and paid-up capital through an allotment and issuance of
1,000,000 ordinary shares of SGD1.00 each credited as fully paid in the share capital of
AWPL to the Company.

(viii) The issued and paid-up capital of the following indirect subsidiaries was increased as follows:

(i) PTCMS increased its issued and paid-up capital through capitalisation of amount owing by
PTCMS to CRG of IDR9,003,120,000 (approximately RM2,890,001) and the same be
applied for an allotment and issuance of 690,000 ordinary shares of IDR13,048.00 each
credited as fully paid in the share capital of PTCMS to CRG.

(ii) GHSB increased its issued and paid-up capital through capitalisation of amount owing by
GHSB to DDSB of RM499,999 and the same be applied for an allotment and issuance of
499,999 ordinary shares of RM1.00 each credited as fully paid in the share capital of GHSB
to DDSB.

(iii) CRF increased its issued and paid-up capital through capitalisation of amount owing by CRF
to CRG of RM7,000,000 and the same be applied for an allotment and issuance of 700,000
ordinary shares of RM10.00 each credited as fully paid in the share capital of CRF to CRG.

(iv) CRL increased its issued and paid-up capital through capitalisation of amount owing by CRL
to CRG of RM18,000,000 and the same be applied for an allotment and issuance of 1,000,000
ordinary shares of RM18.00 each credited as fully paid in the share capital of CRL to CRG.

(v) CRV increased its issued and paid-up capital through capitalisation of amount owing by CRV
to CRG of RM1,899,998 and the same be applied for an allotment and issuance of 1,899,998
ordinary shares of RM1.00 each credited as fully paid in the share capital of CRV to CRG.
10. INVESTMENTS IN SUBSIDIARIES (continued)

(d) The subsidiaries of the Group that have material non-controlling interests (“NCI”) are as follows:

Other
individual
Jeco immaterial
VRD Group subsidiaries * Total
2019

NCI percentage of ownership interest and voting interest 25% 30% - -

Carrying amount of NCI (RM’000) 1,097 18,872 (59) 19,910

(Loss)/Profit allocated to NCI (RM’000) (29) 5,118 144 5,233

2018

NCI percentage of ownership interest and voting interest 25% 30% - -

Carrying amount of NCI (RM’000) 1,126 24,095 (203) 25,018

(Loss)/Profit allocated to NCI (RM’000) (71) 5,243 (57) 5,115

* The NCI of the other subsidiaries of the Group are deemed to be immaterial.
(Cont’d)
NOTES TO THE FINANCIAL STATEMENTS
187
ANNUAL REPORT 2019
BONIA CORPORATION BERHAD
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

188
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

10. INVESTMENTS IN SUBSIDIARIES (continued)

(e) The summarised financial information before intra-group elimination of the subsidiaries that have
material NCI as at the end of each reporting period are as follows:

VRD Jeco Group

2019 RM’000 RM’000
Assets and liabilities

Non-current assets 277 40,907

Current assets 6,245 69,734
Non-current liabilities (15) (7,596)
Current liabilities (2,094) (54,274)
Net assets 4,413 48,771

Results

Revenue 13,229 150,371

(Loss)/Profit for the financial year (115) 18,393
Total comprehensive (loss)/income (115) 19,160

Cash flows from operating activities 224 19,634

Cash flows from investing activities 16 487
Cash flows from/(used in) financing activities 633 (16,784)
Net increase in cash and cash equivalents 873 3,337

Dividends paid to NCI - 9,085

VRD Jeco Group

2018 RM’000 RM’000

Assets and liabilities

Non-current assets 626 44,382

Current assets 6,194 68,014
Non-current liabilities (18) (7,765)
Current liabilities (2,271) (43,814)
Net assets 4,531 60,817

Results

Revenue 13,046 137,929

(Loss)/Profit for the financial year (286) 17,279
Total comprehensive (loss)/income (286) 19,479

Cash flows from operating activities 1,472 21,594

Cash flows used in investing activities (862) (1,325)
Cash flows used in financing activities (1,379) (4,266)
Net (decrease)/increase in cash and cash equivalents (769) 16,003

Dividends paid to NCI - 1,770

 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

189
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

11. INTERESTS IN ASSOCIATES

Group
2019 2018
RM’000 RM’000

Unquoted equity shares, at cost 4,894 4,894

Share of post acquisition profit, net of dividends received 223 441
Loan to an associate (1) 4,855 4,855

9,972 10,190
Less: Impairment losses (9,441) (9,441)

531 749

(1)
In the previous financial years, the Group provided a loan to an associate (refer to Note 15(a) to the financial
statements) of which the fair value at initial recognition based on the prevailing market interest rate was
lower than its transaction price. The difference between the transaction price and the fair value of the loan
to an associate was recognised as part of the interests in the associates of the Group.

(a) The details of the associates, incorporated in Malaysia except otherwise stated, are as follows:

Effective interest
in equity
2019 2018
Name of company % % Principal activities

Associate of Bonia Corporation Berhad

Paris RCG Sdn. Bhd. (“PRCG”) (1) 30 30 Managing food and beverage business

Associate of BCB Properties Sdn. Bhd.

Serene Glow Sdn. Bhd. (“SGSB”) (2) 33 33 Property investment and development

Associates of Jeco (Pte) Limited

Braun Verwaltungs-GmbH (“BVG”) (3) 34 34 Marketing and distribution of

(Incorporated in Germany) fashionable leather goods

Braun GmbH & Co. KG (“BBKG”) (3) 34 34 Marketing and distribution of

(Incorporated in Germany) fashionable leather goods

(1)
Audited by firms of auditors other than BDO PLT
(2)
Equity accounted based on management accounts for the financial year ended 30 June 2019 as the
financial year end of the associate is 30 September
(3)
Equity accounted based on management accounts for the financial year ended 30 June 2019 as these
associates are not required to be audited
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

190
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

11. INTERESTS IN ASSOCIATES (continued)

(b) All the above associates are accounted for using the equity method in the consolidated financial
statements.

The summarised financial information of the associates are as follows:

BVG
and
SGSB BBKG PRCG Total
2019 RM’000 RM’000 RM’000 RM’000

Assets and liabilities

Non-current assets - 4,816 1,531 6,347

Current assets 34 12,407 3,150 15,591

Total assets 34 17,223 4,681 21,938

Liabilities

Non-current liabilities - 12,591 - 12,591

Current liabilities 443 10,355 648 11,446

Total liabilities 443 22,946 648 24,037

Results

Revenue - 31,173 10,294 41,467

(Loss)/Profit for the financial year (5) (98) 1,433 1,330

BVG
and
SGSB BBKG PRCG Total
2018 RM’000 RM’000 RM’000 RM’000

Assets and liabilities

Non-current assets - 5,117 1,531 6,648

Current assets 34 10,417 3,150 13,601

Total assets 34 15,534 4,681 20,249

Liabilities

Non-current liabilities - 12,748 - 12,748

Current liabilities 443 8,440 648 9,531

Total liabilities 443 21,188 648 22,279

Results

Revenue - 28,351 10,294 38,645

(Loss)/Profit for the financial year (5) (1,400) 1,433 28
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

191
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

11. INTERESTS IN ASSOCIATES (continued)

(c) The reconciliation of net assets of the associates to the carrying amount of the investments in associates
are as follows:

BVG
and
SGSB BBKG PRCG Total
2019 RM’000 RM’000 RM’000 RM’000
Share of net
(liabilities)/assets
of the Group (137) (1,963) 992 (1,108)

Loan to an associate - 4,855 - 4,855

Goodwill - 8,646 - 8,646
Gain on dilution of interest - - (461) (461)
Unrecognised share
of other reserves - (4,186) - (4,186)
Unrecognised share
of losses of
associates 489 2,578 - 3,067

489 11,893 (461) 11,921

Less: Share by non-
controlling
interests - (841) - (841)

489 11,052 (461) 11,080

352 9,089 531 9,972

Less: Impairment
losses (352) (9,089) - (9,441)

Carrying amount in
the statement of
financial position - - 531 531

Share of results of
the Group
Share of profit
of the Group - - 202 202
Share of other
comprehensive
income of the
Group - - - -

Share of total
comprehensive income of the Group - - 202 202

Other information
Dividend received - - 420 420
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

192
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

11. INTERESTS IN ASSOCIATES (continued)

(c) The reconciliation of net assets of the associates to the carrying amount of the investments in associates
are as follows: (continued)

BVG
and
SGSB BBKG PRCG Total
2018 RM’000 RM’000 RM’000 RM’000

Share of net
(liabilities)/assets
of the Group (135) (1,940) 1,210 (865)

Loan to an associate - 4,855 - 4,855

Goodwill - 8,381 - 8,381
Gain on dilution of interest - - (461) (461)
Unrecognised share
of other reserves - (3,828) - (3,828)
Unrecognised share
of losses of
associates 487 2,452 - 2,939

487 11,860 (461) 11,886

Less: Share by non-
controlling
interests - (831) - (831)

487 11,029 (461) 11,055

352 9,089 749 10,190

Less: Impairment
losses (352) (9,089) - (9,441)

Carrying amount in
the statement of
financial position - - 749 749

Share of results of
the Group
Share of profit
of the Group - - 430 430
Share of other
comprehensive
income of the
Group - - - -

Share of total
comprehensive income of the Group - - 430 430

Other information
Dividend received - - 360 360
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

193
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

11. INTERESTS IN ASSOCIATES (continued)

(d) During the financial year, the cumulative unrecognised share of losses of associates amounted to
RM3,067,000 (2018: RM2,939,000), and the net increase in unrecognised share of losses amounted to
RM128,000 (2018: net increase of RM579,000). The Group has stopped recognising its share of losses since
there is no further obligation in respect of those losses using the equity method of accounting.
(e) In the previous financial year, the Company had disposed its 40% equity interest in Makabumi Sdn. Bhd. to
a third party for a consideration of RM800. The gain on disposal of the associate of the Group and of the
Company amounted to RM800.

12. OTHER INVESTMENTS

Group
2019 2018
RM’000 RM’000
Financial assets at fair value through profit or loss
- Club memberships 1,203 1,222

Information on the fair value hierarchy is disclosed in Note 38(d) to the financial statements.

13. DEFERRED TAX

(a) The deferred tax assets and liabilities are made up of the following:
Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000

Balance as at 1 July 2018/2017, as

previously reported 6,046 6,024 - (1)
Effects of adoption of MFRS 9
(Note 5.1) (1,141) - - -
Effects of adoption of MFRS 15
(Note 5.1) (35) - - -
Balance as at 1 July 2018/2017, as restated 4,870 6,024 - (1)
Recognised in profit or loss:
- Continuing operations (Note 32) 403 (418) 1 1
- Discontinued operations - 137 - -
Recognised in other comprehensive income 260 10 - -
Reclassification from/to disposal groups
held for sale/held for distribution 160 406 - -
Currency translation differences 42 (113) - -
Balance as at 30 June 2019/2018 5,735 6,046 1 -

Presented after appropriate offsetting as follows:

Deferred tax assets, net (1,770) (1,354) - -
Deferred tax liabilities, net 7,505 7,400 1 -
5,735 6,046 1 -
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

194
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

13. DEFERRED TAX (continued)

(b) The components and movements of deferred tax liabilities and assets during the financial year prior to
offsetting are as follows:

Deferred tax liabilities of the Group

Other
Property, taxable
plant and Intangible temporary
equipment assets differences Offsetting Total
RM’000 RM’000 RM’000 RM’000 RM’000
At 1 July 2018, as
previously reported 2,925 4,969 - (494) 7,400
Effects of adoption of
MFRS 9 (Note 5.1) - - (171) - (171)
At 1 July 2018, as
restated 2,925 4,969 (171) (494) 7,229
Recognised in profit or
loss:
- Continuing
operations 114 (430) 199 (55) (172)
Recognised in other
comprehensive income 260 - - - 260
Reclassification from
disposal group held for
sale/held for
distribution
(Note 26) 160 - - - 160
Currency translation
differences 63 (36) 1 - 28
At 30 June 2019 3,522 4,503 29 (549) 7,505

At 1 July 2017 3,049 5,423 53 - 8,525

Recognised in profit or
loss:
- Continuing
operations (209) (424) 107 (494) (1,020)
- Discontinued
operations 206 - (22) - 184
Recognised in other
comprehensive income 10 - - - 10
Reclassification to
disposal group held for
sale/held for
distribution
(Note 26) (22) - (138) - (160)
Currency translation
differences (109) (30) - - (139)
At 30 June 2018 2,925 4,969 - (494) 7,400
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

195
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

13. DEFERRED TAX (continued)

(b) The components and movements of deferred tax liabilities and assets during the financial year prior to
offsetting are as follows: (continued)

Deferred tax assets of the Group

Other
Property, deductible
plant and temporary
equipment Payables differences Offsetting Total
RM’000 RM’000 RM’000 RM’000 RM’000

At 1 July 2018, as
previously reported 638 196 1,014 (494) 1,354
Effects of adoption of
MFRS 9 (Note 5.1) - - 970 - 970
Effects of adoption of
MFRS 15 (Note 5.1) - - 35 - 35

At 1 July 2018, as
restated 638 196 2,019 (494) 2,359
Recognised in profit or
loss:
- Continuing
operations (613) 251 (158) (55) (575)
Currency translation
differences 3 (7) (10) - (14)

At 30 June 2019 28 440 1,851 (549) 1,770

At 1 July 2017 775 252 1,474 - 2,501

Recognised in profit or
loss:
- Continuing
operations (116) 53 (45) (494) (602)
- Discontinued
operations 83 9 (45) - 47
Reclassification to
disposal groups held for
sale/held for
distribution
(Note 26) (85) (118) (363) - (566)
Currency translation
differences (19) - (7) - (26)

At 30 June 2018 638 196 1,014 (494) 1,354

BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

196
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

13. DEFERRED TAX (continued)

(b) The components and movements of deferred tax liabilities and assets during the financial year prior to
offsetting are as follows: (continued)
Deferred tax liabilities of the Company
Taxable
temporary
differences Offsetting Total
RM’000 RM’000 RM’000
At 1 July 2018 - - -
Recognised in profit or loss (1) - (1)
At 30 June 2019 (1) - (1)
At 1 July 2017 1 - 1
Recognised in profit or loss (1) - (1)
At 30 June 2018 - - -
(c) The amounts of temporary differences for which no deferred tax assets have been recognised in the statement
of financial position are as follows:
Group
2019 2018
RM’000 RM’000
Unused tax losses 26,940 23,037
Unabsorbed capital allowances 7,568 11,761
Other deductible temporary differences 6,755 3,300
41,263 38,09
38,098
Deferred tax assets of certain subsidiaries have not been recognised in respect of these items as it is not
probable that future taxable profits of the subsidiaries would be available against which the deductible
temporary differences could be utilised.

For the Malaysian entities, the unused tax losses of the Group up to the year of assessment 2019 shall be
deductible until year of assessment 2026. The unused tax losses for the year of assessment 2020 onwards will
expire in seven (7) years. The use of tax losses of subsidiaries in other countries is subject to the agreement
of the tax authorities and the tax legislation of the respective countries in which the subsidiaries operate.

14. INVENTORIES
Group
2019 2018
RM’000 RM’000
Raw materials 9,280 6,386
Work-in-progress 1,057 1,755
Finished goods 82,650 97,075
Consumables 131 147
93,118 105,363

During the financial year, inventories of the Group recognised as cost of sales amounted to RM212,081,000 (2018:
RM172,690,000). In the previous financial year, the Group had written off inventories amounting to RM55,000
and this was included in cost of sales.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

197
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

15. TRADE AND OTHER RECEIVABLES

Group Company
2019 2018 2019 2018
Note RM’000 RM’000 RM’000 RM’000
Non-current assets
Other receivables
Third parties (b) 11,482 13,206 - -
Amount owing by a subsidiary (e) - - 18,904 -
Loan to an associate (a) - 5,353 - -
11,482 18,559 18,904 -
Less: Impairment losses
- third parties (5,172) (4,637) - -
- subsidiary - - (180) -
- associate - (5,353) - -
(5,172) (9,990) (180) -
6,310 8,569 18,724 -

Current assets
Trade receivables
Third parties 53,339 61,732 - -
Associate - 198 - -
53,339 61,930 - -
Less: Impairment losses - third parties (17,424) (6,790) - -
35,915 55,140 - -
Other receivables and deposits
Amounts owing by subsidiaries (d) - - 12,959 54,134
Amount owing by an associate 309 309 - -
Loan to an associate (a) 1,561 2,590 - -
Other receivables (b) 10,256 7,067 170 119
Deposits 13,143 13,972 9 9
25,269 23,938 13,138 54,262
Less: Impairment losses
- subsidiaries - - (17) (32,271)
- associates (1,870) (2,899) - -
- deposits (21) (100) - -
- other receivables (388) (174) - -
(2,279) (3,173) (17) (32,271)
22,990 20,765 13,121 21,991
Total trade and other receivables 58,905 75,905 13,121 21,991
Prepayments 5,648 7,331 - -
Total trade and other receivables
(current) 64,553 83,236 13,121 21,991
Total trade and other receivables
(non-current and current) 70,863 91,805 31,845 21,991
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

198
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

15. TRADE AND OTHER RECEIVABLES (continued)

(a) The loan to an associate, Braun GmbH & Co. KG, is unsecured and has a fixed term of 20 years. The loan
is repayable over 20 annual instalments commencing from 2012 with a lump sum repayment upon expiry
of the loan. Interest rate is fixed at 3.0% (2018: 3.0%) per annum. Its fair value at initial recognition was
computed based on cash flows discounted at a market borrowing rate at 7.5% per annum as disclosed in
Note 11 to the financial statements.

As at 30 June 2019, loan to an associate of RM1,561,000 (2018: RM7,943,000) and amount owing by the
associate of RM309,000 (2018: RM309,000) were fully impaired due to the associate’s deficit in total
equity position.

(b) Included in non-current other receivables and current other receivables are amounts owing from an
exclusive authorised dealer of “Braun Buffel” brand of RM6,699,000 and RM2,498,000 respectively
(2018: RM8,569,000 and RM2,067,000 respectively). The amount receivable from the exclusive
authorised dealer is with an interest rate of 7.53% (2018: 7.5%) per annum and is payable through
instalments till 2023.

(c) Trade receivables are non-interest bearing and the normal trade credit terms granted by the Group range
from 30 to 120 days (2018: 30 to 120 days). They are recognised at their original invoice amounts which
represent their fair values on initial recognition.

(d) Current amounts owing by subsidiaries represent advances and payments made on behalf, which are
unsecured, interest-free and repayable within the next twelve (12) months in cash and cash equivalents.

(e) Non-current amount owing by a subsidiary of RM18,904,000 (2018: RM Nil) represents the present value
of advances of funds which is unsecured, interest-free and repayable within the next two (2) years in cash
and cash equivalents.

(f) During the financial year, the Company had reversed impairment losses of RM13,160,017 (2018:
RM3,970,000) on amounts owing by certain subsidiaries following the capitalisation of the amounts owing
by the subsidiaries as costs of investments in subsidiaries as disclosed in Note 10(b)(vi) to the financial
statements.

(g) Non-trade amounts owing by associates represent advances and payments made on behalf, which are
unsecured, interest-free and payable within the next twelve (12) months in cash and cash equivalents.

(h) Information on financial risks of trade and other receivables is disclosed in Note 39 to the financial
statements.

(i) The currency exposure profile of receivables (excluding prepayments) are as follows:

Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000

Ringgit Malaysia 27,774 33,113 21,246 21,991

Singapore Dollar 29,022 24,952 10,599 -
Vietnamese Dong 171 7,069 - -
Indonesian Rupiah 7,787 19,340 - -
Euro 367 - - -
Others 94 - - -

65,215 84,474 31,845 21,991

 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

199
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

15. TRADE AND OTHER RECEIVABLES (continued)

(j) The ageing analysis of trade receivables of the Group are as follows:

Gross Balance
carrying Total as at
Group amount allowance 30.6.2019
2019 RM’000 RM’000 RM’000

Current 19,753 (2,744) 17,009

Past due:
1 to 30 days 13,945 (572) 13,373
31 to 60 days 3,142 (408) 2,734
61 to 90 days 1,145 (846) 299
91 to 120 days 3,991 (1,717) 2,274
More than 120 days 11,363 (11,137) 226

33,586 (14,680) 18,906

53,339 (17,424) 35,915

Gross Balance
carrying Total as at
amount allowance 30.6.2018
2018 * RM’000 RM’000 RM’000

Current 30,189 - 30,189

Past due:
1 to 30 days 8,866 - 8,866
31 to 60 days 4,675 - 4,675
61 to 90 days 2,235 - 2,235
91 to 120 days 564 - 564
More than 120 days 15,401 (6,790) 8,611

31,741 (6,790) 24,951

61,930 (6,790) 55,140

* Comparative information as required under MFRS 139 Financial Instruments: Recognition and
Measurement
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

200
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

15. TRADE AND OTHER RECEIVABLES (continued)

(k) The reconciliation of movements in the impairment losses on trade receivables is as follows:
Lifetime ECL Credit Total
allowance impaired allowance
Group RM’000 RM’000 RM’000

At 1 July 2018 under MFRS 139 - 6,790 6,790

Restated through opening retained earnings
(Note 5.1) 7,936 6,892 14,828
Opening impairment loss of trade
receivables in accordance with MFRS 9 7,936 13,682 21,618
Charge for the financial year 124 42 166
Reversal of impairment loss (4,537) - (4,537)
Written off - (69) (69)
Exchange differences 177 69 246

At 30 June 2019 3,700 13,724 17,424

At 1 July 2017 under MFRS 139 - 7,075 7,075

Charge for the financial year - 516 516
Reversal of impairment loss - (568) (568)
Written off - (173) (173)
Exchange differences - (60) (60)

At 30 June 2018 - 6,790 6,790

Credit impaired refers to individually determined debtors who are in significant financial difficulties and
have defaulted on payments to be impaired as at the end of the reporting period.

The Group has identified the Gross Domestic Product (“GDP”), retail sales growth, unemployment rate and
inflation rate as the key macroeconomic factors in determining the lifetime expected credit loss for trade
receivables.

(l) As at the end of each reporting period, the credit risks exposures and concentration relating to trade
receivables of the Group are summarised in the table below:

Group
2019 2018
RM’000 RM’000

Maximum exposure 35,915 55,140

Collateral obtained - -

Net exposure to credit risk 35,915 55,140

During the financial year, the Group did not renegotiate the terms of any trade receivables.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

201
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

15. TRADE AND OTHER RECEIVABLES (continued)

(m) The reconciliation of movements in the impairment losses on other receivables and amounts owing by
related parties is as follows:
Lifetime
ECL - not Lifetime ECL
12-month credit - credit
ECL impaired impaired Total
Group RM’000 RM’000 RM’000 RM’000
At 1 July 2018 under MFRS 139 - - 13,163 13,163
Restated through opening retained
earnings (Note 5.1) 104 5 38 147
Opening impairment loss of other
receivables and amounts owing by
related parties in accordance with
MFRS 9 104 5 13,201 13,310
Charge for the financial year 350 26 - 376
Reversal of impairment loss - (5) - (5)
Written off - - (6,573) (6,573)
Exchange differences 6 - 337 343
At 30 June 2019 460 26 6,965 7,451

At 1 July 2017 under MFRS 139 - - 13,356 13,356

Charge for the financial year - - 462 462
Exchange differences - - (655) (655)
At 30 June 2018 - - 13,163 13,163

Lifetime ECL - Lifetime ECL

not credit - credit Total
impaired impaired allowance
Company RM’000 RM’000 RM’000
At 1 July 2018 under MFRS 139 - 32,271 32,271
Restated through opening retained earnings
(Note 5.1) 174 - 174
Opening impairment loss of amounts owing by
subsidiaries in accordance with MFRS 9 174 32,271 32,445
Charge for the financial year 23 - 23
Reversal of impairment loss - (14,325) (14,325)
Written off - (17,946) (17,946)
At 30 June 2019 197 - 197
At 1 July 2017 under MFRS 139 - 27,399 27,399
Charge for the financial year - 9,721 9,721
Reversal of impairment loss - (4,843) (4,843)
Written off - (6) (6)
At 30 June 2018 - 32,271 32,271
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

202
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

16. CASH AND BANK BALANCES

Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Cash and bank balances 78,345 75,204 1,377 7,132
Deposits with licensed banks 10,824 8,825 - -
89,169 84,029 1,377 7,132

(a) Included in deposits with licensed banks of the Group is an amount of RM63,000 (2018: RM874,000)
pledged to licensed banks as securities for banking facilities granted to certain subsidiaries as disclosed in
Note 20 to the financial statements.

(b) The currency exposure profile of cash and bank balances are as follows:
Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Ringgit Malaysia 50,712 42,687 1,373 7,128
Chinese Renminbi 146 227 - -
Hong Kong Dollar 8 12 - -
Indonesian Rupiah 1,111 1,930 - -
Singapore Dollar 35,740 35,296 - -
United States Dollar 1,284 2,971 4 4
Vietnamese Dong 114 835 - -
Others 54 71 - -
89,169 84,029 1,377 7,132

(c) For the purpose of statements of cash flows, cash and cash equivalents comprise the following as at the
end of each reporting period:
Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Cash and bank balances
104 104 78,345 104104 75,204 104104 1,377 104104 7,132
Deposits with licensed banks (not
more than three (3) months) 10,824 8,825 - -
89,169 84,029 1,377 7,132
Less: Bank overdrafts included in
borrowings (Note 20) (1,479) (3,139) - -
Less: Deposits pledged to
licensed banks (63) (874) - -
Add: Cash and cash equivalent
classified as held for
sale/held for distribution
(Note 26) - 15,639 - -

Cash and cash equivalents

included in the statements of
cash flows 87,627 95,655 1,377 7,132
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

203
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

16. CASH AND BANK BALANCES (continued)

(d) No expected credit losses were recognised arising from the deposits with financial institutions because the
probability of default by these financial institutions were negligible.

(e) Information on financial risks of cash and bank balances is disclosed in Note 39 to the financial statements.

17. SHORT TERM FUNDS

Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Fair value through profit or loss

Short term funds 18,301 27,293 3,174 6,328

(a) Short term funds are classified as fair value through profit or loss, and subsequently remeasured to fair value
with changes in fair value being recognised in profit or loss. The fair value is categorised as Level 1 in fair
value hierarchy. The short term funds of the Group and of the Company are denominated in RM.

(b) Information on financial risks of short term funds is disclosed in Note 39 to the financial statements.

18. SHARE CAPITAL

Company
2019 2018
Number Number
of shares Amount of shares Amount
’000 RM’000 ’000 RM’000

Ordinary shares:

Issued and fully paid 806,287 201,572 806,287 201,572

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company and are
entitled to one (1) vote per ordinary share at general meeting of the Company as prescribed in the Constitution of
the Company. All ordinary shares rank pari passu with regard to the residual assets of the Company.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

204
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

19. RESERVES
Group Company
2019 2018 2019 2018
Note RM’000 RM’000 RM’000 RM’000
Non-distributable

Available-for-sale reserve (a) - (93) - -

Exchange translation reserve (b) 15,196 11,759 - -
Revaluation reserve (c) 2,521 184 - -
Treasury shares (d) (4,659) (355) (4,659) (355)

13,058 11,495 (4,659) (355)

Distributable

Retained earnings 161,606 227,870 45,218 85,942

174,664 239,365 40,559 85,587

(a) Available-for-sale reserve

The reserve arose from gains or losses of financial assets classified as available-for-sale. As at 1 July 2018,
other investments were reclassified from available-for-sale to financial assets at FVTPL. Therefore, related
fair value losses of RM93,000 were transferred from the available-for-sale reserve to retained earnings on
1 July 2018.

(b) Exchange translation reserve

The exchange translation reserve is used to record foreign currency exchange differences arising from the
translation of the financial statements of foreign operations whose functional currencies are different from
that of the presentation currency of the Group. It is also used to record the exchange differences arising
from monetary items which form part of the net investment of the Group in foreign operations, where the
monetary item is denominated in either the functional currency of the reporting entity or the foreign
operation.

(c) Revaluation reserve

The revaluation reserve arises from the revaluation surplus of properties of the subsidiaries upon transfer
from property, plant and equipment to investment properties.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

205
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

19. RESERVES (continued)

(d) Treasury shares
During the financial year, the Company repurchased 15,098,400 of its issued ordinary shares from the stock
exchange of BMSB and held the same as treasury shares at an average buy-back price of RM0.285 per
ordinary share as detailed below:
Number of Total Price per share
shares consideration Highest Lowest Average
RM’000 RM RM RM
Balance at 1 July 2018 636,000 355 0.555 0.555 0.555
Share repurchased during
the financial year:
April 2019 6,369,400 1,678 0.270 0.250 0.263
May 2019 5,115,400 1,455 0.300 0.255 0.284
June 2019 3,613,600 1,171 0.330 0.300 0.324
15,098,400 4,304 0.330 0.250 0.285
Balance at 30 June 2019 15,734,400 4,659

The total consideration (including transaction costs) of RM4,304,000 paid for the repurchases was financed
by internally generated funds.

As at 30 June 2019, the Company held 15,734,400 (2018: 636,000) treasury shares out of its total issued
shares of 806,287,400 ordinary shares.

Pursuant to Section 127 of the Companies Act 2016, the Directors of the Company may resolve:

(1) to cancel the shares so purchased;

(2) to retain the shares so purchased as treasury shares for distribution as dividends to the shareholders of
the Company and/or resell the shares so purchased on BMSB in accordance with the relevant rules of
BMSB; or
(3) to retain part of the shares so purchased as treasury shares and cancel the remainder.

While the shares so purchased are held as treasury shares, the rights attached to the treasury shares in
relation to voting, dividends and participation in any other distributions or otherwise are suspended and the
treasury shares shall not be taken into account in calculating the number or percentage of shares or a class
of shares in the Company for any purposes including, without limitation to the generality of the provisions
of any law or requirements of the Constitution of the Company or the listing rules of BMSB on substantial
shareholdings, takeovers, notices, the requisitioning of meetings, the quorum and the result of a vote on a
resolution at a meeting of shareholders.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

206
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

20. BORROWINGS

Group Company
2019 2018 2019 2018
Note RM’000 RM’000 RM’000 RM’000

Current liabilities

Conventional financing
facilities - Secured

Bankers’ acceptances 623 1,583 - -

Hire purchase and lease creditors 21 119 178 - -
Revolving credit - 1,200 - -
Term loans 22 5,350 12,098 - 2,500
6,092 15,059 - 2,500
Islamic financing facilities -
Secured

Term financing-i 22 1,598 6,075 - 4,008

Total secured borrowings 7,690 21,134 - 6,508

Conventional financing
facilities - Unsecured

Bank overdrafts 995 2,242 - -

Bankers’ acceptances 5,096 6,443 - -
Revolving credit 1,000 1,000 - -
Trust receipts 5,418 5,988 - -
12,509 15,673 - -
Islamic financing facilities -
Unsecured
Bank overdrafts 484 897 - -
Bankers’ acceptances 325 439 - -

809 1,336 - -
Total unsecured borrowings 13,318 17,009 - -
Total 21,008 38,143 - 6,508
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

207
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

20. BORROWINGS (continued)

Group Company
2019 2018 2019 2018
Note RM’000 RM’000 RM’000 RM’000
Non-current liabilities
Conventional financing
facilities - Secured
Hire purchase and lease creditors 21 130 243 - -
Term loans 22 14,520 21,710 - 1,979
14,650 21,953 - 1,979
Islamic financing facilities -
Secured
Term financing-i 22 20,374 36,209 - 14,322
Total 35,024 58,162 - 16,301

Total borrowings
Bank overdrafts 16(c) 1,479 3,139 - -
Bankers’ acceptances 6,044 8,465 - -
Hire purchase and lease creditors 21 249 421 - -
Term loans and term financing-i 22 41,842 76,092 - 22,809
Revolving credit 1,000 2,200 - -
Trust receipts 5,418 5,988 - -
56,032 96,305 - 22,809

(a) Certain bank overdrafts and bankers’ acceptances of the Group are secured by the following:

(i) first fixed charges over certain freehold and long term leasehold land and buildings of the Company
and its subsidiaries as disclosed in Note 7 to the financial statements; and

(ii) fixed deposits of its subsidiaries as disclosed in Note 16 to the financial statements.

(b) The currency exposure profile of borrowings are as follows:

Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000

Ringgit Malaysia 50,031 84,055 - 22,809

Singapore Dollar 5,587 8,372 - -
Vietnamese Dong 414 2,284 - -
Indonesian Rupiah - 1,594 - -

56,032 96,305 - 22,809

(c) Information on financial risks of borrowings is disclosed in Note 39 to the financial statements.
20. BORROWINGS (continued)
208
(d) Reconciliation of liabilities from financing activities:

(Cont’d)
Hire
purchase Term loan
ANNUAL REPORT 2019

and lease and term Banker Bank Trust Revolving

creditors financing-i acceptance overdraft receipts credit Total
Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
BONIA CORPORATION BERHAD

Group

At 1 July 2018 421 76,092 8,465 3,139 5,988 2,200 96,305

Cash flows:
- Net of repayments and drawdowns of
borrowings (179) (45,401) (2,421) (1,660) (744) (1,200) (51,605)
Non-cash flows:
- Effect of foreign exchange 7 96 - - 174 - 277
NOTES TO THE FINANCIAL STATEMENTS

- Reclassification from disposal group

held from sale 26 - 11,055 - - - - 11,055

7 11,151 - - 174 - 11,332

At 30 June 2019 249 41,842 6,044 1,479 5,418 1,000 56,032

Term loans
and term
financing-i Total
RM’000 RM’000
Company

At 1 July 2018 22,809 22,809

Cash flows (22,809) (22,809)

At 30 June 2019 - -
20. BORROWINGS (continued)

(d) Reconciliation of liabilities from financing activities: (continued)

Hire
purchase Term loan
and lease and term Banker Bank Trust Revolving
creditors financing-i acceptance overdraft receipts credit Total
Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Group
At 1 July 2017 539 118,656 11,672 3,744 7,215 1,000 142,826

Cash flows:
- Net of repayments and drawdowns of
borrowings (181) (15,174) (2,568) (605) (831) 1,200 (18,159)
Non-cash flows:
- Effect of foreign exchange (15) (470) - - (396) - (881)
- Purchase of property, plant and
equipment 7 78 - - - - - 78
- Reclassified to disposal groups
held for sale/held for distribution 26 - (26,920) (639) - - - (27,559)
63 (27,390) (639) - (396) - (28,362)

At 30 June 2018 421 76,092 8,465 3,139 5,988 2,200 96,305

Term loans
and term
financing-i Total
RM’000 RM’000
Company

At 1 July 2017 27,187 27,187

Cash flows (4,378) (4,378)

At 30 June 2018 22,809 22,809

(Cont’d)
NOTES TO THE FINANCIAL STATEMENTS
209
ANNUAL REPORT 2019
BONIA CORPORATION BERHAD
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

210
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

21. HIRE PURCHASE AND LEASE CREDITORS

Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000

Minimum hire purchase and lease

payments:
- not later than one (1) year 128 196 - -
- later than one (1) year but not
later than five (5) years 135 257 - -

Total minimum hire purchase and

lease payments 263 453 - -

Less: Future interest charges (14) (32) - -

Present value of hire purchase and

lease payments 249 421 - -

Repayable as follows:

Current liabilities

- not later than one (1) year 119 178 - -

Non-current liabilities

- later than one (1) year but not

later than five (5) years 130 243 - -

249 421 - -
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

211
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

22. TERM LOANS AND TERM FINANCING-I (“TF-I”)

Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Conventional financing facilities -
Secured

Term loan I is repayable by 180

equal monthly instalments of
facilities
RM26,378 - Secured
each commencing
October 2009 1,760 1,977 - -

Term loan II is repayable as follows:

- 15 equal monthly instalments of
RM104,167 each commencing
September 2011
- 80 equal monthly instalments of
RM208,334 each commencing
December 2012
- 16 equal monthly instalments of
RM104,167 each commencing
August 2019
- Final instalment of RM104,103
in December 2020 - 4,479 - 4,479

Term loan III is repayable as

follows:
- 24 monthly instalments of
principal of RM80,000 plus
interest each commencing
October 2014
- 24 monthly instalments of
principal of RM107,000 plus
interest each commencing
October 2016
- 11 monthly instalments of
principal of RM134,000 plus
interest each commencing
October 2018
- Final instalment of RM1,918,000
in September 2019 2,194 3,713 - -

Term loan IV is repayable as

follows:
- 240 equal monthly instalments of
RM17,554 each commencing
September 2011 2,120 2,225 - -
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

212
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

22. TERM LOANS AND TERM FINANCING-I (“TF-I”) (continued)

Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Conventional financing
facilities - Secured
(continued)

Term loan V is repayable as follows:

- 240 equal monthly instalments of
RM64,878 each commencing
November 2014 8,779 9,141 - -

Term loan VI is repayable as follows:

- 24 equal monthly instalments of
RM70,000 each commencing
October 2014
- 24 equal monthly instalments of
RM93,000 each commencing
October 2016
- 11 equal monthly instalments of
RM116,000 each commencing
October 2018
- Final instalment of RM1,683,536 in
September 2019 1,922 3,239 - -

Term loan VII is repayable as follows:

- 96 equal monthly instalments of
RM26,000 each commencing
January 2014 - 227 - -

Term loan VIII is repayable as follows:

- 240 equal monthly instalments of
RM9,411 each commencing March
2014 1,243 1,301 - -

Term loan IX is repayable as follows:

- 240 monthly instalments of
RM1,688 each commencing April
2015 226 235 - -

Term loan X is repayable as follows:

- 240 monthly instalments of
RM2,396 each commencing April
2015 321 334 - -
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

213
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

22. TERM LOANS AND TERM FINANCING-I (“TF-I”) (continued)

Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Conventional financing
facilities - Secured
(continued)

Term loan XI is repayable as

follows:
- 240 monthly instalments of
RM2,396 each commencing
April 2015 321 334 - -

Term loan XII is repayable as

follows:
- 300 monthly instalments of
RM4,495 each commencing
September 2015
- Final instalment of RM39,195 in
August 2040 570 575 - -

Term loan XIII is repayable as

follows:
- 36 monthly instalments of
SGD97,222 (RM290,558) each
commencing June 2016 - 3,744 - -

Term loan XIV is repayable as

follows:
- to be repaid within 6 months
commencing April 2018 - 2,284 - -

Term loan XV is repayable as

follows:
- to be repaid within 6 months
commencing March 2019 414 - - -

19,870 33,808 - 4,479

BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

214
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

22. TERM LOANS AND TERM FINANCING-I (“TF-I”) (continued)

Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Islamic financing facilities -
Secured
TF-I I is repayable as follows:
- 24 equal monthly instalments
of RM70,000 each
commencing November 2010
- 36 equal monthly instalments
of RM80,000 each
commencing November 2012
- 36 equal monthly instalments
of RM111,710 each
commencing November 2015 - 555 - -

TF-I II is repayable as follows:

- 77 equal monthly instalments of
RM180,000 each commencing
September 2016
- Final instalment of
RM15,358,000 in February
2023 20,525 21,610 - -

TF-I III is repayable as follows:

- 59 monthly instalments of
RM334,000 each commencing
February 2018
- Final instalment of RM294,000
in January 2023 - 18,330 - 18,330

TF-I IV is repayable as follows:

- 59 monthly instalments of
RM36,600 each commencing
March 2018
- Final instalment of RM36,210
in February 2023 1,447 1,789 - -

21,972 42,284 - 18,330

41,842 76,092 - 22,809

 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

215
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

22. TERM LOANS AND TERM FINANCING-I (“TF-I”) (continued)

Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Secured

Repayable as follows:

Current liabilities

- not later than one (1) year 6,948 18,173 - 6,508

Non-current liabilities

- later than one (1) year but not later

than five (5) years 24,092 46,119 - 16,301
- later than five (5) years 10,802 11,800 - -

34,894 57,919 - 16,301

41,842 76,092 - 22,809

(a) Secured term loans are secured by means of legal charges over freehold land and buildings, leasehold land
and buildings of the Company and its subsidiaries (Notes 7 and 8) and are guaranteed by the Company
except for term loan I, III, V, VI, which are secured by a specific debenture over the assets of a subsidiary
(Note 7) and are guaranteed by the Company. The borrowings are also secured by assignment of rental
proceeds.

(b) The term financing-i are Islamic financing facilities that are secured by means of legal charges over freehold
land and buildings, leasehold land and buildings of the Company and its subsidiaries (Notes 7 and 8) and
are guaranteed by the Company except for TF-I II which is secured by a specific debenture over the
furniture, fixtures and fittings and other assets of a subsidiary (Note 7) and is secured by assignment of
rental proceeds.

23. PROVISION FOR RESTORATION COSTS

Group
2019 2018
RM’000 RM’000
Non-current
Provision for restoration costs 1,316 1,700

Current
Provision for restoration costs 1,341 897

2,657 2,597

(a) Provision for restoration costs comprises estimates of reinstatement costs for stores upon termination of
tenancy.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

216
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

23. PROVISION FOR RESTORATION COSTS (continued)

(b) A reconciliation of the provision for restoration costs is as follows:

Group
2019 2018
RM’000 RM’000
Balance as at 1 July 2018/2017 2,597 3,553
Reclassified to disposal group held for
distribution (Note 26) - (650)
Recognised in property, plant and equipment (Note 7(a)) (135) (299)
Recognised in profit or loss
- continuing operations (Note 31)
- unwinding of discount on provision for restoration costs 189 8
- over-provision of restoration costs (23) -
- discontinued operations (Note 26) - 25
Translation adjustments 29 (40)

Balance as at 30 June 2019/2018 2,657 2,597

24. TRADE AND OTHER PAYABLES

Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000

Non-current liabilities

Other payable

Other payable 5,067 4,820 - -

Current liabilities

Trade payables

Third parties 7,707 8,384 - -

Other payables, deposits and

accruals

Amounts owing to subsidiaries - - 79 3,250

Amounts owing to associates 220 480 210 480
Other payables 14,696 6,396 1 159
Deposits 885 1,116 249 249
Deferred revenue - 24,406 - -
Accruals 14,794 21,328 790 2,531
30,595 53,726 1,329 6,669

Total trade and other payables

(current) 38,302 62,110 1,329 6,669
Total trade and other payables
(current and non-current) 43,369 66,930 1,329 6,669
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

217
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

24. TRADE AND OTHER PAYABLES (continued)

(a) Non-current other payable represents loans from a shareholder of a subsidiary for the acquisition of
intellectual property rights, which are unsecured, bear interest at 2% (2018: 2%) per annum and are
repayable on or before 30 August 2025.

(b) Trade payables are non-interest bearing and the normal trade credit terms granted to the Group range
from 30 to 90 days (2018: 30 to 90 days).

(c) Amounts owing to associates represent advances and payments made on behalf, which are unsecured,
interest-free and repayable upon demand.

(d) Amounts owing to subsidiaries represent advances and payments made on behalf, which are unsecured,
interest-free and repayable upon demand.

(e) Information on financial risks of trade and other payables is disclosed in Note 39 to the financial
statements.

(f) The currency exposure profile of payables are as follows:

Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Ringgit Malaysia 17,978 21,392 1,329 6,669
Chinese Renminbi 333 361 - -
Indonesian Rupiah 2,563 624 - -
Hong Kong Dollar 1,065 1,344 - -
Singapore Dollar 20,086 41,876 - -
United States Dollar 1,322 1,286 - -
Vietnamese Dong - 8 - -
Others 22 39 - -
43,369 66,930 1,329 6,669

25. CONTRACT LIABILITIES

Group
2019 2018
RM’000 RM’000
Deferred revenue 23,551 -

(a) Deferred revenue mainly represents advance consideration received from the customers in respect of
royalty arrangement. Deferred revenue will be recognised as revenue when performance obligations are
fulfilled.

(b) Revenue expected to be recognised in future relating to performance obligations that are unsatisfied (or
partially satisfied) at the end of the reporting period, are as follows:
Group
2019 2018
RM’000 RM’000
Within one (1) year 4,802 -
Between one (1) year and five (5) years 2,143 -
More than five (5) years 16,606 -
23,551 -
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

218
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

26. DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE OR HELD FOR DISTRIBUTION

(a) As disclosed in Note 40(b) to the financial statements, on 13 November 2018, the Company completed
the distribution via a dividend-in-specie of its then entire shareholding in CRG and its rights to CRG’s
805,651,400 ordinary shares (equivalent to CRG’s issued share capital of RM68,000,000) to the entitled
shareholders of the Company on the basis of one (1) CRG share for every one (1) share of the Company
held on 1 November 2018 (“Entitlement date”) from its retained earnings as detailed in the Company’s
Circular to Shareholders in relation to the “Proposed Listing of CRG Incorporated Sdn. Bhd. and its
subsidiaries on the LEAP Market of Bursa Malaysia Securities Berhad” dated 8 May 2018. Following the
distribution, CRG Group ceased to be direct/indirect subsidiaries of the Company. The details of the
demerger of CRG Group are disclosed in Note 10 to the financial statements.

(b) On 8 May 2018, the Company entered into a conditional share sale agreement with a Director, Chiang
Sang Sem for the disposal of its 500,000 ordinary shares representing 100% equity interest held in MAC
to the latter for a purchase price of RM2,490,990. Details of the proposed disposal are described in Note
40 to the financial statements.

Accordingly, the assets and liabilities of MAC were classified as disposal group held for sale and the
financial results of MAC were classified as discontinuing operations in the Group’s financial statements
for the financial year ended 30 June 2018.

Management represented that the proposed sale transaction is unlikely to proceed due to the non-fulfilment
of certain conditions precedent of the conditional share sale agreement as at 30 June 2019.

Based on this circumstances, management had since performed a reclassification and MAC ceased to be
classified as disposal group held for sale in the Group’s financial statements for the financial year ended
30 June 2019.

(c) The assets and the associated liabilities held for sale or held for distribution as at 30 June 2018 were as
follows:

CRG
Group MAC Total
Note RM’000 RM’000 RM’000
Assets held for sale/held for distribution
Property, plant and equipment 7 32,495 - 32,495
Investment property 8 - 24,000 24,000
Deferred tax assets 13 566 - 566
Inventories 19,242 - 19,242
Receivables 27,754 6 27,760
Current tax assets 1,318 - 1,318
Cash and bank balances 16 (c) 15,429 210 15,639
96,804 24,216 121,020
Liabilities associated with assets held for
sale/held for distribution
Borrowings 20 16,504 11,055 27,559
Deferred tax liabilities 13 - 160 160
Provision for restoration cost 23 650 - 650
Payables 7,788 110 7,898
Current tax liabilities 351 - 351
25,293 11,325 36,618
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

219
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

26. DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE OR HELD FOR DISTRIBUTION
(continued)

(c) The assets and the associated liabilities held for sale or held for distribution as at 30 June 2018 are as
follows: (continued)

In the previous financial year, included in the above assets were property, plant and equipment and an
investment property with carrying amounts of RM24,252,000 and RM24,000,000 respectively pledged
as security for the borrowings classified under liabilities associated with assets held for sale or held for
distribution.

(d) Analysis of the results of the discontinued operations is as follows:

CRG Group
2019 2018
RM’000 RM’000

Statements of Profit or Loss and Other Comprehensive

Income

Revenue 34,187 114,870

Cost of sales (16,989) (56,001)

Gross profit 17,198 58,869

Other operating income 208 745
Selling and distribution expenses (9,577) (31,378)
General and administrative expenses (7,044) (20,987)
Finance cost (284) (790)

Profit before tax 501 6,459

Tax expense (648) (2,687)

(Loss)/Profit for the financial year (147) 3,772

Other comprehensive income, net of tax

Foreign currency translation differences 304 (364)
Reclassification of exchange translation reserves to profit or
loss upon demerger/deregistration of a foreign subsidiary (50) (183)

Total other comprehensive loss, net of tax 254 (547)

Total comprehensive income 107 3,225

BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

220
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

26. DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE OR HELD FOR DISTRIBUTION
(continued)

(d) Analysis of the results of the discontinued operations is as follows: (continued)

Group
2019 2018
Note RM’000 RM’000

Profit before tax is arrived after charging:

Auditors’ remuneration:
- Statutory
- Auditors of the Company:
- current year 24 60
- Other auditors:
- current year 8 20
- under-provision in prior year 6 -
- Non-statutory
- current year - 61

Depreciation of property, plant and equipment 1,108 2,788

Impairment losses on trade and other receivables 1,049 1,342
Interest expense and profit payment on borrowings:
- bank guarantees 5 6
- bankers’ acceptances 6 104
- term loans and term financing-i 273 655
- unwinding of discount on provision for restoration costs 23 - 25
284 790

Property, plant and equipment written off 254 15

Realised loss on foreign exchange 49 309
Rental commission 202 1,507
Rental of premises 3,629 9,790
Unrealised loss on foreign exchange - 454

And crediting:
Gain on disposal of property, plant and equipment 1 2
Interest income from:
- deposits with licensed banks 93 97
- bank balances 5 4
- others - 12
Realised gain on foreign exchange 2 73
Gain on deregistration of a foreign subsidiary - 183
Unrealised gain on foreign exchange 62 -
Waiver of debts by a third party - 80
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

221
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

26. DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE OR HELD FOR DISTRIBUTION
(continued)

(e) Analysis of the cash flows of the discontinued operations is as follows:

2019 2018
CRG CRG
Group Group MAC Total
RM’000 RM’000 RM’000 RM’000

Statements of Cash Flows

Net cash from/(used in) operating activities 2,449 1,832 (20) 1,812
Net cash used in investing activities (1,428) (1,326) - (1,326)
Net cash used in financing activities (1,178) (860) (2,692) (3,552)
(Repayments to)/Advances from continuing
operations (5) (519) 2,300 1,781

Net decrease in cash and cash equivalents (162) (873) (412) (1,285)
Effect of exchange rate difference on cash
and cash equivalents 47 (262) - (262)
Reclassification from disposal group held
for sale (210) - - -
Cash and cash equivalents at beginning of
the financial year 15,639 16,564 622 17,186

Cash and cash equivalents at the date of

demerger/end of the financial year 15,314 15,429 210 15,639

27. COMMITMENTS

(a) Operating lease commitments

(i) The Group as a lessee

The Group had entered into non-cancellable lease arrangements for boutiques, offices and staff
housing, resulting in future rental commitments. The Group has aggregate future minimum lease
commitments as at the end of each reporting period as follows:

Continuing
operations Total
Group RM’000 RM’000

2019

Not later than one (1) year 29,146 29,146

Later than one (1) year but not later than five (5) years 20,963 20,963

50,109 50,109
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

222
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

27. COMMITMENTS (continued)

(a) Operating lease commitments (continued)

(i) The Group as a lessee (continued)

The Group had entered into non-cancellable lease arrangements for boutiques, offices and staff
housing, resulting in future rental commitments. The Group has aggregate future minimum lease
commitments as at the end of each reporting period as follows: (continued)

Continuing Discontinued
operations operations Total
Group RM’000 RM’000 RM’000

2018

Not later than one (1) year 31,379 7,762 39,141

Later than one (1) year but not later than
five (5) years 37,786 5,788 43,574

69,165 13,550 82,715

Certain lease rentals are subject to contingent rental, which are determined based on a percentage of
sales generated from boutiques.

(ii) The Group as a lessor

The Group had entered into non-cancellable lease arrangements for offices resulting in future rental
receivables. The Group has aggregate future minimum lease receivables as at the end of each
reporting period as follows:

Group Continuing
operations
2019 RM’000

Not later than one (1) year 616

Later than one (1) year but not later than five (5) years 21

637
2018

Not later than one (1) year 414

Later than one (1) year but not later than five (5) years 223

637
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

223
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

27. COMMITMENTS (continued)

(b) Capital commitments

Group
Continuing Discontinued
operations operations Total
2019 RM’000 RM’000 RM’000

Property, plant and equipment:

renovation for offices and warehouses
- Approved and contracted for 68 - 68

2018

Property, plant and equipment:

renovation for offices and warehouses
- Approved and contracted for 1,339 172 1,511

28. CONTINGENT LIABILITIES

Company
2019 2018
RM’000 RM’000
Unsecured corporate guarantees given to financial institutions and third
parties for facilities granted to certain subsidiaries:

- Limit of guarantee 227,700 249,719

- Amounts utilised:
In favour of licensed banks for banking facilities granted to subsidiaries 55,783 73,075
In favour of third parties for tenancy agreements entered into by
subsidiaries 5,701 8,617

61,484 81,692

The Directors are of the view that the probability of the subsidiaries defaulting on the banking facilities and
tenancy agreements and the chances of the financial institutions to call upon the corporate guarantees are remote.
Accordingly, the fair values of the above corporate guarantees given to the subsidiaries for banking facilities are
negligible.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

224
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

29. REVENUE
Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Revenue from contracts with customers
Sale of goods 453,041 430,861 - -
Management fee income - 36 - -
Royalty income 8,193 8,670 - -
461,234 439,567 - -
Others
Rental income 1,025 926 611 1,676
Dividend income from unquoted investments
in subsidiaries and an associate - - 21,619 95,875
462,259 440,493 22,230 97,551

Timing of revenue recognition

Transferred at a point in time 453,041 430,897 - -
Transferred over time 8,193 8,670 - -
Others 1,025 926 22,230 97,551
462,259 440,493 22,230 97,551

Disaggregation of revenue from contracts with customers

Revenue from contracts with customers is disaggregated in the table below by primary geographical markets,
major products and service lines and timing of revenue recognition. The table also includes a reconciliation of the
disaggregated revenue with the reportable segments of the Group.
Investment
Manufactu- and property
Retailing ring development Total
30 June 2019 RM’000 RM’000 RM’000 RM’000
Major goods and services
Sales of goods 452,547 494 - 453,041
Royalty income 8,193 - - 8,193
Total revenue from contracts with customers 460,740 494 - 461,234

Geographical markets
Malaysia 278,351 494 - 278,845
Singapore 148,283 - - 148,283
Indonesia 24,503 - - 24,503
Vietnam 2,994 - - 2,994
Others 6,609 - - 6,609
Total revenue from contracts with customers 460,740 494 - 461,234

Timing of revenue recognition

Transferred at a point in time 452,547 494 - 453,041
Transferred over time 8,193 - - 8,193
Total revenue from contracts with customers 460,740 494 - 461,234
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

225
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

29. REVENUE (continued)

Disaggregation of revenue from contracts with customers (continued)

Revenue from contracts with customers is disaggregated in the table below by primary geographical markets,
major products and service lines and timing of revenue recognition. The table also includes a reconciliation of
the disaggregated revenue with the reportable segments of the Group. (continued)

Investment
Manufactur and property
Retailing -ing development Total
30 June 2018 RM’000 RM’000 RM’000 RM’000

Major goods and services

Sales of goods 430,343 518 - 430,861
Royalty income 8,670 - - 8,670
Management service - - 36 36

Total revenue from contracts with customers 439,013 518 36 439,567

Geographical markets
Malaysia 267,326 518 36 267,880
Singapore 125,562 - - 125,562
Indonesia 29,345 - - 29,345
Vietnam 4,031 - - 4,031
Others 12,749 - - 12,749

Total revenue from contracts with customers 439,013 518 36 439,567

Timing of revenue recognition

Transferred at a point in time 430,343 518 36 430,897
Transferred over time 8,670 - - 8,670

Total revenue from contracts with customers 439,013 518 36 439,567

(a) There is no significant financing component in the revenue arising from sales of products and services
rendered as the products and services are made on the normal credit terms not exceeding twelve (12)
months.

(b) Revenue from contracts with customers recognised for the Group during the financial year included
RM7,852,000 (2018: RM Nil) that were included in the contract liabilities at the beginning of the financial
year.

30. COST OF SALES

Group
2019 2018
RM’000 RM’000

Inventories sold 212,081 172,690

BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

226
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

31. PROFIT BEFORE TAX

Other than those disclosed elsewhere in the financial statements, profit before tax is arrived at:

Group Company
2019 2018 2019 2018
Note RM’000 RM’000 RM’000 RM’000

After charging:

Auditors’ remuneration:
- Statutory
- Auditors of the Company:
- current year 362 350 74 60
- over-provision in prior year (3) - - -
- Other auditors:
- current year 506 454 - -
- under-provision in prior year 3 10 - -
- Non-statutory
- current year 36 83 16 60
- under/(over)-provision in prior year 8 (2) 6 -
Bad debts written off
- trade and other receivables 17 42 - -
- amounts owing by subsidiaries - - 65 29
Fair value loss on long term -
investments 28 - -
Impairment losses on:
- amounts owing by subsidiaries 15 - - 23 9,721
- costs of investments in subsidiaries 10 - - 8,060 5,820
- goodwill on consolidation 9 2,671 2,014 - -
- trade and other receivables 15 542 978 - -
- property, plant and equipment 7 872 1,313 - -
Interest expense and profit payment on
borrowings:
- accretion of non-current other payable - 33 - -
- fair value adjustment on non-current
amount owing by a subsidiary - - 3,146 -
- bank guarantees 56 9 2 2
- bank overdrafts 202 284 - -
- bankers’ acceptances 516 981 - -
- hire purchase and lease creditors 18 27 - -
- term loans and term financing-i 3,396 4,840 629 1,411
- trust receipts 212 54 - -
- revolving credits 87 96 - -
- unwinding of discount on provision
for restoration costs 23 189 8 - -
- others 97 2 - 4
4,773 6,334 3,777 1,417
Loss on disposal of other investment 2 2 - -
Loss on dissolution of a subsidiary - - 4 -
Loss on deregistration of a foreign
subsidiary 92 - - -
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

227
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

31. PROFIT BEFORE TAX (continued)

Other than those disclosed elsewhere in the financial statements, profit before tax is arrived at: (continued)

Group Company
2019 2018 2019 2018
Note RM’000 RM’000 RM’000 RM’000

After charging: (continued)

Potential loss on proposed demerger of

CRG Group - 4,345 - -
Property, plant and equipment written off 7 1,525 810 - -
Realised loss on foreign exchange 814 1,203 - -
Rental commission 1,396 1,729 - -
Rental of office equipment 63 17 - -
Rental of premises 45,512 45,979 - -
Unrealised loss on foreign exchange 24 2,336 - -

And crediting:

Fair value gain on short term funds 342 297 226 128
Gain on disposal of property,
plant and equipment 187 272 2,155 2
Gain on disposal of investment in an
associate - 1 - 1
Interest income from:
- short term funds 316 354 120 58
- deposits with licensed banks 506 429 - -
- bank balances 303 459 111 421
- others 702 844
Gain on deregistration of foreign
subsidiaries - 147 - -
Over-provision of restoration cost 23 23 - - -
Realised gain on foreign exchange 112 303 - 168
Rental income 243 202 - -
Reversal of impairment losses on:
- trade and other receivables 15 4,542 568 - -
- amounts owing by subsidiaries 15 - - 14,325 4,843
Reversal of provision for loss on
demerger of CRG Group 10 2,868 - - -
Unrealised gain on foreign exchange 799 57 - 5
Waiver of debts by subsidiaries - - 3,050 -
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

228
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

32. TAX EXPENSE

Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000

Current tax expense based on profit for

the financial year:
Malaysian income tax 5,913 6,521 77 296
Foreign income tax 6,333 4,717 - -

12,246 11,238 77 296

(Over)/Under-provision in prior years:

Malaysian income tax (94) (612) 27 194
Foreign income tax 2,849 794 - -

2,755 182 27 194

15,001 11,420 104 490

Deferred tax (Note 13)
Relating to origination and reversal of
temporary differences (147) (260) 1 (2)
Under/(Over)-provision in prior years 550 (158) - 3

403 (418) 1 1

15,404 11,002 105 491

The Malaysian income tax is calculated at the statutory tax rate of 24% (2018: 24%) of the estimated taxable
profits for the fiscal year.

Tax expense for other taxation authorities are calculated at the rates prevailing in those respective jurisdictions.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

229
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

32. TAX EXPENSE (continued)

The numerical reconciliation between the tax expense and the product of accounting profit multiplied by the
applicable tax rates of the Group and of the Company are as follows:

Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Profit before tax 38,812 32,130 27,555 82,063

Tax at Malaysian statutory tax rate of 24%

(2018: 24%) 9,315 7,711 6,613 19,695
Tax effects in respect of:
Non-allowable expenses 4,320 5,469 3,422 3,654
Non-taxable income (1,300) (1,402) (9,957) (23,055)
Lower tax rates in foreign jurisdiction (770) (1,218) - -
Effect of rising of tax rate on real
properties 160 - - -
Deferred tax assets not recognised 1,766 1,116 - -
Tax incentive and allowances (386) (282) - -
Utilisation of previously unrecognised
deferred tax assets (1,006) (416) - -
12,099 10,978 78 294
Under-provision of income tax in prior
years 2,755 182 27 194
Under/(Over)-provision of deferred tax
in prior years 550 (158) - 3
15,404 11,002 105 491
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

230
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

32. TAX EXPENSE (continued)

Tax on each component of other comprehensive income is as follows:

Group
Before tax Tax effect After tax
RM’000 RM’000 RM’000

Items that may be reclassified subsequently to profit or

loss

2019

Reclassification of exchange translation reserve to profit

or loss upon deregistration of foreign subsidiaries (142) - (142)
Gain on revaluation of properties upon transfer from
property, plant and equipment to investment properties 2,597 (260) 2,337
Foreign currency translations 3,882 - 3,882

6,337 (260) 6,077

2018

Fair value loss on available-for-sale

financial assets (28) - (28)
Reclassification of exchange translation reserve to profit
or loss upon deregistration of foreign subsidiaries (360) - (360)
Gain on revaluation of a property upon transfer from
property, plant and equipment to investment property 194 (10) 184
Foreign currency translations (2,167) - (2,167)
(2,361) (10) (2,371)

33. EARNINGS PER SHARE

(a) Basic

Basic earnings per ordinary share for the financial year is calculated by dividing the profit for the financial
year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares
outstanding during the financial year, after taking into consideration of treasury shares held by the Company.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

231
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

33. EARNINGS PER SHARE (continued)

(a) Basic (continued)

Group
2019 2018
Profit attributable to equity holders of the parent (RM’000)
- Continuing operations 18,175 16,013
- Discontinued operations (147) 3,772

18,028 19,785

Weighted average number of ordinary shares applicable to basic earnings

per ordinary share (’000) 803,644 805,651

Basic earnings per ordinary share for profit for the financial year (sen)
- Continuing operations 2.26 1.99
- Discontinued operations (0.02) 0.46

2.24 2.45

(b) Diluted

Diluted earnings per ordinary share equals basic earnings per ordinary share as there is no dilutive potential
ordinary shares outstanding during the financial year.

34. DIVIDENDS

Company
2019 2018
Dividend Amount of Dividend Amount of
per share dividend per share dividend
Sen RM’000 Sen RM’000
Dividends paid:

Single tier final dividend in respect of the

financial year ended 30 June 2017, paid
on 22 December 2017 - - 1.25 10,071

On 13 November 2018, the Company completed the distribution via a dividend-in-specie of its then entire
shareholding in CRG and its rights to CRG’s 805,651,400 ordinary shares (equivalent to CRG’s issued share capital
of RM68,000,000) to the entitled shareholders of the Company on the basis of one (1) CRG share for every one
(1) share of the Company held on 1 November 2018 (“Entitlement date”) from its retained earnings as detailed in
the Company’s Circular to Shareholders in relation to the “Proposed Listing of CRG Incorporated Sdn. Bhd. and
its subsidiaries on the LEAP Market of Bursa Malaysia Securities Berhad” dated 8 May 2018.

On 29 August 2019, the Board of Directors declared a single tier interim dividend of 0.5 sen per ordinary share of
approximately RM3,947,000 in respect of the financial year ended 30 June 2019, to be paid on 10 October 2019 to
the shareholders of the Company whose names appear in the Record of Depositors on 18 September 2019. The
dividend will be accounted for in the equity as an appropriation of retained earnings in the financial year ending
30 June 2020.

The Directors do not recommend any final dividend in respect of the financial year ended 30 June 2019.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

232
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

35. EMPLOYEE BENEFITS

Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Wages, salaries and bonuses 75,476 75,810 939 1,714
Contributions to defined contribution plan 8,572 10,105 47 181
Social security contributions 688 883 1 1
Other benefits 12,578 22,172 - -
97,314 108,970 987 1,896

Included in the employee benefits of the Group and of the Company are Executive Directors’ remuneration of the
Group and of the Company amounting to RM10,811,000 (2018: RM14,461,000) and RM311,000 (2018:
RM1,716,000) respectively.

36. RELATED PARTIES DISCLOSURES

(a) Identities of related parties

Parties are considered to be related to the Company if the Company has the ability, directly or indirectly, to
control the party or exercise significant influence over the party in making financial and operating decisions,
or vice versa, or where the Company and the party are subject to common control or common significant
influence. Related parties may be individuals or other entities.

Related parties of the Company include:

(i) Its subsidiaries, fellow subsidiaries, and associates;

(ii) Any entities with joint control of, or significant influence over the Company; and

(iii) Key management personnel of the Company.

Related parties other than those disclosed elsewhere in the financial statements and their relationship with
the Group are as follows:

Related parties Relationship

Cassardi International A company in which a substantial shareholder of a subsidiary of the
Co. Ltd. Company, has substantial financial interests.
Long Bow A company in which a Director, who is also a substantial shareholder of the
Manufacturing (S) Company, and a director of certain subsidiaries of the Company, has
Pte. Ltd. substantial financial interests.
Bonia International A company in which a Director, who is also a substantial shareholder of the
Holdings Pte. Ltd. Company, has substantial financial interests.
Speciale Eyewear Sdn. A company in which a Director, who is also a director of certain subsidiaries
Bhd. of the Company, has substantial financial interests.
CRG Incorporated Former subsidiaries of the Group
Berhad and its A group of companies in which a substantial shareholder, who is also a
subsidiaries Director cum substantial shareholder of the Company, has substantial
financial interests.
Future Diversity Sdn. A company in which certain Directors of several subsidiaries of the
Bhd. Company, have substantial financial interests.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

233
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

36. RELATED PARTIES DISCLOSURES (continued)

(b) In addition to the transactions and balances detailed elsewhere in the financial statements, the Group and
the Company had the following transactions with related parties during the financial year:

Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000

Received/receivable from
subsidiaries
Rental income - - 611 1,676
Dividends - - 21,199 95,515
Administrative fee - - - 78

Received from an associate

Dividend 420 360 420 360

Received/receivable from other

related party

Sale of goods
- Speciale Eyewear Sdn. Bhd. 41 5 - -

Disposal of properties
- Future Diversity Sdn. Bhd. 3,600 - - -

Paid/payable to other related

parties

Purchases
- Speciale Eyewear Sdn. Bhd. 201 152 - -

Royalties
- Cassardi International Co. Ltd. - 66 - -

- Bonia International Holdings

Pte. Ltd. 1,163 2,435 - -

Rental expense
- Long Bow Manufacturing (S)
Pte. Ltd. 1,010 1,335 - -

Security fee
- CRG Incorporated Berhad 55 - - -

Save for the dividends received from subsidiaries, the related parties transactions described above were
carried out in the normal course of business and have been established under negotiated and mutually agreed
terms.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

234
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

36. RELATED PARTIES DISCLOSURES (continued)

(c) Compensation of key management personnel

Key management personnel are those persons responsible for planning, directing and controlling the
activities of the entity, directly and indirectly, including any director (whether executive or otherwise) of
the Group and of the Company.

The remuneration of Directors and other key management personnel during the financial year was as
follows:
Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Continuing operations
Directors of the Company:
Non-executive Directors
Director fees 356 180 333 180
Estimated money value of benefits-in-kind 668 72 343 72
1,024 252 676 252
Executive Directors
Director fees 1,251 1,742 250 420
Short term employee benefits 3,421 5,996 28 1,115
Contributions to defined contribution plan 364 649 33 181
5,036 8,387 311 1,716
Directors of the subsidiaries:
Executive Directors
Director fees 652 844 - -
Short term employee benefits 4,629 4,666 - -
Contributions to defined contribution plan 494 564 - -
5,775 6,074 - -
11,835 14,713 987 1,968
Discontinued operations
Directors of the Company:

Non-executive Directors
Director fees 22 - - -
Short term employee benefits 331 - - -
Contributions to defined contribution plan 40 - - -
393 - - -
Executive Directors
Director fees 1 24 - -
Short term employee benefits - 940 - -
Contributions to defined contribution plan - 117 - -
1 1,081 - -
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

235
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

36. RELATED PARTIES DISCLOSURES (continued)

(c) Compensation of key management personnel (continued)

The remuneration of Directors and other key management personnel during the financial year was as
follows: (continued)

Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000
Discontinued operations
Directors of the subsidiaries:
Executive Directors
Director fees 4 6 - -
Short term employee benefits 213 625 - -
Contributions to defined
contribution plan 26 78 - -
contricontribution plan 243 709 -- --

637 1,790 - -
12,472 16,503 987 1,968

37. OPERATING SEGMENTS

Bonia Corporation Berhad and its subsidiaries are principally engaged in designing, manufacturing, marketing,
retailing, wholesaling and franchising of fashionable leather goods, accessories and apparel for the local and
overseas markets, property development and investment holding.

The Group has arrived at three (3) reportable operating segments that are organised and managed separately
according to the nature of products and services and specific expertise, which requires different business and
marketing strategies. The reportable segments are summarised as follows:

Retailing Designing, promoting and marketing of fashionable apparels, footwear,

accessories and leather goods.

Manufacturing Manufacturing and marketing of fashionable leather goods.

Investment and property Investment holding and rental and development of commercial properties.
development

The accounting policies of operating segments are the same as those described in the summary of significant
accounting policies.

The Group evaluates performance on the basis of profit or loss from operations before tax.

Inter-segment revenue is priced along the similar lines as sales to external customers and is eliminated in the
consolidated financial statements. These policies have been applied consistently throughout the current and
previous financial years.

Segment assets exclude tax assets.

Segment liabilities exclude tax liabilities. Even though loans and borrowings arise from financing activities rather
than operating activities, they are allocated to the segments based on relevant factors (e.g. funding requirement).

Details are provided in the reconciliations from segment assets and liabilities to the position of the Group.
37. OPERATING SEGMENTS (continued)
236
Investment Continuing Discontinued

(Cont’d)
and property operations operations
2019 Retailing Manufacturing development Total Total Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
ANNUAL REPORT 2019

Revenue
Total revenue 460,740 18,085 54,379 533,204 37,617 570,821
Inter-segment revenue - (17,591) (53,354) (70,945) (3,430) (74,375)
BONIA CORPORATION BERHAD

Revenue from external customers 460,740 494 1,025 462,259 34,187 496,446

Interest income 1,474 14 339 1,827 98 1,925

Interest expense and profit payment on Islamic financing (1,277) (67) (3,429) (4,773) (284) (5,057)

Net interest expense and profit payment on Islamic financing 197 (53) (3,090) (2,946) (186) (3,132)

Segment profit/(loss) before tax 43,077 175 (4,440) 38,812 501 39,313
NOTES TO THE FINANCIAL STATEMENTS

Share of profit of an associate - - 202 202 - 202

Tax expense (14,256) (123) (1,025) (15,404) (648) (16,052)

Material items:
- realised loss on foreign exchange, net (582) (118) (2) (702) (47) (749)
- rental commission (1,396) - - (1,396) (202) (1,598)
- rental of premises (44,711) - (801) (45,512) (3,629) (49,141)

Other material non-cash items:

- amortisation of trademarks (1,387) - - (1,387) - (1,387)
- amortisation of other intangible assets (1,079) - - (1,079) - (1,079)
- depreciation of property, plant and equipment (8,741) (656) (3,871) (13,268) (1,108) (14,376)
- fair value adjustments on investment properties - - (1,558) (1,558) - (1,558)
37. OPERATING SEGMENTS (continued)

2019 Investment Continuing Discontinued

and property operations operations
Retailing Manufacturing development Total Total Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Other material non-cash items: (continued)

- impairment losses on goodwill on consolidation - - (2,671) (2,671) - (2,671)
- impairment losses on property, plant and equipment (872) - - (872) - (872)
- impairment losses on trade and other receivables (531) - (11) (542) (1,049) (1,591)
- property, plant and equipment written off (1,196) (100) (229) (1,525) (254) (1,779)
- reversal of impairment losses on trade and other receivables 4,541 1 - 4,542 - 4,542
- unrealised gain/(loss) on foreign exchange, net 800 6 (31) 775 62 837
- reversal of provision for loss on demerger of CRG Group - - 2,868 2,868 - 2,868
Interests in associates - - 531 531 - 531
Additions to non-current assets other
than financial instruments and deferred tax assets 7,800 139 914 8,853 1,531 10,384

Segment assets 296,250 23,255 208,325 527,830 - 527,830

Segment liabilities 79,316 1,345 44,948 125,609 - 125,609
(Cont’d)
NOTES TO THE FINANCIAL STATEMENTS
237
ANNUAL REPORT 2019
BONIA CORPORATION BERHAD
37. OPERATING SEGMENTS (continued)
238
Investment Continuing Discontinued

(Cont’d)
and property operations operations
2018 Retailing Manufacturing development Total Total Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
ANNUAL REPORT 2019

Revenue
Total revenue 439,013 26,800 121,492 587,305 153,814 741,119
Inter-segment revenue - (26,282) (120,530) (146,812) (38,944) (185,756)
BONIA CORPORATION BERHAD

Revenue from external customers 439,013 518 962 440,493 114,870 555,363

Interest income 1,483 - 603 2,086 113 2,199

Interest expense and profit payment on Islamic financing (1,732) (253) (4,349) (6,334) (790) (7,124)

Net interest expense and profit payment on Islamic financing (249) (253) (3,746) (4,248) (677) (4,925)

Segment profit/(loss) before tax 39,591 (364) (7,097) 32,130 6,459 38,589
NOTES TO THE FINANCIAL STATEMENTS

Share of profit of an associate - - 430 430 - 430

Tax expense (10,179) 184 (1,007) (11,002) (2,687) (13,689)

Material items:
- realised (loss)/gain on foreign exchange, net (1,028) (31) 159 (900) (236) (1,136)
- rental commission (1,729) - - (1,729) (1,507) (3,236)
- rental of premises (45,183) - (796) (45,979) (9,790) (55,769)

Other material non-cash items:

- amortisation of trademarks (1,389) - - (1,389) - (1,389)
- amortisation of other intangible assets (2,496) - - (2,496) - (2,496)
- bad debt written off (42) - - (42) - (42)
- depreciation of property, plant and equipment (8,867) (661) (3,896) (13,424) (2,788) (16,212)
- fair value adjustments on investment properties - - 4,306 4,306 - 4,306
37. OPERATING SEGMENTS (continued)

2018 Investment Continuing Discontinued

and property operations operations
Retailing Manufacturing development Total Total Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Other material non-cash items: (continued)

- impairment losses on goodwill on consolidation - - (2,014) (2,014) - (2,014)
- impairment losses on property, plant and equipment (1,313) - - (1,313) - (1,313)
- impairment losses on trade and other receivables (925) - (53) (978) (1,342) (2,320)
- potential loss on proposed demerger of CRG Group - - (4,345) (4,345) - (4,345)
- property, plant and equipment written off (810) - - (810) (15) (825)
- reversal of impairment losses on trade and other receivables 568 - - 568 - 568
- unrealised (loss)/gain on foreign exchange, net (2,323) 34 10 (2,279) (454) (2,733)
Interests in associates - - 749 749 - 749
Additions to non-current assets other
than financial instruments and deferred tax assets 8,674 192 722 9,588 2,089 11,677
Segment assets 326,397 25,059 201,372 552,828 119,136 671,964
Segment liabilities 81,431 5,730 78,671 165,832 36,107 201,939
(Cont’d)
NOTES TO THE FINANCIAL STATEMENTS
239
ANNUAL REPORT 2019
BONIA CORPORATION BERHAD
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

240
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

37. OPERATING SEGMENTS (continued)

Reconciliations of reportable segment revenue, profit or loss, assets and liabilities to the corresponding amounts
of the Group are as follows:

2019 2018
RM’000 RM’000
Revenue

Total revenue for reportable segments 570,821 741,119

Elimination of inter-segment revenues (74,375) (185,756)

496,446 555,363
Less: revenue from discontinued operations (34,187) (114,870)
Revenue of the Group per consolidated statements of
profit or loss and other comprehensive income 462,259 440,493

Profit for the financial year

Profit before tax 39,313 38,589

Tax expense (16,052) (13,689)

Profit for the financial year of the Group per consolidated statements of
profit or loss and other comprehensive income 23,261 24,900

Assets

Total assets for reportable segments 527,830 552,828

Tax assets 5,041 4,875
Assets of disposal groups relating to discontinued operations - 121,020

Total assets of the Group per consolidated statements of financial position 532,871 678,723

Liabilities

Total liabilities for reportable segments 125,609 165,832

Tax liabilities 11,116 10,318
Liabilities of disposal groups relating to discontinued operations - 36,618

Total liabilities of the Group per consolidated statements of financial

position 136,725 212,768
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

241
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

37. OPERATING SEGMENTS (continued)

Geographical information

The Group operates mainly in Malaysia, Singapore and Indonesia.

In presenting information on the basis of geographical areas, segment revenue is based on the geographical location
of customers.

The composition of each geographical segment is as follows:

(i) Malaysia : Manufacturing, designing, promoting and marketing of fashionable apparel,

footwear, accessories and leather goods, and development of commercial
properties.

(ii) Singapore : Designing, promoting and marketing of fashionable apparels, footwear,

accessories and leather goods.
(iii) Indonesia : Marketing and distribution of fashionable goods and accessories.

(iv) Others (1) : Marketing and distribution of fashionable goods and accessories.
(1)
Others represent the marketing and distribution of fashionable goods and accessories to Middle East, East
Asia and other ASEAN Countries.

Segment assets are based on the geographical location of the assets of the Group. The non-current assets do not
include financial instruments and deferred tax assets.

2019 2018
RM’000 RM’000

Revenue from external customers

Malaysia 279,709 268,683
Singapore 148,283 125,562
Indonesia 24,664 29,468
Vietnam 2,994 4,031
Others 6,609 12,749

462,259 440,493

Non-current assets
Malaysia 159,754 201,639
Singapore 87,893 33,677
Indonesia 6,998 7,044
Vietnam - 7

254,645 242,367

Major customers

There were no major customers who contributed more than ten percent (10%) of the total revenue of the Group.
As such, information on major customers is not presented.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

242
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

38. FINANCIAL INSTRUMENTS

(a) Capital management

The primary objective of the capital management of the Group is to ensure that entities of the Group would
be able to continue as going concerns whilst maximising the return to shareholders through the optimisation
of the debt and equity balance. The overall strategy of the Group remains unchanged from that in the
previous financial year.

The Group manages its capital structure and makes adjustments to it in response to changes in economic
conditions. In order to maintain or adjust the capital structure, the Group may adjust the dividend payment
to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives,
policies or processes during the financial years ended 30 June 2019 and 30 June 2018.

The Group monitors capital using gearing ratios, i.e. gearing ratio and net gearing ratio. Gearing ratio
represents borrowings divided by total capital whereas net gearing ratio represents borrowings less cash and
bank balances divided by total capital. Capital represents equity attributable to the owners of the parent.

Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000

Borrowings 56,032 96,305 - 22,809

Less: Short term funds (18,301) (27,293) (3,174) (6,328)
Less: Cash and bank balances (89,169) (84,029) (1,377) (7,132)

(51,438) (15,017) (4,551) 9,349

Total capital 376,236 440,937 242,131 287,159

Gearing ratio (1) 15% 22% N/A 8%

Net gearing ratio (2) N/A N/A N/A 3%

(1)
without taking cash and bank balances and short term funds into consideration
(2)
taking cash and bank balances and short term funds into consideration

The Group will continue to be guided by prudent financial policies of which gearing is an important aspect.

Pursuant to Practice Note No. 17/2005 issued by Bursa Malaysia Securities Berhad, the Group is required
to maintain a consolidated shareholders’ equity equal to or not less than the twenty-five percent (25%) of
the issued and paid-up capital (excluding treasury shares) and such shareholders’ equity is not less than
RM40.0 million. The Company has complied with this requirement for the financial year ended 30 June
2019.

The Group is not subject to any other externally imposed capital requirements.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

243
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

38. FINANCIAL INSTRUMENTS (continued)

(b) Financial instruments

Group Fair value

Amortised through profit
cost or loss Total
2019 RM’000 RM’000 RM’000

Financial assets
Other investments - 1,203 1,203
Trade and other receivables,
net of prepayments 65,215 - 65,215
Short term funds - 18,301 18,301
Cash and bank balances 89,169 - 89,169

154,384 19,504 173,888

Amortised
cost Total
RM’000 RM’000
Financial liabilities
Borrowings 56,032 56,032
Trade and other payables 43,369 43,369

99,401 99,401

Company Fair value

Amortised through profit
cost or loss Total
2019 RM’000 RM’000 RM’000

Financial assets
Other receivables 31,845 - 31,845
Short term funds - 3,174 3,174
Cash and bank balances 1,377 - 1,377

33,222 3,174 36,396

Amortised
cost Total
RM’000 RM’000
Financial liability
Other payables 1,329 1,329
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

244
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

38. FINANCIAL INSTRUMENTS (continued)

(b) Financial instruments (continued)

Group Fair value

Loans and through profit Available-
receivables or loss for-sale Total
2018 RM’000 RM’000 RM’000 RM’000

Financial assets
Other investments - - 1,222 1,222
Trade and other receivables,
net of prepayments 84,474 - - 84,474
Short term funds - 27,293 - 27,293
Cash and bank balances 84,029 - - 84,029

168,503 27,293 1,222 197,018

Other
financial liabilities Total
RM’000 RM’000
Financial liabilities
Borrowings 96,305 96,305
Trade and other payables 66,930 66,930

163,235 163,235

Company Fair value

Loans and through profit
receivables or loss Total
2018 RM’000 RM’000 RM’000

Financial assets
Other receivables 21,991 - 21,991
Short term funds - 6,328 6,328
Cash and bank balances 7,132 - 7,132

29,123 6,328 35,451

Other
financial liabilities Total
RM’000 RM’000
Financial liabilities
Borrowings 22,809 22,809
Other payables 6,669 6,669

29,478 29,478
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

245
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

38. FINANCIAL INSTRUMENTS (continued)

(c) Methods and assumptions used to estimate fair value

The fair values of financial assets and financial liabilities are determined as follows:

i. Financial instruments that are not carried at fair value and whose carrying amounts are a reasonable
approximation of fair value

The carrying amounts of financial assets and liabilities, such as trade receivables and current other
receivables, trade payables and current other payables and borrowings are reasonable approximation
of fair value, either due to their short-term nature or that they are floating rate instruments that are re-
priced to market interest rates on or near the end of the reporting period.

The carrying amounts of the current portion of loans and borrowings are reasonable approximations
of fair values due to the insignificant impact of discounting.

ii. Fixed rate term loan and hire purchase and lease creditors

The fair values of these financial instruments are estimated by discounting expected future cash flows
at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at
the end of each reporting period.

iii. Other investments

The fair values for club memberships are estimated based on references to current available counters
party quotation of the same investment.

iv. Non-current other receivables and other payable

The fair value of non-current other receivables and other payable are estimated by discounting
expected future cash flows at the market incremental lending rate for similar types of lending.

The carrying amounts of the non-current other receivables and other payable are reasonable
approximations of their fair values.

v. Financial guarantees

The Company provides corporate guarantees to financial institutions and certain third parties for
banking facilities utilised and tenancy agreements entered into by certain subsidiaries. The fair values
of such corporate guarantees are negligible as the probability of the subsidiaries defaulting on the
banking facilities and tenancy agreements are remote.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

246
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

38. FINANCIAL INSTRUMENTS (continued)

(d) Fair value hierarchy

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for
identical assets or liabilities.

Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level
1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from
prices).

Level 3 fair value measurements are those derived from inputs for the asset or liability that are not based on
observable market data (unobservable inputs).

The valuation techniques and significant unobservable inputs used in determining the fair value measurement
of Level 3 financial instruments as well as the relationship between key unobservable inputs and fair value,
is detailed in the table below.

Inter-relationship between key

Significant unobservable unobservable inputs and fair
Financial instruments inputs value

Financial assets
Club memberships Counter party quotation The higher the counter party
quotation, the higher the fair value
of the club memberships
38. FINANCIAL INSTRUMENTS (continued)

(d) Fair value hierarchy (continued)

The following tables set out the financial instruments carried at fair values and those not carried at fair values for which fair value is disclosed,
together with their fair values and carrying amounts shown in the statements of financial position.

Fair values of financial instruments Fair values of financial instruments not

carried at fair value carried at fair value Total fair Carrying
2019 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total value amount
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Financial assets
Fair value through profit
or loss
- Short term funds 18,301 - - 18,301 - - - - 18,301 18,301
- Club memberships - - 1,203 1,203 - - - - 1,203 1,203
Financial liabilities
Amortised cost
- Hire purchase and lease
creditors - - - - - 241 - 241 241 249

Company

Financial assets

Fair value through profit

or loss
- Short term funds 3,174 - - 3,174 - - - - 3,174 3,174
(Cont’d)
NOTES TO THE FINANCIAL STATEMENTS
247
ANNUAL REPORT 2019
BONIA CORPORATION BERHAD
38. FINANCIAL INSTRUMENTS (continued)
248
(d) Fair value hierarchy (continued)

(Cont’d)
The following tables set out the financial instruments carried at fair values and those not carried at fair values for which fair value is disclosed,
together with their fair values and carrying amounts shown in the statements of financial position. (continued)
ANNUAL REPORT 2019

Fair values of financial instruments Fair values of financial instruments not

carried at fair value carried at fair value Total fair Carrying
2018 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total value amount
BONIA CORPORATION BERHAD

Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Financial assets
Fair value through profit
or loss
- Short term funds 27,293 - - 27,293 - - - - 27,293 27,293

Available-for-sale financial
NOTES TO THE FINANCIAL STATEMENTS

assets
- Club memberships - - 1,222 1,222 - - - - 1,222 1,222
Financial liabilities
Other financial liabilities
- Hire purchase and lease
creditors - - - - - 504 - 504 504 421
- Term financing-i (fixed
interest rate) - - - - - 566 - 566 566 555

Company

Financial assets

Fair value through profit

or loss
- Short term funds 6,328 - - 6,328 - - - - 6,328 6,328
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

249
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

38. FINANCIAL INSTRUMENTS (continued)

(e) The following table shows a reconciliation of Level 3 fair values:

Group
2019 2018
RM’000 RM’000

Financial assets
Balance as at 1 July 2018/2017 1,222 1,299
Fair value loss recognised (28) (28)
Disposal (10) (15)
Translation adjustments 19 (34)

Balance as at 30 June 2019/2018 1,203 1,222

Sensitivities for the Level 3 fair value measurements of the financial assets and financial liabilities are not
disclosed as they are not material to the Group.

39. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The financial risk management objective of the Group is to safeguard the shareholders’ investment and the Group’s
assets whilst minimising the potential adverse impact arising from fluctuations in foreign currency exchange and
interest rates and the unpredictability of the financial markets.

The Group operates within an established risk management and internal control framework and clearly defined
guidelines that are regularly reviewed by the Board of Directors. Financial risk management is carried out through
risk review programmes, internal control systems, insurance programmes and adherence to the Group financial risk
management policies. The Group is exposed mainly to credit risk, liquidity and cash flow risk, interest rate risk
and foreign currency risk. Information on the management of the related exposures is detailed below.

(i) Credit risk

Cash deposits and trade receivables could give rise to credit risk, which requires the loss to be recognised if
a counter party fails to perform as contracted. The counter parties are major international institutions and
reputable multinational organisations. It is the policy of the Group to monitor the financial standing of these
counter parties on an ongoing basis to ensure that the Group is exposed to minimal credit risk.

The Group’s primary exposure to credit risk arises through its trade receivables while the Company’s
primary exposure is through the amounts owing by subsidiaries. The trading terms of the Group with its
customers are mainly on credit, except for boutique sales, where the transactions are done in cash term. The
credit period is generally for a period of 30 days, extending up to 120 days for major customers. Each
customer has a maximum credit limit and the Group seek to maintain strict control over its outstanding
receivables to minimise credit risk. Overdue balances are reviewed regularly by senior management.

Exposure to credit risk

As at the end of each reporting period, no collateral has been obtained by the Group. The maximum exposure
of the Group and of the Company to credit risk is represented by the carrying amount of each class of
financial assets recognised in the statements of financial position.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

250
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

39. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

(i) Credit risk (continued)

Credit risk concentration profile

The Group determines concentration of credit risk by monitoring the country and industry sector profiles of
its trade receivables on an ongoing basis. The credit risk concentration profile of the trade receivables of the
Group at the end of each reporting period are as follows:

Group
2019 2018
% of % of
RM’000 total RM’000 total
By country
Malaysia 14,837 41 20,596 37
Singapore 12,792 36 19,104 35
Indonesia 7,897 22 8,535 15
Vietnam 21 #
6,905 13
Others 368 1 - -

35,915 100 55,140 100

By industry sectors
Retailing 35,891 100 55,073 100
Manufacturing - - 32 #

Investment property 24 #
35 #

35,915 100 55,140 100

#
Amount is less than 1%

At the end of each reporting period, there was no significant concentration of credit risk for the Company
other than amounts owing by subsidiaries, net of impairment to the Company of RM31,666,000 (2018:
RM21,863,000).

(ii) Liquidity and cash flow risk

The Group actively manages its debt maturity profile, operating cash flows and availability of funding so as
to ensure that all operating, investing and financing needs are met. In executing its liquidity risk management
strategy, the Group measures and forecasts its cash commitments and maintains a level of cash and cash
equivalents deemed adequate to finance the activities of the Group.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

251
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

39. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

(ii) Liquidity and cash flow risk (continued)

The table below summarises the maturity profile of the liabilities of the Group and of the Company at the
end of each reporting period based on contractual undiscounted repayment obligations.

On demand
or within One to Over
one year five years five years Total
RM’000 RM’000 RM’000 RM’000
As at 30 June 2019

Group
Financial liabilities
Trade and other payables 38,302 471 4,727 43,500
Borrowings 22,818 29,050 13,864 65,732

Total undiscounted financial

liabilities 61,120 29,521 18,591 109,232

Company
Financial liabilities
Other payables 1,329 - - 1,329
Financial guarantees* 227,700 - - 227,700

Total undiscounted financial

liabilities 229,029 - - 229,029

As at 30 June 2018

Group
Financial liabilities
Trade and other payables 62,110 457 4,673 67,240
Borrowings 41,231 52,551 15,404 109,186

Total undiscounted financial

liabilities 103,341 53,008 20,077 176,426

Company
Financial liabilities
Other payables 6,669 - - 6,669
Borrowings 7,632 17,855 - 25,487
Financial guarantees* 249,719 - - 249,719

Total undiscounted financial

liabilities 264,020 17,855 - 281,875

*
This disclosure represents the maximum liquidity risk exposure.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

252
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

39. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

(iii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the financial instruments of the Group
and of the Company would fluctuate because of changes in market interest rates.

The exposure of the Group and of the Company to interest rate risk arises primarily from deposits with
licensed banks and interest-bearing borrowings. The Group does not use derivative financial instruments to
hedge this risk.

Sensitivity analysis for interest rate risk

The following table demonstrates the sensitivity analysis of the Group and of the Company if interest rates
at the end of each reporting period changed by fifty (50) basis points with all other variables held constant:

Group Company
2019 2018 2019 2018
RM’000 RM’000 RM’000 RM’000

Profit after tax

- increase by 0.5%
(2018: 0.5%) (87) (207) 12 (63)

- decrease by 0.5%
(2018: 0.5%) 87 207 (12) 63

The sensitivity is lower in 2019 than in 2018 because of decrease in borrowings and increase in deposits
with licensed banks during the financial year. The assumed movement in basis points for interest rate
sensitivity analysis is based on current observable market environment.
39. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

(iii) Interest rate risk (continued)

The following tables set out the carrying amounts, the weighted average effective interest rate as at the end of each reporting period and the remaining
maturities of the financial instruments of the Group and of the Company that are exposed to interest rate risk:

Weighted
average
effective Within More than
interest rate 1 year 1 - 2 years 2 - 3 years 3 - 4 years 4 - 5 years 5 years Total
Note % RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Group
At 30 June 2019

Fixed rates
Other receivables 15(b) 7.53 2,498 2,132 2,132 2,132 - 303 9,197
Deposits with licensed banks 16 3.71 10,224 - - - - - 10,224
Hire purchase and lease creditors 21 5.16 (119) (96) (31) (3) - - (249)
Other payable 24 2.00 - - - - - (5,067) (5,067)

Floating rates
Deposits with licensed banks 16 2.20 600 - - - - - 600
Short term funds 17 3.49 18,301 - - - - - 18,301
Bank overdrafts 20 8.07 (1,479) - - - - - (1,479)
Bankers’ acceptances 20 4.36 (6,044) - - - - - (6,044)
Revolving credit 20 5.11 (1,000) - - - - - (1,000)
Trust receipts 20 4.72 (5,418) - - - - - (5,418)
Term loans and term financing-i 22 4.86 (6,948) (2,536) (2,659) (17,899) (998) (10,802) (41,842)
(Cont’d)
NOTES TO THE FINANCIAL STATEMENTS
253
ANNUAL REPORT 2019
BONIA CORPORATION BERHAD
39. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
254
(iii) Interest rate risk (continued)

(Cont’d)
The following tables set out the carrying amounts, the weighted average effective interest rate as at the end of each reporting period and the remaining
maturities of the financial instruments of the Group and of the Company that are exposed to interest rate risk: (continued)
ANNUAL REPORT 2019

Weighted
average
effective Within More than
BONIA CORPORATION BERHAD

interest rate 1 year 1 - 2 years 2 - 3 years 3 - 4 years 4 - 5 years 5 years Total

Note % RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Group
At 30 June 2018

Fixed rates
Other receivables 15(b) 7.50 2,067 2,067 2,067 2,368 2,067 - 10,636
Deposits with licensed banks 16
NOTES TO THE FINANCIAL STATEMENTS

- RM 3.72 6,502 - - - - - 6,502

- SGD 0.35 813 - - - - - 813
Hire purchase and lease creditors 21 5.35 (178) (119) (92) (29) (3) - (421)
Term financing-i 22 6.50 (555) - - - - - (555)
Other payable 24 2.00 - - - - - (4,820) (4,820)
Floating rates
Deposits with licensed banks 16 4.00 1,510 - - - - - 1,510
Short term funds 17 3.18 27,293 - - - - - 27,293
Bank overdrafts 20 7.68 (3,139) - - - - - (3,139)
Bankers’ acceptances 20 4.55 (8,465) - - - - - (8,465)
Revolving credit 20 3.67 (2,200) - - - - - (2,200)
Trust receipts 20 3.86 (5,988) - - - - - (5,988)
Term loans and term financing-i 22 5.15 (17,618) (12,159) (7,169) (6,667) (20,124) (11,800) (75,537)
39. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

(iii) Interest rate risk (continued)

The following tables set out the carrying amounts, the weighted average effective interest rate as at the end of each reporting period and the remaining
maturities of the financial instruments of the Group and of the Company that are exposed to interest rate risk: (continued)

Weighted
average
effective Within More than
interest rate 1 year 1 - 2 years 2 - 3 years 3 - 4 years 4 - 5 years 5 years Total
Note % RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Company

At 30 June 2019

Floating rate

Short term funds 17 3.64 3,174 - - - - - 3,174

At 30 June 2018

Floating rates

Short term funds 17 3.60 6,328 - - - - - 6,328

Term loans and term financing-i 22 5.68 (6,508) (5,362) (4,633) (4,008) (2,298) - (22,809)
(Cont’d)
NOTES TO THE FINANCIAL STATEMENTS
255
ANNUAL REPORT 2019
BONIA CORPORATION BERHAD
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

256
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

39. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

(iv) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument would
fluctuate because of changes in foreign exchange rates.

Subsidiaries operating in Singapore, Vietnam and Indonesia have assets and liabilities together with
expected cash flows from anticipated transactions denominated in foreign currencies that give rise to
foreign exchange exposures.

The Group maintains a natural hedge, where possible, by borrowing in the currency of the country in which
the investment is located or by borrowing in currencies that match the future revenue stream to be generated
from its investments.

The Group also holds cash and bank balances denominated in foreign currencies for working capital
purposes. At the end of each reporting period, such foreign currency balances amounted to RM38,457,000
(2018: RM41,342,000) (see Note 16(b) to the financial statements) for the Group.

The Group did not enter into any material forward foreign exchange contract during the financial year.

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity analysis of the Group and the Company to a reasonably
possible change in the Singapore Dollar (“SGD”), U.S. Dollar (“USD”), Vietnamese Dong (“VND”) and
Indonesian Rupiah (“IDR”) exchange rates against the respective functional currencies of the Group
entities, with all other variables held constant:

Group Company
2019 2018 2019 2018
Profit after tax RM’000 RM’000 RM’000 RM’000

SGD/RM - strengthen by 3%
(2018: 3%) +891 +228 +242 -
- weaken by 3%
(2018: 3%) -891 -228 -242 -

USD/RM - strengthen by 3%
(2018: 3%) -1 +38 - -
- weaken by 3%
(2018: 3%) +1 -38 - -

VND/RM - strengthen by 3%
(2018: 3%) -3 +128 - -
- weaken by 3%
(2018: 3%) +3 -128 - -

IDR/RM - strengthen by 3%
(2018: 3%) +144 +434 - -
- weaken by 3%
(2018: 3%) -144 -434 - -

The exposure to the other currencies are not significant, hence the effects of changes in exchange rates are
not presented.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

257
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

40. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(a) Proposed disposal of MAC

Pursuant to the conditional share sale agreement dated 8 May 2018, the Company has agreed to dispose of
its 500,000 ordinary shares representing 100% equity interest held in MAC to a Director, Chiang Sang Sem
for a disposal consideration of RM2,490,990 (“Proposed Disposal of MAC”). The disposal consideration
is subject to adjustments on the latest practical date prior to completion of the Proposed Disposal of MAC
(“Cut-Off Date”) as follows:

(i) where the total assets (excluding the net book value of MAC’s property) of MAC on the Cut-Off Date
is higher than that in MAC’s management accounts as at 31 March 2018 (“Accounts”), the disposal
consideration shall be increased by that amount of total assets that has been increased and
correspondingly in the event the total assets (excluding the net book value of MAC’s property) is lower
than in the Accounts, the disposal consideration shall be reduced by the amount; and

(ii) where the total liabilities of MAC on the Cut-Off Date is higher than that in the Accounts, the disposal
consideration shall be reduced by the amount of total liabilities that has been increased and
correspondingly in the event the total liabilities is lower than in the Accounts, the disposal
consideration shall be increased by the amount.

During the financial year, both the Company and Chiang Sang Sem have agreed, vide the first
supplementary letter dated 8 August 2018, extended the Cut-Off Date for a period of two (2) months to 7
October 2018. Subsequently, the Cut-Off Date was further extended for a period of six (6) months from 7
October 2018 to 7 April 2019 vide the second supplementary letter dated 4 October 2018 as agreed between
the parties. Thereafter, the Cut-Off Date was again being extended to 7 October 2019 vide the third
supplementary letter dated 5 April 2019 as executed by the Company and Chiang Sang Sem.

Management represented that the proposed sale transaction is unlikely to proceed due to the non-fulfilment
of certain conditions precedent of the conditional share sale agreement as at 30 June 2019.

Based on this circumstances, management had since performed a reclassification and MAC ceased to be
classified as disposal group held for sale in the Group’s financial statements for the financial year ended 30
June 2019.

(b) Demerger and listing of CRG Group on the Leap Market of Bursa Malaysia Securities Berhad

In the previous financial year, CRG Group was classified as disposal group held for distribution and
discontinued operations in the consolidated financial statements of the Company for the financial year
ended 30 June 2018 in accordance with MFRS 5 Non-current Assets Held for Sale and Discontinued
Operations. CRG Group was recognised as disposal group held for distribution at the lower of its carrying
amount and fair value less costs to sell.

The information memorandum dated 28 September 2018 in relation to the proposed listing by way of
introduction of the entire share capital of CRG on the LEAP Market of Bursa Malaysia Securities Berhad
has been deposited with Securities Commission Malaysia, lodged with Companies Commission of
Malaysia, and announced to Bursa Malaysia Securities Berhad.

On 13 November 2018, the Company completed the Proposed Capitalisation, Proposed Subdivision,
Proposed Conversion, and Proposed Dividend-in-Specie as detailed in its Circular to Shareholders dated 8
May 2018 which resulted in the demerger of CRG Group from the Group.

On 28 November 2018, CRG successfully completed the listing and quotation of its entire issued share
capital of 805,651,400 CRG Shares on the LEAP Market of Bursa Malaysia Securities Berhad.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

258
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

40. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (continued)

(c) On 27 December 2018, a wholly-owned subsidiary of the Company, Luxury Parade Sdn. Bhd. entered into
two (2) Sale and Purchase Agreements with a related party, Future Diversity Sdn. Bhd. (“FDSB”) for the
disposal of the following properties to FDSB for a total cash consideration of RM3,600,000:

(i) Property 1

All that leasehold property held under H.S.(D) 72947 PT No. 3865 Mukim Petaling Daerah Kuala
Lumpur Negeri Wilayah Persekutuan KL measuring approximately 178 square metres together with a
6-storey shop/office erected thereon with a postal address of No.3, Jalan 8/146 (also known as Jalan
Tasik Selatan 8), Bandar Tasik Selatan, 57000 Kuala Lumpur.

(ii) Property 2

All that leasehold property held under H.S.(D) 72948 PT No. 3866 Mukim Petaling Daerah Kuala
Lumpur Negeri Wilayah Persekutuan KL measuring approximately 178 square metres together with a
6-storey shop/office erected thereon with a postal address of No.5, Jalan 8/146 (also known as Jalan
Tasik Selatan 8), Bandar Tasik Selatan, 57000 Kuala Lumpur.

The above transactions were completed during the financial year.

(d) Material litigation

The 60% owned subsidiaries of the Company, AMSB and Mcore (collectively referred as “the Plaintiffs”)
had filed a civil suit on 3 August 2011 against Leong Tat Yan (“the Defendant”). AMSB and Mcore claimed
against Leong Tat Yan for a sum of RM946,000 and RM2,250,000 respectively, being the proceeds of sale
from the joint venture business owed by Leong Tat Yan.

Leong Tat Yan owns 40% of the equity interest in AMSB and he is also a controlling shareholder of 388
Venture Corporation Sdn. Bhd. which owns 40% of the equity interest in Mcore.

There are losses of RM5,389,000 arising from the dispute of which management had made the necessary
impairment in the previous financial year. The losses includes impairment loss of trade receivables
amounting to RM3,196,000 and inventories written off of RM2,193,000 (before non-controlling interest’s
share of loss).

The Plaintiffs filed a Notice of Appeal on 9 April 2013 against part of the decision of the High Court dated
27 March 2013 in connection with the service of Writ of Summons and Statement of Claim on the Defendant.
The Defendant also filed a Notice of Appeal against part of the decision of the High Court dated 27 March
2013 in connection with jurisdiction and forum.

On the hearing date of 8 July 2013, the Court of Appeal allowed the Defendant’s appeal with costs of
RM10,000 and the Plaintiffs’ appeal was accordingly withdrawn with no order as to costs as it was no longer
sustainable.

After discussing with their legal advisors, the Plaintiffs (also referred to as “Applicants”) had on 7 August
2013, filed a Notice of Motion in the Federal Court for the following orders:

(i) the Applicants be granted leave to appeal to the Federal Court against the whole of the decision of
the Court of Appeal given on the 8 July 2013 in Civil Appeal No. W-02(IM)(NCVC)-797-04/2013
pursuant to Sections 96 and 97 of the Courts of Judicature Act, 1964 read with Rules 55, 107 and/or
108 of the Federal Court Rules, 1995 and/or the inherent jurisdiction of the Federal Court.

(ii) in the event that leave to appeal is granted by the Federal Court, the Applicants be granted leave to
file and serve a Notice of Appeal to the Federal Court within 7 days from the date of the order
pursuant to Rule 108 of the Federal Court Rules, 1995.
 BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

259
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

40. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (continued)

(d) Material litigation (continued)

After discussing with their legal advisors, the Plaintiffs (also referred to as “Applicants”) had on 7 August
2013, filed a Notice of Motion in the Federal Court for the following orders: (continued)

(iii) the costs of the application filed by the Applicants be costs in the cause.

(iv) such further or other relief of the Federal Court may deem fit.

Leave to appeal to the Federal Court was granted on 29 January 2015.

On the hearing date of 9 November 2015, the Federal Court allowed the Applicant’s appeal and set aside
the Court of Appeal’s Order dated 8 July 2013 in whole, thereby reversing the Court of Appeal’s decision
that the High Court has no jurisdiction over Leong Tat Yan.

The Plaintiffs had on 31 October 2016 filed a Writ of Summon and Statement of Claim against the Defendant
and served the same on the Defendant on 2 November 2016.

On 21 November 2016, the Defendant filed two (2) separate applications for a declaration that the Malaysian
Court has no jurisdiction over the Defendant and for consequential relief (Enclosure 10), and for a
declaration that the Malaysian Court is not the appropriate forum to try the Plaintiffs’ claim and
consequently for a stay of proceedings (Enclosure 11).

On 16 December 2016, the Defendant filed two (2) separate applications to strike out the Writ of Summons
dated 31 October 2016 for lack of authority (Enclosure 20) and for a stay of proceedings pending arbitration
(Enclosure 22).

On 25 January 2017, the Defendant withdrew Enclosure 20 with no order as to costs.

On 25 April 2017, the High Court dismissed Enclosures 10 and 11 with costs of RM5,000 for each enclosure.

On 3 May 2017, the Defendant filed two (2) appeals against the High Court’s decisions on Enclosures 10
and 11 (“Appeals”). On 8 May 2017, the Defendant filed an application to stay the proceedings pending the
disposal of the Appeals (Enclosure 43).

On 11 May 2017, the Defendant filed two (2) separate applications for an extension of time to file his
Defence (Enclosure 47) and to strike out the Writ of Summons for abuse of process (Enclosure 50).

On 23 May 2017, the High Court dismissed Enclosure 43 with costs of RM1,500. The Judge also granted
Enclosure 47 with no order as to costs, and directed the Defendant to file his Defence by 23 June 2017. The
Defendant also withdrew Enclosure 50, which was accordingly struck out with no order as to costs.

On 22 June 2017, the Defendant filed his Defence and Counterclaim claiming general damages, exemplary
damages, and costs for abuse of process. The Plaintiffs filed their Reply and Defence to Counterclaim on
24 July 2017.

On 17 October 2017, the Court of Appeal dismissed the Appeals with costs of RM5,000 for each appeal.

On 5 January 2018, the High Court allowed the Defendant’s application to stay the proceedings pending
reference of the dispute to arbitration, with costs of RM5,000 to follow the outcome of the arbitration.

On 26 January 2018, the Plaintiffs appealed to the Court of Appeal against the High Court’s decision on
Enclosure 22.
BONIA CORPORATION BERHAD
ANNUAL REPORT 2019

260
NOTES TO THE FINANCIAL STATEMENTS
(Cont’d)

40. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (continued)

(d) Material litigation (continued)

On 26 June 2018, the Court of Appeal allowed the Plaintiffs’ appeal and reversed the decision of the High
Court, with costs of RM15,000 for the Court of Appeal and High Court proceedings awarded to the Plaintiffs.

On 3 July 2018, the Respondent filed an application for leave to appeal to the Federal Court against the
decision of the Court of Appeal.

On 20 July 2018, the Defendant filed an application to stay the proceedings pending the disposal of the Federal
Court proceedings.

On 30 July 2018, the Plaintiffs filed an application for security for costs.

On 8 October 2018, the Federal Court allowed the Defendant’s application to stay the proceedings in full and
the Plaintiffs’ application for security for costs in part.

The Defendant’s application for leave to appeal to the Federal Court against the decision of the Court of
Appeal is fixed for hearing on 21 November 2019.

The solicitors are of the opinion that the prospects of successfully resisting the Defendant’s leave application
in the Federal Court are fair.

The Directors are of the opinion, after taking appropriate legal advice, that no provision for abovementioned
claims is necessary.

41. SIGNIFICANT EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD

(a) NSSB has completed its members’ voluntary winding-up process.

(b) FCSB, ACSB, FRSB, and SCRL commenced their members’ voluntary winding-up or striking off processes.

(c) The Company further repurchased 1,148,000 of its issued ordinary shares from the stock exchange of BMSB
and held a total of 16,882,400 treasury shares as at the date of this report.

(d) The Company proposed to undertake a share consolidation exercise which involves the consolidation of every
four (4) existing shares of the Company held by the shareholders of the Company on an entitlement date to
be determined later (“Entitlement Date”), into one (1) consolidated share (“Proposed Share Consolidation”).

As at the date of this report, the issued share capital of the Company is RM201,571,850 comprising
806,287,400 shares of the Company (inclusive of 16,882,400 shares of the Company held as treasury shares
by the Company. For illustration purposes, upon completion of the exercise, the issued share capital of the
Company shall be RM201,571,850 comprising 201,571,850 consolidated shares (inclusive of 4,220,600
consolidated treasury shares).

However, the actual number of consolidated shares and consolidated treasury shares after the Proposed Share
Consolidation would depend on the total number of issued shares of the Company and the total number of
shares re-purchased and retained as treasury shares by the Company pursuant to its shareholders’ mandate for
a share buy-back exercise, respectively on the Entitlement Date.

The Proposed Share Consolidation is subject to and conditional upon approvals being obtained from Bursa
Malaysia Securities Berhad, the shareholders of the Company at an extraordinary general meeting to be
convened and any other relevant regulatory authorities, if required.
Annual Report 2019

Annual Report 2019