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CHAIRMAN’S STATEMENT
Dear Shareholders,
On behalf of the Board members
of TA ENTERPRISE BERHAD,
it gives me great pleasure to present
to you the Annual Report and
Financial Statements of
the Company and the Group
for the nancial year ended
31 January 2007.
ANNUAL REPORT 2007
008
TA ENTERPRISE BERHAD
(194867-M)
FINANCIAL REVIEW conglomerate with the vision of a
FY2007 was a good year especially strong global presence.
for our stockbroking division, with
the strong stock market rally in the DIVIDEND
last quarter boosting the Group’s The Board has decided that the
pre-tax pro t for the nancial year Company shall adopt a dividend
to RM143.1million, an increase of policy which will pay our shareholders
60% over the previous year’s pre-tax consistent yearly dividends ranging
pro t of RM89.5million. We posted between 40% and 60% of the Group’s
a consolidated pro t after tax of pro t after tax for that nancial year
RM133.7million, a 66% increase subject to the availability of cash
compared to RM80.7million earned reserves and the Group’s requirement
in the previous year. to retain cash in the business for
future expansion or investments. Luxury living exclusively for a discerning few
Overall, we are pleased that all our @ Idaman Residence
business divisions performed better In line with our new dividend policy,
in the year under review. Our earnings the Board is recommending a rst and the exemption of real property
improved to 10.02 sen per share and and nal dividend of 7% less taxation gains tax will help to lift the market
we achieved a full year’s net return for shareholders’ approval for the higher. Given the prevailing positive
on equity (ROE) of 7.1%. Our net nancial year ended 31 January sentiment, we anticipate another year
tangible assets increased to RM1.42 2007. of excellent performance from the
per share, with our prime properties stockbroking division.
still based on historical book values. OPERATIONS REVIEW AND
In terms of capital appreciation, our Going forward, TASH intends to
DEVELOPMENT
share price rose 32.3% in the year complement our service to our
to RM0.88 as at 31 January 2007. valued clients by introducing
STOCKBROKING corporate advisory services and
Since then, our share price has risen Malaysia
more than another 150% to reach a structured products. We are
TASecuritiesHoldingsBerhad(“TASH”) optimistic that these new nancial
high of RM2.21 on 21 February 2007, registered a very commendable pre-
translating to a market capitalisation services and products will generate
tax pro t of RM52.1million or 36% an additional stream of fee-based
of RM2.9billion.
of the Group’s pre-tax pro t for the income for TASH in the future.
With solid shareholders’ equity of nancial year under review.The strong
RM1.86 billion as at 31 January performance was achieved on the Hong Kong
2007, the Group is poised to grow back of a 62% increase in turnover on TA Securities (HK) Limited (“TAHK”)
and develop into a well-diversi ed Bursa Malaysia to RM310.4 billion for recorded another fruitful year with
the period February 2006 to January pre-tax operating pro t before
2007 compared to RM191.3 billion exceptional items jumping by 86% to
for the previous year’s corresponding HK$15.7million from HK$8.4million in
period. Bursa Malaysia had been a previous year. The strong growth was
laggard in the last few years, until mainly propelled by a 53% increase
towards the last quarter of 2006 when in brokerage income coupled with
ANNUAL REPORT 2007
share prices started picking up, and an 89% increase in interest income
played catch-up to its regional peers. on margin nancing and deposits
with banks.
We expect the year 2007 to be a
sterling year for the Malaysian stock The Hong Kong market performed
market with further improvements extremely well in the year 2006 with
in corporate earnings and the the Hang Seng Index surging 27.6%
strengthening of the Ringgit. to 20,106 by end-January 2007 from
Furthermore, the aggressive roll-out 15,753 a year earlier, with market
of contracts under the 9th Malaysia capitalization exceeding HK$10,000
Plan (9MP), a burgeoning corporate billion in the year under review. The
sector M&As, strong in ow of foreign strong rally was mainly boosted by
funds following a slew of foreign the strong economic growth in Hong
exchange liberalisation measures, Kong and Mainland China and the
introduction of investment incentives high in ow of foreign funds into the
to the Iskandar Development Region Hong Kong capital market.
An artist impression of Idaman Residence @ KLCC
TA ENTERPRISE BERHAD
(194867-M)
CHAIRMAN’S
STATEMENT (cont’d)
Maintaining Hong Kong as an existing retail business, whilst new funds, namely TA Global Asset
international nancial centre is part expanding in the area of institutional Allocator Fund (TAGAAF) and TA
of the China Central Government’s sales, especially for stock index Asia Paci c Islamic Balanced Fund
11th Five-Year plan. The HK Stock futures. As an e ort to broaden our (TAIB). TAGAAF, a fund-of-funds that
Exchange is committed to further products and services o erings, invests in four di erent asset classes
strengthening cross-border liaison, TAF is in the midst of setting up a - equities, property related securities,
facilitating the listing of quality futures fund management division, xed income and commodities, aims
companies in Hong Kong, enhancing an exclusive section of the company to provide investors a global exposure
market infrastructure and proactively that will develop and manage trading by investing in reputable funds of
promoting the Hong Kong market strategies intended to meet speci c some of the world’s renowned fund
to both local and foreign investors. nancial objectives of clients. providers. TAIB is our rst internally
However, the future movements of oil managed foreign fund, focusing on
and commodity prices together with UNIT TRUST AND ASSET investing in regional listed equity
the anticipated modest adjustment MANAGEMENT bourses that are Syariah compliant.
for China’s overheated investment In July 2006, TA Investment
and economic climate will remain As at nancial year ended 31 January
Management Bhd (“TAIM”) and TA
the main threat to the Hong Kong 2007, TAIM has 12 unit trust funds
Asset Management Sdn Bhd (“TAAM”)
market. under management, of which 4 are
merged their operations of unit trust
activities and fund management
Faced with increasing competition
jointly under TAIM, which had earlier
among the local brokerages, TAHK is
obtained its fund management
taking a serious approach in business
licence. As at 31 January 2007, TAIM’s
development and cost control to
total funds under management
ensure a sustainable growth in its
amounted to RM647 million, being
business.
the combination of unit trust funds
DERIVATIVES and direct mandate portfolios.
TA Futures Sdn Bhd (“TAF”) again During the year, TAIM emerged
retained its position as one of the top winner of The Star/Standard & Poor’s
ranking brokers for the Crude Palm Investment Funds Award Malaysia
Oil Futures traded on Bursa Malaysia 2007 Equity Malaysia (One Year)
Derivatives Berhad. The company Category for our TA High Growth
foresees a bullish year ahead with the Fund. TAIM also launched two
approval for local futures brokerages
to trade on foreign futures exchanges
and the expected growth of CPO
Futures in tandem with rising crude
palm oil prices.
TAF will strive to improve its overall
market share by building on its
ANNUAL REPORT 2007
1. Contemporary tropical resort living
2. Freehold luxury lifestyle bungalows
@ Tropicana, Petaling Jaya 1
3. Datin Tan addressing the
audiences during the o cial launch of 2
Damansara Idaman, Phase 3,
3
11 January 2007
010
TA ENTERPRISE BERHAD
(194867-M)
Islamic funds and 8 are conventional fast loan processing time, attractive properties, TAP hopes to distinguish
funds, catering to the different financing package and good itself from other competitors, while
demands, needs and risk profiles of customer service, TAFC has built itself striving to be a major contributor
our investors. a reputation for being one of the top to the Group’s earnings in the years
financiers for ESOS financing. ahead.
TAIM will continue to strive to upgrade
its delivery systems to our investors ESOS financing will continue to be a • Property Development
as well as increase the number of priority business focus for the coming Damansara Idaman
channels of distribution for its unit year, besides IPO and other types of TAP’s maiden high-end Damansara
trust division. TAIM also intends to share financing business. TAFC will Idaman residential project was first
improve on its agency development, also expand its scope of business launched in 2005, and marketed as
training and professionalism in this in short term loan financing and a gated and guarded low-density
increasingly competitive industry. other viable business and corporate
bungalow development located on
ventures.
prime freehold land in Petaling Jaya.
CREDIT All bungalows under this project are
TA First Credit Sdn Bhd (“TAFC”) For this year, the business from its
expanded marketing activities in built with exclusive individualistic
turned in another year of strong designs based on contemporary
performance especially in the area other geographical areas outside the
Klang Valley in West and East Malaysia tropical themes and epitomise resort
of share financing. Its pre-tax profit
has increased. TAFC will endeavour living within a gated and guarded
contribution for the year under
to increase its marketing activities in environment.
review was RM29.4million, which
included a write-back of provision for new business opportunities and new
locations. During the year, the project saw the
doubtful debts amounting to RM11.1 successful completion and hand-over
million mainly due to the recovery of 52 units under Phases 2A and 2B to
of financial receivables previously
PROPERTIES
its purchasers. The project’s Phase 3
provided for. with 36 bungalow units was officially
MALAYSIA
The year 2006 was an exciting year launched in Januar y 2007 and
Having established its presence in have already enjoyed encouraging
for TA Properties Sdn Bhd (“TAP”).
the share financing business, TAFC
Despite a generally soft market for response. Sitting on the last piece of
has been active in the financing of property sales in the earlier part of the 62 acre Damansara Idaman land
Employee Share Option Schemes 2006, TAP performed commendably, is Phase 4, which is scheduled to be
(ESOS) implemented for public listed with the local property development launched in 2008.
companies on Bursa Malaysia. With division contributing RM38.7million
its experienced marketing teams, or 27% to the Group’s pre-tax profit. Idaman Villas
Adjacent to the luxury bungalow
During the year under review, TAP development and also situated on
worked hard to establish its premium prime freehold land is Idaman Villas,
branding as a luxury lifestyle TAP’s first upscale semi-detached
property developer in the market. villas with bungalow specifications.
With the current demand for niche This project was launched in February
premium residential and commercial 2007 after the completion of its ANNUAL REPORT 2007
4
4. Spacious living area inspired by modern contemporary themes
that create a sense of tranquility
5. Freehold semi-detached villas with bungalow specifications
5
@ Tropicana, Petaling Jaya
TA ENTERPRISE BERHAD
(194867-M)
CHAIRMAN’S
STATEMENT (cont’d)
beautiful show village, and attracted area comprising semi-detached and • Property Investment
more than 50% sales bookings during bungalow homes. The Group’s other portfolio of
the first week of its launch with its properties including Menara TA One
many unique selling points. The Phase 1 of the commercial development and shop offices at USJ Taipan and
well-thought out and planned gated comprising 24 units of 4-storey shop Subang Business Centre continue to
and guarded development offers office suites was soft-launched in yield good rental income to the local
3 modern contemporary designs December 2006. property investment division.
for its 54 semi-detached villas and Idaman Bintang
boasts private club-like recreational CANADA
TAP is currently awaiting approval for Our award-winning triple-A rated
amenities for its residents. its application of the DO to develop office building, Terasen Centre,
Idaman Residence our 3-acre freehold commercial land, remains the Group’s flagship
Launched in October 2005, Idaman located strategically at the junction investment property on the West
Residence is a 34-storey freehold of Jalan Bukit Bintang and Jalan Imbi. Coast of Canada, being the proud
luxury condominium located It hopes to launch this project by the recipient of many prestigious
strategically within KL’s Golden end of the year. awards from the Building Owners
Triangle and a stone’s throw away This prime development will and Managers Association of British
from KLCC. It is designed by the encompass three towers of executive Columbia (“BOMA”). The present
internationally renowned architect service suites with a podium construction of Vancouver’s pinnacle
Kenneth Yeang, and offers 9 comprising alfresco F & B dining 62-storey Shangri-La hotel-cum-
unrivalled apartment designs with style lots, a convention centre and residential tower across the street
modern contemporary themes multi-purpose function halls. TAP’s from Terasen Centre has moved the
and quality finishes. TAP’s first high- proposed plan is to build and sell downtown core westward, such that
rise development is scheduled for two towers, and retain one tower Terasen Centre is now strategically
completion in end-2008. and the commercial facilities for our positioned in the centre of the city.
investment and operation and at the Since the announcement of the 2010
New Projects same time launch our foray in the
Seri Suria Winter Olympics being awarded to
local hospitality business. the City of Vancouver, Vancouver’s
TAP has already obtained the
Development Order (“DO”) for • Property Construction economy has seen buoyant growth.
the proposed mixed township TAP has during the year, set up a
development project on a 48-acre construction arm called TA Binaprestij
piece of freehold land in Bandar Sdn Bhd (“TAB”) which will initially be
Sri Damansara, which the Group appointed as in-house contractor for
purchased in February 2006. The some of TAP’s low-rise projects. As
project, to be carried out in phases such, TAB’s starting order book will
over a period of 5 years, will consist be TAP’s projects like Idaman Villas
of a commercial development and Seri Suria.
comprising shop office suites, office
complex, F & B/entertainment strip
called Suria Walk with alfresco dining
style lots and an exclusive residential
ANNUAL REPORT 2007
An artist impression of Suria Square shop-offices
012
Seri Suria - 2 1/2 storey semi-detached
TA ENTERPRISE BERHAD
(194867-M)
In the last 2 to 3 years, the residential HOTEL OPERATIONS With many new key corporate
p ro p e r t y m a r k e t h a d m ove d Our hotel operations for the Radisson accounts aligned with the Hotel,
significantly. However in the last year, Plaza Hotel Sydney in Australia we are now strategically positioned
the commercial market has picked managed to double its previous year’s to continue increasing not only the
up, surpassing the residential market results to contribute a commendable occupancy of the Hotel, but also our
to the extent that the availability of 11% to the Group’s pre-tax profit status as one of the leading 5-star
office space is now at record lows. in the year under review. The Hotel hotels in Sydney.
consistently performed well against
Terasen Centre has also seen a its 5-star competitive set, finishing the PROSPECTS AND OUTLOOK
remarkable increase in capital year with an increased average room Malaysia’s economic outlook remains
appreciation since the Group’s initial rate and occupancy percentage. promising despite anticipation of a
investment in 1995. Supported by the
The Hotel was again the recipient of slowdown in the global economy.
strong economy, we expect Terasen
Carlson Hotels’ President’s Award for Economic growth is expected
Centre to be at 100% occupancy
2006, making it the sixth consecutive to reach 5.5% in 2007, led by the
for the next 3 to 5 years, providing
President’s Award it has received implementation of 9MP projects,
stable rental income to the Group.
since opening. This Award recognises which will in turn lift the construction
The Group will continue to look for
the Hotel’s ability to provide genuine sector. The recent exemption of real
opportunities to expand its property
5-star service and is based on guest property gains tax, the relaxation of
development and investment
feedback. It was also a finalist in FIC rules on property investment by
activities in Canada within the next
the 2006 City of Sydney Business foreigners and the new measures to
few years.
Awards for Outstanding 5-star Hotels. revamp the public delivery system
SOUTH AFRICA Further, the Hotel’s fine dining for the property sector will hopefully
As part of the Group’s ongoing efforts restaurant “Bilson’s” was awarded the improve the property market which
to divest its business operations in 3 Chef’s Hats, making it the only hotel has seen flat growth over the last
South Africa, we have entered into an restaurant in Sydney to hold this two years. While growth will remain
Agreement of Sale in September 2006 prestigious Award. broad based, the services sector will
to sell our commercial building, 160 benefit from the added boost of Visit
The Hotel was privileged to host
Jan Smuts Avenue, in Johannesburg Malaysia Year as well as a buoyant
the Australian Prime Minister and
for a total cash consideration of R73.0 stock market.
his cabinet for a 2 day conference
million. The completion of the sale will as well as accommodating the On the external front, the slowdown
realise a respectable 10% gain over the English Cricket Team during their in the US economy will pose a drag to
property’s current carrying value. Sydney games. Moving into 2007, Malaysia’s exports. Nevertheless, the
the Hotel has been selected to host US economy is expected to achieve
a delegation for the Asia-Pacific a soft landing against a backdrop of
Economic Cooperation (APEC) easing oil prices as well as emerging
meeting to be held in September as signs of stabilisation in their housing
well as providing accommodation market.
for attendees at the World Youth Day
symposium.
ANNUAL REPORT 2007
Radisson Plaza Hotel Sydney
The Health Club Studio Spa Suite
TA ENTERPRISE BERHAD
(194867-M)
CHAIRMAN’S
STATEMENT (cont’d)
Overall, we expect a favourable and be recognised as a dynamic
economic environment for Malaysia, financial services and property
supported by strong fundamentals. group. I believe that our passion
Monetary policy is expected to be for excellence and our adaptability
supportive of growth with the central to change in today’s global market
bank holding its key rate unchanged, will put us in good stead to meet the
as a result of manageable in ationary challenges ahead and propel us to
pressure, at 3.5% throughout the greater heights in the days to come.
year. Other positive factors include
a strengthening Ringgit, current ACKNOWLEDGEMENT
account surplus, the liberalisation On behalf of the Board, I would like
of government policies and capital to express our gratitude to all our
controls and higher foreign funds valued shareholders, clients, bankers,
in ows. business partners and the government
authorities, for your continued
The Malaysian stockbroking industry
support and con dence in our Group.
is expected to turn more competitive
with the creation of Investment I am also deeply thankful to the
Banks and the inclusion of the 5 management team, remisiers and all
Idaman Villas show unit
foreign brokers which were issued employees of the TA Group for their
new brokerage licences in 2005/06. unwavering loyalty, commitment
In recent years, institutional investors and invaluable contribution, without
have gained more prominence land banks in prime and strategic which our continuous growth and
in the local equity market while locations with good development strong performance over the years
participation from foreign investors potential. would not be possible.
have risen since the relaxation of
capital controls and removal of We realise that innovation, To my fellow Board members, I
the Ringgit peg. As such, it is vital commitment, hard work and good thank each and every one of you for
that TASH move from being a pure management are among the key your strong support and guidance
broker to become a nancial services ingredients to success in any business extended to me throughout the year.
provider and establish a stronger we are in. Ultimately, our aim is to
foothold in the institutional business. create value for our shareholders.
strengthening
Wewillfocusonfurtherstrengthening With focused strategies in place, we DATIN TAN KUAY FONG
our organisational structure and will surely be able to achieve our goals Executive Chairman
increasing our products and services
o erings. E orts will be made to
look into streamlining some of our
common functions and activities
among our nancial services entities
to achieve greater e ciencyand to
enhance cross-selling of products
and services.
ANNUAL REPORT 2007
With regard to our fairly new core
business, it is the Group’s aspiration
to develop TAP into a premier lifestyle
property developer, and we are fully
dedicated to delivering quality homes
and innovative products with good
value appreciation to our purchasers.
To this end, we have embarked on
an active brand-building exercise to
enhance TAP’s reputation and market
visibility in the industry. We will also
014
continue to focus on increasing our
The upcoming freehold commercial
development @ Bukit Bintang
TA ENTERPRISE BERHAD
(194867-M)
STATEMENT ON
CORPORATE GOVERNANCE
Corporate Governance is the process and structure used B. Board Responsibilities
to direct and manage the business and a airs of the The Board has the overall responsibility for corporate
Company towards enhancing business prosperity and governance, strategic direction and overseeing the
corporate accountability, with the ultimate objective of investmentandbusinessoftheGroup.TheBoardmapsout
realising long term shareholders’ value whilst taking into the Group’s medium and long term strategies in addition
account the interests of stakeholders. to its responsibility to review the Management’s action
plans. The Board’s other primary duties are to conduct
The Board of Directors is committed in ensuring that regular review of the Group’s business operations and
’The Principles and Best Practices of the Malaysian Code performances and to ensure that e ective controls and
on Corporate Governance (the “Code”)’ are observed systems exist to measure and manage business risks.
and practised as a fundamental part of discharging its
responsibilities to protect and enhance shareholders’ The number of Directors’ meetings and attendance for
value. the nancial year in review are as set out below: -
In preparing this report, the Board has considered the Number of Board Meetings
application of the principles of the Code and the extent, Directors
which it has complied with the Best Practices of the Held During
Attended
Tenure in O ce
Code.
Datin Tan Kuay Fong 6 6
DIRECTORS
Zainab Binti Ahmad 6 6
A. Composition of the Board
As at the date of this statement, the Board consists of Dato’ Mohamed Bin Abid 6 6
six (6) members; comprising an Executive Chairman,
two (2) Executive Directors and three (3) Independent Peter U Chin Wei 6 5
Non-Executive Directors. As such, at least one third of
Jory Leong Kam Weng 6 6
the Board are Independent Directors, thereby bringing
objective and independent judgement elements into Christopher Koh Swee Kiat 4 4
the decision making process of the Board. (appointed on 24 May 2006)
The Directors through their vast experiences and
quali cations in economics, accounting, stockbroking, The Board has set up several Board Committees as
nance, legal, property development and business well as Management Committees to assist the Board in
management provide e ective contribution and discharging its duties and responsibilities. The functions
support to the functions of the Board. They bring with and terms of reference of the Board Committees and
them a broad range of skills, experiences and knowledge Management Committees together with the authority
required to successfully direct and supervise the Group’s delegated by the Board to these committees are clearly
business activities, which are vital to its success. A brief de ned in their respective terms of reference. Board
pro le of each Director is presented on pages 6 to 7 of Committees include the Audit Committee, Nomination
this Annual Report. Committee and Remuneration Committee. Management
Committees comprise of Option Committee,
There is a clear division of responsibilities at the helm of Stockbroking Management Committee, Property
ANNUAL REPORT 2007
the Group to ensure a balance of authority and power. Management Committee, TA Investment Management
The Executive Chairman is responsible in ensuring Board Committee (formerly known as Unit Trust Management
e ectiveness in constructive deliberation on matters Committee), Tender Committee, Risk Management
in addition to her overall responsibility for operational Committee, Group Investment Committee, Corporate
performance, organisational e ectiveness and Governance Committee, Tax Planning Committee,
implementation of the Board’s policies and decisions. Information Technology Management Committee,
This is balanced by the presence of Independent Non- Futures Management Committee and ProprietaryTrading
Executive Directors who exercise their independent Investment Committee.
judgement on issues of strategy, standards of conduct,
resources, processes and safeguarding of interests The Management Committees meet from time to time
of minority shareholders. In addition, all queries and to discuss, deliberate, consider and submit proposals
concerns of shareholders and public in general, are on issues of nancial performance, tax planning, risk
directed to our Independent Non-Executive Director, Mr management,informationtechnologysupport,corporate
Jory Leong Kam Weng.
TA ENTERPRISE BERHAD
(194867-M)
STATEMENT ON
CORPORATE GOVERNANCE (cont’d)
governance issues, business development, investment The Nomination Committee considers and recommends
activities, property development, stockbroking and unit to the Boards of the Company and the Group, technically
trust operations as well as asset and fund management. competent persons with integrity and a strong sense
The Board receives regular status reports, updates and of professionalism to be appointed to the relevant
briefing from these committees. In addition, these Boards. Further, the Committee has the responsibility
committees make recommendations to the Board for to assess the contribution of each individual Director
their final decision. and to assess the overall effectiveness of the Boards.
The Committee has the discretion to recommend the
C. Supply of Information size and composition of the respective Boards of the
Board meetings are held to review Management reports
Company and the Group.
on the progress of business operations and to consider,
and if deemed fit, to approve such proposals that requires
In accordance with the Company’s Articles of Association,
the sanction of the Board.
at least one third of the Board are required to submit
The agenda of the Board meetings together with its themselves for re-election at each Annual General
detailed reports, proposition papers and other relevant Meeting. This means that every Director will stand for re-
information on matters requiring the consideration of the election at least once every three (3) years.
Board are circulated to all Directors for their perusal and
consideration well in advance of each Board meeting. E. Directors’ Training
There is a schedule of matters reserved specifically for All members of the Board have attended and completed
the Board’s deliberation and decision which includes the Mandatory Accreditation Programme as prescribed by
the overall Group strategy, acquisition and disposal of Bursa Malaysia Securities Berhad (“Bursa Malaysia”) and had
material assets and approval of corporate plans, financial also accumulated the full Continuing Education Programme
statements, budgets and dividends. The Board papers are (“CEP”) points as at 31 January 2007. The Directors had
comprehensive and encompass both quantitative and attended the following courses during the year :-
qualitative factors so that informed decisions are being • Implementing Strategic Marketing Plan (2 days)
concluded. All proceedings from the Board meetings •
Highlights of the New Financial Reporting Standards
are recorded and confirmed by the Chairman of the in Malaysia (2 days)
meeting.
• Financial Reporting Standards & Salient Features
(2 days)
The Board has access to all information within the Group
• National Accountants Conference 2006 (2 days)
and also to the advice or services of the Company
• MAICSA Conference 2006 (2 days)
Secretary and Senior Management in carrying out their
• Hedge Fund for Top Management (1 day)
duties. The Directors seek external professional advice, if
required. Apart from the above, the directors are encouraged to
attend seminars and other training programmes to keep
D. Appointments of the Board and Re-election abreast with the development in the industry and in the
The appointment of any new member(s) to the Board market place.
is proposed and recommended by the Nomination
Committee. The Nomination Committee had passed DIRECTORS’ REMUNERATION
fifteen (15) resolutions during the financial year.
ANNUAL REPORT 2007
A Remuneration Committee reviews the remuneration
The members of the Committee which is wholly packages of the Directors and subsequently furnishes
comprised of Independent Non-Executive Directors are recommendations to the Board on specific adjustments
as follows: in remuneration to commensurate with the respective
contributions of the Directors. The members of the
Peter U Chin Wei (Chairman) Committee which is wholly comprised of Independent
Independent Non-Executive Director Non-Executive Directors are as follows:
Jory Leong Kam Weng Peter U Chin Wei (Chairman)
Independent Non-Executive Director Independent Non-Executive Director
Christopher Koh Swee Kiat - appointed on 15 May 2007 Jory Leong Kam Weng
016
Independent Non-Executive Director Independent Non-Executive Director
TA ENTERPRISE BERHAD
(194867-M)
Christopher Koh Swee Kiat - appointed on 9 March 2007 Audit Committee assists the Board in reviewing the
Independent Non-Executive Director quarterly reports to Bursa Malaysia and the annual report
to shareholders to ensure its accuracy, adequacy and
Datin Tan Kuay Fong - resigned on 9 March 2007 completeness. The Statement by Directors pursuant to
Executive Chairman Section 169 of the Companies Act 1965 is set out on
page 34 of this Annual Report.
The Remuneration Committee passed five (5) resolutions
upon reviewing the remuneration packages of directors B. Internal Control
and senior management during the financial year. The Board acknowledges its responsibility for the Group’s
systems of internal controls and risk management and
The Remuneration Committee is also authorised by for reviewing the effectiveness of those systems. Such
the Board to assess and review from time to time the systems are designed to manage rather than eliminate
remuneration packages of the Directors and Senior
the risk of failure to achieve business objectives. Any
Management personnel in all forms and also to review
system can only provide a reasonable but not absolute
Directors’ fees of the Company and the Group. However,
assurance against material misstatement, loss or fraud.
the remuneration for the Independent Non-Executive
Directors is determined by the Board as a whole.
Information on the Group’s internal control is presented
Recommendations of the Committee will be reported to
in the Statement on Internal Control laid out on pages 21
the Board for their final decision.
to 23 of this Annual Report.
The remuneration of the Directors of the Company
during the financial year are disclosed in Note 35 of the C. Relationship with Auditors
Audited Financial Statements. The role of the Audit Committee in relation to external
auditors may be found in the Report on Audit Committee
COMMUNICATION WITH SHAREHOLDERS set out on pages 19 to 20. The external auditors meet
AND INVESTORS with the Audit Committee to present the scope of the
financial audit and to review the results of the said audit
The Board recognises the importance of maintaining after the conclusion of the audit. The Company has
effective communication with its shareholders. Thus, the always maintained a close and transparent relationship
annual report contains a balance of reports on results and with its auditors in seeking professional advice and
progress of the business. In addition, the shareholders ensuring compliance with the accounting standards in
and investors have timely and convenient access to Malaysia.
public information on the TA Group via the Company’s
annual report, circulars to shareholders and Bursa LINK COMPLIANCE STATEMENT
for corporate announcements, quarterly financial results
and annual report. The Board considers that it has complied with “The Best
Practices of the Code” for the financial year ended 31
The main forum for dialogue with shareholders is January 2007.
during the Annual General Meeting. At each Annual
General Meeting, the Board presents the progress
OTHER INFORMATION
and performance of the business and encourages
shareholders to participate in a question and answer
A. Share Buyback
session. Directors and senior management staff are
ANNUAL REPORT 2007
There was no share buybacks scheme in place during the
available to respond to shareholders’ questions during
financial year ended 31 January 2007.
the meeting. Extraordinary General Meetings are held as
and when required.
B. Options, Warrants or Convertible
The Company also maintains a website at www.ta.com.my Securities Exercised
that allows all the shareholders and investors to gain There were no options, warrants or convertible securities
access to information about the Group. exercised during the financial year ended 31 January
2007.
ACCOUNTABILITY AND AUDIT
C. American Depository Receipt (ADR) or
A. Financial Reporting Global Depository Receipt (GDR) Programme
The Board is responsible for ensuring the proper The Company has not sponsored any ADR or GDR
maintenance of accounting records of the Group. The programme.
TA ENTERPRISE BERHAD
(194867-M)
STATEMENT ON
CORPORATE GOVERNANCE (cont’d)
D. Sanctions and/or Penalties Imposed develop a piece of freehold vacant land held under
Bursa Malaysia had on 9 April 2007 imposed a fine on No. HS (D) 32163 PT 938 in Mukim Kuala Lumpur,
Mr Peter U Chin Wei for breach of Paragraph 16.11(b) Wilayah Persekutuan measuring 12,872.689 square
of the Listing Requirements of Bursa Malaysia for the metres, Dato’ Mohamed Bin Abid is deemed to have an
late submission of Annual Report and Quarterly Report interest in the Joint Venture by virtue of Section
of Kumpulan Europlus Berhad, a company in which 122A of the Companies Act, 1965. Section 122A of
Mr Peter U Chin Wei acts as a Non-Independent Non- the Companies Act, 1965 was invoked because Dato’
Executive Director. Mohamed bin Abid is currently an Executive Director
and Shareholder of the Company and a Director of TA
Save as disclosed above, the Company is not aware of any Properties Sdn Bhd, whilst his son, Hafez bin Mohamed, is
other sanctions or penalties imposed on the Company, a Director and Shareholder of Beringin Terrace Sdn Bhd.
its subsidiaries, Directors or management by the relevant
regulatory bodies that have been made public which G. Variation in Results
have yet to be disclosed. There were no variances of 10% or more between the
E. Non-Audit Fees audited results of the financial year and the announced
The amount of non-audit fees paid to the External unaudited results.
Auditors, Messrs. Ernst & Young, by the Group and the
Company for the financial year amounted to RM25,000 H. Profit Guarantee
and RM5,000 respectively. During the financial year, there were no profit guarantees
given by the Company.
F. Material Contracts Involving Directors’ and
Major Shareholders’ Interest I. Revaluation Policy on Landed Properties
Save as disclosed below, there were no material contracts
The Group does not revalue its landed properties
during the current financial year, entered into by the
classified as Property, Plant and Equipment, Investment
Company or its subsidiaries involving the interests of
Directors or major shareholders. Property, Land Held for Property Development, Property
Development Costs, Properties Held for Resale, Land
In the Joint Venture between TA Properties Sdn Bhd Held for Resale and Non-Current Asset Classified as Held
and Beringin Terrace Sdn Bhd which was entered to for Sale.
STATEMENT ON DIRECTORS’ RESPONSIBILITY IN
RELATION TO THE FINANCIAL STATEMENTS
The Board of Directors is required under Paragraph • The Group and the Company have used appropriate
15.27 (a) of the Listing Requirements of Bursa Malaysia accounting policies and are consistently applied;
Securities Berhad to issue a statement explaining their
responsibility for preparing the annual audited financial
ANNUAL REPORT 2007
• Reasonable and prudent judgements and estimates
statements. were made; and
The Directors are required to ensure that the financial • All applicable approved accounting standards in
statements for each financial year are properly drawn Malaysia have been followed and confirmed that the
up in accordance with the provisions of the Companies financial statements have been prepared on a going
Act, 1965 and in compliance with applicable approved
concern basis.
accounting standards to give a true and fair view of the
state of affairs of the Group and the Company as at the
The Directors are responsible for keeping proper
end of the financial year and of the results and cash flows
accounting records, which discloses with reasonable
of the Group and the Company for the financial year.
accuracy the financial position of the Company and of
In preparing those financial statements, the Directors are the Group at any time and to ensure that these financial
018
satisfied that: - statements comply with the Companies Act, 1965.
TA ENTERPRISE BERHAD
(194867-M)
REPORT ON
AUDIT COMMITTEE
1. MEMBERSHIP AND ATTENDANCE > he/she must be a member of one of the
associations of accountants specified in Part II of
The Audit Committee (Committee) was set up on 26 May the 1st Schedule of the Accountants Act 1967;
1994. The Committee comprises the following members or
and details of attendance of each member at Committee •
fulfils such other requirements as prescribed by
meetings held during the financial year are as follows: - Bursa Malaysia Securities Berhad.
Number of Committee Meetings
2.2 Chairman
Composition of The Chairman of the Committee shall be an independent
Audit Committee Held During non-executive director nominated by the Board and shall
Attended
Tenure in Office
be appointed amongst the members.
Jory Leong Kam Weng 4 4
(appointed as Chairman 2.3 Objectives
on 23 June 2006) i. To provide an additional assurance to the Board by
Chairman / Independent
giving objective and independent review of financial,
Non-Executive Director
operational and administrative controls and
Datin Tan Kuay Fong 4 4 procedures.
Member / Executive Chairman
ii. To assist the Board in establishing and maintaining
Christopher Koh Swee Kiat 3 3
internal controls for areas of risk as well as
(appointed on 24 May 2006) safeguarding of assets.
Member / Independent
Non-Executive Director
iii. To assess and supervise the quality of audits
conducted by the internal and external auditors.
Peter U Chin Wei 2 2
(resigned on 23 June 2006)
Member / Independent
iv. To reinforce the independence of the company’s
Non-Executive Director external auditor, and ensure that the auditors have
free reign in the audit process.
Mr Jory Leong Kam Weng is a Certified Public Accountant
of CPA Australia and also a member of the Malaysian v. To provide a forum for regular, informal and
Institute of Accountants (“MIA”). private discussions between the external auditor
and directors who have no significant relationships
Mr Christopher Koh Swee Kiat holds an ACCA with management.
postgraduate diploma in Accounting and Finance.
vi. To reinforce the objectivity of the internal audit
2. COMPOSITION AND TERMS OF REFERENCE department.
2.1 Members 2.4 Authority
i. The Committee shall be appointed by the Board i. The Committee is authorised by the Board to
pursuant to a Board Resolution. investigate any activities within its terms of reference
ANNUAL REPORT 2007
and shall have unlimited access to both the internal
ii. It shall comprise of at least three (3) members of
whom a majority shall be independent non-
and external auditors, as well as the employees of
executive directors. the Group.
iii. At least one member of the Committee:
ii. It shall also have the authority to obtain independent
• must be a member of the MIA;
legal or other professional advice as it considers
• if he/she is not a member of the MIA, he/she necessary.
must have at least three years’ working experience
and : iii.
It shall also have the power to establish Sub-Audit
> he/she must have passed the examinations Committee(s) to carry out certain investigations
specified in Part 1 of the 1st Schedule of the on behalf of the Committee in such manner as the
Accountants Act 1967; or Committee shall deem fit and necessary.
TA ENTERPRISE BERHAD
(194867-M)
REPORT ON
AUDIT COMMITTEE (cont’d)
2.5 Functions, Duties and Responsibilities • To review the financial statements before the quarterly
i. To review with the internal and external auditors their announcements to Bursa Malaysia Securities Berhad.
audit plans and reports. • To discuss the audit plan with external auditors and
ii. To review the scope of the internal audit programme
scope for the year as well as the audit procedures to
and procedures, consider the results of the internal be utilised.
audit investigations. • To discuss with internal auditors on its audit plan,
processes and scope, adequacy of resources and co-
iii. To evaluate the adequacy and effectiveness of the
ordination with external auditors.
internal control systems and accounting policies.
• To review the reports prepared by the internal auditors
iv. To review the assistance given by the officers of the on the state of internal control of the Group.
Group to the external auditors.
v. To review the quarterly, annual and consolidated 4. INTERNAL AUDIT FUNCTION
financial statements of the Company before
submission to the Board, focusing particularly on The Group has an established internal audit department,
which assists the Committee in the discharge of its
(a) any changes in accounting policies and practices; duties and responsibilities. The Committee is aware that
(b) significant adjustments arising from the audit; an independent and resourceful internal audit function
(c) the going concern assumption; is essential in ensuring that the internal control system
(d) compliance with accounting standards; and is effective.
(e) other legal requirements.
The main role of the internal audit function is to review
vi. To review any related party transactions within the
the effectiveness of the internal control system and
Company or Group. this review is performed in an impartial, proficient and
professional manner. The internal audit department
vii. To identify and direct any special projects or
covers the review and the adequacy of risk management;
investigations deemed necessary. operational controls; compliance with established
procedures, guidelines and statutory requirements;
viii. To nominate a person or persons as the Company’s quality of assets; management efficiency and comparison
external auditors. of the level of customer services provided by other
competitors.
ix. To carry out such other functions and considers
other topics, as may be agreed upon with the Board.
A risk-based approach is adopted for all audit programs.
x. To review reports and consider recommendations
These audit programs ensure that the instituted controls
of the Sub-Audit Committee(s), if any. are appropriate, effectively applied and reduce the risk
of exposures to an acceptable level which is consistent
with the Group’s risk management policy.
3. SUMMARY OF ACTIVITIES
The Committee meets at least four (4) times annually, or 5. ALLOCATION OF OPTIONS
ANNUAL REPORT 2007
more frequently as circumstances dictate. As part of its
duty to foster open communication, the Head of Internal Subsequent to the termination of the previous
Audit, the relevant heads for the departments being Employees’ Share Option Scheme on 9 January 2004,
audited (if required) and representatives of the external the Company has adopted an Employees’ Share Option
auditors (if required) will normally attend the meetings. Scheme which became effective on 30 January 2004. To-
Other Board members and/or officers of the Company date, the Company has yet to allocate options in regard
or Group may attend meetings upon specific invitation to the Employees’ Share Option Scheme to its eligible
of the Committee. employees.
Besides reviewing the year end financial statements, the The Committee will verify the criteria for allocation of
Committee met four (4) times during the year for the options to eligible employees, as proposed by the Option
020
following purposes: Committee, during the relevant financial year.
TA ENTERPRISE BERHAD
(194867-M)
STATEMENT ON
INTERNAL CONTROL
The Board of Directors (“the Board”) is committed to are highlighted with recommendations for improvement
maintaining a sound system of internal control and risk and mitigation. Follow-up procedures are in place to
management practices in accordance with paragraph monitor the implementation of recommendations made
15.27 (b) of the Bursa Malaysia Securities Berhad by the Internal Audit Department.
(Bursa Malaysia) Listing Requirements and as guided
by the Bursa Malaysia’s guidelines on Statement on The respective Management of the Company and its
Internal Control: Guidance for Directors of Public Listed subsidiaries, with feedback from Risk Management
Companies. Set out below is the Board’s Statement on Department, determine the applicability of risk
Internal Control which outlines the nature and the scope monitoring and reporting procedures and are responsible
of the Group during the year. for the identification and evaluation of significant risks
applicable to their areas of business, together with
INTERNAL CONTROL the design and operation of suitable internal controls.
Whilst risk management is an integral part of the Group’s
TA Enterprise Berhad and its subsidiaries (“the Group”) business, the Risk Management Department had and
system of internal controls is designed to provide a sound will continue to formalize appropriate risk policy and risk
system of internal control to safeguard shareholders’ management framework for the Group and significant
investment and the Group’s assets as well as to improve risk areas are highlighted and brought to the Board’s
the Group’s operations and risk management functions. attention for further assessment.
It covers risk management and financial, operational and
compliance controls. The duties of the Internal Audit Department and
Risk Management Department are performed with
RESPONSIBILITY independence, proficiencies and due professional care.
This provides the Audit Committee and the Board with
The Board affirms its overall responsibilities for reasonable assurance on the adequacy, integrity and
maintaining a sound system of internal control and reliability of the internal control systems.
risk management practices in all aspects of the Group’s
business. In recognition of that responsibility, the The Board through its Audit Committee is ultimately
Board sets policies, guidelines, control systems and responsible for the Group’s system of internal controls
seeks regular assurance from its Management that the and for reviewing its effectiveness. Therefore, the Audit
system of internal control is operating effectively and Committee, on behalf of the Board, together with
is in compliance with laws and regulations. The role of Internal Audit Department reviews the effectiveness of
management is to implement the Board’s policies on risk the internal financial and operating control environment
and control and to ensure proper compliance. of the Group primarily through reviews of reports from
the internal audit function and any recommendation
The Board is ultimately responsible for the Group’s system from the external auditors. Discussions are held with
of internal control and for reviewing its effectiveness, Management of the Company and its subsidiaries on
adequacy and integrity. However, due to the limitations the actions taken in relation to internal control issues
inherent in any system of internal control, it should be identified. During the current financial year, eighteen
noted that such a system is designed to enable the Group (18) internal audit reports were received and reviewed
to meet its business objectives and manage rather than by the Audit Committee.
eliminate the risk of failure. As such, the system can only
provide a reasonable but not absolute assurance against In addition to the above, the Audit Committee reviews
risk, material misstatement, loss or failure. the quarterly results before approval by the Board for
public release, the audit findings and issues of the
INTERNAL AUDIT & RISK external auditors, the annual financial statements and
ANNUAL REPORT 2007
MANAGEMENT FUNCTIONS the Annual Report of the Group. It also reviews and
approves the annual audit plan for the year prior to their
The Group’s Internal Audit Department and Risk execution.
Management Department report directly to the Audit
Committee and are independent of the activities or The Board also seeks regular assurance on the continuity
operations of the subsidiaries, departments and sections and effectiveness of its systems of internal controls
under review. through independent appraisals by the internal auditors
and any recommendations or issues raised by the
The Internal Audit Department performs regular reviews external auditors.
on the internal control procedures, surveillance and
audit of business processes to assess the effectiveness MONITORING MECHANISM AND
of internal controls and to monitor compliance MANAGEMENT STYLE
with procedures. It assesses the integrity of financial
information provided and any major weaknesses in Scheduled periodic meetings of the Board, Board
control procedures. Significant risks impacting the Group Committees and Management Committees represent
TA ENTERPRISE BERHAD
(194867-M)
STATEMENT ON
INTERNAL CONTROL (cont’d)
the fundamental platform by which the Group’s risks and each maintains controls and procedures
performance, business activities and conduct are
appropriate to its own business environment. These
monitored. The daily running and management of include procedures to identify and then mitigate
the business is entrusted to the Executive Chairman, significant risks;
Executive Directors and the Management. Under the
purview of the Executive Chairman and Executive • The Management Committees and Management
Directors, the Chief Operating Officers and Heads of of the Company and its subsidiaries are responsible for
the respective operating subsidiaries of the Group are effective risk management. Each business area /
empowered with the responsibilities of managing their division / department / section within the Group
respective operations and business.
will evaluate its key risks and controls. Periodic reports
confirming the effectiveness of all significant control
The Executive Chairman actively communicates policies and procedures and/or any changes to the
the Board’s expectations to the Management at the business and external environment are prepared by
Management meetings as well as through the various the Senior Executive in each business area/ division/
Project meetings, Hotel Owners meetings, Management department / section within the Group and reviewed
Committee meetings and Board meetings of the various by the respective Senior Management of the Company
subsidiaries. At these meetings, operational and financial and its subsidiaries. The Internal Audit Department
risks, management and corporate issues, business also reviews these reports independently and advises
developments and performance, opportunities and the Audit Committee and the Board of any significant
threats including competitors, market and cross border matters arising or changes to the business that could
environmental analysis are discussed and dealt with. have an impact on the significant risks affecting the
Group;
The Board is responsible for setting the business
direction and overseeing the overall conduct of the • The Board maintains an organizational structure
Group’s operations and business through its various
with clearly defined delegation of responsibilities to
Management Committees and management reporting the Board Committees, Management Committees
mechanism. Through these mechanisms the Board is and the Management of the operating units
promptly informed of major or recent developments and subsidiaries. Clear and well-defined lines of
pertaining to internal controls, regulatory compliance, accountabilities, appropriate organization structure
risk taking and financial commitment. for planning, executing, controlling and monitoring
business operations and authority limits for all
KEY PROCESSES significant aspects of the businesses have been
established in the Company and its subsidiaries. These
The Board has a broad overview on risk policies of the organization structure and authority limits are subject
Group and is committed in maintaining a sound system to regular review and improvement;
of internal controls in the Group.
• Board Committees comprising Audit Committee,
Members of the Management Committees and the Nomination Committee, Remuneration Committee
Board would assess the cost and return on investment, and various Management Committees comprising
profit margin, impact to the Group, review the availability Stockbroking Management Committee, Property
of cash flow before any commitment, investment or Management Committee, Futures Management
significant expenditure is made. The various Departments Committee, Option Committee, Group Investment
and Management Committees are involved in the day- Committee, TA Investment Management Committee
to-day process of: (formerly known as Unit Trust Management Committee),
• Identifying, evaluating and managing risks; and Tender Committee, Corporate Governance Committee,
ANNUAL REPORT 2007
• Designing and implementing the procedures for Proprietary Trading Investment Committee, Tax Planning
planning, capital expenditure, information Committee, Information Technology Management
and reporting system for monitoring the Group’s Committee and Risk Management Committee with
performance.
well defined terms of reference and functions have been
established;
The key processes and elements adopted to monitor and
review the effectiveness of the Group’s internal control • Regular Board meetings are held to discuss and
system are as follows and these processes are embedded decide on policies and major business matters, while
within the Group’s overall business operations and guided the Management Committees’ discussions, briefings
by operational manuals on policies and procedures: and meetings are held from time to time to:
i) Identify, discuss and resolve financial and key
• Each of the key companies within the Group has its
management issues;
own management and internal control structures. The ii) Manage the operational controls;
022
Management of each business unit bears responsibility iii) Monitor and assess the business performance;
for the identification and mitigation of major business iv) Review the risks and controls of the businesses;
TA ENTERPRISE BERHAD
(194867-M)
v) Discuss appropriate tax planning measure and plans; consultant is appointed if necessary to assist in the
vi) Review and evaluate the information technology collection /restructuring of such loans;
requirements and systems support of the various
subsidiaries; • The Group emphasizes continuous effort in
vii) Consider issues of corporate governance and maintaining the quality of its property development
business practices; and products and services. Its Property Division has
viii) Deliberate on the investment proposals. ensured that safety and health regulations,
environmental controls and all other legislations in
The proceedings of some of these meetings are minuted connection with the industry have been considered
or documented in reports, memorandums and proposals and complied with;
submitted to the Board of the Company, the respective
Boards of the subsidiaries and/or its Management from • As property development becomes an integral part
time to time; of the Group’s business, the Board placed emphasis in
implementing appropriate controls and management
• Policies and procedures for key business processes are of the following key functions of its Property Division :-
formalized and documented for each of the significant (a) Sales and Marketing of its development products;
operating units. Relevant regulations, rules, guidelines, (b) Project Management function covering product
laws, policies and procedures governing the major planning and designing, project planning and
operations of the Group are translated into operational scheduling, project cost control and environmental,
manuals and guidelines. The manuals are reviewed health and safety;
and approved by the respective Heads of Department, (c) Credit Control and Administration function on
Compliance Officer and Management before they are billings and collections;
tabled to the Board for adoption and implementation; (d) Construction Management function covering
construction of buildings, quality assurance and
• Corporate values which emphasize ethical behavior quality control, time and cost control, building
and quality service are set out in the TA Group
material purchase and control, and
Employees’ Code of Conduct; (e) Management of its properties and buildings
covering lease and rental, building management
• There are strategic planning, annual budgeting and and services;
target-setting processes for key areas of business,
which are reviewed and approved by the Board. A
• Key functions such as finance, tax, treasury, insurance
detailed budgeting process is in place where and legal matters are centralized at head office;
subsidiaries prepare budgets for the forthcoming
financial year, for approval by the Board. The Board • The professionalism and competence of staff are
evaluates and assesses the long and short-term risks maintained through a rigorous recruitment process, an
and opportunities identified by each of the subsidiaries annual appraisal system and training and development
in the course of the Company’s annual planning programmes to conform with regulatory requirements.
process. Regular forecasts support the active Suitable employees with the required qualifications
monitoring of the Group’s performance against plan and experience are appointed to assume their
to ensure that the objectives of the subsidiaries are
responsibilities. In addition, on-going internal and
in the context of the Group’s overall business external training and development programmes are
strategies and objectives; provided to develop and to enhance the competencies,
skills and technical knowledge of the employees.
• Regular management reports and information are
provided to the Board from the Management of the BOARD’S CONCLUSION
ANNUAL REPORT 2007
various business divisions, on the key operating
statistics, assessment of business performance against The Board recognizes that the Group operates in a
approved budgets, environmental and regulatory dynamic business environment in which the internal
matters; control system must be responsive in order to support
its business objectives. As such, it is pleased to report
• The Board has through the relevant Management that the current system of internal controls in place
Committees adopted an effective and prudent throughout the Group is adequate and satisfactory in
stance with regard to the management of credit risks. addressing its principal risks and to safeguard the Group’s
Credit approval for high value loans are deliberated at interest and assets. The Board believes that a balanced
Management Committees level to ensure that the achievement of its business objectives and operational
loans are within the credit risk capacity and are efficiency has been attained and there is no control
adequately secured by collateral of good quality. For failure or weakness that would have material adverse
recovery of loans, Debt Recovery Unit within the effect on the performance and results of the Group for
Credit Control Department as well as external the year under review.
TA ENTERPRISE BERHAD
(194867-M)
5-YEAR GROUP
FINANCIAL SUMMARY
YEAR ENDED 31 JANUARY 2007 2006 2005 2004 2003
(RM ‘000) (RM ‘000) (RM ‘000) (RM ‘000) (RM ‘000)
OPERATING RESULTS
Revenue 354,520 312,756 283,284 203,445 154,533
Profit before tax ^ 143,115 89,504 120,376 120,164 16,565
Profit after taxation ^ 133,735 80,708 108,478 103,943 12,588
Profit attributable to equity holders
of the parent ^ 133,063 80,348 107,507 103,189 12,364
KEY BALANCE SHEET DATA
Total assets 2,932,810 2,381,692 2,433,687 2,337,467 1,996,879
Cash and cash equivalents * 174,347 440,986 321,768 384,931 407,060
Total liabilities 1,061,694 592,909 660,008 652,077 441,666
Total borrowings** 147,081 152,381 146,302 139,530 124,965
Paid up share capital 1,328,475 1,328,475 1,328,475 1,328,475 1,328,475
Shareholders’ equity 1,863,072 1,781,321 1,766,486 1,679,203 1,550,284
SHARE INFORMATION
Per share (sen)
- Earnings (Basic) 10.02 6.05 8.09 7.77 0.93
- Earnings (Fully diluted) 10.02 6.05 8.09 7.77 0.93
- Net tangible assets ^^ 142.20 136.20 134.07 127.56 118.21
- Gross dividends 7.00 3.00 6.00 7.50 1.00
Share price as at 31 January (RM) 0.88 0.67 0.86 1.09 0.54
Market capitalisation (RM’000) 1,169,058 883,436 1,142,489 1,448,038 717,377
FINANCIAL RATIOS
ANNUAL REPORT 2007
Return on total assets (%) 4.5% 3.4% 4.4% 4.4% 0.6%
Return on shareholders’ equity (%) 7.1% 4.5% 6.1% 6.1% 0.8%
Gearing ratio (times) 0.08 0.09 0.08 0.08 0.08
Price to earnings ratio (times) 8.79 11.00 10.63 14.03 58.02
* Comprises short term funds but excluding monies held in trust, Housing Development Accounts and pledged for
bank guarantees.
** Secured foreign currency denominated term loan and short term borrowings.
024
^ Restated for FY’06, ‘05, ‘04 and ‘03 due to the change in accounting policy as described in Note 3.1(e).
^^ Net tangible assets = total assets - total liabilities - intangible assets - deferred tax assets + deferred tax liabilities.
TA ENTERPRISE BERHAD
(194867-M)
Revenue and Profit After Tax (attributable to equity holders f the parent)
o
‘07 133
355
PAT
‘06 80
313 Revenue
Financial Years
‘05 108
283
‘04 103
203
‘03 12
155
0 50 100 150 200 250 300 350 400 RM Million
Earnings per Share and Gross Dividend Per Share
‘07 7.00
10.02
Gross Dividend
‘06 3.00
6.05 EPS
Financial Years
‘05 6.00
8.09
‘04 7.50
7.77
‘03 1.00
0.93
0.00 2.00 4.00 6.00 8.00 10.00 12.00 Sen
Shareholders’ Equity, Total Assets and Total Liabilities
‘07 2,933
1,062
1,863 Total Assets
‘06 2,382
Total Liabilities
593
Financial Years
1,781
Shareholders’
‘05 2,434 equity
660
1,766
‘04 2,337
652
1,679
‘03 1,997
442
1,550
0 5,000 1,000 1,500 2,000 2,500 3,000 3,500 RM Million
ANNUAL REPORT 2007
Profit After Tax (attributable to equity holders f the parent) and Year-End Share Price
o
150 1.09 1.5
133
108 PAT
103
100 1.0
RM Million
80 Share Price
0.54
0.86 0.88
50 0.67 0.5
12
0 0.0
‘03 ‘04 ‘05 ‘06 ‘07 Financial Years
TA ENTERPRISE BERHAD
(194867-M)
5-YEAR GROUP
FINANCIAL SUMMARY (cont’d)
2005 Revenue, Net Segment Results and Net Segment Assets
450
400
Revenue
Net Segment
350 Results
Net Segment
RM Million
300
Assets
250
200
150
100
50
0 Business Segments
Stockbroking & Investment Credit & Property Property Hotel
Financial Services holding Lending Investment Development Operations
2006 Revenue, Net Segment Results and Net Segment Assets
390
340
Revenue
Net Segment
290 Results
Net Segment
RM Million
240
Assets
190
140
90
40
Business Segments
(10)
Stockbroking & Investment Credit & Property Property Hotel
Financial Services holding Lending Investment Development Operations
2007 Revenue, Net Segment Results and Net Segment Assets
630
580 Revenue
ANNUAL REPORT 2007
530
Net Segment
480 Results
430 Net Segment
RM Million
380 Assets
330
280
230
180
130
80
026
30
Business Segments
(20)
Stockbroking & Investment Credit & Property Property Hotel
Financial Services holding Lending Investment Development Operations
TA ENTERPRISE BERHAD
(194867-M)
21,063
(7%)
274
(0.1%) 187,062
2005 (66%)
67,315 Revenue
(24%)
(RM'000)
7,570
(3%)
25,448
(8%)
7,162
(2%) 205,043
2006 (66%)
67,239 Revenue
(21%)
(RM'000)
Malaysia 7,864
(3%)
Hong Kong
Australia
25,027
South Africa (7%)
6,986
Canada
(2%) 237,788
ANNUAL REPORT 2007
(67%)
2007
73,471
(21%) Revenue
(RM'000)
11,248
(3%)
TA ENTERPRISE BERHAD
(194867-M)
5-YEAR GROUP
FINANCIAL SUMMARY (cont’d)
1,809
(0.1%)
11,796
(0.5%)
285,699
(12%)
1,667,661
44,619 2005 (70%)
(2%) Segment Assets
(RM'000)
342,500
(14%)
40,954
(2%)
1,755
4,912 (0.1%)
(0.2%)
250,062
(11%) 1,699,358
(73%)
39,066
2006
(2%) Segment Assets
(RM'000)
291,655
Malaysia (12%)
Hong Kong 51,290
(2%)
Australia
South Africa
1,286
(0.04%)
Canada 47,074
(2%)
British Virgin 230,259
ANNUAL REPORT 2007
Islands
(8%) 2,240,998
(78%)
Others
33,932
2007
(1%) Segment Assets
(RM'000)
274,306
(9%)
028
62,954
(2%)
TA ENTERPRISE BERHAD
(194867-M)
STATEMENTS
FINANCIAL
Directors’ Report 30
Statement by Directors 34
Statutory Declaration 34
Report of the Auditors 35
Consolidated Balance Sheet 36
Consolidated Income Statement 38
Consolidated Statement of Changes in Equity 39
Consolidated Cash Flow Statement 40
Balance Sheet 43
Income Statement 44
Statement of Changes in Equity 45
Cash Flow Statement 46
Notes to the Financial Statements 48
DIRECTORS’
REPORT
The directors have pleasure in presenting their report together with the audited financial statements of the Group and
the Company for the financial year ended 31 January 2007.
PRINCIPAL ACTIVITIES
The principal activities of the Company are investment holding and the provision of management services and funding
facilities to its subsidiaries.
The principal activities of the subsidiaries are described in Note 8 to the financial statements.
There have been no significant changes in the nature of these activities during the financial year.
RESULTS
Group Company
RM’000 RM’000
Profit for the year 133,735 179,185
Attributable to:
Equity holders of the Company 133,063 179,185
Minority interests 672 -
133,735 179,185
There were no material transfers to or from reserves or provisions during the financial year, other than as disclosed in the
statements of changes in equity.
In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year
were not substantially affected by any item, transaction or event of a material and unusual nature.
DIVIDENDS
The amount of dividends paid by the Company since 31 January 2006 were as follows: RM’000
ANNUAL REPORT 2007
In respect of the financial year ended 31 January 2006 as reported in the
Directors’ Report of that year:
Ordinary final dividend of 3% less 28% taxation, paid on 15 August 2006 28,695
At the forthcoming Annual General Meeting, a final dividend in respect of the current financial year ended 31 January
2007 of 7% less 26% taxation (5.18 sen net per ordinary share), on the number of shares in issue on the entitlement
date to be announced, will be proposed for shareholders’ approval. The financial statements for the current financial
year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in the
030
shareholders’ equity as an appropriation of retained profits in the next financial year ending 31 January 2008.
TA ENTERPRISE BERHAD
(194867-M)
SIGNIFICANT AND SUBSEQUENT EVENTS
The significant and subsequent events of the Group and the Company during and after the financial year are as disclosed
in Note 8 and Note 45 to the financial statements.
EMPLOYEES’ SHARE OPTION SCHEME
The Company had obtained the approval of the Securities Commission on 11 December 2003 and its shareholders
on 9 January 2004 for the issuance of a Employees’ Share Option Scheme (“ESOS”). The ESOS became effective on 30
January 2004 and shall be in force for a period of five years from the date of implementation of the ESOS. The option
price of the ESOS shall be the higher of the par value of TA Enterprise Berhad (“TAE”) shares or the weighted average
market price of TAE as shown in the Daily Official List of Bursa Malaysia for the five market days immediately preceding
the Offer Date with a discount of not more than ten percent (10%) therefrom. The aggregate maximum number of ESOS
shares to be offered and allotted to eligible employees shall be at the discretion of the ESOS Committee after taking into
consideration the position, performance, seniority and the length of service of the eligible employee. As at to-date, the
Company has not allocated any option to eligible employees.
WARRANTS
The 1999/2009 Warrants were constituted by a Deed Poll dated 20 April 1999 executed by the Company. The warrants
were listed on Bursa Malaysia Securities Berhad on 1 July 1999.
The main features of the 1999/2009 Warrants are as follows:
(a) Each warrant will entitle the registered holders to subscribe for one new ordinary share of RM1.00 each at par
in the Company at an exercise price of RM1.00 each, subject to adjustment from time to time in accordance with
the conditions as stipulated in the Deed Poll.
(b) The warrants may be exercised at any time on or before the expiry date of 24 June 2009, ten years from the date
of issue of the rights to allotment of warrants of 25 June 1999. Warrants not exercised during the exercise period
will thereafter lapse and cease to be valid. ANNUAL REPORT 2007
(c) The new ordinary shares of RM1.00 each to be issued pursuant to the exercise of the warrants will rank pari passu
in all respects with the existing issued ordinary shares of the Company except that they shall not be entitled to any
dividends, rights, allotments and/or other distributions, the record date of which is on or before the date of
allotment and issue of the new ordinary shares of the Company pursuant to the exercise of the warrants.
For the purpose hereof, record date means the date as at the close of business on which the shareholders must
be registered as members of the Company in order to participate in any dividends, rights, allotments or any other
distributions.
As at the balance sheet date, the entire 572,579,462 warrants remain unexercised.
TA ENTERPRISE BERHAD
(194867-M)
DIRECTORS’
REPORT (cont’d)
DIRECTORS
The names of directors of the Company in office since the date of the last report and at the date of this report are:
Datin Tan Kuay Fong
Zainab binti Ahmad
Dato’ Mohamed bin Abid
Peter U Chin Wei
Jory Leong Kam Weng
Christopher Koh Swee Kiat
DIRECTORS’ BENEFITS
Neither at the end of the financial year, nor at any time during the year, did there subsist any arrangement to which the
Company was a party, whereby the directors might acquire benefits by means of the acquisition of shares in or debentures
of the Company or any other body corporate, other than those arising from warrants issued by the Company.
Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other
than a benefit included in the aggregate amount of emoluments received or due and receivable by the directors or the
fixed salary of a full time employee of the Company or related corporations as shown in Notes 35 and 40 to the financial
statements) by reason of a contract made by the Company or related corporations with the director or with a firm of
which he or she is a member, or with a company in which he or she has a substantial financial interest.
DIRECTORS’ INTERESTS
According to the register of directors’ shareholdings, the direct and indirect interests of directors in office at the end of
the financial year in shares and warrants in the Company during the financial year were as follows:
Number of Ordinary Shares of RM1.00 Each
1 February
2006/date of 31 January
appointment Bought Sold 2007
The Company
Datin Tan Kuay Fong* 3,061,000 - - 3,061,000
Dato’ Mohamed bin Abid 480,000 - - 480,000
Christopher Koh Swee Kiat 16,000 - - 16,000
Number of 1999/2009 Warrants
ANNUAL REPORT 2007
1 February Bought/ 31 January
2006 (Sold) 2007
The Company
Datin Tan Kuay Fong* 800,000 - 800,000
Zainab binti Ahmad 25,025,400 (24,300,900) 724,500
Dato’ Mohamed bin Abid 200,000 - 200,000
Jory Leong Kam Weng - indirect interest 10,000 - 10,000
* Datin Tan Kuay Fong is the spouse of Datuk Tiah Thee Kian, a substantial shareholder of the Company.
032
Other than the above, the other director in office at the end of the financial year did not have any interest in shares in
the Company or its related corporations during the financial year.
TA ENTERPRISE BERHAD
(194867-M)
OTHER STATUTORY INFORMATION
(a) Before the balance sheets and income statements of the Group and of the Company were made out, 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 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 which were unlikely to realise their values as shown in the accounting
records in the ordinary course of business had been written down to an amount which they might be
expected so to realise.
(b) At the date of this report, the directors are not aware of any circumstances which would render:
(i) the amount 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 substantial extent; and
(ii) the values attributed to current assets in the financial statements of the Group and of the Company
misleading.
(c) At the date of this report, the directors are not aware of any circumstances which have arisen which render
adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading
or inappropriate.
(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report
or financial statements of the Group and of the Company which would render any amount stated in the financial
statements misleading.
(e) As at the date of this report, there does not exist:
(i) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year
which secures the liabilities of any other person; or
(ii) any contingent liability in respect of the Group or of the Company which has arisen since the end of the
financial year.
(f ) In the opinion of the directors:
(i) no contingent liability or other liability has become enforceable or is likely to become enforceable within the
period of twelve months after the end of the financial year which will or may affect the ability of the Group
and of the Company to meet their obligations as and when they fall due; and
(ii no item, transaction or event of a material and unusual nature has arisen in the interval between the end of
the financial year and the date of this report which is likely to affect substantially the results of the operations
of the Group and of the Company for the financial year in which this report is made.
ANNUAL REPORT 2007
AUDITORS
The auditors, Ernst & Young, have expressed their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the directors.
ZAINAB BINTI AHMAD ATO’ MOHAMED BIN ABID
D
Kuala Lumpur, Malaysia
17 May 2007
TA ENTERPRISE BERHAD
(194867-M)
STATEMENT BY DIRECTORS
PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT,1965
We, ZAINAB BINTI AHMAD and DATO’ MOHAMED BIN ABID, being two of the directors of TA ENTERPRISE BERHAD, do
hereby state that in the opinion of the directors, the accompanying financial statements set out on pages 36 to 135 are
drawn up in accordance with the provisions of the Companies Act, 1965 and applicable Financial Reporting Standards in
Malaysia and so as to give a true and fair view of the financial position of the Group and of the Company as at 31 January
2007 and of the results and the cash flows of the Group and of the Company for the year then ended.
Signed on behalf of the Board in accordance with a resolution of the directors.
ZAINAB BINTI AHMAD D
ATO’ MOHAMED BIN ABID
Kuala Lumpur, Malaysia
17 May 2007
STATUTORY DECLARATION
PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965
I, THERESA HOOI YOKE MUI, being the officer primarily responsible for the financial management of TA ENTERPRISE
BERHAD, do solemnly and sincerely declare that the accompanying financial statements set out on pages 36 to 135 are
in my opinion 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.
ANNUAL REPORT 2007
Subscribed and solemnly declared by the
abovenamed Theresa Hooi Yoke Mui at
Kuala Lumpur in Wilayah Persekutuan
on 17 May 2007 T
HERESA HOOI YOKE MUI
034
Before me,
TA ENTERPRISE BERHAD
(194867-M)
REPORT OF THE AUDITORS TO THE MEMBERS OF
TA ENTERPRISE BERHAD
(Incorporated in Malaysia)
We have audited the accompanying financial statements set out on pages 36 to 135. These financial statements are the
responsibility of the Company’s directors.
It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to report our
opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do
not assume responsibility to any other person for the content of this report.
We conducted our audit in accordance with the applicable Approved Standards on Auditing in Malaysia. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant
estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion:
(a) the financial statements have been properly drawn up in accordance with the provisions of the Companies Act,
1965 and the applicable Financial Reporting Standards in Malaysia so as to give a true and fair view of:
(i) the financial position of the Group and of the Company as at 31 January 2007 and of the results and the cash
flows of the Group and of the Company for the year then ended; and
(ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements; and
(b) the accounting and other records and the registers required by the Act to be kept by the Company and by its
subsidiaries for which we have acted as auditors have been properly kept in accordance with the provisions
of the Act.
We have considered the financial statements and the auditors’ reports of the subsidiaries of which we have not acted as
auditors, as indicated in Note 8 to the financial statements, being financial statements that have been included in the
consolidated financial statements.
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial
statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the
consolidated financial statements and we have received satisfactory information and explanations required by us for
those purposes.
The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification material to the
ANNUAL REPORT 2007
consolidated financial statements except for the comment in the auditors’ report of a subsidiary as disclosed in Note 8 to
the financial statements, and in respect of subsidiaries incorporated in Malaysia, did not include any comment required
to be made under Section 174(3) of the Act.
Ernst & Young Gloria Goh Ewe Gim
AF : 0039 No. 1685/04/09(J)
Chartered Accountants Partner
Kuala Lumpur, Malaysia
17 May 2007
TA ENTERPRISE BERHAD
(194867-M)
CONSOLIDATED BALANCE SHEET
AS AT 31 JANUARY 2007
Note 2007 2006
RM’000 RM’000
(restated)
ASSETS
Non-current assets
Property, plant and equipment 4 487,993 547,077
Investment property 5 192,931 218,525
Land held for property development 6(a) 361,204 98,980
Intangible assets 7 491 254
Associated companies 9 15,231 15,229
Other investments 10 34,182 64,973
Deferred tax assets 24 1,097 1,243
Reserves on consolidation - (4,378)
1,093,129 941,903
Current assets
Property development costs 6(b) 95,726 86,630
Properties held for resale 11 2,128 2,865
Land held for resale 12 9,470 9,470
Inventories 13 576 437
Financial receivables 14 308,752 266,542
Trade receivables 15 835,151 410,955
Other receivables 16 108,148 68,394
Tax recoverable 25,673 27,122
Due from associated companies 18 10 9
Short term investments 19 6,720 2,721
Short term funds 20 415,535 564,644
1,807,889 1,439,789
Non-current asset classified as held for sale 21 31,792 -
1,839,681 1,439,789
TOTAL ASSETS 2,932,810 2,381,692
ANNUAL REPORT 2007
EQUITY AND LIABILITIES
Equity attributable to equity holders of the Company
Share capital 22 1,328,475 1,328,475
Reserves 534,597 452,846
1,863,072 1,781,321
Minority interests 8,044 7,462
Total equity 1,871,116 1,788,783
036
TA ENTERPRISE BERHAD
(194867-M)
Note 2007 2006
RM’000 RM’000
(restated)
Non-current liabilities
Deferred tax liabilities 24 19,564 22,122
Term loan 25 125,214 145,182
144,778 167,304
Current liabilities
Provision for liabilities 26 970 4,040
Short term borrowings 25 21,867 7,199
Trade payables 27 695,135 264,794
Other payables 28 112,738 72,796
Due to remisiers 29 76,489 72,814
Due to directors 30 27 70
Due to associated companies 18 1,028 1,668
Income tax payable 8,662 2,224
916,916 425,605
Total liabilities 1,061,694 592,909
TOTAL EQUITY AND LIABILITIES 2,932,810 2,381,692
ANNUAL REPORT 2007
The accompanying notes form an integral part of the financial statements
TA ENTERPRISE BERHAD
(194867-M)
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 JANUARY 2007
Note 2007 2006
RM’000 RM’000
(restated)
Revenue 32 354,520 312,756
Other income 33 44,227 57,209
Purchase of inventories (4,252) (3,719)
Cost of properties sold 6(b) (49,439) (67,458)
Hotel operation costs (exclude personnel costs) (22,923) (21,636)
Personnel costs 34 (69,416) (56,464)
Depreciation (27,655) (31,693)
Remisiers’, agents’ and commissioned futures broker
representatives’ commission (31,007) (21,820)
Foreign exchange (loss)/gains, net 36 (9,920) 7,489
Other expenses 37 (31,844) (73,566)
Profit from operations 152,291 101,098
Finance costs 38 (9,178) (11,491)
Share of profits/(losses) of associated companies, net of tax 2 (103)
Profit before tax 143,115 89,504
Income tax expense 39 (9,380) (8,796)
Profit for the year 133,735 80,708
Attributable to:
Equity holders of the parent 133,063 80,348
Minority interests 672 360
133,735 80,708
Earnings per share (sen) attributable to equity holders of the parent
Basic and diluted, for profit for the year 41 10.02 6.05
ANNUAL REPORT 2007
038
The accompanying notes form an integral part of the financial statements
TA ENTERPRISE BERHAD
(194867-M)
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2007
<---------------------------------- Attributable to Equity Holders of the Parent---------------------------------------> Minority Total
<---------------------------------- Non-distributable ------------------> Distributable Interests Equity
Exchange
Difference
Share Share Capital *General Translation Recognised Retained
capital premium reserve reserve reserve in Equity profits Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 February 2005
As previously stated 1,328,475 63,273 10,324 290 106,689 - 257,435 1,766,486 7,193 1,773,679
Effects of adopting
FRS 121 (Note 3.1(e)) - - - - - 45,232 (45,232) - - -
At 1 February 2005
(restated) 1,328,475 63,273 10,324 290 106,689 45,232 212,203 1,766,486 7,193 1,773,679
Currency translation
differences,
representing net
(loss)/gain not
recognised in
income statement - - - - (26,026) 8,338 - (17,688) (91) (17,779)
Profit for the year - - - - - - 80,348 80,348 360 80,708
Dividend - - - - - - (47,825) (47,825) - (47,825)
At 31 January 2006
(restated) 1,328,475 63,273 10,324 290 80,663 53,570 244,726 1,781,321 7,462 1,788,783
At 1 February 2006
As previously stated 1,328,475 63,273 10,324 290 80,663 - 298,296 1,781,321 7,462 1,788,783
Effects of adopting
FRS 121 (Note 3.1(e)) - - - - - 53,570 (53,570) - - -
At 1 February 2006
(restated) 1,328,475 63,273 10,324 290 80,663 53,570 244,726 1,781,321 7,462 1,788,783
Effects of adopting
FRS 3 (Note 3.1(b)) - - - - - - 4,378 4,378 - 4,378
1,328,475 63,273 10,324 290 80,663 53,570 249,104 1,785,699 7,462 1,793,161
Currency translation
differences,
ANNUAL REPORT 2007
representing net
loss not recognised
in the income
statement - - - - (15,324) (11,671) - (26,995) (90) (27,085)
Profit for the year - - - - - - 133,063 133,063 672 133,735
Dividend - - - - - - (28,695) (28,695) - (28,695)
At 31 January 2007 1,328,475 63,273 10,324 290 65,339 41,899 353,472 1,863,072 8,044 1,871,116
* Maintained by a local stockbroking subsidiary for compliance with the Rules Relating to Participating Organisations of Bursa Securities.
The accompanying notes form an integral part of the financial statements
TA ENTERPRISE BERHAD
(194867-M)
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 JANUARY 2007
2007 2006
RM’000 RM’000
(restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax 143,115 89,504
Adjustments for:
Depreciation 27,655 31,693
Amortisation of:
- trading right in Stock Exchange of Hong Kong - 33
- premium on unquoted bonds and debt securities 20 18
- leasehold development properties 7 7
- deferred financing costs 29 17
- deferred leasing costs 2,685 3,122
- intangible asset 143 77
Accretion of discount on unquoted bonds (58) (92)
Provision for doubtful debts 684 32,647
Write-back of provision for doubtful debts (14,800) (12,414)
Bad debts written off 57 472
Deposit written off - 8
Property, plant and equipment written off - 224
Provision for impairment losses:
- club membership - 11
- property, plant and equipment - 499
- other investments - 10,878
- short term investments - 18
Write-back of provision for impairment loss on:
- property, plant and equipment (5,345) (5,254)
- other investment (1,752) (9)
- short term investment (9) (18)
Write down in value of properties held for resale - 27
Net (gain)/loss on disposal of property, plant and equipment (990) 415
Net gains on disposals of investments (16,832) (17,433)
Gains arising from allotment and cancellation of bonus shares
ANNUAL REPORT 2007
and capital distribution by Bursa Malaysia Berhad - (1,622)
Loss on disposal of club membership 91 110
Purchaser’s deposit forfeited (9) (7)
(Write back)/provision for liabilities, net (1,733) 137
Balance carried forward 132,958 133,068
040
TA ENTERPRISE BERHAD
(194867-M)
2007 2006
RM’000 RM’000
(restated)
CASH FLOWS FROM OPERATING ACTIVITIES (cont’d)
Balance brought forward 132,958 133,068
Unrealised loss on foreign exchange translation, net 8,248 2,886
Interest expense 8,987 11,370
Interest income (24,547) (30,565)
Gross dividends from quoted and unquoted investments (1,383) (1,415)
Share of (profits)/losses of associated companies, net of tax (2) 103
Operating profit before working capital changes 124,261 115,447
(Increase)/decrease in property development costs (6,912) 14,127
(Increase)/decrease in inventories (139) 3
(Increase)/decrease in receivables (597,539) 73,353
(Increase)/decrease in short term investments (2,867) 2,128
Increase in balance in Housing Development Accounts (2,578) (10,956)
Increase/(decrease) in payables 469,595 (34,759)
Decrease in net amount due to associated companies (641) (329)
Cash (used in)/generated from operations (16,820) 159,014
Interest received 6,124 21,247
Taxes paid (3,905) (8,778)
Taxes refunded 230 106
Net cash (used in)/generated from operating activities (14,371) 171,589
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (Note 4) (9,195) (11,586)
Purchase of intangible assets (380) -
Payment of stamp duties and other costs incidental to acquisition of property (8,728) (5,966)
ANNUAL REPORT 2007
Proceeds from disposal of property, plant and equipment 1,043 33,329
Purchase of land held for development (255,566) (8,054)
Deposits paid for acquisition of properties (1,064) (12,303)
Property development costs on land held for development (957) (124)
Purchase of other investments (24,174) (55,483)
Proceeds from disposals of other investments 72,214 57,170
Proceeds from bonus issue and capital distribution by Bursa Malaysia Berhad - 1,622
Proceeds from capital reduction of Bursa Malaysia Berhad - 13,636
Proceeds from disposals of club membership 35 34
Balance carried forward (226,772) 12,275
TA ENTERPRISE BERHAD
(194867-M)
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 JANUARY 2007 (cont’d)
2007 2006
RM’000 RM’000
(restated)
CASH FLOWS FROM INVESTING ACTIVITIES (cont’d)
Balance brought forward (226,772) 12,275
Prepayment to Bursa Malaysia Derivatives Clearing Berhad
for clearing of Ethylene contracts - (1,875)
Interest received 14,918 9,300
Dividends received 1,152 1,084
Net cash (used in)/generated from investing activities (210,702) 20,784
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of short term loan (19,968) (3,392)
Increase in pledged deposits for financing facilities (8,245) (900)
Net drawdown of loan from a substantial shareholder (Note 28) 6,139 1,536
Drawdown of revolving credit facility 15,000 -
Interest paid (5,482) (22,481)
Dividends paid (28,695) (47,825)
Net cash used in financing activities (41,251) (73,062)
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (266,324) 119,311
EFFECTS OF EXCHANGE RATE CHANGES (315) (93)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 440,986 321,768
CASH AND CASH EQUIVALENTS AT END OF YEAR 174,347 440,986
Cash and cash equivalents (Note 20) are as follows:
Cash and bank balances 35,742 44,089
Fixed deposits and placements with licensed financial institutions 138,605 396,897
ANNUAL REPORT 2007
174,347 440,986
042
The accompanying notes form an integral part of the financial statements
TA ENTERPRISE BERHAD
(194867-M)
BALANCE SHEET
AS AT 31 JANUARY 2007
Note 2007 2006
RM’000 RM’000
(restated)
ASSETS
Non-current assets
Property, plant and equipment 4 17,781 18,126
Subsidiaries 8 1,223,636 1,037,181
Associated companies 9 213 190
Other investments 10 126,998 145,475
Due from subsidiary 17 13,000 7,000
1,381,628 1,207,972
Current assets
Other receivables 16 428 404
Tax recoverable 22,155 19,109
Due from subsidiaries 17 226,166 76,868
Short term funds 20 10,834 164,630
259,583 261,011
TOTAL ASSETS 1,641,211 1,468,983
EQUITY AND LIABILITIES
Equity attributable to equity holders of the Company
Share capital 22 1,328,475 1,328,475
Reserves 241,212 90,722
Total equity 1,569,687 1,419,197
Non-current liabilities
Deferred tax liabilities 24 27 26
Current liabilities
Other payables 28 51,021 43,528
Borrowings 25 15,000 -
Due to directors 30 27 70
ANNUAL REPORT 2007
Due to subsidiaries 31 5,449 6,162
71,497 49,760
Total liabilities 71,524 49,786
TOTAL EQUITY AND LIABILITIES 1,641,211 1,468,983
The accompanying notes form an integral part of the financial statements
TA ENTERPRISE BERHAD
(194867-M)
INCOME STATEMENT
FOR THE YEAR ENDED 31 JANUARY 2007
Note 2007 2006
RM’000 RM’000
(restated)
Revenue 32 53,592 133,968
Other income 33 3,552 4,582
Personnel costs 34 (9,314) (7,658)
Depreciation (790) (875)
Foreign exchange gains 36 26 5,956
Other expenses 37 136,124 (41,127)
Profit from operations 183,190 94,846
Finance costs 38 (2,001) (1,023)
Profit before tax 181,189 93,823
Income tax expense 39 (2,004) (11,006)
Profit for the year 179,185 82,817
ANNUAL REPORT 2007
044
The accompanying notes form an integral part of the financial statements
TA ENTERPRISE BERHAD
(194867-M)
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2007
<--- Non-distributable ---> Distributable
Share Share Revaluation Retained
capital premium surplus profits Total
RM’000 RM’000 RM’000 RM’000 RM’000
At 31 January 2005 as previously stated 1,328,475 63,273 55,246 46,101 1,493,095
Effect of adopting revised FRS 127 - - (55,246) (53,644) (108,890)
At 31 January 2005 as restated 1,328,475 63,273 - (7,543) 1,384,205
Net profit for the year as restated - - - 82,817 82,817
Dividend - - - (47,825) (47,825)
At 31 January 2006 as restated 1,328,475 63,273 - 27,449 1,419,197
At 31 January 2006 as previously stated 1,328,475 63,273 51,440 84,899 1,528,087
Effect of adopting revised FRS 127 - - (51,440) (57,450) (108,890)
At 31 January 2006 as restated 1,328,475 63,273 - 27,449 1,419,197
Net profit for the year - - - 179,185 179,185
Dividend (Note 42) - - - (28,695) (28,695)
At 31 January 2007 1,328,475 63,273 - 177,939 1,569,687
ANNUAL REPORT 2007
The accompanying notes form an integral part of the financial statements
TA ENTERPRISE BERHAD
(194867-M)
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 JANUARY 2007
2007 2006
RM’000 RM’000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation 181,189 93,823
Adjustments for:
Depreciation 790 875
Amortisation of premium on unquoted bonds and debt securities 20 18
Accretion of discounts on unquoted bonds (59) (30)
Net write-back of provision for doubtful debts due from subsidiaries (135,763) (75)
Property, plant and equipment written off - 221
(Write-back)/provision for impairment losses on:
- investment in subsidiaries (2,348) 37,507
- an associated company (23) 1
- other investments 32 55
Gain on disposal of other investments (246) (372)
Loss on redemption of trust units outside Malaysia - 1,466
Loss on disposal of club membership 16 43
Unrealised loss/(gain) on foreign exchange translation, net - (7)
Interest expense 1,989 1,019
Interest income (2,393) (3,711)
Gross dividend income (48,792) (130,756)
Operating (loss)/profit before working capital changes (5,588) 77
Increase in receivables (40) (271)
Increase/(decrease) in payables 1,311 (24)
Net cash used in operating activities (4,317) (218)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (368) (196)
ANNUAL REPORT 2007
Subscription of ordinary shares in a subsidiary (Note 8) (5) (19)
Subscription of preference shares in subsidiaries (Note 8) (189,545) (3,000)
Proceeds from redemption of redeemable preference shares in a subsidiary (Note 8) 5,442 18,452
Proceeds from capital reduction of a subsidiary - 740,000
Purchase of quoted trust units in Malaysia (10,082) (10,000)
Proceeds from disposal of quoted trust units in Malaysia 22,352 -
Proceeds from disposal of unquoted trust units outside Malaysia - 10,322
Balance carried forward (172,206) 755,559
046
TA ENTERPRISE BERHAD
(194867-M)
2007 2006
RM’000 RM’000
CASH FLOWS FROM INVESTING ACTIVITIES
Balance brought forward (172,206) 755,559
Purchase of unquoted bonds and debt securities - (26,795)
Proceeds from disposal of unquoted bonds 6,459 5,523
Interest received 2,393 3,711
Dividends received 43,742 118,972
Net cash (used in)/generated from investing activities (119,612) 856,970
CASH FLOWS FROM FINANCING ACTIVITIES
Net drawdown of loan from a substantial shareholder (Note 28) 6,139 1,544
Net repayments to subsidiaries (20,321) (716,198)
Drawdown of revolving credit facility (Note 25) 15,000 -
Interest paid (1,990) (1,019)
Dividends paid (28,695) (47,825)
Net cash used in financing activities (29,867) (763,498)
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (153,796) 93,254
EFFECT OF EXCHANGE RATE CHANGES - 7
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 164,630 71,369
CASH AND CASH EQUIVALENTS AT END OF YEAR 10,834 164,630
Cash and cash equivalents (Note 20) comprise:
Cash and bank balances 295 361
Fixed deposits and placements with financial institutions 10,539 164,269
ANNUAL REPORT 2007
10,834 164,630
The accompanying notes form an integral part of the financial statements
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
1. PRINCIPAL ACTIVITIES AND GENERAL INFORMATION
The principal activities of the Company are investment holding and the provision of management services and
funding facilities to its subsidiaries. The principal activities of the subsidiaries are described in Note 8 to the financial
statements.
There have been no significant changes in the nature of the principal activities during the financial year.
The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the
Main Board of Bursa Malaysia Securities Berhad. The registered office and principal place of business of the
Company is located at 34th Floor, Menara TA One, No. 22, Jalan P. Ramlee, 50250 Kuala Lumpur.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the
directors on 17 May 2007.
2. FINANCIAL RISK MANAGEMENT POLICIES
The Group’s financial risk management policies seek to ensure that adequate financial resources are available for
the development of the Group’s businesses whilst managing its currency, interest rate, market, credit, liquidity
and cash flow risks. The Group manages and allocates its capital resources centrally to ensure that all business
units of the Group maintain the required levels of capital and prudent levels of liquidity at all times. The Group
operates within clearly defined guidelines that are approved by the Board of Directors.
The Group’s stockbroking businesses in Malaysia are supervised by the Securities Commission (“SC”) and Bursa
Malaysia Securities Berhad whilst the Group’s derivative trading subsidiary in Malaysia is supervised by the SC, Bursa
Malaysia Derivatives Berhad and Bursa Malaysia Derivatives Clearing House Berhad. These subsidiaries are
required to comply with minimum capital adequacy requirements. The stockbroking business in Hong
Kong is supervised by the Hong Kong Securities and Futures Commission (“HKSFC”) and is required to maintain
liquid capital in accordance with the financial resources rules of the HKSFC.
The Group’s asset management and unit trust businesses in Malaysia are supervised by the SC and are required to
adhere to the Guidelines issued by the SC.
ANNUAL REPORT 2007
The Group’s property development activities in Malaysia, in its capacity as housing developers are governed by
the Housing Development (Control and Licensing) Act, 1966. As a licensed housing developer in Malaysia, the
relevant subsidiaries are required to maintain Housing Development Accounts for all monies received from the
sale of housing accommodation by its Malaysian property arm.
048
TA ENTERPRISE BERHAD
(194867-M)
The Group’s policies in respect of the major areas of treasury activities are set out as follows:
(a) Currency Risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency
exposures primarily with respect to Australian Dollar, Canadian Dollar, United States Dollar, Hong Kong Dollar,
Singapore Dollar, South African Rand, Sri Lankan Rupee, Philippine Peso and Chinese Renminbi.
Foreign exchange transaction risk impacting the Group’s income statement arises both from external and
intra-group trading, investing and funding activities. Currency risks relating to operating activities in the
normal course of business of the Group are generally not hedged. Such risks may be naturally hedged
through planned course of business and by matching income and expenditure to minimise currency
exchange. Currency exposures arising on the holding of monetary assets and liabilities denominated
in foreign currencies, mainly intra-group and external loans and deposits with financial institutions, are
generally hedged selectively. Hedges may be taken using derivative financial instruments such as forward
foreign exchange contracts for foreseeable significant exchange rate fluctuations and are managed by the
Group Treasury.
The derivative trading subsidiary of the Group in Malaysia receives foreign currency denominated clients’
monies that are deposited in foreign currency denominated bank accounts maintained in Malaysia. The
foreign currencies accepted include United States Dollar and Singapore Dollar and other foreign currencies
permitted are Australian Dollar, British Pound, Japanese Yen and Euro. Such currency risk is naturally
hedged in the absence of any open positions from such clients. Any gains or losses on conversion of
currencies on instructions by customers are normally borne by customers.
Foreign exchange translation differences arising on consolidation and those attributable to net investment
in foreign subsidiaries are recorded and disclosed within shareholders’ equity of the Group. The Group
maintains a natural hedge for certain subsidiaries/trust, by borrowing in the currency of the country in
which the property or investment is located or by borrowing in currencies that match the future revenue
stream to be generated from its investments.
International business, by its nature, is subject to risks including, but not limited to: changing economic
conditions, changes in global political environment, changes in financial and trade regulations and foreign
exchange rate volatility. In general, the Group maintains appropriate reserves to address normal currency
ANNUAL REPORT 2007
fluctuations.
(b) Interest Rate Risk
The Group’s interest rate risk also arises from its interest-bearing borrowings. The Group’s policy is to borrow
principally on a floating rate basis but to retain a proportion of fixed rate debt. The objectives for the mix
between fixed and floating rate borrowings are to reduce the impact of an upward change in interest rates
while enabling benefits to be enjoyed if interest rates fall. The mix between fixed and floating rate borrowings
are monitored and varied according to changes in interest rates to ensure that the Group’s cost of financing
is kept at the lowest possible.
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
2. FINANCIAL RISK MANAGEMENT POLICIES (cont’d)
(b) Interest Rate Risk (cont’d)
The Group does not generally hedge interest rate risks. Hedging of risks through the use of financial
instruments may be adopted should its use results in significant cost savings. Interest rates on investments
and borrowings are determined based on prevailing market rates. The Group has a policy to ensure that the
rates obtained are competitive.
(c) Market Risk
The Group’s principal exposure to market risk arises mainly from changes in equity prices and the state of the
domestic and foreign property markets.
The Group does not use derivative financial instruments to manage equity risk. The risk of loss in value
is minimised via thorough analysis before making the investments and continuous monitoring of the
performance and risk of the investments made. Equity investments classified as current assets are available
for sale and the Group manages disposal of its investments to optimise returns on realisation. Provisions
are established for adverse changes in fair values of short term investments whilst reversals are recognised
to income statement to the extent of previously provided amounts. Total gains are recognised only upon
disposal of investment. Equity investments classified as non-current assets are held for long term. Changes
in market values of long term investment held for strategic reasons, except where an impairment occurs
do not affect the book value of the investments.
The Group manages its exposure to adverse fluctuation in property value via thorough analysis before
investing in the property and continuous monitoring of the state of the property market. The Group
optimises its returns on realisation by managing its decisions to dispose or hold, continue or postpone
development of these properties based on the current and expected future trend of the property market.
Provision for impairment losses will be made when there is indication of adverse changes in fair values of
these properties. Reversals are made to the income statement immediately to the extent of the previously
provided amount when the adverse condition which leads to the impairment of assets cease to exist.
Intrinsic in all businesses, the overall performance of the Group is also driven by external conditions such
as global and domestic economies that are largely unpredictable and uncontrollable. Generally, development
ANNUAL REPORT 2007
and performance of both the regional and domestic capital and property markets have a direct impact
on the Group.
(d) Credit Risk
Credit risk, or the risk of counterparties defaulting, is controlled by the application of credit approvals, limits
and monitoring procedures. Credit risks are minimised and monitored via strictly limiting the Group’s
associations to business partners with high creditworthiness. A credit approval limit structure approved by
the Board of Directors is in place for all lending activities of the Group. Trade and financial receivables are
050
monitored on an ongoing basis via group-wide management reporting procedures.
TA ENTERPRISE BERHAD
(194867-M)
For effective management of non-performing accounts (“NPAs”), a debt recovery unit has been established
to focus on formulating and executing recovery action plans for major NPAs. On the whole, NPAs are
monitored closely by the Group with greater emphasis being placed on TA Centre Berhad, TA Securities
Holdings Berhad, TA First Credit Sdn. Bhd., TA Securities (HK) Limited and TA Antarabangsa Finance South
Africa Limited.
Generally, provisions are made in accordance with specific regulatory requirements or for the unsecured
portion of the Group’s NPAs. Write-off of debts against specific provisions are made only when avenues
of recovery have been exhausted and the loans are deemed to be irrecoverable in the foreseeable future.
Detailed information on NPAs and provisioning requirements are disclosed in the relevant notes to the
financial statements.
The Group does not have any significant exposure or concentration of credit risk that may arise from exposures
to a single debtor or to groups of related debtors other than as disclosed in Note 14 to the financial
statements.
(e) Liquidity and Cash Flow Risk
The Group seeks to achieve a balance between certainty of funding even in difficult times for the markets or
the Group and a flexible, cost-effective borrowing structure. The policy, therefore, seeks to ensure that, at a
minimum, all projected net borrowing needs are covered by committed facilities. In addition, debt maturities
are closely monitored to ensure that the Group is able to meet its obligations as they fall due and any
refinancing needs are met with.
The Group’s Treasury Department manages the Group’s funding needs and allocates funds in such a manner
that all business units maintain optimum levels of liquidity sufficient for their operations without leaving
them unutilised. To this end, daily cash flow forecasts are prepared taking into account all major transactions.
Any excess funds from operating cash cycles, which are temporary in nature, are invested in deposits as and
when available with financial institutions at the most competitive interest rates obtainable.
3. SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Preparation ANNUAL REPORT 2007
The financial statements of the Group and the Company have been prepared under the historical cost
convention unless otherwise indicated in the accounting policies below and comply with the provisions
of the Companies Act, 1965 and applicable Financial Reporting Standards in Malaysia. At the beginning of
the current financial year, the Group and the Company had adopted new and revised FRSs which are
mandatory for financial periods beginning on or after 1 January 2006 as described fully in Note 3.1.
(b) Revenue Recognition
(i) ross brokerage fees in stockbroking subsidiaries are recognised on an accrual basis upon the
G
execution of trade on behalf of clients, computed based on a pre-determined percentage of the
contract value.
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
3. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(b) Revenue Recognition (cont’d)
(ii) Interest earned by the local stockbroking subsidiaries included in service and administrative charges
are generally recognised on an accrual basis, except when the receivable is classified as non-performing.
Where an account is classified as non-performing, interest is suspended until it is realised on a cash
basis, except for margin accounts where interest is suspended until the account is reclassified
as performing. The suspension of interest income is made in accordance with the Rules of Bursa
Malaysia Securities Berhad.
(iii) Interest income from financial receivables of money lending and finance subsidiaries is generally
recognised on an accrual basis, except when a loan debtor becomes non-performing. Interest income
on non-performing loan is suspended until it is realised on a cash basis. Generally, loan debtors are
deemed to be non-performing when repayments are in arrears for more than 3 months or when the
outstanding balance is greater than the value of the collateral pledged.
(iv) Interest income from fixed deposits with licensed banks are recognised on an accrual basis. Interest
income from other sources is recognised on a receipt basis due to uncertainty over its realisation until
physical receipt.
(v) Rollover fees and penalty interest for late payments earned from financial receivables are recognised
on a receipt basis due to uncertainty over recoverability of income.
Rollover fees earned by the local stockbroking subsidiaries are generally recognised on an accrual
basis, except when the receivable is classified as non-performing. Rollover fees from margin accounts
will be suspended until the accounts are reclassified as performing.
(vi) Acceptance fees earned by a money lending subsidiary are recognised upon the drawdown of loan
facility in accordance with the terms of the agreement.
(vii) Service and processing fees earned on money lending and ESOS financing activities of a money
ANNUAL REPORT 2007
lending subsidiary included in the service and administrative charges are recognised upon the
drawdown of loans.
(viii) Dividend income from marketable securities and unquoted shares are recognised when the Group’s
or the Company’s right to receive payment is established, except when there is substantial uncertainty
over the recoverability of income so recognised. In such instances, dividend income is recognised on
a receipt basis.
(ix) Rental income is recognised rateably over the period of tenancy.
052
TA ENTERPRISE BERHAD
(194867-M)
(x) Income from disposals of marketable securities and sale of completed properties are recognised upon
the transfer of risks and rewards of ownership.
(xi) Revenue from sale of development properties is accounted for by the stage of completion method in
respect of all property units that have been sold. The stage of completion is determined by reference
to the project costs incurred to date to the total estimated costs where the outcome of the projects
can be reliably estimated.
(xii) Placement and underwriting fee in stockbroking subsidiaries are recognised when the right to receive
payment is established in accordance with the terms of the placement and/or underwriting
agreements.
(xiii) Manager’s fee from unit trust funds, management fees and nominee service charges are recognised
when the services are performed.
(xiv) Service charges from the sale of units to unitholders is recognised upon the allotment of the trust
units, net of cost of units sold.
(xv) Revenue from rental of hotel rooms, sale of food and beverage and other related income from hotel
operations are recognised upon the sale of goods or the delivery of the service to the customers.
All such revenue from a subsidiary incorporated in Australia are stated net of the amount of goods and
service tax applicable to such revenue.
(xvi) All other income is recognised on an accrual basis.
(c) Subsidiaries and Basis of Consolidation
(i) Subsidiaries
Subsidiaries are entities over which the Group has power to exercise control over the financial and
operating policies so as to obtain benefits therefrom. The existence and effect of potential voting
rights that are currently exercisable or convertible are considered when assessing whether the Group
has such power over another entity.
ANNUAL REPORT 2007
In the Company’s separate financial statements, subsidiaries are stated at cost less provision for any
impairment losses. The assessment and recognition of impairment of assets are in accordance with
the accounting policy referred to in Note 3(t). On disposal of such investments, the difference between
net disposal proceeds and their carrying amounts is included in income statement.
(ii) Basis of consolidation
The consolidated financial statements include the financial statements of the Company and all its
subsidiaries and trusts, of which the Group is the beneficiary, made up to the end of the financial
year.
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
3. SIGNIFICANT ACCOUNTING POLICIES (cont’d.)
(c) Subsidiaries and Basis of Consolidation (cont’d.)
(ii) Basis of consolidation (cont’d.)
Subsidiaries and trusts are consolidated using the acquisition method of accounting. Under the
acquisition method of accounting, the results of subsidiaries and trusts acquired or disposed during
the year are included in the consolidated income statement from the effective date of acquisition, being
the date on which the Group obtains control, and continue to be consolidated up to the date that
such control ceases. The assets and liabilities (including contingent liabilities assumed) of a subsidiary
or trust are measured at their fair values at the date of acquisition and these values are reflected in the
consolidated balance sheet. The difference between the cost of an acquisition and the fair value of the
Group’s share of the net assets of the acquired subsidiary or trust at the date of acquisition is included
in the consolidated balance sheet as goodwill or reserve arising on consolidation. Costs of acquisition is
measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities
incurred or assumed, and equity instruments issued, plus any costs directly attributable to the
acquisitions.
Prior to the change in accounting policies on 1 February 2006, goodwill arising on consolidation was
written off to the income statement. The Group does not have any goodwill on consolidation.
Prior to the change in accounting policies on 1 February 2006, reserve arising on consolidation
was recognised as an item in non-current assets to be recognised in the income statement upon
the disposal of the subsidiary or trust from which it arises unless the subsidiary or trust has a profitable
track record. After the change in accounting policies from 1 February 2006, reserve arising on
consolidation is now to be recognised immediately in the income statement in the year of acquisition.
In accordance with the transitional provisions of FRS 3, the reserve arising on consolidation as at 1
February 2006 of RM4,378,200 was derecognised with a corresponding increase in retained earnings.
Intragroup transactions, balances and resulting unrealised gains are eliminated on consolidation and
the consolidated financial statements reflect external transactions only. Unrealised losses are eliminated
on consolidation unless costs cannot be recovered. Uniform accounting policies are adopted in the
consolidated financial statements for like transactions and event in similar circumstances.
ANNUAL REPORT 2007
Minority interest represents the portion of results and net assets in subsidiaries not held by the Group.
It is measured at the minorities’ share of the fair values of the identifiable assets and liabilities of the
acquiree at the acquisition date and the minorities’ share of changes in the subsidiaries’ equity since then.
(d) Associated Companies
The Group treats as associated companies those companies in which a long term equity interest of between
20 and 50 percent is held and that is neither a subsidiary nor an interest in a joint venture and where it
exercises significant influence over the financial and operating policies through management participation
but not in control or joint control over those policies. The associate is equity accounted for from the date
054
the Group obtains significant influence until the date the Group ceases to have significant influence over
the associate.
TA ENTERPRISE BERHAD
(194867-M)
Investments in associated companies are accounted for in the consolidated financial statements using the
equity method of accounting based on the audited or management financial statements of the associated
companies.
The Group’s share of post-acquisition profits less losses of associated companies is included in the
consolidated income statement and the Group’s interest in associated companies is stated at cost plus the
Group’s share of post-acquisition retained profits or accumulated losses and reserves. Where there has been
a change recognised directly in the equity of the associate, the Group recognises its share of such changes.
Unrealised gains on transactions between the Group and the associated companies are eliminated to
the extent of the Group’s interest in the associated companies. Unrealised losses are eliminated unless cost
cannot be recovered. After the application of the equity method, the Group determines whether it is
necessary to recognise any additional impairment loss with respect to the Group’s net investment in the
associate.
The Group does not have any goodwill relating to its associates.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including
any long-term interests that, in substance, form part of the Group’s net investment in the associate, the Group
does not recognise further losses, unless it has incurred obligations or made payments on behalf of the
associate.
The most recent available audited financial statements of the associates are used by the Group in applying
the equity method. When the dates of the audited financial statements used are not coterminous with
those of the Group, the share of results is arrived at from the last audited financial statements available and
management financial statements to the end of the accounting period. Uniform accounting policies are
adopted for like transactions and events in similar circumstances.
In the Company’s separate financial statements, associates are stated at cost less provision for any impairment
losses. On disposal of such investments, the difference between net disposal proceeds and their carrying
amounts is included in income statement.
(e) Investments
Short term investments
ANNUAL REPORT 2007
(i) Marketable securities are carried at the lower of cost and market value, determined on a contract-
by-contract basis. Cost is determined based on the contract value while market value is determined
based on quoted market values. Increases or decreases in the carrying amount of marketable securities
are credited or charged to the income statement. On disposal of marketable securities, the difference
between net disposal proceeds and its carrying amount is charged or credited to the income statement.
(ii) Cost of trust units are determined using the weighted average method of valuation. Market value of
the trust units is determined based on the underlying value of these trust funds.
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
3. SIGNIFICANT ACCOUNTING POLICIES (contd.)
(e) Investments (cont’d)
Long term investments
Marketable securities and other investments held for the long term are stated at cost less provision for any
impairment losses. The assessment and recognition of impairment of assets are in accordance with the
accounting policy referred to in Note 3(t).
On disposal of an investment, the difference between net disposal proceeds and its carrying amount is
charged or credited to the income statement.
(f) Foreign Currencies
(i) unctional and Presentation Currency
F
The individual financial statements of each entity in 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 (RM), which is also the Company’s
functional currency.
F
(ii) oreign currency transactions
In preparing the financial statements of the individual entities, transactions in currencies other than
the entity’s functional currency (foreign currencies) are recorded in the functional currencies at rates of
exchange approximating those ruling at the date of transaction. At each balance sheet date, foreign
currency monetary items are translated into Ringgit Malaysia at exchange rates approximating those
ruling at that date, unless hedged by forward foreign exchange contracts, in which case the rates
specified in such forward contracts are used. 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 any non-monetary items which are carried at fair value are translated using the
exchange rate that existed when the values were determined.
ANNUAL REPORT 2007
All exchange rate differences are taken to the income statement with the exception of differences
on foreign currency borrowings that provide a hedge against a net investment in a foreign entity.
These exchange differences are taken directly to equity until the disposal of the net investment, at
which time they are recognised in the income statement.
(iii) Foreign Operations
Financial statements of foreign consolidated subsidiaries and trusts are translated at year end
exchange rates with respect to the assets and liabilities, and at exchange rates at the dates of the
transactions with respect to the income statement. All resulting translation differences are recognised
056
in equity.
TA ENTERPRISE BERHAD
(194867-M)
The principal exchange rates used for each respective unit of foreign currency ruling at the balance
sheet date are as follows:
2007 2006
R
M RM
Australian Dollar (“A$”) 2.7030 2.8210
Canadian Dollar (“C$”) 2.9690 3.2635
United States Dollar (“US$”) 3.5015 3.7495
Hong Kong Dollar (“HK$”) 0.4484 0.4834
Singapore Dollar (“S$”) 2.2768 2.3068
South African Rand (“Rand”) 0.4794 0.6140
Sri Lankan Rupee (“Rs”) 0.0323 0.0368
Philippine Peso (“Peso”) 0.0714 0.0715
Chinese Renminbi (“RMB”) 0.4503 0.4653
(g) Property, Plant and Equipment and Depreciation
Property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset’s
carrying amount or are recognised as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the items will flow to the Group and the cost of the items can be
measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and
maintenance are charged to the income statement during the financial period in which they are incurred.
Subsequent to recognition, property, plant and equipment except for freehold land are stated at cost less
accumulated depreciation and any accumulated impairment losses.
Freehold land has an unlimited useful life and therefore is not depreciated. Long term leasehold
land has unexpired period of between 52 years to 73 years. Depreciation of other property, plant and
equipment is provided on a straight line basis to write off the cost of each asset to its residual value over the
estimated useful life at the following annual rates:
Long term leasehold land 2%
ANNUAL REPORT 2007
Buildings 2% to 6.67%
Lifts and renovations 10% to 33.33%
Furniture and fittings 10% to 33.33%
Motor vehicles 20%
Office equipment and computers 10% to 33.33%
The residual values, useful life and depreciation method are reviewed at each financial year-end 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.
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
3. SIGNIFICANT ACCOUNTING POLICIES (cont’d.)
(g) Property, Plant and Equipment and Depreciation (cont’d)
An item of property, plant and equipment is derecognised upon the 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 net carrying amount is recognised in the income statement.
(h) Investment Properties
Investment properties are properties which are held either to earn rental income or for capital appreciation
or both. Such properties are measured initially at cost, including transaction costs.
Investment properties are derecognised when either they have been disposed of or when the investment
property is permanently withdrawn from use and no future economic benefit is expected from its disposal.
Any gain or losses on the retirement or disposal of an investment property are recognised in the income
statement in the year in which they arise.
(i) Land Held for Property Development and Property Development Costs
L
(i) and held for property development
Land held for property development consists of land where no development activities have been
carried out or where development activities are not expected to be completed within the normal
operating cycle. Such land is classified within non-current assets and is stated at cost plus incidental
expenditure incurred to put the land in a condition ready for development and less any accumulated
impairment losses. The policy for the recognition and measurement of impairment losses is in
accordance with Note 3(t).
Land held for property development is reclassified as property development costs at the point when
development activities have commenced and where it can be demonstrated that the development
activities can be completed within the normal operating cycle.
(ii) Property development costs
Land and development costs are classified as property development costs when significant
development work has been undertaken and is expected to be completed within the normal
ANNUAL REPORT 2007
operating cycle.
Property development costs comprise all costs that are directly attributable to development activities
or that can be allocated on a reasonable basis to such activities, less any accumulated impairment
losses. The policy for the recognition and measurement of impairment losses is in accordance with
Note 3(t).
When the financial outcome of a development activity can be reliably estimated, property development
revenue and expenses are recognised in the income statement by using the stage of completion
method. The stage of completion is determined by the proportion that property development costs
058
incurred for work performed to date bear to the estimated total property development costs.
TA ENTERPRISE BERHAD
(194867-M)
Where the financial outcome of a development activity cannot be reliably estimated, property
development revenue is recognised only to the extent of property development costs incurred that is
probable will be recoverable, and property development costs on properties sold are recognised as an
expense in the period in which they are incurred.
Any expected loss on a development project, including costs to be incurred over the defects liability
period, is recognised as an expense immediately.
Property development costs not recognised as an expense are recognised as an asset, which is
measured at the lower of cost and net realisable value.
The excess of revenue recognised in the income statement over billings to purchasers is classified as
accrued billings within trade receivables and the excess of billings to purchasers over revenue
recognised in the income statement is classified as progress billings within trade payables.
(j) Land Held for Resale
Land held for resale relates to freehold land stated at cost, including all incidental expenditure incurred in
acquiring the land and preparing it for resale, less any accumulated impairment losses. The policy for the
recognition and measurement of impairment losses is in accordance with Note 3(t).
(k) Properties Held for Resale
Properties held for resale are stated at the lower of cost and net realisable value and relate to development
projects which have been completed. Cost is determined on the specific identification basis and includes
costs of land, construction and appropriate development expenses.
(l) Intangible Assets
(i) Goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost
of business combination over the Group’s interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities. Following the initial recognition, goodwill is measured at cost less
any accumulated impairment losses. Goodwill is not amortised but instead, it is reviewed for
impairment, annually or more frequently if events or changes in circumstances indicate that the
ANNUAL REPORT 2007
carrying value may be impaired. Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold. The Group does not have any goodwill on consolidation.
(ii) Other Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. Following 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 assesed for impairment whenever there is an indication that the intangible asset may
be impaired. The amortisation period and the amortisation method for an intangible asset with a finite
useful life are reviewed at least at each balance sheet date.
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
3. SIGNIFICANT ACCOUNTING POLICIES (cont’d.)
(l) Intangible Assets (cont’d)
(ii) Other Intangible Assets (cont’d)
The useful life of computer software classified as intangible assets is three years. The useful life of
trading right of the Stock Exchange of Hong Kong Limited is estimated at 5 years and had been fully
amortised as at the balance sheet date.
Intangible assets with indefinite useful lives are not amortised but tested for impairment annually
or more frequently if the events or changes in circumstances indicate that the carrying value may be
impaired. The useful life of an intangible asset with an indefinite life is also reviewed annually
to determine whether the useful life assessment continues to be supportable. The Group presently
does not have intangible assets with indefinite useful life.
(m) Inventories
Inventories, which comprise food, beverages and other consumables, are stated at the lower of cost
(determined on a first-in, first-out basis) and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business less any estimated
costs of completion or costs necessary to make the sale.
(n) Financial, Trade and Other Receivables and Amounts Due From Subsidiaries
These receivables are carried at anticipated realisable values. Bad debts are written-off when identified.
An estimate is made for doubtful debts based on review of all outstanding amounts as at the balance sheet
date. For trade and financial receivables of subsidiaries involved in stockbroking and financial services,
specific provision is made for debts which are considered doubtful or have been classified as non-performing,
net of interest-in-suspense, rollover fees-in-suspense and taking into consideration any collateral held. The
classification of trade receivable as either performing or non-performing is in accordance with the Rules of
Bursa Malaysia Securities Berhad for local subsidiaries involved in stockbroking business.
(o) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, bank balances, short term deposits and placements with
ANNUAL REPORT 2007
licensed financial institutions, excluding monies held in trust, deposits pledged, balances in Housing
Development Accounts, net of outstanding bank overdrafts.
(p) Equity Instruments
Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period
in which they are declared.
(q) Trade and Other Payables and Amounts Due To Subsidiaries
060
These payables are stated at the fair value of the consideration to be paid in the future for goods and
services received.
TA ENTERPRISE BERHAD
(194867-M)
(r) Borrowings and Borrowing Costs
All loans and borrowings are initially recognised at the fair value of the consideration received less directly
attributable transaction costs. After initial recognition, interest bearing loans and borrowings are
subsequently measured at amortised cost using the effective interest rate method. Interest incurred on
borrowings for working capital is charged to the income statement as expense as and when incurred. Interest
incurred on borrowings relating to property development costs is capitalised during the period of active
development until they are ready for sale or upon the suspension of development activities.
(s) Leases
A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards
incidental to ownership. All leases that do not transfer substantially all the risks and rewards are classified as
operating leases.
(i) perating Leases - the Group as Lessee
O
Operating lease payments are charged to the income statement on a straight-line basis over the term
of the relevant lease. The aggregate benefit of any incentives provided by the lessor is recognised as a
reduction of rental expense over the lease term on a straight-line basis.
(ii) perating Leases - the Group as Lessor
O
Assets lease out under operating leases are presented on the balance sheets according to the
nature of the assets. Rental income from operating leases is recognised on a straight-line basis
over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an
operating lease are added to the carrying amount of the leased asset and recognised on a
straight-line basis over the lease term.
(t) Impairment of Non-financial Assets
The carrying amounts of assets, other than inventories and deferred tax assets, are reviewed at each
balance sheet date to determine whether there is any indication of impairment. If any such indication exists,
the asset’s recoverable amount is estimated to determine the amount of impairment loss.
For the purpose of impairment testing of these assets, recoverable amount is determined on an individual
asset basis unless the asset does not generate cash flows that are largely independent of those from other
ANNUAL REPORT 2007
assets. If this is the case, recoverable amount is determined for the cash-generating units (CGU) to which the
asset belongs to.
An asset’s recoverable amount is the higher of an asset’s or cash-generating units’ (“CGU”) fair value less costs
to sell and its value in use. In assessing value in use, the estimated future cash flows 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. Where the carrying amount of an asset exceeds its recoverable
amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses
recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any
goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other
assets in the unit or groups of units on a pro-rata basis.
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
3. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(t) Impairment of Non-financial Assets (cont’d)
An impairment loss is recognised in the income statement in the period in which it arises. An impairment
loss is reversed if, and only if, there has been a change in the estimates used to determine the asset’s
recoverable amount since the last impairment loss was recognised. The carrying amount of an asset is
increased to its recoverable amount, provided that this amount does not exceed the carrying amount that
would have been determined (net of amortisation or depreciation) had no impairment loss been recognised
for the asset in prior years. A reversal of impairment loss is recognised in the income statement.
(u) Forward Exchange Contracts
Outstanding forward exchange contracts at the balance sheet date are valued based on applicable forward
rates ruling at that date, taking maturity profiles into account. Gains or losses are recognised in the income
statement in the year they arise.
The Group may use derivative financial instruments to mitigate certain currency risks. The Group’s criteria for
a derivative instrument to be classified as a hedge includes:
• the hedge transaction is expected to be highly effective in achieving offsetting changes in fair value or
cash flows attributable to the hedged risk;
• the effectiveness of the hedge can be reliably measured;
• there is adequate documentation of the hedging relationships at the inception of the hedge; and
• for cash flow hedges, the forecasted transaction that is a subject of the hedges must be
highly probable.
When an anticipated future transaction is hedged and the underlying position has not been recognised in
the financial statements, any change in the fair value of the hedging instrument is recognised in the income
statement for the period.
The Group may use forward exchange contracts to mitigate exposure to selective foreign currency risk.
Forward exchange contracts are accounted for as foreign currency transactions. Gains and losses on
derivative financial instruments used for hedging of foreign currency transactions are recognised as
income or expense on the same basis as the corresponding hedged position. Foreign exchange contracts
ANNUAL REPORT 2007
are translated at exchange rates prevailing at the end of the reporting period representing their fair values.
(v) Provision for Liabilities
Provision for liabilities is recognised when the Group and the Company have a present obligation as a result
of a past event and it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each
balance sheet date and adjusted to reflect the current best estimate. Where the effect of the time value of
money is material, the amount of a provision is discounted using a current pre-tax rate that reflects, where
appropriate, the risk specific to the liability to the present value of the expenditure expected to be required
062
to settle the obligation.
TA ENTERPRISE BERHAD
(194867-M)
Where discounting is used, the increase in the provision due to the passage of time is recognised as
finance cost.
(w) Employee Benefits
Short term benefits
Wages, salaries, bonuses and social security contributions are recognised as expenses in the year in which
the associated services are rendered by employees of the Group. Short term accumulating compensated
absences such as paid annual leave are recognised when services are rendered by employees that increase
their entitlement to future compensated absences, and short term non-accumulating compensated
absences such as sick leave are recognised when the absences occur.
Defined contribution plans
Defined contribution plans are post-employment benefit plans under which the Group pays fixed
contributions into separate entities or funds and will have no legal or constructive obligation to pay further
contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee
services in the current and preceding financial years. As required by law, companies in Malaysia make
contributions to the state pension scheme, the Employees Provident Fund (“EPF”). Some of the Group’s
foreign subsidiaries make contributions to their respective countries’ statutory pension schemes. Such
contributions are recognised as an expense in the income statement as incurred.
Equity compensation benefits
The TA Enterprise Berhad Employees’ Share Option Scheme (“ESOS”), an equity-settled, share-based
compensation plan, allows the Group’s employees to acquire ordinary shares of the Company.
Subsequent to the change in accounting policies from 1 February 2006, the total fair value of share options
granted to employee is recognised as an employee cost with a corresponding increase in the share option
reserve within equity over the vesting period and taking into account the probability that the options will
vest. The fair value of share options is measured at grant date, taking into account, if any, the market vesting
conditions upon which the options were granted but excluding the impact of any non-market vesting
conditions. Non-market vesting conditions are included in assumptions about the number of options that
are expected to become exercisable on vesting date.
ANNUAL REPORT 2007
The Group has not granted any ESOS as at the balance sheet date. At each subsequent balance sheet date
should the Group have granted any ESOS, the Group will revise its estimate of the number of options that
are expected to become exercisable on vesting date. It will recognise the impact of the revision of original
estimates, if any, in the income statement, and a corresponding adjustment to equity over the remaining
vesting period. The equity amount will be recognised in the share option reserve until the option is exercised,
upon which it will be transferred to share premium, or until the option expires, upon which it will be
transferred directly to retained earnings.
The proceeds received net of any directly attributable transaction costs will be credited to equity when the
options are exercised.
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
3. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(w) Employee Benefits (cont’d)
Termination Benefits
Termination benefits are payable when employment is terminated before the normal retirement date or
whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises
termination benefits as a liability an expense when it is demonstrably committed to either terminate
the employment of current employees according to a detailed plan without possibility of withdrawal or
providing termination benefits as a result of an offer made to encourage voluntary redundancy. In the case
of an offer made to encourage voluntary redundancy, the measurement of termination benefits is based on
the number of employees expected to accept the offer.
(x) Income Tax
Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected
amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax
rates that have been enacted at the balance sheet date.
Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date
between the tax bases of assets and liabilities and their carrying amounts in the financial statements. In
principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets
are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the
extent that it is probable that taxable profit will be available against which the deductible temporary
differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the
temporary difference arises from goodwill or reserve arising on consolidation or from the initial recognition
of an asset or liability in a transaction which is not a business combination and at the time of the transaction,
affects neither accounting profit nor taxable profit.
Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised
or the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance
sheet date. Deferred tax is recognised in the income statement, except when it arises from a transaction
which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in
equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is
included in the resulting goodwill or reserve arising on consolidation.
(y) Financial Instruments
ANNUAL REPORT 2007
Financial instruments are recognised in the balance sheet when the Group has become a party to the
contractual provisions of the instrument.
Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual
arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability,
are reported as expense or income. Distributions to holders of financial instruments classified as equity are
charged directly to equity. Financial instruments are offset when the Group has a legally enforceable right
to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously
064
TA ENTERPRISE BERHAD
(194867-M)
Financial instruments on the balance sheets include short term funds and borrowings, current and non-
current investments, financial, trade and other receivables and payables, related and associated company
balances, amounts due to directors and remisiers. The accounting policies on recognition and measurement
of these items are disclosed in their respective accounting policies.
(z) Non-current Assets (or Disposal Groups) Held for Sale and Discontinued Operation
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use. This condition is regarded as met
only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its
present condition subject only to terms that are usual and customary.
Immediately before classification as held for sale, the measurement of the non-current assets (or all the assets
and liabilities in a disposal group) is brought up-to-date in accordance with applicable FRSs. Then, on initial
classification as held for sale, non-current assets or disposal groups (other than investment properties,
deferred tax assets, employee benefits assets, financial assets and inventories) are measured in accordance
with FRS 5 that is at the lower of carrying amount and fair value less costs to sell. Any differences are included
in profit or loss.
A component of the Group is classified as a discontinued operation when the criteria to be classified as held
for sale 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 major line of business or
geographical area of operations or is a subsidiary acquired exclusively with a view to resale.
3.1 Changes in Accounting Policies, Effects and Changes in Comparatives Arising from
Adoption of New and Revised FRSs
On 1 February 2006, the Group and the Company adopted the following FRSs mandatory for financial periods
beginning on or after 1 January 2006:
FRS 2 S
hare-based Payment
FRS 3 usiness Combinations
B
FRS 5 on-current Assets Held for Sale and Discontinued Operations
N
FRS 101 resentation of Financial Statements
P
FRS 102 Inventories
FRS 108 Accounting Policies, Changes in Estimates and Errors
FRS 110 Events after the Balance Sheet Date
ANNUAL REPORT 2007
FRS 116 Property, Plant and Equipment
FRS 121 The Effects of Changes in Foreign Exchange Rates
FRS 127 Consolidated and Separate Financial Statements
FRS 128 Investments in Associates
FRS 131 Interests in Joint Ventures
FRS 132 Financial Instruments: Disclosure and Presentation
FRS 133 Earnings Per Share
FRS 136 Impairment of Assets
FRS 138 Intangible Assets
FRS 140 Investment Property
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
3.1 Changes in Accounting Policies, Effects and Changes in Comparatives Arising from
Adoption of New and Revised FRSs (cont’d)
The adoption of revised FRS 102, 108, 110, 116, 128, 131, 132, 133 and 136 does not result in significant changes
in accounting policies of the Group and of the Company. The principal changes in accounting policies and their
effects resulting from the adoption of the other new and revised FRSs are discussed below:
(a) FRS 2 : Share Based Payments
Prior to the change in accounting policies from 1 February 2006, no compensation cost or obligation was
recognised upon the grant of ESOS to eligible employees and equity was increased by the proceeds received
when the options were exercised.
Subsequent to the change in accounting policies from 1 February 2006, the total fair value of share options
granted to employee is recognised as an employee cost with a corresponding increase in the share option
reserve within equity over the vesting period and taking into account the probability that the options will
vest. As the Group has not granted any options to its employees, this change in accounting policy did not
affect the financial statements of the Group and the Company.
(b) FRS 3: Business Combinations
Under FRS 3, any excess of the Group’s interest in the net fair value of acquirees’ identifiable assets, liabilities
and contingent liabilities over cost of acquisitions (previously referred to as “reserve on consolidation”), after
reassessment, is now recognised immediately in the income statement.
Prior to 1 February 2006, the reserve on consolidation was recognised as an item in Non-Current Assets in
the balance sheet of the Group and would have been recognised in the income statement upon the disposal
of the trust (of which the Group is a beneficiary) from which it arose. In accordance with the transitional
provisions of FRS 3, the reserve on consolidation as at 1 February 2006 of RM4,378,200 was derecognised
with a corresponding increase in retained profits. The effect on the consolidated balance sheet as at
31 January 2007 is set out in Note 3.1(j)(i). This change has no impact on the consolidated income statement
and the Company’s financial statements.
(c) FRS 5: Non-current Assets Held for Sale and Discontinued Operations
Prior to 1 February 2006, TA Antarabangsa Finance South Africa Limited, a subsidiary incorporated in the
ANNUAL REPORT 2007
Republic of South Africa, had on 5 April 2002 obtained the relevant approval from the Reserve Bank
of South Africa to de-register itself as a commercial bank. Thus, the operation of the subsidiary from
money lending operations only (excluding those from property investment activities that were classified
as continuing operations) was classified as discontinuing from the financial years ended 31 January 2003
to 31 January 2006.
In the current financial year, the Group ceases to classify the money lending operation as discontinuing
as the subsidiary had not entered into any binding sale agreement nor announced any formal disposal plan
to meet the classification criteria specified in FRS 5. This change in classification has been accounted for
retrospectively and the results of the operations previously presented in discontinuing operations were
066
reclassified and included in income from continuing operations for the prior period presented.
TA ENTERPRISE BERHAD
(194867-M)
During the current year, the Group has also reclassified a property in South Africa as non-current asset
held for sale (Note 21).
(d) FRS 101: Presentation of Financial Statements
Prior to 1 February 2006, minority interests at the balance sheet date were presented in the consolidated
balance sheet separately from liabilities and equity. Upon the adoption of the revised FRS 101, minority
interests are now presented within total equity. In the consolidated income statement, minority interests are
presented as an allocation of the total profit or loss for the year. A similar requirement is also applicable to
the statement of changes in equity. The revised FRS 101 also requires disclosure, on the face of the statement
of changes in equity, total recognised income and expenses for the year, showing separately the amounts
attributable to equity holders of the Company and to minority interests.
Prior to 1 January 2006, the Group’s share of taxation of asscociates and jointly controlled entities accounted
for using the equipty method was included as part of the Group’s income tax expense in the consolidated
income statement. Upon the adoption of the revised FRS 101, the share of taxation of associates and jointly
controlled entities accounted for using the equity method are now included in the respective shares of profit
or loss reported in the consolidated income statement before arriving at the Group’s profit or loss before tax.
These changes in presentation have been applied retrospectively and as disclosed in Note 3.1(j)(iii), certain
comparatives have been restated. The effects on the consolidated balance sheet as at 31 January 2007
and consolidated income statement for the year ended 31 January 2007 are set out in Note 3.1(j)(i) and Note
3.1(j)(ii) respectively. These changes in presentation has no impact on the Company’s financial statements.
(e) FRS 121 : The Effects of Changes in Foreign Exchange Rates
Prior to 1 February 2006, exchange differences arising on monetary items that formed part of the Group’s net
investment in foreign operations were recognised in profit or loss in the period in which they arose.
In line with the adoption of FRS 121 The Effects of Changes in Foreign Exchange Rates and for a more
appropriate presentation of events/transactions in the consolidated financial statements, the Group changed
its accounting policy with respect to the recognition of exchange differences arising from the designated
intra-group monetary items that, in substance, formed part of the Group’s net investment in foreign
subsidiaries or trusts (of which the Group is a beneficiary) and for which settlement is neither planned nor
likely to occur in the foreseeable future.
ANNUAL REPORT 2007
Such exchange differences would initially be reclassified to the exchange difference recognised in equity, a
separate component of equity in the Group’s financial statements and would subsequently be recognised in
profit or loss on the realisation of the net investment.
The change in accounting policy has been adopted retrospectively and has resulted in the reclassification
of such cumulative exchange differences (previously recognised gains) from the retained profits to the
exchange gain recognised in equity, as disclosed in Note 3.1(j)(iii). The effects on the consolidated balance
sheet as at 31 January 2007 and consolidated income statement for the year ended 31 January 2007 are set
out in Note 3.1(j)(i) and Note 3.1(j)(ii) respectively.
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
3.1 Changes in Accounting Policies, Effects and Changes in Comparatives Arising from
Adoption of New and Revised FRSs (cont’d)
(f) FRS 127: Consolidated and Separate Financial Statements
Prior to 1 February 2006, certain subsidiaries were revalued by the directors of the Company and the
revaluation surplus arising from the revaluation amounted to RM108,890,000. As a result of adoption of
FRS 127 which does not permit investment in subsidiaries to be carried at valuation, the aforesaid revaluation
surplus of RM108,890,000 which was included in the Company’s cost of investment in subsidiaries was
reversed. The remaining balance of the aforesaid revaluation surplus that amounted to RM51,440,000
(2006: RM55,246,000) in the shareholders’ equity was correspondingly reversed. The revaluation surplus
which had been previously utilised for the issuance of bonus shares and the cumulative revaluation surplus
that were written down as impairment loss, totalling RM57,450,000 (2006: RM53,644,000), are adjusted
against the retained profits of the Company.
(g) FRS 138: Intangible Assets
FRS 138 requires management to make judgement in classification of asset that incorporates both intangible
and tangible elements, i.e. if computer software should be classified as property, plant and equipment in
accordance FRS 116 or as an intangible asset in accordance with FRS 138, depending on the relative
significance of intangible and tangible element. For example, computer software for a computer-controlled
machine tool that cannot operate without that specific software is an integral part of the related hardware
and it is treated as property, plant and equipment. The same applies to the operating system of a computer.
When the software is not an integral part of the related hardware, computer software is treated as an
intangible asset.
After making such assessment, certain computer software had been reclassified from property, plant and
equipment to intangible assets. These changes in presentation have been applied retrospectively and as
disclosed in Note 3.1(j)(iii), certain comparatives have been restated. The effects on the consolidated balance
sheet as at 31 January 2007 are set out in Note 3.1(j)(i). There were no effects on the consolidated income
statement for the year ended 31 January 2007 and the Company’s financial statements.
(h) FRS 140: Investment Property
The adoption of this new FRS has resulted in a change in classification for a property previously classified as
ANNUAL REPORT 2007
Property, Plant and Equipment. This property has been reclassified as investment property as it is held to
earn rentals or for capital appreciation or both, and not for use in the production or supply of goods and
services or for administrative purposes. As the Group has chosen to adopt the cost model, such investment
property would be measured at depreciated cost less any accumulated impairment loss.
The change in classification was effected retrospectively and consequently resulted in a reclassification of
property, plant and equipment to investment property for the comparative year as disclosed in Note 3.1(j)(iii).
The effects on the consolidated balance sheet as at 31 January 2007 are set out in Note 3.1(j)(i). There were
no effects on the consolidated income statement for the year ended 31 January 2007 and the Company’s
068
financial statements.
TA ENTERPRISE BERHAD
(194867-M)
(i) FRSs, amendments to FRSs and Interpretations not yet effective
The Group has not early adopted the following FRSs, amendments to FRSs and Interpretations which have
effective dates as follows:
Effective for financial
FRSs, Amendment to FRSs and periods beginning on
Interpretations or after
FRS 139 - Financial Instruments: Recognition and Measurement Deferred
FRS 117 – Leases 1 October 2006
FRS 124 - Related Party Transactions 1 October 2006
FRS 6 - Exploration for and Evaluation of Mineral Resources * 1 January 2007
Amendment to FRS 1192004 - Employees Benefits - 1 January 2007
Actuarial Gains and Losses, Group Plans and Disclosures *
Amendment to FRS 121 The Effects of Changes in Foreign 1 July 2007
Exchange Rates - Net Investment in a Foreign Operation
IC Interpretation 1: Changes in Existing Decommissioning, 1 July 2007
Restoration and Similar Liabilities*
IC Interpretation 2: Members’ Shares in Co-operative 1 July 2007
Entities and Similar Instruments *
IC Interpretation 5: Rights to Interests arising from Decommissioning, 1 July 2007
Restoration and Environmental Rehabilitation Funds *
IC Interpretation 6: Liabilities arising from Participation in a Specific Market 1 July 2007
- Waste Electrical and Electronic Equipment *
IC Interpretation 7: Applying the Restatement Approach under FRS 1292004 1 July 2007
- Financial Reporting in Hyperinflationary Economies *
IC Interpretation 8: Scope of FRS 2 * 1 July 2007
*Not applicable to the Group under its present circumstances
The above FRSs, amendments to FRSs and Interpretations are expected to have no significant impact on the
financial statements of the Group upon their initial application except possibly for FRS 139 and as
disclosed below.
(i) FRS 117: Leases
ANNUAL REPORT 2007
This standard not yet effective and not adopted by the Group requires leasehold land to be accounted
for as operating leases. Payments made for leasehold land are required to be classified as prepaid lease
and amortised over the term of the lease. Leases of land and buildings are to be classified separately
where leasehold building can remain to be classified as property, plant and equipment.
The future adoption of this standard may have the effect of requiring certain leasehold land currently
included in property, plant and equipment (Note 4) to be segregated and reclassified to prepaid
lease.
F
(ii) RS 124: Related Party Disclosures
This standard not yet effective and not adopted by the Group requires the disclosure of the
compensation of key management personnel in future periods.
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
3.1 Changes in Accounting Policies, Effects and Changes in Comparatives Arising from
Adoption of New and Revised FRSs (contd.)
(j) Summary of effects and changes arising from adoption of new and revised FRSs
The following tables provide estimates of the extent to which each of the line items in the balance sheets
and income statements for the year ended 31 January 2007 is higher or lower than it would have been had
the previous policies been applied in the current year:
I
ncrease/(Decrease)
FRS 3 FRS 5 FRS 101 FRS 121 FRS 127 FRS 138 FRS140
Description of change Note 3.1(b) Note 3.1(c) Note 3.1(d) Note 3.1(e) Note 3.1(f) Note 3.1(g) Note 3.1(h) Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
(i) Effects on balance sheet as at 31 January 2007
Group
Property, plant and
equipment - (31,792) - - - (491) (192,931) (225,214)
Investment property - - - - - - 192,931 192,931
Intangible assets - - - - - 491 - 491
Reserves on
consolidation (4,378) - - - - - - (4,378)
Non-current asset
classified as held
for sale - 31,792 - - - - - 31,792
Foreign exchange
difference recognised
in equity - - - 41,899 - - - 41,899
Retained earnings 4,378 - - - - - - 4,378
Total equity - - 8,044 - - - - 8,044
Company
ANNUAL REPORT 2007
Investment in subsidiaries - - - - (108,890) - - (108,890)
Revaluation reserve - - - - 51,440 - - 51,440
Retained earnings - - - - 57,450 - - 57,450
070
TA ENTERPRISE BERHAD
(194867-M)
I
ncrease/(Decrease)
FRS 3 FRS 5 FRS 101 FRS 121 FRS 127 FRS 138 FRS140
Description of change Note 3.1(b) Note 3.1(c) Note 3.1(d) Note 3.1(e) Note 3.1(f) Note 3.1(g) Note 3.1(h) Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
(ii) Effects on income statement for the year ended 31 January 2007
Group
Other expenses/profit
for the year - - - 11,671 - - - 11,671
Company
Other expenses/profit
for the year - - - - 3,717 - - 3,717
(iii) Restatement of comparatives
The following comparative amounts have been restated arising from the effects of adopting the new and revised FRSs:
Previously stated I
ncrease/(Decrease) Restated
FRS 101 FRS 121 FRS 127 FRS 138 FRS140
Description of change Note 3.1(d) Note 3.1(e) Note 3.1(f) Note 3.1(g) Note 3.1(h)
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 February 2005
Group
Foreign exchange difference
recognised in equity - - 45,232 - - - 45,232
Retained profits 257,435 - (45,232) - - - 212,203
Company
Investment in subsidiaries 1,939,011 - - (108,890) - - 1,830,121
Revaluation reserve 55,246 - - (55,246) - - -
Retained earnings/
(accumulated loss) 46,101 - - (53,644) - - (7,543)
At 31 January 2006
ANNUAL REPORT 2007
Group
Property, plant and equipment 765,856 - - - (254) (218,525) 547,077
Investment property - - - - - 218,525 218,525
Intangible assets - - - - 254 - 254
Foreign exchange difference
recognised in equity - - 53,570 - - - 53,570
Retained profits 298,296 - (53,570) - - - 244,726
Total equity 1,781,321 7,462 - - - - 1,788,783
Company
Investment in subsidiaries 1,146,071 - - (108,890) - - 1,037,181
Revaluation reserve 51,440 - - (51,440) - - -
Retained earnings 84,899 - - (57,450) - - 27,449
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
3.1 Changes in Accounting Policies, Effects and Changes in Comparatives Arising from
Adoption of New and Revised FRSs (cont’d)
(j) Summary of effects and changes arising from adoption of new and revised FRSs (cont’d)
(iii) Restatement of comparatives (cont’d)
Previously stated ncrease/(Decrease)
I Restated
FRS 101 FRS 121 FRS 127 FRS 138 Other
Description of change Note 3.1(d) Note 3.1(e) Note 3.1(f) Note 3.1(g) Reclassification
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
For the year ended 31 January 2006
Group
Foreign exchange gain 15,827 - (8,338) - - - 7,489
Operating profit 109,436 - (8,338) - - - 101,098
Profit before tax 97,842 - (8,338) - - - 89,504
Profit after taxation 89,046 - (8,338) - - - 80,708
Profit for the year attributable to
equity holders of the parent 88,686 - (8,338) - - - 80,348
Earnings per share:
- basic and diluted 6.68 - (0.63) - - - 6.05
Company
Other expenses (37,396) - - (3,806) - 75 (41,127)
Operating profit 98,652 - - (3,806) - - 94,846
Profit before tax 97,629 - - (3,806) - - 93,823
Profit after taxation
and for the year 86,623 - - (3,806) - - 82,817
ANNUAL REPORT 2007
072
TA ENTERPRISE BERHAD
(194867-M)
3.2 Changes in Estimates
The revised FRS 116 Property, Plant and Equipment and FRS 138 Intangible assets require the review of the residual
value and remaining useful life of an item of property, plant and equipment and intangible assets with finite life at
least at each financial year end. The Group has revised the residual values of motor vehicles only. It has also revised
the useful life of a hotel building from 50 years to 70 years, with effect from 1 February 2006. In view of the rate of
technology changes, the Group revised the estimated useful lives of certain computer equipment with effect from
1 July 2006 as summarised below:
In respect of computer equipment Revised remaining
and intangible assets useful economic lives
Acquired more than 3 years ago Nil
Acquired less than 3 years 36 months less months already
depreciated up to 1 July 2006
New assets purchased since 1 July 2006 36 months
The revisions were accounted for prospectively as a change in accounting estimates and as a result, the depreciation
charges of the Group and the Company for the current financial year have been increased by RM1,118,766 and
RM44,577, respectively, whilst the amortisation charges of the Group for the current financial year have been
increased by RM143,000.
3.3 Significant Accounting Estimates and Judgements
(a) Critical Judgements Made in Applying Accounting Policies
The following are the judgements made by management in the process of applying the Group’s accounting
policies that have the most significant effect on the amounts recognised in the financial statements. The
judgements are made based on historical knowledge and best available current information.
(i) Classification between investment properties and property, plant and equipment
The Group has developed certain criteria based on FRS 140 in making judgement whether a property
qualifies as an investment property. Investment property is a property held to earn rentals or for
capital appreciation or both.
Some properties comprise a portion that is held to earn rentals or for capital appreciation and another
portion that is held for use in the production or supply of goods or services or for administrative
purposes. If the portion for internal use is more than an insignificant portion of the entire property,
such properties would be classified as Property, Plant and Equipment. Such judgement is made on an
ANNUAL REPORT 2007
individual property basis.
(ii) Classification of computer software
The Group has developed the following criteria to identify computer software to be classified as
property, plant or equipment or intangible asset:
• software that is embedded in computer-controlled equipment, including operating system that
cannot operate without that specific software is an integral part of the related hardware and is
treated as property, plant and equipment;
• application software that is being used on a computer is generally easily replaced and is not an
integral part of the related hardware and is treated as intangible asset.
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
3.3 Significant Accounting Estimates and Judgements (cont’d)
(b) Key Sources of Estimation Uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the balance
sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are discussed below:
(i) Depreciation and residual values of property, plant and equipment and intangible assets
Certain assets of the Group, e.g. renovation, computers, office equipment, electrical installations and
motor vehicles may have a historical usage of more than their current estimate of useful economic
lives. Nonetheless, the directors are of the opinion that the current estimates are reflective of the future
expected usage in view of the likelihood of technology changes, depletion through regular usage,
downward pressure on secondary market value of used motor vehicles, etc.
(ii) Impairment of property, plant and equipment
The Group carried out the impairment test based on a variety of estimation for the purpose of
determining the fair value and value-in-use of the property, plant and equipment. Estimating the
value-in-use requires the Group to make an estimate of the expected future cash flows from the asset
and also to choose a suitable discount rate in order to calculate the present value of those cash flows.
Expected future cash flows are compared to the historical track record for reasonableness. Discount
rate is based on the Group’s average cost of fund.
(iii) Property development
The Group recognises property development revenue and expenses in the income statement by using
the stage of completion method. The stage of completion is determined by the proportion that
property development costs incurred for work performed to date bear to the estimated total property
development costs.
Significant judgement is required in determining the stage of completion, the extent of the property
development costs incurred, the estimated total property development revenue and costs, as well as
the recoverability of the development projects. In making the judgement, the Group evaluates based
on past experience and by relying on the work of specialists.
(iv) Deferred tax assets
Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the
extent that it is probable that taxable profit will be available against which the losses and capital
allowances can be utilised. Significant management judgement is required to determine the amount
ANNUAL REPORT 2007
of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable
profits together with future tax planning strategies. The total carrying value of recognised tax losses
and capital allowances of the Group was RM1,271,000 (2006: RM2,567,000) and the unrecognised tax
losses and capital allowances of the Group was RM424,201,000 (2006: RM350,295,000).
(v) Provision for doubtful debts on financial receivables
The Group maintains a provision for doubtful accounts representing management’s estimate of the
amount of asset impairment in its financial receivables portfolio. The Group determines the provision
based on on-going review and evaluation performed whether the specific debts are considered
doubtful or have been classified as non-performing and taking into consideration the values of any
074
collaterals held. Certain collaterals pledged are properties which are not readily quoted in the market,
requires the Group to exercise judgement and to perform valuation on them.
TA ENTERPRISE BERHAD
(194867-M)
4. PROPERTY, PLANT AND EQUIPMENT
Office
Furniture equipment
Group *Land and Lifts and and Motor and
buildings Renovations fittings vehicles computers Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 31 January 2007
Cost
At 1 February 2006 as previously stated 923,361 88,926 9,126 6,499 89,320 1,117,232
Less: reclassified to investment
property (Note 5) (301,495) - - - - (301,495)
Less: reclassified to intangible assets - - - - (331) (331)
At 1 February 2006 as restated 621,866 88,926 9,126 6,499 88,989 815,406
Effects of foreign exchange translation (21,549) (2,124) (32) - (1,821) (25,526)
Reclassified from deposits paid in prior years 140 - - - - 140
Additions 1,144 4,304 235 613 2,899 9,195
Write-offs - - (110) (5) (1,790) (1,905)
Disposals - - (11) (377) (472) (860)
Cost of lifts aggregated with building
cost reclassified (2,770) 2,770 - - - -
Reclassified as held for sale (Note 21) (61,723) - - - - (61,723)
At 31 January 2007 537,108 93,876 9,208 6,730 87,805 734,727
Accumulated Depreciation and
Provision for Impairment Losses
At 1 February 2006 as previously stated 197,972 58,483 7,086 5,139 82,696 351,376
Less: reclassified to investment
property (Note 5) (82,970) - - - - (82,970)
Less: reclassified to intangible assets - - - - (77) (77)
At 1 February 2006 as restated 115,002 58,483 7,086 5,139 82,619 268,329
Effects of foreign exchange translation (1,853) (1,292) (31) - (1,648) (4,824)
Depreciation for the year 8,612 7,924 276 253 4,167 21,232
ANNUAL REPORT 2007
Reversal of impairment loss (5,345) - - - - (5,345)
Other write-offs - - (109) (3) (1,808) (1,920)
Disposals - - (11) (343) (453) (807)
Accumulated depreciation of lifts aggregated
with building costs reclassified (424) 424 - - - -
Reclassified as held for sale (Note 21) (29,931) - - - - (29,931)
At 31 January 2007 86,061 65,539 7,211 5,046 82,877 246,734
Net Book Value
075
At 31 January 2007 451,047 28,337 1,997 1,684 4,928 487,993
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
4. PROPERTY, PLANT AND EQUIPMENT (cont’d)
Office
Furniture equipment
Group *Land and Lifts and and Motor and
buildings Renovations fittings vehicles computers Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 31 January 2006
Cost
At 1 February 2005 as previously stated 952,742 87,601 7,649 7,863 88,412 1,144,267
Less: reclassified to investment
property (Note 5) (282,926) - - - - (282,926)
Less: reclassified to intangible assets (Note 7) - - - - (331) (331)
At 1 February 2005 as restated 669,816 87,601 7,649 7,863 88,081 861,010
Effects of foreign exchange translation
as restated (14,266) (4,123) 312 (198) (1,617) (19,892)
Additions 2,040 5,470 1,168 207 2,701 11,586
Written-off in conjunction with refurbishment (5,145) - - - - (5,145)
Other write-offs - - (3) (358) (41) (402)
Disposals (30,579) (22) - (1,015) (135) (31,751)
At 31 January 2006 621,866 88,926 9,126 6,499 88,989 815,406
Accumulated Depreciation and
Provision for Impairment Losses
At 1 February 2005 as previously stated 184,955 55,994 6,408 5,590 76,865 329,812
Less: reclassified to investment
property (Note 5) (71,549) - - - - (71,549)
Less: reclassified to intangible assets - - - - (18) (18)
At 1 February 2005 as restated 113,406 55,994 6,408 5,590 76,847 258,245
Effects of foreign exchange translation
as restated (2,644) (4,128) 247 (195) (328) (7,048)
Depreciation for the year as restated 11,096 6,636 432 783 6,271 25,218
Written-off in conjunction with refurbishment (789) - - - - (789)
ANNUAL REPORT 2007
Other write-offs - - (1) (137) (40) 178)
Disposals (1,312) (19) - (902) (131) (2,364)
Provision for impairment loss 499 - - - - 499
Reversal of impairment loss (5,254) - - - - (5,254)
At 31 January 2006 115,002 58,483 7,086 5,139 82,619 268,329
Net Book Value
At 31 January 2006 506,864 30,443 2,040 1,360 6,370 547,077
076
TA ENTERPRISE BERHAD
(194867-M)
4. PROPERTY, PLANT AND EQUIPMENT (cont’d)
Office
Furniture equipment
Company *Land and and Motor and
buildings Renovations fittings vehicles computers Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
31 January 2007
Cost
At 1 February 2006 20,380 1,403 2,451 922 331 25,487
Additions - 58 13 225 72 368
Transfer from subsidiaries - - - 77 - 77
At 31 January 2007 20,380 1,461 2,464 1,224 403 25,932
Accumulated Depreciation
At 1 February 2006 3,499 923 2,444 369 126 7,361
Charge for the year 408 164 5 43 170 790
At 31 January 2007 3,907 1,087 2,449 412 296 8,151
Net Book Value
At 31 January 2007 16,473 374 15 812 107 17,781
31 January 2006
Cost
At 1 February 2005 20,380 1,289 2,449 1,280 251 25,649
Additions - 114 2 - 80 196
Write-offs - - - (358) - (358)
At 31 January 2006 20,380 1,403 2,451 922 331 25,487
Accumulated Depreciation
ANNUAL REPORT 2007
At 1 February 2005 3,091 771 2,442 256 63 6,623
Charge for the year 408 152 2 250 63 875
Write-offs - - - (137) - (137)
At 31 January 2006 3,499 923 2,444 369 126 7,361
Net Book Value
At 31 January 2006 16,881 480 7 553 205 18,126
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
4. PROPERTY, PLANT AND EQUIPMENT (cont’d)
* Land and buildings comprise:
Group Freehold ^ Long term Buildings-
land leasehold land Buildings in- progress Total
RM’000 RM’000 RM’000 RM’000 RM’000
At 31 January 2007
Cost
At 1 February 2006 as previously stated 106,731 3,560 813,070 - 923,361
Less: reclassified to investment
property (Note 5) (57,111) - (244,384) - (301,495)
At 1 February 2006 as restated 49,620 3,560 568,686 - 621,866
Effects of foreign exchange translation (4,047) - (17,502) - (21,549)
Reclassified from deposits paid in prior years - - - 140 140
Additions - - 51 1,093 1,144
Reclassification of uncompleted buildings - - (1,806) 1,806 -
Land cost aggregated with building
cost reclassified 15,316 - (15,316) - -
Cost of lifts aggregated with building
cost reclassified - - (2,770) - (2,770)
Reclassified as held for sale (Note 21) (8,677) - (53,046) - (61,723)
At 31 January 2007 52,212 3,560 478,297 3,039 537,108
Accumulated Depreciation and
Provision for Impairment Losses
At 1 February 2006 as previously stated - 607 197,365 - 197,972
Less: reclassified to investment
property (Note 5) - - (82,970) - (82,970)
At 1 February 2006 as restated - 607 114,395 - 115,002
ANNUAL REPORT 2007
Effects of foreign exchange translation - - (1,853) - (1,853)
Depreciation for the year - 71 8,541 - 8,612
Reversal of impairment loss - - (5,345) - (5,345)
Accumulated depreciation of lifts aggregated - - (424) - (424)
Reclassified as held for sale (Note 21) - - (29,931) - (29,931)
At 31 January 2007 - 678 85,383 - 86,061
Net Book Value
At 31 January 2007 52,212 2,882 392,914 3,039 451,047
078
TA ENTERPRISE BERHAD
(194867-M)
4. PROPERTY, PLANT AND EQUIPMENT (cont’d)
* Land and buildings comprise:
Group (cont’d) Freehold ^ Long term
land leasehold land Buildings Total
RM’000 RM’000 RM’000 RM’000
At 31 January 2006
Cost
At 1 February 2005 as previously stated 113,970 3,560 835,212 952,742
Less: reclassified to investment property (Note 5) (53,594) - (229,332) (282,926)
At 1 February 2005 as restated 60,376 3,560 605,880 669,816
Effects of foreign exchange translation as restated (1,871) - (12,395) (14,266)
Additions - - 2,040 2,040
Written-off in conjunction with refurbishment - - (5,145) (5,145)
Disposals (8,885) - (21,694) (30,579)
At 31 January 2006 49,620 3,560 568,686 621,866
Accumulated Depreciation and
Provision for Impairment Losses
At 1 February 2005 as previously stated - 536 184,419 184,955
Less: reclassified to investment property (Note 5) - - (71,549) (71,549)
At 1 February 2005 as restated - 536 112,870 113,406
Effects of foreign exchange translation as restated - - (2,644) (2,644)
Depreciation for the year as restated - 71 11,025 11,096
Written-off in conjunction with refurbishment - - (789) (789)
Disposals - - (1,312) (1,312)
ANNUAL REPORT 2007
Provision for impairment loss - - 499 499
Reversal of impairment loss - - (5,254) (5,254)
At 31 January 2006 - 607 114,395 115,002
Net Book Value
At 31 January 2006 49,620 2,953 454,291 506,864
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
4. PROPERTY, PLANT AND EQUIPMENT (cont’d)
Company ^Long term
leasehold
land Buildings Total
RM’000 RM’000 RM’000
Cost
At 1 February 2006/31 January 2007 3,300 17,080 20,380
Accumulated Depreciation
At 1 February 2006 567 2,932 3,499
Charge for the year 66 342 408
At 31 January 2007 633 3,274 3,907
Net Book Value
At 31 January 2007 2,667 13,806 16,473
Cost
At 1 February 2005 3,300 17,080 20,380
Accumulated Depreciation
At 1 February 2005 501 2,590 3,091
Charge for the year 66 342 408
At 31 January 2006 567 2,932 3,499
Net Book Value
At 31 January 2006 2,733 14,148 16,881
^Long term leasehold land has unexpired lease periods between 52 to 73 years
(a) The net book values of property, plant and equipment of certain trusts and a subsidiary pledged to financial
institutions for credit facilities granted to but not utilised by certain trusts and subsidiary as referred to in Note
ANNUAL REPORT 2007
25 are as follows:
2007 2006
RM’000 RM’000
Group
Freehold land 37,077 38,507
Buildings 207,426 219,815
244,503 258,322
080
TA ENTERPRISE BERHAD
(194867-M)
4. PROPERTY, PLANT AND EQUIPMENT (cont’d)
(b) The titles of the freehold buildings acquired by a wholly-owned subsidiary in previous years are in the midst
of being transferred into that subsidiary’s name pending the splitting of master title deeds. The carrying
amount of these buildings is RM8,997,000 (2006: RM9,231,000).
(c) The net book value of a freehold building of a subsidiary pledged to a financial institution for credit facilities
granted to the Company at the end of the financial year as disclosed in Note 25 is as follows:
2007 2006
RM’000 RM’000
Group
Freehold land 15,100 15,100
Buildings 161,024 167,265
176,124 182,365
(d) A motor vehicle of the Group with a net book value of RM221,000 was written-off during the previous financial
year. Insurance claim of RM308,000 was received and recognised as other income during the current
financial year.
(e) Reversal of impairment loss of the Group of ZAR10,087,434 (RM5,345,331 equivalent) was made on a freehold
building situated at 160 Jan Smuts Avenue, Rosebank, Johannesburg, South Africa based on a signed
Agreement of Sale entered on 6 September 2006 that has become unconditional and was pending completion
as at the balance sheet date [Note 45(c)(i)].
(f ) The Group has commenced the replacement of lifts of Menara TA One since the previous financial year and
had completed this exercise during the current financial year , as part of the refurbishment plan of the building.
In the previous financial year, costs of lifts capitalised was RM3,303,000 and building costs attributable to lifts
replaced and written off was RM4,356,000. In tandem with the above, the directors had made a partial reversal
of impairment loss of RM5,254,000 in the previous financial year based on directors’ valuation as at 31 January
2006. During the current financial year, the remaining cost of lifts capitalised was RM886,000, and building
ANNUAL REPORT 2007
costs attributable to the lifts replaced and reclassified to the cost of lifts is RM2,770,000.
(g) The titles of certain properties classified as building-in-progress amounting to RM1,223,000 will only be
transferred to the Group upon the completion of construction.
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
5. INVESTMENT PROPERTY
Freehold
Land Building Total
RM’000 RM’000 RM’000
Group
Cost
At 1 February 2005 - - -
Reclassified from property, plant and equipment (Note 4) 53,594 229,332 282,926
Effects of foreign exchange translation 3,517 15,052 18,569
At 31 January 2006 and 1 February 2006 57,111 244,384 301,495
Effects of foreign exchange translation (5,154) (22,053) (27,207)
At 31 January 2007 51,957 222,331 274,288
Accumulated Depreciation and Provision for Impairment Losses
At 1 February 2005 - - -
Reclassified from property, plant and equipment (Note 4) - 71,549 71,549
Effects of foreign exchange translation - 4,946 4,946
Depreciation for the year - 6,475 6,475
At 31 January 2006 and 1 February 2006 - 82,970 82,970
Effects of foreign exchange translation - (7,973) (7,973)
Depreciation for the year - 6,360 6,360
At 31 January 2007 - 81,357 81,357
Net Book Value
At 31 January 2007 51,957 140,974 192,931
At 31 January 2006 57,111 161,414 218,525
ANNUAL REPORT 2007
Fair value 519,575
The net book values of the freehold land and building are pledged to a financial institution for credit facilities as
disclosed in Note 25.
The fair value of the investment property as at 31 January 2007 was estimated by the Directors based on an
indicative offer received for the investment property and no separate independent valuation was obtained.
The direct-operating costs of this revenue-generating investment property is C$6,389,840 (RM20,540,141
082
equivalent) (2006: C$6,136,747 or RM19,281,659 equivalent), most of which are recoverable from the tenants.
TA ENTERPRISE BERHAD
(194867-M)
6. LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS
Group Freehold Leasehold
land Buildings Total
RM’000 RM’000 RM’000
(a) Land Held for Property Development
Year Ended 31 January 2007
Cost of land purchased
At 1 February 2006 93,657 311 93,968
Reclassified from deposits paid in previous financial year # 12,163 - 12,163
Additions # 266,686 - 266,686
Deemed disposal @ (17,278) - (17,278)
At 31 January 2007 355,228 311 355,539
Development costs *
At 1 February 2006 5,061 - 5,061
Additions 957 - 957
Deemed disposal @ (297) - (297)
At 31 January 2007 5,721 - 5,721
Accumulated amortisation
At 1 February 2006 - (49) (49)
Amortisation during the year - (7) (7)
At 31 January 2007 - (56) (56)
Carrying Amount at 31 January 2007 360,949 255 361,204
Year Ended 31 January 2006
Cost of land purchased
At 1 February 2005 102,781 311 103,092
Additions 8,054 - 8,054
Transfer to property development costs (Note 6(b)) (17,178) - (17,178)
At 31 January 2006 93,657 311 93,968
Development costs *
At 1 February 2005 7,917 - 7,917
ANNUAL REPORT 2007
Additions 124 - 124
Transfer to property development costs (Note 6(b)) (2,980) - (2,980)
At 31 January 2006 5,061 - 5,061
Accumulated amortisation
At 1 February 2005 - (42) (42)
Amortisation during the year - (7) (7)
At 31 January 2006 - (49) (49)
Carrying Amount at 31 January 2006 98,718 262 98,980
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
6. LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS
(cont’d)
(a) Land Held for Property Development (cont’d)
# Inclusive of cash considerations of RM79,657,835 (Note 45(a)(i)), RM109,887,735 (Note 45(a)(ii)), RM22,448,125
(Note 45(a)(iii) and RM58,727,500 (Note 45(a)(iv) and other costs incidental to acquisitions.
@ The cost of land and development costs were accounted for as deemed disposals to a developer, Beringin
Terrace Sdn. Bhd. (“BT”) (see Note 15), in conjunction with the grant of vacant possession of the land by a
subsidiary, TA Properties Sdn. Bhd. (“TAP”) to BT, for their commencement of construction work. Gain from
the disposal of land of RM2,425,000 will be recognised upon the receipt of full payment for the disposal. TAP
is also entitled to a share of development profits in the future, which cannot be presently determined with
certainty.
* The development costs on land held for development comprise mainly the costs incurred in the preparation
and submission of development plans that are not significant relative to the total estimated property
development costs of the land held for development.
(b) Property Development Costs
Group
2007 2006
RM’000 RM’000
Freehold land
At 1 February 2006/2005 86,947 71,720
Transfer from Land Held for Property Development - 17,178
Reversal of completed projects (29,308) (1,907)
Unsold units transferred to Properties held for resale (199) (44)
As at 31 January 2007 57,440 86,947
Development costs
At 1 February 2006/2005 75,458 35,264
Cost incurred during the financial year 59,982 52,698
Transfer from Land Held for Property Development - 2,980
ANNUAL REPORT 2007
Reversal of completed projects (81,969) (15,165)
Unsold units transferred to Properties held for resale (1,248) (319)
As at 31 January 2007 52,223 75,458
Cumulative costs recognised in income statement
At 1 February 2006/2005 (74,775) (20,087)
Recognised during the year (49,439) (71,758)
Reversal of completed projects 111,277 17,070
084
As at 31 January 2007 (12,937) (74,775)
TA ENTERPRISE BERHAD
(194867-M)
6. LAND HELD FOR PROPERTY DEVELOPMENT AND PROPERTY DEVELOPMENT COSTS
(cont’d)
(b) Property Development Costs (cont’d)
Group
2007 2006
RM’000 RM’000
Accumulated impairment losses
At 1 February 2006/2005 (1,000) (5,300)
Reversal of impairment losses - 4,300
As at 31 January 2007 (1,000) (1,000)
Property development costs at 31 January 2007 95,726 86,630
Progress billings account:
Cumulative revenue recognised 215,013 135,576
Cumulative progress billings made (215,942) (115,963)
(929) 19,613
Accrued billings in trade receivables (Note 15) 4,285 27,954
Progress billings in trade payables (Note 27) (5,214) (8,341)
(929) 19,613
ANNUAL REPORT 2007
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
7. INTANGIBLE ASSETS
Group Trading rights in
Stock Exchange of
Hong Kong Limited Software Total
RM’000 RM’000 RM’000
Cost
At 1 February 2006 as previously stated - - -
Effects of adopting FRS 138 (Note 3.1(g)) 167 331 498
At 1 February 2006 as restated 167 331 498
Additions - 380 380
At 31 January 2007 167 711 878
Accumulated amortisation
At 1 February 2006 as previously stated - - -
Effects of adopting FRS 138 (Note 3.1(g)) 167 77 244
At 1 February 2006 as restated 167 77 244
Amortisation - 143 143
At 31 January 2007 167 220 387
Net carrying amount
At 31 January 2007 - 491 491
Cost
At 1 February 2005 as previously stated - - -
Effects of adopting FRS 138 (Note 3.1(g)) 167 331 498
At 1 February 2005 as restated and as at 31 January 2006 167 331 498
Accumulated amortisation
ANNUAL REPORT 2007
At 1 February 2005 as previously stated - - -
Effects of adopting FRS 138 (Note 3.1(g)) 134 18 152
At 1 February 2005 as restated 134 18 152
Amortisation 33 59 92
At 31 January 2006 167 77 244
Net carrying amount
At 31 January 2006 - 254 254
086
TA ENTERPRISE BERHAD
(194867-M)
8. SUBSIDIARIES
Company
2007 2006
RM’000 RM’000
Unquoted shares:
At cost 1,339,504 1,155,500
Less: Provision for impairment losses (115,868) (118,319)
1,223,636 1,037,181
RM’000
Unquoted shares:
At 1 February 2006 1,155,500
Subscription of 5,442 ordinary shares in TA International Sdn. Bhd. (“TAI”) 5
Subscription of 189,545 6,000% NCRPS in TA Properties Sdn. Bhd. (“TAP”) 189,545
Redemption of 5,442 5,000% NCRPS in TAI (5,442)
Disposal of a former directly-held subsidiary to another subsidiary (104)
At 31 January 2007 1,339,504
Provision for impairment losses:
At 1 February 2006 (118,319)
Recognised in income statement 2,348
Disposal of a subsidiary 103
At 31 January 2007 (115,868)
Details of the subsidiaries are as follows:
Effective
Country of Interest (%)
Name of Subsidiaries incorporation 2007 2006 Principal Activities
TA Centre Berhad Malaysia 100 100 Investment holding
TA Securities Holdings Berhad Malaysia 100 100 Stockbroker and dealer in
ANNUAL REPORT 2007
securities
TA Nominees (Tempatan) Sdn. Bhd. Malaysia 100 100 Nominee services
TA Nominees (Asing) Sdn. Bhd. Malaysia 100 100 Nominee services
TASEC Nominees (Tempatan) Sdn. Bhd. Malaysia 100 100 Nominee services
TASEC Nominees (Asing) Sdn. Bhd. Malaysia 100 100 Nominee services
TA Investment Management Berhad Malaysia 70 70 Licensed fund manager
(formerly known as TA Unit Trust managing unit trust and
Management Berhad) private funds
TA Muamalah Nominees (Tempatan) Sdn. Bhd. Malaysia 100 100 Nominee services for Islamic
broking
TA Muamalah Nominees (Asing) Sdn. Bhd. Malaysia 100 100 Nominee services for Islamic
broking
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
8. SUBSIDIARIES (cont’d)
Details of the subsidiaries are as follows:
Effective
Country of Interest (%)
Name of Subsidiaries incorporation 2007 2006 Principal Activities
** Botly Nominees (Tempatan) Sdn. Bhd. Malaysia 100 100 Nominee services
** Botly Nominees (Asing) Sdn. Bhd. Malaysia 100 100 Nominee services
TA Asset Management Sdn. Bhd. Malaysia 100 100 Ceased operations as a licensed
fund management company
** Menara TA Sdn. Bhd. Malaysia 100 100 Property investment and
provision of management
services
** TA Nominees Sdn. Bhd. Malaysia 100 100 Domant
** TA Capital Sdn. Bhd. Malaysia 100 100 Dormant
** TA Commodities Sdn. Bhd. Malaysia 100 100 Commodities trading
TA Futures Sdn. Bhd. Malaysia 70 70 Futures and options broking
TA Properties Sdn. Bhd. Malaysia 100 100 Investment holding and
property development
** TA Ventures Sdn. Bhd. Malaysia 100 100 Dormant
** Beta Vector Sdn. Bhd. Malaysia 100 100 Property investment and
development
** Ample Era Sdn. Bhd. Malaysia 100 100 Property investment and
development
** Ample Equities Sdn. Bhd. Malaysia 100 100 Property investment and
development
** Peramah Setia (M) Sdn. Bhd. Malaysia 100 100 Dormant
Orchard Park Sdn. Bhd. Malaysia 100 100 Property investment and
development
** Pure Factor Sdn. Bhd. Malaysia 100 100 Property investment and
development
** Sharp Factor Sdn. Bhd. Malaysia 100 100 Property investment and
development
** Factor Synergy Sdn. Bhd. Malaysia 100 100 Property investment and
development
** TA Project Management Sdn. Bhd. Malaysia 100 51 Project management
Binaprestij Maju Sdn. Bhd. Malaysia 51 51 General construction
** TA Binaprestij Sdn. Bhd. Malaysia 51 51 Property construction
ANNUAL REPORT 2007
(formerly known as Sistem Kencana Sdn. Bhd.) (formerly dormant)
TA First Credit Sdn.Bhd. Malaysia 100 100 Lending of monies, leasing,
hire purchase and property
development
** TA Property Management Sdn. Bhd Malaysia 100 100 Property management
Cosmic Legion Sdn. Bhd. Malaysia 100 100 Investment holding
Sanjung Padu (M) Sdn. Bhd. Malaysia 100 100 Property investment
Parallel Legion Sdn. Bhd. Malaysia 100 100 Investment holding
Fine Legion Sdn. Bhd. Malaysia 100 100 Investment holding
** ERF Properties Sdn. Bhd. Malaysia 100 100 Dormant
** TA Properties (Sarawak) Sdn. Bhd. Malaysia 100 100 Investment holding and
088
property investment
TA ENTERPRISE BERHAD
(194867-M)
8. SUBSIDIARIES (cont’d)
Details of the subsidiaries are as follows:
Effective
Country of Interest (%)
Name of Subsidiaries incorporation 2007 2006 Principal Activities
** # Star Winners Sdn. Bhd. Malaysia 100 - Property investment and
development
TA International Sdn. Bhd. Malaysia 100 100 Investment holding and
management services
** TA Gemilang Trading Sdn. Bhd. Malaysia 100 100 Investment holding
(formerly known as
Power Launch Sdn. Bhd.)
** TA Dotcom Sdn. Bhd. Malaysia 100 100 Dormant (formerly marketing
and provision of information
technology related goods
and services)
Astra Dinamik Sdn. Bhd. Malaysia 100 100 Property investment and
development
Indo Aman Bina Sdn. Bhd. Malaysia 100 100 Property investment and
development
* ## Winner Star Group Limited Hong Kong 100 - Dormant
** TA Securities (HK) Limited Hong Kong 100 100 Stockbroker and dealer in
securities
* TA International Investment Limited Hong Kong 100 100 Investment holding
* Ace Fit International Limited Hong Kong 100 100 Property investment
** ^^ TA Ace Fit Investment The Rep. of China 100 - Dormant
Management (Kunming) Co. Ltd.
** TA Financial Services Pty. Ltd. Australia 100 100 Investment holding
** TA Ausfinance Limited Australia 100 100 Share investment
** Bold Holdings Pty. Ltd. Australia 60 60 Management services
**Wales House Nominees Pty. Ltd. Australia 100 100 Trusteeship
** Wales House Hotel Ltd. Australia 100 100 Hotel management services
TA Antarabangsa Limited The British Virgin Islands 100 100 Investment holding and
provision of funding facilities
** TA Antarabangsa The British Virgin Islands 100 100 Dormant
Development Ltd.
ANNUAL REPORT 2007
** TA Property Development The Rep. of the Philippines 99.99 99.99 Dormant
(Philippines), Inc.
** Philippine TA Securities, Inc. The Rep. of the Philippines 99.99 99.99 Stockbroker and dealer in
securities (currently under
voluntary suspension)
** TA Investment Holdings The Rep. of South Africa 100 100 Investment holding
South Africa Limited
** TA Antarabangsa Finance The Rep. of South Africa 100 100 Ceased operations as licensed
South Africa Limited bank pursuant to its
deregistration on 5 April 2002
** TA Centre (Proprietary) Ltd. The Rep. of South Africa 100 100 Property investment
** Yorcom No. 13 (Pty) Ltd. The Rep. of South Africa 100 100 Dormant
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
8. SUBSIDIARIES (cont’d)
Effective
Country of Interest (%)
Name of Subsidiaries incorporation 2007 2006 Principal Activities
** TA Development Lanka (Pvt) Ltd. Sri Lanka 100 100 Dormant
* Indian Ocean Lanka (Pvt) Ltd. Sri Lanka 100 100 Investment holding
** TA Properties (Canada) Ltd. Canada 100 100 Property investment
** TA Management Ltd. Canada 100 100 Management services
** TA Development One (Canada) Ltd. Canada 100 100 Trusteeship
** Empress II Holdings Limited Canada 100 100 Dormant
** TA Management (Empress II) Ltd. Canada 100 100 Dormant (formerly
management services)
In addition, the Group is the beneficiary of the following wholly-owned trusts where the trusts’ financial
statements have been included into the Group’s financial statements using the line-by-line reporting format:
Name of Trust Country of Inception
** TA Properties (Canada) Trust Antigua
** TA Development One (Canada) Trust Canada
** TA Development One (Barbados) Trust Barbados
** Wales House Trust Australia
** Empress Holdings Trust Barbados
** Empress Investments Trust Barbados
ANNUAL REPORT 2007
090
TA ENTERPRISE BERHAD
(194867-M)
8. SUBSIDIARIES (cont’d)
* Audited by affiliate of Ernst & Young
** Audited by firms of auditors other than Ernst & Young
# On 18 August 2006, the Company acquired 2 ordinary shares of RM1 each representing 100% equity interest in
Star Winners Sdn. Bhd. for a total consideration of RM2.
## On 22 September 2006, TA International Sdn. Bhd., a wholly subsidiary of the Company acquired 1 ordinary
share of HKD1 representing 100% equity interest in Winner Star Group Limited, a foreign subsidiary, for a total
cash consideration of HKD1.
^^ On 21 June 2006, the Company obtained approval from Wu Hua Local Authorities of Kunming, Yunnan for the
establishment of TA Ace Fit Investment Management (Kunming) Co. Ltd., a wholly-owned foreign enterprise
in Kunming, China. TA Ace Fit Investment Management (Kunming) Co. Ltd. was incorporated in 7 July 2006 with
a registered capital of RMB4,000,000 and is wholly-owned by Ace-Fit International Limited, a wholly-owned
subsidiary of TA Properties Sdn. Bhd., which is in turn, a wholly-owned subsidiary of the Company.
(i) Without qualifying their opinion, the auditors of a 51%-owned subsidiary, Binaprestij Maju Sdn. Bhd., in their
report have drawn attention to the subsidiary’s ability to continue as a going concern. The subsidiary’s financial
statements have been prepared on a going concern basis. The ability of the subsidiary to continue in business
is dependent on its own ability to generate future funds and profitable operations.
(ii) Subscription and redemption of shares in existing subsidiaries
During the year, the Company subscribed for 5,442 ordinary shares of RM1 each in its subsidiary, TA International
Sdn Bhd (“TAI”), a company incorporated in Malaysia for a total cash consideration of RM5,442. TAI also redeemed
5,442 5,000% preference shares of RM1.00 each for a total cash consideration of RM5,442,000 from the
Company.
The Company also subscribed for 189,545 shares of 6,000% non cumulative redeemable preference shares of
RM1 each at a premium of RM999 in its subsidiary, TA Properties Sdn. Bhd., a company incorporated in Malaysia,
for a total cash consideration of RM189,545,000.
ANNUAL REPORT 2007
(iii) Bonus shares issued by a subsidiary
During the year, the Company received 37,000,000 bonus shares of RM1 each on the basis of 1 new ordinary
share for every 5 existing ordinary shares held in its subsidiary, TA Centre Berhad, a company incorporated
in Malaysia.
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
9. ASSOCIATED COMPANIES
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
Unquoted shares at cost 11,899 11,899 325 325
Share of post-acquisition profits less losses 3,332 3,330 - -
Less: Provision for impairment losses - - (112) (135)
15,231 15,229 213 190
The summarised financial information of the associates are as follows:
2007 2006
RM’000 RM’000
Assets and liabilities
Current assets 3,145 3,451
Non-current assets 98,884 98,262
Total assets 102,029 101,713
Current liabilities/total liabilities (7,747) (7,421)
Results
Revenue 16,859 12,066
Loss for the year (27) (414)
The details of the associated companies, all of which are incorporated in Malaysia, are as follows:
Effective Interest (%) Financial
Name of Associates 2007 2006 Year End Principal Activities
Held by the Company:
* TA Travel Sdn. Bhd. 25 25 31 December Tour and travel agency
ANNUAL REPORT 2007
Held by subsidiaries:
* Dinar Ehsan Sdn. Bhd. 25 25 31 January Investment holding
* Panca Resmi Sdn. Bhd. 25 25 31 January Property investment and
property investment holding
** TFC Nominees (Asing) Sdn. Bhd. 50 50 31 January Dormant
*The results of the associated companies have been equity accounted for based on the management financial statements for the
relevant period.
**The results of the associated companies have been equity accounted for based on the audited financial statements for
092
the relevant period.
TA ENTERPRISE BERHAD
(194867-M)
10. OTHER INVESTMENTS
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
At cost:
1 seat in Philippines Stock Exchange, Inc. (“PSE”) 4,507 4,507 - -
1 unit of non-cumulative “A”
preference share in Bursa Malaysia
Derivatives Berhad (“BMDB”) 1,500 1,500 - -
1 unit of non-cumulative “C”
preference share in BMDB 150 150 - -
Quoted securities:
- In Malaysia 28,805 29,830 - -
- Outside Malaysia 2 4 - -
Unquoted shares:
- In Malaysia 490 490 490 490
Redeemable secured loan stocks (“RSLS”) * - 39,256 - -
Quoted trust units in Malaysia # 625 14,209 - 12,000
Unquoted trust units outside Malaysia - - 111,384 111,384
Unquoted bonds and debt securities
in Malaysia 20,280 38,544 15,156 21,638
56,359 128,490 127,030 145,512
Add:
Accretion of discount on unquoted bonds - 179 - 30
Less:
Provision for impairment losses
- on PSE (4,257) (4,257) - -
- on RSLS - (39,256) - -
- other quoted investments (17,814) (20,113) - (55)
Amortisation of premium on unquoted
bonds and debt securities (106) (70) (32) (12)
ANNUAL REPORT 2007
34,182 64,973 126,998 145,475
Market/indicative value:
Quoted securities
- In Malaysia 26,390 14,275 - -
- Outside Malaysia - 2 - -
Unquoted bonds and debt
securities in Malaysia 20,543 39,333 15,488 21,833
Quoted trust units in Malaysia 640 14,083 - 12,200
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
10. OTHER INVESTMENTS (cont’d)
Included in investment in quoted securities in Malaysia of the Group is an amount of RM3,182,000
(2006: RM3,747,000) representing an unsold 1,700,000 (2006: 2,000,000) ordinary shares in Bursa Malaysia Berhad
previously distributed to subsidiaries of the Group that were participating organisations of Bursa Malaysia Securities
Berhad, arising from the demutualisation of the Kuala Lumpur Stock Exchange. These shares were quoted since
18 March 2005.
* Being RSLS received as part settlement of financial receivables from Idris Hydraulic (Malaysia) Berhad during the prior financial years
and were originally redeemable on 20 November 2005 and thereafter extended to 17 November 2007. Management estimates that
there is a high likelihood that the RSLS may not be recoverable Hence, the RSLS which was fully provided for in prior financial years,
was written off during the financial year.
# Included in quoted trust units in Malaysia were unit trust funds managed by a subsidiary totalling RM512,080 (2006: RM14,108,800).
Unquoted trust units outside Malaysia of the Company represent investment in 64,510,755 (2006: 64,510,755)
trust units of A$1.00 each at par in Wales House Trust (“WHT”), a trust incepted in Australia. This represents 50%
interest in WHT while the remaining 50% is held by TA Properties Sdn. Bhd., a wholly-owned subsidiary incorporated
in Malaysia. This investment has been eliminated at Group level, upon consolidation, as the financial statements of
this trust have been included in the Group’s financial statements.
11. PROPERTIES HELD FOR RESALE
Included in properties held for resale of the Group are certain titles of the properties amounting to approximately
RM68,000 (2006: RM68,000) previously charged to a financial institution for a term loan granted to a subsidiary are
in the process of being discharged. The term loan was fully settled in the financial year ended 31 January 2003.
12. LAND HELD FOR RESALE
Included in land held for resale of the Group are certain titles of land amounting to RM7,036,000 (2006: RM7,036,000)
that are in the process of being transferred into those respective subsidiaries’ names pending the final settlement
of expenses.
13. INVENTORIES
Group
ANNUAL REPORT 2007
2007 2006
RM’000 RM’000
At cost:
Food and beverages 341 289
Consumables 235 148
576 437
094
TA ENTERPRISE BERHAD
(194867-M)
14. FINANCIAL RECEIVABLES
Group
2007 2006
RM’000 RM’000
Loans and advances 340,604 307,046
Loan receivables 558,624 541,488
Lease receivables 1,214 1,310
Gross financial receivables 900,442 849,844
Less: Provision for doubtful debts (345,125) (363,304)
Interest-in-suspense (246,565) (219,998)
(591,690) (583,302)
Net financial receivables 308,752 266,542
Group
2007 2006
RM’000 RM’000
The movements in provision for doubtful debts are as follows:
At 1 February 363,304 533,802
Provision made during the year 1,093 29,448
Provision written-back during the year (18,059) (11,941)
Provision written-off during the year (39) (187,018)
Exchange differences (1,174) (987)
345,125 363,304
Provision written-off during the year was in relation to debts which have previously been provided for in the
ANNUAL REPORT 2007
income statement and are now deemed irrecoverable.
All gross financial receivables are receivable within one year.
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
14. FINANCIAL RECEIVABLES (cont’d)
The financial receivables include an amount of RM55,000 (2006: RM1,310,000), representing the total amount due
from customers of a foreign former banking subsidiary, net of provision for doubtful debts and interest-in-
suspense. The subsidiary was deregistered as a commercial bank in the financial year ended 31 January 2003 and
the net financial receivables are expected to be collectible in accordance with the remaining maturity dates in
place before the deregistration.
The five (2006: five) largest loan receivables, which contributed 45% (2006: 49%) of the net financial receivables,
represent the Group’s significant concentration of credit risks, as follows:
Provision
for Interest-
doubtful in-
Gross debts suspense Net
RM’000 RM’000 RM’000 RM’000
Five largest loan receivables 171,536 (13,467) (19,707) 138,362
Others 728,906 (331,658) (226,858) 170,390
900,442 (345,125) (246,565) 308,752
The range of interest rates of financial receivables of the Group are disclosed in Note 47(b).
15. TRADE RECEIVABLES
Group
2007 2006
RM’000 RM’000
Trade receivables from stockbroking subsidiaries:
- Due from brokers 411,584 135,348
- Due from clients 529,902 356,713
Due from unit trust funds 10,374 1,393
Accrued billings in respect of property development costs [Note 6(b)] 4,285 27,954
Due from a developer [Note 6(a)] 17,575 -
Other trade receivables 11,275 11,903
ANNUAL REPORT 2007
984,995 533,311
Less: Provision for doubtful debts (34,921) (26,762)
Interest-in-suspense (114,923) (95,594)
835,151 410,955
Due from brokers and clients represent amounts receivable from the stockbroking subsidiaries’ margin clients and
non-margin clients; and outstanding contracts entered into on behalf of these clients where settlements via the
Central Depository System for the Malaysian subsidiary or Central Clearing and Settlement System for the
096
Hong Kong subsidiary have yet to be made.
TA ENTERPRISE BERHAD
(194867-M)
15. TRADE RECEIVABLES (cont’d)
Due from unit trust funds are receivable by a subsidiary that is a manager for unit trust funds and relate to
management fees receivables and release of trust units receivables.
Due from a developer, Beringin Terrace Sdn. Bhd., a company in which the son of a director of the Company, Dato’
Mohamed bin Abid, has interest, relates to the remaining amount receivable from the disposal of property
[Note 6(a)] . The amount is interest-free and repayable in accordance with the terms of a joint venture agreement.
Land titles for the property disposed are held by the solicitors pending the full settlement of balance from the
developer.
Other trade receivables mainly arise from subsidiaries in futures broking, hotel operations, property investment
and development.
The Group has no significant concentration of credit risk from exposures to a single debtor or to groups of debtors
within its trade receivables. The trade credit term for non-margin clients for the Malaysian stockbroking subsidiary
is 3 market days in accordance with the Bursa Malaysia Securities Berhad Fixed Delivery and Settlement System
(“FDSS”) trading rule whilst for the overseas stockbroking subsidiary, the trade credit term is 2 market days. The trade
credit terms for margin clients for the Malaysian stockbroking subsidiaries are set within standard margin
agreements. Release of trust units receivable from unit trust funds has a trade credit term of not exceeding 10 days
from the date of release. The Group’s normal trade credit terms for other trade receivables are assessed and
approved on a case-by-case basis.
The range of interest rates on interest-bearing trade receivables of the Group are disclosed in Note 47(b).
16. OTHER RECEIVABLES
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
Deposits relating to upgrading of lifts in property - 369 - -
Deposits for acquisition of land held for development 1,064 12,303 - -
Deposit for sharing of costs with other
property developer - 1,860 - -
Other deposits 2,296 1,569 57 32
ANNUAL REPORT 2007
Retention monies paid by housebuyers to stakeholder 7,161 2,266 - -
Prepayment of stamp duties and other costs
incidental to acquisition of property - 5,966 - -
Other prepayments 5,589 5,479 - -
Deferred leasing and financing costs 1 16,342 19,257 - -
Balance carried forward 32,452 49,069 57 32
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
16. OTHER RECEIVABLES (cont’d)
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
Balance brought forward 32,452 49,069 57 32
Amount with derivative clearing house 2 69,016 15,058 - -
Club membership 233 345 - 18
Receivable from Employees’ Provident Fund 3 3,615 2,205 - -
Sundry receivables 4 6,390 5,270 371 356
Balance brought forward 111,706 71,947 428 406
Less : Provision for doubtful debts (3,558) (3,551) - -
Accumulated amortisation of club membership - (2) - (2)
108,148 68,394 428 404
1. Deferred leasing costs relate to tenant inducements and leasing commissions prepaid by a subsidiary that are
deferred and amortised over the respective terms of the lease. Deferred financing costs relate to prepaid
amounts on a mortgage loan in a trust of which the Group has interest and are amortised over the term of
the loan.
2. The amount with derivative clearing house represents unsegregated clearing accounts, security deposits
for Kuala Lumpur Composite Index Futures (“FKLI”) , Crude Palm Oil Futures (“FCPO”) and Ethylene Over-The-
Counter contracts and clearing funds for FKLI and FCPO placed by a subsidiary licensed to carry on derivatives
broking business in Malaysia, which is also a clearing member. The amount is calculated by the clearing house
in accordance with its Business Rules with reference to open positions of all derivative contracts where the
subsidiary is a party in relation to the other clearing members. These amounts are interest bearing, with
weighted average rate of interest earned on unsegregated clearing accounts of 1.38% (2006: 0.74%) per
annum, 1% (2006: 1%) per annum on the security deposits and 1% to 1.38% (2006: 0.74% to 1%) per annum
on the clearing funds. The subsidiary relies on the clearing house to monitor the creditworthiness of other
clearing members via its financial and operational requirements for minimum membership standards.
3. The amount receivable from Employees’ Provident Fund arose from the sales of trust units by a subsidiary under
the Kumpulan Wang Simpanan Pekerja Members’ Investment Schemes.
ANNUAL REPORT 2007
4. Included in sundry receivables of the Group is an amount of RM3,312,000 (2006: RM3,312,000) which relates to
advances made to a third party for the purchase of investments in the previous financial years. The amount is
deemed doubtful as it is currently under litigation and has been fully provided for in previous financial years.
The Group and the Company have no significant concentration of credit risk that may arise from exposures to a
single debtor or to groups of debtors within its other receivables.
098
TA ENTERPRISE BERHAD
(194867-M)
17. DUE FROM SUBSIDIARIES
Company
2007 2006
RM’000 RM’000
Subordinated loan to a subsidiary 13,000 7,000
Unsecured advances to subsidiaries 228,192 78,439
241,192 85,439
Less: Provision for doubtful debts (2,026) (1,571)
239,166 83,868
Repayable on demand 226,166 76,868
Due more than 1 year and less than 2 years 13,000 7,000
239,166 83,868
The amounts due from subsidiaries of the Company are unsecured and interest-free except for an amount of
RM13,000,000 (2006: RM7,000,000) due from a derivative trading subsidiary that bore interest of 7% (2006: 3% to
7%) per annum. The subordinated loan has a maximum aggregate principal amount of RM13,000,000, of which the
full amount was drawndown as at the balance sheet date. The subordinated loan is to be made available for a
period of 3 years from 6 May 2005 with a scheduled maturity date on 5 May 2008, unless modified by any request
from Bursa Malaysia Derivatives Berhad. Unsecured advances have no fixed terms of repayment.
During the current financial year, the Company recovered RM136,218,000 (2006 : Nil) from a subsidiary that
had been written off as bad debts in the prior financial years (Note 40). The remaining amount owing from the same
subsidiary that had been written off as bad debts in the prior financial years is RM65,251,000 (2006 : RM201,469,000).
18. DUE FROM/(TO) ASSOCIATED COMPANIES
The amounts due from/(to) associated companies are unsecured, interest-free and have no fixed terms of repayment.
19. SHORT TERM INVESTMENTS
Group
2007 2006
RM’000 RM’000
ANNUAL REPORT 2007
Quoted securities:
- In Malaysia 6,163 2,495
- Outside Malaysia 842 474
Quoted trust units in Malaysia for sale by a unit trust
management subsidiary in the ordinary course of business 229 155
7,234 3,124
Less: Provision for impairment losses (514) (403)
099
6,720 2,721
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
19. DUE FROM SUBSIDIARIES (cont’d)
Group
2007 2006
RM’000 RM’000
Market value:
Quoted securities:
- In Malaysia 6,294 2,281
- Outside Malaysia 457 1,925
Quoted trust units in Malaysia 229 155
20. CASH AND CASH EQUIVALENTS
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
Cash and bank balances 118,558 69,326 295 361
Fixed deposits and placements with:
- Licensed banks 83,068 171,300 - 34,000
- Licenced investment banks and other
financial institutions 213,909 324,018 10,539 130,269
Short term funds carried forward 415,535 564,644 10,834 164,630
Less:
Monies held in trust (202,050) (95,343) - -
Housing Development Accounts (24,493) (21,915) - -
Pledged for bank guarantees (14,645) (6,400) - -
Cash and cash equivalents 174,347 440,986 10,834 164,630
Included in the short term funds of the Group are:
(i) monies held in trust of approximately RM202,050,000 (2006: RM95,343,000) arising from stockbroking and
derivative trading subsidiaries;
(ii) monies held pursuant to Section 7A of the Housing Development (Control and Licensing) Act 1966 of
ANNUAL REPORT 2007
RM24,493,000 (2006: RM21,915,000) and therefore restricted for use in other operations.
(iii) fixed deposits of RM1,000,000 (2006: RM1,400,000) in a stockbroking subsidiary pledged for bank guarantee
facilities granted to the subsidiary. The said facilities were partly utilised as at the financial year end in the subsidiary;
(iv) fixed deposits of RM1,000,000 (2006: RM1,000,000) of an investment holding subsidiary pledged to a financial
institution for bank guarantee facilities granted to the subsidiary and a related company. The said facilities were
fully utilised as at the financial year end.
(v) fixed deposits in foreign currency of C$999,980 and HK$21,500,000 [in aggregate equivalent to RM12,645,462
100
(2006: Nil)] of an oversea subsidiary pledged to a financial instituition for a standby letter of credit facility
extended to the Company. The said facilities were partly utilised as at the financial year end.
TA ENTERPRISE BERHAD
(194867-M)
20. CASH AND CASH EQUIVALENTS (cont’d)
The weighted average effective interest rates of deposits at the balance sheet date were as follows:
Group Company
2007 2006 2007 2006
% % % %
Licensed banks 3.21 2.86 - 2.85
Licensed investment banks and other financial institutions 3.51 2.60 3.35 2.74
The average maturities of deposits at the end of the financial year were as follows:
Group Company
2007 2006 2007 2006
Days Days Days Days
Licensed banks 12 19 - 30
Licensed investment banks and other financial institutions 14 17 2 24
21. NON-CURRENT ASSET CLASSIFIED AS HELD FOR SALE
The non-current asset classified as held for sale on the Group’s balance sheet as at 31 January 2007, as described
in Note 45 (c)(i), is as follows:
Group
Note 2007 2006
RM’000 RM’000
Freehold land and building:
Cost 4 61,723 -
Accumulated impairment loss 4 (26,727) -
34,996 -
Accumulated depreciation 4 (3,204) -
ANNUAL REPORT 2007
31,792 -
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
22. SHARE CAPITAL
Number of Ordinary Shares
of RM 1 Each A
mount
2007 2006 2007 2006
’000 ’000 RM’000 RM’000
Authorised 4,000,000 4,000,000 4,000,000 4,000,000
Issued and fully paid 1,328,475 1,328,475 1,328,475 1,328,475
The Company had previously obtained the approvals of the Securities Commission on 11 December 2003 and
its shareholders on 9 January 2004 for the issuance of a Employees’ Share Option Scheme (“ESOS”). The ESOS
became effective on 30 January 2004 and shall be in force for a period of five years from the date of implementation
of the ESOS. The option price of the ESOS shall be the higher of the par value of TA Enterprise Berhad’s (“TAE”)
shares or the weighted average market price of TAE as shown in the Daily Official List of Bursa Malaysia for the five
market days immediately preceding the Offer Date with a discount of not more than ten percent (10%) therefrom.
The aggregate maximum number of ESOS shares to be offered and allotted to eligible employees shall be at the
discretion of the ESOS Committee after taking into consideration the position, performance, seniority and the length
of service of the eligible employee. As at to-date, the Company has not allocated any option to eligible employees.
23. WARRANTS
The 1999/2009 Warrants issued in financial year ended 31 January 2000 entitle the registered holders to subscribe
for one new ordinary share of RM1.00 each at par in the Company at an exercise price of RM1.00 each, exercisable
at any time within a period of ten years commencing 25 June 1999. The exercise price of the 1999/2009 Warrants
is subject to adjustment from time to time in accordance with the conditions as stipulated in the Deed Poll
executed by the Company on 20 April 1999.
The remaining unexercised 1999/2009 Warrants as at 31 January 2007 are as follows:
Number of
1999/2009
Warrants
ANNUAL REPORT 2007
At 1 February 2006/31 January 2007 572,579,462
The outstanding warrants have been excluded from the computation of fully diluted earnings per RM1.00 ordinary
share as disclosed in Note 41 as their effects are anti-dilutive.
Details of warrants exercised after the financial year is as disclosed in Note 45(i).
102
TA ENTERPRISE BERHAD
(194867-M)
24. DEFERRED TAXATION
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
At 1 February 20,879 7,475 26 -
Recognised in income statement (Note 39) (1,921) 13,321 1 26
Effect of changes in openning tax rate on
fair value adjustment of assets acquired (345) - - -
Effects of foreign exchange translation (146) 83 - -
At 31 January 18,467 20,879 27 26
Presented after appropriate offsetting as follows:
Deferred tax assets (1,097) (1,243) - -
Deferred tax liabilities 19,564 22,122 27 26
18,467 20,879 27 26
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
Fair Value
Property Deferred Adjustment
Plant and Leasing For Assets
Equipment Costs Acquired Others Total
RM’000 RM’000 RM’000 RM’000 RM’000
At 1 February 2006 15,240 1,958 6,340 696 24,234
Transfer from deferred tax assets - - - 330 330
ANNUAL REPORT 2007
Effect of changes in tax rate not
recognised in the income statement - - (345) - (345)
Recognised in the income statement (685) (254) (1,508) 225 (2,222)
Exchange differences - (157) - (60) (217)
At 31 January 2007 14,555 1,547 4,487 1,191 21,780
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
24. DEFERRED TAXATION (cont’d)
Deferred Tax Liabilities of the Group
Fair Value
Property Deferred Adjustment
Plant and Leasing For Assets
Equipment Costs Acquired Others Total
RM’000 RM’000 RM’000 RM’000 RM’000
At 1 February 2005 1,290 2,314 8,208 (34) 11,778
Transfer from deferred tax assets - - - 346 346
Recognised in the income statement 13,950 (489) (1,868) 369 11,962
Exchange differences - 133 - 15 148
At 31 January 2006 15,240 1,958 6,340 696 24,234
Deferred Tax Assets of the Group
General
Provision
Property for Bad and
Plant and Doubtful Tax
Equipment Debts Losses Others Total
RM’000 RM’000 RM’000 RM’000 RM’000
At 1 February 2006 (794) (562) (1,775) (224) (3,355)
Transfer to deferred tax liabilities - - - (330) (330)
Recognised in the income statement 2 (107) 1,232 (826) 301
Exchange differences 21 - 42 8 71
At 31 January 2007 (771) (669) (501) (1,372) (3,313)
ANNUAL REPORT 2007
At 1 February 2005 (863) (1,391) (2,270) 219 (4,305)
Transfer to deferred tax liabilities - - - (346) (346)
Recognised in the income statement 35 829 590 (95) 1,359
Exchange differences 34 - (95) (2) (63)
At 31 January 2006 (794) (562) (1,775) (224) (3,355)
104
TA ENTERPRISE BERHAD
(194867-M)
24. DEFERRED TAXATION (cont’d)
Deferred Tax Liabilities of the Company:
Accelerated
Capital Allowances
RM’000
At 1 February 2006 26
Recognised in the income statement 1
At 31 January 2007 27
At 1 February 2005 -
Recognised in the income statement 26
At 31 January 2006 26
Deferred tax assets have not been recognised in respect of the following items:
Group
2007 2006
RM’000 RM’000
Unused tax losses 81,686 125,853
Unabsorbed capital allowances 343,515 224,442
The unused tax losses and unabsorbed capital allowances of the subsidiaries are available indefinitely for offset
against future taxable profits of the subsidiaries in which those items arose, other than an amount of C$267,700
(RM794,800 equivalent) (2006: C$1,000) arising in a Canadian subsidiary that will expire in financial year ending
31 January 2014.
In respect of subsidiaries incorporated in Malaysia, the availability of their unused tax losses for offsetting against
ANNUAL REPORT 2007
future taxable profits of the subsidiaries is subject to no substantial changes in shareholdings of the subsidiaries
under Section 44(5A) and (5B) of the Income Tax Act, 1967. Deferred tax assets have not been recognised in respect
of these items as they cannot be used to offset taxable profits of other subsidiaries in the Group and they have
arisen in subsidiaries that have a recent history of losses.
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
25. BORROWINGS
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
Short Term Borrowings (secured)
Foreign currency denominated term loan 6,867 7,199 - -
Revolving credits 15,000 - 15,000 -
21,867 7,199 15,000 -
Long Term Borrowings (secured)
Foreign currency denominated term loan 125,214 145,182 - -
Total Borrowings (secured)
Foreign currency denominated term loan 132,081 152,381 - -
Revolving credits 15,000 - 15,000 -
147,081 152,381 15,000 -
Maturity of borrowing:
Within one year 21,867 7,199 15,000 -
More than 1 year and less than 2 years 7,200 7,548 - -
More than 2 years and less than 5 years 23,761 24,911 - -
5 years or more 94,253 112,723 - -
147,081 152,381 15,000 -
The refinanced foreign currency loan of the Group which will mature on 5 December 2020 bears a fixed interest
rate of 4.79% per annum, repayable in monthly instalments of C$364,412 (RM1,082,000 equivalent) per month.
The term loan of the Group is secured against certain freehold land and building as disclosed in Note 5, the
assignment of rentals and a general security agreement over the said property.
ANNUAL REPORT 2007
The Company’s revolving credit facilities that were partly utilised at the end of the current financial year are secured
by way of a fixed charge and lienholders’ caveat over a freehold building of a subsidiary as disclosed in Note 4 and
a third party assignment of rentals from the building that is pledged.
The short term borrowing facilities of certain trust and a subsidiary of the Company that were not utilised at the
end of the current financial year are secured by way of a fixed charge and lienholders’ caveat over freehold land
and buildings of a trust and a subsidiary, held as property, plant and equipment (as disclosed in Note 4) and
corporate guarantees issued by the Company.
106
TA ENTERPRISE BERHAD
(194867-M)
26. PROVISION FOR LIABILITIES
Contingent
loss on
Employee legal
benefits claims Total
RM’000 RM’000 RM’000
At 31 January 2006 766 3,274 4,040
Provision made during the year under personnel costs 241 - 241
Provision written-back during the year - (1,974) (1,974)
Payment made during the year - (1,300) (1,300)
Exchange differences (37) - (37)
At 31 January 2007 970 - 970
Provision for employee benefits is in respect of annual leave, long service leave and sick leave in an Australian
subsidiary when it is probable that settlement will be required and they are capable of being measured reliably.
Provision for loss on legal claims in prior year was in respect of legal proceedings brought against a subsidiary for
non-payment of disputed claim for work done. The provision which included principal due and accrued late
payment charges was fully reversed following the settlement of the legal case during the year.
27. TRADE PAYABLES
Group
2007 2006
RM’000 RM’000
Trade payables for stockbroking subsidiaries:
- Due to brokers 294,311 108,267
- Due to clients 206,258 66,934
Clients’ and trust monies 160,201 68,327
Unrealised gain/(loss) on clearing accounts on open positions
of clients from a derivative trading subsidiary 13,811 (1,772)
Due to unit trust funds 700 135
ANNUAL REPORT 2007
Progress billings in respect of property development costs [Note 6(b)] 5,214 8,341
Other trade payables 14,640 14,562
695,135 264,794
Trade payables for stockbroking subsidiaries mainly relate to amounts payable to margin and non-margin clients
and outstanding contracts entered into on behalf of clients where settlements via the Central Depository System
or the Central Clearing and Settlement System for the Malaysian and Hong Kong subsidiaries respectively have yet
to be made.
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
27. TRADE PAYABLES (cont’d)
Clients’ and trust monies relate to monies owing to clients maintained in segregated accounts of stockbroking and
derivative broking subsidiaries. Included in the trust monies is an amount of RM1,015,252 (2006: RM5,783,384) due
to a director of the Company, that earns interest of 2.10% to 3.20% (2006: 2.60% to 2.70%) per annum that is
payable by the bank via a stockbroking subsidiary.
Due to unit trust funds are payable by a subsidiary that is a manager for unit trust funds and relate to amounts
arising from the creation of trust units by the subsidiary for sale in the ordinary course of business.
Other trade payables arise mainly from subsidiaries involved in general construction, property management and
property development activities. Included in other trade payables of the previous financial year was an amount of
RM468,400 payable to sub-contractors for construction works performed which was in dispute and settled during
the financial year at a sum of RM250,000. Thus, a gain of RM217,471, after netting off of an amount due to a
subsidiary, was recognised.
The trade credit term for amount payable to non-margin clients in the Malaysian stockbroking subsidiary is 3
market days according to the Bursa Malaysia Securities Berhad FDSS trading rules whilst for the overseas stockbroking
subsidiary, the trade credit term is 2 market days. Clients’ and trust monies have no fixed terms of repayment. The
trade credit term for the amount due to unit trust funds is not exceeding 10 days from the date of creation. The
Group’s credit terms for other trade payables are determined and approved on a case-by-case basis.
28. OTHER PAYABLES
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
Other trade related payables 5,079 4,681 - -
Due to a substantial shareholder of the Company 49,085 43,166 49,085 42,946
Other interest payable 468 514 - -
Amount payable for properties purchased 11,120 - - -
Sundry payables 18,726 12,415 48 48
Accruals 28,260 12,020 1,888 534
ANNUAL REPORT 2007
112,738 72,796 51,021 43,528
Other trade related payables of the Group represent amounts payable arising directly from the Group’s
daily operations.
Included in the amount due to a substantial shareholder of the Company is unsecured loan of RM49,085,000
(2006 : RM42,946,000) from Datuk Tiah Thee Kian that bears interest of 3% to 5% (2006 : 3%) per annum and has
no fixed terms of repayment.
108
TA ENTERPRISE BERHAD
(194867-M)
29. DUE TO REMISIERS
Group
2007 2006
RM’000 RM’000
Current accounts 4,166 1,434
Security deposits 72,323 71,380
76,489 72,814
The amounts due to remisiers by the stockbroking subsidiaries are unsecured. The current account balances
are interest-free and repayable not later than one month. Security deposits are received as collateral for trading
limits granted to the customers of the remisiers. Floating rate interest earned and paid to the remisiers on
security deposits placed as deposits with licensed financial institutions ranged from 2% to 3.4% (2006 : 2% to 3%)
per annum. Repayment of security deposits are subject to the terms in the remisiers’ agreement.
30. DUE TO DIRECTORS
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
Current accounts:
Directors of the Company 27 70 27 70
Current account payables to Directors of the Company are unsecured, interest-free and have no fixed terms
of repayment.
31. DUE TO SUBSIDIARIES
The amounts due to subsidiaries are unsecured, have no fixed terms of repayment and interest-free other than an
ANNUAL REPORT 2007
amount of RM3,291,885 (2006: RM1,506,000) due to TACB, which bore interest of 2% per annum up to
December 2006. The interest-bearing amount was repaid before 31 January 2007.
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
32. REVENUE
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
Gross brokerage 103,955 58,321 - -
Service and administration charge 18,932 18,848 - -
Underwriting commission and placement fee 66 458 - -
Nominee service charges 63 49 - -
Service charges from sale of trust units 6,494 5,853 - -
Manager’s fee from unit trust funds 8,515 7,837 - -
Rollover fees earned 238 3,082 - -
Acceptance fees - 77 - -
Interest income 6,251 4,592 - -
Gross dividends from:
- subsidiaries (Note 40) - - 48,535 124,946
- quoted trust units in Malaysia 85 - 85 -
- unquoted trust units outside Malaysia (Note 40) - - - 5,516
- unquoted shares in Malaysia 172 294 172 294
Management fees from:
- subsidiaries (Note 40) - - 4,800 3,212
- others 249 738 -
Sales of properties 94,720 105,616 - -
Rental income 40,995 39,578 - -
Hotel room rental and related revenue 73,471 67,239 - -
Other revenue 314 174 - -
354,520 312,756 53,592 133,968
ANNUAL REPORT 2007
110
TA ENTERPRISE BERHAD
(194867-M)
33. OTHER INCOME
Included in other income are:
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
Accounting fees earned from:
- subsidiaries (Note 40) - - - 96
Accretion of discount on unquoted bonds 58 92 59 30
Bad debts recovered 915 2,056 - -
Gross dividends from quoted investments:
- in Malaysia 1,044 1,011 - -
- outside Malaysia 82 110 - -
Interest income from:
- subsidiaries (Note 40) - - 411 452
- placements in financial institutions 12,430 12,256 850 2,649
- others 3,341 1,618 1,132 610
- overdue financial receivables 2,525 12,099 - -
Rental income from:
- a Director (Note 40) 360 360 360 360
- others 354 318 6 6
Net gain on disposal of property, plant and equipment 990 - - -
Net gain on disposal of other investments 1,940 14,917 246 372
Net gain on disposal of short term investments 14,909 2,516 - -
Gain arising from allotment and cancellation of bonus
shares and capital distribution by Bursa Malaysia Berhad - 1,622 - -
Purchaser’s deposit forfeited 9 7 - -
Write-back of provision for liabilities 1,974 - - -
ANNUAL REPORT 2007
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
34. PERSONNEL COSTS
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
Wages, salaries and bonuses 60,370 48,408 7,916 6,268
Post employment benefits 23 515 23 11
Social security costs 86 77 47 45
Contribution to Employees’ Provident Fund 5,066 4,681 877 691
Unutilised annual leave 1,367 1,505 - -
Payment under Voluntary Separation Scheme of a subsidiary 842 - - -
Other staff related expenses 1,662 1,278 451 643
69,416 56,464 9,314 7,658
The above personnel costs include remuneration paid / payable to directors of the Group and the Company
(excluding fees, benefits-in-kind and commission that are not classified as personnel costs) that are disclosed in
Note 35 below.
35. DIRECTORS’ REMUNERATION
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
Directors of the Company
Executive:
Salaries and other emoluments 2,639 2,623 2,369 2,359
Bonus 644 62 610 29
Benefits-in-kind 416 440 416 397
3,699 3,125 3,395 2,785
ANNUAL REPORT 2007
Non-executive:
Other emoluments 40 34 25 18
Fees 27 34 20 20
Benefits-in-kind - 4 - 4
67 72 45 42
Non-executive (former Director):
112
Gratuity - 200 - 200
- 200 - 200
TA ENTERPRISE BERHAD
(194867-M)
35. DIRECTORS’ REMUNERATION (cont’d)
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
Other Directors
Executive:
Salaries and other emoluments 2,963 3,144 734 656
Bonus 711 851 250 83
Benefits-in-kind 145 191 52 58
Fees 41 - - -
Commission 690 873 - -
Gratuity 26 504 26 -
4,576 5,563 1,062 797
Non-executive:
Other emoluments 131 8 - -
Benefits-in-kind 15 1 - -
Fees 33 26 - -
179 35 - -
Total 8,521 8,995 4,502 3,824
Total excluding benefits-in-kind 7,945 8,359 4,034 3,365
The number of directors of the Company whose total remuneration during the year fall within the following
bands is as follows:
Number of Directors
2007 2006
Executive Directors:
RM300,000 - RM350,000 - 1
RM350,000 - RM400,000 - 1
ANNUAL REPORT 2007
RM400,000 - RM450,000 1 -
RM450,000 - RM500,000 1 -
RM550,000 - RM600,000 - 1
RM1,850,000 - RM1,900,000 - 1
RM2,650,000 - RM2,700,000 1 -
Former Executive Directors:
RM100,000 - RM150,000 1 -
Non-Executive Directors:
Below RM50,000 3 2
Former Non-Executive Directors:
RM150,000 - RM200,000 - 1
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
36. FOREIGN EXCHANGE (LOSS)/GAINS, NET
Foreign exchange (loss)/gains, net comprise:
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
Realised net gain/(loss) on foreign
exchange transactions 208 10,375 26 5,949
Realised net loss on forward contracts (1,880) - - -
Unrealised (loss)/gain on foreign
exchange translation, net (8,248) (2,886) - 7
(9,920) 7,489 26 5,956
37. OTHER EXPENSES
Included in other expenses are:
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
Auditors’ remuneration:
Parent auditors
Statutory audit
- current year 224 231 28 25
- over provision in prior year (1) (38) - -
Other services
- current year 25 29 5 5
Other firms of auditors
Statutory audit
- current year 390 403 - -
- (over)/under provision in prior year (35) 40 - -
Other services
- current year 176 92 - -
Amortisation of:
ANNUAL REPORT 2007
- intangible asset 143 77 - -
- trading right in SEHK - 33 - -
- premium on unquoted bonds and debt securities 20 18 20 18
- leasehold development properties 7 7 - -
- deferred financing costs 29 17 - -
- deferred leasing costs 2,685 3,122 - -
Provision for doubtful debts
- subsidiaries - - 455 -
- others 684 32,647 - -
114
TA ENTERPRISE BERHAD
(194867-M)
37. OTHER EXPENSES (cont’d)
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
Write-back of provision for doubtful debts
- due from subsidiaries - - - (75)
- others (14,800) (12,414) - -
Bad debts recovered from a subsidiary - - (136,218) -
Bad debts written off 57 472 - -
Deposit written off - 8 - -
Property, plant and equipment written off - 224 - 221
Provision for impairment losses on:
- club membership - 11 - -
- property, plant and equipment - 499 - -
- investment in subsidiaries - - 14,740 37,507
- investment in an associated company - - - 1
- other investments - 10,878 240 55
- short term investments - 18 - -
- development properties 125 - - -
Write down in value of properties held for resale - 27 - -
Net loss on disposal of property, plant and equipment - 415 - -
Loss from redemption of trust units outside Malaysia - - - 1,466
Net loss on disposals of investments 17 7 - -
Loss on disposal of club membership 91 110 16 43
Provision for liabilities - 121 - -
Rental of premises 902 1,126 20 -
Rental of equipment 1,789 1,623 - -
Management fees to:
ANNUAL REPORT 2007
- subsidiaries (Note 40) - - 144 152
- others 2,623 2,016 - -
Fees paid to firms in which certain directors
of the Company have interests (Note 40) 585 66 - -
Write-back of impairment losses on:
- property, plant and equipment (5,345) (5,254) - -
- investment in subsidiaries - - (17,088) -
- associated company - - (23) -
- other investments (1,752) (9) (208) -
- short term investment (9) (18) - -
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
38. FINANCE COSTS, NET
Included in finance costs are:
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
Interest expense:
- Term loan 7,036 10,345 - -
- Revolving credit 204 - 204 -
- Bank overdrafts 1 14 - -
- Subsidiaries (Note 40) - - 40 8
- Loan from a substantial shareholder
of the Company (Note 40) 1,746 1,011 1,745 1,011
8,987 11,370 1,989 1,019
Guarantee and commitment
fees provided 19 52 - -
Others 172 69 12 4
9,178 11,491 2,001 1,023
39. INCOME TAX EXPENSE
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
Current income tax:
Malaysian income tax 13,222 3,843 3,758 11,051
Foreign tax 3,733 6,754 - -
ANNUAL REPORT 2007
16,955 10,597 3,758 11,051
Deferred tax:
Relating to origination and reversal of temporary
differences (Note 24) (1,921) 13,321 1 26
116
TA ENTERPRISE BERHAD
(194867-M)
39. INCOME TAX EXPENSE (cont’d)
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
(Over)/underprovided in prior years:
Malaysian income tax (1,377) (15,133) (1,755) (71)
Foreign tax (4,277) 11 - -
(5,654) (15,122) (1,755) (71)
9,380 8,796 2,004 11,006
Domestic income tax is calculated at the Malaysian statutory tax rate of 27% (2006: 28%) of the estimated assessable
profit for the year. During the financial year, the concessionary income tax rate applicable to subsidiaries
incorporated in Malaysia with paid up capital of RM2.5 million and below is subject to the concessionary tax rate
of 20% on chargeable income of up to RM500,000 (2006: RM500,000). For chargeable income in excess of RM500,000
(2006: RM500,000), the tax rate of 27% is applicable. Taxation for other jurisdictions is calculated at the rates
prevailing in the respective jurisdictions.
The statutory tax rate will be reduced to 26% effective year of assessment 2008. The computation of deferred
tax as at 31 January 2007 has reflected these changes.
Reconciliations of income tax expense applicable to profit before tax at the statutory income tax rate to income
tax expense at the effective income tax rate of the Group and of the Company are as follows:
2007 2006
RM’000 RM’000
Group
Profit before tax 143,115 89,504
Taxation at Malaysian statutory tax rate of 27% (2006: 28%) 38,641 25,061
Effect of loss/(income) subject to concessionary tax rate of 20% 34 (43)
ANNUAL REPORT 2007
Effect of different tax rates in other countries 518 (41)
Effect of income not subject to tax (16,154) (10,388)
Effect of expenses not deductible for tax purposes 13,775 30,076
Benefit from utilisation of group relief (1,280) -
Effect of utilisation of previously unrecognised tax losses and
unabsorbed capital allowances (20,940) (20,879)
Deferred tax assets not recognised during the year 440 132
Over provided in prior years (5,654) (15,122)
Tax expense for the year 9,380 8,796
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
39. INCOME TAX EXPENSE (cont’d)
2007 2006
RM’000 RM’000
Company
Profit before tax 181,189 93,823
Taxation at Malaysian statutory tax rate of 27% (2006: 28%) 48,921 26,270
Effect of income not subject to tax (45,455) (26,525)
Effect of expenses not deductible for tax purposes 293 11,332
Over provided in prior years (1,755) (71)
Tax expense for the year 2,004 11,006
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
Tax losses are analysed as follows:
Tax savings recognised during the year arising from
utilisation of tax losses brought forward 13,675 15,501 - -
Unutilised tax losses carried forward 83,326 131,423 - -
a
Unabsorbed capital allowances re analysed as follows:
Tax savings recognised during the year arising from:
Utilisation of current year capital allowances 2,724 3,907 - -
Utilisation of unabsorbed capital allowances
brought forward from previous years 4,541 5,378 - -
ANNUAL REPORT 2007
Unabsorbed capital allowances carried forward 343,515 224,442 - -
As at 31 January 2007, the Company has tax exempt profits available for distribution of approximately
RM145,035,000 (2006 : RM114,940,000), subject to the agreement of the Inland Revenue Board.
The Company has sufficient tax credit under Section 108 of the Income Tax Act, 1967 and the balance in the tax-
exempt income account to frank the payment of dividends out of its entire retained profits as at 31 January 2007.
118
TA ENTERPRISE BERHAD
(194867-M)
40. SIGNIFICANT RELATED PARTY TRANSACTIONS
In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had
the following transactions with related parties during the financial year:
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
Included in revenue (Note 32) are:
Gross dividends from subsidiaries:
- TA Securities Holdings Berhad - - 32,500 75,000
- TA Futures Sdn. Bhd. - - 210 210
- TA Centre Berhad - - 15,725 14,800
- TA International Sdn. Bhd. - - - 33,156
- TA Properties Sdn. Bhd. - - 100 100
- TA Asset Management Sdn. Bhd. - - - 1,680
- Wales House Trust - - - 5,516
Management fees received from subsidiaries:
- TA Centre Berhad - - 300 -
- TA Securities Holdings Berhad - - 3,600 3,212
- TA Futures Sdn. Bhd. - - 240 -
- TA First Credit Sdn. Bhd. - - 360 -
- TA Investment Management Berhad - - 240 -
- Orchard Park Sdn. Bhd. - - 60 -
Rental income received from a firm where Christopher Koh,
a Director of the Company, has interest 49 - - - ANNUAL REPORT 2007
Rental income, tenant recoveries and reimbursement for
leasehold improvements received from a company related
to Datin Tan Kuay Fong, a director of the Company 675 660 - -
Portfolio management fee earned from Datin Tan Kuay Fong by:
- TA Investment Management Berhad 31 - - -
- TA Asset Management Sdn Bhd 3 24 - -
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
40. SIGNIFICANT RELATED PARTY TRANSACTIONS (cont’d)
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
Included in other income (Note 33) are:
Accounting fees received from subsidiaries:
- TA Asset Management Sdn. Bhd. - - - 36
- TA Investment Management Berhad - - - 60
Interest income received from TA Futures Sdn. Bhd. - - 411 452
Rental income received from
- Datin Tan Kuay Fong, a Director of the Company 360 360 360 360
Unit trust management fee rebate from
- TA Investment Management Berhad - - 8 13
Included in other expenses (Note 37) are:
Management fees paid to subsidiaries:
- TA Project Management Sdn. Bhd. - - 144 144
- TA Dotcom Sdn. Bhd. - - - 8
Legal fees paid to a firm where Jory Leong Kam Weng,
a Director of the Company, has interest 4 2 - -
Consultancy fees paid to a firm where Peter U Chin Wei,
a Director of the Company has interest 21 64 - -
Legal fees paid to a firm where Christopher Koh,
a Director of the Company, has interest 560 - - -
Included in finance costs, net (Note 38) are:
Interest expense to subsidiaries:
- TA Centre Berhad - - 40 8
ANNUAL REPORT 2007
Interest expense on loans from Datuk Tiah Thee Kian,
a substantial shareholder of the Company 1,745 1,011 1,745 1,011
120
TA ENTERPRISE BERHAD
(194867-M)
40. SIGNIFICANT RELATED PARTY TRANSACTIONS (cont’d)
Group Company
2007 2006 2007 2006
RM’000 RM’000 RM’000 RM’000
Others:
Property, plant and equipment transferred from subsidiaries:
- TA Centre Berhad - - 73 -
- TA Securities Holdings Berhad - - 4 -
Net drawdown of loan from:
- Datuk Tiah Thee Kian (Note 28) 5,919 1,544 6,139 1,544
Details of a subordinated loan granted to TA Futures Sdn. Bhd., a subsidiary, is disclosed in Note 17 to the
financial statements.
Other than the transfer of motor vehicles from a wholly-owned subsidiary to the Company at net book value, the
Directors are of the opinion that the above transactions have been entered into in the normal course of business
and have been established on terms and conditions that are not materially different from that obtainable in
transactions with unrelated parties.
41. EARNINGS PER SHARE
The basic and diluted earnings per share are calculated as follows:
Weighted Average Earnings per
Income Number of Share Share
2007 2006 2007 2006 2007 2006
RM’000 RM’000 ’000 ’000 Sen Sen
Net profit for the year 133,063 80,348 1,328,475 1,328,475
ANNUAL REPORT 2007
Basic / diluted earnings per share 10.02 6.05
The outstanding warrants (Note 23) have been excluded from the computation of fully diluted earnings per RM1.00
ordinary share as their conversion to ordinary shares are anti-dilutive.
The comparative basic/diluted earnings per share has been restated to take into account the effect of the changes
in accounting policies (Note 3.1(j)(iii)) on profit for that year.
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
42. DIVIDENDS
Amount Net dividend per share
2007 2006 2007 2006
RM’000 RM’000 Sen Sen
Final
In respect of financial year ended 31 January 2006
3% less 28% taxation, on 1,328,474,702
ordinary shares, declared on 25 May 2006 - 28,695 - 2.16
and paid on 15 August 2006
In respect of financial year ended 31 January 2007
Proposed for approval at AGM (not recognised as
at 31 January 2007)
7% less 26% taxation * - 5.18 -
- 28,695 5.18 2.16
*At the forthcoming Annual General Meeting, a final dividend in respect of the current financial year ended
31 January 2007 of 7% less 26% taxation (5.18 sen net per ordinary share), on the number of shares in isssue on the
entitlement date to be announced, will be proposed for shareholders’ approval. The financial statements for the
current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will
be accounted for in the shareholders’ equity as an appropriation of retained profits in the next financial year ending
31 January 2008.
43. COMMITMENTS
Group
2007 2006
RM’000 RM’000
ANNUAL REPORT 2007
Approved and contracted for:
Property, plant and equipment - 2,984
Land to be held for property development 9,574 262,226
Underwriting commitment in respect of new ordinary
shares to be issued by a listed issuer 5,000 -
RM9,574,200 was paid in February 2007 as the balance of the purchase consideration for the acquisition of the land
122
by Star Winners Sdn. Bhd., a wholly-owned subsidiary of TA Enterprise Berhad [Note 45(a)(vi)].
TA ENTERPRISE BERHAD
(194867-M)
43. COMMITMENTS (cont’d)
A subsidiary has also entered into a put option agreement to require a third party to acquire the abovementioned
shares underwritten by the subsidiary.
Non-Cancellable Operating Lease Commitments - Group as Lessee
Group
2007 2006
RM’000 RM’000
Future minimum rentals payable:
Not later than 1 year 250 417
Later than 1 year and not later than 5 years 88 352
338 769
Operating lease payments represent rental payable by the Group for the use of buildings. Leases are negotiated for
an average of 3.7 (2006 : 3.8) years and rentals are fixed for an average of 2 (2006 : 2) years.
44. CONTINGENT LIABILITIES (unsecured)
TA Antarabangsa Finance South Africa Limited, a wholly owned subsidiary incorporated in The Republic of South
Africa, had provided an indemnity to the purchaser of TA Securities South Africa Limited, a former wholly-owned
subsidiary incorporated in The Republic of South Africa which was disposed during the financial year ended 31
January 2001, for any potential claims against the latter arising from events occurring before the agreed disposal
date. Potential claims amounting to Rand1,600,000 or RM767,000 equivalent (2006: Rand1,600,000 or RM982,000
equivalent) were not provided for in the financial statements of the Group as at 31 January 2007 due to the
uncertainty of the outcome of these claims.
45. OTHER SIGNIFICANT AND SUBSEQUENT EVENTS
(a) Acquisition of properties
(i) On 20 May 2005, Indo Aman Bina Sdn Bhd (“Indo Aman Bina”), a wholly owned subsidiary of TAP, entered
into a Sale and Purchase Agreement to acquire two parcels of freehold land held under HSD 113435 PT
No. 34081 and HSD 113436 PT No. 34082, both in Mukim Sungai Buloh, Daerah Petaling, Negeri Selangor
Darul Ehsan measuring in area approximately 937,149 square feet, for a total cash consideration of
RM79,657,835 [Note 6(a)] which was pending completion as at 31 January 2006. The amount was
capitalised during the current financial year after full payment.
ANNUAL REPORT 2007
(ii) On 20 July 2005, Indo Aman Bina entered into another Sale and Purchase Agreement for the acquisition
of 8 parcels of freehold land measuring approximately 26.55 acres or 1,156,713 square feet in Mukim
Sungai Buloh, Daerah Petaling, Negeri Selangor Darul Ehsan for a total cash consideration of
RM109,887,735 [Note 6(a)] which was pending completion as at 31 January 2006. The amount was
capitalised during the current financial year after full payment.
(iii) On 16 September 2005, Astra Dinamik Sdn Bhd (Astra Dinamik), a wholly owned subsidiary of TAP,
entered into a conditional Sale and Purchase Agreement for the proposed acquisition of five pieces of
freehold vacant land measuring approximately 0.824 acres or 35,917 square feet in Seksyen 67, Mukim
and Bandar of Kuala Lumpur, for a total cash consideration of RM22,448,125 [Note 6(a)] which was
pending completion as at 31 January 2006. The amount was capitalised during the current financial year.
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
45. OTHER SIGNIFICANT AND SUBSEQUENT EVENTS (cont’d)
(a) Acquisition of properties (cont’d)
(iv) On 16 September 2005, Astra Dinamik entered into another conditional Sale and Purchase Agreement
for the proposed acquisition of 14 pieces of freehold vacant land and 3 pieces of adjoining state land to
be alienated, all measuring approximately 2.251 acres or 98,030 square feet in Seksyen 67, Mukim and
Bandar of Kuala Lumpur, for a total cash consideration of RM61,268,750 which was pending completion
as at 31 January 2006. The purchase consideration was revised during the current financial year to
RM58,727,500 [Note 6(a)] after the exclusion of 2 out of 3 pieces of the adjoining state land measuring
3,247 square feet from the Agreement and the reduction of area of the remaining piece of adjoining state
land to 5,133 square feet. The amount was capitalised during the current financial year.
(v) On 29 December 2005, the Directors of Ace Fit International Limited, a wholly-owned subsidiary of
TA International Sdn. Bhd., approved the purchase of 3 units of leasehold office units and 3 units of car
park lots for a total cash consideration of RMB2,721,514 (RM1,225,498 equivalent) which was pending
completion as at 31 January 2006. The acquisition was capitalised during the current financial year as
building-in-construction.
(vi) On 22 Jan 2007, a wholly-owned subsidiary of TAP, Star Winners Sdn Bhd (“SWSB”) entered into a Sale
and Purchase Agreement for the acquisition of 3 pieces of freehold lands held under Grant 42988
Lot 1266, Grant 42989 Lot 1267 and Grant 42990 Lot 1268, measuring approximately 30,703 square
feet in Section 57, Town and District of Kuala Lumpur, State of Wilayah Persekutuan, for a total cash
consideration of RM10,638,000 that was pending completion as at 31 January 2007. The acquisition was
completed subsequent to the financial year and recognised as addition to land held for property
development in the financial year ending 31 January 2008.
(vii) On 15 February 2007, Sharp Factor Sdn Bhd, a wholly owned subsidiary of TAP, entered into a Sale and
Purchase Agreement for the acquisition of a piece of land held under HS(D) 36998, PT 13861, Bandar
Serendah, Ulu Selangor, measuring approximately 35,970 square feet, for a total cash consideration of
RM150,000. The acquisition was completed subsequent to the financial year and recognised as addition
to land held for property development for the financial year ending 31 January 2008.
(b) Acquisition of subsidiaries
(i) On 18 August 2006, TAP had acquired 2 ordinary shares of RM1.00 each representing 100% equity interest
in Star Winners Sdn Bhd (“SWSB”) for a total cash consideration of RM2.00. SWSB was incorporated on
17 July 2006 as a private limited company in Malaysia under the Companies Act, 1965. Its principal
activity is investment holding and SWSB is currently dormant.
(ii) On 22 September 2006, TA International Sdn Bhd (“TAI”), a wholly-owned subsidiary of TAE had
acquired 1 ordinary share of HKD1 representing 100% equity interest in Winner Star Group Limited
(“Winner Star”), a foreign subsidiary, for a total cash consideration of HKD1. Winner Star was incorporated
ANNUAL REPORT 2007
on 20 July 2006 as a limited company in Hong Kong under the Companies Ordinance. Its principal
activity is investment holding.
(c) Disposal of property
(i) TA Antarabangsa Finance South Africa Limited, a wholly-owned subsidiary of the Company incorporated
in the Republic of South Africa, had on 6 September 2006 entered into an Agreement of Sale with
Paramount Property Fund Limited (“PPFL”) for the sale of the rental enterprise including all land and
buildings erected on the property in Rosebank Township for a total cash consideration of
Rand73,000,000 (equivalent to RM34,996,200). The sale is conditional upon the fulfilment of certain
conditions precedent among which, include the confirmation from PPFL that it is satisfied with its due
diligence of the rental enterprise and the approval of the board of directors of PPFL. The agreement has
124
become unconditional and was pending completion as at the balance sheet date.
TA ENTERPRISE BERHAD
(194867-M)
45. OTHER SIGNIFICANT AND SUBSEQUENT EVENTS (cont’d)
(d) Establishment of a wholly-foreign owned enterprise
On 18 May 2006, the Company had submitted an application to Wu Hua Local Authorities of Kunming, Yunnan
for the establishment of a wholly foreign-owned enterprise (“WFOE”) in Kunming, China. The Certificate
of Approval for the establishment of the aforesaid WFOE was obtained on 21 June 2006. Following, the WFOE
was incorporated on 7 July 2006 with a registered capital of RMB4 million and its business licence was received
on 10 July 2006. The WFOE is wholly-owned by Ace Fit International Limited, a wholly-owned subsidiary of TA
Properties Sdn Bhd (“TAP”), which is in turn, a wholly-owned subsidiary of the Company.
(e) Electronic Access Facilities with Permitted Activities (“EAFPA”)
Pursuant to a Bursa Malaysia Securities Berhad’s circular, all of the Group’s EAFPAs were converted into
Branch Offices with effect from 17 July 2006.
(f) Launch of funds by a subsidiary
TA Investment Management Berhad (formerly known as TA Unit Trust Management Berhad) which is a 70%
owned subsidiary had launched TA Global Asset Allocator Fund on 12 June 2006, TA Asia Pacific Islamic Balance
Fund on 7 November 2006 and TA European Equity Fund on 20 March 2007.
(g) Change of subsidiary’s name, approval of subsidiary as licensed fund manager and transfer of fund
management clients from a fellow subsidiary
On 27 March 2006, TA Unit Trust Management Berhad, the Company’s subsidiary changed its name to
“TA Investment Management Berhad” (“TAIM”), pursuant to the approval by Securities Commission as a licensed
fund manager pursuant to section 15A of Securities Industry Act, 1983 on 24 June 2005. This enables TAIM
to manage its own unit trust funds and other clients’ monies. TAIM has ceased the outsourcing of fund
management function in respect of unit trust funds under its management to a fellow subsidiary, TA Asset
Management Sdn. Bhd. (“TAAM”) from 1 February 2006. During the current year, certain of TAAM’s fund
management clients were transferred to be managed by TAIM pursuant to TAAM’s non-renewal of its fund
manager licence after expiring on 4 July 2006.
(h) Subscription of shares in subsidiaries
(i) During the year, the Company subscribed for 5,442 ordinary shares of RM1 each in TAI for a total cash
ANNUAL REPORT 2007
consideration of RM5,442. TAI also redeemed 5,442 5,000% preference shares of RM1.00 each for a total
cash consideration of RM5,442,000 from the Company.
(ii) The Company also subscribed for 189,545 shares of 6,000% non cumulative redeemable preference
shares of RM1 each at a premium of RM999 in TAP for a total cash consideration of RM189,545,000.
(i) Exercise of Warrants 1999/2009
Subsequent to the financial year, the Company issued 34,929,437 new shares for the cash consideration of RM1
per new ordinary shares pursuant to the exercise of 34,929,437 warrants by warrantholders. The number of
warrants outstanding and unexercised after the above is 537,650,025.
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
46. SEGMENTAL INFORMATION
(a) Business Segments:
The Group is organised on a worldwide basis into six major business segments:
(i) Stockbroking and financial services - stockbroking, fund management, unit trust and derivatives trading;
(ii) Investment holding - provision of funding and investment related services;
(iii) Credit and lending - provision of finance and related services.
(iv) Property investment - investment in residential and commercial properties;
(v) Property development - development of residential and commercial properties; and
(vi) Hotel operations - operation of hotel and related services.
Other business segments include other inactive operations, none of which are of a sufficient size to be
reported separately.
2007 Stock
broking Credit
and financial Investment and Property Property Hotel
services holding lending investment development operations Others Elimination Consolidated
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Revenue
External sales 134,413 256 10,354 41,369 94,657 73,471 - - 354,520
Inter-segment sales 159 55,498 - 4,235 63 15,398 - (75,353) -
Total revenue 134,572 55,754 10,354 45,604 94,720 88,869 - (75,353) 354,520
Result
Operating results 63,226 (3,556) 29,359 23,478 38,717 16,032 (506) - 166,750
Foreign exchange
gains/(losses) 96 (10,068) - (4) - 58 (2) - (9,920)
Net segment results 63,322 (13,624) 29,359 23,474 38,717 16,090 (508) - 156,830
Unallocated
corporate expenses (4,539)
ANNUAL REPORT 2007
Operating profit 152,291
Finance costs, net (9,178)
Share of results of
associates - - - (17) - - 19 - 2
Profit before tax 143,115
Income tax expense (9,380)
Profit for the year 133,735
126
TA ENTERPRISE BERHAD
(194867-M)
46. SEGMENTAL INFORMATION (cont’d)
2007 Stock
broking Credit
and financial Investment and Property Property Hotel
services holding lending investment development operations Others Elimination Consolidated
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Assets
Segment assets 1,173,212 111,059 326,660 815,049 190,557 273,952 320 2,890,809
Investment in equity
method of associates - - - 15,047 - - 184 15,231
Unallocated corporate
assets 26,770
Consolidated total assets 2,932,810
Liabilities
Segment liabilities 770,456 71,711 1,586 158,661 24,971 6,082 1 1,033,468
Unallocated corporate
liabilities 28,226
Consolidated total liabilities 1,061,694
Other Information
Capital expenditure 1,341 454 127 6,443 - 817 13 9,195
Depreciation 3,736 803 102 14,194 - 8,799 21 - 27,655
Amortisation 122 41 - 2,714 7 - - - 2,884
Impairment losses, net of
write back - (217) (1,784) 115 125 - - - (1,761)
Non-cash expenses other than
depreciation, amortisation
and impairment losses (498) - (11,121) (2,437) - (3) - - (14,059)
ANNUAL REPORT 2007
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
46. SEGMENTAL INFORMATION (cont’d)
(a) Business Segments (cont’d):
2006 Stock
broking Credit
and financial Investment and Property Property Hotel
services holding lending investment development operations Others Elimination Consolidated
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Revenue
External sales 92,509 294 7,172 39,925 105,616 67,239 1 - 312,756
Inter-segment sales 2,524 178,936 - 34,201 - 12,910 722 (229,293) -
Total revenue 95,033 179,230 7,172 74,126 105,616 80,149 723 (229,293) 312,756
Result
Operating results 41,733 (2,363) (2,404) 18,533 35,025 8,030 (575) - 97,979
Foreign exchange
gains/(losses) (5) 7,439 - (33) - 90 (2) - 7,489
Net segment results 41,728 5,076 (2,404) 18,500 35,025 8,120 (577) - 105,468
Unallocated corporate
expenses (4,370)
Operating profit 101,098
Finance costs, net (11,491)
Share of results of associates - - - (102) - - (1) - (103)
Profit before tax 89,504
Income tax expense (8,796)
Profit after taxation 80,708
Assets
Segment assets 689,002 245,953 332,026 557,734 221,988 291,338 57 - 2,338,098
Investment in equity
method of associates - - - 15,064 - - 165 - 15,229
Unallocated corporate
assets 28,365
Consolidated total assets 2,381,692
Liabilities
Segment liabilities 316,069 53,102 908 172,808 20,912 4,745 19 - 568,563
ANNUAL REPORT 2007
Unallocated corporate
liabilities 24,346
Consolidated total liabilities 592,909
Other Information
Capital expenditure 3,963 221 66 6,618 - 707 11 - 11,586
Depreciation 2,593 984 79 13,663 - 14,359 15 - 31,693
Amortisation 91 36 - 3,140 7 - - - 3,274
Impairment losses, net of
write back 9 47 10,822 (4,735) (18) - - - 6,125
Non-cash expenses other than
128
depreciation, amortisation
and impairment losses 2,427 385 46,119 7,977 27 - 7 - 56,942
TA ENTERPRISE BERHAD
(194867-M)
46. SEGMENTAL INFORMATION (cont’d)
(b) Geographical Segment
Although the Group’s six major business segments are managed on a worldwide basis, they operate in six
principal geographical areas of the world as follows:
(i) Malaysia - stockbroking, investment holding, provision of funding activities, fund management
and unit trust, derivatives trading, property developmen and investment;
(ii) Hong Kong - stockbroking;
(iii) South Africa - property investment and ceased operation as a licensed bank since 5 April 2002.
(iv) Canada - property investment (commercial properties);
(v) Australia - hotel operations; and
(vi) British Virgin Islands - investment holding.
British
Hong South Virgin
Malaysia Kong Australia Africa Canada Islands Others Consolidated
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2007
External revenue 237,788 11,248 73,471 6,986 25,027 - - 354,520
Segment assets 2,240,998 62,954 274,306 33,932 230,259 47,074 1,286 2,890,809
Capital expenditure 7,091 1,231 817 51 - - 5 9,195
2006
External revenue 205,043 7,864 67,239 7,162 25,448 - - 312,756
Segment assets 1,699,358 51,290 291,655 39,066 250,062 4,912 1,755 2,338,098
Capital expenditure 8,825 2,027 707 25 - - 2 11,586
The directors are of the opinion that all inter-segment transactions have been entered into in the normal course of
business and have been established on terms and conditions that are not materially different from that obtainable in
ANNUAL REPORT 2007
transactions with unrelated parties.
47. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
(a) Information about the extent and nature of the financial instruments, including significant terms and
conditions are presented in their respective notes, where applicable.
(b) Interest rate risk
The carrying amounts, the effective interest rates as at the balance sheet date and the remaining maturities of
the Group’s and the Company’s financial instruments that are exposed to interest rate risk are tabled below:
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
47. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES (cont’d)
(b) Interest rate risk (cont’d)
Interest bearing Non
Interest Within more than Interest
Note rate 1 years 1-2 years 2-3 years 3-4 years 4-5 years 5 years Bearing Total
2007 % RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Group
Fixed rate
Unquoted bonds and debts
securities in Malaysia 10 5.8 - 6.6 - 5,124 - 10,000 - 5,156 - 20,280
Financial receivables 14 6.5 - 20.0 900,442 - - - - - - 900,442
Trade receivables 15 6.8 - 20.0 508,933 - - - - - 476,062 984,995
Fixed deposits and
placements 20 3.2 - 3.5 296,977 - - - - - - 296,977
Term loan 25 4.79 (6,867) (7,200) (7,548) (7,914) (8,298) (94,254) - (132,081)
Floating rate
Amount with derivative
clearing house 16 1.0 - 1.4 69,016 - - - - - - 69,016
Revolving credit 25 4.3 (15,000) - - - - - - (15,000)
Interest-bearing client
and trust monies 20 2.7 - 3.2 160,201 - - - - - - 160,201
Due to a substantial
shareholder * 28 5.0 (49,085) - - - - - - (49,085)
Security deposits due to
remisiers 29 2.0 - 3.4 (72,323) - - - - - - (72,323)
2006
Group
Fixed rate
Unquoted bonds and debts
securities in Malaysia 10 4.0 - 7.4 - 5,124 4,476 2,000 10,000 16,944 - 38,544
Financial receivables 14 6.5 - 20.0 849,844 - - - - - - 849,844
Trade receivables 15 6.9 - 20.0 395,171 - - - - - 138,140 533,311
Fixed deposits and
placements 20 2.8 - 3.2 495,318 - - - - - - 495,318
ANNUAL REPORT 2007
Term loan 25 4.79 (7,199) (7,548) (7,914) (8,297) (8,700) (112,723) - (152,381)
Floating rate
Amount with derivative
clearing house 16 0.7 - 1.0 15,058 - - - - - - 15,058
Interest-bearing client
and trust monies 20 2.6 - 3.1 68,327 - - - - - - 68,327
Due to a substantial
shareholder * 28 3.0 (43,166) - - - - - - (43,166)
Security deposits due to
remisiers 29 2.0 - 3.0 (71,380) - - - - - - (71,380)
130
* Amount due to a substantial shareholder has no fixed repayment term and is classified as due within one year for comparison purpose only
TA ENTERPRISE BERHAD
(194867-M)
47. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES (cont’d)
(c) Currency exposure
The net unhedged financial assets and liabilities of the Group companies that are not denominated in their
functional currency are as follows:
At 31 January 2007:
<-------------------- Denominating Currencies ------------------->
United
Ringgit States Canadian Singapore Other
Malaysia Dollars Dollars Dollars currencies Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Functional Currency
of Group Companies
Trade receivables
Hong Kong Dollars 15,150 - - 39 - 15,189
Short term funds
Ringgit Malaysia - 14,559 - 2 - 14,561
United States Dollars - - 57 5 84 146
Hong Kong Dollars 1,150 139 - 47 - 1,336
1,150 14,698 57 54 84 16,043
Other investments
Ringgit Malaysia - - - - 250 250
United States Dollars - - - - 2 2
- - - - 252 252
Trade payables
Hong Kong Dollars 12,794 - - - - 12,794
ANNUAL REPORT 2007
Ringgit Malaysia - 13,625 - - - 13,625
12,794 13,625 - - - 26,419
29,094 28,323 57 93 336 57,903
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
47. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES (cont’d)
(c) Currency exposure (cont’d)
At 31 January 2006:
<-------------------- Denominating Currencies ------------------->
United
Ringgit States Canadian Singapore Other
Malaysia Dollars Dollars Dollars currencies Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Functional Currency
of Group Companies
Trade receivables
Hong Kong Dollars 1,757 - - 37 - 1,794
Short term funds
Ringgit Malaysia - 1,308 6,005 8 19 7,340
United States Dollars - - 474 4,183 72 4,729
Hong Kong Dollars 519 144 - 48 - 711
Philippine Peso - 221 - - - 221
519 1,673 6,479 4,239 91 13,001
Other investments
Ringgit Malaysia - - - - 250 250
United States Dollars - - - - 2 2
- - - - 252 252
Trade payables
Hong Kong Dollars 232 - - - - 232
Ringgit Malaysia - 1,199 - - - 1,199
ANNUAL REPORT 2007
232 1,199 - - - 1,431
2,508 2,872 6,479 4,276 343 16,478
132
TA ENTERPRISE BERHAD
(194867-M)
47. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES (contd.)
(d) Fair values
The aggregate net fair values of financial assets and financial liabilities of the Group and the Company which
are not carried at fair value on the balance sheets are as follows:
Group Company
C
arrying Carrying
A
mount Fair Value Amount Fair Value
R
M’000 RM’000 RM’000 RM’000
Financial Assets
At 31 January 2007:
Long term other investments (Note 10) 34,182 44,764 126,998 127,362
Due from subsidiaries repayable on demand (Note 17) - - 226,166 *
Subordinated loan to a subsidiary (Note 17) - - 13,000 13,006
Short term investments (Note 19) 6,720 6,980 - -
At 31 January 2006:
Long term other investments (Note 10) 64,973 70,082 145,475 145,907
Due from subsidiaries repayable on demand (Note 17) - - 76,868 *
Subordinated loan to a subsidiary (Note 17) - - 7,000 7,865
Short term investments (Note 19) 2,721 4,361 - -
Financial Liabilities
At 31 January 2007:
Long term loan (Note 25) 125,214 122,471 - -
Due to subsidiaries (Note 31) - - 5,449 * ANNUAL REPORT 2007
At 31 January 2006:
Long term loan (Note 25) 145,182 141,723 - -
Due to subsidiaries (Note 31) - - 6,162 *
* It was not practicable to estimate the fair values of the amounts due from/to subsidiaries that are included
in current assets and liabilities due principally to a lack of fixed terms of repayment in the transactions
entered into by the parties involved and a reasonable estimate of fair values could not be made without
incurring excessive costs. However, the Company does not anticipate the carrying amounts recorded at the
balance sheet date to be significantly different from the values that would eventually be received or settled.
TA ENTERPRISE BERHAD
(194867-M)
NOTES TO THE FINANCIAL STATEMENTS
- 31 JANUARY 2007
47. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES (contd.)
(d) Fair values (cont’d)
The following methods and assumptions are used to estimate the fair values of the following classes of
financial instruments:
(i) Long term and short term investments
The fair values of publicly traded instruments are estimated based on quoted market prices. For other
instruments for which there are no quoted market prices, a reasonable estimate of fair value has been
calculated based on the expected cash flows or the underlying net asset base for each investment.
(ii) Financial receivables
The fair values of financial receivables are the estimated recoverable amounts from the respective loans.
For non-performing loans, the Group has taken into account the values of their collateral, latest updates
from settlement negotiations with customers and the latest outcome from legal proceedings initiated.
(iii) Trade and other receivables (excluding prepayments and deferred leasing costs) and payables
(excluding withheld amounts pending the outcome of legal actions taken)
The carrying amounts of trade receivables and payables are subject to normal trade credit terms which
are short term in nature and thus approximate their fair values. The carrying amounts of other receivables
(excluding prepayments and deferred leasing costs) and payables (excluding withheld amounts
pending the outcome of legal actions taken) are reasonable estimates of fair values because of their
short maturities.
(iv) Subordinated loan to a subsidiary
The fair value of subordinated loan to a subsidiary was estimated using discounted cash flow method
based on the expected repayment timing and amount of future cash flows. The discount factor used
was 7.00% (2006: 2.66%) per annum, which was based on the prevailing market rates.
(v) Amount due to directors and remisiers
The carrying amounts of the amount due to directors and remisiers approximate their fair values as
these amounts have no fixed terms of repayment and can be repayable on demand.
(vi) Short term funds and borrowings
The carrying amounts of short term funds and borrowings approximate their fair value due to the
relatively short term maturities of these instruments.
(vii) Term loans
ANNUAL REPORT 2007
The fair values of term loans are estimated using discounted cash flow method based on the expected
timing of amounts payable at the applicable rates of interest levied over the tenure of these loans.
(viii) Provision for liabilities
Provision for employee benefits is deemed to approximate its fair value as this provision is made in
respect of employees’ entitlement which is expected to realise within one year.
(ix) Contingent liabilities
There is no practical way to estimate the fair value of the contingent liabilities arising from the litigation
as disclosed in Note 44 as the likelihood of any material liabilities arising cannot be ascertained at this
juncture. The directors consider the likelihood of these contingent liabilities forthcoming as remote.
134
TA ENTERPRISE BERHAD
(194867-M)
48. COMPARATIVES
The following comparative figures for the Group and Company have been reclassified to conform with current
year’s presentation:
As
As previously
restated Adjustments stated
RM’000 RM’000 RM’000
Group
Consolidated Income Statement
Other income 57,209 5,281 62,490
Cost of properties sold (67,458) (345) (67,803)
Hotel operation costs (exclude personnel costs) (21,636) (12,910) (34,546)
Depreciation (31,693) (59) (31,752)
Other expenses (73,566) 8,033 (65,533)
(137,144) - (137,144)
As
As previously
restated Adjustments stated
RM’000 RM’000 RM’000
Company
Profit before taxation 93,823 3,806 97,629
Impairment loss on investment in subsidiaries 37,507 (3,806) 33,701
131,330 - 131,330
Cash flow statement of the Company had been adjusted for the effects of adopting FRS 127 as disclosed
in Note 3.1(f ).
ANNUAL REPORT 2007
49. CURRENCY
All amounts are stated in Ringgit Malaysia, unless stated otherwise.
TA ENTERPRISE BERHAD
(194867-M)
LIST OF PROPERTIES HELD BY
TA ENTERPRISE BERHAD GROUP
AS AT 31 JANUARY 2007
Location Description Existing Use Date of Approximate Book Value
Acquisition Age of (ACC)
Buildings RM
IN MALAYSIA (years)
1. Lot No 653, Mukim of Kluang Freehold, Land Held for 18/11/1994 - 7,520,991
Mixed Development Development
Land
Area : 4,145,170 sq. ft
2. Lot 2463, GM1783, Mukim of Freehold Land Held for 28/11/1994 - 2,031,294
Batu, District of Kuala Lumpur Agricultural Land Development
Area : 122,491 sq. ft.
3. 2/3 of Lot 1580, EMR. 6715, Freehold Land Held for 31/10/1994 - 2,703,048
Mukim of Batu, District of Kuala Agricultural Land Development
Lumpur Area : 131,580 sq. ft.
4. 1/3 of Lot 1580, Geran Mukim Freehold Land Held for 07/02/2005 - 4,430,582
No 3602, Mukim of Batu, Agricultural Land Development
District of Kuala Lumpur Area : 65,792.10 sq. ft
5. P T No 981, H.S.(D)1690, Mukim Leasehold Land Held for 03/06/1994 - 255,441
of Tras, Daerah Raub, Pahang (Expiring on 4/12/2080) Development
Residential Land
Area : 85,486 sq. ft.
6. Idaman Residence Freehold Residential 25/05/1993 - 30,714,664
Lot 114 to 117, G.36026 to Residential Land Condominium 03/06/1993
36029, Section 58, Mukim and Area : 65,229 sq. ft. Project under
District of Kuala Lumpur Development
7. Lot 25 & 26, Section 58, Mukim Freehold Land Held for 31/07/1991 - 19,971,848
and District of Kuala Lumpur Commercial Land Development
Area : 43,497 sq. ft.
8. Lot 77, Section 58, Mukim and Freehold Land Held for 01/12/1995 - 7,178,502
District of Kuala Lumpur Residential Land Development
Area : 11,172 sq. ft.
9. Geran 27052, No Lot 174 Freehold Land Held for 19/10/2004 - 37,172,860
Seksyen 57, Residential Land Development
Bandar Kuala Lumpur Area : 45,246 sq. ft.
10. Damansara Idaman / Freehold Residential 22/01/1996 - 65,038,871
Idaman Villas Mixed Development Bungalow & Semi-D
Grant No. 5963, Lot 2806, Land Projects under
ANNUAL REPORT 2007
Mukim of Sungai Buloh, Area : 844,395 sq. ft. Development
District of Petaling
11. Lot no 85-H2, No 12A, Freehold Bungalow Held 31/01/2007 1 1,446,481
Lorong PJU 1A/50B, Lorong 1 unit Bungalow for Sale
Jati2, Damansara Idaman Area : 8,930 sq. ft
12. PT11253 - 11258, Mukim and Freehold Shophouses Held 09/08/1993 6 681,583
District of Klang, 6 units Shophouses for Sale/Rent.
TA Industrial Park Area : 9,552 sq. ft
13. PT 7346, 7347, 7348, 7349 Freehold Land Held for 10/03/1992 - 3,648,896
Mukim of Serendah, Industrial Land Resale
136
District of Ulu Selangor Area : 387,259 sq. ft.
14. PT 7131, 7132, 7136, 7137 Freehold Land Held for 10/03/1992 - 3,364,181
Mukim of Serendah, Industrial Land Resale
District of Ulu Selangor Area : 354,768 sq. ft.
TA ENTERPRISE BERHAD
(194867-M)
Location Description Existing Use Date of Approximate Book Value
Acquisition Age of (ACC)
Buildings RM
IN MALAYSIA (years)
15. PT 7135, 7138, 7139, Freehold Land Held for 29/08/1992 - 2,457,085
Mukim of Serendah, Industrial Land Resale
District of Ulu Selangor Area : 260,800 sq. ft.
16. Geran 15376, Lot 421, Freehold Land Held for 27/07/2005 - 3,623,198
Mukim Kuala Lumpur Residential Land Development
Area : 120,095 sq. ft
17. HSD 113435 PT 34081 & HSD Freehold Land Held for 20/05/2005 - 82,612,802
113436 PT34082, Commercial Land Development
Mukim Sungai Buloh, Area : 937,149 sq. ft
Daerah Petaling,
Negeri Selangor
18. HSD 11346 - HSD 113433 & Freehold Land Held for 20/07/2005 - 113,417,488
PT34072 - PT34079, Commercial Land Development
Mukim Sungai Buloh, Area : 1,156,713 sq. ft
Daerah Petaling,
Negeri Selangor
19. Geran 27879, 26388, 26389, Freehold Land Held for 16/09/2005 - 83,768,052
28503-28505, 28508-28510, Commercial Land Development
37038-37040, 37034, 37037 & Area : 129,881 sq. ft
Lot 624, in Seksyen 67, Mukim
and Bandar of Kuala Lumpur
20. Lot No 097565, Mukim Leasehold Disaster 29/05/1998 12 214,067
Hulu Kinta, Daerah Kinta (Expiring on 17/11/2079) Recovery Site
Shop-Office
Area : 3,684 sq. ft.
21. H S (D) 12959, Freehold Property Held for 11/01/1995 4 193,855
P T No 2910, Mukim of 1 unit Townhouse Internal Use
Pasir Panjang, Built-up Area :
District of Port Dickson 1,367 sq. ft.
22. Lot 11502, H.S(D) 52730, Freehold Property with 18/08/1994 13 773,808
Mukim of Damansara, 3 Storey Shop-Office Rental Income
District of Petaling Built-up Area :
4,000 sq. ft.
ANNUAL REPORT 2007
23. HS(D) 88660, PT No 13638, Freehold Properties for 06/04/1995 10 8,784,735
Mukim of Damansara, 3 Blocks of 7 Storey Internal Use with
District of Petaling, Office. Rental Income
Subang Business Centre Built-up Area : 48,173
sq. ft.
24. Lot PT 22, HS(D) 63, Mukim Leasehold TA Official Guest 24/11/1993 9 13,695,038
and District of Kuala Lumpur (Expiring on 24/3/2073) House
Residential Land &
Building
Area : 55,694 sq. ft.
25. Lot 37716 PN 10009 , Mukim Leasehold Property with 30/03/1994 22 1,131,667
and District of Kuala Lumpur (Expiring on 26/3/2073) Rental Income
Residential Land &
Building
Area : 32,726 sq. ft.
TA ENTERPRISE BERHAD
(194867-M)
LIST OF PROPERTIES HELD BY
TA ENTERPRISE BERHAD GROUP
AS AT 31 JANUARY 2007
Location Description Existing Use Date of Approximate Book Value
Acquisition Age of (ACC)
Buildings RM
IN MALAYSIA (years)
26. Menara TA One, Lot 1261, Freehold TA Corporate Head 10/06/1998 10 177,093,608
G.39187, Section 57, 37 Storey Office Building Office and with
Mukim and District of Built-up Area : 418,502 Rental Income
Kuala Lumpur sq. ft.
Land Area : 44,057
sq. ft.
OUTSIDE MALAYSIA
27. Terasen Centre Freehold Investment 11/08/1995 15 192,931,283
Lot E, Block 7, District Lot 185, 24 Storey Office & Property with
Land District 36, Plan 22865, Commercial Building Rental Income
West Georgie, Built-up area : 400,000
Vancouver, Canada sq. ft.
28. E-1204, Phip. Stock Exch. Freehold Principal Business 10/01/1995 14 165,553
Center, Exchange Road, Office Units Office of Phil. TA
Ortigas Center Pasig City, Area : 2,895 sq. ft. Sec, Inc, and Rental
Metro Manila, Philippines Income
29. 1003 D, Renaissance Tower Freehold Property with 19/09/1995 16 141,264
Condominium Residential Rental Income
Meralco Avenue, Ortigas Condominium
Center Pasig City, Area : 2,281 sq. ft
Metro Manila, Philippines
30. Radisson Plaza Hotel Freehold Property with 08/12/1997 7 252,162,905
66, Pitt Street, Sydney, 363 Room, 5 Star Hotel Rental Income
Australia Build-up Area: 231,299
sq. ft.
Land Area: 18,510
sq. ft.
31. Units 1203 & 1204A, Government Lease Principal Business 03/07/2001 19 9,903,840
12th Floor, Tower I , (Expiring on 14/2/2059) Office of TA Sec
Lippo Centre, 89 Queensway, Commercial Building (HK) Limited
Hong Kong. Area: 4,045 sq. ft.
32. Kunming Dianchi Golf Lakeview Villa Uncompleted Unit 15/11/2005 2 1,857,369
Community. G187, Built-up area: 4,441.42
ANNUAL REPORT 2007
Type 7C Yunnan, China sq. ft
33. No 131, Baita road, Kunming, 3 Huido International Uncompleted 29/12/2005 1 1,181,118
Yunnan, China Office Units Office Units
Built-up area: 4,440
sq. ft.
34. 160, Jan Smut Freehold Property Held for 25/10/1996 8 32,787,088
ERF 180, Portion 2 of ERF 161, Commercial Building Sale
Portion 2 of ERF 162 and Area : 67,024 sq. ft.
ERF 235, Rosebank Township.
Registration Division I.R.
Province of Gauteng,
138
Republic of South Africa.
TOTAL RM1,165,055,063
TA ENTERPRISE BERHAD
(194867-M)
ANALYSIS OF SHAREHOLDINGS
AS AT 15 MAY 2007
Authorised Share Capital : RM4,000,000,000.00
Issued and paid-up capital : RM1,342,939,539.00
Class of Shares : Ordinary Shares of RM1.00 each
Voting Rights : One vote per share
Number of Shareholders : 34,824
No of shareholders / % of shareholders/ No of % of issued
Size of holdings depositors depositors shares held capital
1 - 99 380 1.0912 18,162 0.0014
100 – 1,000 7,390 21.2210 7,121,791 0.5303
1,001 – 10,000 21,909 62.9135 95,265,327 7.0938
10,001 - 100,000 4,760 13.6687 130,074,802 9.6858
100,001 - to less than 5% of issued shares 384 1.1027 676,746,457 50.3929
5% and above of issued shares 1 0.0029 433,713,000 32.2958
Total 34,824 100.0000 1,342,939,539 100.0000
SUBSTANTIAL SHAREHOLDERS AS PER THE REGISTER OF SUBSTANTIAL SHAREHOLDERS
Name No of shares % of issued share capital
Direct Indirect
Datuk Tiah Thee Kian 459,478,200 - 34.2144
Note :-
433,713,000 shares held through TASEC Nominees (Tempatan) Sdn Bhd
ANNUAL REPORT 2007
DIRECTORS’ INTERESTS IN SHARES IN THE COMPANY OR IN RELATED CORPORATION
Direct Deemed
No. of shares % No. of shares %
Datin Tan Kuay Fong 3,061,000 0.22793 - -
Zainab Binti Ahmad - - - -
Dato’ Mohamed Bin Abid 274,900 0.02047 - -
Peter U Chin Wei - - - -
Jory Leong Kam Weng - - - -
Christopher Koh Swee Kiat 16,000 0.00119 - -
TA ENTERPRISE BERHAD
(194867-M)
ANALYSIS OF SHAREHOLDINGS
AS AT 15 MAY 2007 (cont’d)
LIST OF TOP 30 SHAREHOLDERS AS AT 15 MAY 2007
Normal Holdings
No. Name Holdings Percentage
1 TASEC Nominees (Tempatan) Sdn Bhd 433,713,000 32.2958
Tiah Thee Kian
2 TA Nominees (Asing) Sdn Bhd 65,091,000 4.8469
Fleet Investments Management Limited
3 TASEC Nominees (Asing) Sdn Bhd 55,275,000 4.1160
TA Securities (HK) Ltd for Delroy Investment Holdings Limited
4 Cartaban Nominees (Asing) Sdn Bhd 48,000,000 3.5742
State Street Australia Fund UAJB for Unifund (HISG as Trustee)
5 TASEC Nominees (Asing) Sdn Bhd 44,714,600 3.3296
TA Securities (HK) Ltd for Globalbase Enterprise Ltd
6 TASEC Nominees (Asing) Sdn Bhd 40,068,800 2.9837
TA Securities (HK) Ltd for Goldcape International Limited
7 Permodalan Nasional Berhad 33,000,000 2.4573
8 Citigroup Nominees (Asing) Sdn Bhd 31,669,292 2.3582
UBS AG for Prism Offshore Fund Ltd
9 Tiah Thee Kian 25,765,200 1.9186
10 HSBC Nominees (Asing) Sdn Bhd 16,831,092 1.2533
Exempt AN for JPMorgan Chase Bank, National Association (U.A.E.)
11 HSBC Nominees (Asing) Sdn Bhd 16,696,000 1.2432
BNY Brussels for Melchior Greater China Opportunities Fund
12 TASEC Nominees (Asing) Sdn Bhd 15,421,200 1.1483
Fortis Private Banking Singapore Limited For Savern Finance Limited
ANNUAL REPORT 2007
13 HSBC Nominees (Asing) Sdn Bhd 14,483,100 1.0785
BNY Brussels for Queensland Investment Corporation
14 HSBC Nominees (Asing) Sdn Bhd 11,245,200 0.8374
Exempt AN for Morgan Stanley & Co. Incorporated
15 Citigroup Nominees (Asing) Sdn Bhd 10,510,242 0.7826
UBS AG for Prism Partners QP LP
140
16 HSBC Nominees (Asing) Sdn Bhd 10,180,500 0.7581
Exempt AN for JPMorgan Chase Bank, National Association (Netherlands)
TA ENTERPRISE BERHAD
(194867-M)
Normal Holdings
No. Name Holdings Percentage
17 Citigroup Nominees (Asing) Sdn Bhd 10,119,100 0.7535
CBNY for DFA Emerging Markets Fund
18 Cartaban Nominees (Asing) Sdn Bhd 8,942,500 0.6659
Investors Bank and Trust Company for Ishares, Inc.
19 TASEC Nominees (Asing) Sdn Bhd 8,294,100 0.6176
TA Securities (HK) Ltd for Jeffrey Smith
20 HSBC Nominees (Asing) Sdn Bhd 7,454,900 0.5551
TNTC for Government of Singapore Investment Corporation Pte Ltd
21 Citigroup Nominees (Asing) Sdn Bhd 6,876,883 0.5121
UBS AG for Prism Partners LP
22 Malaysia Nominess (Tempatan) Sendirian Berhad 6,500,000 0.4840
Great Eastern Life Assurance (Malaysia) Berhad (Par 1)
23 HSBC Nominees (Asing) Sdn Bhd 5,813,500 0.4329
HSBC-FS for Legg Mason Southeast Asia Special Situations Trust (201061)
24 Cartaban Nominees (Asing) Sdn Bhd 5,048,900 0.3760
State Street London Fund JY74 for The Pacific Basin Equity Fund (RIC PLC)
25 HLG Nominee (Tempatan) Sdn Bhd 4,820,000 0.3589
PB Trustee Services Berhad for HLG Growth Fund
26 Citigroup Nominees (Asing) Sdn Bhd 3,938,200 0.2932
CBNY for DFA Emerging Markets Small Cap Series
27 Citigroup Nominees (Asing) Sdn Bhd 3,800,000 0.2830
CB LDN for Banco Popolare Di Bergamo Prumerica SGR
ANNUAL REPORT 2007
28 Citigroup Nominees (Asing) Sdn Bhd 3,500,000 0.2606
UBS AG for EB Asia Absolute Return Master Fund Limited
29 HSBC Nominees (Asing) Sdn Bhd 3,481,000 0.2592
BBH And Co. Boston for Vanguard Emerging Markets Stock Indexfund
30 Amanah Raya Nominees (Tempatan) Sdn Bhd 3,418,400 0.2545
Public Index Fund
Total 954,671,709 71.0882
TA ENTERPRISE BERHAD
(194867-M)
ANALYSIS OF WARRANTHOLDINGS
FOR WARRANTS 1999/2009
AS AT 15 MAY 2007
No. of Warrants in issue : 537,650,025
Exercise Price of Warrants : RM1.00 per new ordinary share throughout the entire tenure of the Warrants
Voting Rights : One vote per warrant
Number of warrantholders : 19,390
No of % of No of % of issued
Size of holdings warrantholders warrantholders warrants held capital
1 - 99 434 2.2383 18,552 0.0034
100 – 1,000 2,965 15.2914 2,689,489 0.5002
1,001 - 10,000 11,591 59.7782 56,388,458 10.4879
10,001 - 100,000 3,845 19.8298 127,701,319 23.7518
100,001 - to less than 5% of issued warrants 554 2.8571 250,852,207 46.6572
5% and above of issued warrants 1 0.0052 100,000,000 18.5995
Total 19,390 100.0000 537,650,025 100.0000
DIRECTORS’ INTERESTS IN WARRANTS IN THE COMPANY OR IN RELATED CORPORATION
Direct Deemed
No. of shares % No. of shares %
Datin Tan Kuay Fong 800,000 0.14879 - -
Zainab Binti Ahmad 724,500 0.13475 - -
Dato’ Mohamed Bin Abid 200,000 0.03719 - -
Peter U Chin Wei - - - -
Jory Leong Kam Weng - - 5,000 0.00093
Christopher Koh Swee Kiat - - - -
ANNUAL REPORT 2007
142
TA ENTERPRISE BERHAD
(194867-M)
LIST OF TOP 30 WARRANTHOLDERS AS AT 15 MAY 2007
Normal Holdings
No. Name Normal Holdings Percentage
1 TASEC Nominees (Tempatan) Sdn Bhd 100,000,000 18.5994
Tiah Thee Kian
2 TASEC Nominees (Asing) Sdn Bhd 14,615,100 2.7183
TA Securities (HK) Ltd for Jeffrey Smith
3 Amanah Raya Nominees (Tempatan) Sdn Bhd 7,071,400 1.3152
Public Growth Fund
4 Amanah Raya Nominees (Tempatan) Sdn Bhd 6,740,000 1.2536
Public Equity Fund
5 Mayban Nominees (Tempatan) Sdn Bhd 6,390,000 1.1885
Mayban Trustees Berhad for Public Regular Savings Fund(N14011940100)
6 Mayban Nominees (Tempatan) Sdn Bhd 4,950,000 0.9207
Mayban Trustees Berhad for Public Industry Fund (N14011930270)
7 Mayban Nominees (Tempatan) Sdn Bhd 4,790,000 0.8909
Mayban Trustees Berhad for Public Aggressive Growth Fund (N14011940110)
8 BLHB Trustee Berhad 4,656,000 0.8660
Public Regional Sector Fund
9 Ke-Zan Nominees (Asing) Sdn Bhd 4,572,400 0.8504
Kim Eng Securities Pte. Ltd for Exquisite Holdings Limited
10 ECM Libra Avenue Nominees (Asing) Sdn Bhd 4,384,300 0.8154
DMG & Partners Securities Pte Ltd for Keen Capital Investment Ltd (N2-60391)
11 Mayban Nominees (Tempatan) Sdn Bhd 3,930,000 0.7310
Mayban Trustees Berhad for Public Balanced Fund (N14011550210)
ANNUAL REPORT 2007
12 Public Nominees (Tempatan) Sdn Bhd 3,780,000 0.7030
Pledged Securities Account for Chan Siong Chong (E-BPT)
13 Mayban Nominees (Asing) Sdn Bhd 3,500,000 0.6510
DBS Bank for Bloomswick Limited (230089)
14 Irene Yap Yin Fei 2,647,700 0.4924
15 Mayban Securities Nominees (Tempatan) Sdn Bhd 2,573,000 0.4786
Pledged Securities Account for Ho Sey Chen (REM 611)
TA ENTERPRISE BERHAD
(194867-M)
ANALYSIS OF WARRANTHOLDINGS
FOR WARRANTS 1999/2009
AS AT 15 MAY 2007 (cont’d)
Normal Holdings
No. Name Normal Holdings Percentage
16 Amanah Raya Nominees (Tempatan) Sdn Bhd 2,450,000 0.4557
PB Growth Fund
17 CIMSEC Nominees (Asing) Sdn Bhd 2,436,033 0.4531
Exempt AN for CIMB-GK Securities Pte Ltd (Retail Clients)
18 CIMSEC Nominees (Asing) Sdn Bhd 2,300,000 0.4278
CIMB Bank Berhad (ETP)
19 HDM Nominees (Tempatan) Sdn Bhd 2,150,000 0.3999
Pledged Securities Account for Kee Boon Yau (M04)
20 Amanah Raya Nominees (Tempatan) Sdn Bhd 2,146,000 0.3991
Public Far-East Select Fund
21 Ke-Zan Nominees (Tempatan) Sdn Bhd 2,044,000 0.3802
Kim Eng Securities Pte. Ltd for Sin Khuan Oi
22 Ke-Zan Nominees (Asing) Sdn Bhd 2,000,000 0.3720
Kim Eng Securities Pte. Ltd (38890)
23 Ke-Zan Nominees (Asing) Sdn Bhd 2,000,000 0.3720
Kim Eng Securities Pte. Ltd for The Nassim Fund
24 HDM Nominees (Asing) Sdn Bhd 1,900,000 0.3534
Lim & Tan Securities Pte. Ltd for Chng Nai Wee
25 HDM Nominees (Asing) Sdn Bhd 1,881,200 0.3499
DBS Vickers Secs (S) Pte. Ltd for Rin Nan Yoong
26 BHLB Trustee Berhad 1,870,000 0.3478
Lee Chiah Cheang
27 HDM Nominees (Asing) Sdn Bhd 1,800,000 0.3348
UOB Kay Hian Pte. Ltd for Koh Lee Ling (Margin)
ANNUAL REPORT 2007
28 BHLB Trustee Berhad 1,600,500 0.2977
Lee Chiah Cheang
29 Citigroup Nominees (Asing) Sdn Bhd 1,500,000 0.2790
Bear Stearns Securities Corp for Longview Investment Associates LLC
30 Amanah Raya Nominees (Tempatan) Sdn Bhd 1,470,000 0.2734
PB Asia Equity Fund
144
Total 204,147,633 37.9704
TA ENTERPRISE BERHAD
(194867-M)
FORM OF PROXY
No. of Shares Held
Incorporated in Malaysia
I/We __________________________________________________(name of shareholder as per NRIC, in capital letters)
NRIC No./ID No./Company No. ____________________________ (new)_________________________________ (old)
of __________________________________________________________________________________(full address)
being a member(s) of TA ENTERPRISE BERHAD, hereby appoint ____________________________________________
(name of proxy as per NRIC, in capital letters) NRIC No. _______________________(new)____________________(old)
of __________________________________________________________________________________(full address)
or failing him/her _____________________________________________(name of proxy as per NRIC, in capital letters)
NRIC No. ___________________________(new) ___________________________(old) of ______________________
___________________________________________________________________(full address) as my/our proxy
to vote for me/us on my/our behalf at the Seventeenth Annual General Meeting of the Company to be held at the
Auditorium, 10th Floor, Menara TA One, 22, Jalan P. Ramlee, 50250 Kuala Lumpur on Wednesday, 27 June 2007 at 10.00
a.m. and at each and every adjournment thereof.
My/our proxy is to vote as indicated below:
RESOLUTIONS FOR AGAINST
1. Adoption of Reports and Financial Statements Resolution 1
2. Approval of First and Final Dividend Resolution 2
3. Re-election of Directors :
a. Dato’ Mohamed Bin Abid Resolution 3a
b. Mr Peter U Chin Wei Resolution 3b
4. Approval of Directors’ Fees Resolution 4
5. Re-appointment of Auditors Resolution 5
6. Authority for Directors to issue shares pursuant to
Section 132D of the Companies Act, 1965 Resolution 6
7. Proposed amendments to Articles of Association of the Company Resolution 7
(Please indicate with an “X” in the spaces provided how you wish your vote to be cast. If you do not do so, the proxy will vote or
abstain from voting at his/her discretion)
For appointment of two proxies, percentage of
shareholdings to be represented by the proxies:
A N N U A L R E P O R T 2A N N U A L R E P O R T 2 0 0 7
No. of shares Percentage
Proxy 1 %
Signature/Common Seal Proxy 2 %
Date : Total 100%
Notes:
1. A member entitled to attend and vote is entitled to appoint a proxy or proxies (but not more than two) to attend and vote at this Meeting in his stead. A proxy
007
may but need not be a member of the Company.
2. This Form of Proxy, in the case of an individual, shall be signed by the appointor or his attorney and in case of a corporation, shall be given under its common
seal or signed on its behalf by an attorney or officer of the corporation so authorised.
3. Where a member appoints more than one proxy, the appointment shall be invalid unless he specifies the proportion of his holdings to be represented by
each proxy.
4. This Form of Proxy must be deposited at the Company’s Registered Office at 34th Floor, Menara TA One, 22, Jalan P. Ramlee, 50250 Kuala Lumpur not less than
forty-eight (48) hours before the time appointed for holding the meeting or any adjournment thereof
TA ENTERPRISE BERHAD
(194867-M)
Fold this flap for sealing
Then fold here
AFFIX
STAMP
HERE
The Company Secretary
TA ENTERPRISE BERHAD (194867-M)
34th Floor, Menara TA One
22, Jalan P. Ramlee
50250 Kuala Lumpur
1st fold here
