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Laporan Tahunan 2008 Annual Report
ECM Libra Financial Group Berhad (713570-K)
(formerly known as ECM Libra Avenue Berhad)
contents
3 CorporateInformation
4 Directors’Profile
8 BoardAudit&RiskManagement CommitteeReport
10 CorporateGovernanceStatement
15 Directors’ResponsibilityStatement
16 Chairman’sStatement
18 NoticeofAnnualGeneralMeeting
20 StatementAccompanying NoticeofAnnualGeneralMeeting
22 Directors’Report
27 StatementbyDirectors
27 StatutoryDeclaration
28 Auditors’Report
29 IncomeStatements
30 BalanceSheets
32 StatementsofChangesinEquity
34 CashFlowStatement
37 NotestotheFinancialStatements
83 OtherInformation
FormofProxy
ECMLibraFinancialGroupBerhadANNUALREPORT20083
corporate information
DIRECTORSDato'SeriKalimullahbinMasheerulHassan(ExecutiveChairman&ChiefExecutiveOfficer)Dato'Ab.HalimbinMohyiddin(ViceChairman)MrLimKianOnn(ManagingDirector)DatukKamarudinbinMdAliDato'OthmanbinAbdullahEncikMahadzirbinAzizanMrLumSingFai
SECRETARYMsWongSeongCho
AUDITORSMessrsErnst&YoungCharteredAccountantsLevel23A,MenaraMileniumJalanDamanlelaPusatBandarDamansara50490KualaLumpurTel: 03-20877000Fax: 03-20955332
REGISTRARPFARegistrationServicesSdnBhdLevel13,Uptown1No.1JalanSS21/58DamansaraUptown47400PetalingJayaSelangorDarulEhsanTel:03-77254888Fax:03-77222311
REGISTERED OFFICE8AFloor,WismaGentingJalanSultanIsmail50250KualaLumpurTel:03-21781888Fax:03-21618818
BUSINESS ADDRESS8AFloor,WismaGentingJalanSultanIsmail50250KualaLumpurTel:03-21781888Fax:03-21618818
WEBSITEwww.ecmlibra.com
LISTINGMainBoardofBursaMalaysiaSecuritiesBerhad
4ECMLibraFinancialGroupBerhadANNUALREPORT2008
directors’ profile
Dato’SeriKalimullahbinMasheerulHassanExecutiveChairman&ChiefExecutiveOfficer/Non-Independent
Dato'SeriKalimullahbinMasheerulHassan,aMalaysian,aged50,beganacareerinjournalismin1979andmovedontothecorporatesector in1995.Hehasgainedvastcorporateexperience,havingheldkeypositions invariousMalaysianlistedcorporations.InSeptember2002,Dato'SeriKalimullahwasappointedaschairmanofthenationalnewsagency,Bernama,foratwo-yeartermbyDYMMYangdi-PertuanAgongbutresignedtotakeonhispositionas Group Chief-in-Editor in The News Straits Times Press (M) Bhd ("NSTP") on 1 January 2004. He left as GroupEditor-in-Chiefon31December2005uponexpiryofhiscontractandreturnedtohisfinancialservicesbusiness.Hewas appointed Deputy Chairman of NSTP on 1 January 2006. Dato' Seri Kalimullah was appointed by the FederalGovernmentasamemberoftheNationalUnityAdvisoryPanelon1January2005foratwo-yearterm.Hewasre-appointedforanothertwo-yeartermon1January2007.
Dato'SeriKalimullahwasappointedChairmanoftheBoardofDirectors("Board")ofECMLibraFinancialGroupBerhad(formerly known as ECM Libra Avenue Berhad) ("ECMLFG" or "Company") on 16 June 2006 and re-designated theExecutiveChairman&ChiefExecutiveOfficerwitheffectfrom1May2007.Heattendedallseven(7)Boardmeetingsheld during the financial year ended 31 January 2008. He was also a member of the Nomination Committee andRemunerationCommitteeduringthefinancialyearended31January2008.
Dato'SeriKalimullahistheChairmanofEkowoodInternationalBerhadandadirectorofECMLibraFoundationandECMLibra InvestmentBankBerhad(formerlyknownasECMLibraAvenueSecuritiesBerhad) ("ECMLIB"),awholly-ownedsubsidiaryofECMLFG.HehasnofamilyrelationshipwiththeotherdirectorsormajorshareholdersofECMLFG,noconflictofinterestwithECMLFGandhasnoconvictionforoffenceswithinthepasttenyears.
Dato'Ab.HalimbinMohyiddinViceChairman/IndependentNon-Executive
Dato'Ab.HalimbinMohyiddin,aMalaysian,aged62,servesontheBoardofAmway(Malaysia)HoldingsBerhad,BankPembangunan Malaysia Berhad Group, Digi.Com Berhad, HeiTech Padu Berhad, Idaman Unggul Berhad, KNM GroupBerhad, MCM Technologies Berhad, Kumpulan Perangsang Selangor Berhad, Utusan Melayu Malaysia Berhad, IdrisHydraulic(Malaysia)Berhad,BICredit&LeasingBerhadandAMDBBerhad.
Dato' Ab. Halim graduated with a Bachelor of Economics (Accounting) degree from University of Malaya in 1971 andthereafter joined Universiti Kebangsaan Malaysia as a Faculty member of the Faculty of Economics. He obtained hisMastersofBusinessAdministrationdegreefromUniversityofAlberta,Canadain1973.HeretiredfromKPMGMalaysiainOctober2001,afirmhejoinedin1977andhadhisearlyaccountingtraininginbothMalaysiaandUnitedStatesofAmerica.Hewasmadepartnerofthefirmin1985.Atthetimeofhisretirement,hewasthepartner in-chargeoftheAssurance and Financial Advisory Services Divisions of the firm and was also looking after the Secured e-CommercePracticeofthefirm.
Dato'Ab.HalimwasappointedasViceChairmanofECMLFGon26March2007.Heattendedfour(4)BoardMeetingsofECMLFGheldduringthefinancialyearended31January2008.HewasalsoappointedamemberoftheNominationCommitteeandRemunerationCommitteeofECMLFGon6February2008.Hehasnofamily relationshipwiththeotherdirectorsormajorshareholdersofECMLFG,noconflictofinterestwithECMLFGandhasnoconvictionforoffenceswithinthepasttenyears.
ECMLibraFinancialGroupBerhadANNUALREPORT20085
directors’ profilecontinued
DatukKamarudinbinMdAliIndependentNon-Executive
DatukKamarudinbinMdAli,aMalaysian,aged58,isaretiredpolicecommissionerandalsoanAssociateoftheRoyalCollege of Defense Studies UK. He holds a Masters in Science (Engineering) from University of Birmingham, UK andBachelor of Science (Honours) (Mechanical Engineering) from University of Strathclyde Glasgow Scotland. DatukKamarudinretiredfromtheRoyalMalaysiaPolice("RMP")on4May2006withmorethan30yearsexperiencespecializingin mechanical engineering and with extensive knowledge and skills in logistic & finance management, manpowerdevelopment,strategicplanning,traininganddevelopment,recruitmentandselection,careerdevelopmentandcrimeprevention,gainedthroughwiderangeofcommandpostsandmanagerialcapacitiesheldduringhistenureofofficeinRMP.HeisactivelyinvolvedinNGOsandisnotedforhiscontributionintheMalaysianCrimePreventionFoundationofwhichheisacouncilmember.
DatukKamarudinwasappointedtotheBoardofECMLFGon16June2006.HeistheChairmanoftheBoardAudit&RiskManagementCommitteeandamemberoftheNominationCommittee.Heattendedallseven(7)Boardmeetingsheldduringthefinancialyearended31January2008.
DatukKamarudinisalsoadirectorofAnnJooResourcesBerhad,AvenueInvestBerhadandECMLIB.HehasnofamilyrelationshipwiththeotherdirectorsormajorshareholdersofECMLFG,noconflictofinterestwithECMLFGandhasnoconvictionforoffenceswithinthepasttenyears.
MrLimKianOnnManagingDirector/Non-Independent
MrLimKianOnn,aMalaysian,aged51,isamemberoftheInstituteofCharteredAccountantsinEngland&WalesandtheMalaysianInstituteofAccountants.HeservedhisarticleshipwithKMGThomsonMcLintockinLondonforfouryears,thenjoinedAndersenConsultingfrom1981to1984asaseniorconsultant.Between1984and1993,hewaswithHongLeongGroup,MalaysiaasaSeniorManagerintheFinanceDivisionandsubsequentlyasanExecutiveDirectorinthestockbrokingarmresponsibleforcorporatefinance,researchandinstitutionalsales.MrLimfoundedtheLibraCapitalGroupin1994andco-foundedtheECMLibraGroupin2002.
MrLimwasappointedtotheBoardofECMLFGon16June2006andre-designatedManagingDirectorwitheffectfrom1May2007.Heattendedallseven(7)Boardmeetingsheldduringthefinancialyearended31January2008.Hewasalsoamemberof theNominationCommitteeandRemunerationCommitteeofECMLFGduringthe financialyearended31January2008.
MrLimisalsothenon-executiveChairmanofPlatoCapitalLimited,acompanyincorporatedinSingaporeandlistedontheStockExchangeofSingaporeandadirectorofECMLibraFoundation.HewasappointedActingCEO/ExecutiveDirectorofECMLIBon6February2008.HehasnofamilyrelationshipwiththeotherdirectorsormajorshareholdersofECMLFG,noconflictofinterestwithECMLFGandhasnoconvictionforoffenceswithinthepasttenyears.
6ECMLibraFinancialGroupBerhadANNUALREPORT2008
directors’ profilecontinued
EnMahadzirbinAzizanIndependentNon-Executive
EnMahadzirbinAzizan,aMalaysian,aged59,isaBarrister-at-LawfromLincoln'sInn,London.HewascalledtothebarofEngland&Walesin1978andhadsinceservedinvariouscapacitiesingovernmentandprivatesectors.HeservedasFederalCounselandLegalAdviserintheMinistryofTrade&Industryin1978to1979afterwhich,heservedasAssistantCompanySecretary/LegalAdviserofMalaysiaInternationalShippingCorporationBerhad.In1983,hejoinedIsland&PeninsularBerhad("I&P"),apropertydevelopmentcompanywithinPermodalanNasionalBerhadGroupasGroupCompanySecretaryandLegalAdviser.SubsequentlyhewaspromotedasDirector,CorporateAffairs in1994.HesatontheBoardofvariouscompanieswithintheI&PGroupuntilhisretirementinApril2007andwasalsoamemberoftheBoardofMajlisAmanahRakyatfrom2000to2003.
EnMahadzirwasappointedtotheBoardofECMLFGon16June2006andattendedallseven(7)Boardmeetingsheldduringthefinancialyearended31January2008.HeistheChairmanoftheRemunerationCommitteeandmemberoftheBoardAudit&RiskManagementCommitteeofECMLFG.Subsequent to theyearend,hewasalsoappointedamemberof theNominationCommittee.
En Mahadzir is also a director of SyarikatTakaful Malaysia Berhad, Avenue Invest Berhad and ECMLIB. He has no familyrelationship with the other directors or major shareholders of ECMLFG, no conflict of interest with ECMLFG and has noconvictionforoffenceswithinthepasttenyears.
Dato'OthmanbinAbdullahIndependentNon-Executive
Dato'OthmanbinAbdullah,aMalaysian,aged59, isanaccountantbyprofessionwithextensivefinancialknowledgeandskills.Hebeganhiscareerin1977asTreasuryAccountantattheAccountantGeneral'sDepartmentandheldvariouspositions intheDepartment.HewassecondedtoSabahElectricityBoardasDeputyGeneralManager (Finance) from1987to1993andsubsequentlywastransferredbacktotheDepartmentandwasappointedasAccountantGeneralofMalaysiafrom2003to2005.
Dato'OthmanwasappointedtotheBoardofECMLFGon16June2006.Heattendedallseven(7)Boardmeetingsheldduringthefinancialyearended31January2008.HeistheChairmanoftheNominationCommitteeandamemberoftheBoardAudit&RiskManagementCommitteeofECMLFG.
Dato'OthmanisalsoadirectorofSyarikatPerumahanNegaraBerhadandECMLIB.HehasnofamilyrelationshipwiththeotherdirectorsormajorshareholdersofECMLFG,noconflictofinterestwithECMLFGandhasnoconvictionforoffenceswithinthepasttenyears.
ECMLibraFinancialGroupBerhadANNUALREPORT20087
directors’ profilecontinued
MrLumSingFaiNon-IndependentNon-Executive
MrLumSingFai,aMalaysian,aged44,istheManagingDirectorofCapitalMarketsforAmcorpGroupBerhad.
MrLum,agraduateoftheUniversityofMalayawithaBachelorofEconomics(Honours)inBusinessAdministration,hasover20yearsofextensiveexperienceinbankingandfinance.AsManagingDirectoroftheCapitalMarketsdivisionofAmcorpGroupBerhad,hehassuccessfullyledabroadrangeoffinancialserviceendeavoursduringhis13yearstenure.
PriortojoiningAmcorp,MrLumwasattachedtoSouthernBankBerhadfrom1987to1994workinginvariouscapacitiesfromoperationstocorporatebanking.HealsositsontheBoardofthecompanieswithintheAmcorpGroupBerhad.
MrLumresignedasalternatedirectortoMrSooKimWaion6February2008andwasre-appointedasdirectorofECMLFGonthesameday.Heattendedthree(3)BoardmeetingsofECMLFGheldduringthefinancialyearended31January2008.HewasappointedamemberoftheNominationCommitteeandRemunerationCommitteeofECMLFGwitheffectfrom6February2008.
MrLumisalsoadirectorofECMLIB.HehasnofamilyrelationshipwiththeotherdirectorsormajorshareholdersofECMLFG,noconflictofinterestwithECMLFGandhasnoconvictionforoffenceswithinthepasttenyears.
8ECMLibraFinancialGroupBerhadANNUALREPORT2008
board audit & risk management committee report
Constitution TheBoardAudit&RiskManagementCommittee("BARMC")wasestablishedon28June2006bytheBoardofDirectors("Board").
CompositionThemembersoftheBARMCduringthefinancialyearended31January2008were:
Chairman: DatukKamarudinbinMdAli (IndependentNon-ExecutiveDirector)
Members: Dato'OthmanbinAbdullah (IndependentNon-ExecutiveDirector)
EnMahadzirbinAzizan (IndependentNon-ExecutiveDirector)
Terms of Reference
(i) ToreviewthefollowingandreportthesametotheBoardofDirectors("Board"):-
(a) nominateandrecommendapersonorpersonsasexternalauditors,andreviewtheauditfees;
(b) withtheexternalauditor,theauditplan;
(c) withtheexternalauditor,hisevaluationofthesystemofinternalaccountingcontrols;
(d) withtheexternalauditor,hisauditreport;
(e) theassistancegivenbytheemployeesoftheGroupandtheCompanytotheexternalauditor;
(f) thequarterlyresultsandyear-endfinancialstatementsoftheGroupandtheCompany,focusingparticularlyon:-
•changesinaccountingpoliciesandpractices
•significantadjustmentsarisingfromtheaudit
•significantandunusualevents
•thegoingconcernassumption
•compliancewithaccountingstandardsandotherlegalrequirements
(g) theadequacyofthescope,functionsandresourcesoftheinternalauditfunctionandthatithasthenecessaryauthoritytocarryoutitswork;and
(h) thefindingsoftheInternalAuditDepartmentoninternalauditsundertakenandmanagement'sresponseandensurethatappropriateactionistaken.
(ii) ToconsideranyrelatedpartytransactionandconflictofinterestsituationthatmayarisewithintheCompanyorGroup.
(iii) Toreviewandmonitortheadequacyandintegrityofinternalcontrolsystems,includingriskmanagementandmanagementinformationsystems.
(iv) ToconsideranyotherfunctionordutyasmaybeagreedtobytheBARMCandtheBoard.
ECMLibraFinancialGroupBerhadANNUALREPORT20089
board audit & risk management committee reportcontinued
Authority
TheBARMCisauthorisedbytheBoardtoinvestigateanymatterwithinitstermsofreference.ItshallhavefullandunrestrictedaccesstoanyinformationpertainingtotheGroupandshallhavetheresourcesitrequirestoperformitsduties.Allemployeesaredirectedtoco-operatewithanyrequestmadebytheBARMC.
TheBARMCisauthorisedbytheBoardtoobtainindependentlegalorotherexternalindependentprofessionaladvice,ifitconsidersnecessary.
TheBARMCisauthorisedbytheBoardtoobtaininformationonanyresignationofinternalauditstaffmembers.Itisfurtherauthorisedtoprovidetheresigningstaffmemberanopportunitytosubmithisreasonsforresigning.TheBARMCisauthorisedbytheBoardtoapproveanyappointmentorterminationofseniorstaffmembersoftheinternalauditfunction.
Meetings
Meetingsshallbeheldnotlessthanfour(4)timesinafinancialyear.Theexternalauditorsmayrequestameetingiftheyconsiderthatoneisnecessary.TheBARMCshallmeetwiththeexternalauditorswithoutexecutiveBoardmemberspresent,atleasttwiceinafinancialyear.MinutesofeachmeetingshallbedistributedtoeachmemberoftheBoard.
Two(2)members,whoshallbeindependentandnon-executivedirectors,shallconstituteaquorumformeetings.
TheCompanySecretaryshallbethesecretaryoftheBARMC.
TheHeadofFinance,theHeadofInternalAudit,theComplianceOfficerandarepresentativeoftheexternalauditorsshallnormallyattendthemeetings.OtherBoardmembers,employeesandexternalindependentprofessionaladvisersmayattendthemeetingsupontheinvitationoftheBARMC.
Activities
Duringthefinancialyearended31January2008,six(6)BARMCmeetingswereheldandattendedbyallBARMCmembers.
TheBARMCreviewedthequarterlyfinancialstatementsandauditedfinancialstatementsoftheGrouppriortotheBoard'sapprovalandsubsequentreleasetoBursaMalaysiaSecuritiesBerhad("BursaMalaysia").TheBARMCalsoreviewedtheexternalauditors'scopeofworkandauditplanfortheGroup,consideredsignificantchanges in accounting and auditing issues, reviewed the management letter and management's response and discussed applicable accounting and auditingstandards.TheBARMCalsoreviewedtheresourcerequirementsoftheinternalauditfunction,approvedtheinternalauditplanforthefinancialyearandrevisionsthereto,theinternalauditprogrammeandauditfindings.
Duringtheyear,theBARMCreviewedtheadequacyandintegrityofinternalcontrolsystems,includingriskmanagementandrelevantmanagementinformationsystems.Italsoreviewedtheprocessesputinplacetoidentify,evaluateandmanagethesignificantrisksencounteredbytheGroup.
In connection with the Employees' Share Option Scheme of the Group, the BARMC also verified that allocation of options was in compliance withapprovedcriteria.
Internal Audit
TheinternalauditfunctionsareorganisedonaGroupbasiswhilethedepartmentisestablishedatECMLibraInvestmentBankBerhad(formerlyknownasECMLibraAvenueSecuritiesBerhad)("ECMLIB").ThecorefunctionofInternalAuditistoperformanappraisaloftheGroup'sactivity,toprovideassuranceonandtohelpmanagementtomaintainanadequateinternalcontrolsystemandcorporategovernanceprocesses.InternalAuditDepartmentprovidesperiodicreportstotheBARMC,reportingontheoutcomeoftheauditsconducted,effectivenessofthesystemofinternalcontrolsimplementedandhighlightingkeycontrolissuesimpactingtheGroup.ThisenablestheBARMCtoexecuteitsoversightfunctionbyforminganopinionontheadequacyofmeasuresundertakenbymanagement.
Duringthefinancialyearended31January2008,theInternalAuditDepartmenthadcarriedoutitsduties,primarilyinECMLIBandAvenueInvestBerhadcoveringbusiness,financial,managementandoperationalareas.TheInternationalStandardsfortheProfessionalPracticeofInternalAuditing,BursaMalaysiaBerhad(Rule511and1202)andSecuritiesCommissionguidelinesoninternalauditareusedasauthoritativeguidelinesforinternalauditingprocedures.
10ECMLibraFinancialGroupBerhadANNUALREPORT2008
corporate governance statement
TheBoardofDirectors("Board")ofECMLibraFinancialGroupBerhad(formerlyknownasECMLibraAvenueBerhad)("ECMLFG"or"Company")iscommittedtomanagetheECMLFGGroupinlinewithcorporategovernancepracticesasproposedintheMalaysianCodeonCorporateGovernance("Code").TheBoardfirmlybelievesthatcorporateaccountabilitycomplementsbusinesspracticesthatwillfacilitatetheachievementoftheCompany'sgoalsandobjectives.
Inpreparingthisstatement,theBoardispleasedtoreport,thatsaveassetoutbelow,theGrouphasappliedtheprinciplessetoutinPart1oftheCodeandhascompliedwiththebestpracticessetoutinPart2oftheCodethroughoutthefinancialyearended31January2008.
A. DIRECTORS
(i) The Board
TheCompanyisledbyaproactiveBoardwithablendofgoodmanagementandentrepreneurialskills,supportedbyindependentDirectorswhobringtotheBoardtheirdifferentfieldsoftrainingandexperiences.
TheBoardisprimarilyentrustedwiththeresponsibilityofsettingthegoalsandthedirectionoftheGroup.ItalsooverseestheconductoftheGroup'sbusinesses,ensuringvariouscontrolsystemsareinplaceaswellasregularlyevaluatingsuchsystemstoensureitsintegrity.ThecontrolsarenecessarytominimisetherisksassociatedwiththebusinessesoftheGroup.
InordertoensurethattheECMLFGGroupisefficientlymanaged,theBoardmeetsonaquarterlybasisandadditionallyasandwhenrequired,withaformalscheduleofmattersspecificallyreservedforitsdeliberationanddecision.Duringthefinancialyearunderreview,seven(7)BoardmeetingswereheldandalltheDirectorshavecompliedwiththerequirementsinrespectofBoardmeetingattendanceasprovidedintheArticlesofAssociation.
Seven(7)Boardmeetingswereheldduringthefinancialyearended31January2008andallDirectorsattendedthesaidmeetingsexceptforDato'Ab.HalimbinMohyiddinandMrSooKimWaiwhowereappointedon26March2007.Dato'Ab.HalimbinMohyiddinandMrSooKimWaiattendedfour(4)andfive(5)Boardmeetingsrespectivelyduringthefinancialyearended31January2008.
The Board collectively reviews and considers all corporate proposals prior to their implementation. Corporate proposals are put to vote aftercarefuldeliberation.TheChairmanofthemeetingshallhaveasecondorcastingvoteintheeventofatieinvotesfororagainstanyparticularproposal,exceptwhenonlytwoDirectorsarecompetenttovoteonthequestioninissue.
TheBoardisupdatedonECMLFGGroup'saffairsatBoardmeetings.TheDirectorsareencouragedtoobtaininformationontheGroup'sactivitiesbyconsultationwithseniormanagementatanytime.ThisistoensureandenabletheBoardmemberstodischargetheirdutiesandresponsibilitiescompetentlyandinaninformedmanner.
(ii) Board Balance
Forthefinancialyearended31January2008,theBoardcomprisedseven(7)Directors,five(5)ofwhomarenon-executive.Ofthenon-executiveDirectors,four(4)areindependent.ThereisacleardivisionofresponsibilitiesattheheadoftheCompanytoensureabalanceofauthorityandpower.Thewidespectrumofknowledge,skillsandexperienceoftheBoardmembersgivesaddedstrengthtotheleadershipwhichisnecessaryfortheeffectivestewardshipoftheGroup.
ECMLibraFinancialGroupBerhadANNUALREPORT200811
corporate governance statementcontinued
A. DIRECTORS (continued)
(ii) Board Balance (continued)
TheBoardrecognises the importanceandcontributionof its independentnon-executiveDirectors.They represent theelementofobjectivity,impartiality and independent judgement of the Board. This ensures that there is adequate check and balance at the Board level. The four(4) independent Directors of the Company provide the Board with vast and varied exposure, expertise and broad business and commercialexperiences.
The Executive Chairman & Chief Executive Officer leads the Board and together with the Managing Director, are responsible for the strategicdirectionoftheGroupwhiletheManagingDirectorprovidesdirectionintheimplementationofbusinessplansandstrategies.
TheBoardhasidentifiedDatukKamarudinbinMdAli,theChairmanoftheBoardAudit&RiskManagementCommittee,astheindependentnon-executiveDirectortowhomconcernsmaybeconveyed,whowouldbringthesametotheattentionoftheBoard.
AbriefprofileoftheDirectorsissetoutonpages4to7ofthisAnnualReport.
(iii) Supply of information
Boardmembersareprovidedwiththenotice,settingouttheagendaandsubsequentlythecomprehensiveBoardpapersinatimelymannerpriortoBoardmeetings.ThisistoensureandenablethemembersoftheBoardtodischargetheirdutiesandresponsibilitiescompetentlyandinawell-informedmanner.AllmembersoftheBoardhaveaccesstotheadviceandservicesoftheCompanySecretary,andwherenecessary,independentprofessionaladvisers.TheyalsohaveunlimitedaccesstoallinformationwithregardtotheactivitiesoftheECMLFGGroup.
(iv) Appointments to the Board
The Nomination Committee, which was set up on 27 September 2006 comprised three (3) independent non-executive Directors and two (2)non-independent non-executive Directors during the financial year ended 31 January 2008.The Committee is responsible for proposing andrecommendingnewnomineestotheBoardaswellasDirectorstofillseatsonBoardcommittees;assessing,onanannualbasis,theeffectivenessoftheBoard,theBoardcommitteesandthecontributionofeachindividualDirector;andannualreviewoftherequiredmixofskills,experiencesandotherqualitieswhichnon-executiveDirectorsshouldbringtotheBoard.
ThemembersoftheNominationCommitteeduringthefinancialyearended31January2008:
-Dato'OthmanbinAbdullah(Chairman)
-DatukKamarudinbinMdAli
-Dato'SeriKalimullahbinMasheerulHassan
-MrLimKianOnn
-EnIbrahimMahaludinbinPuteh(resignedon1March2007)
Sincethefinancialyear-end,theNominationCommitteewasreconstitutedon6February2008asfollows:
-Dato'OthmanbinAbdullah(Chairman)
-DatukKamarudinbinMdAli
-EnMahadzirbinAzizan
-Dato'Ab.HalimbinMohyiddin
-MrLumSingFai
12ECMLibraFinancialGroupBerhadANNUALREPORT2008
corporate governance statementcontinued
A. DIRECTORS (continued)
(v) Re-election
TheArticlesofAssociationoftheCompanyprovidethatatleastone-thirdoftheDirectorsaresubjecttoretirementbyrotationateachAnnualGeneralMeetingandthatallDirectorsshallretireatleastonceineverythreeyears.TheArticlesofAssociationalsoprovidethataDirectorwhoisappointedbytheBoardinthecourseoftheyearshallbesubjecttore-electionatthenextAnnualGeneralMeetingtobeheldfollowinghisappointment.
Directorsoverseventyyearsofagearerequiredtosubmitthemselvesforre-appointmentannuallyinaccordancewithSection129(6)oftheCompaniesAct,1965.
(vi) Directors’ Training
AllDirectorsoftheCompanyhavecompletedtheMandatoryAccreditationProgramme.TheCompanydoesnothaveaformaltrainingprogrammefornewDirectorsbut they receivebriefingsandupdatesontheGroupbusinesses,operations, riskmanagement, internalcontrols, financeandanyneworchangestothecompaniesandotherrelevantlegislation,rulesandregulations.TheDirectorsareencouragedtoattendbriefingsandseminarstokeepabreastwithlatestdevelopmentsintheindustryandtoenhancetheirskillsandknowledge.
B. DIRECTORS’ REMUNERATION
TheRemunerationCommittee,whichwassetupon27September2006,comprisedtwo(2)independentnon-executiveDirectorsandtwo(2)non-independentexecutiveDirectorsduringthefinancialyearended31January2008.ThemembersoftheCommitteewere:
-EnMahadzirbinAzizan(Chairman)
-MrSooKimWai
-Dato'SeriKalimullahbinMasheerulHassan
-MrLimKianOnn
Sincethefinancialyear-end,MrSooKimWairesignedasaDirectoron6February2008andtheRemunerationCommitteewasreconstitutedasfollows:
-EnMahadzirbinAzizan(Chairman)
-Dato'Ab.HalimbinMohyiddin
-MrLumSingFai
TheCommitteeisresponsibleforrecommendingtotheBoardtheremunerationofexecutiveDirectorsandkeyseniormanagementofficersofECMLFGGroup.Directorsdonotparticipateindiscussionandvotingondecisionsregardingtheirownremuneration.TheaggregateannualDirectors'feesasrecommendedbytheBoardmustbeapprovedbyshareholdersattheAnnualGeneralMeeting.
ECMLFGhasanestablishedframeworktoevaluateperformanceandrewardforexecutiveDirectorsandallemployees.RemunerationpackagesfortheexecutiveDirectorsandemployeesareformulatedtobecompetitive,withemphasisbeingplacedonperformance,whichaimstoattract,motivateandretainalllevelsofstafftomanagetheECMLFGGroup.Fornon-executiveDirectors,thelevelofremunerationwouldcommensuratewiththeexperienceandlevelofresponsibilitiesundertakenbythem.
ThedetailsoftheremunerationoftheDirectorsofECMLFGaresetoutintheauditedfinancialstatementsonpages49&50ofthisAnnualReport.
ECMLibraFinancialGroupBerhadANNUALREPORT200813
corporate governance statementcontinued
C. SHAREHOLDERS
TheBoardplacesemphasisontimelyandequitabledisseminationofinformationtoshareholdersonECMLFGGroup'sperformance.PursuanttotheListingRequirementsofBursaMalaysia,timelyannouncementsaremadetothepublicinregardtotheGroup'scorporateproposals,financialresultsandotherrequisitematters.TheCompany'sAnnualGeneralMeetingservesasaforumfordialoguewithshareholders.AttheAnnualGeneralMeeting,shareholdersareencouragedtoparticipateinthequestionandanswersession.ThestatusofallresolutionsproposedattheAnnualGeneralMeetingissubmittedtoBursaMalaysiaattheendofthemeetingday.
Apartfromcontactsatgeneralmeetings,thereisnoformalprogrammeorscheduleofmeetingswithinvestors,shareholders,stakeholdersandthepublic generally. However, the management has the option of calling for meetings with investors/analysts if it is deemed necessary.Thus far, themanagementisoftheopinionthatthisarrangementhasbeensatisfactorytoallparties.
D. ACCOUNTABILITY AND AUDIT
(i) Financial Reporting
The Board is responsible to present a balanced and comprehensive assessment of the ECMLFG Group's financial position to shareholders bymeansoftheannualandquarterlyreportsandotherpublishedinformation.Inthisregard,theBoardisresponsibleforthepreparationoffinancialstatementsthatpresentafairandbalancedreportofthefinancialstateofaffairsoftheECMLFGGroup.
(ii) Internal Control
TheStatementonInternalControlassetoutonpages13&14ofthisAnnualReportprovidesanoverviewofthestateofinternalcontrolswithintheGroup.
(iii) Relationship with Auditors
The Company, through the Board Audit & Risk Management Committee ("BARMC"), has an appropriate and transparent relationship with theexternalauditors.KeyfeaturesunderlyingtherelationshipoftheBARMCwiththeexternalauditorsareincludedintheBARMCReportassetoutonpage9ofthisAnnualReport.
E. STATEMENT ON INTERNAL CONTROL
Responsibility
The Board is responsible for the Group's system of internal control and for reviewing its adequacy and integrity.The Board recognises that theGroup'ssystemofinternalcontrolisdesignedtomanageandnoteliminatetheriskoffailuretoachievetheGroup'sobjectives.Hence,itcanonlyprovidereasonableandnotabsoluteassuranceagainstmaterialmisstatementofmanagementandfinancialinformationoragainstfinanciallossesandfraud.
14ECMLibraFinancialGroupBerhadANNUALREPORT2008
corporate governance statementcontinued
E. STATEMENT ON INTERNAL CONTROL (continued)
Key Processes
Thereisanon-goingprocessforidentifying,evaluatingandmanagingthesignificantrisksfacedbytheGroupthroughoutthefinancialyear,andthesaidprocessisreviewedbytheBoardandaccordswiththeStatementonInternalControl:GuidanceforDirectorsofPublicListedCompanies.
The Board has appointed the BARMC comprising independent Directors to examine the effectiveness of the Group's risk management policies,processes and infrastructure which are established to manage various types of risks and to ensure an effective internal audit function. This isaccomplishedthroughthereviewoftheworkoftheGroupRiskManagement&ComplianceDepartmentandtheGroupInternalAuditDepartment,which focuses on areas of priority identified through risk assessment and in accordance with the plans approved by the BARMC.The Group's riskmanagementcomprisescreditriskmanagement,marketriskmanagementandoperationalriskmanagement,andthedepartmentisheadedbytheChief Risk Officer.While business/operating units have the primary responsibility for managing specific risks assumed by them, Risk Managementprovidesthecentralresourcefordevelopingtoolsandmethodologiesfortheidentification,assessment,quantification,aggregation,monitoringandcontroloftheriskstakenbytheGroupasawhole.Additionally,theGroupExecutiveCommittee("EXCO")comprisingmembersofseniormanagementandtheBoardmonitorsrisksbyevaluatingandapprovingloans,proprietaryandstrategicinvestmentsandpolicymattersrelatingtoallcreditmattersoftheGroup.
Incarryingoutitsresponsibilities,theBARMCreliesonthesupportofComplianceDepartmentandInternalAuditDepartmentinprovidingassuranceontheadequacyofinternalcontrols.ComplianceDepartmentprovidesBARMCperiodicreportsonconformancewithrelevantregulatorybodiesandstatutoryrequirements,whilstGroupInternalAuditDepartmentprovidesBARMCwithperiodicreportshighlightingonanynon-complianceaswellasrecommendationsandmanagementactionplanstoimprovethesystemofinternalcontrols.
TheframeworkoftheGroup'ssystemofinternalcontrolandkeyproceduresinclude:
-Amanagementstructureexistswithclearlydefinedlinesofresponsibilityandtheappropriatelevelsofdelegation.
-Keyfunctionssuchasfinance,taxation,treasury,humanresourcesandlegalmattersarecontrolledcentrally.
-Themanagementdeterminestheapplicabilityofriskmonitoringandreportingproceduresandisresponsiblefortheidentificationandevaluation ofsignificantrisksapplicabletotheirareasofbusinesstogetherwiththedesignandoperationofsuitableinternalcontrols.
-CleardefinitionsoflimitsofauthorityandresponsibilitieshavebeenapprovedbytheBoardandsubjecttoregularreviewsandenhancements.
-PoliciesandprocedureswithembeddedinternalcontrolsaredocumentedinaseriesofStandardOperationsManuals,whichwillbesubjectedto annualreviewforupdatingofanychangesinoperationalprocessesorregulatoryrequirements.BusinessandSupportunitsintheGroupmust ensurecompliancewiththepoliciesandprocedures.
-Corporatevalues,whichemphasiseonethicalbehaviourandqualityservices,aresetoutintheGroup'sEmployeeHandbook.
Onayearlybasis,allthebusinessunitswithintheGroupdrawuptheirbusinessplansandbudgetsfortheBoard'sapprovalandtheperformanceistrackedonaquarterlybasiswiththeseniormanagementteamwithdetailedexplanationsofmajorvariances.
AnassociatedcompanyhasnotbeendealtwithaspartoftheGroupforpurposesofapplyingthisguidance.However,astheassociatedcompanyoperateswithinahighlyregulatedbusinessenvironmentandthroughperiodicreportingtotheGroup,theBoardbelievesthattheriskmanagementpracticesofthisassociatedcompanyhavebeeneffectivelycarriedoutbyitsownBoardandmanagement.
ECMLibraFinancialGroupBerhadANNUALREPORT200715
directors’ responsibility statement
TheBoardisrequiredbytheListingRequirementsofBursaMalaysiaSecuritiesBerhadtopreparethefinancialstatementsforeachfinancialyearwhichgiveatrueandfairviewofthestateofaffairsoftheGroupandoftheCompanyasattheendofthefinancialyearandoftheresultsandcashflowsfortheyearthenended.TheDirectorsaresatisfiedthatinpreparingthefinancialstatementsoftheGroupforthefinancialyearended31January2008,theGrouphasadopted and applied consistently appropriate accounting policies, supported by reasonable and prudent judgements and estimates.The Directors alsoconsiderthatallapplicableapprovedaccountingstandardsinMalaysiahavebeenfollowedandthefinancialstatementshavebeenpreparedonagoingconcernbasis.
TheDirectorsareresponsibleforensuringthattheCompanymaintainssufficientaccountingrecordsthatdisclosewithreasonableaccuracythefinancialpositionoftheGroupandtheCompany,andwhichenablethemtoensurethatthefinancialstatementscomplywiththeCompaniesAct,1965.
TheDirectorsalsohavegeneralresponsibilityfortakingsuchstepsthatarereasonablyopentothemtosafeguardtheassetsoftheGroupandtheCompany,andtakingreasonablestepsforthepreventionanddetectionoffraudandotherirregularities.
16ECMLibraFinancialGroupBerhadANNUALREPORT2008
chairman’s statement
DearShareholders,
On behalf of the Board of Directors, it is my pleasure to present the Annual Report and audited financial statements for the financial year ended 31January2008.
The Group has undergone a major transformation in the past 12 months, particularly with the granting of an investment bank license to its subsidiary,ECMLibraInvestmentBankBerhadbyBankNegaraMalaysiaandtheSecuritiesCommissiononFebruary6,2008.Tobetterreflectthemorecomprehensiverangeofactivities,thenameoftheholdingcompanywaschangedfromECMLibraAvenueBerhadtoECMLibraFinancialGroupBerhadwitheffectfrom31January2008.
Financial and Business ReviewTheGroupregisteredrecordperformance.Onthebackofa42%improvementinrevenuestoRM205.1millionfromRM144.5millioninthepreviousyear,theGroupregisteredamorethanthree-foldincreaseinnetprofit-fromRM20.2millionthepreviousyeartoRM84.4millionfortheperiodunderreview.
ThehigherrevenuewaslargelyattributedtobetterperformanceoftheGroup'sstockbrokingbusinessgiventhehighertradingvolumeandmarketvaluesonBursaMalaysiaSecuritiesBerhadduringthefirsthalfofyear2007.ThiswascoupledwithrevenuecontributionsfromtheGroup'sequitycapitalmarketandprincipalinvestmentactivities.
Equitymarketsrosesome32%in2007,whiletheMalaysianeconomyregistereda6.3%annualgrowthrate.Thestunningperformancedemonstratedtheresilience,flexibilityandadaptabilityoftheMalaysiancorporateandpublicsectors,whichrosetothechallengedespitetheuncertaintiesintroducedinthelatterhalfof2007bytheU.S.financialandhousingcrisis.
Change in the landscapeWeareinforchallengingtimes.Fearsofaglobaleconomicdownturn,sparkedbythesubprimecrisisintheUnitedStates,arerising.OnthepoliticalfrontinMalaysia,theresultsofthe12thGeneralElectionhavebeendescribedasa"politicaltsunami."Malaysiaisenteringunchartedwatersonboththepoliticalandeconomicfronts.HowweatECMLibranavigatethechoppyseasaheadwilldeterminewhethertheGroupemergesfrom2008notonlyunscathed,butwithevenstrongerresults.
Globalgrowthfor2008hasbeenreviseddownwardsto4.1%from4.8%bytheInternationalMonetaryFund.TheMalaysianeconomyisexpectedtoregisteraslowergrowthof6%fortheyearasweakerconsumerspendingintheUnitedStateswilladverselyaffectournation'smulti-billion-ringgitexportindustry.Private investment will possibly take a back seat this year due to the global economic uncertainties. Public investment is expected to be an importantdrivingforcethisyearinMalaysia,withtheplannedtake-offofanumberofmajorinfrastructureprojects.Politicaluncertainty,followingtheMarch8GeneralElection,however,couldbedevilthesmoothimplementationofsomeoftheseprojects.
Current year prospects
TheattainmentofinvestmentbankstatusplacestheGroupinastrongerpositiontorisetothechallenge.Whilethereisnoroomforcomplacency,Iamconfidentthat themeasureswehaveput inplace,andwhichwewillcontinuetoadjust throughoutthisyear,willhelpusemergestronger fromayearthatmaybefullofunpredictabletwistsandturns.Webelievethatincrisisthereareopportunities,andtheGroup'sinherentstrengthsprovideuswiththeconfidenceandcapabilitytoidentitytheseopportunitiesandturninaperformancethatmaximizesshareholderreturns.
ECMLibraFinancialGroupBerhadANNUALREPORT200817
chairman’s statementcontinued
Wehavesetout2objectivesforthisyear:-
To focus on niche markets Withthefinancialservicesindustrybeingmorecompetitive,theGroupwillworktowardsintroducingvaluedinnovativefinancialproductsandservices thatdifferentiateusfromtherest.This,Ibelieve,willestablishtheGroupasaseriousnicheplayerintheinvestmentbankingbusiness.
To achieve greater efficiency TheGroupwillcontinuetoimproveonitsbusinessmodelandoperatingstructuresoastoachievegreateroptimizationofresourcesandtocreateapool ofoperatingsynergies.
Corporate Social ResponsibilityTheGroupstronglybelievesthateducationisthekeytobreakingthepovertycycleinlife.Tothisend,theGroup,inconjunctionwithECMLibraFoundation,setupbythethreefoundingpartnersoftheGroup,haslargelyconcentratedonactivitiesandassistanceinthefieldofeducationfortheunfortunateandthelessprivilegedchildren.Wehavebuilthostels,classrooms,libraries,schoolhalls,audiovisualrooms,computerlabsandcanteensandassistedinrepairing/upgradinginfrastructuresinschoolsalloverthecountry.Recognizingthateducationshouldnotonlyberestrictedtotheconfinesofbricks&mortarbutthatarathermoreholisticapproachtoeducationisnecessary,wehavesponsoredparticipationofstudentsintheperformingarts,vocational/industrialtrainingandinprogrammesforcharacterbuildingbecausewebelievebuildingandnurturingtheleadershipskills,emotionalneedsaswellastheartisticsideofapersonisequallyimportantasisformaleducation.TertiaryeducationhasbecomeexpensiveandmaybebeyondthemeansofmanyyoungMalaysians.TheFoundationassistsinthisareabyprovidingstudentswithinterest-freeandbond-freestudyloanstoenablethemtofurthertheirstudiesinalocalinstitutionofhigherlearningoftheirchoice.
InNovember2007,ECMLibraGroupreceivedHonorableMentionforOutstandingWorkinEducationforthePrimeMinister'sCorporateSocialResponsibilityinauguralaward.Atotalof316entrieswerereceivedfrom161companiesofwhich85entriesviedfortheEducationCategoryAward.ItwasindeedanhonorfortheGrouptoberecognizedforitseffortsandcontributiontothecommunityinthesphereofeducation,beingovertakenonlybythelargestcorporationinthecountry,Petronas,andsharingthestagewithanothergiant,Maxis.
DividendsTheBoardofDirectorshasrecommendedthepaymentofafinalgrossdividendof3%perordinaryshare,whichwillbepartiallypaidoutunderthesingletiertaxsystemandpartiallyafterdeductionofincometaxof26%.TheproposeddividendissubjecttotheapprovalbytheshareholdersattheforthcomingAnnualGeneralMeetingoftheCompanyandispayableinrespectofallordinarysharesinissue.
AppreciationIwouldliketoexpressourheartfeltgratitudetotheapproximately500employeesworkingin13officesnationwidefortheircommitmentandcontributioninsecuringtheinvestmentbankstatusandachievingtheencouragingfinancialresults.Finally,wewouldliketothankourshareholderswhohavebeensupportingandbelievinginusandwhohavecontinuedtohaveconfidenceinus.
Dato’SeriKalimullahbinMasheerulHassanChairman
12March2008
18ECMLibraFinancialGroupBerhadANNUALREPORT2008
notice of annual general meeting
NOTICE IS HEREBY GIVEN that theThird Annual General Meeting of ECM Libra Financial Group Berhad (formerly known as ECM Libra Avenue Berhad)("Company")willbeheldatAnggerikRoom,4thFloor,HotelEquatorial,JalanSultanIsmail,50250KualaLumpuronThursday,5June2008at10.00a.m.inorder:-
AGENDA
1. toreceivetheauditedfinancialstatementstogetherwiththereportsoftheDirectorsandAuditorsthereonforthefinancialyearended31January2008;
2. to declare a final dividend of 3 sen per share less income tax of 26% for the financial year ended 31 January 2008 to be paid on 30 June 2008 toshareholdersregisteredintheRecordofDepositorson11June2008;
3. toapprovethepaymentofDirectors'feesofRM221,288.00tobedividedamongsttheDirectorsinsuchmannerastheDirectorsmaydetermine;
4. tore-electthefollowingDirectorsretiringpursuanttotheCompany'sArticlesofAssociation:-
i) Dato'SeriKalimullahbinMasheerulHassan; ii) DatukKamarudinbinMdAli;and iii) MrLumSingFai;
5. tore-appointMessrsErnst&YoungasAuditorsoftheCompanyandauthorisetheDirectorstofixtheirremuneration;
AS SPECIAL BUSINESS
Toconsiderandifthoughtfit,passthefollowingordinaryresolutions:-
6. Authority To Directors To Issue Shares
“THATpursuanttoSection132DoftheCompaniesAct,1965,theDirectorsbeandareherebyempoweredtoissuesharesintheCompany,atanytimeanduponsuchtermsandconditionsandforsuchpurposesastheDirectorsmay,intheirabsolutediscretiondeemfit,providedthattheaggregatenumber of shares issued pursuant to this resolution in any one financial year does not exceed 10% of the issued capital of the Company for thetimebeingandtheDirectorsbeandarealsoempoweredtoobtainapprovalforthelistingofandquotationfortheadditionalsharessoissuedonBursaMalaysiaSecuritiesBerhadANDTHATsuchauthorityshallcontinueinforceuntiltheconclusionofthenextAnnualGeneralMeetingoftheCompany";
7. Proposed Renewal Of Authority To Directors For The Purchase Of Own Shares
“THATsubjecttotheCompaniesAct,1965("Act"),rules,regulationsandordersmadepursuanttotheAct,provisionsoftheCompany'sMemorandumandArticlesofAssociationandtheListingRequirementsofBursaMalaysiaSecuritiesBerhad("BursaSecurities")andanyotherrelevantauthority,theDirectorsoftheCompanybeandareherebyauthorisedtomakepurchasesofordinarysharesofRM1.00eachintheCompany'sissuedandpaid-upsharecapitalonBursaSecuritiessubjectfurthertothefollowing:-
(a) themaximumnumberofshareswhichmaybepurchasedand/orheldbytheCompanyshallbeequivalenttotenpercent(10%)oftheissuedand paid-upsharecapitaloftheCompany("Shares")forthetimebeing;
(b) themaximumfundtobeallocatedbytheCompanyforthepurposeofpurchasingtheSharesshallnotexceedtheretainedprofitsand/orthe sharepremiumaccountoftheCompany;and
(c) theauthorityconferredbytheresolutionassetoutinparagraphs(a)and(b)abovewillcommenceuponthepassingofthisresolution,until theconclusionofthenextAnnualGeneralMeetingoftheCompanyortheexpiryoftheperiodwithinwhichthenextAnnualGeneralMeeting isrequiredbylawtobeheldunlessrevokedorvariedbyOrdinaryResolutionoftheshareholdersoftheCompanyingeneralmeetingbutsoas nottoprejudicethecompletionofapurchasemadebeforesuchexpirydate;
ECMLibraFinancialGroupBerhadANNUALREPORT200819
notice of annual general meetingcontinued
ANDTHATtheDirectorsoftheCompanybeandareherebyauthorisedtotakeallsuchstepsasarenecessaryorexpedienttoimplementortoeffectthepurchase(s)oftheShares;
ANDtheDirectorsoftheCompanybeandareherebyauthorisedtodealwithanySharessopurchasedandanyexistingtreasuryshares("SaidShares")inthefollowingmanner:-
(a) canceltheSaidShares;
(b)retaintheSaidSharesastreasuryshares;
(c) retainpartoftheSaidSharesastreasurysharesandcanceltheremainder; (d) distributeallorpartoftheSaidSharesasdividendstoshareholdersand/orresellonBursaSecuritiesand/orcancelallorpartofthem;
orinanyothermannerasmaybeprescribedbytheAct,rules,regulationsandordersmadepursuanttotheActandtheListingRequirementsofBursaSecuritiesandanyotherrelevantauthorityforthetimebeinginforceANDTHATtheauthoritytodealwiththeSaidSharesshallcontinuetobevaliduntilalltheSaidShareshavebeendealtwithbytheDirectorsoftheCompany";
8. toconsideranyotherbusinessofwhichduenoticeshallhavebeengiven.
FURTHER NOTICE IS HEREBY GIVENthatadepositorshallqualifyforentitlementtothefinaldividendonlyinrespectof:-(a) sharestransferredintodepositor'ssecuritiesaccountbefore4.00p.m.on11June2008inrespectofordinarytransfers;and(b) sharesboughtonBursaMalaysiaSecuritiesBerhadonacumentitlementbasisaccordingtotheRulesoftheBursaMalaysiaSecuritiesBerhad.
ByOrderoftheBoard
WONGSEONGCHOSecretary
KualaLumpur14May2008
NOTES:
1. Amemberentitledtoattendandvoteattheabovemeetingisentitledtoappointnotmorethantwo(2)proxiestoattendandvoteinhisstead. AproxymaybutneednotbeamemberoftheCompanyandtheprovisionsofSection149(1)(a)and(b)oftheCompaniesAct,1965shallnotapplytotheCompany.Amemberwhoisanauthorizednomineemayappointatleastone(1)proxyinrespectofeachsecuritiesaccountitholds.
2. TheFormofProxymustbedepositedattheRegisteredOfficeoftheCompanyat8AFloor,WismaGenting,JalanSultanIsmail,50250KualaLumpurnotlessthan48hoursbeforethetimeanddateofthemeetingoradjournedmeeting.
Explanatory note on special business
1. OrdinaryResolutiononauthoritytoDirectorstoissueshares
Theordinaryresolution,ifpassed,willgiveauthoritytotheDirectorsoftheCompanytoissuesharesoftheCompanyforsuchpurposesastheDirectorsconsiderwouldbeintheinterestoftheCompany.Thisauthority,unlessrevokedorvariedatageneralmeeting,willexpireattheconclusionofthenextAnnualGeneralMeetingoftheCompany.
2. OrdinaryResolutiononProposedRenewalofShareBuy-BackAuthority
The ordinary resolution, if passed, will give authority to the Directors of the Company to make purchases of shares in the Company through BursaSecuritiesuptotenpercentoftheissuedandpaid-upsharecapitaloftheCompany.Thisauthority,unlessrevokedorvariedatageneralmeeting,willexpireattheconclusionofthenextAnnualGeneralMeetingoftheCompany.
20ECMLibraFinancialGroupBerhadANNUALREPORT2008
statement accompanyingnotice of annual general meeting(PursuanttoParagraph8.28(2)oftheListingRequirementsoftheBursaMalaysiaSecuritiesBerhad)
1. Directors who are standing for re-election at the Third Annual General Meeting of the Company pursuant to the Company's Articles of Association
PursuanttoArticle103oftheCompany'sArticlesofAssociation
Dato'SeriKalimullahbinMasheerulHassan DatukKamarudinbinMdAli
PursuanttoArticle110oftheCompany'sArticlesofAssociation MrLumSingFai
2. Details of attendance of Directors at Board Meetings
Therewereseven(7)BoardMeetingsheldduringthefinancialyearended31January2008.DetailsofattendanceoftheDirectorsaresetout intheDirectors'Profileappearingonpages4to7andCorporateGovernanceStatementonpage10oftheAnnualReport.
3. Place, Date and Time of Third Annual General Meeting
TheThirdAnnualGeneralMeetingoftheCompanywillbeheldatAnggerikRoom,4thFloor,HotelEquatorial,JalanSultanIsmail,50250KualaLumpuronThursday,5June2008at10.00a.m.
4. Further details of individuals who are standing for re-election as Directors
(i) Directors'profileonpages4to7.
(ii) DetailsofinterestinthesecuritiesoftheCompany,ifany,aredisclosedinDirectors'Interestsonpage23.
22ECMLibraFinancialGroupBerhadANNUALREPORT2008
directors’ report
ThedirectorshavepleasureinpresentingtheirreporttogetherwiththeauditedfinancialstatementsoftheGroupandoftheCompanyforthefinancialyearended31January2008.
Change Of NameThenameoftheCompanywaschangedfromECMLibraAvenueBerhadtoECMLibraFinancialGroupBerhad("ECMLFG"or"Company")witheffectfrom31January2008.
Principal ActivitiesTheprincipalactivitiesoftheCompanyareinvestmentholdingandprovisionofmanagementservices.TheprincipalactivitiesofthesubsidiarycompaniesaresetoutinNote14tothefinancialstatements.
Therehavebeennosignificantchangesinthenatureoftheprincipalactivitiesduringthefinancialyear.
Significant EventsSignificanteventsaredisclosedinNote37tothefinancialstatements.
Results Group Company RM ‘000 RM ‘000
Netprofitfortheyear 84,387 49,585
Therewerenomaterialtransferstoorfromreservesorprovisionsduringthefinancialyearotherthanasdisclosedinthefinancialstatements.
DividendsAfinaldividendinrespectofthefinancialyearended31January2007of1senless27%taxon830,901,953ordinaryshares,amountingtoRM6,066,000waspaidon13July2007.
At the forthcomingAnnualGeneralMeeting,a finaldividendof3senperordinaryshareofRM1eachon830,901,953ordinaryshares, in respectof thefinancialyearended31January2008,amountingtoanetdividendpayableofapproximatelyRM20,004,000willbeproposedforshareholders'approval.As at 31 January 2008, the Company has sufficient credit in the section 108 balance to pay franked dividends up to RM14,011,000 and the balance ofRM5,993,000willbedistributedunderthesingletiersystem.Thefinancialstatementsforthecurrentfinancialyeardonotreflectthisproposeddividend.Suchdividend, ifapprovedbytheshareholders,willbeaccountedfor inequityasanappropriationof retainedearnings inthe financialyearending31January2009.
ECMLibraFinancialGroupBerhadANNUALREPORT200823
directors’ reportcontinued
DirectorsThedirectorsoftheCompanyinofficesincethedateofthelastreportandatthedateofthisreportare:
Dato’SeriKalimullahbinMasheerulHassan Dato’AbHalimbinMohyiddin MrLimKianOnn DatukKamarudinbinMdAli Dato’OthmanbinAbdullah EnMahadzirbinAzizan MrSooKimWai(resignedon6February2008) MrLumSingFai(resignedasalternatedirectortoMrSooKimWaion6February2008andre-appointedasdirectoronthesameday) PnEshahbintiMeorSulaiman(resignedon1March2007) EnIbrahimMahaludinbinPuteh(resignedon1March2007)
InaccordancewithArticle103oftheArticlesofAssociationoftheCompany,Dato’SeriKalimullahbinMasheerulHassanandDatukKamarudinbinMdAliwillretireattheforthcomingAnnualGeneralMeetingand,beingeligible,offerthemselvesforre-election.
InaccordancewithArticle110oftheArticlesofAssociationoftheCompany,MrLumSingFaiwillretireattheforthcomingAnnualGeneralMeetingand,beingeligible,offershimselfforre-election.
Directors’ InterestsTheDirectorsholdingofficeattheendofthefinancialyearwhohadbeneficial interests intheordinaryshares/options*oftheCompanyand/orrelatedcorporationsduringthefinancialyearended31January2008,asrecordedintheRegisterofDirectors’ShareholdingskeptbytheCompanyunderSection134oftheCompaniesAct,1965,areasfollows: Shareholdings in which Directors have interests Number of ordinary shares / options *
As at As at 1.2.2007 Acquired Sold 31.1.2008
Direct interest in ECM Libra Financial Group Berhad ("ECMLFG")
Dato’SeriKalimullahbinMasheerulHassan 40,000,000 - 40,000,000 - - 29,000,000* - 29,000,000*Dato’AbHalimbinMohyiddin - 200,000* - 200,000*MrLimKianOnn 92,706,000 - 16,250,000 76,456,000 - 29,000,000* - 29,000,000*DatukKamarudinbinMdAli - 200,000* - 200,000* EnMahadzirbinAzizan - 200,000* - 200,000* Dato’OthmanbinAbdullah - 200,000* - 200,000*
Indirect Interest in ECMLFG
Dato’SeriKalimullahbinMasheerulHassan - 40,000,000 5,000,000 35,000,000MrLimKianOnn 7,000,000 - 7,000,000 -
*TheoptionsoverordinarysharesweregrantedpursuanttotheCompany'sEmployeesShareOptionScheme("ESOS").
24ECMLibraFinancialGroupBerhadANNUALREPORT2008
directors’ reportcontinued
Directors’ BenefitsSincetheendofthepreviousfinancialyear,noneofthedirectorsoftheCompanyhasreceivedorbecomeentitledtoreceiveabenefit(otherthanabenefitincludedintheaggregateamountofemolumentsreceivedordueandreceivablebythedirectorsshowninthefinancialstatementsorthefixedsalaryofafulltimeemployeeoftheCompanyorofarelatedcompany)byreasonofacontractmadebytheCompanyorarelatedcorporationwiththedirectororwithafirmofwhichthedirectorisamember,orwithacompanyinwhichthedirectorhasasubstantialfinancialinterestexceptforMrLimKianOnnwhomaybedeemedtoderiveabenefitbyvirtueofthosetransactions,contractsandagreementsfortheacquisitionand/ordisposalofstocksandsharesand/ortheprovisionofservicesincludingbutnotlimitedtomanagementandconsultancyservices,tenanciesand/ortheprovisionoftreasuryfunctionsandtheconductofnormalstockbrokingbusinessbetweentheCompanyanditsrelatedcorporationsorcorporationsinwhichMrLimKianOnnisdeemedtohaveinterests.
TherewerenoarrangementsduringandattheendofthefinancialyearwhichhadtheobjectofenablingthedirectorsoftheCompanytoacquirebenefitsbymeansoftheacquisitionofsharesin,ordebenturesoftheCompanyoranyotherbodycorporateotherthantheshareoptionsgrantedpursuanttotheEmployeesShareOptionScheme.
Employees Share Option SchemeTheCompany’sEmployeesShareOptionScheme(“ESOS”)isgovernedbytheby-lawsapprovedbytheshareholdersatanExtraordinaryGeneralMeetingheldon1December2005.TheESOSwasimplementedon4January2008andwillbeinforceforaperiodoften(10)years.
TheCompanyhasbeengrantedexemptionbytheCompaniesCommissionofMalaysiafromhavingtodisclosethenamesofoptionholdersgrantedlessthan2,000,000optionseachduringtheyearpursuanttothescheme.Thenamesofoptionholders,otherthandirectors,whohadbeengrantedoptionsof2,000,000ormoreasattheendofthefinancialyearareasfollows: No.ofoptions '000 T.Jeyaratnam 2,000 FranklinTanKokPin 2,000 NgHoeGuan 2,000 WongSeongCho 2,000
ThenamesofdirectorswhohadbeengrantedoptionsaredisclosedinthesectionofDirectors'Interestinthisreport.
ThemainfeaturesoftheESOSare,interalia,asfollows:-
(i) Eligibleemployeesarethoseemployeesof theGroupwhohadbeen inservice forat leastoneyearonthedateofoffer.Themaximumallowable allotmentsforthedirectorshadbeenapprovedbytheshareholdersoftheCompanyinageneralmeeting.TheBoardofDirectorsmayfromtimeto timeatitsdiscretionselectandidentifysuitableeligibleemployeestobeofferedoptions.
(ii) The aggregate number of shares to be issued under the ESOS shall not exceed 15% of the total issued and paid-up ordinary share capital of the Companyforthetimebeing.
(iii) TheESOSshallbeinforceforaperiodof10yearsfrom4January2008.
(iv) Theoptionpriceshallnotbeatadiscountofmorethantenpercent(10%)(orsuchdiscountastherelevantauthoritiesshallpermit)fromthe5-day weightedaveragemarketpriceofthesharesoftheCompanyprecedingthedateofofferandshallinnoeventbelessthantheparvalueoftheshares oftheCompanyofRM1.00.
(v) Anoptionholdermay,inaparticularyear,exerciseuptosuchmaximumnumberofsharesintheoptioncertificateasdeterminedbytheBoardof Directorsorasspecifiedintheoptioncertificate.
Asat31January2008,therewerenoissuanceofnewsharesastherewerenoexerciseoftheESOSoptionsgranted.
ECMLibraFinancialGroupBerhadANNUALREPORT200825
directors’ reportcontinued
Other Statutory Information
(I) As at the end of the financial year
(a) BeforetheincomestatementsandbalancesheetsoftheGroupandtheCompanyweremadeout,thedirectorstookreasonablesteps:
(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and financing and the making of provision fordoubtfuldebtsandfinancingandhadsatisfiedthemselvesthatallknownbaddebtsandfinancinghadbeenwrittenoffandthatadequateprovisionhadbeenmadefordoubtfuldebtsandfinancing;and
(ii) toensurethatanycurrentassets,otherthandebtsandfinancing,whichwereunlikelytorealisetheirbookvaluesasshownintheaccountingrecordsintheordinarycourseofbusinesshadbeenwrittendowntotheirestimatedrealisablevalues.
(b) Intheopinionofdirectors,theresultoftheoperationsoftheGroupandofCompanyduringthefinancialyearwerenotsubstantiallyaffectedby anyitem,transactionoreventofamaterialandunusualnature.
(II) From the end of the financial year to the date of this report
(a) Thedirectorsarenotawareofanycircumstances:
(i) whichwouldrendertheamountwrittenoff forbaddebtsandfinancingortheamountof theprovisionfordoubtfuldebtsandfinancinginadequatetoanymaterialextent;
(ii) whichwouldrenderthevaluesattributedtocurrentassetsinthefinancialstatementsmisleading;and
(iii) whichhadarisenwhichwouldrenderadherencetotheexistingmethodofvaluationofassetsorliabilitiesoftheGroupandtheCompanymisleadingorinappropriate.
(b) Intheopinionofthedirectors:
(i) theresultsoftheoperationsoftheGroupandtheCompanyforthefinancialyearended31January2008arenotlikelytobesubstantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnaturewhichhadarisenintheintervalbetweentheendofthefinancialyearandthedateofthisreport;and
(ii) nocontingentorotherliabilityhasbecomeenforceable,orislikelytobecomeenforceable,withintheperiodoftwelvemonthsaftertheendofthefinancialyearwhichwillormayaffecttheabilityoftheGroupandtheCompanytomeettheirobligationsasandwhentheyfalldue.
(III) As at the date of this report
(a) TherearenochargesontheassetsoftheGroupandtheCompanywhichhadarisensincetheendofthefinancialyeartosecuretheliabilitiesofanyotherperson.
(b) Therearenocontingentliabilitieswhichhadarisensincetheendofthefinancialyear.
(c) Thedirectorsarenotawareofanycircumstancesnototherwisedealtwithinthereportorfinancialstatementswhichwouldrenderanyamountstatedinthefinancialstatementsmisleading.
26ECMLibraFinancialGroupBerhadANNUALREPORT2008
directors’ reportcontinued
AuditorsTheauditors,Ernst&Young,haveexpressedtheirwillingnesstocontinueinoffice.
SignedonbehalfoftheBoardinaccordancewitharesolutionofthedirectorsdated12March2008.
Dato’SeriKalimullahbinMasheerulHassan LimKianOnn
ECMLibraFinancialGroupBerhadANNUALREPORT200827
statutory declaration(PursuanttoSection169(16)oftheCompaniesAct,1965)
I,LauYewSun,beingtheofficerprimarilyresponsibleforthefinancialmanagementofECMLibraFinancialGroupBerhad(formerlyknownasECMLibraAvenueBerhad),dosolemnlyandsincerelydeclarethattheaccompanyingfinancialstatementssetoutonpage29to82areinmyopinioncorrect,andImakethissolemndeclarationconscientiouslybelievingthesametobetrueandbyvirtueoftheprovisionsoftheStatutoryDeclarationsAct,1960.
Subscribedandsolemnlydeclaredby theabovenamedLauYewSunat KualaLumpurintheFederalTerritory on12March2008 LauYewSun
Beforeme,
SohAhKau CommissionerforOaths 12March2008
statement by directors(PursuanttoSection169(15)oftheCompaniesAct,1965)
We,Dato’SeriKalimullahbinMasheerulHassanandLimKianOnn,beingtwoofthedirectorsofECMLibraFinancialGroupBerhad(formerlyknownasECMLibraAvenueBerhad),doherebystatethat,intheopinionofthedirectors,theaccompanyingfinancialstatementssetoutonpages29to82aredrawnupinaccordancewiththeprovisionsoftheCompaniesAct,1965andapplicableFinancialReportingStandardsinMalaysiasoastogiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasat31January2008andofitsresultsanditscashflowsfortheyearthenended.
SignedonbehalfoftheBoardinaccordancewitharesolutionofthedirectorsdated12March2008.
Dato’SeriKalimullahbinMasheerulHassan LimKianOnn
28ECMLibraFinancialGroupBerhadANNUALREPORT2008
auditors’ report
REPORT OF THE AUDITORS TO THE MEMBERS OF ECM LIBRA FINANCIAL GROUP BERHAD(formerlyknownasECMLibraAvenueBerhad)(IncorporatedinMalaysia)
Wehaveauditedthefinancialstatementssetoutonpages29to82.ThesefinancialstatementsaretheresponsibilityoftheCompany'sdirectors.
It isour responsibility to forman independentopinion,basedonouraudit,on the financial statementsandto reportouropiniontoyou,asabody, inaccordancewithSection174oftheCompaniesAct,1965andfornootherpurpose.Wedonotassumeresponsibilitytoanyotherpersonforthecontentofthisreport.
Weconductedouraudit inaccordancewithapplicableApprovedStandardsonAuditing inMalaysia.Thosestandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatement.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements.Anauditalsoincludesassessingtheaccountingprinciplesusedandsignificantestimatesmadebythedirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.Webelievethatourauditprovidesareasonablebasisforouropinion.
Inouropinion:
(a) the financial statements have been properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable FinancialReportingStandardsinMalaysiasoastogiveatrueandfairviewof:
(i) the financialpositionof theGroupandof theCompanyasat31January2008andof the resultsandthecash flowsof theGroupandof theCompanyfortheyearthenended;and
(ii) themattersrequiredbySection169oftheCompaniesAct,1965tobedealtwithinthefinancialstatements;and
(b) theaccountingandotherrecordsandtheregistersrequiredbytheActtobekeptbytheCompanyandbyitssubsidiariesofwhichwehaveactedasauditorshavebeenproperlykeptinaccordancewiththeprovisionsoftheAct.
Wehaveconsideredthefinancialstatementsandtheauditors'reportsthereonofthesubsidiariesofwhichwehavenotactedasauditors,asindicatedinNote14tothefinancialstatements,beingfinancialstatementsthathavebeenincludedintheconsolidatedfinancialstatements.
WearesatisfiedthatthefinancialstatementsofthesubsidiariesthathavebeenconsolidatedwiththefinancialstatementsoftheCompanyareinformandcontentappropriateandproperforthepurposesofthepreparationoftheconsolidatedfinancialstatementsandwehavereceivedsatisfactoryinformationandexplanationsrequiredbyusforthosepurposes.
Theauditors’reportsonthefinancialstatementsofthesubsidiarieswerenotsubjecttoanyqualificationmaterialtotheconsolidatedfinancialstatementsanddidnotincludeanycommentrequiredtobemadeunderSection174(3)oftheAct.
Ernst&Young GloriaGohEweGimAF:0039 No.1685/04/09(J)CharteredAccountants Partner
KualaLumpur,Malaysia 12March2008
ECMLibraFinancialGroupBerhadANNUALREPORT200829
income statementsfortheyearended31Jan2008
Group Company
Note 2008 2007 2008 2007 RM’000 RM’000 RM’000 RM’000
Revenue 3 205,052 144,512 59,447 9,685
Directcosts (44,990) (29,747) (100) -
Netrevenue 160,062 114,765 59,347 9,685
Otheroperatingincome 7,140 5,416 - -
Administrativeexpenses (12,506) (8,241) (1,020) (423)
Otheroperatingexpenses (80,936) (62,948) (4,641) (237)
Operatingprofit 4 73,760 48,992 53,686 9,025
(Loss)/gainondisposalofinvestments 5 (1,184) 2,747 499 -
Writebackof/(allowancefor)impairmentlossoninvestments 6 9,211 (18,642) - -
Rationalisationexpenses 7 - (17,369) - -
Shareofprofitsofassociatedcompanies 3,255 6,074 - -
Financecosts 8 (2,399) (3,450) (38) -
Profit before taxation 82,643 18,352 54,147 9,025
Incometaxexpense 9 1,744 1,806 (4,562) (2,713)
Net profit for the year 84,387 20,158 49,585 6,312
Earnings per ordinary share (sen) 10 - Basic / fully diluted 10.16 2.59
Theaccompanyingnotesformanintegralpartofthefinancialstatements.
30ECMLibraFinancialGroupBerhadANNUALREPORT2008
balance sheetsasat31Jan2008
Group Company
Note 2008 2007 2008 2007 RM’000 RM’000 RM’000 RM’000
ASSETS
Non-current Assets
Property,plantandequipment 11 54,509 57,988 41,227 -
Investmentproperties 12 - 1,020 - -
Intangibleassets 13 284,500 232,000 - -
Investmentinsubsidiarycompanies 14 - - 887,922 777,992
Investmentinassociatedcompanies 15 43,280 46,389 - 3,918
Otherinvestments 16 12,304 14,019 - -
Deferredtaxassets 17 10,000 5,000 - -
404,593 356,416 929,149 781,910
Current Assets
Inventories 18 89 1,016 - -
Marketablesecurities 19 164,095 207,670 - -
Tradereceivables 20 550,845 1,027,865 - -
Loanreceivables 21 25,352 15,284 - -
Otherreceivables,depositandprepayments 22 19,423 32,632 304 19
Amountowingbysubsidiarycompanies 23 - - 60,070 125,090
Depositswithlicensedfinancialinstitutions 24 150,432 107,223 - 10,720
Cashandbankbalances 25 219,840 172,747 25 123
1,130,076 1,564,437 60,399 135,952
TOTAL ASSETS 1,534,669 1,920,853 989,548 917,862
Theaccompanyingnotesformanintegralpartofthefinancialstatements.
ECMLibraFinancialGroupBerhadANNUALREPORT200831
balance sheetscontinuedasat31Jan2008
Group Company
Note 2008 2007 2008 2007 RM’000 RM’000 RM’000 RM’000
EQUITY AND LIABILITIES
Equity attributable to equity holders of the Company
Sharecapital 26 830,902 830,902 830,902 830,902
Reserves 27 106,121 30,396 51,324 6,310
Totalequity 937,023 861,298 882,226 837,212
Non-Current Liabilities
Hirepurchasepayable 444 - 444 -
Deferredtaxliabilities 17 168 433 - -
612 433 444 -
Current Liabilities
Tradepayables 28 521,290 872,907 - -
Otherpayablesandaccruedexpenses 29 74,754 84,697 4,036 962
Amountowingtosubsidiarycompanies 23 - - 102,799 79,308
Shorttermborrowings 30 - 100,000 - -
Taxliabilities 990 1,518 43 380
597,034 1,059,122 106,878 80,650
Totalliabilities 597,646 1,059,555 107,322 80,650
TOTAL EQUITY AND LIABILITIES 1,534,669 1,920,853 989,548 917,862
Theaccompanyingnotesformanintegralpartofthefinancialstatements.
32ECMLibraFinancialGroupBerhadANNUALREPORT2008
statements of changes in equityfortheyearended31Jan2008
<------------ Non-Distributable ------------> <----- Distributable ------>
Foreign Currency Equity Share Merger Translation Compensation General RetainedGroup Capital Reserve Reserve Reserve Reserve Profit Total Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 At1February2007 830,902 26,561 (2,047) - 159 5,723 861,298
Foreigncurrencytranslation - - (4,671) - - - (4,671)
Arisingfromshareoptiongrantedduringtheyear 26 - - - 2,075 - - 2,075
Netprofitfortheyear - - - - - 84,387 84,387
Dividendspaid 32 - - - - - (6,066) (6,066)
At 31 January 2008 830,902 26,561 (6,718) 2,075 159 84,044 937,023
<------------ Non-Distributable -------------> <---------------- Distributable -----------------> Foreign Retained
Currency Profit/ Share Share Merger Translation Capital General (AccumulatedGroup Capital Premium Reserve Reserve Reserve Reserve Loss) Total Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 At1February2006 703,027 152,022 49,551 - 1,000 159 (184,705) 721,054
Sharecapitalreductionpursuantto adistributionofassets-in-specie (314,125) - - - - - - (314,125)
Capitalcancellationexercise undertakenbyAvenueCapital ResourcesBerhad("ACRB") - (152,022) (102,000) - - - 254,022 -
Disposalofsubsidiaries - - 79,010 - (1,000) - (78,140) (130)
Foreigncurrencytranslation - - - (2,047) - - - (2,047)
Sharesissuedpursuanttothe acquisitionofsubsidiaries 442,000 - - - - - - 442,000
Netprofitfortheyear - - - - - - 20,158 20,158
Dividendspaid 32 - - - - - - (5,612) (5,612)
At 31 January 2007 830,902 - 26,561 (2,047) - 159 5,723 861,298
Theaccompanyingnotesformanintegralpartofthefinancialstatements.
ECMLibraFinancialGroupBerhadANNUALREPORT200833
statements of changes in equitycontinuedfortheyearended31Jan2008
Non- Distributable Equity Distributable Share Compensation RetainedCompany Capital Reserve Profit Total Note RM’000 RM’000 RM’000 RM’000 At1February2007 830,902 - 6,310 837,212
Arisingfromshareoptionsgrantedduringtheyear 26 - 1,495 - 1,495
Netprofitfortheyear - - 49,585 49,585
Dividendspaid 32 - - (6,066) (6,066)
At 31 January 2008 830,902 1,495 49,829 882,226
Company
At1February2006 * - - *
SharesissuedtoshareholdersofACRBpursuanttotheACRBreorganisationexercise 849,128 - (2) 849,126
CapitalcancelledpursuanttoACRBreorganisationexercise (146,101) - - (146,101)
Sharecapitalreductionpursuanttoadistributionofassets-in-specie (314,125) - - (314,125)
Sharesissuedpursuanttotheacquisitionofsubsidiaries 442,000 - - 442,000
Netprofitfortheyear - - 6,312 6,312
At 31 January 2007 830,902 - 6,310 837,212
*RepresentsRM2.00.
Theaccompanyingnotesformanintegralpartofthefinancialstatements.
34ECMLibraFinancialGroupBerhadANNUALREPORT2008
cash flow statementfortheyearended31Jan2008
Group Company
2008 2007 2008 2007 RM’000 RM’000 RM’000 RM’000
CASH FLOW FROM OPERATING ACTIVITIESProfitbeforetaxation 82,643 18,352 54,147 9,025
Adjustmentsfor:
(Writebackof )/allowanceforimpairmentlossoninvestments (9,211) 18,642 - -
Depreciationofproperty,plantandequipment 6,214 6,330 372 -
Depreciationofinvestmentproperties 12 21 - -
Exchangetranslationgain (1,610) (1,168) - -
Financecost 2,399 3,450 38 -
Property,plantandequipmentwrittenoff 318 5,637 - -
Shareofresultsofassociatedcompanies (3,255) (6,074) - -
Gain/(loss)ondisposalof:
-marketablesecurities (21,861) (13,780) - -
-investments 1,184 (2,747) (499) -
Dividendincome (612) (1,167) (57,244) (8,333)
CostarisingfromEmployeesShareOptionScheme("ESOS") 2,075 - 1,495 -
Allowancefordoubtfuldebts 540 1,818 - -
Lossondisposalofproperty,plantandequipment 178 97 - -
Operatingprofit/(loss)beforeworkingcapitalchanges 59,014 29,411 (1,691) 692
(Increase)/decreasein:
Inventories 927 326 - -
Marketablesecurities 71,847 (104,475) - -
Tradeandotherreceivables,depositsandprepayments 468,715 (641,347) (105) (18)
Depositsandmoneyheldintrust/pledged (108,661) (15,130) - -
(Decrease)/increasein:
Tradeandotherpayables,andaccruedexpenses (361,560) 590,204 3,518 4,558
Balancecarriedforward 130,282 (141,011) 1,722 5,232
Theaccompanyingnotesformanintegralpartofthefinancialstatements.
ECMLibraFinancialGroupBerhadANNUALREPORT200835
cash flow statement continuedfortheyearended31Jan2008
Group Company
2008 2007 2008 2007 RM’000 RM’000 RM’000 RM’000
CASH FLOW FROM OPERATING ACTIVITIES (continued)Balancebroughtforward 130,282 (141,011) 1,722 5,232
Amountowingby/tosubsidiarycompanies - - 88,511 (389)
Cashgeneratedfrom/(usedin)operations 130,282 (141,011) 90,233 4,843
Taxrecovered 1,468 - - -
Taxpaid (4,166) (2,087) (464) -
Netcashgeneratedfrom/(usedin)operatingactivities 127,584 (143,098) 89,769 4,843
CASH FLOWS FROM INVESTING ACTIVITIES
Dividendreceived 612 1,009 52,629 6,000
Purchaseofproperty,plantandequipment (3,633) (3,766) (41,599) -
PaymenttoBankNegaraMalaysiaformerchantbanklicence (42,500) (10,000) - -
Netcashinflowfromacquisitionofsubsidiarycompanies - 103,263 - -
Capitalinjectiontoasubsidiarycompany - - (109,930) -
Proceedsfromdisposalof: -subsidiarycompany - (255) - -
-associatedcompany 4,417 71,424 4,417 -
-otherinvestments 1,901 - - -
-property,plantandequipment 402 1,871 - -
-investmentproperty 1,497 - - -
Netcash(usedin)/generatedfrominvestingactivities (37,304) 163,546 (94,483) 6,000
Theaccompanyingnotesformanintegralpartofthefinancialstatements.
36ECMLibraFinancialGroupBerhadANNUALREPORT2008
Group Company
2008 2007 2008 2007 RM’000 RM’000 RM’000 RM’000
CASH FLOWS FROM FINANCING ACTIVITIES Shorttermborrowings(repaid)/drawndown (100,000) 10,000 - -
Dividendspaid (6,066) (5,612) (6,066) -
Interestpaid (2,399) (3,450) (38) -
Netcash(usedin)/generatedfromfinancingactivities (108,465) 938 (6,104) -
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (18,185) 21,386 (10,818) 10,843
EFFECTS OF FOREIGN EXCHANGE DIFFERENCES (174) 500 - -
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 167,473 145,587 10,843 -
CASH AND CASH EQUIVALENTS AT END OF YEAR (Note 31) 149,114 167,473 25 10,843
cash flow statement continuedfortheyearended31Jan2008
Theaccompanyingnotesformanintegralpartofthefinancialstatements.
ECMLibraFinancialGroupBerhadANNUALREPORT200837
notes to the financial statements
1. CORPORATE INFORMATION TheCompanyisapubliclimitedcompanyincorporatedinMalaysiaandlistedontheMainBoardofBursaMalaysiaSecuritiesBerhad("BursaMalaysia").
TheprincipalplaceofbusinessoftheCompanyislocatedat8AFloor,WismaGenting,JalanSultanIsmail,50250KualaLumpur.
The principal activities of the Company are investment holding and provision of management services. The principal activities of the subsidiarycompaniesaresetoutinNote14.
Therehavebeennosignificantchangesinthenatureoftheprincipalactivitiesduringthefinancialyear.
ThefinancialstatementswereauthorisedforissuebytheBoardofDirectorsinaccordancewitharesolutionofthedirectorsdated12March2008.
2. SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Preparation
ThefinancialstatementsoftheGroupandoftheCompanyhavebeenpreparedonahistoricalcostbasisandcomplywiththeprovisionsoftheCompaniesAct,1965andapplicableFinancialReportingStandards("FRSs")inMalaysia.
TheaccountingpoliciesadoptedareconsistentwiththoseofthepreviousyearexceptthattheGrouphasadoptedthoseFRSsandamendmentstoFRSsissuedbyMalaysianAccountingStandardsBoard("MASB")thatareeffectiveforfinancialperiodbeginningonorafter1October2006asdescribedinNote2(b)(i).
ECMLibraInvestmentBankBerhad(formerlyknownasECMLibraAvenueSecuritiesBerhad)("ECMLIB")hadreceivedapprovalfromBankNegaraMalaysia("BNM")tocomplywiththerequirementsoftheRevisedGuidelinesonFinancialReportingforLicensedInstitutions("BNM/GP8")notlaterthanoneyearfromthedateofinceptionofitsinvestmentbankstatus.TheGroupandECMLIBhasnotadoptedtherequirementsofBNM/GP8forthecurrentfinancialyearended31January2008.
(b) Changes in Accounting Policies and Effects Arising from Adoption of New and Revised FRSs
(i) On1February2007,theGroupandtheCompanyadoptedFRS117-LeasesandFRS124-RelatedPartyTransactionswhicharemandatoryfor financialperiodsbeginningonorafter1October2006.
TheadoptionofFRS117didnotresultinanysignificantchangesinaccountingpoliciesoftheGroup.
TheeffectsofthechangesinaccountingpoliciesresultingfromtheadoptionofFRS124areasfollows:
(i) Removal of the exemption for the disclosure of related party transactions in the Company's financial statements in respect of transactionswithsubsidiaries.
(ii) Disclosureofthecompensationofkeymanagementpersonnel,asshowninNote34(b).
The MASBhasalso issued the following FRSsandAmendment toFRSswhichwillbeeffective forannualperiodsbeginningonorafter 1 January2007.TheseFRSsandAmendmentsare,however,notapplicabletotheGrouportheCompany.
FRS6:ExplorationforandEvaluationofMineralResources
AmendmenttoFRS1192004:EmployeeBenefits-ActuarialGainsandLosses,GroupPlansandDisclosures
38ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
(b) Changes in Accounting Policies and Effects Arising from Adoption of New and Revised FRSs (continued)
(ii) Standards and Interpretations Issued but Not Yet Effective
Atthedateofauthorisationofthesefinancialstatements,thefollowingnewandrevisedFRSs,AmendmenttoFRSsandInterpretationswere issuedbutnotyeteffectiveandhavenotbeenappliedbytheGroupandtheCompany:
Effective for financial periods beginning FRSs, Amendment to FRSs and Interpretations on or after
FRS107:CashFlowStatements 1July2007
FRS111:ConstructionContracts 1July2007
FRS112:IncomeTaxes 1July2007
FRS118:Revenue 1July2007
FRS120:AccountingforGovernmentGrantsandDisclosureofGovernmentAssistance 1July2007
FRS126:AccountingandReportingbyRetirementBenefitPlans 1July2007
FRS129:FinancialReportinginHyperinflationaryEconomies 1July2007
FRS134:InterimFinancialReporting 1July2007
FRS137:Provision,ContingentLiabilitiesandContingentAssets 1July2007
AmendmenttoFRS121:TheEffectsofChangesinForeignExchangeRates–NetInvestmentinaForeignOperation 1July2007
ICInterpretation1:ChangesinExistingDecommissioning,RestorationandSimilarLiabilities 1July2007
ICInterpretation2:Members’SharesinCo-operativeEntitiesandSimilarInstruments 1July2007
ICInterpretation5:RightstoInterestsarisingfromDecommissioning,RestorationandEnvironmental RehabilitationFunds 1July2007
ICInterpretation6:LiabilitiesarisingfromParticipatinginaSpecificMarket–WasteElectricaland ElectronicEquipment 1July2007
ICInterpretation7:ApplyingtheRestatementApproachunderFRS1292004–FinancialReportin HyperinflationaryEconomies 1July2007
ICInterpretation8:ScopeofFRS2 1July2007
FRS139:FinancialInstruments:RecognitionandMeasurement Deferred
TheabovenewandrevisedFRSs,AmendmenttoFRSsandInterpretationswiththeexceptionofFRS139areexpectedtohavenosignificant impactonthefinancialstatementsoftheGroupandtheCompanyupontheirinitialapplication.TheGroupandtheCompanyareexempted fromdisclosingthepossibleimpact,ifany,tothefinancialstatementsupontheinitialapplicationofFRS139.
ECMLibraFinancialGroupBerhadANNUALREPORT200839
notes to the financial statementscontinued
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
(c) BNM 'Garisan Panduan' 8 ("BNM/GP8") not yet adopted
TheGrouphasnotyetadoptedBNM/GP8forthecurrentfinancialyear,asapprovedbyBNM.TheadoptionofBNM/GPinthefinancialyearending 31January2009willresultinthereclassificationofmarketablesecuritiestosecuritiesheld-for-trading/available-for-sale/held-to-maturity.
(d) Subsidiaries and Basis of Consolidation
(i) Subsidiaries
SubsidiariesareentitiesoverwhichtheGrouphas theability tocontrol the financialandoperatingpoliciessoas toobtainbenefits fromtheiractivities.TheexistenceandeffectofpotentialvotingrightsthatarecurrentlyexercisableorconvertibleareconsideredwhenassessingwhethertheGrouphassuchpoweroveranotherentity.
IntheCompany’sseparatefinancialstatements,investmentsinsubsidiariesarestatedatcostlessimpairmentlosses,ifany.Ondisposalofsuchinvestments,thedifferencebetweennetdisposalproceedsandtheircarryingamountsisincludedinprofitorloss.
(ii) Basis of Consolidation
TheconsolidatedfinancialstatementscomprisethefinancialstatementsoftheCompanyanditssubsidiariesasatthebalancesheetdate.ThefinancialstatementsofthesubsidiariesarepreparedforthesamereportingdateastheCompany.
Subsidiariesareconsolidatedfromthedateofacquisition,beingthedateonwhichtheGroupobtainscontrol,andcontinuetobeconsolidateduntilthedatethatsuchcontrolceases.Inpreparingtheconsolidatedfinancialstatements,intragroupbalances,transactionsandunrealisedgainsorlossesareeliminatedinfull.Uniformaccountingpoliciesareadoptedintheconsolidatedfinancialstatementsforliketransactionsandeventsinsimilarcircumstances.
Purchase method of consolidation
Acquisitions of subsidiaries are generally accounted for using the purchase method unless they qualify under the merger principles ofaccountingasexplainedbelow.Thepurchasemethodofaccounting involvesallocatingthecostoftheacquisitiontothefairvalueoftheassets acquired and liabilities and contingent liabilities assumed at the date of acquisition.The cost of an acquisition is measured as theaggregateofthefairvalues,atthedateofexchange,oftheassetsgiven,liabilitiesincurredorassumed,andequityinstrumentsissued,plusanycostsdirectlyattributabletotheacquisition.
Anyexcessof thecostof theacquisitionover theGroup’s interest in thenet fairvalueof the identifiableassets, liabilitiesandcontingentliabilities represents goodwill. Any excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and contingentliabilitiesoverthecostofacquisitionisrecognisedimmediatelyinprofitorloss.
Merger principles of accounting
Businesscombinationsinvolvingentitiesundercommoncontrolareaccountedforusingmergerprinciplesofaccounting.Whenthemergerprinciplesofaccountingisadopted,thedifferencebetweenthecostofinvestmentintheCompany'srecordsandtheshareholders'equityofthesubsidiariesistreatedasamergerreserveoramergerdeficit.Theresultsofthesubsidiarycompaniesbeingmergedarepresentedasifthemergerhadbeeneffectedthroughoutthecurrentandpreviousfinancialyears.
40ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
(d) Subsidiaries and Basis of Consolidation (continued)
(ii) Merger principles of accounting (continued)
ThemergerprinciplesofaccountingwasadoptedbytheGroupinrespectoftheacquisitionofAvenueCapitalResourcesBerhad("ACRB")anditssubsidiariespursuanttotheACRBreorganisationexerciseinthepreviousfinancialyear.Assuch,theresultsoftheGrouphavebeenstatedasiftheACRBGrouphavebeencombinedwiththeCompanythroughoutthecurrentandpreviousaccountingperiodseventhoughtheCompanywasonlyincorporatedon24October2005.ThecomparativefiguresoftheGrouprelatetothatoftheACRBGroupandadjustedfortheeffectsarisingfromusingthemergerprinciplesofaccounting.
(e) Associates Associates are entities in which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture.
Significantinfluenceisthepowertoparticipateinthefinancialandoperatingpolicydecisionsoftheinvesteebutnotincontrolorjointcontroloverthosepolicies.
Investmentsinassociatesareaccountedforintheconsolidatedfinancialstatementsusingtheequitymethodofaccounting.Undertheequitymethod,theinvestmentinassociateiscarriedintheconsolidatedbalancesheetatcostadjustedforpost-acquisitionchangesintheGroup’sshareofnetassetsoftheassociate.TheGroup’sshareofthenetprofitorlossoftheassociateisrecognisedintheconsolidatedprofitorloss.Wheretherehasbeenachangerecogniseddirectlyintheequityoftheassociate,theGrouprecognisesitsshareofsuchchanges.Inapplyingtheequitymethod,unrealisedgainsandlossesontransactionsbetweentheGroupandtheassociateareeliminatedtotheextentoftheGroup’s interestintheassociate.Afterapplicationoftheequitymethod,theGroupdetermineswhetherit isnecessarytorecogniseanyadditionalimpairmentlosswithrespecttotheGroup’snetinvestmentintheassociate.TheassociateisequityaccountedforfromthedatetheGroupobtainssignificantinfluenceuntilthedatetheGroupceasestohavesignificantinfluenceovertheassociate.
WhentheGroup’sshareoflossesinanassociateequalsorexceedsitsinterestintheassociate,includinganylong-termintereststhat,insubstance,formpartoftheGroup’snetinvestmentintheassociate,theGroupdoesnotrecognisefurtherlosses,unlessithasincurredobligationsormadepaymentsonbehalfoftheassociate.
ThemostrecentavailableauditedfinancialstatementsoftheassociatesareusedbytheGroupinapplyingtheequitymethod.WherethedatesoftheauditedfinancialstatementsusedarenotcoterminouswiththoseoftheGroup,theshareofresultsisarrivedatfromthelastauditedfinancialstatementsavailableandmanagementfinancialstatementstotheendoftheaccountingperiod.Uniformaccountingpoliciesareadoptedforliketransactionsandeventsinsimilarcircumstances.
IntheCompany’sseparatefinancialstatements,investmentsinassociatesarestatedatcostlessimpairmentlosses.
Ondisposalofsuchinvestments,thedifferencebetweennetdisposalproceedsandtheircarryingamountsisincludedinprofitorloss.
(f) Intangible Assets
(i) Goodwill
GoodwillacquiredinabusinesscombinationisinitiallymeasuredatcostbeingtheexcessofthecostofbusinesscombinationovertheGroup’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Following the initial recognition, goodwill is measuredatcostlessanyaccumulatedimpairmentlosses.Goodwillisnotamortisedbutinstead,itisreviewedforimpairment,annuallyor morefrequentlyifeventsorchangesincircumstancesindicatethatthecarryingvaluemaybeimpaired.Gainsandlossesonthedisposalof anentityincludethecarryingamountofgoodwillrelatingtotheentitysold.
ECMLibraFinancialGroupBerhadANNUALREPORT200841
notes to the financial statementscontinued
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
(f) Intangible Assets (continued)
(ii) Merchant bank licence This representscontributiontoBNMforamerchantbank licencetotransformECMLIB, theUniversalBrokersubsidiary intoan Investment
Bank.Themerchantbanklicencehasindefiniteusefullifeandisstatedatcostlessaccumulatedimpairmentlosses.
Merchantbank licence isnotamortisedbut tested for impairmentannuallyormore frequently if theeventsorchanges incircumstances indicatethatthecarryingvaluemaybeimpaired.Anyimpairmentlossisrecognisedinincomestatement.
(g) Property, Plant and Equipment, and Depreciation Allitemsofproperty,plantandequipmentareinitiallyrecordedatcost.Subsequentcostsareincludedintheasset’scarryingamountorrecognised
asaseparateasset,asappropriate,onlywhenitisprobablethatfutureeconomicbenefitsassociatedwiththeitemwillflowtotheGroupandtheCompanyandthecostoftheitemcanbemeasuredreliably.Thecarryingamountofthereplacedpartisderecognised.Allotherrepairsandmaintenancearechargedtotheincomestatementduringthefinancialperiodinwhichtheyareincurred.
Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation and any accumulatedimpairmentlosses.
Depreciationofotherproperty,plantandequipmentisprovidedforonastraight-linebasistowriteoffthecostofeachassettoitsresidualvalueovertheestimatedusefullife,atthefollowingannualrates:
%
Landandbuildings 2
Furnitureandfittingsandofficeequipment 10-20
Computers 20-25
Officerenovations 10-20
Motorvehicles 20
Theresidualvalues,usefullifeanddepreciationmethodarereviewedateachfinancialyear-endtoensurethattheamount,methodandperiodofdepreciationareconsistentwithpreviousestimatesandtheexpectedpatternofconsumptionofthefutureeconomicbenefitsembodiedintheitemsofproperty,plantandequipment.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use ordisposal.Thedifferencebetweenthenetdisposalproceeds,ifanyandthenetcarryingamountisrecognisedinprofitorloss.
(h) Investment Properties Investment properties are properties which are held either to earn rental income or for capital appreciation or for both. Such properties are
measuredatcost, includingtransactioncosts, lessaccumulateddepreciationandimpairmentloss.Costrepresentthecostfortheconstructionandacquisitionofinvestmentproperties.
Investmentpropertyisderecognisedwheneitherithasbeendisposedoforwhentheinvestmentpropertyispermanentlywithdrawnfromuseandnofutureeconomicbenefitisexpectedfromitsdisposal. Anygainsorlossesontheretirementordisposalofaninvestmentpropertyarerecognisedinprofitorlossintheyearinwhichtheyarise.
42ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
(i) Impairment of Non-financial Asset Thecarryingamountsofnon-financialassets,otherthaninvestmentpropertiesanddeferredtaxassets,arereviewedateachbalancesheetdate
todeterminewhetherthereisanyindicationofimpairment.Ifanysuchindicationexists,theasset’srecoverableamountisestimatedtodeterminetheamountofimpairmentloss.
Forgoodwill,therecoverableamountisestimatedateachbalancesheetdateormorefrequentlywhenindicatorsofimpairmentareidentified.
Forthepurposeofimpairmenttestingoftheseassets,recoverableamountisdeterminedonanindividualassetbasisunlesstheassetdoesnotgeneratecashflowsthatarelargelyindependentofthosefromotherassets.Ifthisisthecase,recoverableamountisdeterminedforthecash-generatingunit("CGU")towhichtheassetbelongsto.Goodwillacquiredinabusinesscombinationis,fromtheacquisitiondate,allocatedtoeachoftheGroup’sCGUs,orgroupsofCGUs,thatareexpectedtobenefitfromthesynergiesofthecombination,irrespectiveofwhetherotherassetsorliabilitiesoftheGroupareassignedtothoseunitsorgroupsofunits.
Anasset’srecoverableamountisthehigherofanasset’sorCGU’sfairvaluelesscoststosellanditsvalueinuse.Inassessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheasset.Wherethecarryingamountofanassetexceedsitsrecoverableamount,theassetisconsideredimpairedandiswrittendowntoitsrecoverableamount.ImpairmentlossesrecognisedinrespectofaCGUorgroupsofCGUsareallocatedfirsttoreducethecarryingamountofanygoodwillallocatedtothoseunitsorgroupsofunitsandthen,toreducethecarryingamountoftheotherassetsintheunitorgroupsofunitsonapro-ratabasis.
Animpairmentloss isrecognisedinprofitor loss intheperiodinwhichitarises. Impairmentlossongoodwill isnotreversedinasubsequentperiod.Animpairmentlossforanassetotherthangoodwillisreversedif,andonlyif,therehasbeenachangeintheestimatesusedtodeterminetheasset’srecoverableamountsincethelastimpairmentlosswasrecognised.Thecarryingamountofanassetotherthangoodwillisincreasedto itsrevisedrecoverableamount,providedthatthisamountdoesnotexceedthecarryingamountthatwouldhavebeendetermined(netofamortisationordepreciation)hadnoimpairmentlossbeenrecognisedfortheassetinprioryears.Areversalofimpairmentlossforanassetotherthangoodwillisrecognisedinprofitorloss.
(j) Inventories InventoriesconsistofstocksofunitsinunittrustfundsheldbyasubsidiaryoftheGroup.Theseinventoriesarevaluedatthelowerofcostand
marketvalueonaggregatebasis.Costisdeterminedusingtheweightedaveragebasis.
(k) Provisions for Liabilities ProvisionsforliabilitiesarerecognisedwhentheGrouphasapresentobligationasaresultofapasteventanditisprobablethatanoutflowof
resourcesembodyingeconomicbenefitswillberequiredtosettletheobligation,andareliableestimateoftheamountcanbemade.Provisionsarereviewedateachbalancesheetdateandadjustedtoreflectthecurrentbestestimate.Wheretheeffectofthetimevalueofmoneyismaterial,provisionsarediscountedusingacurrentpre-taxratethatreflects,whereappropriate,therisksspecifictotheliability.Wherediscountingisused,theincreaseintheprovisionduetothepassageoftimeisrecognisedasfinancecost.
(l) Financial Instruments FinancialinstrumentsarerecognisedinthebalancesheetwhentheGrouphasbecomeapartytothecontractualprovisionsoftheinstrument.
Financialinstrumentsareclassifiedasliabilitiesorequityinaccordancewiththesubstanceofthecontractualarrangement.Interest,dividendsandgainsandlossesrelatingtoafinancialinstrumentclassifiedasaliability,arereportedasexpenseorincome.Distributionstoholdersoffinancialinstrumentsclassifiedasequityarerecogniseddirectlyinequity.FinancialinstrumentsareoffsetwhentheGrouphasalegallyenforceablerighttooffsetandintendstosettleeitheronanetbasisortorealisetheassetandsettletheliabilitysimultaneously.
ECMLibraFinancialGroupBerhadANNUALREPORT200843
notes to the financial statementscontinued
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
(l) Financial Instruments (continued) Theaccountingpoliciesforfinancialinstrumentsrecognisedonthebalancesheetaredisclosedintheindividualpolicystatementsassociatedwith eachitem.
(i) Equity instruments
Ordinarysharesareclassifiedasequity.Dividendsonordinarysharesarerecognisedinequityintheperiodinwhichtheyaredeclared.
Thetransactioncostsofanequitytransactionareaccountedforasadeductionfromequity,netoftax.Equitytransactioncostscompriseonlythoseincrementalexternalcostsdirectlyattributabletotheequitytransactionwhichwouldotherwisehavebeenavoided.
(ii) Marketable securities
Marketable securities represent quoted securities and fixed income securities which are carried at the lower of cost and market value,determinedonaportfoliobasis.Costisdeterminedontheweightedaveragebasiswhilemarketvalueisdeterminedbasedonquotedmarketvaluesatthecloseofbusinessatthebalancesheetdate.
Increasesordecreases inthecarryingamountofmarketablesecuritiesarecreditedorchargedtotheincomestatementasallowanceforimpairmentlossofmarketablesecuritiesorasallowancewrittenback.Allowanceforwrite-downismadewhenthemarketablesecuritiesbecomelessmarketableasstatedinaccordancewiththeRulesofBursaMalaysia.
Ondisposalofmarketablesecurities,thegainorlossrepresentingthedifferencebetweennetdisposalproceedsanditscarryingamountiscreditedorchargedtotheincomestatements.
(iii) Other Non-Current Investments
Othernon-currentinvestmentsconsistoflongterminvestmentsinquoted,unquotedsharesandunittrusts.Theseinvestmentsarestatedatcostlessimpairmentlosses.
On disposal of an investment, the difference between net disposal proceeds and its carrying amount is recognised in the incomestatement.
(iv) Receivables
Tradereceivablesrelatingtothestockbrokingactivitiesarecarriedatanticipatedrealisablevalues.Baddebtsarewrittenoffwhenidentified.Whenanaccountisclassifiedasnon-performing,interestissuspendedandissubsequentlyrecognisedonacashbasis.
InaccordancewiththeRulesofBursaMalaysia,clients’accountsareclassifiedasnon-performingunderthefollowingcircumstances:
Types of account Criteria for classification as non-performing
ContraLosses Whentheaccountremainsoutstandingfor16calendardaysormorefromthedate ofcontratransaction.
Overduepurchasecontracts WhentheaccountremainsoutstandingfromT+3marketdaysonwards.
Marginaccounts Whenthevalueofcollateralhasfallenbelow130%oftheoutstandingbalance.
44ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
(l) Financial Instruments (continued) (iv) Receivables (continued)
- Specific allowance
Specificallowancesforbadanddoubtfulreceivablesaremadeforaccountswhichhavebeenclassifiedasnon-performing,netofinterest- in-suspenseandtakingintoconsiderationanycollateralheldandthedepositofdealers'representativesandallamountsduetotheGroup, inaccordancewiththeRulesofBursaMalaysia.
- General allowance
Generalallowancesaremadetocoverpossiblelosseswhichhavenotbeenspecificallyidentifiedbasedonacertainpercentageofitstotal tradereceivables,afterdeductingspecificallowancesandinterest-in-suspense.Generalallowancesaremadebasedonacertainpercentage oftradereceivables(excludingoutstandingpurchasecontractswhicharenotdueforpayment),netof interest-in-suspenseandspecific allowancesalreadymade.
Other trade, non-trade and loan receivables are carried at anticipated realisable values. Allowance for doubtful debts is made based onestimatesofpossiblelosseswhichmayarisefromnon-collectionofcertainreceivableaccountswhiledebtsconsideredtobeuncollectiblearewrittenoff.
(v) Cash and Cash Equivalents
Cashandcashequivalentsconsistofcashinhand,bankbalancesanddepositplacementsmaturinglessthanonemonthheldforthepurposeofmeetingshorttermcommitmentsandreadilyconvertibleintocashwithoutsignificantriskofchangesinvalue.
(vi) Interest Bearing Loans and Borrowings
Allloansandborrowingsareinitiallyrecognisedatthefairvalueoftheconsiderationreceivedlessdirectlyattributabletransactioncosts.Afterinitialrecognition,interestbearingloansandborrowingsaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.
(vii) Payables Tradeandotherpayablesarestatedatcostwhichisthefairvalueoftheconsiderationtobepaidinthefutureforgoodsandservicesreceived.
(m) Revenue and Income Recognition RevenueisrecognisedtotheextentthatitisprobablethattheeconomicbenefitswillflowtotheGroupandtherevenuecanbereliablymeasured.
Thefollowingspecificrecognitioncriteriamustalsobemetbeforerevenueisrecognised:
(i) Grossbrokerage is recognisedupontheexecutionof tradeonbehalfofclients,computedbasedonapre-determinedpercentageof the contractvalue.
(ii) Marginincomecomprisemargininterestincomeandrolloverfees.Margininterestincomeisrecognisedonanaccrualbasisexceptwheresuch margin account is considered non-performing in accordance with Schedule 7A of the Rules of Bursa Malaysia, in which case recognition ofsuchinterest issuspended.Subsequenttosuspension, interest isrecogniseduponreceiptuntilallarrearshavebeenpaid.Rolloverfees arerecognisedonanaccrualbasis.Rolloverfeesfromnon-performingmarginaccountswillbesuspendeduntiltheaccountsarereclassified asperforming.
ECMLibraFinancialGroupBerhadANNUALREPORT200845
notes to the financial statementscontinued
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
(m) Revenue and Income Recognition (continued)
(iii) Gainsorlossesondisposalofinvestmentsarerecogniseduponconfirmationoftransactionsbythestockbrokers.
(iv) Unittrustandfundmanagementfeesarerecognisedonanaccrualbasis.
(v) Underwriting,advisory,arrangementandplacementfeesarerecognisedasandwhenservicesareperformed.
(vi) OtherrevenueearnedbytheGrouparerecognisedonthefollowingbases:
Dividendincome-whentherighttoreceivepaymentisestablished.
Managementfeeandrentalincome-accrualbasisbyreferencetotheagreementsentered.
Otherinterestincome-onanaccrualbasisunlesscollectibilityisindoubt,inwhichcasetheyarerecognisedonreceiptbasis.
(n) Foreign Currencies
(i) Functional and Presentation Currency
TheindividualfinancialstatementsofeachentityintheGrouparemeasuredusingthecurrencyoftheprimaryeconomicenvironmentinwhichtheentityoperates(“thefunctionalcurrency”).TheconsolidatedfinancialstatementsarepresentedinRinggitMalaysia(RM),whichisalsotheCompany’sfunctionalcurrency.Allvaluesareroundedtothenearestthousand(RM'000)exceptwhenotherwiseindicated.
(ii) Foreign Currency Transactions
In preparing the financial statements of the individual entities, transactions in currencies other than the Company’s functional currency(foreigncurrencies)arerecordedinthefunctionalcurrenciesusingtheexchangeratesprevailingatthedatesofthetransactions.Ateachbalancesheetdate,monetaryitemsdenominatedinforeigncurrenciesaretranslatedattheratesprevailingonthebalancesheetdate.Non-monetaryitemscarriedatfairvaluethataredenominatedinforeigncurrenciesaretranslatedattheratesprevailingonthedatewhenthefairvaluewasdetermined.Non-monetaryitemsthataremeasuredintermsofhistoricalcostinaforeigncurrencyarenottranslated.
Exchangedifferencesarisingonthesettlementofmonetaryitems,andonthetranslationofmonetaryitems,areincludedinprofitorlossfortheperiod.
Exchangedifferencesarisingonthetranslationofnon-monetaryitemscarriedatfairvalueareincludedinprofitorlossfortheperiodexceptforthedifferencesarisingonthetranslationofnon-monetaryitemsinrespectofwhichgainsandlossesarerecogniseddirectlyinequity.Exchangedifferencesarisingfromsuchnon-monetaryitemsarealsorecogniseddirectlyinequity.
(iii) Foreign Operations
The results and financial position of foreign operations that have a functional currency different from the presentation currency of theconsolidatedfinancialstatementsaretranslatedintoRMasfollows:
46ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
(n) Foreign Currencies (continued)
(iii) Foreign Operations (continued)
-Assetsandliabilitiesforeachbalancesheetpresentedaretranslatedattheclosingrateprevailingatthebalancesheetdate;
-Incomeandexpensesforeachincomestatementaretranslatedataverageexchangeratesfortheyear,whichapproximatestheexchangeratesatthedatesofthetransactions;and
-Allresultingexchangedifferencesaretakentotheforeigncurrencytranslationreservewithinequity.
(o) Income Tax Incometaxontheprofitorlossfortheyearcomprisescurrentanddeferredtax.Currenttaxistheexpectedamountofincometaxespayablein
respectofthetaxableprofitfortheyearandismeasuredusingthetaxratesthathavebeenenactedatthebalancesheetdate.
Deferredtax isprovidedfor,usingthe liabilitymethod. Inprinciple,deferredtax liabilitiesarerecognisedforall taxabletemporarydifferencesanddeferredtaxassetsarerecognisedforalldeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditstotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditscanbeutilised.Deferredtaxisnotrecognisedifthetemporarydifferencearisesfromgoodwillornegativegoodwillorfromtheinitialrecognitionofanassetorliabilityinatransactionwhichisnotabusinesscombinationandatthetimeofthetransaction,affectsneitheraccountingprofitnortaxableprofit.
Deferredtaxismeasuredatthetaxratesthatareexpectedtoapplyintheperiodwhentheassetisrealisedortheliabilityissettled,basedontaxratesthathavebeenenactedorsubstantivelyenactedatthebalancesheetdate.Deferredtaxisrecognisedintheincomestatement,exceptwhenitarisesfromatransactionwhichisrecogniseddirectlyinequity,inwhichcasethedeferredtaxisalsorecogniseddirectlyinequity,orwhenitarisesfromabusinesscombinationthatisanacquisition,inwhichcasethedeferredtaxisincludedintheresultinggoodwillortheamountofanyexcessoftheacquirer'sinterestinthenetfairvalueoftheacquiree'sidentifiableassets,liabilitiesandcontingentliabilitiesoverthecostofthecombination.
(p) Employee Benefits
(i) Short term employee benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services arerendered by employees. Short term accumulating compensated absences such as paid annual leave are recognised when services arerendered by employees that increase their entitlement to future compensated absences. Short term non-accumulating compensatedabsencessuchassickleavearerecognisedwhentheabsencesoccur.
(ii) Post-employment benefits - Defined contribution plans
Definedcontributionplansarepost-employmentbenefitplansunderwhichtheGrouppaysfixedcontributionsintoseparateentitiesorfundsandwillhavenolegalorconstructiveobligationtopayfurthercontributionsifanyofthefundsdonotholdsufficientassetstopayallemployeebenefitsrelatingtoemployeeservicesinthecurrentandprecedingfinancialyears.Suchcontributionsarerecognisedasanexpenseintheprofitorlossasincurred.Asrequiredbylaw,companiesinMalaysiamakesuchcontributionstotheEmployeesProvidentFund(“EPF”).
ECMLibraFinancialGroupBerhadANNUALREPORT200847
notes to the financial statementscontinued
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
(p) Employee Benefits (continued)
(iii) Share-based Compensation
TheCompany'sEmployeeShareOptionScheme("ESOS"),anequity-settled,share-basedcompensationplan,allowsthestaffoftheGroupanddirectorsofthecompaniestoacquireordinarysharesoftheCompany.Thetotalfairvalueofshareoptionsgrantedtoemployeesisrecognisedasanemployeecostwithacorrespondingincreaseintheequitycompensationreservewithinequityoverthevestingperiodandtakingintoaccounttheprobabilitythattheoptionswillvest.Thefairvalueofshareoptionsismeasuredatgrantdate,takingintoaccount,ifany,themarketvestingconditionsuponwhichtheoptionsweregrantedbutexcludingtheimpactofanynon-marketvestingconditions. Non-market vesting conditions are included in assumptions about the number of options that are expected to becomeexercisableonvestingdate.
Ateachbalancesheetdate,theGrouprevisesitsestimatesofthenumberofoptionsthatareexpectedtobecomeexercisableonvestingdate.Itrecognisestheimpactoftherevisionoforiginalestimates,ifany,intheincomestatement,andacorrespondingadjustmenttoequityovertheremainingvestingperiod.Theequityamountisrecognisedintheshareoptionreserveuntiltheoptionisexercised,uponwhichitwillbetransferredtosharepremium,oruntiltheoptionexpires,uponwhichitwillbetransferreddirectlytoretainedprofit.
Theproceedsreceivednetofanydirectlyattributabletransactioncostsarecreditedtoequitywhentheoptionsareexercised.
(q) Significant Accounting Estimates and Judgements Preparation of the financial statements involved making certain estimates, assumptions concerning the future judgements. They affect the
accounting policies applied, amounts of assets, liabilities, income and expenses reported and disclosures made.They are assessed on an on-goingbasisandarebasedonexperienceandrelevantfactors,includingexpectationsoffutureeventsthatarebelievedtobereasonableunderthecircumstances.Changes in theseestimatesandassumptionsbymanagementmayhaveaneffectonthebalancesas reported in financialstatements.
(i) Impairment of goodwill and other intangible assets
TheGroupdetermineswhethergoodwillandotherintangibleassetsareimpairedatleastonanannualbasis.Thisrequiresanestimationofthevalue-in-useofthecash-generatingunits(“CGU”)towhichgoodwillandotherintangibleassetsareallocated.Estimatingavalue-in-useamountrequiresmanagementtomakeanestimateoftheexpectedfuturecashflowsfromtheCGUandalsotochooseasuitablediscountrateinordertocalculatethepresentvalueofthosecashflows.
(ii) Classification of investments
Managementusesitsjudgementtodeterminetheclassificationofitsinvestmentsintocurrentandnon-current.Aninvestmentisclassifiedascurrentifitisreadilyrealisableanditisheldfortradingorintendedbymanagementtoberealisedwithin12monthsafterthebalancesheetdate.Allotherinvestmentsareclassifiedasnon-current.
(iii) Income taxes
DeferredtaxassetsarerecognisedforallunusedtaxlossesandunabsorbedcapitalallowancestotheextentthatitisprobablethattaxableprofitwillbeavailableintherespectiveentitywithintheGroupagainstwhichthelossesandcapitalallowancescanbeutilised.Significantmanagement judgement, which will be reviewed periodically, is required to determine the amount of deferred tax assets that can berecognised,baseduponthelikelytimingandleveloffuturetaxableprofitstogetherwithfuturetaxplanningstrategies.ThedisclosureonthedeferredtaxassetsandunrecognisedtaxlossesandcapitalallowancesareinNote17.
48ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
(q) Significant Accounting Estimates and Judgements (continued)
(iv) Classification between investment properties and property, plant and equipment
TheGrouphasdevelopedcertaincriteriabasedonFRS140inmakingjudgementwhetherapropertyqualifiesasaninvestmentproperty.Investmentpropertyisapropertyheldtoearnrentalsorforcapitalappreciationorboth.
Somepropertiescompriseaportionthat isheldtoearnrentalsorforcapitalappreciationandanotherportionthat isheldforuseintheproductionorsupplyofgoodsorservicesorforadministrativepurposes.Iftheseportionscouldbesoldseparately(orleasedoutseparatelyundera finance lease), theGroupwouldaccount for theportionsseparately. If theportionscouldnotbesoldseparately, theproperty isaninvestmentpropertyonlyifaninsignificantportionisheldforuseintheproductionorsupplyofgoodsorservicesorforadministrativepurposes.Judgementismadeonanindividualpropertybasistodeterminewhetherancillaryservicesaresosignificantthatapropertydoesnotqualifyasinvestmentproperty.
Inthecurrentfinancialyear,theGrouphastenantedoutaportionofitsfreeholdbuildingtoathirdpartywhilstanotherportionisusedbycertainsubsidiariesoftheGroupastheirprincipalplaceofbusiness.TheGrouphasnotclassifiedthisportionasinvestmentpropertyastheportionstenantedbyexternalpartiescannotbesoldseparatelyandtheportionsusedbytheGroupinthesupplyofgoodsandservicesisnotaninsignificantportion.Accordingly,thispropertyisstillclassifiedasproperty,plantandequipmentinthefinancialstatementsoftheGroupasattheendofthecurrentfinancialyear.
(v) Provision for ESOS-related costs
The Group and the Company made certain provisions for ESOS-related costs which are calculated using a binomial model. The fairvalue of equity-settled share options granted is estimated as at the date of grant using the binomial model, taking into account thetermsandconditionsuponwhichtheoptionsweregranted.Thefollowingtableliststheassumptioninputstothemodelused:
Shareprice(asat25Jan08)(RM) 0.815
Exerciseprice(RM) 1.00
Expectedvolatility(%) 32.08%
Riskfreeinterestrate(%) 3.50%
Dividendpayout(RM) 0.02
Averagedividendyield(%) 1.50%
Historicaldividendyield(%) 1.00%
Expectedfuturedividendyield(%) 2.00%
Actualvolatilityinthefuturemaydifferfromtheexpectedvolatility,nonethelesstheexpectedvolatilityreflectstheGroup'sbestestimateoffuturevolatilityovertheremainingoptionperiod.
ECMLibraFinancialGroupBerhadANNUALREPORT200849
notes to the financial statementscontinued
3. REVENUE Group Company
2008 2007 2008 2007 RM’000 RM’000 RM’000 RM’000
Brokerageincome 120,465 69,199 - -
Managementfees 15,638 22,237 - -
Placementfees 12,569 6,481 - -
Marginandotherfeesincome 15,461 12,458 - -
Corporatefinanceandadvisoryfee 3,105 4,345 - -
Interestincome
-deposits 14,054 12,306 1,331 269 -others 212 2,539 795 1,083
Rentalincome 1,075 - 77 -
Grossdividendincomefrom:
-subsidiarycompany - - 57,244 8,333 -otherinvestments 612 1,167 - -
Gainondisposalofmarketablesecurities 21,861 13,780 - -
205,052 144,512 59,447 9,685
4. OPERATING PROFIT
OtherthanthoseitemsdisclosedinNote3,operatingprofitisstated:
Group Company
2008 2007 2008 2007 RM’000 RM ‘000 RM’000 RM’000
Aftercharging:
Staffcosts(excludingdirectors'remuneration)(Note(i)) 34,908 26,458 1,831 -
ContributionstoEPF 3,004 2,612 8 -
Directors’remuneration(Note(ii)) 5,216 8,594 2,752 204
50ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
4. OPERATING PROFIT/(LOSS) (continued) Group Company 2008 2007 2008 2007 RM’000 RM ‘000 RM’000 RM’000
Aftercharging:(continued)
Depreciationof: -property,plantandequipment 6,214 6,330 372 - -investmentproperties 12 21 - -
Rentalof: -premises 3,568 3,072 25 - -equipment - 130 - -
Auditors’remuneration: -statutory 216 221 28 25 -others 70 5 5 5
(Reversalof )/allowancefordoubtfuldebts: -tradereceivables (2,238) 1,818 - - -otherreceivables 2,778 - - -
Lossondisposalofproperty,plantandequipment 178 97 - -
CostarisingfromEmployeesShareOptionScheme("ESOS") 2,075 - 1,495 -
Andcrediting:
Exchangetranslationgain 1,610 1,168 - -
Badreceivableswrittenoffnowrecovered 97 272 - -
Note(i) Staffcostsincludesalaries,bonuses,costarisingfromESOSandallotherstaff-relatedexpensesbutexcludingdirectors’remuneration.
Note(ii) Directors’remunerationconsistsofthefollowing:
Group Company 2008 2007 2008 2007 RM’000 RM ‘000 RM’000 RM’000
DirectorsoftheCompany(Note(iii)): Fees 295 195 295 195 Otheremoluments 2,457 977 2,457 9
Directorsofsubsidiarycompanies: Fees 196 158 - - Otheremoluments 2,268 7,264 - -
5,216 8,594 2,752 204
Estimatedmonetaryvalueofbenefits-in-kindreceivedbydirectors - - - -
ECMLibraFinancialGroupBerhadANNUALREPORT200851
notes to the financial statementscontinued
4. OPERATING PROFIT/(LOSS) (continued)
Note(iii)ThetotalremunerationofthedirectorsoftheCompanyduringthefinancialyearfallwithinthefollowingbands:
Number of directors
2008 2007 Executivedirectors: RM50,000toRM950,000 - - RM950,001toRM1,000,000 1 - RM1,000,001toRM1,500,000 - - RM1,500,001toRM1,550,000 1 -
Non-executivedirectors: BelowRM50,000 3 6 RM50,000toRM100,000 2 - RM500,001toRM550,000 - 2*
*Twoofthenon-executivedirectorswerepreviouslyexecutivedirectorsoftheoperatingsubsidiariesofECMLibraBerhadpriortothemerger.
5. (LOSS)/GAIN ON DISPOSAL OF INVESTMENTS Group Company 2008 2007 2008 2007 RM’000 RM‘000 RM’000 RM’000
(Loss)/gainondisposalof: -quotedinvestments - 2,314 - - -associatedcompanies 941 - 499 - -subsidiarycompanies - 433 - - -investmentproperties 489 - - - -otherinvestments (2,614) - - -
(1,184) 2,747 499 -
52ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
6. WRITEBACK OF/(ALLOWANCE FOR) IMPAIRMENT LOSS Group Company 2008 2007 2008 2007 RM’000 RM‘000 RM’000 RM’000
Writebackof/(allowancefor)impairmentlossoninvestments
-investmentinassociatedcompanies - (5,983) - -
-otherinvestments 9,211 (12,659) - -
9,211 (18,642) - -
7. RATIONALISATION EXPENSES
Rationalisation expenses in the previous financial year relate to expenses incurred by the Group to streamline its business activities following thecompletionofthemergerexerciseundertakeninthepreviousfinancialyear.IncludedintherationalisationexpensesoftheGroupare:
2007
RM’000
Staffvoluntaryseparationandretentionschemes 10,097
Property,plantandequipmentwrittenoff 5,637
Relocationexpenses 1,019
Otherexpenses 616
17,369
8. FINANCE COSTS Group Company 2008 2007 2008 2007 RM’000 RM‘000 RM’000 RM’000
Financecostsconsistofinterestexpenseonshorttermborrowings 2,399 3,450 38 -
ECMLibraFinancialGroupBerhadANNUALREPORT200853
notes to the financial statementscontinued
9. INCOME TAX EXPENSE Group Company 2008 2007 2008 2007 RM’000 RM‘000 RM’000 RM’000
Incometax:
-Currentyear'sprovision 3,240 3,639 4,658 2,713 -Realpropertygainstax 29 - - - -Under/(over)provisionoftaxinprioryears 252 (445) (96) -
3,521 3,194 4,562 2,713 Deferredtaxation:
-Relatingtooriginationandreversaloftemporarydifferences(Note17) (5,265) (5,000) - -
(1,744) (1,806) 4,562 2,713
DomesticincometaxiscalculatedattheMalaysianstatutorytaxrateof26%(2007:27%)oftheestimatedassessableprofitfortheyear.Thedomesticstatutorytaxratewillbereducedto25%fromthecurrentyear’srateof26%,effectiveyearofassessment2009.Thecomputationofdeferredtaxasat31January2008hasreflectedthesechanges.
Theincometaxexpensefortheyearcanbereconciledtotheprofitbeforetaxperincomestatementsasfollows:
Group Company 2008 2007 2008 2007 RM’000 RM‘000 RM’000 RM’000
Profitbeforetaxation 82,643 18,352 54,147 9,025
Taxattherateof26%(2007:27%) 21,487 4,955 14,078 2,437
Taxeffectsof: Non-allowableexpenses 4,429 7,543 1,109 276 Non-taxableincome (1,670) (5,310) (10,529) - Under/(over)provisionoftaxinprioryears 252 (445) (96) -
Realpropertygainstax 29 - - -
Deferredtaxnotrecognisedontemporarydifferences (1,037) - - -
Deferredtaxrecognisedonunabsorbedtaxlosses (5,000) - - -
Utilisationofdeferredtaxassetspreviouslynotrecognised (20,415) (5,867) - -
Effectofchangesintaxrateonopeningbalanceofdeferredtax 181 (2,682) - -
(1,744) (1,806) 4,562 2,713
54ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
10. EARNING PER ORDINARY SHARE
ThebasicanddilutedearningsperordinaryshareiscalculatedbydividingtheGroup’sprofitaftertaxationofRM84,387,000(2007:RM20,158,000)bytheweightedaveragenumberofordinarysharesinissueduringtheyearof830,902,000(2007:779,402,000).
Forthefinancialyearended31January2008,outstandingESOShavebeenexcludedfromthecomputationoffullydilutedearningsperRM1ordinarysharesastheirconversiontoordinaryshareswouldbeanti-dilutive.
11. PROPERTY, PLANT AND EQUIPMENT
Furniture Freehold and fittings land and and office Motor Group building equipment Computers vehicles Total RM’000 RM’000 RM’000 RM’000 RM’000
Cost
At1February2007 42,557 23,299 21,603 3,840 91,299
Reclassification (633) (189) 821 1 -
Additions 5 1,002 1,034 1,592 3,633
Write-offs - (328) (425) - (753)
Disposals - - (85) (1,489) (1,574)
At31January2008 41,929 23,784 22,948 3,944 92,605
Accumulated Depreciation
At1February2007 2,740 13,447 15,181 1,943 33,311
Reclassification (68) (367) 434 1 -
Chargeduringtheyear 803 1,912 2,790 709 6,214
Write-offs - (156) (279) - (435)
Disposals - - (85) (909) (994)
At31January2008 3,475 14,836 18,041 1,744 38,096
Net Carrying Amount
At31January2008 38,454 8,948 4,907 2,200 54,509
ECMLibraFinancialGroupBerhadANNUALREPORT200855
notes to the financial statementscontinued
11. PROPERTY, PLANT AND EQUIPMENT (continued)
Furniture Freehold and fittings land and and office Motor Group building equipment Computers vehicles Total RM’000 RM’000 RM’000 RM’000 RM’000
Cost
At1February2006 43,240 14,764 11,335 3,466 72,805
Acquisitionofsubsidiaries 2 19,048 17,144 1,667 37,861
Additions 511 528 2,345 382 3,766
Write-offs - (9,461) (8,671) (125) (18,257)
Disposalofsubsidiaries - (1,425) (282) (15) (1,722)
Disposals (1,196) (155) (268) (1,535) (3,154)
At31January2007 42,557 23,299 21,603 3,840 91,299
Accumulated Depreciation
At1February2006 1,979 7,171 8,521 1,229 18,900
Acquisitionofsubsidiaries - 10,127 12,437 631 23,195
Chargeduringtheyear 863 2,052 2,470 945 6,330
Write-offs - (4,754) (7,739) (127) (12,620)
Disposalofsubsidiaries - (1,047) (246) (15) (1,308)
Disposals (102) (102) (262) (720) (1,186)
At31January2007 2,740 13,447 15,181 1,943 33,311
Net Carrying Amount
At31January2007 39,817 9,852 6,422 1,897 57,988
56ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
11. PROPERTY, PLANT AND EQUIPMENT (continued) Includedinproperty,plantandequipmentoftheGrouparethefollowingfullydepreciatedproperty,plantandequipmentwhicharestillinuse:
Group 2008 2007
RM’000 RM’000
Renovation 3,508 -
Computers 11,591 11,530
Furnitureandfittingsandofficeequipment 4,980 7,160
Motorvehicles 769 383
20,848 19,073
Freehold land and Office Motor Company building equipment vehicles Total RM’000 RM’000 RM’000 RM’000
Cost
At1February2007 - - - -
Additions 40,005 2 1,592 41,599
At31January2008 40,005 2 1,592 41,599
Accumulated Depreciation
At1February2007 - - - -
Chargeduringtheyear 133 - 239 372
At31January2008 133 - 239 372
Net Carrying Amount
At31January2008 39,872 2 1,353 41,227
ECMLibraFinancialGroupBerhadANNUALREPORT200857
notes to the financial statementscontinued
12. INVESTMENT PROPERTIES
Group
2008 2007 RM’000 RM’000
LocatedinMalaysia:
Shopoffices - 1,062
Less:Accumulateddepreciation - (42)
Net - 1,020
13. INTANGIBLE ASSETS Merchant Bank Group Goodwill Licence Total RM’000 RM’000 RM’000
2008 Cost/Net Carrying Amount
At1February2007 232,000 - 232,000
Additions - 52,500 52,500
At31January2008 232,000 52,500 284,500
Goodwill Total RM’000 RM’000
2007 Cost/Net Carrying Amount
At1February2006 - -
Arisingfromacquisitionofsubsidiariesduringthefinancialyear 232,000 232,000
At31January2007 232,000 232,000
58ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
13. INTANGIBLE ASSETS (continued)
The merchant bank licence represents contribution by ECMLIB to BNM to carry on merchant banking business and is considered tohaveindefiniteusefullife,whichisnotamortisedandisassessedforimpairmentannually.
Duringthefinancialyear,theGroupassessedtherecoverableamountofgoodwillandmerchantbanklicence,anddeterminedthatgoodwillassociatedwiththeacquisitionofoperatingsubsidiariesoftheCompanyandthemerchantbanklicencearesustainablebasedonthevalue-in-useaftertakingintoconsiderationthefutureeffectofthemergedoperationsandadiscountfactorof6.76%(2007:5.00%)perannum.
Thefollowingkeyassumptionswereusedbymanagementinassessingtherecoverableamountofgoodwillandthemerchantbanklicence:
(i) Thebasisusedtodeterminethevalue-in-usewasbasedonaprofitbudgetapprovedbymanagementaftertakingintoconsiderationthegrowth rateonthebudgetedprofit.
(ii) ThegrowthrateusedisbasedontheassumptionthatonthemovementoftheKualaLumpurCompositeIndexoveraperiod.
Withregardtotheassessmentofvalue-in-use,managementbelievesthatnoreasonablepossiblechangeinanyoftheabovekeyassumptionswouldcausethecarryingvaluestomateriallyexceeditsrecoverableamounts.
14. INVESTMENT IN SUBSIDIARY COMPANIES Company 2008 2007 RM’000 RM’000
Unquotedsharesinlocalcorporations,atcost 887,922 777,992
Thesubsidiarycompanies,allincorporatedinMalaysiaexceptasotherwiseindicated,areasfollows:
Effective Percentage of Ownership Name of Company 2008 2007 Principal Activities
% %
ECMLibraInvestmentBankBerhad 100 100 Stockbroking,underwriting,placement (formerlyknownasECMLibraAvenue andprovisionofadvisoryservices SecuritiesBerhad)anditssubsidiaries:
-ECMLNominees(Tempatan)Sdn.Bhd. 100 100 Provisionofnomineesservicesforlocalclients (formerlyknownasECMLibraAvenue Nominees(Tempatan)Sdn.Bhd.)
-ECMLNominees(Asing)Sdn.Bhd. 100 100 Provisionofnomineesservicesforforeignclients (formerlyknownasECMLibraAvenue Nominees(Asing)Sdn.Bhd.)
ECMLibraFinancialGroupBerhadANNUALREPORT200859
notes to the financial statementscontinued
14. INVESTMENT IN SUBSIDIARY COMPANIES (continued)
Thesubsidiarycompanies,allincorporatedinMalaysiaexceptasotherwiseindicated,areasfollows(continued):
Effective Percentage of Ownership Name of Company 2008 2007 Principal Activities
% %
-AvenueKestrelSdn.Bhd. 100 100 Dormant
AvenueInvestBerhad 100 100 Provisionofunittrustandasset anditssubsidiary: managementservices
-AvenueAssetManagement 100 100 Provisionofportfolio Services(Labuan)Ltd. managementservices AvenueServicesSdn.Bhd. 100 100 Provisionofmanagement services ECMLibraHoldingsLimited 100 100 Investmentholdingandprovisionof anditssubsidiaries: advisoryservices
-ECMLibraInvestmentBankLimited 100 100 Provisionofoffshoreinvestmentbanking anditssubsidiary: andrelatedfinancialservices
-ECMLibraInvestmentsLimited 100 100 Investmentholdingandprovisionof (IncorporatedinBritishVirginIslands) financialservices -ECMLibraSecuritiesLimited* 100 100 Dormant (IncorporatedinHongKong)
ECMLibraCapitalSdn.Bhd. 100 100 Provisionofmanagement,investmentadvisory andinvestmentconsultingservices
ECMLibraPartnersSdn.Bhd. 100 100 Provisionofcreditservices *AuditedbyfirmotherthanErnst&Young.
60ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
14. INVESTMENT IN SUBSIDIARY COMPANIES (continued)
Thesubsidiarycompanies,allincorporatedinMalaysiaexceptasotherwiseindicated,areasfollows:(continued) Effective Percentage of Ownership Name of Company 2008 2007 Principal Activities
% %
ECMLibraCapitalMarketsSdnBhd 100 100 Provisionoffundmanagementservices
AvenueCapitalResourcesBerhad 100 100 Investmentholdingandprovisionof anditssubsidiaries: managementservices
-UltimateAcresSdn.Bhd. 100 100 Dormant
-PiucoEntertainmentVenture(M)Sdn.Bhd. 100 100 Companydissolvedon26January2008 (Inmembers'voluntaryliquidation)
ACRBCapitalSdn.Bhd. 100 100 Dormant
ECMLibraSecuritiesSdn.Bhd. 100 100 Dormant anditssubsidiaries: -ECMLibraSecuritiesNominees 100 100 Dormant (Tempatan)Sdn.Bhd.
-ECMLibraSecuritiesNominees 100 100 Dormant (Asing)Sdn.Bhd.
-ECMLibraSecuritiesNomineesSdn.Bhd. 100 100 Dormant -ECMLibraSecuritiesPortfolio 100 100 Dormant ManagementSdn.Bhd.
ECMLibraFinancialGroupBerhadANNUALREPORT200861
notes to the financial statementscontinued
15. INVESTMENT IN ASSOCIATED COMPANIES Group Company 2008 2007 2008 2007 RM’000 RM’000 RM’000 RM’000
Quotedshares,outsideMalaysia 39,492 42,380 - -
Unquotedshares,withinMalaysia - 3,918 - 3,918
39,492 46,298 - 3,918
Shareinpostacquisitionresults 3,788 91 - -
43,280 46,389 - 3,918
Less:Impairmentloss - - - -
Net 43,280 46,389 - 3,918
Quotedshares,outsideMalaysia Atmarketvalue 18,622 27,178 - - Atfairvalue 21,459 18,233 - -
ThecarryingvalueoftheGroup'squotedinvestmentinanassociatedcompanyhasexceededthemarketvaluebyapproximatelyRM24,658,000(2007:RM19,211,000).Basedonthedirectors’valuation,thecarryingvalueoftheGroup’s investment inassociatedcompanyissupportedby itsrecoverableamount.
Theassociatedcompanies,allincorporatedinMalaysia,exceptasotherwiseindicated,areasfollows:
Effective Percentage of Ownership
Name of Company Principal Activities Year end 2008 2007
WestcombFinancialGroupLimited(IncorporatedinSingapore) Investmentholding 31December 24 24 MuamalatAvenueSdn.Bhd. Provisionofasset 31December - 40 management services
On18December2006,theCompanyenteredintoaconditionalsharesaleagreementwithBankMuamalatMalaysiaBerhadforthedisposalofitsentire40%equityinterestheldinMuamalatAvenueSdn.Bhd.forRM4.42million.Thesaiddisposalwascompletedon15March2007.
62ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
15. INVESTMENT IN ASSOCIATED COMPANIES (continued)
Thefollowingamountsrepresenttheassets,liabilities,revenueandexpensesoftheassociatedcompaniesoftheGroupremainingasatyearend:
Group 2008 2007 RM’000 RM’000
Property,plantandequipment 428 1,103
Intangibleassets 2,974 3,119
Investments 216 395
Currentassets 163,031 191,573
Currentliabilities (74,724) (109,133)
Longtermliabilities (895) (206)
NetAssets 91,030 86,851
Revenue 48,286 24,426
Expenses (32,011) (22,961)
Profitbeforetaxation 16,275 1,465
Incometaxexpense (2,923) (382)
Netprofitfortheyear 13,352 1,083
16. OTHER INVESTMENTS Group 2008 2007 RM’000 RM’000
Sharesinunquotedlocalcorporations,atcost 2,240 6,759
Otherquotedinvestments 10,624 15,139
12,864 21,898
Less:Impairmentloss (560) (7,879)
12,304 14,019
Marketvalueof: Otherquotedinvestments 11,921 16,485
ECMLibraFinancialGroupBerhadANNUALREPORT200863
notes to the financial statementscontinued
17. DEFERRED TAX ASSETS/(LIABILITIES)
Group 2008 2007 RM’000 RM’000
Atbeginningofthefinancialyear 4,567 (117)
Acquisitionofsubsidiarycompanies - (316)
Recognisedintheincomestatement(Note9) 5,265 5,000
Atendofthefinancialyear 9,832 4,567
Presentedafterappropriateoffsettingasfollows:
Deferredtaxassets 10,000 5,000
Deferredtaxliabilities (168) (433)
9,832 4,567
Allmovementindeferredtaxassetsandliabilitieshavebeenrecognisedintheincomestatement.Thecomponentsofdeferredtaxliabilitiesandassetsasatthe endofthefinancialyearareasfollows:
Group 2008 2007 RM’000 RM’000
Acceleratedcapitalallowance 168 983
Unutilisedtaxlosses (10,000) (5,000)
Provisions - (197)
Others - (353)
(9,832) (4,567)
64ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
17. DEFERRED TAX ASSETS/(LIABILITIES) (continued) Deferredtaxassetshavenotbeenrecognisedinrespectofthefollowingitems:
Group 2008 2007 RM’000 RM’000
Unusedtaxlosses 169,800 246,796
Excessofcapitalallowancesoverdepreciationofproperty,plantandequipment (464) (3,065)
Othertemporarydifferences 32 5,452
Netdeferredasset 169,368 249,183
TheunutilisedtaxlossesandunabsorbedcapitalallowancesoftheGroupareavailableindefinitelyforoffsettingagainstfuturetaxableprofitsoftherespectiveentitieswithintheGroup,subjecttonosubstantialchangeinshareholdingsofthoseentitiesundertheIncomeTaxAct,1967andguidelinesissuedbythetaxauthority.
18. INVENTORIES
Group 2008 2007 RM’000 RM’000
Atcost: UnittrustquotedinMalaysia-manager’sstocks 89 1,016
MarketvalueoftrustunitsquotedinMalaysia 89 1,016
19. MARKETABLE SECURITIES Group 2008 2007 RM’000 RM’000
Atcost: Unquotedprivatedebtsecurities 64,373 120,545
Less:Allowancefordiminutioninvalue (4,400) (2,115)
59,973 118,430
ECMLibraFinancialGroupBerhadANNUALREPORT200865
notes to the financial statementscontinued
19. MARKETABLE SECURITIES (continued) Group 2008 2007 RM’000 RM’000
Quotedshares 104,122 98,124
Less:Allowancefordiminutioninvalue - (8,884)
104,122 89,240
Net 164,095 207,670
Indicativemarketvalueof: Unquotedprivatedebtsecurities 66,219 120,927Quotedshares 112,357 92,756
20. TRADE RECEIVABLES Group 2008 2007 RM’000 RM’000
Amountowingbyclients 367,731 697,044Amountowingbybrokers 183,847 334,902
551,578 1,031,946
Less:Allowancefordoubtfulreceivables -specificallowance(Note(a)) (271) (1,102) -generalallowance(Note(b)) (2,775) (4,790) -interest-in-suspense(Note(c)) (725) (944)
547,807 1,025,110
AmountduebyTrustees 3,038 2,368
Othertradereceivables - 387
Net 550,845 1,027,865
66ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
20. TRADE RECEIVABLES (continued) Thetradesettlementfortheamountsowingbyclientsandbrokersis3marketdaysaccordingtotheFixedDeliveryandSettlementSystem("FDSS")
tradingrulesofBursaMalaysiaSecuritiesBerhad("BursaMalaysia").Thetradecredittermsformarginclientsaresetwithinstandardmarginagreements.
Thetradecredittermsforothertradereceivablesgenerallyrangesfrom30daysto90days.Othertradecredittermsareassessedandapprovedonacase-by-casebasis.
Movementsintheallowanceforbadanddoubtfulreceivablesandinterest-in-suspenseaccountsareasfollows:
Group 2008 2007 RM’000 RM’000
(a) SpecificAllowance: Balanceatbeginningofyear 1,102 164
Acquiredfrombusinessmerger - 562
Allowancemadeduringtheyear 695 376
Allowancenolongerrequired (918) -
Amountwrittenoff (608) -
Balanceatendofyear 271 1,102
(b) GeneralAllowance: Balanceatbeginningofyear 4,790 3,095
Acquiredfrombusinessmerger - 253
Allowancemadeduringtheyear 3,063 1,442
Writtenback (5,078) -
Balanceatendofyear 2,775 4,790
(c) Interest-in-suspense: Balanceatbeginningofyear 944 435
Acquiredfrombusinessmerger - 710
Suspendedduringtheyear 465 -
Writtenback (684) (201)
Balanceatendofyear 725 944
ECMLibraFinancialGroupBerhadANNUALREPORT200867
notes to the financial statementscontinued
20. TRADE RECEIVABLES (continued) Theclassificationofnon-performingaccountsinaccordancewithRule1104.1,Schedule7AoftheRulesofBursaMalaysiaisasfollows:
Group 2008 2007 RM’000 RM’000
Non-performingaccounts,classifiedasdoubtful 126 111
Non-performingaccounts,classifiedasbad 1,242 3,023
Totalnon-performingaccounts 1,368 3,134
21. LOAN RECEIVABLES AlloftheGroup'sloanreceivablesaresecured,bearinterestraterangingfrom9.0%to10.0%perannum(2007:9.5%to11.0%perannum)andmature
withinayear.
22. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS
Group Company
2008 2007 2008 2007 RM’000 RM’000 RM’000 RM’000
Taxrecoverable 7,233 9,427 180 -
Depositsandprepayments 6,905 17,340 100 13
Otherreceivables 5,285 5,865 24 6
19,423 32,632 304 19
IncludedindepositsoftheGroupinthepreviousfinancialyearwasanamountofRM10,000,000whichrepresentsdepositpaidtotheGovernmentofMalaysiafortheissuanceofamerchantbanklicenceasoneofthepre-conditionsfortheproposedtransformationofECMLIBintoaninvestmentbank.Thisdepositisnon-interestbearing.WiththepaymentofRM42.5millionbyECMLIBbeingthebalancepaymentforthemerchantbanklicence,thesaiddeposithasbeenreclassifiedtointangibleassetsasdisclosedinnote13.
68ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
23. AMOUNTS OWING BY/TO SUBSIDIARY COMPANIES Company
2008 2007 RM’000 RM’000
Amountowingbysubsidiarycompanies 60,070 125,090
Amountowingtosubsidiarycompanies 102,799 79,308
Theamountowingby/tosubsidiarycompaniesmainlyrepresentpaymentsmadeonbehalfandunsecuredadvances,whichareinterestfreewithnofixedtermsofrepaymentexceptforamountowingbyasubsidiarycompanytotallingRM28,840,000(2007:RM37,500,000)whichbearinterestrangingfrom3.5%to4.5%(2007:3.5%to4.5%)perannum.
24. DEPOSITS WITH LICENSED FINANCIAL INSTITUTIONS
Group Company
2008 2007 2008 2007 RM’000 RM’000 RM’000 RM’000
Depositswith: Licensedbanks 150,432 106,290 - 10,720
Otherfinancialinstitutions - 933 - -
150,432 107,223 - 10,720
IncludedindepositswithlicensedfinancialinstitutionsoftheGroupare:
(a)depositsamountingtoRM600,000(2007:RM600,000)pledgedtothefinancialinstitutionsforcreditfacilitiesgrantedtosubsidiarycompanies;and
(b)shorttermdepositsofRM21,781,000(2007:RM58,171,000)heldintrustonbehalfofasubsidiarycompany’sremisiersandclients.
ECMLibraFinancialGroupBerhadANNUALREPORT200869
notes to the financial statementscontinued
24. DEPOSITS WITH LICENSED FINANCIAL INSTITUTIONS (continued)
Therangeofeffectiveinterestratesofdepositsasatthebalancesheetdatewereasfollows:
Group Company
2008 2007 2008 2007 RM’000 RM’000 RM’000 RM’000
% % % %
Depositswith: Licensedbanks 2.4 to 4.9 2.3to5.3 2.5 to 3.1 3.0to3.1 Otherfinancialinstitutions - 3 - -
Theaveragematuritiesofdepositsasattheendofthefinancialyearwereasfollows:
Group Company
2008 2007 2008 2007 Days Days Days Days
Depositswith: Licensedbanks 13 68 29 31 Otherfinancialinstitutions - 14 - -
25. CASH AND BANK BALANCES
IncludedundercashandbankbalancesoftheGroupisanamountofRM198,777,000(2007:RM53,726,000)inrespectofmoneyheldintrustaccountsforremisiersandclientsofasubsidiarycompany.
70ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
26. SHARE CAPITAL Number of Ordinary Shares of RM1 Each Amount 2008 2007 2008 2007 Group ’000 ’000 RM’000 RM’000
Authorised: Atbeginning/endofyear 1,500,000 1,500,000 1,500,000 1,500,000
Issuedandfullypaid-up:
Atbeginningofyear 830,902 703,027 830,902 703,027
Cancellationarisingfromcapitalreduction - (314,125) - (314,125)
Issuance - 442,000 - 442,000
Atendofyear 830,902 830,902 830,902 830,902
Company
Authorised:
Atbeginning/endofyear 1,500,000 1,500,000 1,500,000 1,500,000
Issuedandfullypaid-up:
Atbeginningofyear 830,902 * 830,902 *
IssuancepursuanttotheACRBreorganisationexercise - 849,128 - 849,128
Reductionpursuanttodistributionofassets-in-specie - (314,125) - (314,125)
Cancellationbywayofacapitalreductionexercise - (146,101) - (146,101)
Issuancepursuanttoacquisitionofsubsidiaries - 442,000 - 442,000
Atendofyear 830,902 830,902 830,902 830,902
*RepresentRM2.00.
The Company’s Employees Share Option Scheme (“ESOS”) is governed by the by-laws approved by the shareholders at an Extraordinary GeneralMeetingheldon1December2005.TheESOSwasimplementedon4January2008andwillbeinforceforaperiodoften(10)years.
ECMLibraFinancialGroupBerhadANNUALREPORT200871
notes to the financial statementscontinued
26. SHARE CAPITAL (continued) TheCompanyhasbeengrantedexemptionbytheCompaniesCommissionofMalaysiafromhavingtodisclosethenamesofoptionholdersgranted
lessthan2,000,000optionseachduringtheyearpursuanttothescheme.Thenamesofoptionholders,otherthandirectors,whohadbeengrantedoptionsof2,000,000ormoreasattheendofthefinancialyearareasfollows:
No.ofoptions '000T.Jeyaratnam 2,000FranklinTanKokPin 2,000NgHoeGuan 2,000WongSeongCho 2,000
ThenamesofdirectorswhohadbeengrantedoptionsaredisclosedinthesectionofDirectors'Interestinthisreport.
ThemainfeaturesoftheESOSare,interalia,asfollows:
(i) EligibleemployeesarethoseemployeesoftheGroupwhohadbeeninserviceforatleastoneyearonthedateofoffer.Themaximumallowable allotmentsforthedirectorshadbeenapprovedbytheshareholdersoftheCompanyinageneralmeeting.TheBoardofDirectorsmayfromtime totimeatitsdiscretionselectandidentifysuitableeligibleemployeestobeofferedoptions.
(ii) TheaggregatenumberofsharestobeissuedundertheESOSshallnotexceed15%ofthetotalissuedandpaid-upordinarysharecapitalofthe Companyforthetimebeing.
(ii) TheESOSshallbeinforceforaperiodof10yearsfrom4January2008.
(iv) Theoptionpriceshallnotbeatadiscountofmorethantenpercent(10%)(orsuchdiscountastherelevantauthoritiesshallpermit)fromthe5-day weightedaveragemarketpriceofthesharesoftheCompanyprecedingthedateofofferandshallinnoeventbelessthantheparvalueofthe sharesoftheCompanyofRM1.00.
(v) Anoptionholdermay,inaparticularyear,exerciseuptosuchmaximumnumberofsharesintheoptioncertificateasdeterminedbytheBoardof Directorsorasspecifiedintheoptioncertificate.
Asat31January2008,therewasnoissuanceofnewsharesarisingfromtheexerciseofoptionspursuanttotheESOS.
27. RESERVES Group Company 2008 2007 2008 2007 RM’000 RM’000 RM’000 RM’000 Non-distributable:
Mergerreserves 26,561 26,561 - -
Foreignexchangetranslationreserve (6,718) (2,047) - -
Equitycompensationreserve 2,075 - 1,495 -
Distributable: Retainedprofits 84,044 5,723 49,829 6,310
Generalreserve 159 159 - -
106,121 30,396 51,324 6,310
72ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
27. RESERVES (continued) MergerreservearoseupontakingoverofthelistingstatusofasubsidiarycompanywheretheresultsandthefinancialpositionoftheGrouphavebeen
combinedunderthemergerprinciplesofaccounting,asdescribedintheaccountingpolicies.
Generalreservearosefromtheredemptionofredeemablenon-convertiblepreferencesharesinasubsidiarycompany.
EquitycompensationreservearosefromthegrantingofshareoptionstodirectorsandemployeesoftheCompany.
Inthepast,Malaysiancompaniesadoptthefullimputationsystem.InaccordancewiththeFinanceAct2007whichwasgazettedon28December2007,companiesshallnotbeentitledtodeducttaxondividendpaid,creditedordistributedtoitsshareholders,andsuchdividendswillbeexemptedfromtaxinthehandsoftheshareholders("singletiersystem").However,thereisatransitionalperiodofsixyears,expiringon31December2013,toallowcompaniestopayfrankeddividendstotheirshareholdersunderlimitedcircumstances.Companiesalsohaveanirrevocableoptiontodisregardthesection108balanceandopttopaydividendsunderthesingletiersystem.Thechangeinthetaxlegislationalsoprovidesforthesection108balancetobesectionlocked-inasat31December2007inaccordancewithSection39oftheFinanceAct2007.
TheCompanydidnotelectfortheirrevocableoptiontodisregardthesection108balance.Accordingly,duringthetransitionalperiod,theCompanymayutilisethecredit inthesection108balanceasat31January2008todistributecashdividendpaymentstoordinaryshareholdingsasdefinedundertheFinanceAct2007.Asat31January2008,theCompanyhassufficientcreditinthesection108balancetopayfrankeddividendsamountingto RM14,011,000 (2007: RM6,000,000) out of its retained earnings. If the balance of the retained earnings were to be distributed as dividends, theCompanymaydistributesuchdividendsunderthesingletiersystem.
28. TRADE PAYABLES Company 2008 2007 RM’000 RM’000
Amountowingtoclients 221,982 550,995
Amountowingtobrokers 131,217 234,237
Clients'trustmonies 165,525 85,615
Amountowingtotrustees 2,566 2,060
521,290 872,907
Thetradecredittermfornon-marginclientsandbrokersis3marketdaysaccordingtoFDSStradingrulesofBursaMalaysia.
29. OTHER PAYABLES AND ACCRUED EXPENSES Group Company 2008 2007 2008 2007 RM’000 RM’000 RM’000 RM’000
Otherpayablesandaccruedexpenses 46,831 65,540 1,840 520
Remisiersanddealerstrustaccounts 25,727 18,458 - -
Depositsreceived 2,196 699 2,196 442
74,754 84,697 4,036 962
ECMLibraFinancialGroupBerhadANNUALREPORT200873
notes to the financial statementscontinued
30. SHORT TERM BORROWINGS Company 2008 2007 RM’000 RM’000
Termloan-unsecured - 40,000
Interbankborrowing - 60,000
- 100,000
Theunsecuredtermloanduringthepreviousfinancialyearwhichcarriedafixedinterestrateof8%perannumwasfullysettleduponmaturityinthecurrentfinancialyearended31January2008.
Theinterbankborrowingfromalicensedbankinthepreviousfinancialyearwasunsecured,boreinterestof3.70%perannumandwasfullysettleduponmaturityinthecurrentfinancialyearended31January2008.
31. CASH AND CASH EQUIVALENTS Group Company 2008 2007 2008 2007 RM’000 RM’000 RM’000 RM’000
Depositswithlicensedfinancialinstitutions 150,432 107,223 - 10,720
Cashandbankbalances 219,840 172,747 25 123
370,272 279,970 25 10,843
Less: Shorttermdepositsheldintrust(Note24) 21,781 58,171 - -
Depositspledgedwithfinancialinstitutions(Note24) 600 600 - -
Cashandbankbalancesheldintrust(Note25) 198,777 53,726 - -
221,158 112,497 - -
149,114 167,473 25 10,843
74ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
32. DIVIDENDS
Afinaldividendof1sen,less27%tax,amountingtoRM6,066,000proposedinrespectofthefinancialyearended31January2007,waspaidon13July2007.
AttheforthcomingAnnualGeneralMeeting,afinaldividendof3senperordinaryshareofRM1eachon830,901,953ordinaryshares,inrespectofthefinancialyearended31January2008,amountingtoanetdividendpayableofapproximatelyRM20,004,000willbeproposedforshareholders'approval.Asat31January2008,theCompanyhassufficientcredit inthesection108balancetopayfrankeddividendsuptoRM14,011,000andthebalanceofRM5,993,000willbedistributedunderthesingletiersystem.Thefinancialstatementsforthecurrentfinancialyeardonotreflectthisproposeddividend.Suchdividend,ifapprovedbytheshareholders,willbeaccountedforinequityasanappropriationofretainedearningsinthefinancialyearending31January2009.
33. COMMITMENTS Group
2008 2007 RM’000 RM’000
Operational Commitments Approvedbutnotcontractedfor: Underwritingcommitments - 3,401
Capital Commitments Approvedbutnotcontractedfor: Purchaseofproperty,plantandequipment 418 933
Non-cancellation operating lease commitments Futureminimumrentalspayable Notlaterthan1year - 1,901 Laterthan1yearandnotlaterthan5years - 212
- 2,113
Other Commitments Approvedbutnotcontractedfor: BalanceofpaymenttotheGovernmentofMalaysiafor transformationofasubsidiaryintoaninvestmentbank* - 42,500
*On6February2008,ECMLIB,asubsidiaryoftheCompany,wasgrantedamerchantbanklicencebytheMinisterofFinancetoallowECMLIBtocarryonmerchantbankingbusiness.
ECMLibraFinancialGroupBerhadANNUALREPORT200875
notes to the financial statementscontinued
34. SIGNIFICANT RELATED PARTY TRANSACTIONS
(a) Inadditiontothetransactionsdetailedelsewhereinthefinancialstatements,theGroupandtheCompanyhadthefollowingtransactionswith relatedpartiesduringthefinancialyear:
Group 2008 2007 RM’000 RM’000
Transactionwithacompanyinwhichadirectorandshareholderofholdingcompanyhasinterestin:
Projectmanagementfee 439 263
ThedirectorsoftheCompanyareoftheopinionthattheabovetransactionshadbeenenteredintointhenormalcourseofbusinessandhadbeen establishedundertermsthatarenolessfavourablethanthosearrangedwithindependentthirdparties.
(b) Compensationofkeymanagementpersonnel
Theremunerationofdirectorsandothermembersofkeymanagementduringtheyearwasasfollows: Group Company 2008 2007 2008 2007 RM’000 RM’000 RM’000 RM’000
Short-termemployeebenefits 5,640 8,441 3,628 209
Definedcontributionplan 669 338 412 186
6,309 8,779 4,040 395
Includedinthetotalkeymanagementpersonnelare:
Group Company 2008 2007 2008 2007 RM’000 RM’000 RM’000 RM’000
Directors'remuneration(Note4(ii)) 5,216 8,594 2,752 204
76ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
35. FINANCIAL INSTRUMENTS
(a) Financial Risk Management Objectives and Policies
TheoperationsoftheGrouparesubjecttoavarietyoffinancialrisks,includinginterestraterisk,creditrisk,liquidityrisk,cashflowriskandprice risk.TheGrouphas formulateda financial riskmanagement frameworkwhoseprincipalobjective is tominimisetheGroup’sexposuretorisks and/orcostsassociatedwiththefinancing,investingandoperatingactivitiesoftheGroup.
(b) Interest rate risk
TheGroupisexposedtointerestrateriskthroughtheimpactofratechangesoninterestbearingfixeddepositsandbankborrowings.Theinterest rateoffixeddepositsandshorttermborrowingsaredisclosedinNote24and30respectively.
(c) Credit risk
Creditriskisthepotentiallossofrevenueandprincipallossesintheformofspecificprovisionsasaresultofpartialortotaldefaultordebtsand/or marginfinancing.
Experiencedkeypersonnelareappointedtohighlevelmanagementcommitteestoestablishoverallcreditrisklimits,marginfinancingassessment, collateralandprudentlendingpolicies.
TheGroupisexposedtocreditriskmainlyfromtradereceivables.TheGroupextendscredittoitsclientsuponcarefulevaluationoftheclientsso astolimithighcreditconcentrationinaclientorclientsfromaparticularmarket.
(d) Liquidity risk
Liquidityriskrelatestotheabilitytomaintainsufficientliquidassetstomeetitsfinancialcommitmentsandobligationsasandwhentheyfalldue atareasonablecost.
LiquidityriskiscontrolledthroughtheCapitalAdequacyRequirementsofBursaMalaysiaandtheGroupliquidityriskmanagementpolicy.
(e) Cash flow risk
TheGroupreviewsitscashflowpositionregularlytomanageitsexposuretofluctuationsinfuturecashflowsassociatedwithitsmonetaryfinancial instruments.
(f) Price risk
The proprietary position of private debt securities and equities are subjected price risk. Such positions were marked-to-market daily and the price risk was controlled by investing in high quality stocks and highly rated PDS as well as cut-loss should the expected prices decline substantially.Forthoseinstrumentsheldtomaturity,adequateprovisionsweremadewhenthereispermanentdimunitioninvalue.
ECMLibraFinancialGroupBerhadANNUALREPORT200877
notes to the financial statementscontinued
35. FINANCIAL INSTRUMENTS (continued)
(g) Fair value of financial assets and financial liabilities
ThecarryingamountsoffinancialassetsandliabilitiesoftheGroupandoftheCompanyatthebalancesheetdateapproximatedtheirfairvalues exceptforthefollowings:
Group Company Carrying Carrying amount Fair value amount Fair value Note RM’000 RM’000 RM’000 RM’000
2008 Financial Assets
Investmentinassociatedcompany
-quoted 15 43,280 21,459 - -
Amountsowingbysubsidiarycompanies 23 - - 60,070 *
Financial Liabilities
Amountsowingtosubsidiarycompanies 23 - - 102,799 *
2007 Financial Assets
Investmentproperties 12 1,020 1,386 - -
Investmentinassociatedcompany
-quoted 15 42,913 18,233 - -
-unquoted 15 3,476 4,417 3,918 4,417
Amountsowingbysubsidiarycompanies 23 - - 125,090 *
Financial Liabilities
Amountsowingtosubsidiarycompanies 23 - - 79,308 *
* Itisnotpracticablewithintheconstraintsoftimelinessandcosttoestimatethefairvalueoftheamountsowingfrom/tosubsidiarycompanies principallyduetothelackoffixedrepaymentterms.However,theGroupdoesnotanticipatethecarryingamountsrecordedatthebalancesheet datetobesignificantlydifferentfromthevaluesthatwouldeventuallybereceivedorsettled.
78ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
35. FINANCIAL INSTRUMENTS (continued)
(g) Fair value of financial assets and financial liabilities (continued)
Themethodsandassumptionsusedbymanagementtodeterminefairvaluesoffinancialinstrumentsotherthanthosewhosecarryingamounts reasonablyapproximatetheirfairvaluesareasfollows:
(i) Quoted investments (non-current assets)/Marketable securities/Inventories (unit trusts quoted in Malaysia)
Thefairvalueofthesefinancialassetsisdeterminedbyreferencetostockexchangequotedmarketpricesatthecloseofbusinessonthe balancesheetdate.
(ii) Unquoted investment / Loan and other receivables
Itisnotpracticaltoestimatethefairvalueofunquotedinvestments,loanreceivablesandotherreceivables.
(iii) Cash and cash equivalents, trade, loan and other receivables, trade and other payables, and current borrowings
Thecarryingamountsapproximatefairvaluebecauseoftheshortmaturityoftheseinstruments.
36. SEGMENTAL REPORTING
Business segments
TheGroupisorganisedintothefollowingoperatingdivisions:
(a) Financialserviceswhichincludestockbrokingactivities,investmentbankingactivities,assetmanagement,unittrustsmanagement,creditservices andcustodianservices;and
(b) Investmentholdingswhichincludeprovisionofmanagementservices,investmentinassociatedcompaniesandotherinvestments.
NogeographicalsegmentalinformationisprovidedastheGroupoperatesprincipallyinMalaysia.
ECMLibraFinancialGroupBerhadANNUALREPORT200879
notes to the financial statementscontinued
36. SEGMENTAL REPORTING (continued) Financial Investment Group services holdings Eliminations Consolidated RM’000 RM’000 RM’000 RM’000 2008
Revenue 203,644 78,313 (76,905) 205,052
Results Segmentresults 87,624 68,677 (82,541) 73,760
Shareofprofitsofassociatedcompanies 3,255
Lossondisposalofinvestments (1,184)
Writebackofimpairmentlossoninvestments 9,211
Financecosts (2,399)
Profitbeforetax 82,643
Incometaxexpense 1,744
Netprofitfortheyear 84,387
Financial Investment services holdings Consolidated RM’000 RM’000 RM’000
2008 Assets Segmentassets 1,228,264 263,125 1,491,389Investmentinassociatedcompanies 43,280 - 43,280
Consolidatedtotalassets 1,534,669
Liabilities Segmentliabilities 513,145 84,501 597,646
Other Information Capitaladditions 2,039 1,594 3,633Depreciationof: -property,plantandequipment 5,702 512 6,214 -investmentproperties - 12 12
80ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
36. SEGMENTAL REPORTING (continued) Financial Investment Group services Holdings Eliminations Consolidated
RM’000 RM’000 RM’000 RM’000 2007
Revenue 142,934 19,725 (18,147) 144,512
Results Segmentresults 49,470 17,669 (18,147)48,992
Shareofprofitsofassociatedcompanies 6,074
Rationalisationexpenses (17,369)
Gainondisposalofinvestments 2,747
Impairmentlossoninvestments (18,642)
Financecosts (3,450)
Profitbeforetax 18,352
Incometaxexpense 1,806
Netprofitfortheyear 20,158
Financial Investment services holdings Consolidated RM’000 RM’000 RM’000 2007
Assets Segmentassets 1,848,549 25,915 1,874,464Investmentinassociatedcompanies 42,913 3,476 46,389
Consolidatedtotalassets 1,920,853
Liabilities Segmentliabilities 1,056,365 3,190 1,059,555
Other Information Capitaladditions 3,670 96 3,766Depreciationof: -property,plantandequipment 6,152 178 6,330 -investmentproperties - 21 21
ECMLibraFinancialGroupBerhadANNUALREPORT200881
notes to the financial statementscontinued
37. SIGNIFICANT EVENTS
(a) On18December2006,theCompanyenteredintoaconditionalsharesaleagreementwithBankMuamalatMalaysiaBerhadforthedisposalofits entire40%equityinterestheldinanassociatedcompany,namelyMuamalatAvenueSdn.Bhd.forRM4.42million.Thesaiddisposalwascompleted on15March2007.
(b) TheCompanychangeditsnamefromECMLibraAvenueBerhadtoECMLibraFinancialGroupBerhadwitheffectfrom31January2008.
(c) ECMLibraAvenueSecuritiesBerhad,asubsidiaryoftheCompany,changeditsnametoECMLibraInvestmentBankBerhadwitheffectfrom31 January2008tofacilitatethetransformationfromaUniversalBrokertoanInvestmentBank.
38. EVENT SUBSEQUENT TO BALANCE SHEET DATE
Subsequenttothefinancialyearend,on6February2008,ECMLIBwasgrantedamerchantbanklicencebytheMinisterofFinancetoallowECMLIBtocarryonmerchantbankingbusiness.
39. COMPARATIVES
Certaincomparativefigureshavebeenreclassifiedtoconformwiththecurrentyear'spresentation.
As As Previously Restated Adjustment Reported RM’000 RM’000 RM’000
Group
Income Statements (Extract): Revenue 144,512 24,876 119,636
Gainondisposalofinvestmentincome 2,747 (13,780) 16,527
Otheroperatingincome 5,416 (11,096) 16,512
Balance sheet (Extract)
Note15-Investmentinassociatedcompanies
Quotedshares,outsideMalaysia Atfairvalue 18,233 (24,680) 42,913
82ECMLibraFinancialGroupBerhadANNUALREPORT2008
notes to the financial statementscontinued
39. COMPARATIVES (continued)
As As Previously Restated Adjustment Reported RM’000 RM’000 RM’000
Group
Balance sheet (Extract) (Continued)
Note19-Marketablesecurities
Unquotedprivatedebtsecurities Allowancefordiminutioninvalue (2,115) 2,021 (4,136)
Quotedshares Allowancefordiminutioninvalue (8,884) (2,021) (6,863)
(10,999) - (10,999)
Indicativemarketvalueof:
Unquotedprivatedebtsecurities 120,927 (16,484) 137,411Quotedshares 92,756 839 91,917
Note35-FinancialInstruments
(g) Fairvalueoffinancialassetsandfinancialliabilities
Quotedshares,outsideMalaysia Atfairvalue 18,233 (24,680) 42,913
ECMLibraFinancialGroupBerhadANNUALREPORT200883
other information
1. MATERIAL CONTRACT Therewerenomaterialcontracts(notbeingcontractenteredintointheordinarycourseofbusiness)whichhadbeenenteredintobytheCompany anditssubsidiariesinvolvingtheinterestofdirectorsandmajorshareholders,eitherstillsubsistingattheendofthefinancialyearorenteredintosince theendofthepreviousfinancialyearpursuanttoItem21,PartA,Appendix9CoftheListingRequirementsofBursaMalaysia.
2. NON-AUDIT FEES
Theamountofnon-auditfeespaidtoExternalAuditors,Messrs.Ernst&Young,bytheGroupforthefinancialyearamountedtoRM70,500.
3. ANALYSIS OF SHAREHOLDERS AS AT 15 APRIL 2008
Authorisedsharecapital : RM1,500,000,000.00
Issued&paid-upcapital : RM830,901,953.00
Classofshares : OrdinarySharesofRM1.00
Votingrights
- onshowofhands : 1vote
- onapoll : 1voteforeachshareheld
Distribution schedule of shareholdings:
Size of Holdings No. of Shareholders % No. of Shares %
Lessthan100 2,690 9.88 126,627 0.01
100-1,000 6,711 24.65 3,887,246 0.47
1,001-10,000 12,931 47.50 59,018,061 7.10
10,001-100,000 4,347 15.97 135,411,217 16.30
100,001-lessthan5%ofissuedshares 542 1.99 427,982,983 51.51
5%andaboveofissuedshares 2 0.01 204,475,819 24.61
27,223 100.00 830,901,953 100.00
Thirty Largest Shareholders:
Name of Shareholders No. of Shares %
1. EquityVisionSdnBhd 128,019,819 15.41
2. LimKianOnn 76,456,000 9.20
84ECMLibraFinancialGroupBerhadANNUALREPORT2008
3. ANALYSIS OF SHAREHOLDERS AS AT 15 APRIL 2008 (continued)
Thirty Largest Shareholders (continued):
Name of Shareholders No. of Shares %
3. CitigroupNominees(Asing)SdnBhd 41,078,800 4.94 -exemptanforCitibankNA,Singapore(JuliusBaer)
4. ECMLNominees(Tempatan)SdnBhd 35,000,000 4.21 -ECMLibraCapitalMarketsSdnBhdforECMLibraHoldingsSdnBhd
5. HikkayaJayaSdnBhd 26,467,220 3.18
6. CIMBGroupNominees(Tempatan)SdnBhd 22,126,992 2.66 -AmcorpGroupBerhadforHikkayaJayaSdnBhd
7. Multi-PurposeHoldingsBerhad 17,223,484 2.07
8. SumberamaSdnBhd 16,926,400 2.04
9. CartabanNominees(Asing)SdnBhd 10,396,000 1.25 -exemptanforCaceisBankLuxembourg
10. LimSuTong@LimCheeTong 10,200,000 1.23
11. KenangaNominees(Tempatan)SdnBhd 8,200,400 0.99 -KenangaCapitalSdnBhdforBHBuildersSdnBhd
12. HSBCNominees(Asing)SdnBhd 7,796,872 0.94 -exemptanforCreditSuisse
13. CIMBGroupNominees(Tempatan)SdnBhd 6,880,972 0.83 -AmcorpGroupBerhadforMezzanineCapital(Malaysia)SdnBhd
14. CitigroupNominees(Asing)SdnBhd 6,644,300 0.80 -UBSAGSingaporeforYujiHoldingsLimited
15. Multi-PurposeInsuransBhd 6,618,000 0.80
16. CitigroupNominees(Asing)SdnBhd 6,220,730 0.75 -CBNYforDFAEmergingMarketsFund
17. CIMBGroupNominees(Tempatan)SdnBhd 6,059,100 0.73 -AmcorpGroupBerhadforCorporateviewSdnBhd
18. CitigroupNominees(Tempatan)SdnBhd 4,300,000 0.52 -PledgedSecuritiesAccountforGooiSeongHeen
19. HDMNominees(Tempatan)SdnBhd 3,900,000 0.47 -UOBKayHianPteLtdforGooiSeongLim
20. LooGeokEng 3,850,000 0.46
21. ChowSoiWah 3,849,300 0.46
other informationcontinued
ECMLibraFinancialGroupBerhadANNUALREPORT200885
3. ANALYSIS OF SHAREHOLDERS AS AT 15 APRIL 2008 (continued)
Thirty Largest Shareholders (continued):
Name of Shareholders No. of Shares %
22. GanSeongLiam 3,642,100 0.44
23. ABBNominee(Tempatan)SdnBhd 3,320,506 0.40 -AffinBankBerhad
24. SooNgikGee@SooYehJoo 3,176,100 0.38
25. HDMNominees(Tempatan)SdnBhd 3,100,000 0.37 -OCBCSecuritiesPteLtdforGooiSeongLim
26. PublicNominees(Tempatan)SdnBhd 3,000,000 0.36 -PledgedSecuritiesAccountforGooiSeongHeen
27. RHBNominees(Asing)SdnBhd 3,000,000 0.36 -OCBCSecuritiesPrivateLimitedforOCBCPBA/CPrimevestHoldingsPteLtd
28. CitigroupNominees(Tempatan)SdnBhd 2,932,400 0.35 -Uni.AsiaLifeAssuranceBerhad
29. CitigroupNominees(Asing)SdnBhd 2,398,877 0.29 -CBNYforDFAEmergingMarketsSmallCapSeries
30. ECMLNominees(Tempatan)SdnBhd 2,253,000 0.27 -ECMLibraFoundation
Substantial Shareholders: Direct Interest Deemed Interest Name of Shareholders No. of shares % No. of Shares %
MrLimKianOnn 76,456,000 9.20 - -
HikkayaJayaSdnBhd 48,594,212 5.85 - -
EquityVisionSdnBhd 128,019,819 15.41 - -
TanSriDato'AzmanHashim - - 189,554,103(1) 22.81
AmcorpGroupBerhad - - 61,534,284(2) 7.40 (formerlyknownasArab-MalaysianCorporationBerhad)
ClearGoalSdnBhd - - 61,534,284(2) 7.40
Note:
(1) Deemedinterestof22.81%byvirtueofSection6AoftheCompaniesAct,1965heldthroughHikkayaJayaSdnBhd(48,594,212),CorporateviewSdnBhd(6,059,100),MezzanineCapital (Malaysia)SdnBhd(6,880,972)andEquityVisionSdnBhd(128,019,819)
(2) Deemedinterestof7.4%byvirtueofSection6AoftheCompaniesAct,1965heldthroughHikkayaJayaSdnBhd(48,594,212),CorporateviewSdnBhd(6,059,100)andMezzanineCapital (Malaysia)SdnBhd(6,880,972)
other informationcontinued
86ECMLibraFinancialGroupBerhadANNUALREPORT2008
4. DIRECTORS' INTERESTS AS AT 15 APRIL 2008:
Subsequent to the financialyearended31January2008, there isnochange to thedirectors' interests in thesharesof theCompanyand/or itsrelatedcorporations.
5. LIST OF PROPERTIES
Built up Age of Net Book Description/ Area Property Value Date of Location & Description Existing Use Tenure Sq. ft (years) RM’000 Acquisition
1. 111,JalanMacalister Land&office Freehold 28,201 11 6,555 27.08.1997 10400Penang premises
2. Unit6-01,Level06 Investment Freehold 1,285 14 175 24.12.2001 WismaPantaipremises property 12200Butterworth Penang
3. BlockC6,Unit64 Investment Freehold 3,373 12 438 24.12.2001 Parcel64-G,64-1,64-2 property No.2831Chinatown BandarBaruPrai Penang
4. BangunanAvenue Building Freehold 183,076 15 39,872 08.09.2004 8JalanDamansaraEndah DamansaraHeights 50490KualaLumpur
6. REVALUATION POLICY ON LANDED PROPERTIES TheGrouphasnotadoptedapolicyofregularrevaluationonlandedproperties.
other informationcontinued
I/We of
being a member/members of ECM Libra Financial Group Berhad (formerly
knownasECMLibraAvenueBerhad)herebyappoint
of
orfailinghim/her
of
orfailinghim/her,theChairmanofthemeetingasmy/ourproxy/proxiestovoteforme/usonmy/ourbehalfattheThirdAnnualGeneralMeetingoftheCompanytobeheldatAnggerikRoom,4thFloor,HotelEquatorial,JalanSultanIsmail,50250KualaLumpuronThursday,5June2008at10.00a.m.andatanyadjournmentthereof.
My/Ourproxy/proxiesistovoteeitheronshowofhandsoronapollasindicatedbelowwithan"X":
Datedthis_________dayof_________________2008
________________________________ ________________________________
Numberofsharesheld SignatureofMember(s)Notes
1. Ifyouwishtoappointotherperson(s)tobeyourproxy,deletethewords"theChairmanofthemeeting"andinsertthename(s)andaddress(es)oftheperson(s)desiredinthespacesoprovided.
2. Ifthereisnoindicationastohowyouwishyourvote(s)tobecast,theproxywillvoteorabstainathis/herdiscretion.
3. AproxymaybutneednotbeamemberoftheCompanyandtheprovisionsofSection149(1)(a)and(b)oftheCompaniesAct,1965shallnotapplytotheCompany.
4. Amembershallbeentitledtoappointnotmorethantwo(2)proxiestoattendandvoteatthesamemeetingprovidedthatwhereamemberoftheCompanyisanauthorisednomineeasdefinedundertheCentralDepositoriesAct,itmayappointatleastone(1)proxyinrespectofeachsecuritiesaccountitholdswithordinarysharesoftheCompanystandingtothecreditofthesaidsecuritiesaccount.Whereamemberappointsmorethanone(1)proxytoattendthesamemeeting,themembershallspecifytheproportionofhisshareholdingstoberepresentedbyeachproxy.
5. Inthecasewhereamemberisacorporation,thisFormofProxymustbeexecutedunderitsCommonSealorunderthehandofitsAttorney.
6. AllFormsofProxymustbedulyexecutedanddepositedattheRegisteredOfficeoftheCompanyat8AFloor,WismaGenting,JalanSultanIsmail,50250KualaLumpurnotlessthan48hoursbeforethetimeanddateforholdingthemeetingoradjournedmeeting.
RESOLUTIONS FOR AGAINST
1. Toreceivetheauditedfinancialstatementsandreports
2. Todeclareafinaldividendof3senlessincometaxof26%
3. ToapprovethepaymentofDirectors’fees
4. Tore-electthefollowingasDirectors:
4.1Dato’SeriKalimullahbinMasheerulHassan
4.2DatukKamarudinbinMdAli
4.3MrLumSingFai
5. Tore-appointMessrsErnst&YoungasAuditorsoftheCompanyandauthorisetheDirectors tofixtheirremuneration
6. ToapprovetheordinaryresolutionpursuanttoSection132DoftheCompaniesAct,1965
7. ToapprovetheProposedRenewalofShareBuy-BackAuthority
ECM Libra Financial Group Berhad (713570-K)(formerlyknownasECMLibraAvenueBerhad)
(IncorporatedinMalaysia)
FORM OF PROXY