Sample Disclosure – Note On Earnings Per Share (29 September 2009)


(a) Basic

The basic earnings per share is calculated on the Group profit for the financial year attributable to equity holders of the Company of RMX,XXX,XXX and is based on the weighted number of ordinary shares outstanding during the financial year of XX,XXX,XXX.

(b) Diluted

Diluted earnings per share is not presented as there are no dilutive potential ordinary shares outstanding as at 31 March 2009.

Sample Disclosure – Auditors’ Report With Disclaimer Opinion (28 September 2009)



We were engaged to audit the financial statements of ABC Berhad, which comprise the balance sheets as at day/month/year of the Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages XX to XX.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with MASB Approved Accounting Standards in Malaysia for Entities Other than Private Entities and the Companies Act, 1965. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. Because of the matters described in the Basis for Disclaimer of Opinion paragraphs, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion.

Basis for Disclaimer of Opinion

As disclosed in Note X to the financial statements on Basis of Preparation, the Company has defaulted on the repayment of bank borrowings amounting to RMXXX,XXX,XXX which was due for payment on day/month/year and the solicitors representing the financier of the borrowings issued a notice of demand to the Company for full settlement of the outstanding borrowings and interests due as at day/month/year. At the date of this report, the Receiver and Manager appointed is  assessing a number of proposals in respect of the borrowings but no decision has been made. We could not obtain sufficient appropriate evidence on the following:

(a)           the appropriateness of the use of the going concern assumption in the preparation of the financial statements. As disclosed in Note X to the financial statements. The default of the borrowings and the relevant events occurred subsequently together with the lack of clear evidence to support the ability of the Group and of the Company to meet the repayment of the borrowings and the interest thereon have casted significant doubt on the Group and the Company’s ability to continue in operations and therefore the Group and the Company may be unable to realise its assets and discharge its liabilities in the normal course of business;

(b)           the recoverability of the carrying value of the property, plant and equipment of the Group amounting to RMXXX,XXX,XXX, as disclosed in Note X to the financial statements; and

(c)           the Company’s ability to recover the entire carrying value of its investments in subsidiaries and advances to subsidiaries. As at day/month/year.

Disclaimer of opinion

Because of the significance of the matters referred to in the Basis for Disclaimer of Opinion above, we do not express an opinion on the financial statements.


In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report that, in our opinion:

(a)           the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b)           we have considered the financial statements and the auditors’ report of the subsidiary of which we have not acted as auditors,

(c)           we have not been able to satisfy ourselves that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group due to the matters referred to in Note X to the financial statements. We have not received satisfactory information and explanations required by us for those purposes.

(d)           the audit reports on the financial statements of all the subsidiaries were qualified in the manner as disclosed in Note X to the financial statements.


This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.


DEF & Co.


(No. AF: 1234)

Chartered Accountants



(No. 1234/1/10 (J))

Chartered Accountant



Sample Disclosure – Issue Of Shares In Directors’ Report (28 September 2009)


Pursuant to a Members’ Circular Resolution dated 1 February 2009, the authorised share capital of the Company was increased from RM100,000 to RM10,000,000 by the creation of an additional 9,900,000 ordinary shares of RM1.00 each.

On the same date, the issued and fully paid-up share capital of the Company was increased from RM100,000 to RM10,000,000 by the issue of an additional 9,900,000 new ordinary shares of RM1.00 each, at par, in satisfaction for the acquisition of the entire share capital of ABC Sdn. Bhd..

The new shares issued rank pari passu with the existing ordinary shares of the Company.

ABC Sdn. Bhd.  has become a wholly-owned subsidiary of the Company since 1 February 2009.

Sample Disclosure – Note On Goodwill (27 September 2009)


Note On Goodwill

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For the purpose of impairment testing, goodwill is allocated to the subsidiary which represents the lowest level within the Group at which the goodwill is monitored for internal management purpose.

During the financial year, the Group has recognised impairment loss on goodwill on consolidation of RM30,000 (2008 – Nil) due to the deterioration of the financial position and financial performance of a subsidiary in property development segment.

The balance of the goodwill on consolidation of RM500,000 (2008 – RM530,000) is related to the manufacturing segment and the recoverable amount is determined based on the value-in-use calculations. The calculations performed are based on the pre-tax cash flow projections derived from financial budgets approved by the Directors covering the coming 5 financial years. This method of calculations is consistent with that adopted in the previous financial year. The key assumptions used in the calculations are as follows:-

(a) Sales growth rate of 10% for the first two financial years from the 2010 budget, which is the base year for the cash flows projections, and 12% for the subsequent financial years.

(b) Discount rate of 10%, being the estimated weighted average cost of capital of the Company.

(c) Terminal value representing the projected carrying amount of the net assets of the manufacturing segment as at the end of Year 5.

The Directors determined budgeted gross margin and results based on past performance and its expectations of market development. The discount rate used are pre-tax and reflect specific risks relating to the relevant segments. Based on the recoverable amount determined, goodwill on consolidation related to the manufacturing segment is not impaired for the current financial year. With regard to the assessment of value in use, the Directors believe that no reasonably possible change in any of the above key assumptions would cause the carrying value of the unit to be materially different from its recoverable amount.

Revenue Expenditure (25 September 2009)

Revenue expenditure is recorded as expenses in Income Statement. Examples of revenue expenditure are office rentals, utilities such as water & electricity, printing & stationery & etc.. Revenue expenditure also includes those incurred to maintain the earning capacity of non-current assets such as repairs and maintenance. It is the expenditure on goods or services which will be used up i.e. the benefits that come with the goods or services will be consumed. The unused goods purchased would then be recognised as inventory on Balance Sheet i.e. part of Current Assets.

Example – On 31/1/2007, Dragon Co. Ltd. issue a cheque of $88.98 to pay its electricity bill and another cheque of $1,500 to pay its monthly rental of shop. The double entry to record these transactions is: –

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