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42. FINANCIAL INSTRUMENTS (continued) The following methods and assumptions are used to estimate the fair values of the following classes of financial instruments: (i) Cash and cash equivalents and trade and other receivables/payables The carrying amounts approximate fair values due to the relatively short term maturity of these financial instruments. (ii) Quoted investments The fair value of quoted shares is determined by reference to the stock exchange quoted market bid prices at the close of the business on the balance sheet date. (iii) Unquoted investments It is not practical to estimate the fair value of the Group’s unquoted investments due to time constraint, lack of market information and the inability to estimate fair value without incurring excessive costs. However, the Group does not expect the carrying amounts to be significantly different from recoverable amounts. (iv) Borrowings The carrying amount of short term borrowings approximates fair value because of the short maturity period. The fair value of long term borrowings is estimated based on the current rates available for borrowings with the same maturity profile. 43. SIGNIFICANT EVENTS (a) Pursuant to Practice Note 1 (“PN1”) of the Bursa Malaysia Securities Berhad (“Bursa Securities”) Main Market Listing Requirements (“Listing Requirements”) which came into effect on 3 August 2009, the Company had on 3 August 2009 announced that Megasteel Sdn Bhd (“Megasteel”), a major subsidiary of the Company, was in default in payments in respect of credit facility granted by Bank Pembangunan Malaysia Berhad (“Bank Pembangunan”) of RM6.8 million as at 30 April 2009 and the syndicated term loan facility granted by the Syndicated Term Loan Lenders of RM105.6 million as at 30 June 2009. The Directors of the Company had on 6 August 2009 in accordance with PN1, submitted a Solvency Declaration to Bursa Securities confirming that the Group will be able to pay all its debts as and when they fall due within a period of 12 months from 3 August 2009. The Company had: i) on 10 August 2009 obtained the agreement of Bank Pembangunan to reschedule the credit facility amounting to RM47.6 million as at 31 July 2009. The default of the credit facility with Bank Pembangunan was therefore remedied; and ii) on 15 September 2009 obtained the requisite approval from its Syndicated Term Loans Lenders for the rescheduling of the credit facility amounting to RM1,002.4 million as at 31 July 2009 and the default of the credit facility by Megasteel had been remedied. Accordingly, the Company no longer falls under PN1 of the Listing Requirements. (b) During the financial year, Y. Bhg. Tan Sri William H.J. Cheng (“TSWC”) had granted Megasteel an option to put (“Put Option”) to him or his nominee(s) to purchase from Megasteel 102,000,000 ordinary shares of RM1.00 each in Lion Industries Corporation Berhad (“LICB”) (“LICB Shares”) (“Option Agreement”) which represents approximately 14.31% of the total paid-up capital of LICB pursuant to the Option Agreement dated 30 September 2009. The Security Trustee in its capacity as the assignee of the Option Agreement had on 7 December 2009 exercised the Put Option on TSWC to acquire the 102,000,000 LICB Shares from Megasteel at a total consideration of RM131.58 million or RM1.29 per LICB Share based on the 10-day weighted average price of LICB Shares up to 4 December 2009. TSWC had on 24 June 2010 completed the acquisition of the 102,000,000 LICB Shares pursuant to the Option Agreement. 118
STATEMENT BY DIRECTORS We, TAN SRI WILLIAM H.J. CHENG and TAN SRI CHENG YONG KIM, being two of the Directors of LION CORPORATION BERHAD, do hereby state that, in the opinion of the Directors, the financial statements set out on pages 34 to 118 are drawn up in accordance with the provisions of the Companies Act, 1965 and applicable Financial Reporting Standards in Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company as at 30 June 2010 and of the results, and cash flows of the Group and of the Company for the financial year ended on that date. Signed in accordance with a resolution of the Directors dated 28 September 2010. TAN SRI WILLIAM H.J. CHENG TAN SRI CHENG YONG KIM Chairman and Managing Director Director Kuala Lumpur, Malaysia STATUTORY DECLARATION I, TAN SRI WILLIAM H.J. CHENG, the Director primarily responsible for the financial management of LION CORPORATION BERHAD, do solemnly and sincerely declare that the financial statements set out on pages 34 to 118 are, in my opinion, correct, and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960. Subscribed and solemnly declared by the abovenamed TAN SRI WILLIAM H.J. CHENG at Kuala Lumpur in the Federal Territory on 28 September 2010. TAN SRI WILLIAM H.J. CHENG Before me W259 AHMAD B. LAYA Commissioner for Oaths Kuala Lumpur 119
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CONTENTS Page Notice of Meeting 1 C
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6.1.2 Proposed Shareholders’ Mand
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CORPORATE INFORMATION Board of Dire
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Tan Sri Cheng Yong Kim Non-Independ
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Folk Fong Shing @ Kok Fong Hing Ind
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Supply of Information The Board as
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3. RELATIONS WITH SHAREHOLDERS AND
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AUDIT COMMITTEE REPORT COMPOSITION
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ACTIVITIES DURING THE FINANCIAL YEA
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NOMINATION COMMITTEE Chairman : Mr
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THE GROUP’S BUSINESSES • Aerial
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sebanyak 25%. Kesan positif pengumu
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CHAIRMAN’S STATEMENT On behalf of
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主席报告我谨代表董事部,
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FINANCIAL STATEMENTS 2010 For The F
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DIRECTORS’ INTERESTS (continued)
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OTHER STATUTORY INFORMATION Before
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INCOME STATEMENTS FOR THE FINANCIAL
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BALANCE SHEETS (continued) AS AT 30
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Group STATEMENTS OF CHANGES IN EQUI
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CASH FLOW STATEMENTS FOR THE FINANC
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NOTES TO THE FINANCIAL STATEMENTS 3
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3. SIGNIFICANT ACCOUNTING POLICIES
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4. CHANGES IN ACCOUNTING POLICIES (
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5. CRITICAL ACCOUNTING JUDGEMENTS A
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9. PROFIT/(LOSS) FROM OPERATIONS Th
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11. OVER PROVISION FOR LOSS Pursuan
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Page 76 and 77: 18. INVESTMENT IN SUBSIDIARIES 74 C
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Page 82 and 83: 19. INVESTMENT IN ASSOCIATES Group
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Page 90 and 91: 26. NON-CURRENT ASSETS CLASSIFIED A
Page 92 and 93: 29. PREFERENCE SHARES Megasteel iss
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Page 96 and 97: 30. BORROWINGS (continued) The weig
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Page 100 and 101: 31. REDEEMABLE CONVERTIBLE SECURED
Page 102 and 103: 32. BONDS AND DEBTS Group Company 2
Page 104 and 105: 32. BONDS AND DEBTS (continued) (A)
Page 106 and 107: 33. DEFERRED LIABILITIES 104 Group
Page 108 and 109: 36. EMPLOYEE BENEFITS (a) Defined B
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Page 112 and 113: 39. RELATED PARTY TRANSACTIONS Rela
Page 114 and 115: 40. SEGMENTAL ANALYSIS (continued)
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Page 118 and 119: 42. FINANCIAL INSTRUMENTS Financial
Page 122 and 123: INDEPENDENT AUDITORS’ REPORT TO T
Page 124 and 125: LIST OF GROUP PROPERTIES AS AT 30 J
Page 126 and 127: Thirty Largest Registered Sharehold
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Page 130 and 131: OTHER INFORMATION (I) MATERIAL CONT
Page 132 and 133: (IV) STATUS OF CONDITIONS IMPOSED B
Page 134: ✄ FORM OF PROXY CDS ACCOUNT NUMBE
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