Question:
6 JUKAF3073 UKAF3073 CORPORATE REPORTING Section A - Answer ALL question. (Compulsory) [Total: 40 marks] Q1. Johan group's summarized consolidated financial statement for the year ended 31 July 2020 are as follows: Johan Bhd: Consolidated Statement of Profit or Loss and Other Comprehensive Income for the years ended 31 July 2020 and 2019 2020 RM Mil 2019 RM' Mil Revenue Cost of sales 9,650 (4,900) 8,790 (5,750) Gross profit Operating expenses Gains on revaluation of financial assets Finance costs 4,750 (3,756) 26 (49) 3,040 (3,020) 40 (33) Profit (loss) before taxation Income tax expense 971 (80) 27 0 Profit for the year 891 27 Profit for the year attributable to: Owners of the parent Non-controlling interests 876 15 27 0 Profit for the year 891 27 Acti Go to Johan Bhd: Consolidated Statements of Financial Position as at 31 July: 2020 RM Mil 2019 RM Mil Non-current assets: Property, plant and equipment Intangible assets Goodwill Financial assets 3,680 330 60 2,400 350 - 210 180 4,280 2,930 400 Current assets: Inventory Trade receivables Bank 460 275 340 230 860 845 Total assets 5,140 3,775 Equity: Equity shares Retained earnings 1,550 1,900 1,796 1,305 3,696 50 2,855 Non-controlling interest 3,746 2,855 Non-current liabilities: 6% bonds 680 550 680 550 280 Current liabilities: Trade payables and provisions Bank overdraft Current tax payable 466 168 80 90 714 370 110 Total equity and liabilities 5,140 3.775 The following notes should be taken into consideration: 1. On 1 December 2019, Johan bought an 80% stake in another entity, Mariam Bhd. The cost of this stake was RM200 million, satisfied by Johan issuing 120 million equity shares and RM80 million in cash. The fair value of the net Property, plant and equipment Intangible assets Inventory Cash Trade payables RM Mil 130 20 25 20 (15) 180 2. 3. The fair value of the non-controlling interest at the acquisition date was RM47 million. Johan uses the full (fair value) goodwill method in all acquisitions. Goodwill was tested for impairment at 31 July 2020, and any impairment loss was correctly accounted for through operating expenses. Depreciation of property, plant and equipment amounted to RM207 million, charged to operating expenses. Amortization charges of RM45 million relating to intangible assets were also charged to operating expenses. Disposals of property, plant and equipment were made for proceeds of RM140 million, on which gains of RM14 million were recognized. These gains were netted against operating expenses. No disposals of intangible assets were recorded. There were no non-cash adjustments to the 6% bonds. Interest has been paid up to date. 4. 5. 6. Included in the figure for "trade payables and provisions' at 31 July 2020 is a provision for warranty claims amounting to RM27 million (2019: RM14 million). 7. 8. Equity dividends were paid during the period by Johan and Mariam. Financial assets which had cost RM60 million, and had a carrying value on 1 August 2019 of RM75 million, were sold during the year for RM78 million. The gain was netted against finance costs. A bonus issue was made during the year capitalizing RM50m of retained earnings. Other shares were issued for cash, in addition to those to fund the acquisition referred to in note (1) above. 9. A consolidated Statement of Cash Flows showing all the relevant supporting workings (19 marks)
