annual report 2015 - Tanjung Offshore Berhad

Transcription

annual report 2015
CONTENTS
Annual Report 2015
2
Vision, Mission & Philosophy
17
Directors’ Profile
3
Corporate Information
23
Audit Committee Report
6
Corporate Structure
27
7
Tanjung Offshore Berhad
Statement on Risk Management and
Internal Control
8
Tanjung Offshore Services Sdn Bhd
29
Statement of Corporate Governance
9
Gas Generators (M) Sdn Bhd
Universal Gas Generators Sdn Bhd
37
Other Information
38
Financial Statements
107
Notice of Annual General Meeting
110
Notice of Nomination of Messrs. SJ Grant
Thornton
111
List of Properties Owned by the Group
113
Analysis of Shareholdings
•
Form of Proxy
10
Tanjung Newenergy Services Sdn Bhd
Tanjung Petroconsult Sdn Bhd
Tanjung CSI Sdn Bhd
11
Management Team
12
Five (5) Years Group Financial Highlights
14
Chairman’s Statement
VISION
To be the preferred
service provider to the oil
majors in Malaysia and
the region.
MISSION &
PHILOSOPHY
To support the Oil & Gas industry as a
“One Stop Solution Provider” through:
1
2.
3.
4.
5.
2
TANJUNG OFFSHORE BERHAD (662315-U)
Providing Quality Products & Services
Optimizing Resources
New Technologies
Enhancing Technical Competencies
Full Compliance to Health, Safety
and Environmental Regulations
CORPORATE INFORMATION
COMPANY SECRETARIES:
REGISTRAR:
Kang Shew Meng (MAICSA0778565)
Seow Fei San (MAICSA7009732)
Tricor Investor & Issuing House Services Sdn Bhd
(Company No. 11324-H)
Unit 32-01, Level 32, Tower A
Vertical Business Suite, Avenue 3, Bangsar South
No. 8, Jalan Kerinchi
59200 Kuala Lumpur, Malaysia
Tel: 03-2783 9299
Fax: 03-2783 9222
Email: [email protected]
Web: www.tricorglobal.com
REGISTERED OFFICE:
802, 8thFloor, Block C
Kelana Square, 17 Jalan SS7/26
47301 Petaling Jaya
Selangor Darul Ehsan
Tel: 03-7803 1126
Fax: 03-7806 1387
STOCK EXCHANGE LISTING:
HEAD/MANAGEMENT OFFICE:
Main Market of Bursa Malaysia Securities Berhad
Suite 5-1, Level 5,
Wisma UOA Damansara II
No. 6, Changkat Semantan
Damansara Heights
50490 Kuala Lumpur
STOCK INFORMATION:
Stock Name: TGOFFS, TGOFFS-WA
Stock Code: 7228, 7228-WA,
Bloomberg Code: TOFF MK
AUDITORS/REPORTING ACCOUNTANTS:
Aljeffri Dean (Firm No.: AF 1366)
Chartered Accountants
2-5-13, 5th Floor, Menara KLH
(Business Centre)
No. 2, Jalan Kasipillay
51200 Kuala Lumpur
Tel: 03-2381 1170
PRINCIPAL BANKERS:
United Overseas Bank (MALAYSIA) Berhad
(Company No. 271809-K)
Level 7, Menara UOB, Jalan Raja Laut
50350 Kuala Lumpur
Tel: 03-2772 6265
Malayan Banking Berhad
(Company No. 3813-K)
Setapak Business Centre
2nd Floor, Maybank Setapak
343 Jalan Pahang
53000 Kuala Lumpur
Tel: 03-4022 0784
AmInvestment Bank Berhad
(Company No. 23742-V)
Level 15, Bangunan AmBank Group
55 Jalan Raja Chulan
50200 Kuala Lumpur
Tel: 03-2078 2633
ANNUAL REPORT 2015
3
CORPORATE INFORMATION (Cont’d)
BOARD OF DIRECTORS
4
CORPORATE INFORMATION (Cont’d)
From left to right:
1)Dato’ Syed Hussian bin
Syed Junid
Independent NonExecutive Director
2)Tan Sam Eng
3)Rahmandin @
Rahmanudin bin Md.
Shamsudin
Group Chief Executive
Officer
4)Datuk Dr. Nik Norzrul
Thani bin N. Hassan
Thani
Non-independent NonExecutive Chairman
5)Tan Sri Datuk Tan Kean
Soon
Executive Deputy
Chairman
6)Dato’ Maheran binti
Mohd Salleh
7)Datuk Suraj Singh Gill
ANNUAL REPORT 2015
5
GROUP CORPORATE STRUCTURE
100%
TANJUNG CITECH UK
LIMITED
100%
TANJUNG OFFSHORE
SERVICES SDN BHD
Integrated service provider to the oil and gas and
related industries.
100%
TANJUNG CITECH
SDN BHD
TANJUNG DRILLTECH
SDN BHD
100%
TANJUNG
NEWENERGY
SERVICES SDN BHD
Provision of project management services to the
engineering and energy industries.
51%
TANJUNG CSI
SDN BHD
FIRCROFT TANJUNG
SDN BHD
51%
TANJUNG HMS
PETROLEUM
SDN BHD
100%
TANJUNG
PETROCONSULT
SDN BHD
Provision of engineering and professional
manpower services to the oil and gas and related
industries.
100%
UNIVERSAL GAS
GENERATORS
SDN BHD
Selling and letting of gas generators.
100%
100%
GAS GENERATORS
(M) SDN BHD
GAS GENERATORS
INTERNATIONAL LTD
100%
TANJUNG OFFSHORE
MARINE SERVICES
SDN BHD
100%
7 NEWMARKET
STREET HOLDINGS
LIMITED (UK)
100%
TANJUNG OFFSHORE
RESOURCES
SDN BHD
51%
100%
Supply, design, configure, integrate, test, install
and commission distributed control systems,
programmable logic controllers, supervisory
control and data acquisitions, safety shutdown
systems, fire gas systems, fire addressable
systems, liquid and gas analyzer systems, control
valves, instrumentation and electrical heat tracing
systems and to train and supply manpower for
after sales services.
6
100%
CITECH ENERGY
RECOVERY SYSTEMS
UK LIMITED
Manufacturing and trading of all types of
machinery, equipment and generators used for
welding, cutting, cooking and other commercial
applications.
100%
7 NEWMARKET
STREET LIMITED (UK)
TANJUNG OFFSHORE BERHAD
Tanjung Offshore Berhad (Tanjung) was incorporated on the 11th August 2004 with its shares are traded on the Main Board
Market of Bursa Malaysia Securities Berhad. Tanjung Offshore Berhad is principally the investment holding with its subsidiaries
and associated companies involving in the provision of engineering equipment packages, equipment maintenance services and
spares to the Oil & Gas and other related industries in ASEAN region.
Tanjung Group is actively involved in both the upstream and downstream markets within the industry. Tanjung participates in all
stages of the life cycle of the Production Sharing Contracts (PSC) as follows:
1. EXPLORATION
3. PRODUCTION
5. ABANDONMENT
Surface geochemistry
Seismic activities
Drilling services
Flow of Oil & Gas to onshore plants
Power generation
Systems application
Maintenance services
Dismantling of structures
Decommissioning of machinery &
equipment
Pollution control exercise and
assessment
2. DEVELOPMENT
4. MAINTENANCE
Hookup & Commissioning
Structure & Construction
Engineering Equipments
Retrofitting
Structural strength & corrosion
assessment
Engineering equipment maintenance
ANNUAL REPORT 2015
7
TANJUNG OFFSHORE SERVICES SDN BHD
Tanjung Offshore Services Sdn Bhd (“TOS”), a wholly owned subsidiary of Tanjung, commences business in the mid 1990s
being a reputable integrated service provider for the industry. With over 20 years of experience in the Oil & Gas sector, TOS offers
services such as customised engineered equipment packages, drilling & platform services, project management of contracts,
spares and parts for equipment and other related services. TOS also act as exclusive agents for various world-renowned Original
Equipment Manufacturers (OEM) such as pumps, control systems, switchgears, instrumentations and valves that are widely
used in both upstream and downstream activities of the Oil & Gas industry.
Throughout the years, TOS scope of businesses has also expanded with it holding PETRONAS license for a vast range of
categories of product and services. TOS has a full package of supplies and services which entails the initial engirneering design
layout, project management & planning, implementation, installation, commissioning followed by scheduled maintenance,
troubleshooting and reliable after-sales services. TOS identifies the requirement of each client, and assist in the front-end
engineering design (FEED). Throughout this phase, constant and comprehensive technical discussions with our prospective
clients as part of our value added services in developing innovative ideas in the exploration, production, maintenance and
abandonment stages of field’s development.
Together with our client’s feedback, we continue closely monitor the progress of each project undertaken to ensure various
process methods are in compliance to the approved design and specifications. TOS continuously increase and improve the
range of products and services to meet not only the stringent requirements of the industry but most importantly the standards
that our clients are satisfied with.
8
GAS GENERATORS (M) SDN BHD
UNIVERSAL GAS GENERATORS SDN BHD
On 2013, Tanjung had successfully acquired the remaining 49% equity interest of
Gas Generators (M) Sdn Bhd (“GASTEC”) and its subsidiaries. GASTEC being the
second biggest subsidiary of Tanjung is principally involved in the manufacturing
and marketing of inert gas generators in both the industrial and also the Oil & Gas
market.
One of the most common inert gas, Nitrogen, is primarily used for purging of tanks
and pipelines to enhance overall plant safety. The generator produces nitrogen from
compressed air thereby eliminating the cost and hazard associated with transporting
of nitrogen gas cylinders offshore.
GASTEC has expanded its operations throughout the ASEAN region with active
presence in Malaysia, Australia, Thailand, Indonesia, Manila and other ASEAN
regions. GASTEC also has the capabilities to design and manufactures nitrogen
gas generators for on-site gas production facilities on long term “Build, Operate and
Transfer” and “Build, Operate and Own” Contracts to the related industries.
ANNUAL REPORT 2015
9
TANJUNG NEW ENERGY SERVICES SDN BHD
TANJUNG PETROCONSULT SDN BHD
Other subsidiaries of Tanjung include
Tanjung NewEnergy Services Sdn Bhd
(“TNE”), Tanjung Petroconsult Sdn
Bhd (“TPC”) and Tanjung CSI Sdn Bhd
(“TCSI”).
TNE and TPC are mainly involved in
energy related products and services
which offer cost effective and efficient
solutions to the oil majors. TNE and
TPC compliments each other and
has total commitment to engineering
excellence, fitness for purpose,
design and an uncompromising
approach to quality. TNE and TPC
has also put a strong emphasis on
being environmentally friendly through
better use and management of energy
resources.
Some of our main engineering
products are as follows:
•
•
•
•
•
•
Centrifugal Pumps
Dynamic Position System
CCTV Surveillance System for the
Oil Gas industry
Umbilical Subsea Cables
Solar Power Panels
Self Priming Marine Pumps.
TANJUNG CSI SDN BHD
TCSI are involved in industrial field instrumentation and automation. The services TCSI provides include:
•
•
•
•
•
•
•
10
Process & safety automation, measurement, analytical, actuation instrumentations and wet gas metering system
Fire & Gas integrated security systems and field detectors
Gas analyzers for moisture, H2S and CO measurements
Liquid & Gas metering solutions for custody transfer/ allocation and pipeline detection system or PLDS
PQE- Power Quality Consultancy Services
Multiphase Flow Metering Solutions
Rotating machineries engineering solutions focusing on supplying high quality and innovative control solutions for turbines
and compressors.
MANAGEMENT TEAM
ANNUAL REPORT 2015
11
FIVE (5) YEARS GROUP FINANCIAL HIGHLIGHTS
Group
Revenue
2011
RM’000
2012
RM’000
2013
RM’000
2014
RM’000
2015
RM’000
334,437*
263,707*
327,791
107,345*
60,606
EBITDA
(47,869)*
(20,752)*
16,148
6,604*
(73,754)
Net Profit / (Loss) before tax
(56,168)
(25,718)
12,739
205*
(73,804)
Net Profit / (Loss) after tax
(55,396)
(11,585)
10,909
1,061*
(76,255)
Pre-tax Margin / (Loss) (%)
(16.79)
(9.75)
3.89
0.19
(121.78)
Net Margin / (Loss) (%)
(16.56)
(4.39)
3.33
0.99
(125.82)
Basic Earnings / (Loss) per share (sen)
(19.14)
(3.99)
3.52
0.28
(20.18)
* Excludes discontinued operations.
REVENUE (RM’000)
650,000
‘11
‘12
‘13
‘14
NET PROFIT / (LOSS) AFTER TAX (RM’000)
‘15
80
‘11
‘12
‘13
‘14
70
600,000
60
550,000
50
40
500,000
30
450,000
10,909
20
400,000
350,000
300,000
1,061
10
334,437
327,791
0
263,707
-10
-20
250,000
-40
200,000
150,000
-50
107,345
60,606
100,000
-60
-70
0
12
(11,585)
-30
-80
(55,396)
(76,255)
‘15
FIVE (5) YEARS GROUP FINANCIAL HIGHLIGHTS (Cont’d)
REVENUE BREAKDOWN FOR THE YEAR ENDED 2015
Engineering Equipment
Services
Products & Services
52.52%
47.48%
RM31.83 mil
RM28.78 mil
SHAREHOLDERS’
FUNDS
2015 = 122,417,369
‘11
323,287,445
‘12
166,275,581
‘13
184,547,505
‘14
190,578,092
‘15
122,417,369
0
50
100
150
200
250
300
350
400
(million)
ANNUAL REPORT 2015
13
CHAIRMAN’S STATEMENT
14
CHAIRMAN’S STATEMENT (Cont’d)
Dear Shareholders,
The year 2014 has been a reminder of how uncertain and volatile the oil
and gas industry can be. During the financial year 2015, the downward
trends in the oil and gas industry in Malaysia have accelerated even further.
The sharp drop in crude oil prices has significantly impacted Tanjung
Offshore Group’s overall performance. With crude oil price remaining low
and supply continuing to outpace demand, the short term outlook for the
oil and gas industry in Malaysia and globally remains volatile and weak.
Despite such tough times, the Tanjung Offshore Group will continuously
strive for improvement and growth.
Diversification
With the drop in crude oil prices, we believe that business diversification is vital
to the survival of the Tanjung Offshore Group. I am pleased to inform you that we
have taken a focused approach towards diversification of the Tanjung Offshore
Group’s business. We have and will continue to explore business opportunities
that will provide long-term and stable returns. By investing in strategic resources,
the Tanjung Offshore Group will be in a stronger position to pursue and realiser
new business opportunities. Our Board of Directors and Management are firmly
motivated to improve the Tanjung Offshore Group’s financial performance so as to
add value.
Legacy
With the backdrop of declining crude oil prices during the financial year 2015, one
of the most pertinent tasks for the Board of Directors’ and Management this year
was to chart a clear path towards resolving the numerous legal and business pitfalls
which were plaguing the Tanjung Offshore Group. The Tanjung Offshore Group has
declared significant impairments in its financial statements which have adversely
impacted the financial performance for the year 2015. Rapid globalization has
extensively increased the complexities of business (both locally and internationally),
in which corporate governance has unquestionably become my first priority, as it
is for everyone in the Tanjung Offshore Group. An organisation needs to always
practise qualitative corporate governance rather than quantitative corporate
governance thereby ensuring that it is efficiently running with the required level of
governance and transparency. I am working steadfastly with the senior management
of the Tanjung Offshore Group to fortify the importance of corporate governance
and transparency in all business dealings. Integrity and accountability will continue
to define and guide us through the current challenging business environment.
Our
Board
and
Management
are
strongly motivated to
improve the Group’s
financial performance
in order, to constantly
add more value for our
shareholders.
ANNUAL REPORT 2015
15
CHAIRMAN’S STATEMENT (Cont’d)
Financial Performance
For the financial year 2015, the Tanjung Offshore Group registered total revenue of RM60.6 million and a loss after tax of RM76.3
million. Total revenue for the financial year registered a decrease of 43.5% as compared to financial year 2014 during which we
recorded a revenue of RM107.3 million. The drop in revenue during financial year 2015 stemmed from the sharp decline in crude
oil prices coupled with the disposal of the Tanjung Offshore Group’s maintenance division, Tanjung Maintenance Services Sdn
Bhd in 2014.
Tanjung Offshore Group posted a net loss after tax of RM76.3 million for financial year 2015 compared to a profit after tax
of RM1.1 million for financial year 2014. The significant contributor towards the net loss for the financial year 2015 was the
impairment of the Tanjung Offshore Group’s investment in the commercial property in Birmingham, England.
As at 31st December 2015, the Tanjung Offshore Group’s shareholders’ funds stood at RM122.42 million as compared to
RM190.58 million as at 31st December 2014. The decrease in shareholder’s funds during the financial year 2015 is primarily
attributable to the impairment exercise implemented during the financial year 2015 and the lower revenue generated by the
Tanjung Offshore Group.
Conclusion
The Board of Directors are confident in the positive outlook for the Tanjung Offshore Group. We thank you for your support
towards the Tanjung Offshore Group and the trust which you have bestowed on the Board of Directors in leading the Tanjung
Offshore Group. I am determined to continue with the pursuit of efficiency towards realising a goal of long-term sustainability for
the Tanjung Offshore Group.
Datuk Dr. Nik Norzul bin N. Hassan Thani
Chairman
16
DIRECTORS’ PROFILE
Datuk Dr. Nik Norzrul Thani Bin Nik Hassan Thani (“Datuk Dr. Nik”)
Malaysian, age 55
Non-Independent Non-Executive Chairman
Member of Remuneration Committee
Datuk Dr Nik Norzrul Thani bin N Hassan Thani holds a Ph.D. in Law from the School of Oriental and African Studies, University
of London and a Masters in Law from Queen Mary College, University of London. He read law at the University of Buckingham,
United Kingdom. Datuk Dr Nik was a Visiting Fulbright Scholar at Harvard Law School and a Visiting Chevening Fellow at the
Oxford Centre of Islamic Studies, Oxford University. Datuk Dr Nik is also a Fellow of the Financial Services Institute of Australasia
(FINSIA).
Datuk Dr Nik also holds a Post-Graduate Diploma in Syariah Law and Practice (with Distinction) from the International Islamic
University of Malaysia. He is a Barrister of Lincoln’s Inn and an Advocate & Solicitor of the High Court of Malaya. He was called
to the Bar of England and Wales in 1985 and to the Malaysian Bar in 1986. He was formerly the Acting Dean/Deputy Dean of the
Faculty of Laws, International Islamic University Malaysia.
Datuk Dr Nik is a director of UMW Holdings Berhad, Fraser & Neave Holdings Berhad, Chin Hin Group Berhad and MSIG
Insurance (M) Bhd. Currently, Datuk Dr Nik is the Chairman and Senior Partner of Messrs Zaid Ibrahim & Co. Prior to joining Zaid
Ibrahim & Co.,Datuk Dr Nik was with Baker & McKenzie (International Lawyers), Singapore.
Datuk Dr Nik was appointed to the Board on 23 March 2015.
ANNUAL REPORT 2015
17
DIRECTORS’ PROFILE (Cont’d)
Tan Sri Datuk Tan Kean Soon (“Tan Sri Tan”)
Malaysian, age 52
Executive Deputy Chairman
Member of the Remuneration and Share Issuance Scheme Committees
Tan Sri Tan has more than 30 years of experience in leading various projects within the upstream and downstream sectors of the
oil and gas industry. He is also the current Chairman and Chief Executive Officer of CP Energy & Services Sdn Bhd, which he
founded since 1992. Under his stewardship, CP Energy & Services Sdn Bhd has registered rapid growth over the years.
Tan Sri Tan also holds Directorships in local and foreign companies such as CP Technology & Engineering Sdn Bhd, Prisma
Cerah Sdn Bhd, Thach Han Marine Services Co Ltd and CP Energy (S) Pte Ltd.
Tan Sri Tan holds a Masters in Business Administration. Tan Sri Tan is also the Chairman of Malaysian Chinese Oil & Gas Alliance,
a member of Malaysian Oil & Gas Services Council since 2008 and Malaysian Petroleum Club since 2008.
Tan Sri Tan was appointed to the Board of Directors of Tanjung on 23 June 2014.
18
Rahmandin @ Rahmanudin bin Md. Shamsudin
(“En. Rahman”)
Malaysian, age 60
Group Chief Executive Officer
Member of the Share Issuance Scheme Committee
En. Rahman holds a Bachelor of Economics (Hons) from the Loughborough University of Technology, United Kingdom.
En. Rahman started his career in the banking industry as Credit Officer for Malayan Banking Berhad in 1977, responsible mainly for loan
processing, documentation and disbursement. In 1982, he joined Esso Production (M) Inc., Kuala Lumpur as Management Accountant
responsible for the internal control & audit of the company. During the course of his service with Esso Production (M) Inc., he had also
worked as Purchasing Analyst responsible for the procurement of products and services for the company in the upstream Oil & Gas
sector.
Since then En. Rahman has ventured into businesses providing services to the hospitality, education and oil and gas industries. He has
also previously ventured into the construction industry specialising in marine engineering works. Given his good business acumen and
corporate experiences, his services shall be invaluable to Tanjung Offshore Berhad and its subsidiaries (“Group”) in driving the Group to
achieve new heights and consolidating the workforce and members of the Board of Directors in the near term.
En. Rahman was appointed to the Board of Directors of Tanjung on 12 February 2015.
ANNUAL REPORT 2015
19
Datuk Suraj Singh Gill (“Datuk Suraj”)
Malaysian, age 45
Independent Non-Executive Director
Member of the Audit and Nomination Committees
Datuk Suraj read law at the University Of Leicester, England and graduated with an
LL.B (Hons) Degree in 1994. He received his Certificate in Legal Practice from the Legal
Profession Qualifying Board, Malaysia in 1995 and was called to the Malaysian Bar and
admitted as an Advocate & Solicitor of the High Court of Malaya in 1997.
Datuk Suraj commenced his legal career as a Corporate Lawyer in 1997 with Messrs
Rashid & Lee. In the year 2000, Datuk Suraj co-founded Deol & Gill, a mid-size full service
law firm in Kuala Lumpur. Datuk Suraj advises public listed companies, government
linked corporations and multinational corporations.
Datuk Suraj was appointed to the Board of Tanjung on 31 March 2015
Datuk Syed Hussian bin Syed Junid
(“Datuk Syed Hussian”)
Malaysian, age 55
Member of the Audit and Nomination Committees
Datuk Syed Hussian started his career with The American Malaysian Insurance Sdn
Bhd as a Trainee Executive in 1982. In 1986, he was promoted as the Penang Branch
Manager. Later in 1989, he was promoted as the Regional Manager covering Penang,
Perlis, Kedah and Perak. He is currently the Senior Director of Business Operations
& Sales Support for Asia at Western Digital Sdn Bhd, a company involved in the
manufacture of hard-disc drives.
Datuk Syed Hussian is also a Senior Independent Non Executive Director of AWC Berhad.
He also serves on the boards of various other private limited companies. Datuk Syed
Hussian holds a Diploma in Insurance from The Association for Overseas Scholarship
Tokyo in 1988 and a Certificate in Insurance from Institute Teknologi MARA in 1982.
Datuk Syed Hussian was appointed to the Board of Tanjung on 31 March 2015.
20
Tan Sam Eng (“Ms Tan”)
Malaysian, age 64
Chairperson of the Audit Committee
Ms. Tan is a Chartered Accountant and a Chartered Secretary. She is a member of
the Malaysian Institute of Accountants (MIA), a Fellow Member of the Association of
Chartered Certified Accountants (ACCA), and also a Member of the Chartered Tax
Institute of Malaysia (CTIM).
Ms. Tan has more than 30 years of professional experience and was involved in all
aspects of financial practice such as auditing, taxation, corporate finance & advisory
works. Her auditing experience covers practically the whole spectrum of Malaysian
business environment including insurance, property development, engineering, and
communications, and transportation, plantations, manufacturing and trading.
Ms. Tan was appointed to the Board of Tanjung on 23 March 2015.
Dato’ Maheran binti Mohd Salleh (“Dato’ Maheran”)
Malaysian, age 43
Chairperson of the Nomination and Remuneration Committees
Dato’ Maheran has more than 20 years of local and global experience in corporate affairs
and public relations. She was one of the senior management in charge of Corporate
Affairs in Standard Chartered Bank and also for Standard Chartered’s Saadiq. She was
responsible for the formulation and implementation of SCB Saadiq’s local CA governance
and strategies and was the instrumental person in positioning Standard Chartered Bank
Malaysia as the primary conventional and Islamic financial institution in Malaysia. Prior
to that, she was the Economic Editor with the Radio and Television Malaysia (RTM) and
Media Prima Berhad (TV3), focusing in broadcasting, journalism and presenting.
Dato’ Maheran currently sits on the Boards of non-listed companies as Executive Director,
such as LeMana Holdings Sdn Bhd, LeMana Petrol Sdn Bhd and Perlombongan Anak
Sungai, among others. She develops and leads various strategic interests focusing in
mining-related, downstream oil and gas activities and finance. She is one of the leading
Bumiputra female mining developer and pioneering the involvement of female to be
competing in a male-dominated environment.
Dato’ Maheran holds an LLB (Hons) from University of Buckingham, UK. She dedicates
her intervals commendably in associating with various non-government organizations
and also has a keen interest in strategically influencing to future of Bumiputra talent
development whereby she holds a position as a life member in few organizations, such
as PENIAGAWATI (Malaysia based Women Entrepreneur Association), Arab Business
Club Dubai UAE and Malaysia National Press Association.
Dato’ Maheran was appointed to the Board of Tanjung on 23 March 2015
ANNUAL REPORT 2015
21
Attendance of Board of Directors Meeting
The Directors’ attendance of Board of Directors Meeting can be found in the Statement of Corporate Governance in this Annual Report.
Family relationship with any director and/or major shareholder
None of the Directors has any family relationship with any director and/or major shareholder of the Company.
Conflict of interest
None of the Directors has any conflict of interest with the Company.
Conviction of Offence
None of the Directors has been convicted of any offence within the past ten (10) years other than traffic offences.
22
AUDIT COMMITTEE REPORT
Objectives
The primary objectives of the Audit Committee (“AC”):
•
•
•
•
Assist the Board in execute its statutory duties and fiduciary responsibilities relating to accounting & management controls,
financial reporting and business ethics policies.
Monitor compliance within the Group policies to ensure the objectivity and effectiveness of the Group’s internal control
measures.
Serve as the focal point for communication between External Auditors, Internal Auditors and management to make certain
the integrity of the management and adequacy of disclosure to shareholders.
Serve as an independent party when reviewing financial information presented by the management before distribution to
shareholders and general public.
COMPOSITION OF THE AUDIT COMMITTEE
The members of the AC are comprises of Non-E xecutive Directors (“NEDs”) and their respective designations who have served
during the financial year ended 31 December 2015 are as follows:-
Name
Independent
Designation
Meetings
Attended
Tan Sam Eng
(appointed as chairperson on 17 August 2015)
Yes
Chairperson
Independent NED
3/3
Datuk Suraj Singh Gill
(appointed on 23 February 2016)
Yes
Member
Independent NED
-
(appointed on 31 March 2015)
Yes
Member
Independent NED
3/3
(resigned on 23 February 2016)
No
Member
Non-Independent
Non-Executive Chairman
3/3
Dato’ Dr. (H) Ab Wahab bin Haji Ibrahim
(ceased office on 17 August 2015)
Yes
Chairman
Independent NED
4/4
Shahrizal Hisham bin Abdul Halim
(ceased office on 31 March 2015)
Yes
Member
Independent NED
2/2
George William Warren Jr.
(ceased office on 31 March 2015)
Yes
Member
Independent NED
2/2
ANNUAL REPORT 2015
23
AUDIT COMMITTEE REPORT (Cont’d)
•
Membership
The AC must fulfill the following requirements:a)
b)
c)
d)
The AC must be composed of not less than three (3) members;
A majority of the members must be independent directors and all members must be non-executive; and
At least one member of the AC must fulfill the requirements as prescribed or approved by the Exchange.
The Chairman shall be an Independent, Non-Executive Director. No alternate director is appointed as a member of the
Audit Committee;
e) In the event that any vacancy in the Audit Committee results in the non-compliance of the above requirements, the
Company must fill the vacancy within three (3) months; and
f) The Company Secretary shall act as Secretary to the Audit Committee.
•
Terms of Reference
a) The Audit Committee shall be granted the authority to investigate any activity of the Company and its subsidiaries, and
all employees shall be directed to co-operate as requested by members of the Committee;
b) The Audit Committee shall be empowered to retain persons having special competence as necessary to assist the
Committee in fulfilling its responsibilities;
c) The Audit Committee shall provide assistance to the Board in fulfilling its fiduciary responsibilities particularly relating to
business ethics, policies and financial management control;
d) The Audit Committee shall maintain a direct line of communication between the Board, External Auditors, Internal
Auditors and Management through regularly scheduled meetings;
e) The Audit Committee shall provide greater emphasis on the audit functions by increasing the objectivity and independence
of External and Internal Auditors and providing a forum for discussion that is independent of the Management;
f) The Audit Committee may invite any person to the meeting to assist the Audit Committee in decision-making process
and that the Audit Committee may meet exclusively as and when necessary; and
g) Serious allegations that have financial implications against any employee of the Company shall be referred to the Audit
Committee for investigation to be conducted.
•
Authority
The Audit Committee shall have the following authority as empowered by the Board of Directors:a) The authority to investigate any matter within its terms of reference;
b) The resources which are required to perform its duties;
c) Full, free and unrestricted access to any information, records, properties and personnel of the Company and any other
subsidiaries (if any) or sister companies;
d) Direct communication channels with the External Auditors and person(s) carrying out the internal audit function or
activity (if any);
e) Able to obtain independent professional or other advice; and
f) Able to convene meetings with the External Auditors and Internal Auditors together with other independent nonexecutive members of the Board, excluding the attendance of any Executive Directors, at least once a year or whenever
deemed necessary.
•
Meetings
a) The Audit Committee shall meet at least four (4) times in a year to discuss any matters raised by the Auditors in
discharging their functions. The quorum for a meeting of the Audit Committee shall be two (2); and
b) At least once a year, the whole Board shall meet with the External Auditors without the presence of any executive Board
member/Managing Director or Senior Management.
24
•
Duties and responsibilities
The duties and responsibilities of the Audit Committee are as follows:i) To obtain satisfactory response from Management on reports issued by External and Internal Auditors;
ii) To oversee the function of the Internal Audit Department;
iii) To review arrangements established by Management for compliance with any regulatory or other external reporting
requirements, by-laws and regulations related to the Company’s operations;
iv) To consider the appointment of the External Auditor, the audit fee and any questions of resignation or dismissal, to
discuss with the External Auditor before the audit commences, the nature and scope of the audit, and ensure coordination where more than one audit firm is involved, their audit report and evaluation of the system of the internal
controls and review the quarterly and year-end financial statements of the Company;
v) To discuss problems and reservations arising from the external audits, and any matter the auditor may wish to discuss
and to oversee the internal audit function; and
vi) To consider any related party transactions that may arise within the Company including any transaction, procedure or
course of conduct that raises questions of Management’s integrity.
SUMMARY OF ACTIVITIES DURING THE FINANCIAL YEAR
During the financial year ended 31 December 2015, the activities of the Audit Committee included the following:•
•
•
•
•
•
•
•
•
•
Reviewed the external auditors’ scope of work and their audit plan.
Reviewed with the external auditors the results of their audit, the audit report and internal control recommendations in
respect of improvements in internal control procedures noted in the course of their audit.
Reviewed and approving the annual audit plan of the Internal Audit Department, including the scope of work for the financial
year. Reviewed the annual report and the audited financial statements of the Company and the Group prior to submission to
the Board for their consideration and approval. The review was to ensure that the audited financial statements were drawn
up in accordance with the provisions of the Companies Act, 1965 and the applicable approved accounting standards issued
by the Malaysian Accounting Standards Board (“MASB”).
Reviewed the Company’s compliance with the Listing Requirements of the Bursa Malaysia Securities Berhad (“Bursa
Securities”) (“Listing Requirements”) and the applicable approved accounting standards issued by MASB.
Reviewed of the quarterly unaudited financial statements and its explanatory notes thereon and recommending to the Board
for Directors’ approval.
Reviewed and approving the Internal Audit Charter.
Reviewed the risk management policy and framework for adoption by the Group, prior to submission to the Board for
consideration and approval.
Reviewed the Audit Committee Report and Statement on Risk Management and Internal Control prior to their inclusion in
the Company’s Annual Report.
Met with the External Auditors without the presence of the Management and Executive Directors.
In January 2015, an Independent Committee comprising members of the Audit Committee was formed to investigate
various allegations against the Tanjung Group. In relation to this, the Independent Committee has also appointed Messrs
Ferrier Hodgson to perform a special audit on the allegations and a report has been presented to the Board on 23 April 2015
and submitted the same to Bursa Malaysia Securities Berhad.
ANNUAL REPORT 2015
25
INTERNAL AUDIT FUNCTION
The Group has engaged an external internal audit professional firm during the year to perform the internal audit function of the
Group. The internal audit firm reports directly to the Audit Committee and administratively to the Chief Executive Officer. The
activities of the internal audit firm are guided by the Internal Audit Charter that provides its independence in evaluating and
reporting on the adequacy, integrity and effectiveness of the overall internal control system, risk management and corporate
governance in the Group using a systematic and disciplined approach. The reviews and control improvement initiatives conducted
by the internal audit firm during the year were defined in an annual audit plan approved by the Audit Committee. The audit plan
encompassed the issuance of internal audit charter, documented terms of reference for the Board and Board Committees,
director’s code of ethics, service provider code of conduct and fraud prevention manual.
Other initiatives undertaken by the internal audit professional firm in FYE 2015 include the review of risk management policies in
key subsidiaries and operational review of project management within the Group. The corresponding reports of the audit reviews
performed were presented to the Audit Committee and forwarded to the Management for attention and corrective actions. The
Management is responsible for ensuring that the recommended corrective actions are taken within the required timeframe. The
cost incurred in relation to the internal audit function during the year was RM20,000.
During the year, various management and reporting meetings were held to ensure that the internal audit policies are implemented
and communicated effectively throughout all divisions within the Group.
26
STATEMENT ON RISK MANAGEMENT AND
INTERNAL CONTROL
INTRODUCTION
Pursuant to paragraph 15.26(b) of the Bursa Malaysia Securities Berhad Main Market Listing Requirements, and as guided by
the Statement on Risk Management and the state of Internal Control: Guidelines for Directors of Listed Issuers (“the Guidelines”),
the Board of Directors (“Board”) is responsible for the adequacy and effectiveness of the Tanjung Group’s (“the Group”) risk
management and internal control system.
The Board has established an ongoing process for identifying, evaluating and managing the significant risks faced by the Group
and this process includes enhancing the risk management and internal control system from time to time in response to the
changes to the business environment or regulatory guidelines.
The Board ensures that the system manages the Group’s key areas of risk within an acceptable risk profile to increase the
likelihood that the Group’s policies and business objectives will be achieved. The Board continually reviews the system to
ensure that the risk management and internal control system provides a reasonable but not absolute assurance against material
misstatement of management and financial information and records or against financial losses or fraud.
BOARD RESPONSIBILITIES
The Board is responsible for the Group’s internal control and risk management system to safeguard shareholders’ investment
and the Group’s assets as well as reviewing the adequacy and effectiveness of the said system.
The Board is of the view that the risk management and internal control system in place for the year under review and up to the
date of issuance of the financial statements is adequate and effective to safeguard the interests of shareholders, customers,
employees and the Group’s assets.
In view of the limitations inherent in any system of risk management and internal control, these systems are designed to manage,
rather than eliminate, the risk of failure to achieve the Group’s business and corporate objectives. These systems can therefore
only provide reasonable, but not absolute assurance, against material misstatement or loss.
RISK MANAGEMENT GOVERNANCE
Risk Management is regarded by the Board to be an integral part of the business operations. The Board maintains an on-going
commitment to enhance the Group’s control environment and processes. The key risks relating to the Group’s operations and
strategic and business plans are addressed at Management’s meetings. Significant risks identified by the Management are to be
brought to the attention of the Board at their scheduled meetings.
The abovementioned practices/initiatives put in place by the Board serve as the on-going practice used to identify, evaluate
and manage significant risks during the financial year under review. In view of the recent weaknesses on the Group’s corporate
governance and internal control systems that have come to the Board’s attention, the Board is in the process of addressing these
weaknesses noted so as to improve the effectiveness and efficiency of the risk management function and the internal control
systems of the Group.
The Group Risk Management Framework which sets out the fundamental principles on risk governance is to drive the
development of risk management practices and tools which enable the identification, measurement and continuous monitoring
of all applicable risks of the Group including the identification of emerging risks.
The Board established a governance structure that is designed to govern the Group’s business activities to be: consistent with
the Group’s overall business objectives and risk appetite conducted within clearly defined lines of responsibility, authority limits,
and accountability aligned to risk management and control responsibilities subjected to adequate risk management and internal
controls
SYSTEM OF INTERNAL CONTROL AND COMPLIANCE PROCESS
The Group maintains a system of internal control that serves to safeguard its assets; identify and manage risk; ensure compliance
with statutory and regulatory requirements; and to ensure operational results are closely monitored and substantial variances are
promptly explained.
Whilst the Board maintains control and direction over appropriate strategic, financial, organizational and compliance issues, it
has delegated the implementation of the system of internal controls to the executive management, led by the Executive Director.
The Executive Director, who is empowered to manage the business of the Group, has primary operational responsibility for the
system of internal controls.
ANNUAL REPORT 2015
27
STATEMENT ON RISK MANAGEMENT AND
INTERNAL CONTROL (Cont’d)
The management of TOB identify key compliance risk areas as guided by the Group Compliance Framework and conduct ongoing
compliance checks. Reports on the compliance status of the entities are submitted to the TOB’s Audit Committee for review. The Group
Compliance Framework is established to outline the governance structure on compliance risk management functions and control
responsibilities.
The Audit Committees of TOB review internal control issues identified by the respective Internal Auditors, the external auditors and
management, and evaluate the adequacy and effectiveness of their risk management and internal control systems. They also review the
internal audit functions with particular emphasis on the scope and frequency of audits and the adequacy of resources.
The Group’s risk appetite sets out the level of risk tolerance and limits to govern, manage and control the Group’s risk taking activities.
The strategic objectives, business plans, desired risk profile and capital plans are required to be aligned with the risk appetite.
The Board convenes meetings on quarterly basis in order to maintain full and effective supervision. The Executive Director, being the
principal channel of communication between the Board and the management, will lead the presentation of Board papers and provide
comprehensive explanation on main issues. In arriving at any decisions based on recommendations by management and the Audit
Committee, a thorough deliberation and discussion by the Board is a prerequisite.
The salient features of the Group’s system of internal control include, inter alia :• An organizational structure with clearly defined lines of responsibility and relevant authority has been set up for the Group.
• The Group’s management with the assistance of a centralized human resource function sets the policies for recruitment, training and
appraisal of the employees within the Group.
• Policies and procedures which sets out the compliance standards for daily operations for the respective business units of the Group;
• The Group’s management meets monthly to review the operational and financial performance of the businesses in the Group and its
subsidiaries, and to discuss key business, operational and management issues.
• The Board of Directors receives and reviews quarterly performance reports on the Group and its subsidiaries from the management,
and discuss on significant business and risk issues
WHISTLE-BLOWING
The Group has a whistle-blowing policy and procedure to provide opportunity for employees, directors and others to raise their concerns
of any malpractice within the Group. The objective of the policy and procedure is to provide and facilitate a mechanism for whistleblower
to report concern about any suspected and/or known misconduct, wrongdoings, corruption, fraud, waste and/or any abuse of power.
This will enable each case/issue can be investigated and for appropriate action to be taken to ensure that the matter is resolved
effectively and within the Group wherever possible.
CONCLUSION
The Executive Director (ED) and Chief Financial Officer (“CFO”) are fully aware of the issues highlighted to the Board arising from the
weaknesses in the corporate governance and internal control systems of the Group. The ED and CFO had given their assurance that the
Group’s risk management and internal control system are operating adequately and effectively in all material aspects. Together with the
Board, the CEO and the CFO are in the process of improving the adequacy, effectiveness and efficiency of the corporate governance
practices and the systems of internal control in the Group to continue to safeguard the interest of the shareholders’ investment and the
Group’s assets.
There are guidelines within the Group for hiring and termination of staff, formal training programmes for staff and annual performance
appraisals to enhance the level of staff competency in carrying out their duties and responsibilities. There are policy guidelines and
authority limits imposed on executive directors and management within the Group in respect of the day-to-day operations.
Policies and procedures to ensure compliance with internal controls and the relevant laws and regulations are set out in operations
manuals, guidelines and directives issued by the Group which are updated from time to time. Procedural guidelines are established
to set out a systematic process and procedure in the review of the adequacy and effectiveness of the risk management and internal
control system.
The Board is of the view that the risk management and internal control systems of the Group require continuous pertinent efforts from
the Board to improve its adequacy, effectiveness and efficiency in meeting the Group’s strategic objectives.
28
STATEMENT OF CORPORATE GOVERNANCE
The Board of Directors (“Board”) of Tanjung Offshore Berhad (“TOB” or the “Company”) recognises and is committed in upholding
a high benchmark of corporate governance and ensuring controls, systems and processes are well sustained for the Group. The
Board will continuously evaluate the status of the Group’s corporate governance practices and procedures with a view to adopt and
implement the Best Practices of the Code wherever applicable in the best interests of the stakeholders of the Company. This statement
is prepared pursuant to the Malaysian Code on Corporate Governance 2012 (“MCCG 2012” or the “Code”) and the Main Market Listing
Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”).
1. Roles & Responsibilities of the Board
The Board is fully aware of its responsibilities and has adopted as key roles in strategising the direction of the Group and has
assumed the following duties in demonstrating the following fiduciary and leadership roles:
•
•
•
•
•
•
Overseeing and monitoring the conduct of business, financial performance and any major capital intensive investments of the
Group;
Reviewing and implementing appropriate budgets and strategic business plans of the Group, monitoring compliance with
applicable financial reporting standards and integrity and adequacy of all financial information disclosure;
Identifying principal risks and ensuring the implementation of appropriate internal controls and mitigation measures to
effectively monitor and manage risks;
Reviewing the adequacy and integrity of the internal control and management information systems of the Group;
Developing a corporate code of conduct within the Group to address any conflicts of interest relating to the stakeholders of
the Company; and
Establishing and overseeing the development and implementation of the corporate communication policies with shareholders,
stakeholders and the public.
DIRECTORS
The Chairman ensures its smooth and effective functioning within the Board.
The Executive Directors (“EDs”) are responsible for overseeing the day-to-day operations and affairs of the Company.
The Non-Executive Directors (“NEDs”), both Independent and Non-independent, are responsible in providing insights, unbiased and
independent views, advice and judgement towards the Board and bring impartiality to Board deliberations and decision making.
NEDs play as a vital check and balance role by challenging and scrutinising the Management’s proposals and recommendations in an
objective manner to the decision making process at the Board level.
BOARD COMPOSITION
As at the date of this statement, the Board now comprises of seven (7) Directors, including two (2) EDs, six (6) NEDs where five (5) of
them being Independent Directors. This composition satisfies the MMLR where it stated that at least two (2) Directors or one-third of
the Board must be independent.
Together the Directors act in the best interest of the Company and believe that the current Board composition fairly reflects the
interests of its shareholders to provide effective leadership, strategic direction and necessary governance to the Group. These Directors
collectively have skills and experiences from different field of business, in terms of commercial, financial, technical, corporate and legal
experience for the effective management of the Group’s businesses.
The Company has also formalised a set of ethical standards through a code of conduct, which is subject to periodical review, to ensure
Directors practice ethical, business like and lawful conduct, including proper use of authority and appropriate decorum when acting as
the Board.
The Board conducted assessment on the independence of the Independent Directors and is satisfied that the Independent Directors
have met the independence criteria stated in the MMLR
None of the Independent Directors have served the Company exceeding a cumulative terms of nine (9) years. At present, the
Company do not have a formal policy to limit the tenure of independent director to nine (9) years. However, the Board is mindful of the
recommendation in the Code to ensure effectiveness of independent directors.
BOARD COMMITTEE
The Board has established different board committees to assist the Board in discharging its duties. These committees are as follows:
Audit Committee (“AC”)
The composition of the Audit Committee is in compliance with relevant regulatory requirements. The report of the Audit Committee
is stated herein.
ANNUAL REPORT 2015
29
STATEMENT OF CORPORATE GOVERNANCE (Cont’d)
BOARD COMMITTEE (cont’d)
Nomination Committee (“NC”)
The Board recognises the importance in having a Board with appropriate mix of skills, competencies and expertise is the
fundamental to how policies and strategies are shaped and contribute to the quality of decision making.
Therefore, the NC’s functions and responsibilities are set out in the term of reference (“TOR”) as follows:•
•
•
•
•
Recommend to the Board the minimum requirements for appointments of the Board, Board Committees and the senior
key management of the Group;
Review annually the overall composition of the Board in terms of size and skills, balance between EDs and NEDs,
independence and mix of other core competencies required for the Group;
Assess annually the effectiveness of the Board and several key personnel in the management as a whole;
Formulating the nomination, selection, election and succession policies for members of the Board and Board
Committees; and
Overseeing Board induction and training programmes.
The NC meets at least once in each financial year and additional meetings may be arranged at any time when necessary.
The NC members are as follows:Name
Dato’ Maheran binti Mohd Salleh
Independent
Yes
Yes
Yes
Designation
Chairperson
Independent NED
Member
Independent NED
Member
Independent NED
The activities carried out by the NC during the financial year and up to the date of this Annual Report are as follows:
•
•
•
•
Reviewed and assessed the suitability of candidate for appointment as director.
Reviewed the mix of skill and experience and other qualities of the Board;
Reviewed the assessment of the effectiveness of the Board as a whole, the Board Committees and the Directors; and
Reviewed and recommended to the Board on the re-election of Directors retiring at the Annual General Meeting.
Remuneration Committee (“RC”)
The Board has established a remuneration policy and procedure to facilitate the RC to review consider and recommend
to the Board the levels and elements of remuneration of Directors with executive functions and the senior management.
The Board as a whole determines the allowances of the Non-ExecutiveDirectors and the Non-Executive Chairman after
considering the recommendation of the RC.
The RC meets once a year in each financial year and additional meetings may be called any time when necessary.
The RC members are as follows:Name
Dato Maheran binti Mohd Salleh
30
Independent
Yes
No
Tan Sri Datuk Tan Kean Soon
No
Designation
Chairperson
Non-Executive Director
Member
Non-Executive Chairman
Member
BOARD COMMITTEE (cont’d)
Remuneration Committee (“RC”) (cont’d)
The determination of remuneration packages of the Executive Directors are matters for the Board as a whole. The
remuneration scheme of the Directors is structured in a way to attract, retain and motivate them in order to run the Group
successfully.
The Board reviews the remuneration of the Executive Directors annually whereby the respective EDs are not allowed to
involve in the discussion or contribute to any decision making on their own remuneration package.
The aggregate remuneration of the Directors for the financial year ended 31 December 2015 is as follows:Remuneration Per year
Basic salary
Bonuses
Fees
Total
Executive Directors
1,239,852
101,310
–
1,341,162
Remuneration Band (RM) per year
0 - 50,000
50,001 - 100,000
100,001 - 150,000
150,001 – 200,000
200,001 – 250,000
> 250,000
Non-Executive Directors
–
–
401,500
401,500
Total
1,239,852
101,310
401,500
1,742,662
Executive Directors Non-Executive Directors
–
–
–
7*
2**
1*
–
1*
–
–
2
–
* One of the Directors has resigned during current financial year
** Both Directors have resigned during the current financial year.
Share Issuance Scheme Committee (“SISC”)
The SISC shall be vested with such powers and duties as are conferred upon it by the Board including the following powers:-
•
•
•
•
To administer the Share Issuance Scheme (“SISC”) and to grant share options in accordance to the Bye-Laws;
To recommend to the Board to establish, amend, and revoke Bye-Laws, rules and regulations to facilitate the
implementation of the SIS;
To construct and interpret the provisions hereof in the best interest of the Company; and
Generally, to exercise such powers and perform such acts as are deemed necessary or expedient to promote the best
interest of the Group.
The SISC members are as follows:Name
Rahmandin @ Rahmanudin bin Md Shamsudin
Designation
Member
Member
ED/Group Chief Executive Officer
As at 30 April 2016, the status of the SIS is as follows:No. of SIS Options Granted
up to 30 April 2016
No. of SIS exercised
as at 30 April 2016
Cancelled
No. of SIS Options
Outstanding as at
30 April 2016
Date of expiry of SIS
Scheme
55,688,000
24,009,100
2,112,900
29,566,000
7 May 2016
ANNUAL REPORT 2015
31
BOARD’S COMMITMENT
The Board meets at least four times a year, with additional meeting are called upon when decisions on urgent matters arise
between the scheduled meetings. Papers and documents pertaining to matters on the agenda for the Board and Board
Committees meetings are furnished to the Directors in advance of the meetings to ensure they are fully aware of the upcoming
issues. Board Committee meetings are held prior to the Board meetings, to allow the Committees to properly convey the matters
and reports to the Board.
The record of attendance of each director at Board Meetings of the Company in 2015 is as follow:Name
Dato’ Dr. Nik Norzul Thani bin N. Hassan Thani
(appointed on 23 March 2015)
No. of Meetings Attended
% of Attendance
7/7
100%
12/12
100%
Rahmandin@Rahmanudin bin Md. Shamsudin
(Appointed on 12 February 2015)
9/9
100%
(Appointed on 31 March 2015)
6/6
100%
5/6
83%
Dato’ Maheran bte Mohd Salleh
7/7
100%
Tan Sam Eng
7/7
100%
Datuk Mohd Hafarizam bin Harun
(Resigned on 22 February 2016 )
7/7
100%
10/11
90%
George William Warren Jr.
(Resigned on 23 March 2015)
4/4
100%
Shahrizal Hisham bin Abdul Halim
4/4
100%
Muhammad Sabri bin Ab Ghani
4/4
100%
Tan Wee Koh
6/6
100%
Dato’ Dr. Ab Wahab Bin Haji Ibrahim
(Resigned on 17 August 2015)
As of above, all Directors have complied with the minimum of 50% attendance requirement on Board meetings.
32
SUPPLY OF INFORMATION
The Board recognizes that the decision making process is highly dependent on the quality of information furnished. As such, the
Board members have full and unrestricted access to all information concerning the Group’s affairs. Prior to the Board meetings,
all Board members are provided with the agenda and board papers containing information relevant to the business of the
meeting to enable them to obtain further explanations, where necessary, in order to be properly briefed before the meetings. The
Board papers including information on major financial, operational and corporate matters of the Group. The Board members also
have access to the advice and services of the Company Secretary, senior management and independent professional advisers
including the external auditors.
Along with good governance practices and in order to enhance transparency and accountability, the Board has established and
put in place the following policies and procedures which are made available at the office of the Company. These include the:- -
Code of Conduct
Shareholder’s Right relating to General Meeting
Further information of the Group’s operations is also made available at the Company’s website at www.tanjungoffshore.com.my.
APPOINTMENT AND RE-ELECTION
In accordance with Article 103 of the Company’s Articles of Association, at least one-third of the Directors for the time being shall
retire from office and be subject to retirement by rotation at each Annual General Meeting (“AGM”). The article also provides that
all Directors shall retire once in every three (3) years in compliance with the Code. Directors who are appointed before the next
AGM will retire and be subject to re-election by shareholders at the next AGM.
DIRECTOR’S TRAINING
All Directors of the Company have completed the Mandatory Accreditation Programme (“MAP”) by Bursa Malaysia. The Company
does not have a formal training program for new Director but they receive briefings and updates on the Group’s businesses,
operations, risk management, internal control, finance and relevant legislation, rules and regulations. The briefings and updates
aims at communication to the newly appointed Directors, the Company’s vision and mission, its philosophy and nature of the
business, current issues within the Group, the corporate strategy and the expectation of the Company concerning input of the
Director.
The Directors are encouraged to attend various external and internal professional courses, briefings, and seminars relevant to
the Group to keep themselves abreast with latest development in the industry, regulatory updates or changes and to enhance
their skills and knowledge.
The Board acknowledged that the Directors through varied experiences and qualifications provided the desired contribution and
support to the functions of the Board. Directors’ training is an on-going process as Directors recognize the need to continually
develop and refresh their knowledge and skills, and to update themselves on market development.
Directors are encouraged to attend continuous education programmes and seminars to keep abreast of relevant changes in
laws and regulations and the development in the industry.
Additionally, the Directors are also updated on a continuing basis on new and/ or revised requirements to the Listing Requirements
as and when the same were advised by the Bursa Securities. The Directors will continue to undergo other relevant training
programmes, conferences and seminars that may further enhance their skills and knowledge.
The individual directors are to evaluate and determine relevant programmes, seminars, briefings or dialogues available that would
best enable them to enhance their knowledge and contributions towards the Group.
ANNUAL REPORT 2015
33
CORPORATE DISCLOSURE POLICY
The Board has, based on the recommendation of the Code, adopted a Corporate Disclosure Policy to ensure accurate, clear,
timely and complete disclosure of material information necessary for informed investing and take reasonable steps to ensure that
all who invest in the Company’s securities enjoy equal access to such information to avoid an individual or selective disclosure.
These will be reviewed and improved on from time to time.
ThIs Policy applies to all Directors, management, officers and employees of the Group.
RELATIONSHIP WITH SHAREHOLDERS
The Group recognises the importance of effective communication with its shareholders and investors to keep them informed
of the major development of the group. As such, a shareholder communications policy has been implemented for the purpose.
Information is disseminated through the following channels:•
•
•
•
Annual Report;
Circulars to shareholders;
Various disclosures and announcement to Bursa Securities Malaysia Berhad; and
Company’s website at www.tanjungoffshore.com.my
In addition, shareholders and investors can have a channel of communication with the Group Corporate Finance to direct any
queries and provide feedback to the Group.
Tel No : 03-2087 7000
Fax No : 03- 2092 1043
Email : [email protected]
The main forum for dialogue with shareholders remains at the Annual General Meeting (“AGM”). AGM provides opportunity for
shareholders to seek clarifications or raise questions pertaining to the operations and financials of the Group. Senior Management
and External Auditors are also available to respond to any shareholder’s queries during the AGM.
The shareholders are informed of their rights to demand for poll prior to the commencement of each general meeting.
CORPORATE SOCIAL RESPONSIBILITY
The Company is consistent in its Corporate Social Responsibility (CSR) agenda, and is committed to employing responsible
practices with regard to the development and improvement of its employees, the environment as well as in our local communities.
The Company’s employees are the greatest assets of the Group. As much as the Company commits to give back to the society,
the Company also commits significant resources in nurturing human talents, technical skills upgrading, career development
programs and lifelong learning. The Company aims to instill good civic values so that the employees too can act as ambassadors
in advancing the worthy causes.
A CSR policy is established to ensure the Company’s business operations are conducted according to best industry standards
and practices. Integrity is a core element of the Company’s business and operational competency model. A key feature of this is
that all business interactions will be discharged in a socially responsible manner. The goal is to behave ethically and with integrity
in the communities where the Company operates directly and indirectly, and to respect cultural, national and religious diversity.
The CSR policy is to be assessed, reviewed and updated annually, with the assistance and advice from the Company Secretary,
in accordance with the needs of the Company and as and when there are changes to the regulations that may have an impact
on the Board in discharging its responsibilities. Any change and or updates to the policy shall be recommended to the Board
for approval.
34
ACCOUNTABILITY AND AUDIT
1. Financial Reporting
The Board is responsible to present a balanced, clear and comprehensive assessment of the Group’s financial performance
and prospects through the quarterly and annual financial statements to shareholders. The Board and the Audit Committee
have to ensure that the financial statements are drawn up in accordance with the provisions of the Companies Act, 1965 and
applicable approved accounting standards in Malaysia. In presenting the financial statements, the Board has reviewed and
ensured that appropriate accounting policies have been used, consistently applied and supported by reasonable judgments
and estimates.
2. Internal Control
The Board has overall responsibility for maintaining a sound and effective system of internal control of the Group, covering not
only financial controls but also controls relating to operations, compliance and risk management to safeguard shareholders
investments and the Group’s assets. The Board also recognizes that the system of internal control has inherent limitations
and is aware that such a system can only provide reasonable and not absolute assurance against material misstatements,
loss or fraud.
The internal control system of the Group is supported by an established organizational structure with well-defined authority
and responsibility lines, and which comprises of appropriate financial, operational and compliance controls.
3. Relationship with Auditors
The Board, via the AC, has established a formal and transparent arrangement for maintaining an appropriate relationship
with its auditors, both external and internal. The AC will evaluate the performance, independence and objectivity of the
external auditors prior to making any recommendation to the Board on the re-appointment of the external auditors. The
external auditors are to meet with the AC without the presence of the Management at least 2 times during one financial year.
4. Statement of Directors’ Responsibility
The Directors are required by the Companies Act, 1965 to prepare financial statements for each financial year, which give a
true and fair view of the state of affairs of the Group and the Company and of the results and cash flow of the Group and the
Company for the financial year then ended.
In preparing the financial statements for the FYE 2014, the Directors have:•
•
•
•
Adopted the appropriate accounting policies and applied them consistently;
Made judgments and estimates that are reasonable and prudent;
Ensure applicable approved accounting standards have been followed, and any material departures have been disclosed
and explained in the financial statements; and
Ensure the financial statements have been prepared on a going concern basis.
The Directors are responsible for keeping proper accounting records of the Group and Company, which disclose with
reasonable accuracy the financial position of the Group and the Company, and which will enable them to ensure the
financial statements have complied with the provisions of the Companies Act, 1965 and the applicable approved accounting
standards in Malaysia.
The Directors have the general responsibility for taking such steps as are reasonably open to them to safeguard the assets
of the Group and to prevent and detect fraud and other irregularities.
ANNUAL REPORT 2015
35
5. Gender Diversity
To date, the Board has appointed two women to the Board of Directors of Tanjung and they are Dato’ Maheran (Independent
Non-Executive Director) and Ms Tan(Independent Non-Executive Director).
The NC shall oversee the procedure in addition to the board recruitment, board performance evaluation and succession
planning processes. We shall always aim to provide a suitable working environment that is free from harassment and
discrimination in order to attract and retain women participation in the Board, and also to have diversity in ethnicity and age
on board as well as workforce.
6. Compliance Statement
36
The above statements are clear reflections of the conscious efforts of the Board and Management to strengthen the
Company’s governance process. The Board believes this to be an ongoing process and shall continue to strive for full
adoption of the Best Practices of the Code in the near future.
OTHER INFORMATION
OTHER DISCLOSURE REQUIREMENTS
a) Share Buybacks
The Company had not renewed the share buy-back mandate since the Eighth Annual General Meeting, therefore no share
buy-back were carried out during the financial year under review.
b) Options, Warrants or Convertible Securities
As at 31 December 2015, the share option movements are as detailed below:No of Share Options Share Options Exercised as at
granted as at
31 December 2015
31 December 2015
55,688,000
24,009,100
Share Options Cancelled
as at 31 December 2015
2,112,900
No of Share Options
outstanding as at
30 December 2015
29,566,000
As at 31 December 2015, the number of outstanding Warrant A are as follows:Conversion price
Warrants A
RM0.50
Outstanding as at
31 December 2015
29,981,990
Expiry Date
7 April 2016
c) Depository Receipt (“DR”) Program
During the financial year under review, the Company did not sponsor any DR Program.
d) Imposition of Sanctions/Penalties
There were no public sanctions and/or penalties imposed on the Company or its subsidiaries, Directors or management by
the relevant regulatory bodies during the financial year under review.
e) Non-Audit Fees
The Board has engaged Messrs Ferrier Hodgson to perform a special audit on certain transactions undertaken by the
Company in the financial year ended 31 December 2015. Save as disclosed above, there were no other non-audit fees paid
to the external auditors during the financial year under review.
f) Variation in Results
There was no material variation between the audited results for the financial year ended 31 December 2015 and the unaudited
results previously announced.
g) Material Contracts
To the best of the Board’s knowledge, there are no material contracts involving the Group with any of the major shareholders
or Directors in office during the year under review.
h) Contracts Relating to Loans
i)
No contract relating to loans was executed by the Company during the year under review.
j)
No profit guarantees were provided by the Company or its subsidiaries during the year under review.
No RPT were transacted during the year under review.
Profit guarantees
Related Party Transactions (“RPT”)
ANNUAL REPORT 2015
37
Financial
Contents
38
39
Directors’ Report
44
Statement by Directors
45
Statutory Declaration
46
Independent Auditors’ Report
48
Statements of Financial Position
50
Statements of Profit or Loss
51
Statements of Comprehensive Income
52
Statement of Changes in Equity
54
Statements of Cash Flows
56
Notes to the Financial Statements
REPORT OF THE DIRECTORS
for the Financial Year Ended 31 December 2015
The directors hereby submit their report together with the audited financial statements of the Group and the Company for the
financial year ended 31 December 2015.
PRINCIPAL ACTIVITIES
The Company is principally engaged in investment holding. The principal activities of the subsidiaries are described in Note 7 to
the Financial Statements. There have been no significant changes in the nature of the activities during the current financial year.
RESULTS
Net (loss) / profit for the year
GROUP
RM
COMPANY
RM
(76,255,283)
3,733,343
In the opinion of the directors except for the impairment losses and allowance for doubtful debts totalling to RM78,969,285, the
results of the operations of the Group and the Company during the financial year have not been affected by any item, transaction
or event of a material or unusual nature.
DIVIDENDS
There were no dividend paid or declared since the end of the previous financial year ended and the directors do not recommend
any final dividend in respect of the current financial year.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provisions other than those disclosed in the financial statements.
ISSUANCE OF SHARES
During the financial year, the Company has issued the following ordinary shares:
No. of Shares Issued
Issue Price
Purposes
7,012,702
RM0.50
Exercise of Share Issuance Scheme
The new ordinary shares issued during the current financial year rank pari passu in all respects with the existing ordinary shares
held in the Company, other than those disclosed in the following section on unexercised options granted to executive directors
and employees of the Group and the Company.
ANNUAL REPORT 2015
39
REPORT OF THE DIRECTORS (Cont’d)
UNEXERCISED OPTIONS GRANTED
i)
Share Issuance Scheme (“SIS”)
The SIS is governed by the By-Laws approved by the shareholders at an Extraordinary General Meeting held on 07 February
2013 and is to be in force for a period of 3 years. The SIS has been effective on 12 July 2013. The salient features, terms and
details of the SIS are disclosed in Note 28 to the Financial Statements.
As at 31 December 2015, there were 29,566,000 (2014: 37,196,300) unissued ordinary shares pursuant to the SIS options
granted under the SIS scheme, at RM0.50 per share.
ii) Issuance of Warrants
The subscription price of Warrant A 2006/2016 is RM0.50. The details of the issuance of Warrants are disclosed in Note 29
to the Financial Statements.
As at 31 December 2015, there is a total of 29,981,990 (2014: 29,981,990) outstanding Warrant A 2006/2016 warrants. The
said warrant expired in 2016.
DIRECTORS
The directors who held office since the date of the last report are:
Tan Sam Eng
Dato’ Maheran binti Mohd Salleh
Datuk Dr. Nik Norzrul Thani bin N. Hassan Thani
Datuk Mohd Hafarizam bin Harun
Dato’ Dr. (H) Ab Wahab bin Haji Ibrahim
(Resigned w.e.f 22.02.2016)
(Resigned w.e.f 17.08.2015)
DIRECTORS’ BENEFITS
During and at the end of the financial year, no arrangements subsisted to which the Company or its subsidiaries is a party,
with the object or objects of enabling directors of the Company to acquire benefits by means of the acquisition of shares in, or
debentures of, the Company or any other body corporate.
Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than a
benefit included in the aggregate amount of emoluments received or due and receivable by the directors shown in the financial
statements or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related
corporation with the director or with a firm of which the director is a member, or with a company in which the director has a
substantial financial interest.
40
DIRECTORS’ INTERESTS
According to the Register of Directors’ Shareholdings, the interests of directors in office at the end of the financial year in the
ordinary shares of the Company during the financial year are as follows:
Number of Ordinary Shares of RM0.50 each
At
01.01.2015
Bought/
Consolidation
Sold/
Consolidation
At
31.12.2015
Direct Interests:
Datuk Dr. Nik Norzrul Thani bin N. Hassan Thani
–
17,889,600
–
70,000
37,183,900
10,330,400
4,460,000
–
–
–
–
–
37,183,900
28,220,000
4,460,000
70,000
Indirect Interests:
Tan Sri Datuk Tan Kean Soon*
Datuk Dr. Nik Norzrul Thani bin N. Hassan Thani^
Dato’ Maheran binti Mohd Salleh^
4,050,000
–
–
2,032,000
4,190,000
4,190,000
(4,050,000)
–
–
2,032,000
4,190,000
4,190,000
Number of Warrants over Ordinary Shares of RM0.50 each
At 01.01.2015
Granted
Vested
At 31.12.2015
937,039
–
–
937,039
* Deemed interest pursuant to Section 134(12) of the Companies Act, 1965
^ Deemed interest pursuant to Section 6A of the Companies Act, 1965
None of the other directors in office at the end of the financial year held any shares or debentures in the Company or in any
related corporations during the financial year ended 31 December 2015.
ANNUAL REPORT 2015
41
OTHER STATUTORY INFORMATION
Before the financial statements of the Group and the Company were prepared, the directors took reasonable steps:
(a) to ascertain that proper action had been taken in relation to the writing-off of bad debts and the making of allowance for
doubtful debts, and have satisfied themselves that all known bad debts had been written off and that adequate allowance
had been made for doubtful debts; and
(b) to ensure that any current assets which were unlikely to be realised at their book values in the ordinary course of business
have been written down to their estimated realisable values.
As of the date of this report, the directors are not aware of any circumstances:
(a) which would render the amount written off for bad debts or the amount of the allowance for doubtful debts inadequate to
any substantial extent in the financial statements of the Group and the Company; or
(b) which would render the values attributed to current assets in the financial statements of the Group and the Company
misleading; or
(c) which have arisen which render adherence to the existing method of valuation of assets and liabilities of the Group and the
Company misleading or inappropriate; or
(d) not otherwise dealt with in this report or financial statements which would render any amount stated in the financial
statements of the Group and the Company misleading.
As of the date of this report, there does not exist:
(a) any charge on the assets of the Group and the Company which has arisen since the end of the financial year and secures
the liability of any other person; or
(b) any contingent liability of the Group and the Company which has arisen since the end of the financial year.
No contingent or other liability has become enforceable, or is likely to become enforceable within the period of twelve months
after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Group and
the Company to meet its obligations as and when they fall due.
In the opinion of the directors, no item, transaction or event of a material or unusual nature has arisen in the interval between the
end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group
and the Company for the current financial year.
42
AUDITORS
The retiring auditors, Messrs. AljeffriDean, have indicated their willingness to be re-appointed in accordance with Section 172(2)
of the Companies Act, 1965.
Signed on behalf of the Board of Directors in accordance with a resolution of the directors,
Tan Sri Datuk Tan Kean Soon Rahmandin @ Rahmanudin bin Md. Shamsudin
Kuala Lumpur,
28 March 2016
ANNUAL REPORT 2015
43
STATEMENT BY THE DIRECTORS
Pursuant to Section 169 (15) of the Companies Act, 1965
The directors of Tanjung Offshore Berhad state that, in their opinion, the financial statements set out in pages 48 to 105 are
drawn up in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the
provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial positions of the Group and
the Company as at 31 December 2015 and of their financial performance and the cash flows of the Group and the Company for
the financial year ended on that date.
In the opinion of the directors, the information set out in Note 39 to the Financial Statements has been compiled in accordance with
the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures
pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants, and
the directive of Bursa Malaysia Securities Berhad.
Signed on behalf of the Board of Directors in accordance with a resolution of the directors,
Kuala Lumpur,
28 March 2016
44
STATUTORY DECLARATION
Pursuant to Section 169 (16) of the Companies Act, 1965
I, Ong Fee Peng, the officer primarily responsible for the financial management of Tanjung Offshore Berhad, do solemnly
and sincerely declare that the financial statements set out in page 48 to 105 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
By Ong Fee Peng
At Wilayah Persekutuan Kuala Lumpur
On 28 March 2016
)
)
)
)
Before me,
Commissioner for Oaths
Agong Sia (W460)
ANNUAL REPORT 2015
45
INDEPENDENT AUDITORS’ REPORT
to the Members of Tanjung Offshore Berhad
(Incorporated in Malaysia)
Report on the Financial Statements
We have audited the financial statements of Tanjung Offshore Berhad, which comprise statements of financial position as at
31 December 2015 of the Group and of the Company, statements of profit or loss and statements of other comprehensive
income, statements of changes in equity and statements of cash flows of the Group and the Company for the year then ended,
and a summary of significant accounting policies and other explanatory information, as set out on pages 48 to 105.
Directors’ Responsibility for the Financial Statements
The directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in
accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements
of the Companies Act, 1965 in Malaysia. The directors are also responsible for such internal control as the directors determine
is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the
Company’s preparation of financial statements that give a true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and the Company as of
31 December 2015 and of their financial performance and cash flows for the year then ended in accordance with Malaysian
Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965
in Malaysia.
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:
(a) In our opinion, 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’ reports of all the subsidiaries of which we have not acted as
auditors, which are indicated in Note 7 to the Financial Statements.
(c) We are satisfied 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 and we have received satisfactory information and explanations required by us for those purposes.
(d) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment
made under Section 174(3) of the Act.
46
INDEPENDENT AUDITORS’ REPORT (Cont’d)
to the Members of Tanjung Offshore Berhad
(Incorporated in Malaysia)
Other Reporting Responsibilities
The supplementary information set out in Note 39 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad
and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information
in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the
Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute
of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary
information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia
Securities Berhad.
Other Matters
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.
AljeffriDean
AF 1366
Chartered Accountants
Zuhairi Dziaruddin
No. 3145/06/16(J)
Chartered Accountant
Kuala Lumpur, 28 March 2016
ANNUAL REPORT 2015
47
STATEMENTS OF FINANCIAL POSITION
GROUP
NOTE
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
Subsidiary companies
Associate company
Joint venture
Investment property
Other investments
Other receivables, deposits and prepayments
CURRENT ASSETS
Inventories
Trade receivables
Other receivables, deposits and prepayments
Amount owing by subsidiary companies
Amount owing by associate company
Amount owing by joint venture
Other investments
Cash and cash equivalents
TOTAL ASSETS
See accompanying notes to the financial statements.
48
5
6
7
8
9
10
11
12
13
14
12
7
8
9
11
15
COMPANY
2015
2014
RM
RM
2015
RM
2014
RM
14,174,699
2,969,366
–
1,285
337,623
26,618,655
3,511,434
4,860,000
15,562,577
3,242,638
–
1,285
331,582
36,439,960
489,897
6,480,000
–
–
95,364,167
–
–
–
2,139,834
4,860,000
–
–
95,364,167
–
–
–
–
6,480,000
52,473,062
62,547,939
102,364,001
101,844,167
284,640
35,296,394
13,062,280
–
1,276
2,978,661
53,870
67,229,016
1,416,507
39,984,602
59,636,034
–
100,380
2,538,796
20,226,182
52,363,234
–
–
2,742,991
110,697,943
–
–
53,870
25,875,102
–
–
3,873,613
97,989,251
–
–
18,926,182
11,474,941
118,906,137
176,265,735
139,369,906
132,263,987
171,379,199
238,813,674
241,733,907
234,108,154
STATEMENTS OF FINANCIAL POSITION (Cont’d)
GROUP
NOTE
COMPANY
2015
2014
RM
RM
2015
RM
2014
RM
2,836,392
3,499,067
–
–
2,836,392
3,499,067
–
–
28,652,090
16,021,273
–
696,459
755,616
31,644,958
10,216,745
–
713,102
2,161,750
–
1,213,125
24,914,406
–
98,446
–
967,339
24,739,678
–
98,446
46,125,438
44,736,555
26,225,977
25,805,463
48,961,830
48,235,622
26,225,977
25,805,463
190,767,645
(4,396,520)
(63,953,756)
187,261,294
(4,396,520)
7,713,278
190,767,645
(4,396,520)
29,136,805
187,261,294
(4,396,520)
25,437,917
TOTAL EQUITY
122,417,369
190,578,052
215,507,930
208,302,691
TOTAL LIABILITIES AND EQUITY
171,379,199
238,813,674
241,733,907
234,108,154
NON-CURRENT LIABILITY
Hire purchase and finance lease payables
CURRENT LIABILITIES
Trade payables
Other payables, provisions and accruals
Amount owing to subsidiary companies
Provision for taxation
16
17
18
7
16
TOTAL LIABILITIES
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
OF THE COMPANY
Share capital
Treasury shares
Reserves
19
20
21
ANNUAL REPORT 2015
49
STATEMENTS OF PROFIT OR LOSS
GROUP
NOTE
2015
RM
COMPANY
2014
RM
2015
RM
2014
RM
1,555,799
–
Continuing Operations
Revenue
Cost of sales
3(q),
22
Gross profit
Other income
Operating expenses
60,606,042
(54,857,846)
107,344,762
(84,069,876)
709,271
–
5,748,196
876,710
(80,378,674)
23,274,886
1,373,078
(24,197,255)
709,271
76,914
2,963,645
1,555,799
8,835,942
(6,364,429)
3,749,830
(16,487)
–
4,027,312
(25,281)
–
(Loss)/Profit from operations
Finance costs
Share of profit of joint venture
23
(73,753,768)
(56,844)
6,041
450,709
(322,610)
76,582
(Loss)/Profit before zakat and taxation
Zakat and taxation
24
25
(73,804,571)
(2,274,973)
204,681
(2,916,756)
3,733,343
–
4,002,031
(215,028)
(76,079,544)
(2,712,075)
3,733,343
3,787,003
(Loss)/Profit for the year after tax
Discontinued Operations
(175,739)
3,772,868
–
–
Net (loss)/profit for the year
(76,255,283)
1,060,793
3,733,343
3,787,003
Net (loss)/profit for the year attributable
to:
Equity holders of the Company
(76,255,283)
1,060,793
3,733,343
3,787,003
(Losses)/Earnings per share attributable
to equity holders of the Company
(Sen):
Basic
- Continuing operations
- Discontinued operations
26
27
Diluted
- Continuing operations
- Discontinued operations
50
(20.13)
(0.05)
(0.74)
1.02
(20.18)
0.28
(20.13)
(0.05)
(0.74)
1.02
(20.18)
0.28
STATEMENTS OF OTHER COMPREHENSIVE INCOME
GROUP
2015
RM
Net (loss)/profit for the year
Other comprehensive income/(loss):
Items that will be subsequently reclassified to profit or loss
Exchange differences on translating of foreign operations
Revaluation of short term investment
- Net fair value changes in short term investment
- Reclassification adjustments
Total comprehensive (loss)/income for the year
(76,255,283)
4,622,755
(34,506)
–
2014
RM
1,060,793
(152,233)
15,895
1,993
COMPANY
2015
2014
RM
RM
3,733,343
3,787,003
–
–
(34,455)
–
15,895
1,993
4,588,249
(134,345)
(71,667,034)
926,448
3,698,888
(34,455)
3,804,891
17,888
(71,667,034)
926,448
3,698,888
3,804,891
Total comprehensive (loss)/income for the year attributable
to:
Equity holders of the Company
ANNUAL REPORT 2015
51
52
28
–
–
–
–
–
–
(4,396,520) 68,738,801
–
3,506,351
190,767,645
–
–
–
–
81,197
(4,396,520) 68,738,801
–
–
187,261,294
–
–
28
–
–
(19,579,028)
–
–
(19,579,028)
–
–
–
–
–
(19,579,028)
1,080,621
–
–
1,080,621
–
(164,057)
(13,341)
807,800
(81,197)
531,416
(12,122)
(34,506)
–
22,384
17,888
–
–
–
–
4,496
3,989,329
4,622,755
–
(633,426)
(152,233)
–
–
–
–
(481,193)
Total
Equity
RM
926,448
–
–
807,800
4,296,299
(71,667,034)
3,506,351
(118,171,357) 122,417,369
(76,255,283)
–
(41,916,074) 190,578,052
1,060,793
164,057
13,341
–
–
(43,154,265) 184,547,505
Attributable to Equity Holders of the Company
Non Distributable
Distributable
EquitySettled
Foreign
Employee Investment
Currency
Share
Capital
Benefits Revaluation Translation Accumulated
Premium
Reserve
Reserve
Reserve
Reserve
Losses
RM
RM
RM
RM
RM
RM
(4,396,520) 68,657,604
Treasury
Shares
RM
–
4,296,299
182,964,995
Share
Capital
RM
28
NOTE
Balance as at
01.01.2014
Issuance of ordinary
shares pursuant
to SIS
Recognition of
share-based
payments
Effect on
cancellation of SIS
Disposal of
subsidiary
company
Total comprehensive
income for the
year
Balance as at
31.12.2014
Issuance of ordinary
shares pursuant
to SIS
Total comprehensive
loss for the year
Balance as at
31.12.2015
GROUP
STATEMENTS OF CHANGES IN EQUITY
28
28
28
NOTE
–
–
–
–
(4,396,520) 68,736,693
–
3,506,351
190,767,645
–
–
–
–
81,197
(4,396,520) 68,736,693
–
–
187,261,294
–
–
–
–
1,975,462
–
–
1,975,462
–
–
–
–
–
1,975,462
1,080,621
–
–
1,080,621
–
807,800
(13,341)
(164,057)
(81,197)
531,416
(12,071)
(34,455)
–
22,384
17,888
–
–
–
–
4,496
Total
Equity
RM
3,804,891
807,800
–
–
4,296,299
3,698,888
3,506,351
(42,643,900) 215,507,930
3,733,343
–
(46,377,243) 208,302,691
3,787,003
–
13,341
164,057
–
(50,341,644) 199,393,701
Attributable to Equity Holders of the Company
Non Distributable
Distributable
EquitySettled
Employee Investment
Share
Capital
Benefits Revaluation Accumulated
Premium
Reserve
Reserve
Reserve
Losses
RM
RM
RM
RM
RM
(4,396,520) 68,655,496
Treasury
Shares
RM
–
–
–
4,296,299
182,964,995
Share
Capital
RM
Balance as at 31.12.2015
Issuance of ordinary shares
pursuant to SIS
Total comprehensive income for
the year
Issuance of ordinary shares
pursuant to SIS
Recognition of share-based
payments
Effect on cancellation of SIS
Disposal of subsidiary company
Total comprehensive income for
the year
COMPANY
STATEMENTS OF CHANGES IN EQUITY (Cont’d)
ANNUAL REPORT 2015
53
STATEMENTS OF CASH FLOW
GROUP
NOTE
CASH FLOW FROM OPERATING ACTIVITIES
- From continuing operations
- From discontinued operations
26
2015
RM
2014
RM
COMPANY
2015
2014
RM
RM
(73,804,571)
(175,739)
204,681
3,772,868
3,733,343
–
4,002,031
–
(73,980,310)
3,977,549
3,733,343
4,002,031
Adjustments for:
Amortisation of intangible assets
Allowance for doubtful debts, impairment and written off,
net off recovered
273,272
273,272
–
–
78,969,285
660,632
4,560,509
–
Depreciation of property, plant and equipment
Interest expense
Loss on disposal of associate company
Unrealised (gain)/loss on foreign exchange
SIS expenses
Written off of amount owing by subsidiary companies
Gain on disposal of a subsidiary company
(Gain)/Loss on disposal of property, plant and equipment
(Gain)/Loss on redemption of other investment
Share of loss of certain projects
Interest income
Dividend income
Reversal of provision
2,400,423
648,309
–
(10,180,160)
–
–
–
(35,267)
–
(6,041)
(355,880)
(1,014,018)
(62,465)
–
Operating (loss)/profit before changes in working capital
Decrease in inventories
Decrease/(Increase) in receivables
Balances with subsidiary companies
Balances with related companies
Balances with associate companies
Balances with joint venture
Increase/(Decrease) in payables
(3,342,852)
1,131,867
1,203,536
–
–
99,104
(439,866)
2,661,135
6,094,501
12,023,492
589,156
–
(2,675,723)
(100,380)
(2,538,796)
(10,337,353)
(2,863,591)
(4,930,412)
–
–
(198,144)
103,403
(2,069,305) (24,001,905)
–
(1,700,343)
–
–
–
–
245,786
614,262
Cash generated from/(used in) operations
Zakat paid
Tax refund
Tax paid
Refurbishment cost incurred
1,312,923
–
92,174
(4,277,400)
–
3,054,897
(270,000)
1,355,624
(2,271,055)
(26,106,240)
(4,885,254) (29,914,995)
–
(270,000)
–
–
(371,584)
(673,708)
–
–
Net cash used in operating activities
(2,872,302)
(24,236,774)
(5,256,838) (30,858,703)
54
5,880,290
–
613,823
16,487
46,931
–
(245,522) (10,464,659)
807,800
–
–
–
(359,501)
–
37,886
–
(47,607)
–
(76,582)
–
–
–
(1,936,949)
(676,607)
–
(32,664)
(3,537,521)
–
–
25,281
–
178,005
–
1,254,019
(8,835,942)
–
1,993
–
–
(1,555,799)
–
–
STATEMENTS OF CASH FLOW (Cont’d)
GROUP
NOTE
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Net cash inflow from disposal of a subsidiary company
Net cash on acquisition of a subsidiary company
Incorporation of joint venture
Purchase of other investment
Proceed from redemption of other investment
Interest received
Dividend received
30
31
Net cash generated from/(used in) investing activities
Net cash generated from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Effects on exchange rate changes on cash and cash
equivalents
2014
RM
(1,035,544)
(271,892)
58,266
880,288
1,620,000
4,136,430
– (36,789,000)
–
(255,000)
– (11,300,000)
14,208,000
5,000,000
643,882
1,591,537
62,465
–
–
–
900,000
(36,789,000)
–
(9,500,000)
5,000,000
1,150,682
–
(37,007,637)
16,167,135
(39,238,318)
3,506,351
–
(679,318)
(648,309)
4,296,299
(60,243)
(1,020,043)
(613,823)
3,506,351
–
–
(16,487)
4,296,299
–
–
(25,281)
1,759,661
5,326,756
1,759,661
3,938,385
7,928,946
5,249,525
3,546,947
16,159,822
9,265,280
(66,550,074)
75,815,354
16,623,152 (53,315,465)
50,153,573 103,468,875
32
COMPANY
2015
2014
RM
RM
–
–
1,620,000
–
–
–
14,208,000
306,471
32,664
15,557,069
CASH FLOW FROM FINANCING ACTIVITIES
Issuance of shares
Net term loan and other borrowings
Repayment of hire purchase and finance lease
Interest paid
Decrease/(Increase) in cash and cash equivalents pledged
as security
Cash and cash equivalents at end of the year
2015
RM
(724,071)
2,291
163
–
–
66,779,016
50,153,573
25,425,102
9,265,280
ANNUAL REPORT 2015
55
NOTES TO THE FINANCIAL STATEMENTS
1. GENERAL INFORMATION
The Company is a public limited company domiciled and incorporated in Malaysia and listed on the Main Market of the Bursa
Malaysia Securities Berhad.
The registered office is located at 802, 8th Floor, Block C, Kelana Square, 17 Jalan SS7/26, 47301 Petaling Jaya,
Selangor Darul Ehsan.
The principal place of business is located at Suite 5-1, Level 5, Menara UOA Damansara II, No.6 Changkat Semantan,
Damansara Heights, 50490 Kuala Lumpur.
The Company is principally engaged in investment holding. The principal activities of the subsidiaries are described in Note 7
to the Financial Statements. There have been no significant changes in the nature of the activities during the current financial
year.
The functional currency of the Company is Ringgit Malaysia (“RM”) as the sales and purchases are mainly denominated in
RM, receipts from operations are usually retained in RM and funds from financing activities are mainly generated in RM.
For the purpose of the consolidated financial statements, the financial statements of each entity within the Group are
expressed in RM, which is the functional currency of the Company, and the presentation currency for the consolidated
financial statements.
2. ADOPTION OF AMENDMENTS TO MALAYSIAN FINANCIAL REPORTING STANDARDS AND ANNUAL
IMPROVEMENTS
The accounting policies adopted by the Group and by the Company are consistent with those adopted in the previous year
except as discussed below: MFRSs that do not have significant impacts on these financial statements
The following annual improvements issued by the Malaysian Accounting Standards Board (“MASB”) have been adopted
which are effective for financial periods beginning on or after 01 January 2015:
Annual improvements to MFRSs 2010 - 2012 Cycle
The adoption of the above pronouncements did not have any impact on the financial statements of the Group and the
Company.
MFRSs that have been issued but are not yet effective
The Group and the Company have not adopted the following MFRSs that have been issued by the MASB but are not yet
effective:
Effective for annual period beginning on or after 01 January 2016
Amendments to MFRS 11 Joint Arrangements - Accounting for Acquisitions of Interests in Joint Operations
Amendments to MFRS 101 Presentation of Financial Statements - Disclosure Initiative
Amendments to MFRS 127 Separate Financial Statements - Equity Method in Separate Financial Statements
Amendments to MFRS 116 Property, Plant and Equipment and MFRS 138 Intangible Assets - Clarification of Acceptable
Methods of Depreciation and Amortisation
Amendments to MFRS 10 Consolidated Financial Statements, MFRS 12 Disclosure of Interests in Other Entities and MFRS
128 Investments in Associates and Joint Ventures - Investment Entities: Applying the Consolidation Exception
Amendments to MFRS 10 Consolidated Financial Statements and MFRS 128 Investments in Associates and Joint Ventures
- Sale or Contribution of Assets between an Investor and its Associate or Joint Venture *
56
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
2. ADOPTION OF AMENDMENTS TO MALAYSIAN FINANCIAL REPORTING STANDARDS AND ANNUAL
IMPROVEMENTS (cont’d)
Effective for annual period beginning on or after 01 January 2018
MFRS 15 Revenue from Contracts with Customers
MFRS 9 Financial Instruments (IFRS 9 Financial Instruments as issued by the International Accounting Standards Board in
July 2014)
* The effective date of these Standards have been deferred, and yet to be announced by MASB.
These pronouncements are not expected to have any effect to the financial statements of the Group and the Company upon
their initial application, except as described below:
MFRS 9 Financial Instruments
In November 2014, MASB issued the final version of MFRS 9 Financial Instruments which reflects all phases of the financial
instruments project and replaces MFRS 139 Financial Instruments: Recognition and Measurement and all previous versions
of MFRS 9. The standard introduces new requirements for classification and measurement, impairment and hedge
accounting. MFRS 9 is effective for annual periods beginning on or after 01 January 2018, with early application permitted.
Retrospective application is required, but comparative information is not compulsory. The adoption of MFRS 9 will have
an effect on the classification and measurement of the Group’s financial assets, but no impact on the classification and
measurement of the Group’s financial liabilities.
MFRS 15 Revenue from Contracts with Customers
The core principle of MFRS 15 is that an entity should recognise revenue which depicts the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for
those goods or services. Under MFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied.
Either a full or modified retrospective application is required for annual periods beginning on or after 01 January 2018 with
early adoption permitted. The Group is currently assessing the impact of MFRS 15 and plans to adopt the new standard on
the stipulated effective date. MFRS 15 establishes a new five-step models that will apply to revenue arising from contracts
with customers. MFRS 15 will supersede the current revenue recognition guidance including MFRS 118 Revenue, MFRS 111
Construction Contracts and the related interpretations when it becomes effective.
3. SIGNIFICANT ACCOUNTING POLICIES
The financial statements have been prepared in accordance with the Malaysian Financial Reporting Standards (“MFRSs”),
International Financial Reporting Standards (“IFRSs”) and the provisions of the Companies Act, 1965.
(a) Basis of Preparation
The financial statements have been prepared on the historical cost basis unless otherwise indicated in the other section
of accounting policies.
The principal accounting policies adopted are set out below.
(b) Basis of Consolidation
The consolidated financial statements incorporate the financial statements of the Company and all subsidiaries.
Subsidiaries are entities controlled by the Company. The Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power over the
entity. Potential voting rights are considered when assessing control only when such rights are substantive. The Group
considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current
ability to direct the activities of the investee that significantly affect the investee’s return.
Investment in subsidiaries is accounted for in the Company’s separate financial statements at cost. If an investment in a
subsidiary is classified as held for sale, that investment is accounted for in accordance with MFRS 5 Non-current Assets
Held for Sale and Discontinued Operations.
ANNUAL REPORT 2015
57
3. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
(b) Basis of Consolidation (cont’d)
The results of a subsidiary are included in the consolidated financial statements from the acquisition date until the date
on which the Company ceases to control the subsidiary. Any difference between the fair value of the consideration
received from the loss of control of a subsidiary and the carrying amount as at the date when control is lost, including the
cumulative amount of any translation difference that relate to the subsidiary formerly recognised in other comprehensive
income, is reclassified to consolidated profit or loss as a gain or loss. Consolidated financial statements are prepared
using uniform accounting policies for like transactions and other events in similar circumstances.
Non-controlling interests are presented in the consolidated statement of financial position within equity, separately from
the equity attributable to owners of the Company. Non-controlling interests in the profit or loss of the Group are also
separately disclosed.
Changes in the Company’s ownership interest in a subsidiary that do not result in a loss of control are accounted for
as equity transactions. Any difference between the amount by which the non-controlling interests are adjusted and the
fair value of the consideration paid or received are recognised directly in equity and attributable to the owners of the
Company.
All intragroup balances, transactions, income and expenses are eliminated in full.
(c) Business Combinations
Business combinations are accounted for by applying the acquisition method. The consideration transferred in a
business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the
assets transferred by the Group, the liabilities incurred by the Group to former owners of the acquiree and the equity
interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs are generally recognised
in profit or loss as incurred.
At the acquisition date, the Group allocates the cost of a business combination by recognising the acquiree’s identifiable
assets, liabilities and contingent liabilities that satisfy the recognition criteria in MFRS 3 Business Combinations at their
fair values, except for non-current assets and disposal groups that are classified as held for sale in accordance with
MFRS 5 Non-current Assets Held for Sale and Discontinued Operations, which are recognised at fair value less costs
to sell.
(d) Property, Plant and Equipment
The cost of an item of property, plant and equipment is recognised as an asset when it is probable that future economic
benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. After
recognition as an asset, items of property, plant and equipment are carried at cost less accumulated depreciation and
any accumulated impairment losses. Depreciation is provided on a straight-line basis so as to write off the depreciable
amount of the following assets over their estimated useful lives, as follows:
Freehold land and building
Leasehold land and building
Furniture and fittings
Renovation
Workshop tools
Office equipment
Motor vehicles
Equipment
Plant and machinery
58
Percentage (%)
2
Over 80 months - 50 years
10
10
20
10 – 33 1/3
20 – 25
10 – 50
10 – 33 1/3
Depreciation of an asset under construction begins when it is ready for its intended use. The residual values and useful
lives of depreciable assets, if significant, are reviewed at the end of each reporting period.
(d) Property, Plant and Equipment (cont’d)
The carrying amounts of items of property, plant and equipment are derecognised on disposal or when no future
economic benefits are expected from their use. Any gain or loss arising from the derecognition of items of property,
plant and equipment, determined as the difference between the net disposal proceeds, if any, and the carrying amounts
of the item, is included in profit or loss. Neither the sale proceeds nor any gain on derecognition is classified as revenue.
(e) Goodwill
Goodwill arising on the acquisition of a subsidiary or a proportionately consolidated jointly-controlled entity, being the
excess of the aggregate of the consideration transferred, the amount of any non-controlling interest in the acquiree,
and the acquirer’s previously held equity interest in the acquiree over the net of the acquisition-date amounts of the
identifiable assets acquired and the liabilities assumed. After initial recognition, goodwill is measured at cost less any
accumulated impairment losses.
Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing,
goodwill is allocated at the acquisition date to each of the Group’s cash-generating units that are expected to benefit
from the synergies of the combination. A cash-generating unit to which goodwill has been allocated is tested for
impairment annually, and whenever there is an indication that the unit may be impaired, by comparing the carrying
amount of the unit, including the goodwill, with the recoverable amount of the unit. An impairment loss is recognised
for a cash-generating unit when the recoverable amount of the unit is less than the carrying amount of the unit. Any
impairment loss recognised is first allocated to reduce the carrying amount of any goodwill allocated to the unit and
then, to the other assets of the unit within the scope of MFRS 136 Impairment of Assets pro rata on the basis of the
carrying amount of each applicable asset in the unit. Any impairment loss recognised for goodwill is not reversed.
Goodwill arising on the acquisition of investments in associates is included within the carrying amount of the investments
and is assessed for impairment as part of the investment.
If, after reassessment, the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent
liabilities recognised exceeds the cost of the business combination, the excess is recognised immediately in profit or
loss.
On disposal of a subsidiary or a proportionately consolidated jointly-controlled entity, the attributable amount of goodwill
is included in the determination of the gain or loss on disposal.
(f) Other Intangible Assets
Intangible assets are recognised when it is probable that future economic benefits that are attributable to the assets will
flow to the Group and the cost of the assets can be measured reliably.
Internally Generated Intangible Assets
Costs associated with internally generated intangible assets arising from research activities are recognised in profit or
loss in the period in which the expenditure is incurred.
An internally generated intangible asset arising from development activities is recognised only when all of the following
conditions are demonstrated:
-
-
-
-
-
-
the technical feasibility of completing the intangible asset so that it will be available for use or sale.
the intention to complete the intangible asset and thereafter use it or sell it.
the ability to either use or sell the intangible asset.
how the intangible asset will generate probable future economic benefits.
the availability of adequate technical, financial and other resources to complete the development and thereafter to
use or sell the intangible asset.
the ability to measure reliably the expenditure attributable to the intangible asset during its development phrase.
Other development expenditure is recognised in profit or loss as and when it is incurred.
ANNUAL REPORT 2015
59
(f) Other Intangible Assets (cont’d)
Internally Generated Intangible Assets (cont’d)
After initial recognition, internally generated intangible assets are carried at cost less any accumulated amortisation and
accumulated impairment losses. Internally generated gas generator development costs are amortised on a straight-line
basis over their estimated useful lives of 15 years. The amortisation period and method are reviewed at least at the end
of each reporting period.
The carrying amounts of intangible assets are derecognised on disposal or when no future economic benefits are
expected from their use. Any gain or loss arising from the derecognition of an intangible asset, determined as the
difference between the net disposal proceeds, if any, and the carrying amounts of the asset, is recognised in profit or
loss. Neither the sale proceeds nor any gain on derecognition is classified as revenue.
(g) Investment in Associates
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest
in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the
investee but is not control or joint control over those policies.
Investment in associates is accounted for in the Company’s separate financial statements at cost. If an associate is
classified as held for sale, the investment is accounted for in accordance with MFRS 5 Non-current Assets Held for Sale
and Discontinued Operations.
Investment in associates are accounted for in the Group’s consolidated financial statements using the equity method
until the date the Group ceases to have significant influence over the associates or the investment is classified as held
for sale in accordance with MFRS 5 Non-current Assets Held for Sale and Discontinued Operations.
Under the equity method, investment in associates are initially recognised at cost and thereafter, the carrying amount is
increased or decreased to recognise the Group’s share of the profit or loss of the investees after the date of acquisition.
Losses of associates in excess of the Group’s interest in the associates, include any long-term interests that form part
of the Group’s net investment in the associates, are not recognised.
Profits or losses on transactions entered into between the Group and associates are eliminated to the extent of the
Group’s interest in the associates.
On acquisition of an investment in an associate, any excess of the cost of the investment over the Group’s share of the
net fair value of the associate’s identifiable assets, liabilities and contingent liabilities is included in the carrying amount
of the investment. If, after reassessment, the Group’s interest in the net fair value of the identifiable assets, liabilities and
contingent liabilities recognised exceeds the cost of the business combination, the excess is included as income in the
determination of the Group’s share of the associates’ profit or loss in the period in which the investment is acquired.
(h) Impairment of Assets Other Than Goodwill and Financial Assets
60
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired.
If any such indication exists, the recoverable amount of the asset is estimated. Irrespective of whether there is any
indication of impairment, the Group test an intangible asset with an indefinite useful life or an intangible asset not yet
available for use for impairment annually by comparing the carrying amount with its recoverable amount. When there is
an indication that an asset may be impaired but it is not possible to estimate the recoverable amount of the individual
asset, the Group determines the recoverable amount of the cash-generating unit to which the asset belongs.
The recoverable amount of an asset and a cash-generating unit is the higher of the fair value less costs to sell and value
in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
(h) Impairment of Assets Other Than Goodwill and Financial Assets (cont’d)
If the recoverable amount of an asset or a cash-generating unit is less than the carrying amount, an impairment loss is
recognised to reduce the carrying amount to its recoverable amount. An impairment loss for a cash-generating unit is
firstly allocated to reduce the carrying amount of any goodwill allocated to the cash-generating unit, and then, to the
other assets of the unit within the scope of MFRS 136 Impairment of Assets pro rata on the basis of the carrying amount
of each appropriate asset in the unit. An impairment loss is recognised immediately in profit or loss.
An impairment loss recognised in prior periods for an individual asset or the appropriate assets of a cash-generating
unit is reversed when there has been a change in the estimates used to determine the asset’s recoverable amount. An
impairment loss is reversed to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation, if no impairment loss had been recognised in prior periods. A reversal
of an impairment loss is recognised immediately in profit or loss.
(i) Non-current Assets Held for Sale
Non-current assets and disposal groups are classified as held for sale if there has been a change in management
intentions in respect of the future use of the asset or disposal group, and hence the carrying amount will be recovered
principally through a sale transaction rather than through continuing use.
On initial classification as held for sale, non-current assets and disposal groups are measured at the lower of their
carrying amount and fair value less costs to sell. Immediately before the initial classification as held for sale, the carrying
amount of non-current assets and disposal groups is measured in accordance with the applicable MFRSs.
An impairment loss is recognised for any initial or subsequent write-down of the assets and disposal groups to fair value
less costs to sell. Any subsequent increase in fair value less costs to sell is recognised as a gain in profit or loss, to the
extent of the cumulative impairment loss that had previously been recognised.
(j) Foreign Currencies
Foreign Currency Transactions
Transactions in foreign currencies are initially recorded in the functional currency by applying to the foreign currency
amount the spot exchange rates between the functional currency and the foreign currency at the date of the transactions.
At the end of each reporting period, foreign currency monetary items are translated using the closing rate. Non-monetary
items that are measured at historical cost in a foreign currency are translated using the exchange rates at the date of
the transactions. Non-monetary items that are measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value was determined.
Exchange differences are recognised in profit or loss in the period in which they arise except when a gain or loss on a
non-monetary item is recognised in other comprehensive income. If so, any exchange differences relating to that gain
or loss is recognised in other comprehensive income.
Exchange Differences on Net Investment in Foreign Operations
Exchange differences arising on monetary items that forms part of the Company’s net investment in foreign operations
are recognised in the profit or loss in the separate financial statements of the Company. In the consolidated financial
statements, such exchange differences are recognised initially in other comprehensive income and accumulated in
equity under the heading of foreign currency translation reserves. On the disposal of a foreign operation, the cumulative
amounts of the exchange differences relating to the foreign operation, recognised in other comprehensive income and
accumulated in the separate component of equity, are reclassified from equity to profit or loss when the gain or loss on
disposal is recognised.
ANNUAL REPORT 2015
61
(j) Foreign Currencies (cont’d)
Foreign Operations
Assets and liabilities of foreign operations, including goodwill arising on the acquisition and any fair value adjustments,
are translated into Ringgit Malaysia at the closing rate at the end of the reporting period. Income and expenses are
translated at exchange rates approximating the exchange rates at the date of the transactions. All resulting exchange
differences are recognised in other comprehensive income and accumulated in equity under the heading of foreign
currency translation reserve. On disposal of the foreign operations, the cumulative amounts of the exchange differences
relating to the foreign operations, recognised in other comprehensive income and accumulated in the separate
component of equity, are reclassified from equity to profit or loss when the gain or loss on disposal is recognised.
(k) Inventories
Inventories are measured at the lower of cost and net realisable value. Cost of inventories comprises all costs of
purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.
Cost of inventories is assigned by using the First-in First-out method.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
(l) Share-based Payments
The Group operates an equity-settled share-based payments scheme to allow the employees of the Group to acquire
ordinary shares of the Company. The grant by the Company of options over its equity instruments to the employees of
subsidiary undertakings in the Group is treated as a capital contribution in the subsidiaries’ financial statements. The fair
value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting
period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity-settled employee
benefits reserve in the Company’s financial statements.
The fair value determined at the grant date is recognised as expense in profit or loss in accordance with MFRS 2 Sharebased Payment over the periods during which the employees become unconditionally entitled to the options, based on
the Group’s estimate of the ordinary shares that will eventually vest, and adjusted for the effect of non market-based
vesting conditions. At the end of each reporting period, the Group revises the estimates of the number of options that
are expected to become exercisable, and recognises the impact of the revision of the original estimates.
(m) Provisions
A provision is recognised when the Group and the Company have a present legal or constructive obligation as a result
of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation. The risks and uncertainties are taken
into account in reaching the best estimate of a provision. When the effect of the time value of money is material, the
amount recognised in respect of the provision is the present value of the expenditure expected to be required to settle
the obligation.
(n) Leases – as lessee
Finance Leases
62
Leases of assets are classified as finance lease where substantially all the risks and benefits incidental to the ownership
of the assets, but not the legal ownership, are transferred to the Group. The Group initially recognise finance leases as
assets and liabilities in the statements of financial position at amounts equal to the fair value of the leased assets or, if
lower, the present value of the minimum lease payments at the inception of the leases. Any initial direct costs are added
to the amount recognised as an asset.
(n) Leases – as lessee (cont’d)
Finance Leases (cont’d)
Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. A
finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest
on the remaining balance of the liability. Finance charges are recognised in profit or loss unless they are attributable
to qualifying assets, in which case they are capitalised in accordance with the accounting policy for borrowing costs.
Contingent rents are charged as an expense in profit or loss in the period in which they are incurred. The depreciation
policy for depreciable leased assets is consistent with that of depreciable assets that are owned. If there is no reasonable
certainty that the Group will obtained ownership by the end of the lease term, the leased assets are depreciated over
the shorter of the lease terms and their useful lives.
Operating Leases
All other leases are classified as operating leases. Lease payments under operating leases are recognised as expense
in profit or loss on a straight-line basis over the lease term.
(o) Financial Assets
Financial assets are recognised in the statements of financial position when the Group and the Company become a
party to the contractual provisions of the instrument. Regular way purchases and sales of financial assets are recognised
and derecognised using trade date accounting.
On initial recognition, financial assets are measured at fair value, plus transaction costs for financial assets not at ‘fair
value through profit or loss’.
Effective interest method is a method of calculating the amortised cost of financial assets and of allocating the interest
income over the relevant period. The effective interest rate is the rate that exactly discounts estimate future cash receipts
through the expected life of the financial assets or a shorter period to the net carrying amount of the financial assets.
After initial recognition, financial assets are classified into one of four categories: financial assets at ‘fair value through
profit or loss’, ‘held-to-maturity’ investments, loans and receivables and ‘available-for-sale’ financial assets. The Group
and the Company did not have any financial assets other than loans and receivables, ‘available-for-sale’ financial assets
and ‘held-to-maturity’ investments.
Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market.
After initial recognition, loans and receivables are measured at amortised cost using the effective interest method less
any accumulated impairment losses. Gains or losses are recognised in profit or loss when loans and receivables are
derecognised or impaired.
‘Available-for-Sale’
Investment in quoted equity and debt instruments that are traded in active market and certain unquoted equity
instruments (when the fair value can be determined using a valuation technique) are classified as ‘available-for-sale’
financial assets. ‘Available-for-sale’ financial assets are measured at fair value.
Gains or losses on ‘available-for-sale’ financial assets are recognised in other comprehensive income, except for
impairment losses and foreign exchange gains or losses, until the ‘available-for-sale’ financial assets are derecognised.
At that time, the cumulative gains or losses previously recognised in other comprehensive income are reclassified from
equity to profit or loss as a reclassification adjustment.
ANNUAL REPORT 2015
63
(o) Financial Assets (cont’d)
‘Available-for-Sale’ (cont’d)
Interest calculated using the effective interest method is recognised in profit or loss. Dividends on ‘available-for-sale’
equity instruments are recognised in profit or loss when the Group’s and the Company’s right to receive payment is
established.
‘Held-to-Maturity’
‘Held-to-maturity’ investments are non-derivative financial assets with fixed or determinable payments and fixed maturity
that the Group and the Company have the positive intention and ability to hold to maturity.
After initial recognition, ‘held-to-maturity’ investments are measured at amortised cost using the effective interest
method less any accumulated impairment losses. Gains or losses are recognised in profit or loss when ‘held-to-maturity’
investments are derecognised or impaired.
Impairment of Financial Assets
64
At the end of each reporting period, the Group and the Company assess whether there is any objective evidence that
financial assets held are impaired. Financial assets are impaired if there is objective evidence of impairment as a result
of one or more events that occurred after the initial recognition of the financial assets which have an impact on the
estimated future cash flows of the financial assets that can be reliably measured.
For other financial assets, objective evidence could include:
- significant financial difficulty of the issuer; or
- a breach of contract; or
- the lender granting to the borrower a concession that the lender would not otherwise consider; or
- it becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or
- observable data indicating that there is a measurable decrease in the estimated future cash flows from the financial
assets since the initial recognition of those assets.
For certain categories of financial assets, such as trade receivables, if it is determined that no objective evidence of
impairment exists for an individually assessed financial asset, whether significant or not, the assets are included in a
group with similar credit risk characteristics and collectively assessed for impairment.
The carrying amounts of the financial assets are reduced directly, except for the carrying amounts of trade receivables
which are reduced through the use of an allowance account. Any impairment loss is recognised in profit or loss
immediately. If, in later periods, the amount of any impairment loss decreases, the previously recognised impairment
losses are reversed directly, except for the amounts related to trade receivables which are reversed to write back the
amount previously provided in the allowance account. The reversal is recognised in profit or loss immediately.
If there is objective evidence that impairment losses have been incurred on financial assets carried at cost, the amount
of any impairment loss is measured as the differences between the carrying amounts of the financial assets and the
present value of their estimated future cash flows discounted at the current market rate of return for a similar financial
assets. Such impairment losses are not reversed.
For ‘available-for-sale’ financial assets, if a decline in fair value has been recognised in other comprehensive income
and there is objective evidence that the assets are impaired, the cumulative losses that have been recognised are
reclassified to profit or loss.
Impairment losses recognised in profit or loss for an investment in an equity instrument classified as ‘available-for-sale’
financial assets are not reversed through profit or loss.
(o) Financial Assets (cont’d)
Impairment of Financial Assets (cont’d)
If the fair value of a debt instrument classified as an ‘available-for-sale’ financial asset subsequently increases, and the
increase can be objectively related to an event occurring after the impairment losses were recognised in profit or loss,
the impairment losses are reversed and recognised in profit or loss.
Derecognition of Financial Assets
Financial assets are derecognised when the contractual rights to the cash flows from the financial assets expire or the
Group and the Company transfer the financial assets and the transfers qualify for derecognition.
On derecognition of financial assets in their entirety, the differences between the carrying amounts and the sum of the
consideration received and any cumulative gains or losses that have been recognised in other comprehensive income
are recognised in profit or loss.
(p) Financial Liabilities and Equity Instruments Issued by the Company
Classification of Liabilities and Equity
On initial recognition, financial liabilities and equity instruments are classified in accordance with the substance of the
contractual arrangement.
Interests, dividends, losses and gains relating to a financial instrument that is classified as a financial liability is recognised
as income or expense in profit or loss. Distributions to holders of an equity instrument are debited directly to equity,
net of any related income tax benefit. Transaction costs of an equity instrument are accounted for as a deduction from
equity, net of any related income tax benefit.
Equity Instruments
Equity instruments are any contracts that evidence a residual interest in the assets of the Company after deducting all
of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue
costs.
Treasury Shares
When the Company reacquires its own equity instruments (‘treasury shares’), these treasury shares are deducted from
equity. No gains or losses are recognised in profit or loss on the purchase, sale, issue and cancellation of these treasury
shares. Considerations paid or received are recognised directly in equity.
Financial Liabilities
Financial liabilities are recognised on the statements of financial position when the Group and the Company become a
party to the contractual provisions of the instrument.
On initial recognition, financial liabilities are measured at fair value, less transaction costs for financial liabilities not at ‘fair
value through profit or loss’.
After initial recognition, financial liabilities are either classified as at ‘fair value through profit or loss’ or amortised cost
using the effective interest method. The Group and the Company did not have any financial liabilities other than financial
liabilities at amortised cost using the effective interest method.
ANNUAL REPORT 2015
65
(p) Financial Liabilities and Equity Instruments Issued by the Company (cont’d)
Financial Liabilities at Amortised Cost using the Effective Interest Method
Effective interest method is a method of calculating the amortised cost of financial liabilities and allocating the interest
expense over the relevant period. The effective interest rate is the rate that exactly discounts estimate future cash
payments through the expected life of the financial liabilities or a shorter period to the net carrying amount of the
financial liabilities.
After initial recognition, financial liabilities other than financial liabilities at ‘fair value through profit or loss’ are measured
at amortised cost using the effective interest method. Gains or losses are recognised in profit or loss when the financial
liabilities are derecognised or impaired.
Derecognition of Financial Liabilities
Financial liabilities are derecognised when the obligation specified in the contract is discharged, cancelled or expires.
Any difference between the carrying amounts of financial liabilities derecognised and the consideration paid is recognised
in profit or loss.
(q) Revenue
Revenue is measured at the fair value of the consideration received or receivable, net of discounts and indirect taxes
applicable to the revenue.
Revenue is recognised in the profit or loss based on the following:
Rendering of Services
Revenue from rendering of services is recognised by reference to the stage of completion of the transaction at the end
of the reporting period when the outcome of the transaction can be estimated reliably. Upfront payments for which there
are subsequent deliverables are initially reported as deferred revenue and are recognised as revenue only when the
deliverables are completed and accepted by the customers. Cost incurred for work performed for which performance
milestones have yet to be achieved is initially recorded as deferred cost and recognised as cost of sales only when the
deliverables are completed and accepted by customers.
Sales of Goods
Revenue from sales of goods is recognised when the following conditions are satisfied:
- the Group has transferred to the buyer the significant risks and rewards of ownership of the goods;
- the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor
effective control over the goods sold;
- the amount of revenue can be measured reliably;
- it is probable that the economic benefits associated with the transaction will flow to the Group; and
- the costs incurred and to the incurred in respect of the transaction can be measured reliably.
Interest Revenue
Interest revenue is recognised on an accrued on a time basis.
Dividend Revenue
66
Dividend revenue is recognised when the shareholder’s rights to receive payment is established.
(r) Employee Benefits
Short-term Employment Benefits
Short-term employment benefits, such as wages, salaries, bonuses, allowances and social security contributions, are
recognised as expense when the employees have rendered services to the Group.
The expected cost of bonus payments are recognised when the Group and the Company have a present legal or
constructive obligation to make such payments as a result of past events and a reliable estimate of the obligation can
be made. A present obligation exists when the Group and the Company have no realistic alternative but to make the
payments.
Defined Contribution Plan
Contributions payable to the defined contribution plan are recognised as expense when the employees have rendered
services to the Group and the Company.
Termination Benefits
Termination benefits are recognised as a liability and an expense when the Group is demonstrably committed to either
terminate the employment of the employees before the normal retirement date, or provide termination benefits as a
result of an offer made for voluntary redundancy. The Group is demonstrably committed to a termination when the
Group has a detailed formal plan for the termination and are without realistic possibility of withdrawal.
Termination benefits in relation to the offer made to encourage voluntary redundancy are measured based on the
number of employees expected to accept the offer.
(s) Borrowing Costs
Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are
capitalised as part of the cost of the assets when the Group incurs the expenditure for the assets, incur borrowing costs
and undertake activities that are necessary to prepare the assets for the intended use or sale.
Capitalisation of borrowing costs is suspended during extended periods in which active development is suspended and
ceased when substantially all the activities necessary to prepare the qualifying assets for the intended use or sale are
complete.
Other borrowing costs are recognised as expense in profit or loss when they are incurred.
(t) Zakat and Income Tax
The Group and the Company recognise its obligation towards the payment of zakat and income tax in the statements
of profit or loss.
Tax expense is the aggregate amount included in the determination of profit or loss for the period in respect of current
tax and deferred tax. Current tax and deferred tax are charged or credited directly to other comprehensive income or
equity if the tax relates to items that are credited or charged directly to other comprehensive income or equity. Current
tax for current and prior periods is recognised as a liability to the extent unpaid. If the amount already paid in respect of
the current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.
Current tax assets and liabilities for the current and prior periods are measured at the amounts expected to be paid
or recovered, using the tax rates that have been enacted or substantially enacted by the end of the reporting period.
Current tax assets and liabilities are offset only when the Group and the Company have a legally enforceable right to
set off the recognised amounts and intend either to settle on a net basis, or to realise the asset and settle the liability
simultaneously.
ANNUAL REPORT 2015
67
(t) Zakat and Income Tax (cont’d)
Deferred tax is provided in full on temporary differences which are the differences between the carrying amounts
in the financial statements and the corresponding tax base of an asset or liability at the end of the reporting period.
Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for
all deductible temporary differences to the extent that it is probable that future taxable profit will be available against
which the deductible temporary differences can be utilised. Deferred tax liabilities and assets are not recognised if the
temporary differences arise from initial recognition of goodwill and the initial recognition of assets or liabilities that is not
a business combination and at the time of the transaction, affected neither accounting profit nor taxable profit.
Deferred tax liabilities and assets reflect the tax consequences that would follow from the manner in which the Group
and the Company expect to recover or settle the carrying amounts of their assets and liabilities and are measured at the
tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates
that have been enacted or substantially enacted by the end of the reporting period.
The carrying amounts of the deferred tax assets are reviewed at the end of each reporting period, and they are reduced
to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit or part of
the deferred tax assets to be utilised. The reduction is reversed to the extent that it becomes probable that sufficient
taxable profit will be available. Deferred tax assets and liabilities are offset when the Group and the Company have a
legally enforceable right to set off current tax assets and liabilities, and the deferred tax assets and liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which
intend either to settle current tax liabilities and assets on a net basis or to realise the assets and settle the liabilities
simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be
settled or recovered.
(u) Cash and Cash Equivalents
Cash and cash equivalents in statements of cash flows comprise cash, bank balances and highly liquid investments that
are readily convertible to a known amount of cash and which are subject to an insignificant risk of changes in value.
(v) Segmental Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segment, has been identified as the board of directors that makes strategic decisions.
Segment reporting is presented for enhanced assessment of the Group’s and the Company’s risks and returns.
Business segments provide products or services that are subject to risk and returns that are different from those of other
business segments. Geographical segments provide products or services within a particular economic environment
that is subject to risks and returns that are different from those components operating in other economic environments.
Segment revenue, results, assets and liabilities are those amounts resulting from the operating activities of a segment
that are directly attributable to the segment and the relevant portion that can be allocated on a reasonable basis to the
segment. Segment revenue, results, assets and liabilities are determined after elimination of intragroup balances and
intragroup transactions as part of the consolidation process.
(w) Financial Guarantee Contracts
68
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder
for a loss it incurs because a specified debtor fails to make payment when due.
(w) Financial Guarantee Contracts (cont’d)
Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs. Subsequent to
initial recognition, financial guarantee contracts are recognised as income in the profit or loss over the period of the
guarantee. If the debtor fails to make payment relating to financial guarantee contract when it is due and the Group,
as the issuer, is required to reimburse the holder for the associated loss, the liability is measured at the higher of the
best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially
recognised less cumulative amortisation.
(x) Offsetting Financial Instruments
Financial assets and liabilities are offset and the net amount presented in the statements of financial position when there
is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise
the asset and settle the liability simultaneuosly.
(y) Contingent Liabilities
The Group does not recognise contingent liabilities, but discloses its existence in the financial statements. A contingent
liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or nonoccurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not
recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent
liability also arises in the extremely rare case where there is a liability that cannot be recognised because it cannot be
measured reliably.
(z) Joint Arrangements
Joint arrangements are arrangements of which the Group has joint control, established by contracts requiring unanimous
consent for decisions about the activities that significantly affect the arrangements’ returns. Joint arrangements are
classified as either joint operation or joint venture. A joint arrangement is classified as a joint operation when the Group
or the Company has rights to the assets and obligations for the liabilities relating to an arrangement. Whilst, a joint
arrangement is classified as a joint venture when the Group has rights only to the net assets of the arrangements.
Joint Ventures
Investment in joint ventures is accounted for in the consolidated financial statements using the equity method of
accounting. Under the equity method, the investment in joint ventures is carried in the statements of financial position
at cost adjusted for post-acquisition changes in the Group’s share of net assets of the joint ventures. The Group’s
share of profit or loss of joint ventures is recognised in the statements of profit or loss. Where there has been a change
recognised directly in the equity of the joint ventures, the Group recognises its share of such changes.
In applying the equity method, unrealised gains or losses on transactions between the Group and the joint ventures
are eliminated to the extent of the Group’s interest in the joint ventures. After application of the equity method, the
Group determines whether it is necessary to recognise any additional impairment loss with respect to the Group’s net
investment in the joint ventures. The Group determines at each reporting date whether there is any objective evidence
that the investment in the joint ventures is impaired. If this is the case, the Group calculates the amount of impairment
as the difference between the recoverable amount of the joint venture and its carrying value and recognises the amount
in statements of profit or loss. The joint ventures are equity accounted for from the date the Group obtains joint control
until the date the Group ceases to have joint control over the joint ventures.
Goodwill relating to a joint venture is included in the carrying amount of the investment and is not amortised. Any excess
of the Group’s share of the net fair value of the joint ventures’ identifiable assets, liabilities and contingent liabilities over
the cost of the investments is excluded from the carrying amount of the investment and is instead included as income
in the determination of the Group’s share of the joint ventures’ profit or loss in the year in which the investments are
acquired.
ANNUAL REPORT 2015
69
(z) Joint Arrangements (cont’d)
Joint Ventures (cont’d)
When the Group’s share of losses in joint ventures equals or exceeds its interest in the joint ventures, including any
long-term interests that, in substance, form part of the Group’s net investment in the joint ventures, the Group does not
recognise further losses, unless it has incurred obligations or made payments on behalf of the joint ventures.
The most recent available audited financial statements of the joint ventures are used by the Group in applying the equity
method. Where the dates of the audited financial statements used are not coterminous with those of the Group, the
share of results is arrived at from the last audited financial statements available and management financial statements
to the end of the accounting year. Uniform accounting policies are adopted for like transactions and events in similar
circumstances.
On disposal of such investment, the difference between net disposal proceeds and their carrying amounts is included
in the statement of profit or loss.
Joint Operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the
assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of
control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent
of the parties sharing control.
The Group as a joint operator recognises in relation to its interest in a joint operation:
(a) its assets, including its share of any assets held jointly;
(b) its liabilities, including its share of any liabilities incurred jointly;
(c) its revenue from the sale of its share of the output arising from the joint operation;
(d) its share of the revenue from the sale of the output by the joint operation;
(e) its expenses, including its share of any expenses incurred jointly.
The Group accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint operation in
accordance with the MFRSs applicable to the particular assets, liabilities, revenues and expenses.
Profits or losses resulting from transactions between the Group and its joint operation are recognised in the Group’s
financial statements only to the extent of unrelated investors’ interests in the joint operation.
(aa)Investment Property
70
Investment property which is held to earn rentals or for capital appreciation or both, including property that is being
constructed or developed for future use as investment property, is measured initially at its cost. Transaction costs are
included in the initial measurement.
After initial recognition as investment property, investment property is carried at cost less accumulated depreciation and
any accumulated impairment losses.
Depreciation of an investment property begins when it is ready for its intended use.
An investment property is derecognised on disposal or when the investment property is permanently withdrawn from
use and no future economic benefits are expected from its disposal. Any gain or loss arising from derecognition,
determined as the difference between any net disposal proceeds and the carrying amounts of the investment property,
and is recognised in statements of profit or loss.
4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
Critical Judgements in Applying the Accounting Policies
The judgements, apart from those involving estimations described below, that the management has made in the process
of applying the accounting policies and that have the most significant effect on the amounts recognised in the financial
statements are as follows:
Revenue Recognition
The Group is a party to the contractual agreements, which can involve upfront and milestone payments that may occur
over several years. These agreements may also involve certain future obligations. Revenue is only recognised when, in
management’s judgement, the significant risks and rewards of ownership have been transferred or when the obligation has
been fulfilled.
Deferred Tax Assets
Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent that it is
probable that future taxable profits will be available against which the tax losses and capital allowances can be utilised.
Significant management judgement is required to determine the amount of deferred tax assets that can be recognised,
based upon the likely timing and level of future taxable profits together with future tax planning strategies. Key Sources of Estimation Uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting
period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next financial year are as follows:
Impairment of Financial Assets
The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired.
To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of
insolvency or significant financial difficulties of the debtor and default or significant delay in payments. Where there is objective
evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for
assets with similar credit risk characteristics.
Useful Lives of Property, Plant and Equipment
Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. The management
exercises their judgement in estimating the useful lives of the depreciable assets. The Group assesses annually the useful
lives of the property, plant and equipment and if the expectation differs from the original estimate, such difference will impact
the depreciation in the period in which such estimate has been charged.
Share-based Payments to Employees
The cost of providing the share-based payments to the employees is charged to the profit or loss over the vesting period.
The cost is based on the fair value of the options and the number of the options expected to vest. The fair value of the options
is determined using Black-Scholes-Merton option pricing model.
Amortisation of Intangible Assets
The development costs of gas generators are amortised on a straight line basis over their useful lives of 15 years. The Group
assesses annually the useful lives of the intangible assets and if the expectation differs from the original estimate, such
difference will impact the amortisation expenses in the period in which such estimate has been charged.
ANNUAL REPORT 2015
71
72
1,028,940
3,029,905
End of the year
Net Carrying Amount
948,113
80,827
–
4,058,845
End of the year
Accumulated
Depreciation
Beginning of the year
Charge for the year
Disposal/Written off
4,058,845
–
–
–
Freehold
land
and
building
RM
Additions
Reclassification from/(to)
Cost
At 31 December 2015
GROUP
1,533,088
296,829
261,829
35,000
–
1,829,917
1,829,917
–
–
–
Leasehold
land
and
building
RM
5. PROPERTY, PLANT AND EQUIPMENT
442,704
439,741
348,635
91,106
–
882,445
814,593
67,852
–
–
Furniture
and
fittings
RM
35,792
188,418
–
188,418
–
224,210
–
224,210
–
–
Renovation
RM
781,559
773,022
771,612
1,410
–
1,554,581
1,524,981
29,600
–
–
Workshop
tools
RM
2,073,151
6,538,143
5,889,744
648,399
–
8,611,294
8,119,896
443,295
48,103
–
Office
equipment
RM
139,677
2,168,582
2,304,473
71,071
(206,962)
2,308,259
2,538,220
–
–
(229,961)
Motor
vehicles
RM
–
37,351,672
37,351,672
–
–
37,351,672
37,351,672
–
–
–
Equipment
RM
6,138,823
7,924,393
6,640,201
1,284,192
–
14,063,216
13,792,629
270,587
–
–
Plant and
machinery
RM
Total
RM
–
–
–
–
–
–
14,174,699
56,709,740
54,516,279
2,400,423
(206,962)
70,884,439
48,103 70,078,856
–
1,035,544
(48,103)
–
–
(229,961)
Assets under
construction
RM
Net Carrying Amount
End of the year
Accumulated
Depreciation
Charge for the year
Reclassification
from/(to)
Disposal of a subsidiary
company
End of the year
Cost
Additions
Reclassification
from/(to)
Disposal of a subsdiary
company
At 31 December 2014
GROUP
(728,000)
–
(115,266)
–
3,110,732
1,568,088
261,829
–
–
–
(133,262)
948,113
332,388
44,707
990,164
91,211
1,829,917
–
–
–
(1,038,403)
4,058,845
2,557,917
–
Leasehold
land and
building
RM
5,097,248
–
Freehold
land and
building
RM
465,959
348,635
(239,528)
–
–
482,726
105,436
814,593
(321,270)
–
–
1,109,461
26,402
Furniture
and
fittings
RM
5. PROPERTY, PLANT AND EQUIPMENT (Cont’d)
–
–
(2,890,159)
198,542
–
2,242,990
448,627
–
(4,264,129)
198,542
–
4,061,937
3,650
Renovation
RM
753,369
771,612
(1,707,975)
–
–
2,303,872
175,715
1,524,981
(1,848,406)
–
–
3,373,387
–
Workshop
tools
RM
–
(97,663)
3,815,128
119,744
2,538,220
(1,547,121)
–
(97,665)
4,103,749
79,257
Motor
vehicles
RM
2,230,152
5,889,744
233,747
2,304,473
(1,505,640) (1,532,735)
(198,542)
(11,577)
6,827,379
778,124
8,119,896
(1,648,356)
(198,542)
(20,443)
9,878,985
108,252
Office
equipment
RM
–
37,351,672
–
–
–
35,795,371
1,556,301
37,351,672
–
–
–
37,351,672
–
Equipment
RM
7,152,428
6,640,201
(10,042,502)
–
(4,837)
14,127,115
2,560,425
13,792,629
(15,129,827)
–
(9,000)
28,931,456
–
Plant and
machinery
RM
48,103
–
–
–
–
–
–
48,103
(233,448)
–
–
227,220
54,331
Assets under
construction
RM
15,562,577
54,516,279
(18,033,805)
–
(247,339)
66,917,133
5,880,290
70,078,856
(25,720,557)
–
(1,165,511)
96,693,032
271,892
Total
RM
ANNUAL REPORT 2015
73
5. PROPERTY, PLANT AND EQUIPMENT (cont’d)
(a) Included in the property, plant and equipment are motor vehicles and plant and machinery which are acquired by means
of hire purchase and lease arrangements with a net carrying amount of RMNil and RM3,780,113 (2014: RM8,616 and
RM4,338,454) respectively.
(b) Included in the office equipment are computer software and hardware with a net carrying amounts of RM865,715 and
RM130,329 (2014: RM955,862 and RM60,694) respectively.
6. INTANGIBLE ASSETS
GROUP
Cost
Beginning/End of the year
Development
Costs
RM
Patent and
Goodwill on
Trademark Consolidation
RM
RM
Total
RM
4,099,075
13,810
339,253
4,452,138
936,228
273,272
–
–
–
–
936,228
273,272
Amortised during the year
1,209,500
273,272
–
–
–
–
1,209,500
273,272
1,482,772
–
–
1,482,772
Net Carrying Amount
As at 31 December 2015
2,616,303
13,810
339,253
2,969,366
As at 31 December 2014
2,889,575
13,810
339,253
3,242,638
Accumulated Amortisation
Amortised during the year
(a) The development costs incurred in developing gas generator are amortised on a straight line basis over their useful lives
of 15 years.
(b) Goodwill acquired in the business combinations is, from the acquisition date, allocated to the cash-generating units
(‘CGU’) that are expected to benefit from the synergies of the combination, as follows:
Engineered packages/Product and services
2015
RM
2014
RM
339,253
339,253
The recoverable amounts of the cash-generating units are determined based on the computation of their value in use.
The key assumptions used in the computation of value in use are discount rate, growth rate and projected cash flows from
use and disposal at the end of the useful life.
Discount rate is determined based on the pre-tax rate that reflect current market assessment of the time value of money and
risks specific to the assets.
The projected cash flows from use are derived from the most recent financial budgets approved by management.
The estimate of net cash flows for the disposal of the assets at the end of its useful life is the present value of the amount that
the Group expects to obtain from the disposal of the assets in an arm’s length transaction between knowledgeable, willing
parties, after deducting the estimated costs of disposal.
74
6. INTANGIBLE ASSETS (cont’d)
The key assumptions used for determining the value in use, which are determined based on management’s past experience
and expectation of the future development, are as follows:
%
Profit margin
Discount rate
30
7
7. SUBSIDIARY COMPANIES
COMPANY
2015
RM
Unquoted shares, at cost
Less: Accumulated impairment losses
SIS granted to employees of the subsidiary companies
Details of the Company’s subsidiaries as at 31 December 2015 are as follows:
Group
Country of
Effective
Incorporation
Interest
2015 2014
%
%
Held by the Company:
Tanjung Offshore Services Sdn.
Bhd.
Tanjung CSI Sdn. Bhd.
100
100
Malaysia
100
100
Malaysia
Gas Generators (Malaysia) Sdn.
Bhd.
^7 New Market Street Holdings
Limited
Tanjung Offshore Marine Services
Sdn. Bhd.
Tanjung Citech Sdn. Bhd.
Tanjung Offshore Resources
Sdn. Bhd.
*Tanjung Citech UK Limited
100
100
Malaysia
100
100
100
100
British Virgin
Islands
Malaysia
100
100
100
100
Malaysia
Malaysia
100
100
*PT Tanjung Offshore
Nusantara
Tanjung HMS Petroleum Sdn.
Bhd
80
80
England and
Wales
Indonesia
51
51
2014
RM
189,757,394
(95,568,386)
189,757,394
(95,568,386)
94,189,008
1,175,159
94,189,008
1,175,159
95,364,167
95,364,167
Principal Activities
Integrated service provider to the oil and gas and
related industries.
Design, engineering, training, installation and
commissioning for plant automation and safety
system, flow metering solutions, control valves,
field instrumentations, control solutions for
turbines and compressors and after sales
activities for onshore and offshore services.
Manufacturing and supply of gas generators to
both industrial and oil and gas industry.
Investment holding.
Ownership and leasing offshore vessels to local
and international oil industry major.
Dormant.
Mineral trading.
Dormant.
In the process of voluntarily winding up.
Oilfield development and provision of integrated
services to the oil and gas industry.
ANNUAL REPORT 2015
75
7. SUBSIDIARY COMPANIES (cont’d)
Group
Effective
Interest
2015 2014
%
%
Held by Tanjung Offshore
Services Sdn. Bhd.:
Tanjung PetroConsult Sdn. Bhd.
Tanjung NewEnergy Services Sdn.
Bhd.
Held by Tanjung Citech UK
Limited:
*Citech Energy Recovery Systems
UK Limited
Held by Gas Generators
(Malaysia) Sdn. Bhd.:
Universal Gas Generators (M) Sdn.
Bhd.
*Gas Generators International Ltd
Held by 7 New Market Street
Holdings Limited:
^7 New Market Street Limited
Country of
Incorporation
Provision for engineering and professional
manpower services to the oil and gas and related
industries.
Provision of project management services to the
engineering and energy industries.
100
100
Malaysia
100
100
Malaysia
100
100
England and
Wales
100
100
Malaysia
100
100
100
100
Dormant.
Selling and letting of gas generator equipment.
Malaysia (Wilayah Marketing gas generator packages.
Persekutuan
Labuan)
British Virgin
Islands
Acquire, develop and realisation of real estate.
* The financial statements of these companies are not audited by AljeffriDean.
^ These companies are not required by their local laws to appoint statutory auditors.
The amount owing by/(to) subsidiary companies are unsecured, interest free and are repayable on demand.
None of the Group’s subsidiary companies that have non-controlling interest are material to the Group. Therefore the
summarised financial information is not presented.
8. ASSOCIATE COMPANY
GROUP
2015
RM
2014
RM
Unquoted share, at cost
Share of attributable post acquisition losses after taxation
134,999
(8,355)
134,999
(8,355)
Less: Accumulated impairment losses
126,644
(125,359)
126,644
(125,359)
1,285
1,285
The associate company has no significant contingent liability to which the Group is exposed, nor has the Group any
significant contingent liability in relation to its interest in the associate company.
76
8. ASSOCIATE COMPANY (cont’d)
Details of the Group’s associate company as at 31 December 2015 are as follows:
Group
Effective
Interest
2015 2014
%
%
Held by Gas Generators (M)
Sdn. Bhd.:
*PT. Gas Generators Indonesia
35
35
Country of
Incorporation
Indonesia
Commission agent for the fabrication and supply of
industrial equipment.
* The financial statements of this company is not audited by AljeffriDean.
The amount owing by associate company is unsecured, interest free and is repayable on demand.
None of the Group’s associate company is material to the Group. Therefore the summarised financial information is not
presented.
9. JOINT VENTURE
GROUP
Unquoted shares, at cost
Share of attributable post acquisition profit after taxation
2015
RM
2014
RM
255,000
82,623
255,000
76,582
337,623
331,582
The joint ventures have no significant contingent liability to which the Group is exposed, nor has the Group any significant
contingent liability in relation to its interest in the joint venture. Details of the Group’s joint ventures as at 31 December 2015
are as follows:
Group
Effective
Interest
2015 2014
%
%
Country of
Incorporation
Supply manpower for the oil and gas industry and
petrochemicals industry.
Dormant.
Held by Tanjung Offshore
Services Sdn. Bhd.
Fircroft Tanjung Sdn. Bhd.
51
51
Malaysia
*Tanjung Drilltec Sdn. Bhd.
51
51
Malaysia
* The financial statements of this company is not audited by AljeffriDean.
The above joint arrangements are structured via separate companies and provide the Group with the rights to the net assets
of the companies under the arrangements. Therefore these companies are classified as joint ventures of the Group. These
joint ventures have the same reporting period as the Group. No quoted market prices are available for the shares of the
Group’s joint venture as these companies are private companies.
ANNUAL REPORT 2015
77
9. JOINT VENTURE (cont’d)
The amount owing by joint venture is unsecured, subject to interest rate at 8.60% (2014: 8.60%) per annum and is repayable
on demand.
Summarised statement of profit or loss of the material joint venture is as follows:
Revenue
Net profit for the year/period
Share of results
2015
RM
2014
RM
19,308,355
5,079,973
12,082
153,163
6,041
76,582
2015
RM
2014
RM
Summarised statement of financial position of the material joint venture is as follows:
Total assets
Total liabilities
5,240,317
(4,600,176)
2,502,777
(1,849,610)
Net assets
640,141
653,167
Group’s share of joint venture’s net assets
337,623
331,582
10. INVESTMENT PROPERTY
GROUP
78
Investment property
under refurbishment
2015
2014
RM
RM
Cost
Acquisition of a subsidiary company (Note 31)
Exchange differences
36,439,960
–
8,710,670
–
36,789,000
(349,040)
End of the year
45,150,630
36,439,960
Accumulated Impairment Loss
Impairment loss recognised during the year
–
18,531,975
–
–
End of the year
18,531,975
–
Net Carrying Amount
26,618,655
36,439,960
The fair value of the investment property of the Group as at 31 December 2015 is determined by a valuation carried out by
Savills PLC, an independent professional valuer, based on the vacant possession value. Savills PLC has relevant recognised
professional qualification and recent experience in valuing properties in the relevant locations.
At the date of this report, the refurbishment work is yet to be completed.
11. OTHER INVESTMENTS
GROUP
Held-to-maturity investment
Structured products
Available-for-sale investment
Money market
Quoted shares
Analyse as follows:
Non-current
Current
COMPANY
2015
2014
RM
RM
2015
RM
2014
RM
–
6,300,000
–
5,000,000
53,870
3,511,434
13,926,182
489,897
53,870
2,139,834
13,926,182
–
3,565,304
14,416,079
2,193,704
13,926,182
3,565,304
20,716,079
2,193,704
18,926,182
3,511,434
53,870
489,897
20,226,182
2,139,834
53,870
–
18,926,182
3,565,304
20,716,079
2,193,704
18,926,182
During the current financial year, the Group and the Company recognised an impairment loss of RM3,278,463 and
RM2,860,166 (2014: RMNil) respectively for its quoted shares as there were significant or prolonged decline in the fair value
of these investments below their costs.
12. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS
2015
RM
GROUP
2014
RM
2015
RM
COMPANY
2014
RM
Other receivables
Deposits
Prepayments
Refurbishment cost
Chromite sand’s project
Proceeds from disposal of a subsidiary company
3,362,216
214,682
26,383,852
32,346,720
6,478,870
6,480,000
3,077,796
175,702
26,433,014
26,106,240
7,621,998
8,100,000
248,348
500
874,143
–
–
6,480,000
1,830,101
–
423,512
–
–
8,100,000
Less: Allowance for doubtful debts
75,266,340
(57,344,060)
71,514,750
(5,398,716)
7,602,991
–
10,353,613
–
17,922,280
66,116,034
7,602,991
10,353,613
4,860,000
13,062,280
6,480,000
59,636,034
4,860,000
2,742,991
6,480,000
3,873,613
17,922,280
66,116,034
7,602,991
10,353,613
Analyse as follows:
Non-current
Current
Refurbishment cost
On 26 May 2014, 7 New Market Street Limited, the wholly-owned subsidiary of the Company entered into a Development
Agreement to perform a refurbishment work on the newly acquired office building in Birmingham, United Kingdom. During
the current financial year, the refurbishment cost has been fully impaired.
ANNUAL REPORT 2015
79
12. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS (cont’d)
Chromite sand’s project
This represents advances given for the purpose of washing and trading of chromite tailings in the Philippines. During the
current financial year, the cost of the said project has been fully impaired.
Proceeds from disposal of a subsidiary company in the previous year
On 29 August 2014, the Company entered into an agreement for the disposal of its entire equity interest in Tanjung Maintenance
Services Sdn. Bhd. via a management buy-out for a total consideration of RM9,000,000. A deposit of RM900,000 has been
paid by the purchasers upon signing the agreement and the remaining consideration of RM8,100,000 will be paid via five
equal yearly installments of RM1,620,000 per year until full settlement.
13. INVENTORIES
GROUP
2015
RM
2014
RM
At cost:
Work-in-progress
Raw materials
Finished goods
180,828
350,021
103,812
1,416,507
350,021
–
Less: Allowance for impairment losses
634,661
(350,021)
1,766,528
(350,021)
284,640
1,416,507
2015
RM
2014
RM
14. TRADE RECEIVABLES
GROUP
Trade receivables
Less: Allowance for doubtful debts
80
46,848,360
(11,551,966)
46,426,580
(6,441,978)
35,296,394
39,984,602
The credit term of trade receivables are ranging from 30 days to 60 days.
Included in the Group’s trade receivables are deferred revenue amounting to RM18,266,180 (2014: RM6,449,148).
Included also in the Group’s trade receivables are amount owing by related companies totalling to RM625,424 (2014:
RM1,254,726).
14. TRADE RECEIVABLES (cont’d)
As at 31 December 2015, the trade receivables ageing are as follows:
GROUP
2015
RM
2014
RM
Neither past due nor impaired
01 to 30 days past due but not impaired
31 to 60 days past due but not impaired
More than 61 days past due but not impaired
12,060,384
748,987
5,623,559
16,863,464
15,952,022
4,149,259
906,928
18,976,393
Impaired
35,296,394
11,551,966
39,984,602
6,441,978
46,848,360
46,426,580
Trade receivables that are neither past due nor impaired
Trade receivables that were neither past due nor impaired relate to customers for whom there were no default. None of
the Group’s trade receivables that are neither past due nor impaired have been renegotiated during the current financial
year.
Trade receivables that are past due but not impaired
Trade receivables that were past due but not impaired relate to customers that have good track record with the Group. Based
on past experience and no adverse information to date, the directors of the Group are of the opinion that no allowance for
impairment is necessary in respect of these balances as there has not been a significant change in the credit quality and the
balances are still considered fully recoverable.
Trade receivables that are impaired
All impaired trade receivables are individually determined. The reconciliation of the allowance account is as follows:
GROUP
Disposal of a subsidiary company
Additional allowance recognised
Amounts recovered and reversed
End of the year
2015
RM
6,441,978
–
5,205,542
(95,554)
11,551,966
2014
RM
10,058,317
(4,147,024)
602,668
(71,983)
6,441,978
ANNUAL REPORT 2015
81
15. CASH AND CASH EQUIVALENTS
GROUP
Cash and bank balances
Fixed deposits with licensed banks
COMPANY
2015
2014
RM
RM
2015
RM
2014
RM
39,673,997
27,555,019
11,468,020
40,895,214
10,217,102
15,658,000
8,024,941
3,450,000
67,229,016
52,363,234
25,875,102
11,474,941
The Group’s and the Company’s cash and cash equivalents amounting to RM450,000 (2014: RM2,209,661) each have been
pledged to licensed banks for banking facilities granted to the Group and the Company.
16. HIRE PURCHASE AND FINANCE LEASE PAYABLES
GROUP
2015
RM
2014
RM
2,836,392
696,459
3,499,067
713,102
3,532,851
4,212,169
Future minimum hire purchase and finance lease payments
Not later than 1 year
Later than 1 year and not later than 5 years
944,143
3,079,246
964,796
3,987,814
Less: Future finance charges
4,023,389
(490,538)
4,952,610
(740,441)
Present value of hire purchase and finance lease payables
3,532,851
4,212,169
Present value of hire purchase and finance lease payables is analysed as follows:
Not later than 1 year
Later than 1 year and not later than 5 years
696,459
2,836,392
713,102
3,499,067
3,532,851
4,212,16 9
Classified as:
Non-current liability
Current liability
82
The Group obtains the above facilities to finance the acquisition of certain motor vehicles, plant and machinery. Implicit
interest rates are fixed at the date of the agreements, and the amount of the payments is fixed throughout the period. The
Group has the option to purchase the assets at the end of the agreements.
17. TRADE PAYABLES
GROUP
Ringgit Malaysia
Other currencies
2015
RM
2014
RM
24,105,451
4,546,639
20,697,645
10,947,313
28,652,090
31,644,958
The normal trade credit terms granted to the Group range from 30 to 45 days. The Group has in place a sound financial risk
management procedure to ensure that all amounts payable are paid within the credit periods.
Included in the Group’s trade payables are deferred cost amounting to RM17,471,539 (2014: RM18,338,683). Included also
in the Group’s trade payables are amount owing to related companies totalling to RM1,922,884 (2014: RM3,369,007).
18. OTHER PAYABLES, PROVISIONS AND ACCRUALS
GROUP
Other payables
Provisions
Accruals
COMPANY
2015
2014
RM
RM
2015
RM
2014
RM
1,157,588
8,408,137
6,455,548
3,687,726
6,120,710
408,309
213,256
501,069
498,800
580,939
279,150
107,250
16,021,273
10,216,745
1,213,125
967,339
Number of Shares
2015
2014
UNIT
UNIT
2015
RM
2014
RM
19. SHARE CAPITAL
GROUP AND COMPANY
Amounts
Authorised Share Capital
Ordinary Shares of RM0.50 each:
Created during the year
600,000,000
–
400,000,000
200,000,000
300,000,000
–
200,000,000
100,000,000
End of the year
600,000,000
600,000,000
300,000,000
300,000,000
Issued and Fully Paid Share Capital
Ordinary Shares of RM0.50 each:
Issuance of ordinary shares pursuant to SIS (Note 28)
374,522,587
7,012,702
365,929,989
8,592,598
187,261,294
3,506,351
182,964,995
4,296,299
End of the year
381,535,289
374,522,587
190,767,645
187,261,294
In the previous financial year, the Company has increased its authorised share capital from RM200,000,000 comprising of
400,000,000 ordinary shares of RM0.50 each to RM300,000,000 comprising of 600,000,000 ordinary shares of RM0.50
each by the creation of additional 200,000,000 new ordinary shares of RM0.50 each.
ANNUAL REPORT 2015
83
19. SHARE CAPITAL (cont’d)
During the current financial year, the Company has issued the following ordinary shares:
No. of Shares Issued
Issue Price
Purposes
7,012,702
RM0.50
Exercise of Share Issuance Scheme
The new ordinary shares issued rank pari passu in respect of the distribution of dividends and repayment of capital with the
existing ordinary shares.
At the end of the reporting period, 2,477,500 (2014: 2,477,500) ordinary shares are held by the Company as treasury shares
(Note 20 to the Financial Statements), and number of outstanding ordinary shares issued and fully paid (excluding treasury
shares) is 379,057,789 (2014: 372,045,087) units.
Capital Management
The primary objective of the management of the Group’s and the Company’s capital structure is to optimise the balance
between debts and equity to achieve a low cost of capital and maximise the return to stakeholders.
The capital structure of the Group and the Company consists of debts (comprising hire purchase and finance lease) and
equity (comprising issued ordinary shares, accumulated losses and other reserves). The Group and the Company monitor
their capital using a gearing ratio, based on net debts divided by total capital. The target gearing ratio is to maintain it at
below 20%. The directors review the capital structure on a quarterly basis, and consider the cost of capital and the risks
associated with each class of capital. During the current financial year, no significant changes were made in the objectives,
policies or processes for managing capital. The gearing ratio at the end of the reporting period was as follows:
GROUP
2015
RM
2015
RM
COMPANY
2014
RM
Hire purchase and finance lease payables (Note 16)
Less: Cash and cash equivalents (Note 15)
3,532,851
(67,229,016)
4,212,169
(52,363,234)
–
(25,875,102)
–
(11,474,941)
Net debts
Equity attributable to equity holders of the Company
(63,696,165)
122,417,369
(48,151,065)
190,578,052
(25,875,102)
215,507,930
(11,474,941)
208,302,691
58,721,204
142,426,987
189,632,828
196,827,750
NA
NA
NA
NA
Total capital
Gearing ratio (%) - Net debts over total capital
2014
RM
Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a consolidated
shareholders’ equity equal to or not less than the 25% of the issued and paid up capital (excluding treasury shares) and such
shareholders’ equity is not less than RM40,000,000. The Company has complied with this requirement.
20. TREASURY SHARES
84
There was no share buy-back during the current financial year. The ordinary shares repurchased are being held as treasury
shares in accordance with the requirement of Section 67A of the Companies Act, 1965. The treasury shares may be
distributed as ‘share dividends’ to the shareholders.
21. RESERVES
GROUP
2015
RM
Non-distributable:
Share premium
Capital reserves
Equity-settled employee benefits reserve
Investment revaluation reserve
Foreign currency translation reserve
Distributable:
Accumulated losses
2014
RM
COMPANY
2015
2014
RM
RM
68,738,801
(19,579,028)
1,080,621
(12,122)
3,989,329
68,738,801
(19,579,028)
1,080,621
22,384
(633,426)
68,736,693
1,975,462
1,080,621
(12,071)
–
68,736,693
1,975,462
1,080,621
22,384
–
54,217,601
49,629,352
71,780,705
71,815,160
(118,171,357)
(41,916,074)
(42,643,900)
(46,377,243)
(63,953,756)
7,713,278
29,136,805
25,437,917
Share Premium
The share premium arose from the issues of ordinary shares in excess of the par value.
The capital reserves represent the value of warrants capitalised for the issuance of serial payment bond with detachable
warrants. Upon the exercise of the warrants, the value of these warrants will be credited to share premium. Capital reserves
also include all the changes in the Group’s ownership interest in a subsidiary company that do not result in a loss of
control. Capital Reserves
Equity-Settled Employee Benefits Reserve
The reserve represents the cumulative value of employee services for the issue of SIS. If the share option is exercised, the
amount from the equity-settled employee benefits reserves is transferred to share premium. If the share option expires, the
amount from the equity-settled employee benefits reserves is transferred to accumulated losses. The details of the SIS are
disclosed in Note 28 to the Financial Statements.
Investment Revaluation Reserve
The investment revaluation reserve arose from the changes in the value of investment recognised when they are revalued.
Foreign Currency Translation Reserve
The foreign currency translation reserve arose from the exchange differences on the translation of foreign
operations.
ANNUAL REPORT 2015
85
22. REVENUE
GROUP
Rendering of services
Sales of goods
Dividend income
Interest revenue
COMPANY
2015
2014
RM
RM
2015
RM
2014
RM
34,280,960
25,615,811
32,664
676,607
76,598,277
29,190,686
–
1,555,799
–
–
32,664
676,607
–
–
–
1,555,799
60,606,042
107,344,762
709,271
1,555,799
23. FINANCE COSTS
GROUP
Hire purchase interest
Finance lease interest
Overdraft interest
Interest on bill payable
Commitment fee
86
COMPANY
2015
2014
RM
RM
2015
RM
2014
RM
9,271
1,064
81
–
46,428
68,287
5,597
103,961
22,389
122,376
–
–
55
–
16,432
–
–
322
–
24,959
56,844
322,610
16,487
25,281
24. (LOSS)/PROFIT BEFORE ZAKAT AND TAXATION
GROUP
2014
RM
96,261
18,000
273,272
96,261
18,000
273,272
20,000
18,000
–
20,000
18,000
–
78,952,458
2,400,423
656,044
5,880,290
4,560,509
–
–
–
–
–
–
1,597,616
–
37,886
46,931
–
1,649,768
–
–
–
–
–
–
–
–
1,993
–
1,254,019
b)Other gains and income
Gain on disposal of property, plant and equipment
Gain on foreign exchange
Gain on redemption of other investment
Interest income
Dividend income
Rental income
Share of loss of certain projects
35,267
15,223,474
–
–
1,014,018
62,465
70,800
355,880
–
1,105,507
359,501
47,607
1,936,949
–
–
–
–
11,952,254
–
–
676,607
32,664
–
–
–
320,637
8,835,942
–
1,555,799
–
–
–
c) Employee benefit expenses
Staff costs (including directors’ remuneration and
fees):
- Short term benefits
- SIS expenses
- Termination benefits
- EPF contributions
14,450,971
–
23,870
1,382,782
14,302,222
807,800
–
1,574,306
597,430
–
–
21,354
1,042,105
–
–
74,615
a) Other losses and expenses
Statutory audit
- Current year
- Other related services
Amortisation of intangible assets
Allowance for doubtful debts, impairment and written
off, net off recovered
Depreciation of property, plant and equipment
Loss on disposal and written off of property, plant and
equipment
Loss on disposal of associate company
Loss on redemption of other investment
Rental expenses
Written off of amount owing by subsidiary companies
COMPANY
2015
2014
RM
RM
2015
RM
Key management personnel are defined as those persons having authority and responsibility for planning, directing and
controlling the activities of the Group directly or indirectly. There are no other key management personnel except for the
directors of the Company.
ANNUAL REPORT 2015
87
24. (LOSS)/PROFIT BEFORE ZAKAT AND TAXATION (cont’d)
Employee benefit expenses including the following remuneration paid to the directors, who are the key management
personnel, of the Group and the Company:
GROUP
2015
RM
Non-Executive
- Current year fee
- Overprovision in previous year fee
2014
RM
COMPANY
2015
2014
RM
RM
401,500
–
192,000
(57,000)
401,500
–
192,000
(57,000)
401,500
135,000
401,500
135,000
Executive
- Remuneration
1,341,162
1,400,240
195,930
981,720
1,341,162
1,400,240
195,930
981,720
Total directors’ fee and remuneration
1,742,662
1,535,240
597,430
1,116,720
Remuneration band:
Number of
Directors
2015
Non-Executive Directors:
RM0
RM1 - RM50,000
RM50,001 - RM100,000
RM100,001 - RM200,000
–
–
7^
2*
–
–
4
–
Executive Directors:
Below RM100,000
RM100,001 - RM200,000
RM200,001 and above
–
2*
2
–
–
3
^ One of the directors has resigned during the current financial year.
* Both directors have resigned during the current financial year.
88
2014
25. ZAKAT AND TAXATION
GROUP
Zakat
Corporate taxation
Current year provision
Under/(Over) provision in previous year
2014
RM
–
270,000
–
270,000
2,210,010
64,963
2,965,702
(318,946)
–
–
401,119
(456,091)
2,274,973
2,646,756
–
2,274,973
2,916,756
–
(54,972)
215,028
The zakat and income tax expense is reconciled to the accounting (loss)/profit at the applicable tax rates as follows:
GROUP
2015
RM
2014
RM
COMPANY
2015
2014
RM
RM
(73,804,571)
204,681
3,733,343
4,002,031
Taxation at Malaysian statutory tax rate at 25%
Zakat
Tax effect on expenses that are not deductible for tax
purposes
Deferred tax assets not recognised
Effect on Group’s relief
Utilisation of unused tax losses and unabsorbed
capital allowances
Income not subject to tax
Under/(Over) provision in previous year
(18,451,143)
–
51,170
270,000
933,336
–
1,000,508
270,000
3,923,536
172,728
–
1,682,829
–
–
1,955,563
–
(265,807)
–
(2,616,165)
–
–
(2,289,145)
(456,091)
20,406,538
3,000,338
–
(112,991)
(2,632,733)
64,963
2,274,973
COMPANY
2015
2014
RM
RM
2015
RM
(283,544)
(898,188)
(318,946)
2,916,756
–
215,028
The Malaysian statutory tax rate will be reduced to 24% from the current year’s rate of 25%, effective from Year of Assessment
2016.
Deferred tax assets are not recognised for the following temporary differences by certain subsidiaries:
GROUP
Unused tax losses
Unabsorbed capital allowances
2015
RM
2014
RM
46,815,505
31,036,122
39,566,959
25,343,139
77,851,627
64,910,098
Deferred tax assets are not recognised for the above temporary differences as it is not probable that future taxable profit will
be available against which the deductible temporary differences and unused tax losses can be utilised by the subsidiaries.
However, the unused tax losses and unabsorbed capital allowances may be carried forward indefinitely. At the end of each
reporting period, the subsidiaries reassess the unrecognised deferred tax assets, previously unrecognised deferred tax
assets are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax assets
to be recovered.
ANNUAL REPORT 2015
89
26. DISCONTINUED OPERATIONS
On 10 February 2012, the Company announced that its wholly-owned subsidiary, Citech Energy Recovery Systems UK
Limited (“CiTech”), a company incorporated in England and Wales, has commenced the cessation of business operations
with immediate effect.
Since the fair value of the disposal group less costs to sell exceeded the net carrying amount of the relevant assets and
liabilities, no impairment loss was recognised.
The results of the discontinued operations are as follows:
GROUP
Revenue
Cost of sales
2015
RM
2014
RM
48,711
–
217,049
167,973
Gross profit
Operating expenses
48,711
(224,450)
385,022
3,387,846
(Loss)/Profit before taxation
Taxation
(175,739)
–
3,772,868
–
(175,739)
3,772,868
(Loss)/Profit before taxation are derived at after:
GROUP
2015
RM
2014
RM
a) Other losses and expenses
Statutory audit
Allowance for doubful debts and written off
27,255
16,827
27,255
4,588
b) Other gains and income
Gain on foreign exchange
Reversal of provision
40,378
–
118,197
3,537,521
2015
RM
2014
RM
Net cash flows attributable to discontinued operations are as follows:
GROUP
Net cash (used in)/generated from operating activities
90
(13,462)
53,323
27. (LOSSES)/EARNINGS PER SHARE
The amounts used in calculating basic and diluted (losses)/earnings per share attributable to the ordinary equity holders of
the Company are as follows:
From continuing and discontinued operations
GROUP
(Losses)/Earnings used for the computation of basic/diluted
- (Loss)/Profit attributable to equity holders of the Company
2015
RM
(76,255,283)
2014
RM
1,060,793
From continuing operations
GROUP
2015
RM
2014
RM
(Loss)/Profit attributable to equity holders of the Company
Adjustment for loss/(profit) from discontinued operations
(76,255,283)
175,739
1,060,793
(3,772,868)
Loss used for the computation of basic/diluted from continuing operations
(76,079,544)
(2,712,075)
Weighted Average Number of Ordinary Shares
From continuing and discontinued operations
GROUP
2015
UNIT
2014
UNIT
Weighted average number of ordinary shares after deducting treasury shares
377,889,160
368,858,910
Weighted average number of ordinary shares used for the computation of basic
377,889,160
368,858,910
–
–
–
–
377,889,160
368,858,910
Effects of dilutive potential ordinary shares:
- SIS*
- Warrants*^
Weighted average number of ordinary shares used for the computation of diluted
* The amount is not presented as the computation would result in anti-dilutive.
^ Warrants A 2006/2016 expired in 2016.
ANNUAL REPORT 2015
91
28. SHARE ISSUANCE SCHEME (“SIS”)
The SIS is governed by the By-Laws approved by the shareholders at an Extraordinary General Meeting held on 07 February
2013 and is to be in force for a period of 3 years. The SIS has been effective on 12 July 2013. The salient features of the ByLaws of SIS are as follows:
(a) The maximum number of Options which may be allotted pursuant to the SIS (“Options”) shall not exceed 15% of the total
issued and paid-up share capital of the Company (excluding Treasury Shares) at any point in time during the duration of
the SIS.
(b) Executive directors and employees of the Group and the Company will be eligible to participate in the SIS provided that
they fulfill the conditions for eligibility stipulated in the rules, terms and conditions contained in the By-Laws (“Eligible
Persons”).
(c) The maximum number of Options that may be offered and allotted to an Eligible Persons shall be determined by the
SIS Committee taking into consideration inter-alia, the Eligible Persons’ designation, job description, responsibilities and
seniority.
(d) The exercise price of the Options issued pursuant to SIS shall be as follows:
i)
at a discount of not more than 10% from the volume-weighted average market price of the shares as shown in the
daily official list issued by Bursa Malaysia Securities Berhad (“Bursa Securities”) for the 5 market days immediately
preceding the date of offer; and
ii) the par value of the shares.
(e) The new shares to be allotted and issued upon any exercise of the Options will, upon such allotment and issuance, rank
pari passu in all respects with the existing and issued shares except that the new shares so issued will not be entitled
to any dividends, rights, allotments and/or any other distributions which may be declared, made or paid to shareholders
prior to the date of allotment of the new shares. The new shares will be subjected to all provisions of the Articles of
Association in relation to their transfer, transmission or otherwise. The Options shall not carry any right to vote at a
general meeting of the Company.
(f) Options are exercisable, in whole or in part (provided that an Option is exercised in part in respect of 1,000 shares or
any multiple thereof) as follows:
Number of Options Granted
20,000 and below
20,001 to 50,000
Above 50,000
92
Percentage of Options Exercisable from Acceptance Date
1st year
2nd year
3rd year
50%
33%
33%
50%
33%
33%
–
34%
34%
28. SHARE ISSUANCE SCHEME (“SIS”) (cont’d)
Movements of the number and the related weighted average exercise prices of SIS are as follows:
2015
Number of
Share
Options
UNIT
2014
Weighted
Average
Exercise
Price
RM
Number of
Share
Options
UNIT
Weighted
Average
Exercise
Price
RM
Granted
Cancelled
Exercised
37,196,300
–
(617,598)
(7,012,702)
0.50
0.50
0.50
0.50
36,244,200
10,670,000
(1,125,302)
(8,592,598)
0.50
0.50
0.50
0.50
End of the year
29,566,000
0.50
37,196,300
0.50
Exercisable at the end of the year
29,321,588
27,155,012
The SIS outstanding at the end of the reporting period has the following weighted average exercise prices and remaining
contractual life:
2015
Number of
Oustanding
SIS
UNIT
07 May 2016
11 June 2017
28,735,000
831,000
Exercise
Price
RM
0.50
0.50
2014
Number of
Oustanding
SIS
UNIT
Exercise
Price
RM
36,365,300
831,000
0.50
0.50
The fair value of the services received for SIS is measured by reference to the fair value of the equity instruments granted.
The estimated fair values of the SIS granted on the grant date are RM0.09.
The fair values of the Options are estimates on the date of grant using the Black-Scholes-Merton option pricing model with
the following assumption:
Weighted average share price
Options exercise price
Expected dividend yield
Risk-free annual interest rate
Expected volatility
Expected Options life
RM0.65
RM0.50
6%
3%
5%
3 years
The expected volatility is based on the historical volatility, calculated based on the weighted average expected life of the SIS.
There is no market conditions associated with the SIS granted. Vesting conditions, including service and performance
conditions, are not considered in the fair value measurement at grant date.
Included in the total number of outstanding SIS are outstanding SIS from the disposed subsidiary company totaling to
8,972,000 unit (2014: 8,972,000 unit).
ANNUAL REPORT 2015
93
29. WARRANTS
On 30 November 2005, the Company issued a RM150,000,000 nominal value up to eight (8) years 4.5% per annum serial
fixed rate bonds with detachable warrants to the primary subscribers.
On 03 March 2006, the primary subscribers were allotted a total of 18,514,600 warrants to the shareholders at an offer price
of RM0.24 per warrant on the basis of one (1) warrant for every five (5) ordinary shares held on entitlement date.
On 29 August 2006, the Company completed the listing of an additional 9,257,000 warrants arising from the bonus issue
exercise which was implemented in accordance to the Deed Poll dated 13 January 2006 on the basis of one (1) new warrant
for every two (2) warrants held on entitlement date.
On 13 June 2007, the Company completed the listing of an additional 10,095,104 warrants arising from the bonus issue
exercise on the basis of two (2) new warrants for every five (5) existing warrants.
On 14 August 2012, the subscription price of Warrant A 2006/2016 has been adjusted from RM0.55 to RM0.50 pursuant to
the special dividend of RM0.44 per ordinary share of RM0.50 each.
As at 31 December 2015, there is a total of 29,981,990 (2014: 29,981,990) outstanding Warrant A 2006/2016 warrants. The
said warrant expired in 2016.
30. DISPOSAL OF A SUBSIDIARY COMPANY IN THE PREVIOUS FINANCIAL YEAR
In the previous financial year, the Company entered into an agreement for the disposal of its entire equity interest in Tanjung
Maintenance Services Sdn. Bhd. (“TMS”) via a management buy-out for a total consideration of RM9,000,000. A deposit of
10% or equivalent to RM900,000 has been paid by the purchasers upon signing the said agreement and the remaining of
the consideration will be paid via five equal yearly installments of RM1,620,000 per year until full settlement.
The net assets of TMS at the date of disposal and at 31 December 2013 were as follows:
GROUP
29.08.2014
RM
31.12.2013
RM
Inventories
Trade and other receivables
Cash and cash equivalents (including bank overdraft)
Trade and other payables
Term loan
7,686,750
2,035,838
30,468,355
(3,236,430)
(27,969,234)
(103,547)
(241,233)
9,457,946
3,510,316
18,705,127
(2,027,290)
(19,834,491)
(364,115)
(301,476)
Net assets
8,640,499
359,501
9,146,017
Total consideration
Unsettled consideration
9,000,000
(8,100,000)
Deposit received
Cash and cash equivalents disposed off
900,000
3,236,430
Net cash inflow from disposal of a subsidiary company
4,136,430
94
31. ACQUISITION OF A SUBSIDIARY COMPANY IN THE PREVIOUS FINANCIAL YEAR
In the previous financial year, the Company entered into a sale and purchase agreement for the acquisition of entire shares in 7
New Market Street Holdings Limited (“7NMSH”) for a cash consideration of £6,700,000. 7NMSH owns a 100% shareholding
in 7 New Market Street Limited which in turn owns an office building in Birmingham, United Kingdom. The acquisition has
been completed on 09 May 2014.
The net assets acquired in the transactions were as follows:
GROUP
Investment property
Carrying
amount
RM
Fair
value
RM
36,789,000
36,789,000
Goodwill on consolidation
36,789,000
–
Purchase consideration
Cash and cash equivalents acquired
36,789,000
–
Net cash on acquisition of a subsidiary company
36,789,000
32. STATEMENTS OF CASH FLOW - CASH AND CASH EQUIVALENTS
GROUP
Cash and cash equivalents (Note 15)
Less: Cash and cash equivalents pledged as security
(Note 15)
2015
RM
2014
RM
2015
RM
COMPANY
2014
RM
67,229,016
52,363,234
25,875,102
11,474,941
(450,000)
66,779,016
(2,209,661)
50,153,573
(450,000)
25,425,102
(2,209,661)
9,265,280
33. DEFERRED TAXATION
The amounts of deferred tax assets and liabilities, after appropriate offsetting, are included in the statements of financial
position, as follows:
GROUP
Deferred tax assets
Deferred tax liabilities
Net position
2015
RM
3,483,911
(3,483,911)
2014
RM
2,268,402
(2,268,402)
–
ANNUAL REPORT 2015
–
95
33. DEFERRED TAXATION (cont’d)
The following are the movements of deferred tax assets and liabilities before offsetting:
Beginning of
the year
RM
Disposal of a
subsidiary
company
RM
Recognised in
the profit
or loss
RM
(Note 25)
End of the
year
RM
Deferred Tax Assets
Unused tax losses and unabsorbed capital
allowances
2,268,402
–
1,215,509
3,483,911
Deferred Tax Liabilities
2,268,402
–
1,215,509
3,483,911
–
–
–
–
GROUP
2015
Net Position
2014
Deferred Tax Assets
Unused tax losses and unabsorbed capital
allowances
2,665,594
(1,460,910)
1,063,718
2,268,402
Deferred Tax Liabilities
2,665,594
(1,460,910)
1,063,718
2,268,402
–
–
Net Position
34. RELATED PARTY TRANSACTIONS
GROUP
With associate company, PT. Gas Generators Indonesia
Purchase from joint venture
With joint venture, Fircroft Tanjung Sdn Bhd
Services rendered to
Interest income receivables
Services rendered by
96
–
–
2015
RM
2014
RM
–
(915,432)
–
146,318
–
5,264,824
–
(2,063,248)
The directors are of the opinion that all the transactions above have been entered into in the normal course of business and
have been established on terms and conditions that are not materially different from that obtainable in transactions with
unrelated parties.
35. OPERATING SEGMENTS
General Information
The information reported to the Group’s chief operating decision maker to make decisions about resources to be allocated
and for assessing their performance is based on the nature of the activities of the Group. The Group’s operating segments
are as follows:
(a) Products and services; and
(b) Engineered packages – engineering activities
Measurement of Reportable Segments
Segment information is prepared in conformity with the accounting policies adopted for preparing and presenting the
consolidated financial statements. Transactions between reportable segments are measured on the basis that is similar to
those external customers. Segment results are profit earned or loss incurred by each segment without allocation of finance
costs, share of profit/(loss) from joint ventures and income tax expense. There are no significant changes from prior financial
year in the measurement methods used to determine reported segment results.
All the Group’s assets are allocated to reportable segments other than assets used centrally for the Group, associate
companies, joint venture and current and deferred tax assets. Jointly used assets are allocated on the basis of the revenues
earned by individual segments.
All the Group’s liabilities are allocated to reportable segments other than liabilities incurred centrally for the Group, current
and deferred tax liabilities. Jointly incurred liabilities are allocated in proportion to the segment assets.
Geographical Information
The operating segments are not presented by geographical segment as all the foreign operations have been discontinued
and in the process of winding up. The newly acquired foreign operations have not commenced its business.
ANNUAL REPORT 2015
97
35. OPERATING SEGMENTS (cont’d)
GROUP
2015
Total
Total
Continuing Discontinued
Operations
Operations
RM
RM
Products
and Services
RM
Engineered
Packages
RM
Total
Operations
RM
29,051,071
31,554,971
60,606,042
48,711
60,654,753
(78,561,150)
4,807,382
(73,753,768)
(56,844)
6,041
(2,274,973)
(175,739)
–
–
–
(73,929,507)
(56,844)
6,041
(2,274,973)
(76,079,544)
(175,739)
(76,255,283)
Segment Revenue and Results
Segment Revenue
Revenue from all customers
Segment Results
Segment profit or loss
Finance costs
Zakat and taxation
Net loss for the year
Segment Assets and Liabilities
Assets
Segment assets
Associate companies
Joint venture
125,129,327
45,910,964
171,040,291
–
Total Group’s assets
Liabilities
Segment liabilities
Total Group’s liabilities
98
171,040,291
1,285
337,623
171,379,199
38,534,052
9,672,162
48,206,214
–
48,206,214
755,616
48,961,830
35. OPERATING SEGMENTS (cont’d)
GROUP
2014
Products
and Services
RM
Maintenance
Services
RM
Engineered
Packages
RM
49,690,731
24,200,200
33,453,831
844,149
8,638,384
Total
Total
Continuing Discontinued
Operations
Operations
RM
RM
Total
Operations
RM
107,344,762
107,561,811
Segment Revenue
and Results
Segment Revenue
Revenue from all
customers
Segment Results
Segment profit or loss
Finance costs
Share of profit of joint
venture
Zakat and taxation
Net (loss)/profit for the
year
(9,031,824)
217,049
450,709
(322,610)
3,772,868
–
4,223,577
(322,610)
76,582
(2,916,756)
–
–
76,582
(2,916,756)
(2,712,075)
3,772,868
1,060,793
–
238,480,807
1,285
331,582
Segment Assets
and Liabilities
Assets
Segment assets
Associate companies
Joint venture
190,877,144
–
47,603,663
238,480,807
Total Group’s assets
Liabilities
Segment liabilities
Total Group’s liabilities
238,813,674
32,808,174
–
13,265,698
46,073,872
–
46,073,872
2,161,750
48,235,622
ANNUAL REPORT 2015
99
36. FINANCIAL INSTRUMENTS
36.1 Classification of financial instruments
Financial assets and financial liabilities are measured on an ongoing basis either at fair value or at amortised cost. The
principal accounting policies in Note 3 to the Financial Statements describe how the classes of financial instruments are
measured, and how income and expense, including fair value gains or losses, are recognised. The following table analyses
the financial assets and liabilities in the statements of financial position by the class of financial instruments to which they
are assigned, and therefore by the measurement basis:
GROUP
2015
Financial Assets
Trade receivables
Other receivables, deposits and
prepayments
Amount owing by associate companies
Other investments
Trade payables
Loans and
Receivables
RM
AvailableFor-Sale
RM
Held-toMaturity
RM
Financial
Liabilities at
Amortised
Cost
RM
35,296,394
–
–
–
35,296,394
17,922,280
1,276
2,978,661
–
67,229,016
–
–
–
3,565,304
–
–
–
–
–
–
–
–
–
–
–
17,922,280
1,276
2,978,661
3,565,304
67,229,016
123,427,627
3,565,304
–
–
126,992,931
–
–
–
–
–
–
–
–
–
28,652,090
16,021,273
3,532,851
28,652,090
16,021,273
3,532,851
–
–
–
48,206,214
48,206,214
39,984,602
–
–
–
39,984,602
66,116,034
100,380
2,538,796
–
52,363,234
–
–
–
14,416,079
–
–
–
–
6,300,000
–
–
–
–
–
–
66,116,034
100,380
2,538,796
20,716,079
52,363,234
161,103,046
14,416,079
6,300,000
–
181,819,125
–
–
–
–
–
–
–
–
–
31,644,958
10,216,745
4,212,169
31,644,958
10,216,745
4,212,169
–
–
–
46,073,872
46,073,872
Total
RM
2014
Financial Assets
Trade receivables
Other receivables, deposits and
prepayments
Amount owing by associate companies
Other investments
Trade payables
100
36.
FINANCIAL INSTRUMENTS (cont’d)
36.2 Financial risk management objective and policies
The Group is mainly exposed to credit risk, liquidity risk and market risk (including foreign currency risk, interest rate
risk and equity price risk). The Group has formal risk management policies and guidelines, as approved by the Board of
Directors, which set out its overall business strategies, its tolerance for risks and its general risk management philosophy.
Such policies are monitored and undertaken by the Managing Director.
36.2.1Credit risk
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the
Group.
The carrying amounts of the financial assets recorded on the statements of financial position at the end of the reporting
period represent the Group’s maximum exposure to credit risk in relation to financial assets. No financial assets carry a
significant exposure to credit risk other than those disclosed in the notes.
The Group does not hold any collateral and thus, the credit exposure is continuously monitored by the directors.
Included in the Group’s trade receivables are a group of debtors that represented 45% (2014: 40%) of total trade
receivables. There are no concentrations of credit risk for other financial assets.
36.2.2Liquidity risk
The Group’s funding requirements and liquidity risk are managed with the objective of meeting business obligations on a
timely basis. The Group monitors its cash flows and ensures that sufficient funding is in place to meet the obligations as
and when they fall due.
The following table analyses the remaining contractual maturity for non-derivative financial liabilities. The tables have been
drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can
be required to pay.
GROUP
2015
Trade payables
Weighted
Average
Effective
Interest Rate
%
Not Later
than 1 Year
RM
Later
than 1 Year
RM
Total
RM
–
2.78 to 9.79
28,652,090
696,459
–
2,836,392
28,652,090
3,532,851
29,348,549
2,836,392
32,184,941
31,644,958
713,102
–
3,499,067
31,644,958
4,212,169
32,358,060
3,499,067
35,857,127
2014
Trade payables
–
2.78 to 9.79
ANNUAL REPORT 2015
101
36.
36.2.3Market risk
Foreign currency risk
The Group incurs foreign currency risk on transactions that are denominated in foreign currencies. The currencies giving
rise to this risk are primarily the Great Britain Pound (“GBP”), United States Dollar (“USD”), Australia Dollar (“AUD”),
Singapore Dollar (“SGD”) and EURO. The Group has not entered into any derivative instruments for hedging or trading
purposes as the net exposure to foreign currency risk is not significant. The carrying amounts of the Group’s foreign
currency denominated financial assets and financial liabilities at the end of the reporting period are as follows:
Financial Assets
2015
Trade receivables
GBP
RM
USD
RM
AUD
RM
SGD
RM
EURO
RM
Total
RM
182,958
217,512
9,726,915
18,550,434
–
986,770
142,605
101,073
524,379
2,983,013
10,576,857
22,838,802
400,470
28,277,349
986,770
243,678
3,507,392
33,415,659
344,277
491,203
15,002,562
25,706,943
–
892,539
124,276
–
3,102,129
3,854,151
18,573,244
30,944,836
835,480
40,709,505
892,539
124,276
6,956,280
49,518,080
GBP
RM
USD
RM
AUD
RM
SGD
RM
EURO
RM
Total
RM
843,385
3,022,480
–
18,133
662,641
4,546,639
598,378
9,984,468
–
–
364,467
10,947,313
2014
Trade receivables
2015
Trade payables
2014
Trade payables
Certain of the other foreign currencies are not presented as the amounts are not material.
102
36.
36.2.3Market risk (cont’d)
Foreign currency risk sensitivity
A 10% strengthening of Ringgit Malaysia against the following foreign currencies at the end of the reporting period would
increase/(decrease) the loss before tax and other comprehensive income/the profit before tax and other comprehensive
loss by the amounts shown below. This analysis assumes that all other variables remain unchanged.
2015
Loss before tax
Other comprehensive income
GBP
RM
USD
RM
AUD
RM
SGD
RM
EURO
RM
Total
RM
(44,292)
(652,438)
2,525,487
–
98,677
–
22,555
–
284,475
–
2,886,902
(652,438)
(696,730)
2,525,487
98,677
22,555
284,475
2,234,464
(23,710)
(186,210)
(3,072,504)
–
(89,254)
–
(12,428)
–
(659,181)
–
(3,857,077)
(186,210)
(209,920)
(3,072,504)
(89,254)
(12,428)
(659,181)
(4,043,287)
2014
Profit before tax
Other comprehensive loss
A 10% weakening of Ringgit Malaysia against the above foreign currencies at the end of the reporting period would
have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other
variables remain unchanged.
Interest rate risk
The Group obtains financing through leasing arrangement and other financial liabilities. The Group’s policy is to obtain the
borrowings with the most favourable interest rates in the market.
The Group constantly monitors its interest rate risk and does not utilise interest swap contracts or other derivative
instruments for trading or speculative purposes. At the end of the reporting period, there were no such arrangements,
interest rate swap contracts or other derivative instruments outstanding.
ANNUAL REPORT 2015
103
36.
36.2.3Market risk (cont’d)
Interest rate risk (cont’d)
The carrying amounts of the Group’s financial instruments that are exposed to interest rate risk are as follows:
Weighted
Average
Effective
Interest Rate
%
2015
Fixed
Rate
RM
Floating
Rate
RM
2014
Fixed
Rate
RM
Floating
Rate
RM
3.00 to 3.10
53,870
–
20,226,182
–
2.80 to 3.17
27,555,019
–
40,895,214
–
27,608,889
–
61,121,396
–
3,532,851
–
4,212,169
–
Financial Assets
Other investments
Fixed deposits with licensed
banks
Hire purchase and finance lease
payables
2.78 to 9.79
Financial instruments at fixed rates are fixed until the maturity of the instruments. The other financial instruments of the
Group that are not included in the abovementioned table are not subject to interest rate risks.
Equity price risk
Equity price risk is the risk that the value of an equity instrument will fluctuate as a result of changes in market prices. The
Group and the Company are exposed to equity price risk mainly through the Group’s investment in quoted shares.
If the unit prices for quoted ‘available-for-sale’ financial assets increased by 10%, with all other variables being held
constant, the Group’s ‘available-for-sale’ financial assets reserves at the end of the reporting period would increase
approximately by RM357,000 (2014: RM1,440,000) respectively.
If the unit prices for quoted ‘available-for-sale’ financial assets decreased by 10%, with all other variables being held
constant, it would have the equal but opposite effect on the amounts shown above.
36.3 Fair value of financial assets and financial liabilities
The carrying amounts of financial assets and financial liabilities, as reported in the financial statements, approximate their
respective fair values.
104
36. FINANCIAL INSTRUMENTS (cont’d)
36.4 Determination of fair value
The carrying amounts of the financial assets and financial liabilities are recognised at their fair values, except for the
financial assets and financial liabilities which are recognised at cost and amortised cost after initial recognition. However,
the directors are of the opinion that the carrying amounts do not materially different from their fair values.
Valuation techniques and significant assumptions used in determining fair value of financial assets and financial liabilities
recognised at amortised cost or cost after initial recognition are as follows:
Financial assets and liabilities with published price in active markets
The fair values of financial assets and financial liabilities traded on active markets are determined with reference to their
quoted market price.
Trade and other receivables, fixed deposits, cash and bank balances and trade and other payables
The carrying amounts approximate the fair values due to their short-term nature.
Non-current borrowings
Non-current borrowings are determined by discounting the relevant cash flows using the current interest rates for similar
instruments at the end of the reporting period and their carrying amounts are expected to approximate fair values.
37. OPERATING LEASE COMMITMENTS
The Group has lease commitments in respect of rented premises which are classified as operating leases. A summary of
the non-cancellable long-term commitments is as follows:
GROUP
Within 1 year
2015
RM
2014
RM
381,024
762,048
38. AUTHORISATION FOR ISSUE OF THE FINANCIAL STATEMENTS
The financial statements of the Company were authorised for issue by the Board of Directors on 28 March 2016.
ANNUAL REPORT 2015
105
39. SUPPLEMENTARY INFORMATION – BREAKDOWN OF ACCUMULATED LOSSES INTO REALISED AND
UNREALISED
The breakdown of the accumulated losses of the Group and of the Company as at 31 December 2015 into realised and
unrealised losses is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March
2010 and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits
or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the
Malaysian Institute of Accountants.
GROUP
2015
RM
Total accumulated losses:
- Realised
- Unrealised
106
2014
RM
2015
RM
COMPANY
2014
RM
(118,171,357)
–
(41,916,074)
–
(42,643,900)
–
(46,377,243)
–
(118,171,357)
(41,916,074)
(42,643,900)
(46,377,243)
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the Twelfth Annual General Meeting of the Company will be held at Kenanga Room,
Kelab Darul Ehsan, Taman Tun Abdul Razak, Jalan Kerja Air Lama, 68000 Ampang Jaya, Selangor Darul Ehsan on Friday,
20 May 2016 at 9.00 a.m. to transact the following businesses:
AGENDA
1.
To receive the Audited Financial Statements for the financial year ended 31 December 2015 and the Reports
of Directors and Auditors thereon.
2.
To approve the payment of Directors’ fee.
3.
To re-elect the following Directors retiring in accordance with Article 103 of the Company’s Articles of
Association:-
4.
Resolution 1
i) Dato’ Maheran bte Mohd Salleh
ii) Datuk Suraj Singh Gill
Resolution 2
Resolution 3
To appoint Auditors and to authorise the Directors to determine their remuneration.
Resolution 4
Notice of Nomination pursuant to Section 172(11) of the Companies Act, 1965 has been received by the
Company for the nomination of Messrs. SJ Grant Thornton who have given their consent to act as auditors
of the Company and of the intention to propose the following resolution:“THAT Messrs. SJ Grant Thornton be and are hereby appointed as auditors of the Company in place of
the retiring auditors, Messrs. AljeffriDean and to hold office until the conclusion of the next Annual General
Meeting at a remuneration to be determined by the Directors.”
5.
As Special Business to consider and if thought fit, to pass the following Ordinary Resolution, with or without
modifications:ORDINARY RESOLUTION
AUTHORITY TO ISSUE SHARES
“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised Resolution 5
to issue shares in the Company at any time until the conclusion of the next Annual General Meeting and
under such terms and conditions and for such purposes as the Directors may, in their absolute discretion,
deem fit provided that the aggregate number of shares to be issued does not exceed 10 per centum of
the issue share capital of the Company for the time being, subject always to the approval of all relevant
regulatory bodies being obtained for such issue and allotment.”
ANNUAL REPORT 2015
107
NOTICE OF ANNUAL GENERAL MEETING (Cont’d)
ORDINARY RESOLUTION - PROPOSED NEW SHAREHOLDERS’ MANDATE FOR RECURRENT
RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE
“THAT, subject to the Companies Act, 1965 (“Act”), the Memorandum and Articles of Association of the Resolution 6
Company and the Bursa Malaysia Securities Berhad Main Market Listing Requirements, approval be and is
hereby given to the Company and its subsidiaries to enter into all recurrent related party transactions of a
revenue or trading nature with Blue Ocean Legacy Sdn. Bhd., CP Energy & Services Sdn. Bhd. and Crystal
ZVS Holdings Sdn. Bhd. as specified in Section 2.5 of Proposed Shareholders’ Mandate in the Circular to
Shareholders dated 27 April 2016 (“RRPTs”) provided that such transactions are:
(i) recurrent transactions of a revenue or trading nature;
(ii) necessary for the day-to-day operations;
(iii) carried out in the ordinary course of business on normal commercial terms which are not more
favourable to the Related Parties than those generally available to the public; and
(iv) are not to the detriment of the minority shareholders,
(“RRPT Mandate”).
AND THAT such approval shall continue to be in force until:(a)
the conclusion of the next Annual General Meeting of the Company, at which time it will lapse,
unless by a resolution passed at that meeting, the authority is renewed; or
the expiration of the period within which the next Annual General Meeting of the Company is
required to be held pursuant to Section 143(1) of the Act (but shall not extend to such extension
as may be allowed pursuant to Section 143(2) of the Act); or
revoked or varied by a resolution passed by shareholders in a general meeting; or
(b)
(c)
whichever is earlier; and the aggregate value of the RRPTs be disclosed in the annual report of the Company.
AND THAT the Directors of the Company be and are hereby authorised to complete and do all such acts
and things as they may consider expedient or necessary to give full effect to the RRPT Mandate.”
6.
To transact any other business of which due notice shall have been given.
BY ORDER OF THE BOARD
SEOW FEI SAN
KANG SHEW MENG
Secretaries
Petaling Jaya
27 April 2016
108
NOTICE OF ANNUAL GENERAL MEETING (Cont’d)
NOTES:
1. Only depositors whose names appear on the Record of Depositors as at 12 May 2016 shall be entitled to attend, speak and
vote at the said meeting or appoint proxies to attend, speak and vote on his/her behalf.
2. A member entitled to attend and vote at the meeting shall not be entitled to appoint more than two (2) proxies to attend and
vote in his/her stead. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the
Companies Act, 1965 shall not apply.
3. Where a member appoints two (2) proxies, the appointment shall be invalid unless he/she specifies the proportions of his/
her shareholding to be represented by each proxy.
4. Where a Member is an authorised nominee as defined under the Central Depositories Act, it may appoint one (1) proxy in
respect of each Securities Account it holds with ordinary shares of the Company standing to the credit of the said Securities
Account.
5. Where a Member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for
multiple beneficial owners in one securities account known as an omnibus account, there is no limit to the number of proxies
which the Exempt Authorised Nominee may appoint in respect of each omnibus account its holds.
6. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his/her attorney duly authorised
in writing or, if the appointer is a corporation, either under its Common Seal or under the hand of its officer or attorney duly
authorised.
7. The instrument appointing a proxy and the power of attorney or other authority (if any), under which it is signed or a notarially
certified copy thereof, must be deposited at the Company’s Share Registrar’s Office at Tricor Investor & Issuing House
Services Sdn Bhd, Unit 32-01, Level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi,
59200 Kuala Lumpur, not less than forty eight hours (48) hours before the time appointed for holding the meeting or any
adjournment thereof.
Explanatory notes on Special Business:
ORDINARY RESOLUTION 5 - AUTHORITY TO ISSUE SHARES
At last year’s Eleventh Annual General Meeting held on 25 June 2015, authority was given to Directors to allot and issue no more
than 10% of the issued share capital of the Company. As at the date of this notice, no new shares in the Company were issued
pursuant to the authority granted, accordingly the mandate will lapse at the conclusion of the Twelfth Annual General Meeting.
As such, the Board would like to seek for a renewal of the mandate.
The proposed Ordinary Resolution 5, if passed, will give the Directors of the Company, from the date of the above Annual
General Meeting, authority to allot and issue shares from the unissued capital of the Company for such purposes as the Directors
may deem fit and in the interest of the Company. The authority will provide flexibility to the Company for any possible fund raising
activities, including but not limited to further placing of shares for purpose of funding future investment project(s), working capital
and/or acquisitions.
The authority, unless revoked or varied by the Company in general meeting, will expire at the conclusion of the next Annual
General Meeting of the Company.
ORDINARY RESOLUTION 6 - PROPOSED NEW SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY
TRANSACTIONS OF A REVENUE OR TRADING NATURE
The proposed Ordinary Resolution 6, if passed, will enable the Company and/or its subsidiaries to enter into recurrent transactions
involving the interests of related parties, which are of a revenue or trading nature and necessary for the Group’s day-to-day
operations, subject to the transactions being carried out in the ordinary course of business and on terms not to the detriment
of the minority shareholders of the Company. Further information on the Proposed New Shareholders’ Mandate for Recurrent
Related Party Transactions of a Revenue or Trading Nature is set out in the Circular to Shareholders dated 27 April 2016, which
is despatched together with the Company’s Annual Report 2015.
ANNUAL REPORT 2015
109
NOTICE OF NOMINATION OF MESSRS. SJ GRANT
THORNTON
The Directors
Tanjung Offshore Berhad
802, 8th Floor, Block C
Kelana Square
17 Jalan SS7 /26
47301 Petaling Jaya
Selangor Darul Ehsan
Dear Sirs,
NOTICE OF NOMINATION OF MESSRS. SJ GRANT THORNTON
I, being a shareholder of Tanjung Offshore Berhad hereby give notice, pursuant to Section 172(11) of the Companies Act, 1965 of
my nomination of Messrs. SJ Grant Thornton as auditors of the Company in place of the retiring auditors and of my intention to
propose the following resolution as an ordinary resolution at the next Annual General Meeting of the Company:
RESOLUTION
“THAT Messrs. SJ Grant Thornton, be and are hereby appointed Auditors of the Company in place of the retiring auditors,
Messrs. AljeffriDean to hold office until the conclusion of the next Annual General Meeting at a remuneration to be determined
by the Directors.”
Dated this 29th day of March, 2016.
110
LIST OF PROPERTIES
Title Identification /
Postal Address
Approximate Age of
Building / Tenure /
Date of Expiry of Lease
Land Area /
(Built-Up Area)
sq. ft.
Net Book Value As
At 31 December
2015 (RM)
GRN 38601 Lot No.
25929 Mukim of Setapak,
District and State of
Wilayah Persekutuan /
No. 8-3, Jalan Puncak
Setiawangsa 4, 54200
Kuala Lumpur; and
Age of building : 12 years
Tenure : Freehold
1,760 / (4,634)
493,475.46
GRN 38600 Lot No.
No. 10, Jalan Puncak
Setiawangsa 4, Taman
Setiawangsa, 54200
Kuala Lumpur
Tenure : Freehold
1,760 / (4,634)
576,000.12
Tenure : Freehold
1,760 / (4,634)
1,011,904.78
1,760 / (4,634)
996,000.00
GRN 38599 Lot No.
Setiawangsa 4, 54200
Kuala Lumpur; and
GRN 38598 Lot No.
Setiawangsa 4, Taman
Setiawangsa, 54200
Kuala Lumpur
Description And
Existing Use /
Ownership
3-storey shopoffices
owned by TOS
Tenure : Freehold
ANNUAL REPORT 2015
111
LIST OF PROPERTIES (Cont’d)
Title Identification /
Postal Address
Description And
Existing Use /
Ownership
Approximate Age of
Building / Tenure /
Date of Expiry of Lease
Land Area /
(Built-Up Area)
sq. ft.
Net Book Value As
At 31 December
2015 (RM)
PN 4114, Lot No. 3790
(formerly known as HS(D)
2670, PT 4199), Mukim
of Teluk Kalung, District
of Kemaman, State of
Terengganu / Lot D1
Kawasan MIEL Teluk
Kalung 24007 Kemaman
Terengganu Darul Iman
A factory lot used as
the Group’s Kemaman
Operation Centre
providing complete
maintenance services
Tenure : 60-year
leasehold expiring
22.8.2057
21,427 / (8,626)
696,685.89
PN 4115, Lot No. 3791
(formerly known as HS(D)
2671, PT 4200), Mukim
of Teluk Kalung, District
of Kemaman, State of
Terengganu / Lot D2
Kawasan MIEL Teluk
Kalung 24007 Kemaman
Terengganu
A factory lot used as
the Group’s Kemaman
Operation Centre
providing complete
maintenance services.
Age of building : 3.5 years
Tenure : 60-year
leasehold expiring
22.8.2057
16,017 / (8,626)
657,980.99
HM Land Registry,
WM230856, SP 0687,
Section S, Britannia
House, 7 New Market
Street (50 Great Charles
Street) Queensway, West
Midlands, Birmingham B3
2LT
8 storey of
commercial office
building with ground
floor commercial
space and 18 car
parking spaces
Tenure: Freehold
8276 / (50,088)
26,618,655
112
ANALYSIS OF SHAREHOLDINGS
As at 8 April 2016
DISTRIBUTION OF SHAREHOLDINGS
Size of holding
1 - 99
100 - 1,000
1,001 - 10,000
10,001 - 100,000
100,001 - 18,953,413 ( * )
18,953,414 and above ( ** )
Total
No. of
Shareholders
% of
Shareholders
No. of
Shares
% of Issued
Share Capital
135
525
2,429
1,622
297
4
5,012
2.693
10.474
48.463
32.362
5.925
0.079
100.000
3,595
355,441
14,072,105
55,879,516
194,496,829
114,260,800
379,068,286
0.000
0.093
3.712
14.741
51.309
30.142
100.000
No. of Shares
% of
Issued Share
Capital**
36,000,000
30,739,000
28,220,000
19,301,800
13,134,800
11,295,700
9.496
8.109
7.444
5.091
3.465
2.979
9,755,100
5,900,000
5,500,000
2.573
1.556
1.450
4,915,000
1.296
4,460,000
4,359,700
4,316,300
1.176
1.150
1.138
3,642,900
3,387,600
0.961
0.893
3,236,100
0.853
3,087,000
0.814
3,060,000
2,797,000
2,617,900
2,139,900
0.807
0.737
0.690
0.564
Remark:* - Less than 5% of issued shares
** - 5% and above of issued shares
Total issued shares as at 08/04/2016 : 381,545,786
Treasury shares as at 08/04/2016 : 2,477,500
‘Adjusted’ capital after netting treasury shares as at 08/04/2016 : 379,068,286
THIRTY LARGEST SHAREHOLDERS
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
RAHMANDIN @ RAHMANUDIN BIN MD SHAMSUDIN
LEMBAGA TABUNG HAJI
TAN KEAN SOON
ANUGERAH BAKTI SUPPLIES SDN BHD
ABYSSINA RESOURCES (M) SDN BHD
MAYBANK NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR GRACE VUN SIAW NEI
NORLIYAH BINTI JAAFAR
NORHAFIZAH BT MOHD NORDIN
ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR CAROL VUN ON NEI (8078831)
PUBLIC NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR JESSIE TANG (E-KKU)
NIK NORZRUL THANI BIN N.HASSAN THANI
NG BOO KEAN @ NG BEH KIAN
AMSEC NOMINEES (TEMPATAN) SDN BHD
AMTRUSTEE BERHAD FOR APEX DANA AL-SOFI-I (UT-APEX-SOFI)
CORPORATE ADVISORY AND RE-ENGINEERING SERVICES SDN BHD
AMSEC NOMINEES (TEMPATAN) SDN BHD
AMTRUSTEE BERHAD FOR APEX DANA AL-FAIZ-I (UT-APEX-FAIZ)
PLEDGED SECURITIES ACCOUNT FOR TEOH PEK WEI
HLB NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR TAN CHING LING
KVC VALVE (M) SDN BHD
TAY HOCK TIAM
LIM GAIK BWAY @ LIM CHIEW AH
PLEDGED SECURITIES ACCOUNT FOR CAROL VUN ON NEI
ANNUAL REPORT 2015
113
ANALYSIS OF SHAREHOLDINGS (Cont’d)
THIRTY LARGEST SHAREHOLDERS (cont’d)
Name
22
23
24
25
26
27
28
29
30
ROSLINA BINTI TAIB
LEUNG KIT MAN
PTS OFFSHORE & MARINE SDN BHD
CITIGROUP NOMINEES (ASING) SDN BHD
CBNY FOR DFA EMERGING MARKETS SMALL CAP SERIES
TAN ENG HEONG
TAN BOON HAR
PTS RESOURCES SDN BHD
PLEDGED SECURITIES ACCOUNT FOR SHARON SURAYA ABDULLAH
CITIGROUP NOMINEES (ASING) SDN BHD
CBNY FOR DIMENSIONAL EMERGING MARKETS VALUE FUND
No. of Shares
% of
Issued Share
Capital**
1,957,500
1,830,000
1,791,000
1,776,400
0.516
0.482
0.472
0.468
1,700,000
1,650,000
1,581,000
1,569,900
0.448
0.435
0.417
0.414
1,556,500
0.410
SUMMARY
TOTAL NO. OF HOLDERS
TOTAL HOLDINGS
TOTAL PERCENTAGE (%)
:
:
:
30
217,278,100
57.318
TOTAL ISSUED SHARES AS AT 8 APRIL 2016
TREASURY SHARES AS AT 8 APRIL 2016
‘ADJUSTED’ CAPITAL AFTER NETTING TREASURY SHARES AS AT 8 APRIL 2016
:
:
:
381,545,786
2,477,500
379,068,286
SUBSTANTIAL SHAREHOLDERS AS AT 8 APRIL 2016
(as per Register of Substantial Shareholders)
Name
Direct
Encik Rahmandin @ Rahmanudin bin Md. Shamsudin
Lembaga Tabung Haji
37,183,900
28,220,000
30,739,000
No. of Shares held
%
Indirect
9.81
7.44
8.11
%
–
–
–
–
–
–
No. of Shares held
%
Indirect
%
DIRECTORS’ SHAREHOLDINGS AS AT 8 APRIL 2016
(as per Register of Directors’ Shareholdings)
Name
Direct
Encik Rahmandin @ Rahmanudin bin Md. Shamsudin
Datuk Dr. Nik Norzrul bin N. Hassan Thani
Dato’ Maheran bte Mohd Salleh
Ms Tan Sam Eng
Datuk Syed Hussian Syed Junid
37,183,900
28,220,000
4,460,000
–
–
70,000
–
9.81
7.44
1.18
–
–
0.02
–
–
2,612,000 (a)
4,190,000 (b)
4,190,000 (b)
–
–
–
–
0.69
1.11
1.11
–
–
–
(a) Deemed interest by virtue of his spouse and children’s interest pursuant to Section 134(12) of the Companies Act, 1965.
(b) Deemed interest by virtue of his / her interests in Abyssina Resources (M) Sdn. Bhd. pursuant to Section 6A of the Companies
Act, 1965.
114
(Incorporated in Malaysia under the Companies Act, 1965)
FORM OF PROXY
I/We
NRIC No./Company No.
of
being a Member/Members of Tanjung Offshore Berhad
(“Company”), hereby appoint of or failing him/her,
of
as my/our proxy to vote for me/us and on my/our behalf at Twelfth Annual General Meeting
of the Company to be held at Kenanga Room, Kelab Darul Ehsan, Taman Tun Abdul Razak, Jalan Kerja Air Lama, 68000
Ampang Jaya, Selangor Darul Ehsan on Friday, 20 May 2016 at 9.00 a.m. and at any adjournment thereof in the manner as
indicated below:ORDINARY RESOLUTION
FOR
AGAINST
Resolution No. 1
Resolution No. 2
Resolution No. 3
Resolution No. 4
Resolution No. 5
Resolution No. 6
(Please indicate with an “X” in the spaces provided on how you wish your vote to be cast. In the absence of specific direction,
your proxy will vote or abstain as he / she thinks fit)
Signed this
day of
2016.
No. of Shares Held
Signature of Shareholder or Common Seal
Notes:
1. Only depositors whose names appear on the Record of Depositors as at 12 May 2016 shall be entitled to attend, speak and vote at the said meeting or appoint
proxies to attend, speak and vote on his/her behalf.
2. A member entitled to attend and vote at the meeting shall not be entitled to appoint more than two (2) proxies to attend and vote in his/her stead. A proxy may
but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply.
3.Where a member appoints two (2) proxies, the appointment shall be invalid unless he/she specifies the proportions of his/her shareholding to be represented
by each proxy.
4. Where a Member is an authorised nominee as defined under the Central Depositories Act, it may appoint one (1) proxy in respect of each Securities Account it
holds with ordinary shares of the Company standing to the credit of the said Securities Account.
5. Where a Member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities
account known as an omnibus account, there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each
omnibus account its holds.
6.The instrument appointing a proxy shall be in writing under the hand of the appointer or of his/her attorney duly authorised in writing or, if the appointer is a
corporation, either under its Common Seal or under the hand of its officer or attorney duly authorised.
7. The instrument appointing a proxy and the power of attorney or other authority (if any), under which it is signed or a notarially certified copy thereof, must be
deposited at the Company’s Share Registrar’s Office at Tricor Investor & Issuing House Services Sdn Bhd, Unit 32-01, Level 32, Tower A, Vertical Business
Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200 Kuala Lumpur, not less than forty eight hours (48) hours before the time appointed for holding the
meeting or any adjournment thereof.
fold here
fold here
STAMP
The Registrar
TANJUNG OFFSHORE BERHAD
(Company No.: 662315-U)
Unit 32-01, Level 32
Tower A, Vertical Business Suite
Avenue 3, Bangsar South
No. 8 Jalan Kerinchi
59200 Kuala Lumpur
fold here
Suite 5-1, Level 5, Wisma UOA Damansara II,
No. 6, Changkat Semantan,
Damansara Heights, 50490 Kuala Lumpur.
Tel: +60-3-2087 7000 Fax: +60-3-2087 7040
www.tanjungoffshore.com.my
.

annual report 2015 - Tanjung Offshore Berhad

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