Unwavered - Globaltec Formation Berhad

Transcription

GLOBALTEC FORMATION BERHAD (953031-A)
Unwavered
www.globaltec.com.my
and
AN
Resilient
NU
AL REPORT
ANNUAL REPORT 2013
(953031-A)
(Incorporated in Malaysia under the Companies Act, 1965)
Wisma AIC, Lot 3, Persiaran Kemajuan, Seksyen 16, 40200 Shah Alam, Selangor Darul Ehsan, Malaysia
Tel: +603-5543 1413 Fax: +603-5543 2045
(953031-A)
1
20
3
Cover
Rationale
Globaltec Formation Berhad Group was formed with a vision to create an enlarged Group that has stronger balance
sheet position and financial resources. The Group faced a challenging business condition in the financial year
2013, nevertheless, the Board of Directors (“Board”) and management remain unwavered by the adverse impact
encountered.
The financial reserves and expertise in diverse businesses as well as regional business networks and presence remain
the key strength of the Group. Your Board and management firmly believe in the Group’s resilience which will propel
the Group towards achieving its vision when the business condition improves.
contents
CORPORATE PROFILE
Globaltec in Brief 02
04
Corporate Information 05
Group Structure 06
Performance Highlights
CORPORATE REPORTS
Board of Directors 08
10
Directors’ Profile
Chairman’s Message
Business Review
16
21
CORPORATE GOVERNANCE
Corporate Governance Statement 25
Audit Committee Report 35
Statement on Risk Management
and Internal Control 40
FINANCIAL REPORT & OTHER INFORMATION
Financial Statements 42
Other Information Required under the
Listing Requirements of Bursa Malaysia
Securities Berhad
135
Statistics on Shareholdings 137
Properties of the Group 140
Notice of the Second Annual General Meeting 145
Proxy Form
globaltec formation berhad (953031-A) • Annual Report 2013
globaltec IN BRIEF
Business overview
Globaltec Formation Berhad’s business comprises two main segments, namely the Integrated Manufacturing Services
(“IMS”) Segment and the Resources Segment.
The IMS Segment offers the following multi-disciplinary manufacturing services:
•
•
•
•
•
•
Precision machining and assembly of radio frequency microwave, photonics and medical components;
Precision stamping;
Design and fabrication of precision tooling and automation equipment;
Assembly and test of semiconductor and smart card devices;
Design, manufacturing and assembly of automotive components; and
Injection moulding and blow moulding.
The Resources Segment is involved in oil palm plantations and coal mining. As at todate, the extraction and marketing
of coal has yet to commence.
100%
100%
100%
Annual Report 2013 • globaltec formation berhad (953031-A)
globaltec in brief (cont’d)
IMS SEGMENT
precision
machining, STAMPING & TOOLING
semiconductor
Automotive Components
Design & Manufacturing
Resources SEGMENT
Oil palm plantations
Coal mining
performance highlights
FY 2013
RM’000
FY 2012 (1)
RM’000
Revenue 387,875
(Loss)/Profit
before taxation
(15,043)
(20,658)
(Loss)/Profit
after taxation (Loss)/profit attributable to owners of the Company (“Net (Loss)/Profit”)
(20,698)
Net
(Loss)/earnings per share (sen) – basic (0.392) Net
Property,
plant and equipment 209,455
Total
assets 554,541 Shareholders’
funds 382,311
tangible assets Net
275,716 Total
debt
70,658 Total
debt/Shareholders’ funds
0.18
(3.88)
Pre-tax
(Loss)/profit/Revenue (%) (2.85)
Pre-tax
(Loss)/profit/Share capital (%) (2.71)
Pre-tax
(Loss)/profit/Total assets (%)
(3.93)
Pre-tax
(Loss)/profit/Shareholders’ funds (%)
Current ratio (times)
1.78 FY
2013
Revenue
RM’000
Net Profit/(Loss)
RM’000
220,519
13,933 11,871
12,217
0.438
225,585 *
585,322 *
403,734 *
275,918 *
70,084
0.17
6.32
2.64
2.38 *
3.45 *
1.61 *
Total Assets
RM’000
IMS:
• Precision Machining, Stamping & Tooling
151,419
12,216
• Semiconductor
54,153
(10,178)
•
Automotive Components Design & Manufacturing
176,012
(1,056)
180,103
92,835
189,467
IMS:
Total
Resources
– Oil Palm Plantations
Investment
Holding
462,405
68,627
23,509
381,584
982
6,232
(46)
59
(21,634)
Total
387,875
(20,698)
554,541
FY
2012 (1)
Revenue
RM’000
Net Profit/(Loss)
RM’000
Total Assets
RM’000
IMS:
• Precision Machining, Stamping & Tooling
• Semiconductor
• Automotive Components Design & Manufacturing
86,081
14,114
188,156 *
118,044
113,130 *
(6,282)
13,126
190,454 *
(408)
IMS: Total
Resources – Oil Palm Plantations
Investment Holding
217,251
555
2,713
7,424
62
4,731
491,740*
69,162
24,420
Total
220,519
12,217
585,322 *
FY2012 represents 18-month financial period ended 30 June 2012 and comprises the consolidated financial results of:
• AIC Group for the eighteen (18) months financial period from 1 January 2011 to 30 June 2012; and
• Jotech Group and AutoV Group for the period from 25 May 2012, being the completion date of the Merger, to 30 June 2012.
* Restated.
(1)
corporate information
BOARD OF DIRECTORS
Datuk Dr. Goh Tian Chuan, JP
Group Executive Chairman
Kong Kok Keong
Group Deputy Executive Chairman/Executive Chairman of AutoV Group
Ooi Boon Pin
Executive Director/ CEO of AIC Group
Lim Siok Hui
Chen Heng Mun
Ash’ari bin Ayub
Ng Kok Hok
Wong Zee Shin
Mej Jen Dato’ Mokhtar
bin Perman (Rtd)
Executive Director/CEO of Jotech Group
AUDIT COMMITTEE
Executive Director/Group Finance Director
Independent Non-Executive Director
Non-Independent Non-Executive Director
NOMINATING COMMITTEE
REMUNERATION COMMITTEE
Ash’ari bin Ayub (Chairman)
Ng Kok Hok (Chairman)
Ng Kok Hok
Ash’ari bin Ayub
Wong Zee Shin
Wong Zee Shin
Ng Kok Hok
Wong Zee Shin
COMPANY SECRETARIES Solicitors
EXTERNAL AUDITOR
Seow Fei San (MAICSA 7009732)
KPMG
Law Mee Poo (MAICSA 7033423)
Leong Lup Yan (MIA 11572)
INTERNAL AUDITOR
Columbus Advisory Sdn Bhd
REGISTERED OFFICE SHARE REGISTRAR
Wisma AIC
Tricor Investor Services Sdn Bhd
Lot 3, Persiaran Kemajuan
Level 17, The Gardens North Tower
Sekysen 16
Mid Valley City, 40200 Shah Alam
Lingkaran Syed Putra
Selangor Darul Ehsan
59200 Kuala Lumpur
Tel: +603-5543 1413
Tel: +603-2264 3883
Fax: +603-5543 2045
Fax: +603-2282 1886
Lee Choon Wan & Co.
Mah-Kamariyah & Philip Koh
Teh & Lee
PRINCIPAL BANKERS/FINANCIER
Bank Islam Malaysia Berhad
CIMB Bank Berhad
Citibank Berhad
Malaysian Industrial Development Finance Berhad
Malayan Banking Berhad
OCBC Bank (Malaysia) Berhad
RHB Bank Berhad
United Overseas Bank (Malaysia) Berhad
group structure
Group structure (cont’d)
Board of Directors
1
2
3
1. Datuk Dr. Goh Tian Chuan, JP
2.Kong Kok Keong
Group Deputy Executive Chairman
3.Ooi Boon Pin
Executive Director
4. Lim Siok Hui
Executive Director
4
board of directors (cont’d)
5. Chen Heng Mun
Executive Director
5
6.Ash’ari bin Ayub
Independent Director
7. Ng Kok Hok
8. Wong Zee Shin
9. Mej Jen Dato’ Mokhtar B. Perman (Rtd)
Non-Independent Director
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7
8
9
10
directors’ profile
Group Executive Chairman, Malaysian, aged 52
is our founder and Group
Executive Chairman. He was
appointed to our Board of
Directors (“Board”) on 20 July
2011 and as a member of the
Remuneration Committee on 28
March 2012.
On 31 May 2012, a merger exercise which integrated the
then AIC Corporation Berhad (“AIC”), Jotech Holdings
Berhad
(“Jotech”)
and
AutoV
Corporation
Berhad
respective group of companies under our Company
(“Merger”) was completed. Datuk Dr. Goh Tian Chuan, JP
was the Executive Chairman of AIC and Jotech. He was
appointed to the board of directors of AIC on 15 June 2006.
He was also appointed as a member of the Remuneration
Committee of AIC on 31 July 2006. He was redesignated as
Executive Chairman of AIC on 2 July 2007. Datuk Dr. Goh
Tian Chuan, JP was appointed to the board of directors of
Jotech on 1 June 2006 and was also the Chairman of the
Remuneration Committee of Jotech.
Datuk Dr. Goh Tian Chuan, JP graduated from the Royal
Malaysia Police College in 1982 and was a Senior Police
As for Nakamichi Corporation Berhad, Datuk Dr. Goh
Officer attached to the police headquarters in Kepayan,
Tian Chuan, JP was appointed to the board of directors
Kota Kinabalu, Sabah for thirteen (13) years. He started
on 8 July 2008 and was later redesignated as Executive
his own business after leaving the police force in 1994. His
Chairman on 3 February 2009. He was redesignated back
businesses at present, apart from his investments in several
as Non-Executive Chairman of Nakamichi Corporation
public listed companies covers a multitude of industries
Berhad (“NCB”) on 1 November 2011 and resigned on
from investment holding (earning rental) to plantation and
2 December 2011.
property development and gaming businesses. He joined
Everise Ventures Sdn Bhd, a subsidiary of Repco Holdings
On December 2011, Datuk Dr Goh Tian Chuan, JP was
Berhad, in October 1995 as President. In September 2000,
conferred with the title Justice of the Peace by the Tuan
he was appointed by Danaharta Berhad as Non-Executive
Yang Terutama of Malacca and on 7 April 2012, he was
and Non-Independent Director of Repco Holdings Berhad
conferred Honorary Doctorate of Civil Laws by European
and resigned on 27 August 2004.
University Switzerland.
On 8 November 2004, he was appointed as a NonIndependent and Non-Executive Director of Cepatwawasan
Group Berhad. Subsequently, he was redesignated as CEO
on 8 April 2005 and as Executive Chairman from 25 July
2005 to 31 October 2005.
directors’ profile (cont’d)
Kong Kok Keong
Group Deputy Executive Chairman/ Executive Chairman of AutoV Group,
Malaysian, aged 59
Kong Kok Keong was appointed
to our Board on 28 March 2012
as the Group Deputy Executive
Chairman and is the Executive
Chairman of AutoV Group.
Kong Kok Keong obtained his B.A (Honours) in Business
Studies from Leicester Polytechnic, United Kingdom in July
1979. He started his career with Binder Hamlyn (Chartered
Accountants) in United Kingdom as an electronic data
processing supervisor from September 1979 to January
1983. He then returned to Malaysia and joined Rashid
Hussain Securities Sdn Bhd as a Finance Manager from
April 1983 to August 1984. He moved on to Larut Tin Fields
Bhd as an accountant from September 1984 to August
1985. From September 1985 to October 1987, he was the
Financial Controller of Kimara Securities Sdn Bhd before
joining Fountain Industries Sdn Bhd as an accountant from
January 1988 to December 1988. Subsequently, he was a
Director of Visionplan Systems (M) Sdn Bhd from January
1989 to April 1990. From May 1990 to March 1992, he
was a commissioned dealer’s representative for ArabMalaysian Securities Sdn Bhd. He later joined Innosabah
Securities Sdn Bhd and served as an Executive Director
from April 1992 to December 2001. During that period,
in September 1993, he was appointed as a Director of
Sititrust & Administrator Ltd, a Labuan offshore company
to which he still serve as a director until today.
Kong Kok Keong is the Chairman and CEO of AutoV since
15 April 2006.
Ooi Boon Pin
Executive Director/ CEO of AIC Group, Malaysian, aged 55
Ooi Boon Pin was appointed to
our Board on 28 March 2012 as
an Executive Director and he is
the CEO of AIC Group.
He graduated with an Honours Degree in Manufacturing
Technology from the National Institute for Higher Education
(University of Limerick), Ireland in 1981. While studying
for his degree, he joined Analog Devices B.V., Ireland, in
1978, a company involved in design and wafer fabrication,
assembly and test of semiconductors, as a Product
Development Engineer and later as a Process Engineer in
the assembly department. Upon his return to Malaysia in
1981, he joined Micro-Machining Sdn Bhd, as a Quality
Assurance Engineer where he was in charge of quality
assurance in tool room and lead frame stamping facility.
He later assumed the position of Project Engineering
Manager and was responsible for the development of new
tool designs and end-of-line assembly equipment from
design to manufacturing. He later set up Prodelcon in 1985
and is its Managing Director from 1996 till now. He was
an Executive Director of Jotech since 30 April 1997 but
was redesignated as a Non-Independent Non-Executive
Director on 20 August 2008. He is also a member of the
Audit and Nominating Committees of Jotech, Chairman of
the Technical Advisory Committee for Applied Engineering
and council member of the Penang Skills Development
Centre. He was awarded the Pingat Kelakuan Terpuji by
the Governor of Penang in July 2006.
Ooi Boon Pin is the Executive Director and Group CEO of
AIC and also the Non-Independent Non-Executive Director
of Jotech from 20 August 2008 to 18 June 2012.
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12
Lim Siok Hui
Executive Director/ CEO of Jotech Group, Singaporean, Aged 64
Lim Siok Hui was appointed to
our Board on 28 March 2012 as
an Executive Director. He is the
CEO of Jotech Group. He has
been the Managing Director of
Jotech Metal Fabrication since
1994, a position he still holds
today.
He commenced his career in 1970 as a supervisor in Alloy
Industries (S) Pte Ltd, a company involved in the trading of
and manufacturing of aluminium cans. He was promoted
to factory manager in 1972 and was appointed as its
director in 1974. From 1989 to 1994, he was appointed as
the Managing Director of Intergrate (S) Pte Ltd, a company
specialising in tools and dies. He has more than 35 years
of experience in the metal stamping industry, having
worked with Japanese and Hong Kong metal stamping
companies.
Lim Siok Hui is the CEO of Jotech. He was appointed to
the Board of Directors of Jotech since 7 August 1995.
Lim Siok Hui obtained his O-Levels in 1966 and he served
in the national service of Singapore from 1966 to 1970.
Chen Heng Mun
Executive Director/ Group Finance Director, Malaysian, aged 43
Chen Heng Mun was appointed
to our Board on 28 March 2012
as an Executive Director and
he is also our Group Finance
Director.
Prior to passing the professional exams conducted by the
then Malaysian Association of Certified Public Accountants
in 1995, Chen Heng Mun worked for KPMG, an international
accounting firm from January 1991 to February 1996.
He started as an Audit Assistant in KPMG and left as an
Audit Supervisor. Subsequently, he joined AIC as Group
Accountant in February 1996 and was appointed to the
board of AIC on 1 August 2007 as an Executive Director/
Chief Financial Officer. He was an Independent NonExecutive Director of Jotech from 3 January 2007 to 2 July
2007. Previously, he was an Executive Director of NCB from
23 June 2008 to 2 December 2011. He was appointed to
the Board of AutoV on 26 May 2008 as Non-Independent
Non-Executive Director. He is a member of the Malaysian
Institute of Accountants, Malaysian Institute of Certified
Public Accountants and Certified Public Accountants,
Australia.
Ash’ari bin Ayub
Independent Non-Executive Director, Malaysian, aged 71
Ash’ari bin Ayub is our
Independent Non-Executive
Director and he was appointed
to our Board on 28 March
2012. He is also the Chairman
of the Audit Committee and
Remuneration Committee and
a member of the Nominating
Committee since 28 March
2012.
He passed the professional examination of the then
Malaysian Association of Certified Public Accountants on
24 June 1967. He is a member of the Malaysian Institute of
Certified Public Accountants and the Malaysian Institute of
Accountants. He started his career with Coopers Brothers
& Co as an articled clerk in 1961 and was later promoted
to a qualified audit assistant. He served in Coopers
Brothers & Co until 1970. Thereafter, he joined various
organisations in the government and private sector. He
was a senior partner in Coopers & Lybrand for about 20
years from 1974 until his retirement in 1994. From 1995
to 1996, he served as a General Manager of Finance &
Administration in Ranhill Bersekutu Sdn Bhd. Currently,
he is an Independent Non-Executive Director of Metrod
Holdings Berhad and BCB Berhad.
He has been the Independent Non-Executive Director of
AutoV since 20 February 2001. He was also a Chairman
of the Audit Committee and Remuneration Committee of
AutoV and was a member of the Nominating Committee
of AutoV. Subsequent to the Merger, he has resigned from
AutoV on 30 June 2012.
Wong Zee Shin
Wong Zee Shin is our Independent
Non-Executive Director and he was
appointed to our Board on 28 March
2012. He is a member of the Audit
Committee, Nominating Committee
and Remuneration Committee since
28 March 2012.
He graduated with a Bachelor Degree in Finance and
Accounting from the University Technology of Sydney,
Australia in July 1999. He is a member of the Malaysian
Institute of Accountants and Certified Public Accountants,
Australia. He started his career in Ernst & Young, an
international public accounting firm in Sandakan, Sabah
from December 1999 to 2004. In August 2004, he joined
Cepatwawasan Group Berhad as an Accountant and later
joined Sogomax Sdn Bhd as an Accountant in June 2006.
Subsequently in December 2009 to present, he joined
Malbumi Estate Sdn Bhd as their Group Accountant.
He was appointed to the Board of Jotech on 2 July 2007.
He was the Independent Non-Executive Director of Jotech
and was also the Chairman of the Audit and Nominating
Committees and was a member of the Remuneration
Committee. Subsequent to the Merger, he has resigned
from Jotech on 18 June 2012.
13
14
Ng Kok Hok
Ng Kok Hok is our Independent
Non-Executive Director and he was
appointed to our Board on 28 March
2012. He is also the Chairman of
the Nominating Committee and a
member of the Audit Committee and
Remuneration Committee since 28
March 2012.
In 1992, he was promoted to the position of Finance
Manager cum Company Secretary and in 1994, he assumed
the position of Financial Controller. He then joined TA Unit
Trust Management Berhad as General Manager in 1996
and subsequently progressed to the position of a CEO in
1997 where he continued to serve until 1999. From 1999
to 2003, he was the Corporate General Manager of CY
Multimedia Sdn Bhd and from 2000 to 2004, he was the
General Manager of Allday Best Sdn Bhd. He is the founder
and is currently the Executive Director of Alpha Outlook
Sdn Bhd, a company principally involved in power quality
products and energy management systems. He founded
Alpha Outlook Sdn Bhd on 17 March 2004. He is also an
He graduated with an Honours Degree in Accounting Independent Non-Executive Director of 1 Utopia Berhad
from the Institute of Cost and Management Accountants, and Ingenuity Solutions Berhad, both of which are listed
now known as the Chartered Institute of Management on the ACE Market of Bursa Malaysia Securities Berhad.
Accountants (“CIMA”) in 1985. He is a Chartered
Accountant with the Malaysian Institute of Accountants, Ng Kok Hok was appointed to the board of directors of AIC
an Associate Member of CIMA, a Chartered Global on 1 September 2007 as an Independent Non-Executive
Management Accountant and a Member of the Financial Director. On the same date, he was appointed as Chairman
Planning Association of Malaysia. He started his career as of the Audit Committee and Remuneration Committee
an Accountant with CMRS Sdn Bhd from 1986 to 1988. and was a member of the Nominating Committee of AIC.
From 1988 to 1990, he moved on to become an Accountant Subsequent to the Merger, he has resigned from AIC on
for Kong Long Huat Chemicals Sdn Bhd. Thereafter, in 31 May 2012.
1990 he joined Kuala Lumpur Mutual Fund Berhad (now
known as Public Mutual Berhad) as an Accountant.
Mej Jen Dato’ Mokhtar bin Perman
Non-Independent Non-Executive Director, Malaysian, aged 60
Mej Jen Dato’ Mokhtar Bin
Perman is our Non-Independent
Non-Executive Director and he
was appointed to our Board on
10 June 2013.
He received his secondary education from the Muar High
School and later joined the Cadet Wing of the Royal
Military College, Sungei Besi. He successfully completed
his Cadet Training and was commissioned into the Royal
Artillery Regiment on 14 April 1972.
Upon being commissioned as a 2nd Lieutenant in the
Malaysian Army, he attended various military courses and
later served at various appointments in the Royal Artillery
Regiments as well as at the formation headquarters.
In 1979 he was chosen to attend a one-year Gunnery
Instructor Course at the Indian School Of Artillery, Deolali,
India which on completion earned him the much respected
qualification in the Royal Artillery Regiment as an Instructorin-Gunnery. On his return to Malaysia, he was posted to
the Artillery Wing, Pusat Latihan Tentera Darat – The Army
Training School (“LATEDA”) as an instructor from 1980 to
1982. He was later posted to various regimental and staff
appointments at the Ministry Of Defence. In 1985, Dato’
Mokhtar was selected to attend Security and Strategic
Studies Course at the University Kebangsaan Malaysia, in
which earned a diploma on completion of the course. After
a 2-year posting at the Defence Intelligence Staff Division,
he was sent to attend the one-year staff course at the
Armed Forces Staff College, Higate, Kuala Lumpur.
In February 1992, he was promoted to the rank of Leftenant
Kolonel and was given the honour to command the 2nd
Royal Artillery Regiment in Kluang, Johor. In 1995, Mej
Jen Dato’ Mokhtar was selected to attend the one – year
Armed Forces Defence College Course in Kuala Lumpur.
One year later, in September 1996 he was selected to
attend a three-month Security Studies Course at the Asia
Pacific Center For Security Studies in Honolulu, Hawaii. In
April 1997, he was promoted to the rank of Kolonel and
assumed the post of the Director Of Artillery at the Army
Headquarters.
In January 2000, Mej Jen Dato’ Mokhtar was once again
selected to attend an overseas course, this time to the
Australian Defence College, Canberra to attend the oneyear Defence Staff/Defence Strategic Studies Course
which earned him the fellowship of the Australian Defence
College and Diploma in Defence and Strategic Studies. On
his return from Canberra, he was promoted to the rank
of Brigadier Jeneral and assumed the post of Assistant
Chief Of Staff for Planning and Development at the Army
Headquarters. In February 2003, he was posted out of
Army Headquarters to command the 11th Infantry Brigade
in Sungei Buloh, Selangor. Two years later, on 1st July
2005 he was promoted to the rank of Mejar Jeneral to
command the Army Doctrine and Training Command until
his retirement on 7 December 2010.
In his nearly 40 years of service in the Malaysian Armed
Forces, Mej Jen Dato’ Mokhtar has been bestowed with
the various awards and medals, among others are Pingat
Setia Angkatan Tentera (“PSAT”), Dato’ Paduka Kesatria
Mahkota Kelantan (“DPKK”), Johan Setia Mahkota
(“JSM”), Pahlawan Angkatan Tentera (“PAT”), Paduka
Kesatria Kelantan (“PKK”), and Kesatria Mangku Negara
(“KMN”). He has also travelled overseas extensively on
official duties.
ADDITIONAL INFORMATION
Conflict of interest/family relationships with any Director and/or major Shareholder
None
Convictions for offences (within the past 10 years, other than traffic offences)
None
Particulars of material contracts of the Group, involving directors and major shareholders’ interest
There are no material contracts of the Group involving Directors and Major Shareholders’ interest.
15
16
chairman’s Message
unwavered
Your Board as well as the management
remain
Group faced in FY 2013.
We firmly believe in the key strength and the
by the business condition the
resilience
of the Group
Group towards achieving its
vision when the business condition improves.
which will propel the
Dear Shareholders
On behalf of the Board of Directors, I would like to present to you the 2013 annual report of your Company. In 2012, the
recovery of the global economy remained slow as the European sovereign debt crisis was still unresolved. The crisis had
not only threatened the stability of the Eurozone financial system but also caused a wider negative impact on worldwide
business conditions. Further, the economic growth of the United States of America remained slow although there were
positive signs of improvement in unemployment rate towards the end of 2012. Although signs of moderation had emerged,
the uncertainties continued with China reporting a slowdown. Even domestic demand in the emerging economies were
showing signs of moderation. The Group’s businesses were impacted from these slowdown of economic activities locally
and globally.
chairman’s message (cont’d)
During the financial year, the Group continued
its integration activities subsequent to the
completion of merger at the end of May
2012. The integration process, particularly
on management was successfully carried
out and with this, the Group is ready to
leverage on the expertise as an integrated
manufacturing service (“IMS”) provider.
The Group faced a very challenging business
condition, especially on the semiconductor
business. Semiconductor industry continued
to be slow and it has pulled down the overall
performance of the Group. The automotive
business was lacklustre and several projects
which the division had initiated failed to yield
the desired results for this financial year due
to postponement of the said projects by
customers.
Nevertheless, your Board as well as the
management remain unwavered by the
adverse impact the Group encountered
in financial year (“FY”) 2013. We firmly
believe that the Group’s financial reserves
and expertise in the diverse businesses as
well as the regional business networks and
presence remain the key strength which
will propel the Group towards achieving its
vision when the business condition
improves.
17
18
FINANCIAL PERFORMANCE
Financial year 2013 reported an underperformance for the Group. The Group posted
a revenue of RM387.9 million and net loss of RM20.7 million. In the first financial period
ended 30 June 2012, the Group registered a total revenue of RM220.5 million and net profit
of RM12.2 million. Last financial period comprised the Company’s result from incorporation
date, 15 July 2011 to 30 June 2012 and consolidated the 18-month results of AIC Group
and 1 month performance of both the AutoV Corporation Sdn Bhd (formerly known as
AutoV Corporation Berhad) group and Jotech Holdings Sdn Bhd (formerly known as
Jotech Holdings Berhad) group.
The Group’s IMS Business Segment revenue registered an improvement mainly derived
from the Automotive Components Design and Manufacturing Division. However, the
revenue of Semiconductor Division contracted due to the slowing global economy and
lacklustre business condition in the Semiconductor and Electrical & Electronics industries.
The revenue of Semiconductor Division which declined by about 31.2%, had impacted the
Group’s performance for FY 2013.
The Group registered a net loss of RM20.7 million compared to RM12.2 million net profit
posted in the last financial period. The Group wrote off a total goodwill related to the IMS
Business Segment of RM20.5 million in this financial year. This together with the losses of
the Semiconductor Division of RM10.2 million were the main factors that resulted in the
Group’s under performance this year.
Despite the dismal results reported, I wish to highlight that the Group’s cash position did
not deteriorate but instead grew from RM30.8 million at the end of previous financial period
end to RM38.2 million as at 30 June 2013. The financial health of the Group as reflected
by the liquidity or net current assets also improved from RM66.2 million to RM78.5 million.
Total liabilities also recorded a decline from RM159.3 million to RM150.0 million. The net
assets of the Group stood at RM382.3 million compared to RM403.7 million mainly due to
the aforementioned losses.
FORWARD PLANS & STRATEGIES
The Board shares your concerns and urgency to return the Group to profit in the ensuing
years. The forward plans and strategies have been mapped out with priorities set in
ensuring the turnaround plans for underperforming companies are executed timely and
effectively. In addition, the Group will capitalise on the strength of business divisions with
growth in both revenue and profitability to maximise their returns to shareholders.
For the IMS Business Segment, the Group will focus on the automotive industry business
under the Automotive Components Design and Manufacturing Division. The Precision
Machinery, Stamping and Tooling will undertake expansion plans in the medium term and
is poised to be the growth driver for the Group.
STREAMLINE BUSINESSES TO BE AN EFFECTIVE
INTEGRATED MANUFACTURING PROVIDER
Your Board will continue to seek opportunities to enhance the effectiveness of the Group
as an integrated manufacturer. The automotive business presents good openings for the
Group to embark on this direction. However, some of the businesses which do not effectively
form as a part of the Group’s integrated business will be rationalised. This will also ensure
the Group’s resources in the IMS Business Segment are utilised effectively for the optimum
return of our investment.
STRENGTHEN THE GROUP PERFORMANCE
The businesses that have been under-performing are under study by the Board. Strategic
business plans have been undertaken, such as changing the portfolio of products
by investing in new machinery and equiment as well as pitching for new customers with
stable and growth potential business. Continuous production improvement plans such
as improving production processes and efficiency are also being diligently carried out by
the management. Cost rationalisation mainly from the tightening of expenditure budget
and right-sizing of production headcount also formed part of the stringent measures
undertaken to counter the impact of the business slowdown.
Your Board is also weighing the strategic option in divesting the non-profitable investments.
Such measure though may cost the Group a one-off loss but it is imperative so that the
Group’s performance could be strengthened in the near term.
19
20
SEEKING OUT GROWTH OPPORTUNITIES
The Company continually seeks out growth and profitable opportunities to maximise
shareholders’ value. The Company will leverage on the financial strength of the Group to
capitalise on investment ventures which have good long-term yield prospects. The property
investments of the Group present good opportunities for the Group to yield profitable
returns and to further venture into this growing sector.
Corporate Social Responsibilities (“CSR”)
The Group believes in the importance in cultivating the CSR spirit amongst the employees
so that a positive difference and meaningful change in the communities can be brought
about together in the areas it operates. Several CSR initiatives were undertaken this year,
namely blood donation campaign and “gotong-royong” cleaning of factory’s compound.
WELCOME & TERIMA KASIH
I wish to welcome Mej Jen Dato’ Mokhtar B. Perman in joining your Board of Directors and
look forward to working with Dato’ and his sharing of invaluable expertise and experience
for the achievement of the vision of the Company.
I also wish to express a sincere Terima Kasih to Mr. Hon Poh Chow for his service and
invaluable contribution to the Board during his tenure with us as the Independent Director
of the Company. I welcome him in joining us in the management team to steer the Group
forward to greater heights. “Gotong-royong” cleaning of
factory compound
Blood donation campaign
BUSINESS Review
OVERVIEW
The Group’s businesses comprise two main segments, namely the Integrated Manufacturing
Services (“IMS”) and the Resources. There are three (3) business divisions under the IMS
segment as follows:
1.
Precision machining, stamping and tooling;
2.
Semiconductor; and
3.
Automotive components design and manufacturing.
The Resources Division is involved in oil palm plantation and coal mining. As at todate, the
extraction and marketing of coal has yet to commence.
Financial Review
The Group registered a total revenue of RM387.9 million and RM20.7 million net loss for
the financial year ended 30 June 2013. The Group reported revenue of RM220.5 million
and RM12.2 million net profit for the first financial period ended 30 June 2012.
The financial results of the Group for the financial period ended 30 June 2012 were derived
from consolidated financial results of:
•
AIC Group for the eighteen (18) months financial year from 1 January 2011 to 30 June
2012; and
•
Jotech Group and AutoV Group for the period from 25 May 2012, being the
completion date of the Merger, to 30 June 2012.
The revenue and results of the business divisions of the Group for the financial year ended 30 June 2012 and 2013 are
as follows:
Division/Segment
Revenue for financial year/period ended 30 June
<------------- 2013 -------------> <----------- 2012 ---------->
Amount
Composition
Amount Composition
RM’000
%
RM’000
%
Precision machining, stamping and tooling
Semiconductor
Automotive components design and manufacturing
151,419
54,153
176,012
39.0
14.0
45.4
86,081
118,044
13,126
39.0
53.5
6.0
IMS
381,584
98.4
217,251
98.5
6,232
6,232
59
1.6
1.6
-
555
555
2,713
0.3
0.3
1.2
387,875
100.0
220,519
100.0
Oil palm plantations
Resources
Investment holding
Total
21
22
business review (cont’d)
Net (Loss)/Profit for financial
year/period ended 30 June
<------------ 2013 -------------> <----------- 2012 ---------->
Division/Segment
Amount
Composition
Amount Composition
RM’000
%
RM’000
%
Precision machining, stamping and tooling
12,216
-
14,114
115.0
Semiconductor
(10,178)
- (6,282)
(51.4)
Automotive
components design and manufacturing
- (1,056)
(408)
(3.3)
IMS
Oil
palm plantations
Resources
Investment
holding
Total
982
-
7,424
60.8
(46)
(46)
(21,634)
- - - 62
62
4,731
0.5
0.5
38.7
(20,698)
- 12,217 100.0
The Group’s net assets and cash position as at 30 June 2013 stood at RM382.3 million and RM38.2 million respectively
compared to 30 June 2012 of RM403.7 million and RM30.8 million respectively. The Group’s gearing position remains
low at 0.18 times. Despite the substantial net loss registered, the Group’s cash position improved from net cash inflow
from operating activities amounted to RM26.9 million for the financial year.
Business Review
Precision Machining, Stamping And Tooling Division (“PMSD”)
The Precision Machining, Stamping and Tooling Division specialises in precision
machining and automation business (“PMD”) and precision metal stamping and tooling
business (“PSD”). PMD business comprises high precision machining of components for medical devices,
photonics and RF microwave products. It also manufactures high precision tooling, mould
and die sets as well as develops automation system for the semiconductor industry. Prodelcon Sdn Bhd (“Prodelcon”), a wholly-owned subsidiary operates the PMD business
in a plant in Penang.
The PSD business is carried out by Jotech group of companies, namely Jotech Metal
Fabrication Industries Sdn Bhd (“JMF”) which is located at Johor in Malaysia, PT Indotech
Metal Nusantara (“Indotech”) at Karawang in Indonesia and GuangDong Jotech Kong Yue
Precision Industries Ltd (“JKY”) at Xin Hui District in GuangDong Province. Its activities
comprise the design and fabrication of tooling, prototyping, precision metal stamping and
sub-assembly services. PMSD contributed RM151.4 million or 39.0% of the Group’s revenue for the current
financial year and this division continued to be the highest profit contributor to the Group
with RM12.2 million net profit registered. Revenue contributed by PMSD decreased by RM7.0 million or 4.4% compared to the
aggregate of annualised PMD’s revenue of RM77.2 million for the eighteen (18) months
ended 30 June 2012 and annualised PSD’s one-month revenue of RM8.9 million reported
in the last financial period.
Precision Machining, Stamping And Tooling Division (“PMSD”) (cont’d)
Net profit of the PMSD decreased by RM4.9 million or 28.6% in this financial year compared
to the aggregate annualised PMD’s net profit for the eighteen (18) months ended 30
June 2012 and annualised PSD’s net profit for one month results reported last year. The
attributing factors for lower profit reported were price erosion and increasing labour cost
due to the softer demand and more competitive business condition encountered.
Semiconductor Division
The Semiconductor Division is engaged in the design, development, procurement,
assembly, testing and sale of semiconductor products. It provides a one-stop solution
services, including package design and development, engineering and test development,
assembling and testing of IC packages and smart card modules as well as drop shipment
and distribution services. AIC Semiconductor Sdn Bhd (“AICS”), a wholly-owned subsidiary
operates this business in a plant at Kulim High Tech Park in Kedah.
The Semiconductor Division posted a revenue of RM54.2 million and a net loss of RM10.2
million for this financial year ended 30 June 2013. In the previous financial period of 18
months, this division reported revenue of RM118.0 million with a net loss of RM6.3
million. The continual down cycle of semiconductor industry was the main cause for the
losses suffered.
Various initiatives to counter the impact of revenue slowdown such as tighter control of
expenditure budget, right sizing its headcount and continual improvement in productivity
efficiency were carried out by the management. Strategic measures such as enhancement
of its product portfolio with new products and securing new customers with growth and
stable product loading were being pursued. With a better product mix and cost control
measures taken, the company anticipates that its profitability shall improve as the business
demand grows.
Automotive Components Design and Manufacturing Division
The Automotive Components Design and Manufacturing Division (“Automotive Division”)
manufactures automotive components for the automotive industry in Malaysia, namely
Proton, Perodua, Toyota, Honda and other automotive manufacturers and assemblers.
The main subsidiaries for this Division are AutoV Corporation Sdn Bhd (“AutoV Corp”) and
Proreka Malaysia Sdn Bhd. This Division operates with 6 plants in Selangor.
This division contributed the highest revenue to the Group with RM176.0 million posted for
the current financial year. The division’s revenue grew by RM18.5 million or 11.7% compared
to the annualised one-month revenue of RM13.1 million reported last year. The improvement
in revenue was mainly contributed from stronger demand as one of the major customers
launched a new car model during the financial year.
The Automotive Division however incurred a net loss of RM1.1 million this year compared
to RM0.4 million for a one month results reported for the last financial period. The loss
was mainly due to a total RM2.3 million one-off allowance was made for warranty and
service claim made this year.
23
24
Resources Division
The Oil Palm Plantation Division (“Plantation Division”) currently has 916.25 hectares of oil
palm plantations located at Sungai Lokan locality in the district of Kinabatangan, Sandakan
Lahad-Datu, Sabah. A total of 836.96 hectares have been planted with oil palm as at 30
June 2013. The age of the oil palm tree ranges from 3 to 17 years. The wholly-owned
subsidiaries in this division are Malgreen Progress Sdn Bhd and Cergas Fortune Sdn Bhd.
Plantation Division registered RM6.2 million revenue this year which is comparable to the
annualised revenue of RM0.55 million for one month revenue reported last period. A
marginal net loss of RM0.05 million was recorded for the current financial year compared
to annualised revenue of RM0.06 million profit posted for one month performance last
year. In the current financial year, the main attributing factor for the under-performance of
this division was the sharp decline in FFB price.
Prospect
The financial year ahead is expected to be challenging due to increasing competitive
business condition amidst an uncertain global economic outlook. Notwithstanding this,
the Board and management have mapped out the forward plans and strategies with
priorities set in ensuring that the turnaround plans for underperforming companies are
executed timely and effectively. In addition, the Group will capitalise on the strength of
business divisions with growth potential in both revenue and profitability so that the Group
can return to profit in the ensuing years.
3-D display of the components and systems supply by our Automotive Components Design & Manufacturing Division
CORPORATE GOVERNANCE STATEMENT
The Board of Directors (“Board”) is committed to ensure that the highest standards of corporate governance are practiced
throughout the Group as a fundamental part of discharging its responsibilities to protect and enhance shareholder value
and the financial performance of the Group.
Set out below is a statement of how the Group has applied the principles of the Malaysian Code on Corporate Governance
2012 (the “Code”), having regard to the recommendations stated under each principle. The Group has applied the
principles of the Code, having regard to the recommendations stated under each principle.
SECTION 1: DIRECTORS
THE BOARD OF DIRECTORS
An effective Board leads and controls the Group. The Board meets at least four times a year, with additional meetings
convened as necessary. In addition, the Board also attends general meetings and meetings with management from time
to time. All Board members bring an independent judgement to bear on issues of strategy, performance, resources and
standards of conduct.
The Board held five (5) Board Meetings during the financial year. The details of attendance of each individual Director
are as follows:
Name
Meetings Attended
Datuk Dr. Goh Tian Chuan, JP (“Datuk Goh”)
5/5
Kong Kok Keong
5/5
Ooi Boon Pin
5/5
Lim Siok Hui
5/5
Chen Heng Mun
5/5
Ash’ari bin Ayub
5/5
Ng Kok Hok
5/5
Wong Zee Shin
5/5
Mej Jen Dato’ Mokhtar bin Perman (Rtd) (appointed on 10 June 2013)
N/A
Hon Poh Chow (resigned on 31 July 2013)
5/5
All the Directors, save for Mej Jen Dato’ Mokhtar bin Perman, who was only appointed on 10 June 2013, have complied
with the minimum 50% attendance requirement in respect of Board Meetings, as prescribed by the listing requirements
of Bursa Malaysia Securities Berhad (“Bursa Malaysia”).
The Board has delegated specific responsibilities to three subcommittees, namely Audit Committee, Nominating Committee
and Remuneration Committee. All committees have written terms of reference and procedures, and the Board receives
reports of their proceedings and deliberations. These Committees have the authority to examine particular issues and
report back to the Board with their recommendations. The ultimate responsibilities for the final decision on all matters,
however, lie with the entire Board.
Director(s), prior to accepting new directorships in other companies outside the Group, must inform the Group Executive
Chairman of the Board of such appointment and an indication of the time the Director(s) will spend on the new
appointment.
BOARD CHARTER
The Board has adopted a charter, which amongst others, provide guidance to the Board in discharging their roles,
responsibilities and duties. The Board Charter also inter-alia outlines the balance and composition of the Board, the
Board’s authorities, schedule of the matters reserved for the Board, the establishment of Board committees and the
processes and procedures in convening board meetings. The Board Charter is reviewed annually.
25
26
CORPORATE GOVERNANCE STATEMENT (cont’d)
SECTION 1: DIRECTORS (cont’d)
BOARD BALANCE
The Board, headed by the Group Executive Chairman currently has nine (9) members, comprising five (5) Executive
Directors, one (1) Non-Independent Non-Executive Director and three (3) Independent Non-Executive Directors. Together,
the Directors bring a wide range of business and financial experience relevant to the Group. A brief description of the
background of each Director is presented on pages 10 to 15.
Datuk Goh is the Group Executive Chairman and Chief Executive Officer (“CEO”) of the Resources Segment while Kong
Kok Keong is the Group Deputy Executive Chairman and Executive Chairman of AutoV Group, Ooi Boon Pin and Lim
Siok Hui serve as CEO of AIC Group and Jotech Group respectively. There is a clear division of responsibility for these
roles to ensure balance of power and authority.
The Board takes cognisance that the Code recommends that where the chairman of the Board is not an independent
director, majority of the Board must comprise of independent directors. However, the Board has decided to depart from
this recommendation as the Board acknowledges that the Group Executive Chairman is the single largest shareholder
and there is the advantage of shareholder leadership and a natural alignment of interests. In respect of potential conflicts
of interest, the Board is comfortable that there is no undue risk involved as all related party transactions are disclosed
and strictly dealt with in accordance with the Main Market Listing Requirements of Bursa Malaysia. In addition, the
presence of Independent Directors which comprise one third of the Board members ensures that there is independence
of judgement.
The role of the non-executive directors is to provide independent and objective views, constructively challenge and
actively play a part in the development of the business objectives and strategies of the Group, ensure effective check
and balance in the proceedings of the Board and that no individual has unrestricted power or influence over any Board
decision. Ash’ari bin Ayub, the Audit Committee Chairman, is the Senior Independent Non-Executive Director to whom
concerns may be conveyed.
The Company considers that the complement of Non-Executive Directors provide an effective Board with a mix of
knowledge and broad business and commercial experience. This balance is particularly important in ensuring that the
strategies proposed by the executive management are fully discussed and examined, and takes into account of the long
term interests of the Company. The Board is satisfied that the current Board composition fairly reflects the investment of
minority shareholders in the Company.
The Directors, whose experience, knowledge and skills are entrenched in various industries reflect the diverse nature
of the Group’s operations. However, achieving gender diversity is challenging, particularly in the industries the Group
is in. Notwithstanding this, the Board will work towards introducing the female composition of our Board when suitable
candidates are identified.
In addition, the Board takes cognisance of the Code’s recommendation that the tenure of an Independent Director should
not exceed a cumulative term of nine (9) years. As at the end of the financial year, all the Independent Directors have been
in service for less than two (2) years.
SUPPLY OF INFORMATION
All Directors review Board reports prior to the Board meeting. These papers are issued in sufficient time to enable the
Directors to obtain further explanations, where necessary, in order to be briefed properly before the meeting. The board
paper includes, among others, the following details:
•
•
Quarterly performance report of the Group
Major risk, operational and financial issues
SUPPLY OF INFORMATION (cont’d)
•
•
•
•
•
•
Business forecasts and outlook
Material legal matters
Information on related party transactions
Circular resolutions passed
Announcements and press releases made
Internal control concerns
In addition, there is a schedule of matters reserved specifically for the Board’s decision, including the approval of corporate
plans, acquisitions and disposals of assets that are material to the Group, major investments and changes to senior
management and control structure of the Group, including key policies, procedures and authority limits.
All Directors have access to the advice and services of the Company Secretaries and take independent professional
advice, if necessary, at the Company’s expense. Before incurring such professional fees, the Director concerned must
consult with the Group Executive Chairman.
AUDIT COMMITTEE
The Audit Committee report is presented on pages 35 to 39 of this annual report.
APPOINTMENTS TO THE BOARD
The Code endorses, as good practice, a formal procedure for appointments to the Board, with a Nominating Committee
making recommendations to the Board. The Code, however, states that this procedure may be performed by the Board as
a whole, although, as a matter of best practice, it recommends that these responsibilities be delegated to a committee.
New appointees will be considered and evaluated by the Nominating Committee. The Nominating Committee will then
recommend the candidates to be approved by the Board. The Company Secretary will ensure that all appointments are
properly made, that all information necessary is obtained, as well as all legal and regulatory requirements are met.
NOMINATING COMMITTEE
The Nominating Committee consists entirely of Non-Executive Directors, all of whom are independent, and the members
are as follows:
•
•
•
Ng Kok Hok (Chairman)
Ash’ari bin Ayub
Wong Zee Shin
The Code recommends that the Senior Independent Director be the Chairman of Nominating Committee. The Nominating
Committee appointed Mr. Ng Kok Hock as the Chairman instead of Tuan Haji Ash’ari bin Ayub (“THAA”) who is the Senior
Independent Director of the Company. This was due to THAA has assumed the chairmanship of the Audit Committee and
Remuneration Committee. Eventhough THAA is not the chairman of the Nominating Committee, he is a member of the
Nominating Committee.
The primary objectives of the Nominating Committee are to evaluate suitability of candidates and make recommendations
to the Board on all new Board appointments. The Nominating Committee is also empowered to assess the performance
of the Directors, effectiveness of the Board and Board Committees as a whole.
27
28
NOMINATING COMMITTEE (cont’d)
The activities of the Nominating Committee during the year were as follows:
•
•
•
•
Review the terms of reference and authority of the Nominating Committee to be consistent with the revised principles
and recommendations under the Code;
Review the profile and made recommendation to the Board on the appointment of a new director;
Review the performance and effectiveness of all the directors; and
Review and recommend to the Board on the re-election of Directors retiring, at the forthcoming Annual General
Meeting.
DIRECTORS’ TRAINING
As an integral element of the process of appointing new directors, the Nominating Committee ensures that there is
appropriate orientation and education program for new Board members. This is supplemented by visits to key locations
and meetings with key senior executives. As at the date of this statement, all Directors have attended the Mandatory
Accreditation Programme as prescribed by Bursa Malaysia.
During the FYE 2013, the Directors received briefings and updates on the Group’s businesses, operations, risk
management, internal controls, corporate governance, finance and any changes to relevant legislation, rules and
regulations. The Directors are also encouraged to attend seminars and briefings in order to keep themselves abreast with
the latest developments in the business environment and to enhance their skills and knowledge.
During the FYE 2013, the Directors collectively or on their own, attended various training programmes, seminars, briefings
and/or workshops as follows:
DirectorName of Conferences, Seminars and Training Programmes Attended
Datuk Dr. Goh Tian Chuan
-
-
-
Enterprise Risk Management Training and Workshop
FX & Economic Outlooks Briefing
Risk Management Policy
Kong Kok Keong
-
-
-
Advocacy Sessions on Corporate Disclosure
Ooi Boon Pin
-
-
Shared Services & Outsourcing Conference 2012
Lim Siok Hui
-
Chen Heng Mun
-
-
-
-
-
Workshop On Making The Most Of The Chief Financial Officer’s Role – Everyone’s
Responsibility
KPMG Tax Summit
Future of Corporate Reporting
Ash’ari bin Ayub
-
-
-
-
Bursa Malaysia Securities Berhad’s Half Day Governance Programme Series
The key components of establishing and maintaining world-class audit committee
reporting capabilities
DIRECTORS’ TRAINING (cont’d)
DirectorName of Conferences, Seminars and Training Programmes Attended
Ng Kok Hok
-
-
-
-
-
Governance, Risk Management And Compliance: What Directors Should Know
Advocacy Sessions on Corporate Disclosure
Future of Corporate Reporting
Wong Zee Shin
-
-
-
-
Seminar Percukaian Kebangsaan 2012
2012 Convergence – MFRS Changes, Updates & New Developments Beyond 2012
CPD Seminar by the Institute of Approved Company Secretaries (22.6.13) covering:
• Personal Data Protection Act 2010
• Proxy and Corporate Representative – Are they the same?
• Minutes and Resolutions – Are they the same?
• Understanding the workings of Section 132C, 132E and 132F of the Companies
Act, 1965
Hon Poh Chow
(resigned on 31 July 2013)
-
-
Mandatory Accreditation Programme
Mej Jen Dato’ Mokhtar
bin Perman (Rtd) (appointed on 10 June 2013)
-
-
Mandatory Accreditation Programme (attended on 3rd and 4th July 2013)
The Company recognises the importance of continuous professional development and training for its directors. The Board
as a whole has undertaken an assessment of the training needs of each director after taking into account the training
programmes the Directors had attended in the past three (3) years and the qualification, role, responsibilities, knowledge
and experience of the respective Directors. The proposed training programmes encompass areas related to the industry
or businesses of the Group, governance, risk management and the relevant regulations related to the Group.
RE-ELECTION
In accordance with Article 77 of the Company’s Articles of Association, at the first annual general meeting (“AGM”), all
Directors shall retire from office and at the AGM in every subsequent year, one-third (1/3) of our Directors or, if the number
of Directors is not three (3) or a multiple of three (3), the number nearest to one-third (1/3) shall retire from office and be
eligible for re-election provided always that all our Directors shall retire from office once at least in each three (3) years
but shall be eligible for re-election. The Directors to retire in each year shall be those who have been longest in office
since their last election.
Article 83 of the Articles of Association of the Company further states that any director newly appointed shall hold office
only until the next following AGM and then shall be eligible for re-election but shall not be taken into account in determining
the Directors who are to retire by rotation at that AGM.
Directors over seventy years of age shall hold office until the next AGM but shall be eligible for re-appointment in
accordance with Section 129(6) of the Companies Act, 1965.
29
30
RE-ELECTION (cont’d)
The following Directors are subject to re-election at this forthcoming AGM:
•
•
•
•
Kong Kok Keong (Article 77)
Lim Siok Hui (Article 77)
Mej Jen Dato’ Mokhtar bin Perman (Article 83)
Ash’ari bin Ayub (Section 129(6) of the Companies Act, 1965)
SECTION 2: DIRECTORS’ REMUNERATION
REMUNERATION COMMITTEE
The Remuneration Committee comprises of three (3) Independent Non-Executive Directors and an Executive Director.
The Remuneration Committee members are as follows:
•
•
•
•
Ng Kok Hok
Wong Zee Shin
Directors abstaining from decision in respect of their remuneration.
During the financial year, the Remuneration Committee:
•
noted the total directors fees of RM170,450.00, which are paid and payable to the Non-Executive Directors, for
the financial year ended 30 June 2013 was within the shareholders’ mandate of RM300,000 per annum obtained at
the last AGM of the Company;
•
reviewed the remuneration of the Executive Directors and opined that the remuneration is adequate and commensurate
with the present job scope of the Executive directors. The Remuneration Committee would revisit the remuneration
package of the Executive Directors as and when the need arises; and
•
recommended the payment of the directors remuneration for the Executive and Non-Executive Directors to the
Board for approval.
The Remuneration Committee is responsible to recommend to the Board a remuneration framework for Directors with
the objective to ensure that the Company attracts and retains the Directors needed to run the Group successfully. It is
the ultimate responsibility of the entire Board to approve the remuneration of the Executive Directors with the respective
Directors abstaining from decisions in respect of their remuneration.
The determination of the remuneration of the Non-Executive Directors is a matter for the Board as a whole with individual
Directors abstaining from decision in respect of their remuneration.
DIRECTORS’ REMUNERATION
The number of Directors of the Company whose remuneration and fees received from the Group for the financial year
ended 30 June 2013, including fees paid to companies in which Directors have interest, fall in the following bands:
ExecutiveNon-Executive
RM1,650,000 – RM1,700,000
RM800,000 – RM850,000
RM650,000 – RM700,000
RM450,000 – RM500,000
Below RM50,000
1
2
1
1
-
5
SECTION 2: DIRECTORS’ REMUNERATION (cont’d)
REMUNERATION COMMITTEE (cont’d)
The aggregate remuneration of Directors with categorisation into appropriate components is as follows:
RMExecutiveNon-Executive
Remuneration
Fees
Meeting allowances 4,666
-
-
170
10
The Board has considered disclosure details of the remuneration of each Director. The Board is of the view that the
transparency and accountability aspects of corporate governance as applicable to Directors’ remuneration are appropriately
served by the “range disclosure” as required by the listing requirements.
SECTION 3: PROMOTING ETHICAL CONDUCT
The Board has adopted a Code of Ethics and Conduct which governs the ethics and conduct of the Directors, management
and employees of the Group. The Code of Ethics and Conduct includes appropriate communication and feedback channels
that facilitate whistleblowing. The Board reviews and amends the Code of Ethics and Conduct when the need arises.
SECTION 4: PROMOTING SUSTAINABILITY
The Board has formalised and adopted a Sustainability Policy which form part of the Company’s Code of Ethics and
Conduct. The Board’s commitment to sustainability is outcome-based, innovative and founded on the belief that the
Group has a responsibility for its contribution to have a lasting impact on the environment around us. Sustainability is
about creating a lasting legacy for the planet and for our community.
The Board recognises that acting in a responsible and sustainable manner creates new opportunities, enhances investor
value, and improves social and environmental returns.
The Board has the ultimate responsibility for reviewing and approving the sustainability strategy and monitoring the
achievement of sustainability objectives through reviewing regular performance reporting.
SECTION 5: SHAREHOLDERS
INVESTOR RELATIONS AND SHAREHOLDERS COMMUNICATION
The Board acknowledges the importance of communication with the shareholders and investors. Discussions were held
between the senior management with the analysts, shareholders and investors throughout the year. Presentations based
on permissible disclosures are given to explain the Group’s performance, major developments and significant events
of the Group. The Group has been making timely announcements to the public with regards to the Group’s corporate
proposals, financial results, other regulatory announcements as well as information which would be of interest to the
investors and members of the public.
In addition, the Group has also established a website at www.globaltec.com.my for shareholders and the public to access
for information related to the Group.
AGM
The AGM represents the principal forum for dialogue and interaction with all shareholders of the Company. Shareholders
are encouraged to attend the AGM and participate in the proceedings and question and answer session. All Directors,
senior management and external auditors are available to respond to the shareholders’ questions during the AGM.
31
32
SECTION 6: ACCOUNTABILITY AND AUDIT
FINANCIAL REPORTING
The Board has a responsibility and aims to provide/present a fair, balanced and meaningful assessment of the Group’s
financial performance and prospects at the end of the financial year, primarily through the annual financial statements,
quarterly reports to Bursa Malaysia as well as the Message from the Group Executive Chairman and the Management
Discussion & Analysis section in the annual report to the shareholders. The Audit Committee assists the Board in
overseeing the Group’s financial reporting processes and the quality of its financial reporting.
STATEMENT OF DIRECTORS’ RESPONSIBILITY FOR PREPARING THE FINANCIAL STATEMENTS
The Directors are required by the Companies Act, 1965 to prepare financial statements for each financial year which have
been made out in accordance with the applicable approved accounting standards and give a true and fair view of the state
of affairs of the Group and of the Company at the end of the financial year and of the results and cash flows of the Group
and of the Company for the financial year then ended.
In preparing the financial statements, the Directors have:
•
•
•
•
selected suitable accounting policies and applied them consistently;
made judgements and estimates that are reasonable and prudent;
ensured that all applicable accounting standards have been followed; and
prepared financial statements on the going concern basis as the Directors have a reasonable expectation, having
made enquiries, that the Group and the Company have adequate resources to continue in operational existence for
the foreseeable future.
The Directors have the responsibility for ensuring that the Company keeps accounting records which disclose with
reasonable accuracy of the financial position of the Group and the Company and which enable them to ensure that the
financial statements comply with the applicable approved accounting standards in Malaysia and the Companies Act,
1965.
The Directors have overall responsibilities for taking such steps as are reasonably open to them to safeguard the assets
of the Group and to prevent other irregularities.
CORPORATE DISCLOSURE POLICY
The Board is committed to ensuring that communications to the investing public regarding the business, operations and
financial performance of the Group are accurate, timely, factual, informative, consistent, broadly disseminated and where
necessary, information lodged with regulators is in accordance with applicable regulatory requirements.
The objectives of the Corporate Disclosure Policy are to:
(a) warrant in writing the Group’s existing disclosure policies, guidelines and procedures and ensure consistent approach
to the Group’s disclosure practices throughout the Group;
(b) ensure that all persons to whom the Corporate Disclosure Policy applies, understand their obligations to preserve
the confidentiality of material information;
(c) effectively increase understanding of the Group’s business and enhance its corporate image by encouraging
practices that reflect openness, accessibility and cooperation; and
SECTION 6: ACCOUNTABILITY AND AUDIT (cont’d)
CORPORATE DISCLOSURE POLICY (cont’d)
(d) reinforce the Company’s commitment to compliance with the continuous disclosure obligations imposed by Malaysian
securities law and regulations and the listing requirements.
RISK MANAGEMENT AND INTERNAL CONTROL
The Board has established a risk management framework and reviews it periodically. The Statement on Risk Management
and Internal Control presented on pages 40 and 41 provides an overview of the risk profiles and state of internal control
within the Group.
RELATIONSHIP WITH THE AUDITORS
The role of the Audit Committee in relation to the external auditors is described on pages 35 to 39. The Company has
always maintained a close and transparent relationship with its external auditors in seeking professional advice and
ensuring compliance with the accounting standards in Malaysia.
The Audit Committee has a direct communication channel with the internal and external auditors. During the financial
year, the Audit Committee had two (2) meetings with the external auditors without the presence of the Executive Directors
and management.
SECTION 7: CORPORATE SOCIAL RESPONSIBILITY
The Board believes the improvement in the conditions surrounding our stakeholders, employees, society and the
environment is vital to the growth of the Group.
The Board recognises that acting in a responsible and sustainable manner creates new opportunities, enhances investor
value, and improves social and environmental returns.
Our corporate social responsibilities cover the following key areas:
OCCUPATIONAL HEALTH AND SAFETY
Clear and written policies, including any updates as well as any training on occupational health and safety matters are
provided to employees. In line with this, safety officers, in our major subsidiaries, are employed to ensure the policies are
adhered and implemented effectively and safety audits are conducted regularly. Health and safety programmes are also
carried out every year to create awareness and to educate employees on occupational health and safety related matters.
In addition, blood donation campaigns, health talks and medical checks were also conducted.
EMPLOYEE WELFARE AND DEVELOPMENT
Training is provided to the employees. The training comprises both technical, soft skills and includes grooming future
leaders. Apart from training, employees are also provided with medical and healthcare insurance and adequate leave and
compensation programs which commensurate with their rank and level of employments.
Further, the Group acknowledges the need to provide a healthy and balanced lifestyle to its employees. In this aspect,
various initiatives, such as family day, social events and sports activities were organised by our major subsidiaries.
33
34
SECTION 7: CORPORATE SOCIAL RESPONSIBILITY (cont’d)
SUPPLY CHAIN
The Group in its procurement policies strives wherever possible to source locally in the nation’s interest and for materials
which are environmentally friendly such as materials which are ISO 14001 certified and which are lead free or ROHS
(Restriction of Hazardous Substances) compliant.
ENVIRONMENTAL PRESERVATION
It is our policy to comply with environmental laws governing plant operations, maintenance and improvement in areas
relating to environmental standards, emission standards, energy conservation, housekeeping and storage methods,
noise level management and treatment of plant effluents and waste water. In addition, our factories are certified to the
international environmental management systems standard, ISO 14001. Continuous efforts are being made to reduce
wastages, promote recycling, instill environmental conservation awareness among employees and to encourage suppliers
in meeting our environmental policy.
EDUCATION AND TRAINING
Education continues to be a key beneficiary of the Group’s corporate contribution, in line with its belief that education
plays a key role in nation building. The Group offers industrial training attachments to undergraduates from the local
universities and technical colleges as part of ongoing commitment towards providing the necessary exposure and training
to students of today.
The above statement is made in accordance with the resolution of the Board dated 25 October 2013.
audit committee Report
Members of the Committee
The Committee comprises of three (3) Independent Non-Executive Directors which are as follows:
Chairman
Ash’ari bin Ayub, Committee Chairman
(The Committee Chairman is a member of the MIA)
Members
Ng Kok Hok
Wong Zee Shin
1.ROLE OF AUDIT COMMITTEE (“COMMITTEE”)
The Committee shall:
•
•
•
•
•
•
•
Provide assistance to the Board of Directors (“Board”) in fulfilling its fiduciary responsibilities relating to the
corporate governance, risk management, accounting and reporting practices of the Company and the Group
together with the status of internal controls.
Improve the Group’s business efficiency and the quality of the accounting function, the system of internal
controls and audit function, thereby strengthening the confidence of the public in the Group’s reported results.
Maintain through regularly scheduled meetings, a direct line of communication between the Board and the
external auditors as well as the internal auditors.
Enhance the independence of both the external and internal auditors’ functions through active participation in
the audit process.
Provide an objective view on the effectiveness of Enterprise Risk Management as a whole to the Board.
Strengthen the role of the independent Directors by giving them a greater depth of knowledge as to the
operations of the Company and the Group through their participation in the Committee.
Act upon the Board’s request to investigate and report on any issues or concerns with regards to the Management
of the Group.
2.TERMS OF REFERENCE
•COMPOSITION
The Committee shall be appointed by the Board from amongst its Directors and consist of no fewer than three
(3) members, all of whom shall be non-executive Directors, with the majority being independent Directors,
unencumbered by any relationships with senior management and the operating executive, or any other
relationship which might, in the opinion of the Board, be considered to be a conflict of interest. At least one
member of the Committee:
(i) must be a member of the Malaysian Institute of Accountants (“MIA”); or
35
36
audit committee Report (cont’d)
2.TERMS OF REFERENCE (cont’d)
•COMPOSITION (cont’d)
(ii) if he is not a member of the MIA, he must have at least three (3) years’ working experience and:
(a) he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act
1967; or
(b) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule
of the Accountants Act 1967; or
(iii) fulfils such other requirements as prescribed by Bursa Malaysia Securities Berhad (“Bursa Malaysia”).
The members of the Committee shall elect a Chairman from among their number who shall be an Independent
Director. An alternate Director must not be appointed as a member of the Committee. In the event of any
vacancy in the Committee, the Board, through the Nominating Committee if necessary, shall fill the vacancy
within three months.
The Board shall review the performance of the Committee and the terms of office of each of its members at
least once in every three years to determine whether the Committee and its members have carried out their
duties in accordance with their terms of reference.
•AUTHORITY
The Committee is authorised by the Board:
a)
b)
c)
d)
e)
f)
to investigate any matter within its terms of reference;
to request the resources required to perform its duties;
to request and be granted full and unrestricted access to any information it determines as relevant to its
activities from any employees of the Company or the Group and all employees are directed to co-operate
with any request made by the Committee;
to have direct communication channels with the external auditors and the internal auditors;
to obtain independent professional advice and to engage external party having relevant experience and
expertise as it considers necessary to assist the Committee; and
to convene meetings with the external and internal auditors, excluding the attendance of the other Directors
and employees of the Group, whenever deemed necessary.
•ATTENDANCE AND FREQUENCY OF MEETINGS
The quorum for a meeting is two members of the Committee, provided that the majority of members present at
the meeting shall be Independent Non-Executive Directors.
The Executive Directors and the Group Chief Financial Officer are normally invited to attend meetings only
for discussion of those matters on the agenda for the meeting which fall within their specific scope of
responsibility. Representatives from the Group’s internal audit function are normally invited for attendance
at each meeting. Representatives of the external auditors are also invited from time to time to brief the
Committee on related audit matters.
A minimum of four (4) meetings per year is planned, although additional meetings may be called at any time at
the Committee Chairman’s discretion.
At least twice a year, if required, the Committee shall meet with the external auditors, the internal auditors or
both, without the presence of any executives of the Group.
•
PROCEDURES OF MEETINGS
a)
b)
c)
d)
e)
f)
•MINUTES OF MEETINGS
The Committee Chairman shall preside at all meetings. In his absence, Committee members present shall
elect among themselves an independent Director to be the chairman of the meeting;
The Committee Chairman may call for a meeting upon the request of the internal or external auditors or
any Committee Member, or the Company’s Group Executive Chairman, in order to consider any matter
that should be brought to the attention of the Directors or shareholders;
The Secretary of the Committee shall, with the agreement of the Committee Chairman, draw up the
agenda for the meeting and the agenda shall be sent to all members of the Committee and any other
persons who may be required to attend;
A minimum seven days’ notice shall be given for all meetings. Nevertheless, a shorter notice is permitted
subject to agreement by all Committee members;
All decisions are determined by a majority of votes. In case of equality of votes, the Committee Chairman
shall have a casting vote; and
A resolution in writing signed by a majority of the Committee members and constituting a quorum shall be
effective as a resolution passed at a meeting of the Committee.
The Company Secretary shall attend the meetings of the Committee and keep written minutes of all
proceedings. Minutes of meetings must be signed by the Chairman of the meeting and are kept at the registered
office of the Company.
•FUNCTIONS
The Committee shall review, appraise and report to the Board on:
a) The discussion with the external auditors, prior to the commencement of audit, the audit plan which states
the nature and scope of the audit and ensures co-ordination of audit where more than one audit firm is
involved;
b) The review with the external auditors, their evaluation of the system of internal controls and the Statement
on Risk Management and Internal Control, together with their management letters and Management’s
response;
c) The discussion of issues and reservations arising from the external audits, the audit report and any matters
the external auditors may wish to discuss (in the absence of Management, where necessary);
d) The assistance given by the employees of the Group to the external and internal auditors;
e) The review of the following in respect of internal audit:
•
Adequacy of the scope, functions, competency and resources of the internal audit functions and that
it has the necessary authority to carry out its work;
•
The internal audit programme;
•
The major findings of internal audit investigations and Management’s responses, ensuring that
appropriate actions are taken on the recommendations of the internal auditors;
•
Co-ordination of external audit with internal audit;
•
Approval of any appointment or termination and appraisal of the performance of the Group Internal
Audit function; and
•
Resignations of Internal Auditors, together with providing the resigning Internal Auditors an opportunity
to submit the reasons for resignation.
37
38
•FUNCTIONS (cont’d)
f)
g)
h)
i)
j)
k)
l)
The review of quarterly reporting to Bursa Malaysia and audited financial statements of the Group before
the submission to the Board, focusing particularly on:•
Changes in or implementation of major accounting policies;
•
Significant and unusual events;
•
Compliance with accounting and financial reporting standards and other legal requirements; and
•
Any commentary on the future outlook for the Company and the Group.
The review of any related party transaction and conflict of interest situation that may arise within the
Group or the Company, including any transaction, procedure or course of conduct that raises questions of
Management integrity;
The review of any letter of resignation from the external auditors together with the reasons for such
resignation;
The review of the re-appointment of the Group’s external auditors, including the examination of the
independence of the external auditors and, where appropriate, the reasons (supported by grounds) why it
is not suitable to re-appoint the external auditors;
The recommendation for the nomination and appointment of external auditors, as well as for approval of
the audit fee;
Prompt reporting to Bursa Malaysia on any matter reported by the Committee to the Board which has not
been satisfactorily resolved, resulting in a breach by the Company of the Listing Requirements of Bursa
Malaysia; and
Any other function that may be mutually agreed upon by the Committee and the Board from time to time,
which would be beneficial to the Company and the Group and ensure the effective discharge of the
Committee’s duties and responsibilities.
The Committee has adopted an Auditors Evaluation Policy and reviews it periodically.
3.MEETINGS OF THE COMMITTEE
The details of attendance at the Committee meetings for the financial year ended 30 June 2013 are as follows:
Total Committee
Date of MeetingMembers
1. 30 August 2012 4
2. 24 October 2012
4
3. 28 November 2012
4
4. 27 February 2013
4
5. 29 May 2013
4
Attendance by
Committee Members
(Percentage of Attendance)
4 (100%)
4 (100%)
4 (100%)
4 (100%)
4 (100%)
The details of attendance by individual Committee Member from the date of the establishment of the Audit Committee
until the date of this report are as below:
Name of Director
Total Meetings Attended
Percentage of Attendance
1. Ash’ari bin Ayub
5/5
100%
2. Ng Kok Hok
5/5
100%
3. Wong Zee Shin
5/5
100%
4. Hon Poh Chow (resigned on 31 July 2013)
5/5
100%
4.INTERNAL AUDIT FUNCTION
In discharging its duties, the Audit Committee is supported by an internal audit function which is outsourced to an
independent professional service firm who undertakes the necessary activities to enable the Committee to discharge
its functions effectively. The Committee regards the internal audit function as essential to assist in obtaining the
assurance it requires regarding the effectiveness of the systems of internal controls within the Company and the
Group.
During the financial period under review, the internal auditor conducted internal audits to assess the effectiveness
and integrity of the system of internal controls of the Company and certain operating units in the Group in accordance
with the approved audit plan by the Committee. The findings and recommendations for improvements were presented
to the Audit Committee for deliberation. The costs incurred by the Group for the internal audit function during the
period amounted to RM125,000.
5.ACTIVITIES
During the financial period and up to the date of this report, the Committee carried out its duties in accordance with
its term of reference. The main activities undertaken by the Committee were as follows:
• •
•
•
•
•
•
•
•
•
•
•
Reviewed the external auditors’ scope of work and audit plans for the period. Prior to the audit, representatives
from the external auditors presented their audit strategy and plan.
Reviewed with the external auditors the results of the audit, the audit report and the management letters.
Reviewed the independence, objectivity and effectiveness of the external auditors and the services provided,
including non-audit services (if any).
Reviewed the internal auditors’ scope of work, function, competency and resources in carrying out the internal
audit work.
Held a private meeting with the external and internal auditors without the presence of Management.
Reviewed the internal audit reports, which highlighted the internal audit findings, recommendations and
management‘s response. Discussed with Management, actions taken to improve the system of internal control
based on improvement opportunities identified in the internal audit reports.
Reviewed the Annual Report and the Audited Financial Statements of the Group and the Company, prior to the
submission to the Board for their consideration and approval, 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 as determined and set out by The Malaysian Accounting Standard Board (“MASB”). Any
significant issues arising from the audit of the financial statements by the external auditors were deliberated
upon.
Received and reviewed the Enterprise Risk Management reports.
Reviewed the quarterly unaudited financial results announcements of the Group before recommending them to
the Board for its approval. The review and discussion of these announcements was conducted with the presence
of the Executive Directors.
Reviewed and approved the statements on risk management and internal control to be included in the Annual
Report.
In respect of the quarterly and period end financial statements, reviewed the Company’s compliance with the
Listing Requirements of Bursa Malaysia, applicable approved accounting standards set by MASB and other
relevant legal and regulatory requirements.
Reviewed related party transactions entered into by the Company and the Group to ensure that such transactions
were undertaken in line with the Group’s normal commercial terms and that the internal control procedures with
regards to such transactions are sufficient.
39
40
STATEMENT ON RISK MANAGEMENT
AND INTERNAL CONTROL
Introduction
This Statement on Risk Management and Internal Control by the Board of Directors (“Board”) on the Group is made
pursuant to the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Malaysia”) and in accordance with
the Principles and Recommendations as provided in the Malaysian Code on Corporate Governance 2012 (“Code”).
This statement is guided by the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed
Issuers.
BOARD’S RESPONSIBILITIES
The Board acknowledges its overall responsibility for the establishment of a sound risk and control framework for the
Group as well as the review of its adequacy, integrity and effectiveness. The Board determines the Group’s level of risk
tolerance and actively identifies, assess and monitor key business risks to safeguard shareholders’ investments and
the Group’s assets. It should be noted, however, that such framework/systems are designed to manage rather than to
eliminate the risk of failure to achieve business objectives. In addition, it should be noted that these systems can only
provide reasonable but not absolute assurance against material misstatement or loss.
There is an ongoing process for identifying, evaluating and managing the significant risks faced by the Group in its
achievement of objectives and strategies. The process has been in place during the year up to the date of approval of the
annual report and is subject to review by the Board.
The Board is assisted by Management in implementing the Board’s policies and procedures on risk and control by
identifying and analysing risk information; designing, operating suitable internal controls to manage and control these
risks; and monitoring effectiveness of risk management and control activities.
The key features of the risk management and internal control systems are described below.
RISK MANAGEMENT AND INTERNAL CONTROL
Risk Management
The Group has in place a database of risks and controls information captured in the format of risk registers. Key risks
of major business units are identified, assessed and categorised to highlight the sources of risks, their impacts and the
likelihood of occurrence. Risk profiles for the major operating business units are presented to the Audit Committee and
the Board for deliberation and approval for adoption. Action plans to address key risks were developed and their status of
implementation was reported to the Audit Committee and the Board.
The risk profile of the major operating business units of the Group are being monitored by its respective Management. The
risks identified for the Group were considered in formulating the strategies and plans that were approved and adopted by
the Board. The strategies and plans are monitored and revised as the need arises.
Briefings on risk management were conducted for Board and Management as part of the Group’s efforts to instill a
proactive risk management culture and implement a proper risk management framework in the Group.
STATEMENT ON RISK MANAGEMENT
AND INTERNAL CONTROL (cont’d)
RISK MANAGEMENT AND INTERNAL CONTROL (cont’d)
Internal Control
The Board receives and reviews reports from the Management on key financial data, performance indicators and
regulatory matters quarterly. This is to ensure that matters that require the Board and Management’s attention are
highlighted for review, deliberation and decision on a timely basis. The Board approves appropriate responses or
amendments to the Group’s policy. Besides, the results of the Group are reported quarterly and any significant fluctuations
are analysed and acted on in a timely manner.
There is a budgeting system that requires preparation of the annual budget by all major operating business units. The
annual budget which contains financial, operating targets and performance indicators are reviewed and approved by the
Executive Directors together with the Management before being presented to the Board for final review and approval.
Issues relating to the business operations are highlighted to the Board’s attention during Board meetings. Further
independent assurance is provided by the Group Internal Audit Function and the Audit Committee. The Audit Committee
reviews internal control matters and update the Board on significant issues for the Board’s attention and action.
The Group’s internal audit function has been outsourced to a professional service firm, as part of its effort in ensuring that
the Group’s systems of internal controls are functioning as intended. Further details of the Internal Audit Function are set
out on page 35 in the Audit Committee Report.
The other salient features of the Group’s systems of internal controls are as follows:
•
•
•
•
•
Quarterly review of the financial performance of the Group by the Board and the Audit Committee;
Defined organisation structure and delegation of responsibilities;
Operations review meetings are held by the respective divisions to monitor the progress of business operations,
deliberate significant issues and formulate corrective measures;
Establish and adoption of whistle blowing framework; and
Code of conduct provided to all employees of the Group.
REVIEW BY BOARD
The Board considered the system of internal controls and risk management described in this statement to be satisfactory
and generally adequate within the context of the Group’s business environment. The Board and Management will continue
to take measures to strengthen the control environment and monitor the health of the internal controls framework.
The Board also obtained assurance from the Executive Chairman and Group Finance Director that the Group’s risk
management and internal control system is operating adequately and effectively, in all material aspects.
CONCLUSION
The Board, through the Audit Committee and Management, confirms that it has reviewed the effectiveness of the internal
control framework and considers the Group’s system of internal control is sufficient to provide reasonable assurance in
safeguarding the shareholders’ interests and assets of the Group.
The above statement is made in accordance with the resolution of the Board dated 25 October 2013.
41
42
Financial Statements
Directors’ Report
43
Statements of Financial Positions 47
Statements of Profit or Loss
and Comprehensive Income 49
Statements of Changes in Equity 51
Statements of Cash Flows 53
Notes to the Financial Statements 56
132
Statutory Declaration 132
Statement by Directors
Independent Auditors’ Report 133
directors’ report
For the financial year ended 30 June 2013
The Directors hereby submit their report and the audited financial statements of the Group and of the Company for the year
ended 30 June 2013.
Principal activities
The Company is principally engaged in investment holding activities, whilst the principal activities of the subsidiaries are as
stated in Note 7 to the financial statements.
There has been no significant change in the nature of these activities during the financial year.
Results
GroupCompany
RM’000RM’000
Loss for the year attributable to:
Owners of the Company
Non-controlling interests
(20,698)
40
(136,024)
-
(20,658)
(136,024)
Reserves and provisions
There were no material transfers to or from reserves and provisions during the year under review except as disclosed in
the financial statements.
Dividends
No dividend was paid during the year and the Directors do not recommend any dividend to be paid for the year under
review.
Directors of the Company
Directors who served since the date of the last report are:
Kong Kok Keong
Lim Siok Hui
Ooi Boon Pin
Chen Heng Mun
Ash’ari bin Ayub
Ng Kok Hok
Wong Zee Shin
Mej Jen Dato’ Mokhtar bin Perman (Rtd) (appointed on 10 June 2013)
43
44
directors’ report (cont’d)
Directors’ interests in shares
The interests and deemed interests in the ordinary shares of the Company and of its related corporations (other than
wholly-owned subsidiaries) of those who were Directors at year end (including the interests of the spouses or children of
the Directors who themselves are not Directors of the Company) as recorded in the Register of Directors’ Shareholdings
are as follows:
Number of ordinary shares
AtBalance at
1.7.2012BoughtSold
30.6.2013
– direct interest
774,752,152
– indirect interest (a)
156,604,176
Kong Kok Keong
– direct interest
536,278,093
89,953,000
– indirect interest (b)
Ooi Boon Pin
– direct interest
78,035,580
– indirect interest (c)
19,285,800
Lim Siok Hui
58,005,520
Chen Heng Mun
– direct interest
1,862,180
2,004,716
Ng Kok Hok
– direct interest
10,713
10,713
Wong Zee Shin
19,327
275,281,099
-
- 1,050,033,251
(156,604,166)
10
79,471,584
298,000,000
-
-
615,749,677
387,953,000
-
-
-
-
-
-
78,035,580
19,285,800
58,005,520
-
-
-
-
1,862,180
2,004,716
-
-
-
-
-
-
10,713
10,713
19,327
Notes:
(a)
(b)
(c) Deemed interest by virtue of Section 6A of the Companies Act, 1965 (“Act”) held through Cara Kaya Sdn. Bhd. and his son.
Deemed interest by virtue of Section 6A of the Act held through Darulnas (M) Sdn. Bhd. and by virtue of Section 134(12) of the
Act held through his spouse.
Deemed interest by virtue of Section 134(12) of the Act held through his spouse.
None of the other Directors holding office at 30 June 2013 had any interest in the shares or options of the Company during
the financial year.
By virtue of his interest in the shares of the Company, Datuk Dr. Goh Tian Chuan, JP and Kong Kok Keong are also deemed
interested in the shares of the subsidiaries during the financial year to the extent that the Company has an interest.
Save for Datuk Dr. Goh Tian Chuan, JP and Kong Kok Keong none of the other Directors holding office at 30 June 2013
had any interest in the shares or options of the related corporations of the Company during the financial year.
Directors’ benefits
Since the end of the previous financial period, no Director of the Company has received nor become entitled to receive any
benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors
as shown in the financial statements or the fixed salary of a full time employee of the Company or of related corporations)
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 other than as disclosed in Note
29 to the financial statements.
There were no arrangements during and at the end of the financial year which had the object 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.
Issue of shares and debentures
There were no changes in the authorised, issued and paid-up capital of the Company and no debentures were issued
during the financial year.
Options granted over unissued shares
As disclosed in Note 33 to the financial statements, a wholly owned subsidiary, AutoV Systems Sdn Bhd had in the previous
financial period issued Redeemable Convertible Preference Shares (“ASSB RCPS”) of RM0.01 each to the vendors or
Proreka (M) Sdn Bhd and its subsidiaries (“Proreka”). The ASSB RCPS are convertible to the ordinary shares of the
Company at a conversion ratio of 119 shares for every 6 ASSB RCPS held and expires on 31 December 2013.
Save for the above, no other options were granted to any person to take up unissued shares of the Company during the
financial year.
Other statutory information
Before the statements of financial position and statements of profit or loss and other comprehensive income of the Group
and of the Company were made out, the Directors took reasonable steps to ascertain that:
i) all known bad debts have been written off and adequate provision made for doubtful debts, and
ii) any current assets which were unlikely to be realised in the ordinary course of business have been written down to an
amount which they might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances:
i) that would render the amount written off for bad debts or the amount of the provision for doubtful debts, in the Group
and in the Company inadequate to any substantial extent, or
ii) that would render the value attributed to the current assets in the financial statements of the Group and the Company
misleading, or
iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and
of the Company misleading or inappropriate, or
iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in the
financial statements of the Group and of the Company misleading.
45
46
Other statutory information (cont’d)
At the date of this report, there does not exist:
i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which
secures the liabilities of any other person, or
ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.
No contingent liability or other liability of any company in the Group 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 of the Company to meet their obligations as and when they fall
due.
In the opinion of the Directors, except for the impairment of goodwill, impairment loss on trade and other receivables,
impairment of investment in jointly controlled entity and inventories written off of RM20,546,000, RM1,704,000, RM2,883,000
and RM1,434,000 respectively as disclosed in Note 24 to the financial statements, the financial performance of the Group
for the financial year ended 30 June 2013 have not been substantially affected by any item, transaction or event of a
material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that
financial year and the date of this report.
In the opinion of the Directors, except for the impairment loss on investment in subsidiaries of RM142,510,000 and the fair
value gain on contigent consideration of RM4,449,000 as disclosed in Note 24 to the financial statements, the financial
performance of the Company for the financial year ended 30 June 2013 have not been substantially affected by any item,
transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval
between the end of that financial year and the date of this report.
Auditors
The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
Chen Heng Mun
Shah Alam,
Date: 25 October 2013
47
Statements of financial positions
As at 30 June 2013
GroupCompany
Note
30.6.2013
30.6.2012
1.1.2011
30.6.2013
30.6.2012
RM’000RM’000RM’000RM’000RM’000
(restated) (restated)
Assets
Property, plant and equipment
Biological assets
Investment property
Intangible assets
Investments in subsidiaries
Investment in associate
Investment in jointly
controlled entity
Other investments
Deferred tax assets
3
4
5
6
7
8
209,455
38,611
11,045
106,595
-
7,179
225,585
38,020
11,045
127,816
-
7,221
104,175
-
11,033
4,326
-
-
24
-
-
-
420,909
-
563,419
-
9
10
11
-
-
1,998
646
-
832
-
13,456
-
-
-
-
-
374,883
411,165
132,990
420,933
563,419
52,475
407
50,772
732
19,901
-
-
-
-
83,424
5,140
38,212
86,324
5,539
30,790
40,139
145
16,697
3,978
-
107
17
*
Total current assets
179,658
174,157
76,882
4,085
17
Total assets
554,541
585,322
209,872
425,018
563,436
15
15
15
527,365
105,473
(250,527)
527,365
105,473
(229,104)
173,873
4,437
(44,149)
527,365
105,473
(217,059) 527,365
105,473
(81,035)
Total equity attributable to
owners of the Company
16
382,311
22,192
403,734
22,259
134,161
10,108
415,779
-
551,803
-
Total equity
404,503
425,993
144,269
415,779
551,803
Total non-current assets
Inventories
12
Other investments
10
Trade and other receivables
(including derivatives)
13
Current tax assets
Cash and cash equivalents
14
Equity
Share capital
Share premium
Reserves
* Denotes RM90
48
Statements of financial positions (cont’d)
As at 30 June 2013
GroupCompany
Note
30.6.2013
30.6.2012
1.1.2011
30.6.2013
30.6.2012
RM’000RM’000RM’000RM’000RM’000
Liabilities
Borrowings
Government grants
Deferred tax liabilities
17
18
11
33,568
-
15,271
35,398
137
15,885
17,283
-
8,791
-
-
-
-
Total non-current liabilities
Borrowings
17
Provision for warranties
19
Government grants
18
Trade and other payables (including derivatives)
20
Tax liabilities
48,839
51,420
26,074
-
-
37,090
1,824
28
34,686
1,282
57
11,038
-
-
-
-
-
1,409
-
61,280
977
70,282
1,602
27,751
740
9,232
7
10,224
-
Total current liabilities
101,199
107,909
39,529
9,239
11,633
Total liabilities
150,038
159,329
65,603
9,239
11,633
Total equity and liabilities
554,541
585,322
209,872
425,018
563,436
The notes on pages 56 to 130 are an integral part of these financial statements.
49
Statements of profit or loss and comprehensive income
For the year ended 30 June 2013
GroupCompany
Year ended
1.1.2011 toYear ended
15.7.2011 to
Note
30.6.2013
30.6.2012
30.6.2013
30.6.2012
RM’000RM’000RM’000RM’000
Revenue
- sale of goods
-
dividend (gross)
- services
375,795
53
12,027
196,644
438
23,437
-
3,000
969
-
387,875
220,519
3,969
-
Cost
of sales
-
(316,947)
(166,762)
Other
costs
-
(10,739)
(21,306)
(327,686)
(188,068)
-
-
Gross
profit
60,189
32,451
3,969
Administrative
expenses
(45,752)
(23,374)
(1,163)
(1,898)
Distribution
costs
(2,853)
(2,205)
-
Other
operating expenses
(30,793) (4,786)
(142,510)
Other operating income
10,390
14,260
4,449
Results
from operating activities
16,346
(8,819) (135,255)
Finance income
21
594
443
24
Finance
costs
22
(4,985)
(2,777)
(36)
(1,898)
(32)
Operating
(loss)/profit (13,210)
14,012
(135,267)
Share of loss of equity-accounted
(1,833)
(79)
investees, net of tax
-
(1,930)
(Loss)/Profit
before tax
(15,043)
13,933
(135,267)
Income
tax expense
23
(5,615)
(2,062)
(757)
(1,930)
-
(Loss)/Profit
for the year/period
(1,930)
24
(20,658)
11,871
(136,024)
Other comprehensive (loss)/income,
net of tax
Items that may be reclassified
subsequently to profit or loss
Foreign currency translation
differences for foreign operations
(534)
66
-
Share of foreign currency translation
(28)
differences
of equity-accounted investees
-
-
Total comprehensive (loss)/income
for the year/period
11,937
(21,220)
(136,024)
-
(1,930)
50
Statements of profit or loss and comprehensive income
(cont’d)
GroupCompany
Year ended
15.7.2011 to
Note
30.6.2013
30.6.2012
30.6.2013
30.6.2012
RM’000RM’000RM’000RM’000
(Loss)/Profit attributable to:
(Loss)/Profit for the year/period
attributable to:
for the year/period
(Loss)/Earnings per
ordinary share (sen):
26
Basic
Diluted
(20,698)
40
12,217
(346)
(136,024)
-
(1,930)
-
(20,658)
11,871
(136,024)
(1,930)
(21,423)
203
16,521
(204)
(136,024)
-
(1,930)
-
(21,220)
16,317
(136,024)
(1,930)
(0.392)
(0.377)
0.438
0.436
Note
Non-distributable
Share
Share
Capital Revaluation
capital
premium reserve
reserve
(Note 15.1) (Note 15.3)(Note 15.4) (Note 15.5)
RM’000
RM’000 RM’000
RM’000
NonAccumulated
controlling Total
losses
Total
interests
equity
RM’000 RM’000 RM’000
RM’000
- (51,492) 134,161 10,108 144,269
-
1,302
-
-
-
Other
reserves
(Note15.6)
RM’000
(197,172)
(37,973)
-
As restated
527,365 105,473
6,041
-
403,734 22,259 425,993
Total
comprehensive (loss)/income for
(725)
(20,698) (21,423)
the
year
-
-
-
-
203 (21,220)
(270)
(270)
Dividends
to non-controlling interests
-
-
-
-
-
-
-
At
30 June 2013
527,365 105,473
6,041
-
(197,897)
(58,671)
382,311 22,192 404,503
At
30 June 2012/1 July 2012 (restated)
527,365 105,473
6,041
4,257
(197,172)
(37,973) 407,991 22,382 430,373
Effect
of transition to MFRSs 34
-
-
-
(4,257)
-
-
(4,257) (123) (4,380)
At
1 January 2011 (restated)
173,873
4,437
6,041
-
- (50,190) 134,161 10,108 144,269
Effects
of the Acquisition 33
353,492 101,036
-
-
- 297,464 12,478 309,942
(157,064)
Fair
value adjustment on shares issued
as
consideration 33
-
-
-
-
(40,155)
-
(40,155)
- (40,155)
Total comprehensive income/(loss) for
the period
-
-
-
4,257
47
12,217
16,521
(204) 16,317
At
1 January 2011 (as previously stated)
173,873
4,437
6,041
1,302
Effect
of transition to MFRSs 34
-
-
-
(1,302)
Group
Statements of changes in equity
51
52
Statements of changes in equity (cont’d)
Non-distributable
Fair value
ShareShare adjustmentAccumulatedTotal
capital
premium
reserve
losses
equity
Note (Note 15.1) (Note 15.3) (Note 15.6)
CompanyRM’000RM’000RM’000RM’000RM’000
At 17 July 2011 (date of incorporation)
*
-
-
-
Issue of ordinary shares
527,365
105,473
-
-
Fair value adjustment on shares issued as
consideration
33
-
-
-
(79,105)
Total
comprehensive loss for the period
-
-
-
(1,930)
*
632,838
At
30 June 2012/1 July 2012
527,365
105,473
(79,105)
(1,930)
Total
comprehensive loss for the year
-
-
-
(136,024)
551,803
(136,024)
At
30 June 2013
527,365
(79,105)
(137,954)
105,473
* Represents RM2 issued and paid up capital at incorporation.
(79,105)
(1,930)
415,779
Statements of cash flows
GroupCompany
Year ended
15.7.2011 to
Note
30.6.2013
30.6.2012
30.6.2013
30.6.2012
RM’000RM’000RM’000RM’000
Cash flows from operating activities
(Loss)/Profit
before tax 13,933
(15,043)
(135,267)
(1,930)
Adjustments for:
Amortisation of development costs
808
33
-
Amortisation of government grants
-
(56)
(9)
Changes in fair value of contingent
consideration payable
-
(4,449)
(4,449)
Changes in fair value of derivatives
134
-
(8)
Changes in fair value of
other investment
142
-
(10,326)
Depreciation of property, plant and
equipment
26,765
22,136
4
Development costs written off
129
-
-
Dividend income
(53)
(438)
(3,000)
Interest expense
4,871
2,686
36
32
Finance income (594)
(443)
(24)
Gain arising from fair value changes in
biological assets
-
-
(591)
Gain on disposal of property, plant
and equipment
-
(133)
(8)
Gain on disposal of other investment
-
-
(22)
Government grants written off
-
-
(110)
Impairment loss on goodwill
20,546
-
-
Impairment on investment in subsidiaries
-
-
142,510
Impairment loss on investment in jointly
controlled entity
2,883
-
-
Impairment loss on trade and other
1,704
1,241
-
receivables
Inventories written off
1,434
201
-
Property, plant and equipment written off
228
9
-
2,570
400
-
Share of loss of equity-accounted investees
1,833
79
-
Reversal of provision for warranties
-
-
(284)
Unrealised foreign exchange (gain)/loss
-
(326)
(715)
Operating profit/(loss) before changes
in working capital
42,244
28,913
(190)
Changes in working capital:
Inventories
-
(3,137)
(601)
1,204
3,640
(3,961)
Trade and other payables 3,457
(4,366)
(6,061)
(1,898)
(4)
525
Cash generated from/(used in) operations `
35,945
25,891
(694)
(1,377)
Tax paid (net)
-
(7,307)
(4,272)
Warranties paid
-
(1,744)
(241)
Net cash generated from/(used in)
operating activities
26,894
21,378
(694)
(1,377)
53
54
Statements of cash flows (CONT’d)
GroupCompany
Year ended
15.7.2011 to
Note
30.6.2013
30.6.2012
30.6.2013
30.6.2012
RM’000RM’000RM’000RM’000
Cash flows from investing activities
Acquisition of subsidiaries, net of cash
and cash equivalents acquired
33
-
19,982
-
Additional investment in equity
accounted investee
-
-
(4,000)
Capital expenditure of investment property
-
-
(12)
Development costs paid
-
(262)
(363)
Dividend received
53
438
2,250
Interest received
594
443
24
Placement of pledged deposits with
a licensed bank
129
-
(91)
Proceeds from disposal of other
investments
204
-
-
Proceeds from disposal of property,
plant and equipment
291
268
-
Purchase of property, plant and equipment (ii)
(11,907)
(13,040)
(28)
Net cash (used in)/generated from investing
activities
7,625
2,246
(14,898)
Cash flows from financing activities
Drawdown of borrowings
4,869
1,409
-
Repayment of borrowings
(8,498)
(16,964)
(1,409)
Repayment of finance lease liabilities
-
(2,088)
(2,189)
Interest paid
(4,871)
(2,686)
(36)
Net cash (used in)/generated from financing
activities
(10,588)
(20,430)
(1,445)
Net increase in cash and cash equivalents
1,408
1,409
(32)
1,377
8,573
107
^
Effect of exchange rate fluctuations on
cash and cash equivalents
(410)
(33)
-
-
Cash and cash equivalents at beginning of
year/period/date of incorporation
24,262
15,722
**
*
Cash and cash equivalents at end of
year/period
25,260
24,262
107
**
^ Denotes RM88
* Denotes RM2
** Denotes RM90
(i)
55
Statements of cash flows (CONT’d)
(i) Cash and Cash Equivalents
Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial
positions amounts:
GroupCompany
Note
30.6.2013
30.6.2012
30.6.2013
30.6.2012
RM’000RM’000RM’000RM’000
Deposits placed with licensed banks
14
Short term placement funds with
approved financial institutions
14
Cash and bank balances
14
Less: Deposits pledged
14
Bank overdrafts
17
12,051
8,667
-
-
3,813
22,348
142
21,981
-
107
**
38,212
(4,028)
(8,924)
30,790
(4,157)
(2,371)
107
-
-
**
-
25,260
24,262
107
**
** Denotes RM90
(ii)Purchase of Property, Plant and Equipment
During the year, the Group purchased property, plant and equipment with the following aggregate cost, of which
RM300,000 (1.7.2011 to 30.6.2012: RM1,017,000) were acquired by means of finance leases.
GroupCompany
Year ended
15.7.2011 to
Note
30.6.2013
30.6.2012
30.6.2013
30.6.2012
RM’000RM’000RM’000RM’000
By means of:
- Finance lease - Cash and cash equivalents
300
11,907
1,017
13,040
-
28
-
12,207
14,057
28
-
3
Notes to the Financial Statements
56
The Company is incorporated and domiciled in Malaysia and is listed on the Main Market of the Bursa Malaysia Securities
Berhad (“Bursa Malaysia”). The address of its registered office and principal place of business is as follows:
Registered office/Principal place of business
Wisma AIC
Lot 3, Persiaran Kemajuan
Seksyen 16
40200 Shah Alam
Selangor Darul Ehsan
The consolidated financial statements of the Company as at and for the year ended 30 June 2013 comprise the Company
and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”) and the Group’s
interest in an associate and a jointly controlled entity. The financial statements of the Company as at and for the year ended
30 June 2013 do not include other entities.
The Company is principally engaged in investment holding activities, whilst the principal activities of its subsidiaries are as
stated in Note 7.
The financial statements were authorised for issue by the Board of Directors on 25 October 2013.
1.Basis of preparation
(a)Statement of Compliance
The financial statements of the Group and of the Company have been prepared in accordance with the applicable
Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards (“IFRSs”) and
the requirements of the Companies Act, 1965 in Malaysia. These are the Group’s and the Company’s first financial
statements prepared in accordance with MFRS 1 and MFRS 1, First-time Adoption of Malaysian Financial
Reporting Standards has been applied.
In the previous years, the financial statements of the Group and of the Company were prepared in accordance
with Financial Reporting Standards (“FRSs”). The financial impacts of transition to MFRS are disclosed in Note
34 to the financial statements.
The following are accounting standards, amendments and interpretations that have been issued by the Malaysian
Accounting Standards Board (“MASB”) but have not been adopted by the Group and the Company:
MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January
2013
•
MFRS 10, Consolidated Financial Statements
•
MFRS 11, Joint Arrangements
•
MFRS 12, Disclosure of Interests in Other Entities
•
MFRS 13, Fair Value Measurement
•
MFRS 119, Employee Benefits (2011)
•
MFRS 127, Separate Financial Statements (2011)
•
MFRS 128, Investments in Associates and Joint Ventures (2011)
•
IC Interpretation 20, Stripping Costs in the Production Phase of a Surface Mine
•
Amendments to MFRS 7, Financial Instruments: Disclosures – Offsetting Financial Assets and Financial
Liabilities
•
Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards – Government
Loans
•
Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards (Annual
Improvements 2009-2011 Cycle)
•
Amendments to MFRS 101, Presentation of Financial Statements (Annual Improvements 2009-2011
Cycle)
•
Amendments to MFRS 116, Property, Plant and Equipment (Annual Improvements 2009-2011 Cycle)
Notes to the Financial Statements (cont’d)
1.Basis of preparation (cont’d)
(a)Statement of Compliance (cont’d)
2013 (cont’d)
•
Amendments to MFRS 132, Financial Instruments: Presentation (Annual Improvements 2009-2011 Cycle)
•
Amendments to MFRS 134, Interim Financial Reporting (Annual Improvements 2009-2011 Cycle)
•
Amendments to MFRS 10, Consolidated Financial Statements: Transition Guidance
•
Amendments to MFRS 11, Joint Arrangements: Transition Guidance
•
Amendments to MFRS 12, Disclosure of Interests in Other Entities: Transition Guidance
2014
•
Amendments to MFRS 10, Consolidated Financial Statements: Investment Entities
•
Amendments to MFRS 12, Disclosure of Interests in Other Entities: Investment Entities
•
Amendments to MFRS 127, Separate Financial Statements (2011): Investment Entities
•
Amendments to MFRS 132, Financial Instruments: Presentation – Offsetting Financial Assets and Financial
Liabilities
2015
•
MFRS 9, Financial Instruments (2009)
•
MFRS 9, Financial Instruments (2010)
•
Amendments to MFRS 7, Financial Instruments: Disclosures – Mandatory Effective Date of MFRS 9 and
Transition Disclosures
The Group plans to apply the abovementioned standards, amendments and interpretations:
•
•
•
from the annual period beginning on 1 July 2013 for those standards, amendments or interpretations that
are effective for annual periods beginning on or after 1 January 2013.
The initial application of the standards are not expected to have any material financial impact on the financial
statements of the Group and the Company.
(b)Basis of Measurement
The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2 and
on the assumption that the Group and the Company are going concerns.
The Company was in a net current liabilities position of RM5,154,000 (30.6.2012: RM11,616,000) as at 30 June
2013. This indicates the existence of an uncertainty which may cast significant doubt on the ability of the Company
to continue as a going concern.
The validity of the going concern assumption is dependent upon the ability of the Company to generate
sufficient positive cash flows from its operations to enable the Company to fulfill its obligations as and when they
fall due.
At the date of this report, there is no reason for the Directors to believe that there is any significant uncertainty
that the Company will not be able to generate sufficient positive cash flows from its operations. Accordingly,
the financial statements do not include any adjustments relating to the recoverability and classification of recorded
asset amounts or to amounts and classification of liabilities that may be necessary if the Company is unable to
continue as a going concern.
57
58
1.Basis of preparation (cont’d)
(c)Functional and presentation currency
These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency.
All financial information is presented in RM and has been rounded to the nearest thousand, unless otherwise
stated.
(d)Use of Estimates and Judgements
The preparation of financial statements in conformity with Malaysian Financial Reporting Standards (“MFRSs”)
requires management to make judgements, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from
these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the year in which the estimates are revised and in any future years affected.
There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies
that have significant effect on the amounts recognised in the financial statements other than those disclosed in
the following notes:
•
•
•
•
•
•
•
•
Note 5 – valuation of investment property
Note 6 – purchase price allocation and measurement of the recoverable amounts of cash-generating
units
Note 7 – measurement of recoverable amounts of cash generating units of subsidiaries
Note 9 – measurement of recoverable amounts of cash generating units of jointly controlled entity
Note 11 – deferred tax assets and liabilities
Note 19 – provision for warranties
Note 30 – fair value of financial instruments
Note 33 – business combinations
2.Significant accounting policies
The accounting policies set out below have been applied consistently to the periods presented in these financial
statements of the Group and the Company and in preparing the opening MFRS statements of financial position of the
Group at 1 January 2011 (the transition date to MFRS framework), unless otherwise stated. The Company adopted
MFRSs since its incorporation date of 15 July 2011.
(a)Basis of Consolidation
(i) Subsidiaries
Subsidiaries are entities, including unincorporated entities, controlled by the Group. The financial statements
of subsidiaries are included in the consolidated financial statements from the date that control commences
until the date that control ceases. Control exists when the Group has the ability to exercise its power to
govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing
control, potential voting rights that presently are exercisable are taken into account.
Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any
impairment losses. The cost of investments includes transaction costs.
The accounting policies of subsidiaries are changed when necessary to align them with the policies adopted
by the Group.
2.Significant accounting policies (cont’d)
(a)Basis of Consolidation (cont’d)
(ii) Business Combinations
Business combinations are accounted for using the acquisition method from the acquisition date, which is
the date on which control is transferred to the Group.
Acquisitions on or after 1 January 2011
For acquisitions on or after 1 January 2011, the Group measures goodwill at the acquisition date as:
•
the fair value of the consideration transferred; plus
•
the recognised amount of any non-controlling interests in the acquiree; plus
•
if the business combination is achieved in stages, the fair value of the existing equity interest in the
acquiree; less
•
the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities
assumed.
When the excess is negative, a bargain purchase gain (negative goodwill) is recognised immediately in
profit or loss.
For each business combination, the Group elects whether it measures the non-controlling interests in the
acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets at the
acquisition date.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group
incurs in connection with a business combination are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent
consideration is classified as equity, it is not remeasured and settlement is accounted for within equity.
Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or
loss.
Acquisitions before 1 January 2011
As part of its transition to MFRS, the Group elected not to restate those business combinations that occurred
before the date of transition to MFRSs, i.e. 1 January 2011. Goodwill arising from acquisitions before 1
January 2011 has been carried forward from the previous FRS framework as at the date of transition.
(iii) Acquisitions of Non-controlling Interests
The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss of control
as equity transactions between the Group and its non-controlling interest holders. Any difference between
the Group’s share of net assets before and after the change, and any consideration received or paid, is
adjusted to or against Group reserves.
(iv) Loss of Control
Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the subsidiary,
any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or
deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in
the previous subsidiary, then such interest is measured at fair value at the date that control is lost.
Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial asset
depending on the level of influence retained.
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(v) Associates
Associates are entities, including unincorporated entities, in which the Group has significant influence, but
not control, over the financial and operating policies.
Investments in associates are accounted for in the consolidated financial statements using the equity
method less any impairment losses. The cost of the investment includes transaction costs. The consolidated
financial statements include the Group’s share of the profit or loss and other comprehensive income of the
equity accounted associates, after adjustments if any, to align the accounting policies with those of the
Group, from the date that significant influence commences until the date that significant influence ceases.
When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest
including any long-term investments is reduced to zero, and the recognition of further losses is discontinued
except to the extent that the Group has an obligation or has made payments on behalf of the associate.
When the Group ceases to have significant influence over an associate, it is accounted for as a disposal of
the entire interest in that associate, with a resulting gain or loss being recognised in profit or loss. Any
retained interest in the former associate at the date when significant influence is lost is re-measured at fair
value and this amount is regarded as the initial carrying amount of a financial asset.
When the Group’s interest in an associate decreases but does not result in a loss of significant influence,
any retained interest is not re-measured. Any gain or loss arising from the decrease in interest is
recognised in profit or loss. Any gains or losses previously recognised in other comprehensive income are
also reclassified proportionately to profit or loss.
Investments in associates are measured in the Company’s statement of financial position at cost less any
impairment losses. The cost of the investment includes transaction costs.
(vi) Jointly Controlled Entities
Jointly controlled entities are those entities over whose activities the Group has joint control, established by
contractual agreement and requiring unanimous consent for strategic financial and operating decisions.
Investments in jointly controlled entities are accounted for in the consolidated financial statements using
the equity method less any impairment losses. The cost of the investment includes transaction costs. The
consolidated financial statements include the Group’s share of the profit or loss and other comprehensive
income of the equity accounted jointly controlled entities, after adjustments if any, to align the accounting
policies with those of the Group, from the date that significant influence commences until the date that
significant influence ceases.
When the Group’s share of losses exceeds its interest in an equity-accounted joint venture, the carrying
amount of that interest (including any long-term investments) is reduced to zero and the recognition of
further losses is discontinued except to the extent that the Group has an obligation or has made payments
on behalf of the joint venture.
Investments in jointly controlled entities are stated in the Company’s statement of financial position at cost
less impairment losses, unless the investment is classified as held for sale or distribution.
(vii) Non-controlling Interests
Non-controlling interests at the end of the reporting year, being the equity in a subsidiary not attributable
directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of
financial position and statement of changes in equity within equity, separately from equity attributable to the
owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated
statement of profit or loss and other comprehensive income as an allocation of the profit or loss and the
comprehensive income for the year between non-controlling interests and the owners of the Company.
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests
even if doing so causes the non-controlling interests to have a deficit balance.
(viii)Transactions Eliminated on Consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group
transactions, are eliminated in preparing the consolidated financial statements.
Unrealised gains arising from transactions with equity accounted associates are eliminated against the
investment to the extent of the Group’s interest in the investees. Unrealised losses are eliminated in the
same way as unrealised gains, but only to the extent that there is no evidence of impairment.
(b)Foreign Currency
(i) Foreign Currency Transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at
exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the end of the reporting year are
retranslated to the functional currency at the exchange rate at that date.
Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the
reporting date except for those that are measured at fair value are retranslated to the functional currency at
the exchange rate at the date that the fair value was determined.
Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences
arising on the retranslation of available-for-sale equity instruments which are recognised in other
comprehensive income.
(ii) Operations Denominated in Functional currencies other than Ringgit Malaysia
The assets and liabilities of operations denominated in functional currencies other than RM, including
goodwill and fair value adjustments arising on acquisition, are translated to RM at exchange rates at the
end of the reporting year, except for goodwill and fair value adjustments arising from business combinations
before 1 January 2011 which are treated as assets and liabilities of the Company. The income and expenses
of foreign operations are translated to RM at exchange rates at the dates of the transactions.
Foreign currency differences are recognised in other comprehensive income and accumulated in the
foreign currency translation reserve (“FCTR”) in equity. However, if the operation is a non-wholly-owned
subsidiary, then the relevant proportionate share of the translation difference is allocated to the noncontrolling interests. When a foreign operation is disposed of such control, significant influence or joint
control is lost, the cumulative amount in the FCTR related to that foreign operation is reclassified to profit or
loss as part of the profit or loss on disposal.
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(b)Foreign Currency (cont’d)
(ii) Operations Denominated in Functional Currencies other than Ringgit Malaysia (cont’d)
When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while
retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests.
When the Group disposes off only part of its investment in an associate or joint venture that includes a
foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative
amount is reclassified to profit or loss.
In the consolidated financial statements, when settlement of a monetary item receivable from or payable to
a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses
arising from such a monetary item are considered to form part of a net investment in a foreign operation and
are recognised in other comprehensive income, and are presented in the FCTR in equity.
(c)Financial Instruments
(i) Initial Recognition and Measurement
A financial asset or a financial liability is recognised in the statement of financial position when, and only
when, the Group or the Company becomes a party to the contractual provisions of the instrument.
A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not
at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue
of the financial instrument.
(ii) Financial Instrument categories and Subsequent Measurement
The Group and the Company categorise financial instruments as follows:
Financial Assets
(a) Financial Assets at Fair Value through Profit or Loss
Fair value through profit or loss category comprises financial assets that are held for trading, including
derivatives (except for a derivative that is a financial guarantee contract or a designated and effective
hedging instrument) or financial assets that are specifically designated into this category upon initial
recognition.
Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair
values cannot be reliably measured are measured at cost.
Other financial assets categorised as fair value through profit or loss are subsequently measured at
their fair values with the gain or loss recognised in profit or loss.
(b) Loans and Receivables
Loans and receivables category comprises debt instruments that are not quoted in an active market.
Financial assets categorised as loans and receivables are subsequently measured at amortised cost
using the effective interest method.
All financial assets, except for those measured at fair value through profit or loss, are subject to review for
impairment (see Note 2(k)(i)).
(c)Financial Instruments (cont’d)
(ii) Financial Instrument categories and Subsequent Measurement (cont’d)
Financial Liabilities
All financial liabilities are subsequently measured at amortised cost other than those categorised as fair
value through profit or loss.
Fair value through profit or loss category comprises financial liabilities that are held for trading, derivatives
(except for a derivative that is a financial guarantee contract or a designated and effective hedging
instrument) or financial liabilities that are specifically designated into this category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair
values cannot be reliably measured are measured at cost.
Other financial liabilities categorised as fair value through profit or loss are subsequently measured at their
fair values with the gain or loss recognised in profit or loss.
(iii) Financial Guarantee Contracts
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 in accordance with
the original or modified terms of a debt instrument.
When settlement of a financial guarantee contract become probable, an estimate of the obligation is made.
If the carrying value of the financial guarantee contract is lower than the obligation, the carrying value is
adjusted to the obligation amount and accounted for as a provision.
(iv) Derecognition
A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows
from the financial asset expire or the financial asset is transferred to another party without retaining control
or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference
between the carrying amount and the sum of the consideration received (including any new asset obtained
less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is
recognised in profit or loss.
A financial liability or part of it is derecognised when, and only when, the obligation specified in the contract
is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the
carrying amount of the financial liability extinguished or transferred to another party and the consideration
paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
(d) Property, Plant and Equipment
(i) Recognition and Measurement
Items of property, plant and equipment are measured at cost less any accumulated depreciation and any
accumulated impairment losses.
Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs
directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling
and removing the items and restoring the site on which they are located.
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(d) Property, Plant and Equipment (cont’d)
(i) Recognition and Measurement (cont’d)
Purchased software that is integral to the functionality of the related equipment is capitalised as part of that
equipment.
The cost of property, plant and equipment recognised as a result of a business combination is based on
fair value at acquisition date. The fair value of property is the estimated amount for which a property could be
exchanged between knowledgeable willing parties in an arm’s length transaction after proper marketing
wherein the parties had each acted knowledgeably, prudently and without compulsion. The fair value of
other items of plant and equipment is based on the quoted market prices for similar items when available
and replacement cost when appropriate.
When significant parts of an item of property, plant and equipment have different useful lives, they are
accounted for as separate items (major components) of property, plant and equipment.
The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the
proceeds from disposal with the carrying amount of property, plant and equipment and is recognised net
within “other operating income” or “other operating expenses” respectively in profit or loss.
(ii) Subsequent Costs
The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying
amount of the item if it is probable that the future economic benefits embodied within the part will flow to the
Group or the Company, and its cost can be measured reliably. The carrying amount of the replaced part
is derecognised to profit or loss. The costs of the day-to-day servicing of property, plant and equipment are
recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount
substituted for cost, less its residual value.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each
part of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the
lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by
the end of the lease term. Freehold land is not depreciated. Property, plant and equipment under construction
are not depreciated until the assets are ready for their intended use.
The estimated useful lives for the current and comparative years are as follows:
Leasehold land
Buildings
Plant and machinery
Tools, jigs and fixtures
Furniture, fittings, office equipment, renovation and signboard
Motor vehicles
Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate.
30 - 99 years
50 - 60 years
3 - 10 years
1 - 4 years
3 - 10 years
5 years
(e)Biological Assets
Biological assets comprise of mature and immature oil palm plantations. Biological assets are stated at fair value
less estimated costs to sell with any changes therein recognised in profit or loss in the reporting period in which
it arises.
(f)Leased Assets
(i) Finance Lease
Leases in terms of which the Group or the Company assumes substantially all the risks and rewards of
ownership are classified as finance leases. On initial recognition of the leased asset is measured at an
amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent
to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that
asset.
Minimum lease payments made under finance leases are apportioned between the finance expense and the
reduction of the outstanding liability. The finance expense is allocated to each year during the lease term
so as to produce a constant yearic rate of interest on the remaining balance of the liability. Contingent lease
payments are accounted for by revising the minimum lease payments over the remaining term of the lease
when the lease adjustment is confirmed.
Leasehold land which in substance is a finance lease is classified as property, plant and equipment.
(ii) Operating Leases
Leases, where the Group or the Company does not assume substantially all the risks and rewards of
ownership are classified as operating leases and except for property interest held under operating lease,
the leased assets are not recognised in the Group’s statements of financial position.
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term
of the lease unless another systematic basis is more representative of the time pattern in which economic
benefits from the leased asset are consumed. Lease incentives received are recognised in profit or loss as
an integral part of the total lease expense, over the term of the lease.
Leasehold land which in substance an operating lease is classified as prepaid lease payments.
(g)Investment Properties
(i) Investment Properties Carried at Cost
Investment properties are properties which are owned to earn rental income or for capital appreciation or for
both. These include freehold land and leasehold land which in substance is a finance lease held for a
currently undetermined future use. Properties that are occupied by the companies in the Group are
accounted for as owner-occupied rather than as investment properties. Investment properties initially and
subsequently measured at cost are accounted for similarly to property, plant and equipment.
Investment properties are measured at cost less any accumulated depreciation and any impairment losses,
consistent with the accounting policy for property, plant and equipment as stated in accounting policy Note
2(d).
Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other substituted
for cost.
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(g)Investment Properties (cont’d)
(i) Investment Properties Carried at Cost (cont’d)
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful life of 50 to 60
years for buildings. Long term leasehold land is not depreciated due to the nature of the long term lease.
An investment property is derecognised on its disposal, or when it is permanently withdrawn from use and
no future economic benefits are expected from its disposal. The difference between the net disposal
proceeds and the carrying amount is recognised in profit or loss in the year in which the item is
derecognised.
(ii) Reclassification to/from Investment Property
When an item of property, plant and equipment is transferred to investment property following a change in
its use, any difference arising at the date of transfer between the carrying amount of the item immediately
prior to transfer and its fair value is recognised directly in equity as a revaluation of property, plant and
equipment. However, if a fair value gain reverses a previous impairment loss, the gain is recognised in
profit or loss. Upon disposal of an investment property, any surplus previously recorded in equity is
transferred to retained earnings, the transfer is not made through profit or loss.
When the use of a property changes such that it is reclassified as property, plant and equipment or
inventories, its fair value at the date of reclassification becomes its cost for subsequent accounting.
(h) Intangible Assets
(i) Goodwill
Goodwill arises on business combination is measured at cost less any accumulated impairment
losses. Negative goodwill is recognised immediately in the income statement. In respect of equityaccounted investees, the carrying amount of goodwill is included in the carrying amount of the
investment and an impairment loss on such an investment is not allocated to any asset, including
goodwill, that forms part of the carrying amount of the equity-accounted investee.
(ii) Research and Development
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical
knowledge and understanding, is recognised in profit or loss when incurred.
Expenditure on development activities, whereby the application of research findings are applied to a
plan or design for the production of new or substantially improved products and processes, is capitalised
only if development costs can be measured reliably, the product or process is technically and
commercially feasible, future economic benefits are probable and the Group intends to and has
sufficient resources to complete development and to use or sell the asset.
The expenditure capitalised includes the cost of materials, direct labour and overheads costs that are
directly attributable to preparing the asset for its intended use. For qualifying assets, borrowing costs
are capitalised in accordance with the accounting policy on borrowing costs. Other development costs
are recognised in profit or loss as incurred.
Capitalised development costs are measured at cost less any accumulated amortisation and any
accumulated impairment losses.
(h)Intangible Assets (cont’d)
(iii) Other Intangible Assets
Intangible assets, other than goodwill and development cost, that are acquired by the Group, which have
finite useful lives, are measured at cost less any accumulated amortisation and any accumulated impairment
losses.
The costs of intangible assets acquired in a business combination are their fair values at the date of
acquisition. The fair value of other intangible assets is based on the discounted cash flows expected to be
derived from the use and eventual sale of the assets.
(iv) Subsequent Expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the
specific asset to which it relates. All other expenditure, including expenditure on internally generated
goodwill and brands, is recognised in profit or loss as incurred.
(v) Amortisation
Amortisation is based on the cost of an asset less its residual value.
Goodwill and intangible assets with indefinite useful lives are not amortised but are tested for impairment
annually and whenever there is an indication that they may be impaired.
Development cost and other intangible assets are amortised from the date that they are available for use.
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible
assets.
The estimated useful lives for development cost are 4 to 5 years. Amortisation methods, useful lives and
residual values are reviewed at the end of each reporting year and adjusted, if appropriate.
(i)Inventories
Inventories are measured at the lower of cost and net realisable value.
The cost of inventories is measured based on weighted average cost formula, and includes expenditure incurred
in acquiring the inventories, production conversion costs and other costs incurred in bringing them to their existing
location and condition. In the case of work-in-progress and finished and trading goods, cost includes an
appropriate share of production overheads based on normal operating capacity.
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.
The fair value of inventories acquired in a business combination is determined based on the estimated selling
price in the ordinary course of business less the estimated costs of completion and sale, and a reasonable profit
margin based on the effort required to complete and sell the inventories.
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(j)Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid investments
which have an insignificant risk of changes in fair value with original maturities of three months or less, and are
used by the Group and the Company in the management of their short term commitments.
For the purpose of the statements of cash flows, cash and cash equivalents are presented net of bank overdrafts
and pledged deposits.
(k)Impairment
(i) Financial Assets
All financial assets (except for financial assets categorised as fair value through profit or loss, investments
in subsidiaries, investments in associates and investments in jointly controlled entities) are assessed at
each reporting date whether there is any objective evidence of impairment as a result of one or more events
having an impact on the estimated future cash flows of the asset. Losses expected as a result of future
events, no matter how likely, are not recognised. For an equity instrument, a significant or prolonged decline
in the fair value below its cost is an objective evidence of impairment. If any such objective evidence exists,
then the financial asset’s recoverable amount is estimated.
An impairment loss in respect of loans and receivables is recognised in profit or loss and is measured as
the difference between the asset’s carrying amount and the present value of estimated future cash flows
discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through
the use of an allowance account.
An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or
loss and is measured as the difference between the financial asset’s carrying amount and the present value
of estimated future cash flows discounted at the current market rate of return for a similar financial asset.
If, in a subsequent year, the fair value of a debt instrument increases and the increase can be objectively
related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss
is reversed, to the extent that the asset’s carrying amount does not exceed what the carrying amount would
have been had the impairment not been recognised at the date the impairment is reversed. The amount of
the reversal is recognised in profit or loss.
(ii) Other Non Financial Assets
The carrying amounts of other non financial assets (except for inventories and deferred tax assets) are
reviewed at the end of each reporting year to determine whether there is any indication of impairment. If any
such indication exists, then the asset’s recoverable amount is estimated.
For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for use, the
recoverable amount is estimated each annual year at the same time and when there is indication of
impairment.
For the purpose of impairment testing, assets are grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely independent of the cash inflows of other assets
or groups of assets (the cash-generating unit or “CGU”). Subject to an operating segment ceiling test, for the
purpose of goodwill impairment testing, cash-generating units to which goodwill has been allocated are
aggregated so that the level at which impairment testing is performed reflects the lowest level at which
goodwill is monitored for internal reporting purposes. The goodwill acquired in a business combination, for the
purpose of impairment testing, is allocated to CGUs that are expected to benefit from the synergies of the
combination.
(k)Impairment (cont’d)
(ii) Other Non Financial Assets (cont’d)
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs
to sell. In assessing fair value less costs to sell or 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 or cash generating unit.
An impairment loss is recognised if the carrying amount of an asset or its related CGU exceeds its estimated
recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are
allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the
carrying amounts of the other assets in the units on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses
recognised in prior years are assessed at the end of each reporting year for any indications that the loss
has decreased or no longer exists. An impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount since the last impairment loss was recognised. An
impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or amortisation, if no impairment loss had
been recognised. Reversals of impairment losses are credited to profit or loss in the financial year in which
the reversals are recognised.
(l) Equity Instruments
Instruments classified as equity are measured at cost on initial recognition and are not remeasured
subsequently.
(i) Issue Expenses
Costs directly attributable to the issue of instruments classified as equity are recognised as a deduction from
equity.
(ii) Preference Share Capital
Preference share capital is classified as equity if it is non-redeemable, or is redeemable but only at the
Company’s option, and any dividends are discretionary. Dividends thereon are recognised as distributions
within equity.
Preference share capital is classified as financial liability if it is redeemable on a specific date or at the option
of the equity holders, or if dividend payments are not discretionary. Dividends thereon are recognised as
interest expense in profit or loss as accrued.
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(m) Employee Benefits
(i) Short-term Employee Benefits
Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick
leave are measured on an undiscounted basis and are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing
plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service
provided by the employee and the obligation can be estimated reliably.
(ii) State Plans
(iii) Termination Benefits
The Group’s contributions to Employees’ Provident Fund are charged to profit or loss in the year to which
they relate. Once the contributions have been paid, the Group has no further payment obligations.
Termination benefits are recognised as an expense when the Group is committed demonstrably, without
realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the
normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary
redundancy. Termination benefits for voluntary redundancies are recognised as expenses if the Group
has made an offer encouraging voluntary redundancy, it is probable that the offer will be accepted, and the
number of acceptances can be estimated reliably. If benefits are payable more than 12 months after the
reporting period, then they are discounted to their present value.
(n) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the
obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding
of the discount is recognised as finance cost.
Warranties
A provision for warranties is recognised when the underlying products or services are sold. The provision is
based on historical warranty data and a weighting of all possible outcomes against their associated
probabilities.
(o)Revenue and Other Income
(i) Goods Sold
Revenue from the sale of goods in the course of ordinary activities is measured at fair value of the
consideration received or receivable, net of returns and allowances, trade discount and volume rebates.
Revenue is recognised when persuasive evidence exists, usually in the form of an executed sales
agreement, that the significant risks and rewards of ownership have been transferred to the customer,
recovery of the consideration is probable, the associated costs and possible return of goods can be
estimated reliably, and there is no continuing management involvement with the goods, and the amount of
revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be
measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised.
(o)Revenue and Other Income (cont’d)
(ii) Services
Revenue from services rendered is recognised in profit or loss when the services have been rendered.
Revenue from management services is accrued, by reference to the agreements entered.
(iii)
Rental Income
(iv) Dividend Income
Dividend income is recognised in profit or loss on the date that the Group’s or the Company’s right to receive
payment is established.
(v) Interest Income
Rental income from investment property is recognised in profit or loss on a straight-line basis over the term
of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the
term of the lease. Rental income from subleased property is recognised as other income.
Interest income is recognised as it accrues using the effective interest method in profit or loss.
(vi) Government Grants
Government grants that compensate the Group for the cost of an asset are recognised initially as deferred
income at fair value when there is reasonable assurance that they will be received and that the Group
will comply with the conditions associated with the grant and are then recognised in profit or loss as other
income on a systematic basis over the useful life of the asset.
Grants that compensate the Group for expenses incurred are recognised in profit or loss as other income
on a systematic basis in the same years in which the expenses are recognised.
(p)Borrowing Costs
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying
asset are recognised in profit or loss using the effective interest method.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time to get ready for their intended use or sale, are
capitalised as part of the cost of those assets.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for
the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare
the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases
when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are
interrupted or completed.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation.
(q) Income Tax
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in
profit or loss except to the extent that it relates to a business combination or items recognised directly in equity
or other comprehensive income.
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(q) Income Tax (cont’d)
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates
enacted or substantively enacted by the end of the reporting year, and any adjustment to tax payable in respect
of previous financial years.
Deferred tax is recognised using the liability method, providing for temporary differences between the carrying
amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not
recognised for the following temporary differences: the initial recognition of goodwill, and the initial recognition of
assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor
taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary
differences when they reverse, based on the laws that have been enacted or substantively enacted by the end
of the reporting year.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities
and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on
different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets
and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available
against which the temporary difference can be utilised. Deferred tax assets are reviewed at the end of each
reporting year and are reduced to the extent that it is no longer probable that the related tax benefit will be
realised.
A tax incentive that is not a tax base of an asset is recognised as a reduction of tax expense in profit or loss as
and when it is granted and claimed.
(r)Earnings per Ordinary Share
The Group presents basic and diluted earnings per share data for its ordinary shares (“EPS”).
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the
weighted average number of ordinary shares outstanding during the year, adjusted for own shares held, if any.
Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted
average number of ordinary shares outstanding adjusted for own shares held for the effects of all dilutive potential
ordinary shares, which comprise convertible notes and share options granted to employees.
(s)Operating Segments
An operating segment is a component of the Group that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the
Group’s other components. An operating segment’s operating results are reviewed regularly by the chief
operating decision makers, which in this case are Executive Directors of the Group, to make decisions about
resources to be allocated to the segment and assess its performance, and for which discrete financial information
is available.
(t)Contingencies
Contingent Liabilities
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated
reliably, the obligation is not recognised in the statements of financial position and is disclosed as a contingent
liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence
will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as
contingent liabilities unless the probability of outflow of economic benefits is remote.
At 30 June 201366,184
64,816
344,290
11,119
25,924
4,901
50 517,284
At
60,041
339,472
11,367
24,833
4,851
3,959 510,876
30 June 2012/1 July 2012, restated66,353
Additions
-
467
8,624
395
1,465
535
721 12,207
Disposals
-
-
-
(2,302)
(61)
(369)
(488)
(3,220)
Write
offs
-
-
-
-
(20)
(582) (43)
(645)
Reclassification
-
4,424
-
-
6
(3)
(4,427)
Currency
translation differences
-
41
(169)
(116)
(1,484)
(3)
(203) (1,934)
At 1 January 2011 8,935
40,796
298,250
-
21,392
1,827
- 371,200
Acquisitions through business
combinations (Note 33)54,345
19,001
33,599
11,347
4,535
2,942
3,936 129,705
Additions 3,065
222
8,791
20
1,811
134
14 14,057
Disposals
-
-
-
-
(260)
(2,766)
(54)
(3,080)
Write
offs
-
-
-
-
-
(964)
(144)
(1,108)
Currency
8
22
56
-
5
2
9
102
Furniture,
fittings, office
equipment,
Tools,
renovationConstruction
Group
Plant and
jigs and
andMotor
work-in
Land
Buildings machinery
fixtures
signboard vehicles
progress
Total
CostRM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000
3.
73
Property, plant and equipment (cont’d)
33,970
52,016
54,805
At 30 June 2012/1 July 2012, restated64,469
At 30 June 201362,922
10,011
At 1 January 2011 7,339
Carrying value
3,262
75,308
83,791
60,511
268,982
7,205
10,999
-
3,914
6,417
6,865
1,542
19,507
2,748
3,486
813
2,153
306,459
1,370
283,921
1,370
285,291
26,765
(3,062)
(417)
(748)
265,655
1,370
267,025
22,136
(2,820)
(1,099)
49
50 209,455
3,959 225,585
- 104,175
- 307,829
Depreciation and impairment losses
At
1 January 2011
Accumulated depreciation 1,596
6,826
236,418
-
19,801
1,014
-
Accumulated impairment losses
-
-
1,321
-
49
-
-
1,596
6,826
237,739
-
19,850
1,014
-
Depreciation for the period 288
1,194
18,867
368 1,015
404
-
Disposals
-
-
-
-
-
(2,766)
(54)
Write
offs
-
-
-
-
-
(964)
(135)
Currency translation differences
-
5
39
-
4
1
-
At 30 June 2012/1 July 2012, restated
8,025
254,360
368 17,919
1,365
-
-
-
1,321
-
49
-
-
1,884
8,025
255,681
368 17,968
1,365
-
Depreciation for the year 1,372
1,845
16,529
3,963
1,937
1,119
-
(2,300)
(61)
(367)
(334)
Disposals
-
-
-
(20)
(356)
(41)
Write
offs
-
-
-
-
(212)
(3)
Reclassification
-
209
-
6
-
(68)
(696)
(3)
Currency
6
-
13
-
At
30 June 2013
10,011
267,661
3,914
19,458
2,153
-
-
-
1,321
-
49
-
-
74
Furniture,
fittings, office
equipment,
Tools,
renovationConstruction
Plant and
jigs and
andMotor
work-inGroup
Land
Buildings machinery
fixtures
signboard vehicles
progress
Total
RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000
3.
75
3.
Restatement of Property, Plant and Equipment
Under FRSs, the Group measured its land and building at valuation. Valuations for the Group were carried out in May
2012 as well as in 2006.
Upon transition to MFRSs, the Group elected to apply the optional exemption to use the previous revaluation carried
out in 2006 as deemed cost under MFRSs. Please refer to Note 34 for further details.
Furniture,
fittings
Company
and office
equipment
CostRM’000
At 1 January 2011/30 June 2012/1 July 2012
Additions
28
At 30 June 2013
28
Depreciation
At 1 January 2011/30 June 2012/1 July 2012
Depreciation for the year
4
At 30 June 2013
4
Carrying amounts
At 1 January 2011
-
At 30 June 2012/1 July 2012
-
At 30 June 2013
3.1Leased Plant and Equipment
24
At 30 June 2013, the carrying amounts of leased plant and equipment of the Group are as follows:
Group
30.6.2013
30.6.2012
1.1.2011
RM’000RM’000RM’000
Carrying amounts
Plant and machinery
2,094
1,891
3,370
Office equipment
100
90
Motor vehicles
1,601
2,417
762
3,795
4,398
4,132
These leased plant and equipment secures lease obligations as mentioned in Note 17.
76
3.
3.2Security
At 30 June 2013, the property, plant and equipment of the Group with the following carrying amounts are charged
to financial institutions as securities for borrowings of the Group as mentioned in Note 17.
Group
30.6.2013
30.6.2012
1.1.2011
RM’000RM’000RM’000
(restated)
Carrying amounts
Land
19,640
19,436
6,623
Buildings
43,728
40,592
28,653
Plant and machinery
46,437
55,253
52,203
Furniture, fittings, office equipment, renovation
and signboard 1,499
1,375
1,095
Motor vehicles
6
37
88
111,310
116,693
88,662
3.3 Land
Included in the carrying amounts of land are:
Group
30.6.2013
30.6.2012
1.1.2011
RM’000RM’000RM’000
(restated)
Freehold land
8,760
8,760
Short term leasehold land
43,756
45,186
7,339
Long term leasehold land
10,406
10,523
62,922
64,469
7,339
4.Biological assets
Group
2013
2012
RM’000RM’000
At fair value
At 1 July 2012/1 January 2011
38,020
Acquisitions through business combinations (Note 33)
-
38,020
Gain arising from fair value changes in biological assets
591
At 30 June
38,611
38,020
These relate to the Group’s bearer biological assets of oil palm plantations.
4.Biological assets (Cont’d)
Analysis of the biological assets
Group
Year ended
1.1.2011 to
30.6.2013
30.6.2012
Planted area (in hectares)
- Mature
742
742
- Immature -
742
742
Output harvested
Oil palm fresh fruit bunches (in metric ton)
13,648
19,838
Fair value less costs to sell (in RM’000)
38,611
38,020
Analysis of Measurement
The fair values of oil palm plantations at year end were determined by an independent valuer using the comparison
method on an open market value basis.
The oil palms were mainly planted between 1996 and 2010, and are currently aged between 3 to 17 years old.
Significant assumptions made in determining the fair values of the oil palm plantations are as follows:
(a)
(b)
(c)
No new planting or replanting activities are assumed;
Oil palm trees have an average life of 25 years, with the first three years as immature and remaining years as
mature; and
There is keen demand for oil palm estates in Sabah with the continued demand for fresh fruit bunches from local
mills.
Financial Risk Management Strategies
The Group is exposed to financial risks arising from changes in oil palm fresh fruit bunches (“FFB”) prices. The Group
does not anticipate that FFB prices will decline significantly in the foreseeable future and, therefore, has not entered
into derivative or other contracts to manage the risk of a decline in FFB prices. The Group reviews its outlook for FFB
prices regularly in considering the need for active financial risk management.
77
78
4.Biological assets (Cont’d)
Security
Biological assets, representing oil palm plantation, with a carrying amount of RM38,611,000 (30.6.2012: RM38,020,000)
are charged as security for borrowings as disclosed in Note 17.
5.Investment propertY
Long term
leasehold
Group
land
RM’000
Cost
At 1 January 2011
Capital expenditure capitalised
At 30 June 2012/30 June 2013
Carrying amounts
At 1 January 2011
At 30 June 2012/30 June 2013
11,033
12
11,045
11,033
11,045
The Group acquired a parcel of long term leasehold land in 2010 which has an unexpired lease term of 911 years as
at end of year. This parcel of investment property is not being rented out and no income nor direct operating expense
has been incurred. Based on directors’ valuation, the fair value of the investment property at 30 June 2013 was
estimated to be RM13,730,000.
6.Intangible assets
CustomerDevelopment
GroupGoodwill relationships
costTotal
RM’000RM’000RM’000RM’000
Cost
At 1 January 2011
Acquisitions through business combinations
-As previously stated (Note 33.3)
-Adjustment on completion of
purchase price allocation
exercise:
- customer relationships
- contingent consideration
4,326
-
-
4,326
112,363
-
1,098
113,461
(31,499)
9,699
31,499
-
-
-
9,699
As restated
Additions
At 30 June 2012
Written-off
Additions 90,563
-
31,499
-
1,098
363
123,160
363
94,889
-
-
31,499
1,461
-
(129)
-
262
127,849
(129)
262
At 30 June 2013
94,889
31,499
127,982
1,594
6.Intangible assets (cont’d)
CustomerDevelopment
GroupGoodwill relationships
costTotal
RM’000RM’000RM’000RM’000
At 1 January 2011/30 June 2012
Impairment during the year
-
20,546 -
-
-
-
20,546
At 30 June 2013
20,546
-
-
20,546
Amortisation
At 1 January 2011
Amortisation for the period
-
-
-
-
-
33
33
At 30 June 2012
Amortisation for the year -
-
-
-
33
808
33
808
At 30 June 2013
-
-
841
841
At 1 January 2011
4,326
-
-
4,326
At 30 June 2012, restated
94,889
31,499
1,428
127,816
At 30 June 2013
74,343
31,499
753
106,595
Carrying amounts
Intangible assets arising from the Acquisition as defined in Note 33 amounting to RM112,363,000 was previously
arrived at based on provisional fair values of identifiable assets and liabilities on the acquisition of the businesses of
Jotech Group and AutoV Group as disclosed in Note 33.3.
Following the expiry of the Proreka profit guarantee period on 31 December 2012, management assessed that there
will be potential profit guarantee compensations to be received and it is now probable that the compensation of the
profit guarantee will crystallise to enable the conversion of the ASSB RCPS as detailed in Note 33.3. Upon the
Proreka vendors making good the profit guarantee, a liability on contingent consideration will arise, resulting in
additional goodwill of RM9,699,000 being recognised.
Upon completion of the purchase price allocation exercise in May 2013, the fair value of customer relationships
was determined as RM31,499,000 and goodwill from the Acquisition as RM90,563,000. For customer relationships,
the Group identified the intangible assets arising from supply arrangements with selected established long term
customers.
6.1Amortisation
Development cost is amortised when the product is ready for commercialisation and goes into mass production
and is amortised over its estimated useful lives.
6.2Impairment Review of Goodwill and Customer Relationship
For the purpose of impairment testing, goodwill is allocated to the Group’s operating divisions which represent
the lowest level within the Group at which the goodwill is monitored for internal management purposes.
In assessing whether goodwill has been impaired, the carrying amount of the CGU (including goodwill) is
compared with the recoverable amount of the CGU. The recoverable amount is the higher of fair value less costs
to sell (“FVLCTS”) and value in use (“VIU”).
79
80
6.Intangible assets (Cont’d)
6.2Impairment Review of Goodwill and Customer Relationship (cont’d)
The aggregate carrying amount of goodwill of RM74,343,000 (30.6.2012: RM94,889,000; 1.1.2011: RM4,326,000)
has been allocated to the Integrated Manufacturing Services Segment of the Group.
At 30 June 2013, the recoverable amounts of the CGUs were based on their FVLCTS which was based on
the best information available to reflect the amount the Group can obtain on disposal of the CGUs at year end,
in an arm’s length transaction between knowledgeable, willing parties, after deducting the cost of disposal. The
FVLCTS was estimated by discounting the future pre-tax cash flow projections approved by the Board of
Directors covering a five-year period.
The significant key assumptions used are as follows:
•
•
•
Cash flows of more than 5 years were extrapolated using a constant terminal growth rate of 4%
(30.6.2012: 4%), which does not exceed the long-term average growth rate of the industry;
The CGUs will continue their operations indefinitely; and
Pre-tax discount rates of 8.5% to 14.0% (30.6.2012: 14.5% to 17.4%) were applied in discounting the cash
flows. The discount rates were determined based on the Group’s weighted average cost of capital.
The values assigned to the key assumptions represent management’s assessment of future trends in the
industries and are based on both external sources and internal sources.
Based on management’s assessment, impairment loss of RM20,546,000 has been identified and adjusted for
during the year.
Sensitivity Analysis
The above estimates are sensitive in the following areas:
(i) an increase/(decrease) of a one percentage point in discount rate used would have (decreased)/increased
the recoverable amount by approximately (RM23,889,000)/RM31,413,000.
(ii) an increase/(decrease) of a one percentage point in terminal growth rate used would have increased/
(decreased) the recoverable amount by approximately RM26,672,000/(RM19,835,000).
7.Investments in subsidiaries
Company
2013
2012
RM’000RM’000
At cost:
Unquoted shares
At 1 July 2012/15 July 2011 (date of incorporation)
Additions during the year/period
Impairment during the year/period
At end of year/period
563,419
-
(142,510)
563,419
-
420,909
563,419
7.Investments in subsidiaries (cont’d)
Impairment Assessment
Management assessed the recoverable amounts of the investments in subsidiaries based on the higher of net tangible
assets value or the FVLCTS of these subsidiaries. The assessment resulted in an impairment loss of
RM142,510,000 (2012: Nil).
The details of the subsidiaries are as follows:
Country of
Name of subsidiary
incorporation Principal activities
Jotech Holdings Sdn. Bhd.(“Jotech”) (1)
AIC Corporation Sdn. Bhd. (“AIC”)
AutoV Corporation Sdn. Bhd. (“AutoV”) Globaltec Plantations Sdn. Bhd. (1)
Subsidiaries of Jotech
Malaysia
Malaysia
Malaysia Malaysia
Effective
ownership
interest
2013
2012
%
%
Investment holding
Investment holding
Investment holding
Dormant
100
100
100
100
100
100
100
100
Cergas Fortune Sdn. Bhd. (1)
Malaysia Malaysia Malgreen Progress Sdn. Bhd. (1)
Cultivation and sales
of oil palm fruit bunches
100
100
Cultivation and sales of
oil palm fruit bunches
100
100
Jotech Metal Fabrication Industries Sdn. Bhd. Malaysia
Subsidiaries of Jotech Metal
Fabrication Industries Sdn. Bhd.
Manufacturing and
fabrication of tools and
dies and stamped metal
components for electrical
and consumer electronics
industries
100
100
GuangDong Jotech Kong Yue Precision
The People’s
Republic of
Industries Ltd (2)
China
Indonesia
PT Indotech Metal Nusantara (2)
Manufacturing and
components for electronics
and electrical industries
60
60
Manufacturing and
and automotive industries
100
100
Yee Heng Precision Stamping Sdn. Bhd. Malaysia
Fabrication of tools, dies and
precision metal stamping
100
100
81
82
7.Investments in subsidiaries (Cont’d)
The details of the subsidiaries are as follows (cont’d):
Country of
Name of subsidiary
Effective
ownership
interest
2013
2012
%
%
Subsidiaries of AIC
Prodelcon Sdn. Bhd.
Malaysia
Manufacture of high
precision tooling, die-sets,
semiconductor moulds
and parts and high precision
components, jigs and
fixtures and the design and
manufacture of turnkey
automation systems
100
100
AIC Technology Sdn. Bhd.
AIC Inspirasi Sdn. Bhd. Malaysia
Investment holding
100
100
Malaysia
Investment holding
100
100
Malaysia
Dormant
100
100
Malaysia
Dormant
100
100
Malaysia Dormant
-
100
94
94
AIC Properties Sdn. Bhd.
Integral CAD Technologies Sdn. Bhd
Custom Tooling (Malaysia) Sdn. Bhd. (3)
Subsidiary of AIC Technology Sdn. Bhd.
AIC Semiconductor Sdn. Bhd.
Malaysia Subsidiary of Prodelcon Sdn. Bhd.
Isotrax Engineering Sdn. Bhd. (2)
Subsidiaries of AutoV
Design, procurement, sales, assembly and test of
integrated circuit chips and
other ancillary activities
Malaysia
Dormant
100
100
AutoV Sdn. Bhd. (1)
Malaysia
AutoV Mando Sdn. Bhd.
Malaysia
Dormant
100
100
Manufacture of
automotive steering
columns and related
vehicle components
70
70
AutoV Systems Sdn. Bhd. Malaysia
Marketing of automotive
starter motor
100
100
Automako Sdn. Bhd. Malaysia
Manufacture and sale of
automotive wiper arms
and blades and other
related components
100
100
Country of
Name of subsidiary
Subsidiaries of AutoV (cont’d)
Autoventure Coat Sdn. Bhd.
Effective
ownership
interest
2013
2012
%
%
Malaysia
Dormant
100
100
Malaysia
Investment holding
100
100
Autovisor Plastics Sdn. Bhd.
Malaysia
Manufacturing of sunvisors
and interior car lamps
100
100
Aventur Door System Sdn. Bhd. Malaysia
Manufacturing of car window
regulators and other
automotive components
100
100
Brimal Holdings Sdn. Bhd.
Malaysia
Design, manufacturing and
assembly of automotive
components and electronic
products
100
100
JP Metal Sdn. Bhd.
Malaysia
Manufacture and fabrication of tools and
and automotive industries
100
100
Nobel Decree Sdn. Bhd. Malaysia
Manufacture and supply of automotive electric
horns
84
84
Nuwizard Technologies Sdn. Bhd. (1) Malaysia Proreka (M) Sdn. Bhd.
Malaysia
Dormant
100
100
Manufacturing and sourcing
of parts for the automotive
industry
100
100
Malaysia
Dormant
100
100
Malaysia
Dormant
100
100
Malaysia
Dormant
100
100
Autoventure Corporation Sdn. Bhd. (1) Subsidiaries of Autoventure
Corporation Sdn. Bhd.
AutoV Marketing Sdn. Bhd. (1)
(formerly known as Bryte-DY Sdn. Bhd.)
Direct Past Sdn. Bhd.
HKR Manufacturing Sdn. Bhd. (1) 83
84
Country of
Name of subsidiary
Effective
ownership
interest
2013
2012
%
%
Subsidiaries of Proreka (M) Sdn. Bhd.
Malaysia
Proreka Tech Sdn. Bhd. Manufacturing and trading
in automotive parts and
accessories
85
85
Proreka Automotive Parts Sdn. Bhd. (1)
Malaysia
Product design services
and trading in automotive
parts and accessories
100
100
Proreka Plastic Sdn. Bhd. (1)
Malaysia
Dormant
100
100
Senko Sekei Sdn. Bhd. (1)
Malaysia
Dormant
100
100
(1)
The auditors’ reports on the financial statements of these subsidiaries contain an emphasis of matter on going
concern. The ability of these subsidiaries to continue as going concerns is dependent on the continuing financial
support from the holding and related companies.
(2)
Subsidiary audited by other firm of accountants.
(3)
This subsidiary has been de-registered as at the year/period end.
Pursuant to the Acquisition as mentioned in Note 33, which was completed on 25 May 2012, AIC, AutoV and Jotech
and their respective group of companies became subsidiaries of the Company on even date.
On 30 June 2012, the Company subscribed for redeemable convertible preference shares in AIC, AutoV and Jotech
for a total investment cost of RM553,720,000 via the capitalisation of the amount owed by AIC, AutoV and Jotech.
On 15 June 2012, the Company acquired the entire equity interest, comprising 2 ordinary shares of RM1.00 each in
Globaltec Plantations Sdn. Bhd. for a cash consideration of RM2.00.
8.Investment in associate
Group
30.6.2013
30.6.2012
RM’000RM’000
At cost:
Unquoted shares outside Malaysia Share of post-acquisition reserves
7,221
(42)
7,221
-
7,179
7,221
Summary financial information for the associate, not adjusted for the percentage of ownership held by the Group:
GroupEffectiveTotalTotal
Country of
ownershipRevenueLoss
assets liabilities
incorporation
interest
(100%) (100%)
(100%)
(100%)
30.6.2013
%RM’000RM’000RM’000RM’000
Rockhill Resources Ltd.
30.6.2012
British Virgin Islands
40
-
157
2,379
2,438
Rockhill Resources Ltd.
British Virgin Islands
40
-
45
2,433
2,368
In 2012, pursuant to the business combinations (refer Note 33), the Group acquired a 40% equity interest in Rockhill
Resources Ltd.
9.Investment in jointly controlled entity
Group
30.6.2013
30.6.2012
NoteRM’000RM’000
At cost:
At beginning of year/period
646
Acquisition through business combinations
33
-
Additions during the year/period
4,000
4,646
Share of post-acquisition reserves
(1,763)
Impairment during the year/period
(2,883)
At end of year/period
-
725
725
(79)
646
85
86
9.Investment in jointly controlled entity (cont’d)
Summary financial information on the jointly controlled entity, not adjusted for the percentage of ownership by the
Group:
GroupEffectiveTotalTotal
Country of
ownershipRevenueLoss
assets liabilities
incorporation
interest
(100%) (100%)
(100%)
(100%)
30.6.2013
%RM’000RM’000RM’000RM’000
Proreka Sprintex Sdn. Bhd.
Malaysia
50
724
(3,448)
10,807
5,041
Malaysia
50
-
(705)
9,823
8,610
30.6.2012
Proreka Sprintex Sdn. Bhd. Impairment Assessment
Management has fully impaired its investment in the jointly controlled entity due to continued losses faced by the
jointly controlled entity in the current and prior period.
Contingent Liability
As at 30 June 2013, the Company had executed corporate guarantees in favour of licensed financial institutions of up
to a limit of RM103.4 million for credit facilities granted to subsidiaries and a jointly controlled entity. Out of the total
banking facilities secured by corporate guarantees by the Company, a total of RM49.2 million was outstanding at the
year end.
The corporate guarantee of RM5.0 million to the jointly controlled entity, together with advances amounting to RM0.8
million as at 30 June 2013 by the Group to the jointly controlled entity, represents a form of provision of financial
assistance by the Company in accordance to paragraph 8.23(1)(ii) of the Listing Requirements. Out of the total banking
facilities granted to the jointly controlled entity and secured by a corporate guarantee by the Company, a total of RM3.6
million was outstanding at the year end.
10.Other investments
Quoted shares in Malaysia
Group
30.6.2013
30.6.2012
1.1.2011
RM’000RM’000RM’000
Non-current
Financial assets at fair value through profit or loss
- Designated upon initial recognition
-
-
13,456
Current
Financial assets at fair value through profit or loss
- Held for trading
Market value
407
732
-
407
732
13,456
11.Deferred tax assets/(liabilities)
Recognised deferred tax assets/(liabilities)
Deferred tax assets and liabilities are attributable to the following:
AssetsLiabilitiesNet
30.6.2013 30.6.2012 1.1.201130.6.2013 30.6.2012 1.1.2011 30.6.2013 30.6.2012 1.1.2011
RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’00
Group
Property, plant and
equipment
- capital allowances
in excess of
depreciation
-
-
-(15,455) (14,535) (11,343) (15,455) (14,535) (11,343)
- revaluation prior to
MFRS adoption
-
-
- (4,682) (5,156)
(416) (4,682) (5,156)
(416)
Unabsorbed reinvestment
allowances
3,560
2,894 2,835
-
-
-
3,560
2,894
2,835
Unabsorbed capital
allowances
-
448
-
-
-
-
-
448
Provisions
1,787
1,006
-
-
-
-
1,787
1,006
Tax loss carry-forwards
100
371
-
-
-
-
100
371
Others
1,417
-
133
-
(81)
-
1,417
(81)
133
Tax assets/(liabilities)
6,864
4,719 2,968(20,137) (19,772) (11,759) (13,273) (15,053) (8,791)
Set off
(4,866) (3,887) (2,968) 4,866
3,887 2,968
-
-
Net tax assets/(liabilities)
1,998
832
-(15,271) (15,885) (8,791) (13,273) (15,053) (8,791)
Movement in recognised temporary differences during the year/period
Acquisitions
throughRecognisedRecognised
business
in profit Translation in profit Translation
At combinations
or loss exchange
At or loss exchange
At
Group
1.1.2011
(Note 33) (Note 23) differences 30.6.2012 (Note 23) differences 30.6.2013
RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000
(restated)
Property, plant and
equipment
- capital allowance in
excess of
depreciation
(11,343)
(4,476)
1,285
(1) (14,535)
(935)
15 (15,455)
- revaluation prior to
MFRS
adoption
(416)
(4,777)
37 -
(5,156)
474
-
(4,682)
Unabsorbed capital
allowances
-
448
-
-
448
(448)
-
- Tax loss-
carry-forwards
-
371
-
-
371
(271)
-
100
Unabsorbed reinvestment
allowances
2,835
-
59
-
2,894
666
-
3,560
Provisions
-
1,005
-
1
1,006
795
(14)
1,787
Other items
133
(298)
85
(1)
(81)
1,486
12
1,417
(8,791)
(7,727)
1,466
(1) (15,053)
1,767
13 (13,273)
87
88
11.Deferred tax assets/(liabilities) (cont’d)
Unrecognised Deferred Tax Assets
Deferred tax assets have not been recognised in respect of the following items (stated at gross):
GroupCompany
Note
30.6.2013 30.6.2012
1.1.2011 30.6.2013 30.6.2012
RM’000RM’000RM’000RM’000RM’000
Tax loss carry-forwards
Unabsorbed capital allowances
Temporary differences
- property, plant and equipment
30,583
843
21,271
4,081
16,728
3,835
-
-
-
2,451
(410)
(23)
-
-
33,877
24,942
20,540
-
-
The temporary differences above do not expire under current tax legislation. Deferred tax assets have been recognised
up to the extent of the future taxable profits available against which the Group can utilise the benefits thereon.
12.Inventories
Group
30.6.2013
30.6.2012
1.1.2011
RM’000RM’000RM’000
At cost:
Raw materials
Work-in-progress
Finished goods
Consumable goods
27,675
8,543
11,891
3,231
26,975
8,516
10,379
3,495
10,059
4,633
1,689
3,520
51,340
49,365
19,901
At net realisable value:
Raw materials
Work-in-progress
Finished goods
921
54
160
1,173
71
163
-
1,135
1,407
-
52,475
50,772
19,901
4,989
4,566
-
Carrying amount of inventories pledged as security for
borrowings (Note 17)
89
12.Inventories (Cont’d)
Group
Year ended
1.1.2011 to
30.6.2013
30.6.2012
RM’000RM’000
Recognised in profit or loss:
Inventories recognised as cost of sales
Inventories written off
211,976
1,434
87,186
201
13.Trade and other receivables, including derivatives
GroupCompany
Note
30.6.2013 30.6.2012
1.1.2011 30.6.2013 30.6.2012
RM’000RM’000RM’000RM’000RM’000
Current
Trade
Trade receivables
13.1
70,705
69,554
35,189
-
Less:
Impairment losses 13.2
-
(2,077)
(910)
(180)
-
Amount due from subsidiaries 13.3
68,628
-
68,644
-
35,009
-
-
682
-
68,628
66,644
35,009
682
-
14,796
-
17,680
-
5,005
-
3,296
-
4
13
-
-
125
-
-
14,796
17,680
5,130
3,296
17
83,424
86,324
40,139
3,978
17
Non-trade
Other receivables and deposits
13.4
Amount due from subsidiaries
13.3
Forward exchange contracts at fair
value through profit or loss:
13.1Trade Receivables
13.2Impairment Loss on Trade Receivables
Included in trade receivables of the Group is an amount of RM603,000 (30.6.2012: RM1,123,000; 1.1.2011:
RM2,299,000) due from the non-controlling interests of a subsidiary. The trade receivable is subject to normal
trade terms.
During the year, the Group has written off RM281,000 (30.6.2012: RM159,000; 1.1.2011: RM249,000) of trade
receivables and their corresponding impairment losses of equivalent amount.
13.3Amount Due from Subsidiaries
a)
The amount due from subsidiaries (non-trade) represents advances which are unsecured, interest free and
repayable on demand.
The amount due from subsidiaries (trade) is unsecured, interest free and repayable on demand.
b)
90
13.Trade and other receivables, including derivatives (CONT’d)
13.4Other Receivables and Deposits
Other receivables and deposits of the Group and the Company comprise of the following:
GroupCompany
Note
30.6.2013 30.6.2012
1.1.2011 30.6.2013 30.6.2012
RM’000RM’000RM’000RM’000RM’000
Other receivables
Less:
Impairment losses
Deposits
13.5
Prepayments
2,539
(1,913)
2,299
(1,657)
1,182
(341)
-
- -
626
5,199
8,195
642
4,668
8,779
841
3,522
642
-
3,296
-
4
-
14,020
14,089
5,005
3,296
4
In the previous financial year, the Group has written off RM93,000, of its impairment of other receivables
against the allowance amount.
13.5 Included in the deposits of the Group and of the Company are rental deposits of RM3,291,000 (30.6.2012: Nil)
which earns interest at the rate of about 3% per annum (1.1.2011 to 30.6.2012: Nil).
14.Cash and cash equivalents
GroupCompany
Note
30.6.2013 30.6.2012
1.1.2011 30.6.2013 30.6.2012
RM’000RM’000RM’000RM’000RM’000
Deposits placed with licensed banks
Short term placement funds with
approved financial institutions
Cash and bank balances
12,051
8,667
8,240
-
-
3,813
22,348
142
21,981
4,975
3,482
-
107
-
38,212
30,790
16,697
107
-
Included in deposits placed with licensed banks of the Group is a deposit of RM4,028,000 (30.6.2012: RM4,157,000;
1.1.2011: RM975,000) pledged for bank facilities granted to subsidiaries.
15.Capital and reserves
15.1 Share Capital
GroupCompany
NumberNumber
Amount of sharesAmount of shares
RM’000
’000RM’000
’000
Authorised:
Ordinary shares of RM1.00 each
1 January 2011/at date of incorporation
500,000
500,000
100
100
Effect of Acquisition
-
(500,000)
(500,000)
Share split to RM0.10 each
-
-
-
900
Created during the period 1,000,000 10,000,000
999,900
9,999,000
At 30 June 2012/30 June 2013 1,000,000 10,000,000 1,000,000 10,000,000
91
15.Capital and reserves (CONT’d)
15.1Share Capital (Cont’d)
GroupCompany
NumberNumber
Amount of sharesAmount of shares
RM’000
’000RM’000
’000
Issued and fully paid up:
1 January 2011/at date of
incorporation 173,873
173,873
- (1)
(173,873)
(173,873)
Effect of Acquisition
-
Share split to RM0.10 each
Issued during the period
At 30 June 2012/30 June 2013
- (1)
-
-
527,365
-
5,273,646
- (2)
- (2)
527,365 5,273,646
527,365
5,273,646
527,365
5,273,646
(1)
The Company was incorporated on 15 July 2011 with an authorised share capital of 100,000 ordinary shares of
RM1.00 each and an issued and paid-up share capital of 2 ordinary shares of RM1.00 each.
On 28 March 2012, the Company undertook a share split exercise involving the sub-division of every one (1)
ordinary share of RM1.00 each in the Company to ten (10) ordinary shares of RM0.10 each (the “Shares”). On even
date, the Company increased its authorised share capital from RM100,000 to RM1 billion comprising
10,000,000,000 Shares.
On 25 May 2012, the Company issued 5,273,646,228 shares at RM0.12 each pursuant to the Acquisition
disclosed in Note 33.
On 31 May 2012, the issued and paid up share capital of the Company was listed on the Main Market of Bursa
Malaysia.
(2)
Denotes 2 units totalling RM2.00
Share split from 2 units to 20 units totaling RM2.00
15.2Ordinary Shares
The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled
to one vote per share at meetings of the Company and rank equally with regard to the Company’s residual
assets.
15.3Share Premium
This comprises the premium paid on subscription of shares in the Company over and above the par value of
the shares.
15.4Capital Reserve
The capital reserve arose from bonus issues and as a result of redemption of preference shares made by a
subsidiary of AIC in prior years.
15.5Revaluation Reserve
The revaluation reserve in previous period relates to the revaluation of leasehold land and buildings of the
Group. Upon adoption of MFRS in the current year, the revaluation reserve has been reclassified to
accummulated losses and property, plant and equipment.
92
15.Capital and reserves (CONT’d)
15.6Other Reserves
Foreign
BusinessFair value currency
combination adjustment translation
Group
deficit
reserve
reserve Total
RM’000RM’000RM’000RM’000
At 1 January 2011
-
-
-
Fair value adjustment on shares
issued as consideration
-
(40,155)
-
(40,155)
Effect of Acquisition (Note 33) (157,064)
-
- (157,064)
differences of foreign operations
-
-
47
47
At 30 June 2012 (157,064)
(40,155)
47 (197,172)
differences of foreign operations
-
-
(725)
(725)
At 30 June 2013 (157,064)
(40,155)
(678) (197,897)
The business combination deficit represents the excess of the purchase consideration paid by the Company,
the legal acquirer, over the net assets of AIC, the accounting acquirer on the date of completion of the Acquisition
as disclosed in Note 33.
The fair value adjustment reserve represents the difference between the fair value and the issue price of the
equity issued as consideration for the acquisition of the AutoV and Jotech Businesses as disclosed in Note
33.
The foreign currency translation reserve comprises all foreign currency differences arising from the translation
of the financial statements of the Group entities with functional currencies other than RM.
16.Non-controlling interests
This consists of the non-controlling shareholders’ proportion of share capital and reserves of subsidiaries that
they have interest in.
93
17.Borrowings (secured)
GroupCompany
Note
30.6.2013 30.6.2012
1.1.2011 30.6.2013 30.6.2012
RM’000RM’000RM’000RM’000RM’000
Non-current
Term loans
17.1
Trade financing 17.3
Finance lease liabilities
17.2
Current
Tem loans
17.1
Trade financing 17.3
Murabahah capital financing 17.4
Finance lease liabilities 17.2
Bank overdrafts 17.5
Total borrowings
32,223
-
3,175
15,176
-
2,107
-
-
-
-
33,568
35,398
17,283
-
-
13,459
12,864
294
1,549
8,924
19,400
10,300
565
2,050
2,371
10,082
-
-
956
-
-
-
-
-
-
1,409
-
37,090
34,686
11,038
-
1,409
70,658
70,084
28,321
-
1,409
17.1 Term Loans
29,955
1,726
1,887
The borrowings are secured by either single security or combination of securities, comprising freehold and
leasehold land, buildings, plant and equipment, inventories, fixed and floating charges on certain assets as well
as corporate guarantees from related companies as disclosed in Notes 3, 4 and 12.
17.2Finance Lease Liabilities
Finance lease liabilities are repayable as follow:
PresentPresentPresent
Future
value ofFuture value ofFuture
value of
minimum minimum minimum minimum minimum minimum
lease
lease
lease
lease
lease
lease
paymentsInterest payments paymentsInterest payments paymentsInterest payments
30.6.2013 30.6.2013 30.6.2013 30.6.2012 30.6.2012 30.6.2012 1.1.2011 1.1.2011 1.1.2011
RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000RM’000
Group
Less than one year
2,031
144
1,887
2,321
271
2,050
1,139
183
956
Between one and
five years
1,625
76
1,549
3,372
197
3,175
2,412
305
2,107
3,656
220
3,436
5,693
468
5,225
3,551
488
3,063
17.3Trade Financing
The borrowings are secured by either single security or combination of securities, comprising fixed and floating
charges on assets as well as corporate guarantees from related companies and personal guarantees from
individual directors.
17.4Murabahah Capital Financing
The borrowings are secured by fixed and floating charges on assets as well as corporate guarantees from a
related company.
94
17.Borrowings (secured) (cont’d)
17.5Bank overdrafts
The borrowings are secured by either single security or combination of securities as well as personal guarantees
from individual directors.
These borrowings are subject to repayment terms and interest rates as disclosed in Note 30.5.
18.Government grants
Group
2013
2012
Acquisition through business combinations
33
Write off
Amortised during the year/period
194
-
(110)
(56)
203
(9)
At 30 June
Current portion
28
(28)
194
(57)
Non-current portion
-
137
A government grant was received by a subsidiary from Small and Medium Industries Development Corporation to
increase and upgrade production. The government grant is being amortised on a systematic basis over the useful life
of the assets of 5 years and recognised as other income in the profit or loss. There are no other unfulfilled conditions
or contingencies attached to the grant.
During the year, RM56,000 (1.1.2011 to 30.6.2012: RM9,000) has been amortised and recognised as other income in
the profit or loss.
19.Provision for warranties
Group
2013
2012
At 1 January 2011/1 July 2012
1,282
Assumed through business combinations
33
-
Provisions made during the year/period
2,570
Reversal
made during the year/period
(284)
Provisions
used during the year/period
(1,744)
1,123
400
(241)
At 30 June
1,282
1,824
The provision for warranties relates to finished goods sold during the year/period. The provision is based on estimates
made from historical warranty data associated with similar products and services. The Group expects to incur most
of the liability over the next financial year.
95
20.Trade and other payables, including derivatives
GroupCompany
Note
30.6.2013 30.6.2012
1.1.2011 30.6.2013 30.6.2012
RM’000RM’000RM’000RM’000RM’000
Trade payables
20.1
Non-trade
Accrued expenses
Provisions
Other payables
Amount due to subsidiaries 20.2
Contingent consideration
payable, at fair value
20.3
Forward exchange contracts at
fair value through profit or loss:
Amount due to directors
33,727
40,365
17,365
-
-
11,918
1,894
8,481
-
8,314
2,569
9,283
-
3,472
482
6,432
-
137
-
359
3,486
356
169
-
5,250
9,699
-
5,250
9,699
-
10
42
10
-
-
-
-
-
27,553
29,917
10,386
9,232
10,224
61,280
70,282
27,751
9,232
10,224
20.1Trade Payables
Included in trade payables of the Group is an amount of RM318,000 (30.6.2012: RM464,000; 1.1.2011: Nil) due
to companies in which a director of certain subsidiaries is also a director and substantial shareholder. The trade
payable is subject to normal trade terms.
20.2Amount Due to Subsidiaries
In the previous financial year, trade payables of the Group included an amount of RM12,000 (1.1.2011:
RM93,000) due to a company in which a person related to a Director of the Company has interest. The trade
payable is subject to normal trade terms.
The amount due to subsidiaries represents advances received which are unsecured, interest free and repayable
on demand.
20.3Contingent Consideration Payable
This relates to the contingent consideration payable on the redeemable convertible preference shares of a
subsidiary (“ASSB RCPS”), as mentioned in Notes 6, 33.1 and 33.3.
Contingent consideration payable is stated at the fair value of the ordinary shares that the Company expects to
issue upon the conversion of the ASSB RCPS. This is expected to crystalise once the profit guarantee payments
are made. The change in fair value subsequent to the completion of the purchase price allocation exercise in
May 2013, is taken to profit or loss.
96
21.Finance income
GroupCompany
Year ended
15.7.2011 to
30.6.2013
30.6.2012
30.6.2013
30.6.2012
RM’000RM’000RM’000RM’000
Interest income on deposits and short term
placement funds with licensed banks
and approved financial institutions
594
443
24
-
22.Finance costs
GroupCompany
Year ended
15.7.2011 to
30.6.2013
30.6.2012
30.6.2013
30.6.2012
RM’000RM’000RM’000RM’000
Interest expense on:
- Term loans
- Finance lease liabilities
- Trade financing facilities
Other finance costs
3,271
286
1,314
2,285
306
95
36
-
-
32
-
4,871
114
2,686
91
36
-
32
-
4,985
2,777
36
32
97
23.Income tax expense
GroupCompany
Year ended
15.7.2011 to
30.6.2013
30.6.2012
30.6.2013
30.6.2012
RM’000RM’000RM’000RM’000
Current tax expense
Malaysian - current year
5,110
3,688
- prior year
1,358
(297)
Overseas - current year
914
137
757
-
-
-
Total current tax
757
-
-
-
-
-
-
-
-
757
-
7,382
3,528
Deferred tax expense
Reversal
of temporary differences
(1,742)
(2,216)
Under provision in prior year
-
787
Crystallisation of deferred tax
liabilities on revaluation surplus
(25)
(37)
Total
deferred tax (Note 11)
(1,767)
(1,466)
Total income tax expense
5,615
2,062
Reconciliation of tax expense
(Loss)/Profit
for the year/period
(20,658)
11,871
Total income tax expense
5,615
2,062
(136,024)
757
(1,930)
-
(Loss)/Profit
excluding tax
(15,043)
13,933
(135,267)
(1,930)
(33,817)
35,678
(1,112)
8
(483)
483
Income tax calculated using Malaysian,
China and Indonesian tax rate of 25%
(3,761)
3,483
Non-deductible
expenses
9,916
1,552
Tax
exempt income
(2,104)
(2,815)
Tax
incentives
-
(4)
(766)
Effect of deferred tax not recognised 122
404
Recognition of previously unrecognised deferred
tax assets
(328)
(269)
-
Share of loss in equity-accounted investee
441
20
Under-provision in prior years
1,358
490
Crystallisation of deferred tax liability on
revaluation surplus of property arising
(25)
(37)
prior to MFRS adoption
Total tax
5,615
2,062
-
-
-
-
-
-
757
-
98
24. (Loss)/Profit for the year/period
GroupCompany
Year ended
15.7.2011 to
30.6.2013
30.6.2012
30.6.2013
30.6.2012
RM’000RM’000RM’000RM’000
(Loss)/Profit for the year/period
is arrived at after charging:
Amortisation of development costs
Auditors’ remuneration:
- Audit fees KPMG Malaysia
- current year - underprovision in prior year
Other auditors
- Non-audit fees KPMG Malaysia
Depreciation on property, plant
and equipment
Development cost written off
Fair value loss on derivatives
Fair value loss on other investment
Impairment loss on goodwill
Impairment on investment in subsidiaries
controlled entity
Impairment loss on trade and other
receivables Inventories written off
Personnel expenses (including key
management personnel):
- Contribution to Employees Provident Fund
- Wages, salaries and others
Property, plant and equipment written off
Rental expense in respect of:
- Equipment
- Premises
Realised foreign exchange loss (net)
Share of loss of equity-accounted investees,
net of tax
808
33
-
-
480
-
96
115
442
-
9
310
45
5
-
50
40
256
26,765
129
-
142
20,546
-
22,136
-
134
-
-
-
4
-
-
-
-
142,510
-
2,883
-
-
-
1,704
1,434
1,241
201
-
-
-
4,665
62,792
228
2,570
3,437
41,719
1
400
24
200
-
-
-
97
1,873
206
49
2,271
-
1
356
-
-
1,833
79
-
-
99
24. (Loss)/Profit for the year/period (cont’d)
GroupCompany
Year ended
15.7.2011 to
30.6.2013
30.6.2012
30.6.2013
30.6.2012
RM’000RM’000RM’000RM’000
and after crediting:
Amortisation of government grants
Dividend income
Fair value gain on contingent consideration
Fair value gain on derivatives
Fair value gain on other investment
biological assets
Gain on disposal of other investments
Gain on disposal of property, plant and
equipment
Government grants written off
Impairment on trade and other
receivables reversed
Management fee received
Rental income from property
Realised foreign exchange gain (net)
Unrealised foreign exchange gain (net)
Reversal of provision for warranties
56
53
4,449
8
-
9
438
-
-
10,326
-
3,000
4,449
-
-
-
591
22
-
-
-
-
-
133
110
8
-
-
-
-
-
-
17
-
326
284
21
-
2,277
954
715
-
-
539
430
-
-
-
-
25. Key management personnel compensation
The key management personnel compensations are as follows:
GroupCompany
Year ended
15.7.2011 to
30.6.2013
30.6.2012
30.6.2013
30.6.2012
RM’000RM’000RM’000RM’000
Directors:
- Fees
- Remuneration
170
4,676
79
3,069
170
93
-
4,846
3,148
263
-
5,148
1,948
70
-
4
20
-
-
5,152
1,968
70
-
9,998
5,116
333
-
Other key management personnel:
- Short-term employee benefits
- Estimated monetary value of
benefits-in-kind
100
26.Earnings per ordinary share - Group
i)Basic Earnings per Ordinary Share
The calculation of basic earnings per ordinary share was based on the profit attributable to owners of the
Company and the weighted average number of ordinary shares outstanding, calculated as follows:
Group
Year ended
1.1.2011 to
30.6.2013
30.6.2012
RM’000RM’000
(Loss)/Profit
attributable to owners of the Company
(20,698)
’000
12,217
Issued ordinary shares at 1 July 2012/1 January 20115,273,646
Issued during the year/period
-
2,608,105
180,302
Weighted average number of ordinary shares
5,273,646
2,788,407
SenSen
Basic
per ordinary share
(loss)/earnings
(0.392)
’000
0.438
ii)Diluted Earnings per Ordinary Share
The calculation of diluted earnings per ordinary share was based on profit attributable to owners of the Company
and the weighted average number of ordinary shares outstanding after adjusting for the effects of all potential
dilutive instruments, calculated as follows:
Group
Year ended
1.1.2011 to
30.6.2013
30.6.2012
RM’000RM’000
(Loss)/Profit
attributable to owners of the Company (20,698)
12,217
’000
’000
Weighted average number of ordinary shares
Weighted
average number of ordinary shares (basic)5,273,646
2,788,407
Effect of conversion of ASSB RCPS (Note 33) 216,184
14,623
Weighted average number of ordinary shares (diluted)5,489,830
2,803,030
SenSen
Diluted
(loss)/earnings per ordinary share
(0.377)
0.436
27.Operating segments
The Group has three reportable segments, as described below, which are the Group’s strategic business units. The
strategic business units offer different products and services, and are managed separately because they require
different technology and marketing strategies. For each of the strategic business units, the Group’s Executive
Directors (the chief operating decision makers) review internal management reports at least on a monthly basis. The
following summary describes the operations in each of the Group’s reportable segments:
•
•
•
The accounting policies of the reportable segments are the same as described in Note 2(s).
Performance is measured primarily on segment profit before tax (“Segment Profit”) as included in the internal
management reports that are reviewed by the Group’s Executive Directors. Segment profit is used to measure
performance as management believes that such information is the most relevant in evaluating the results of certain
segments relative to other entities that operate within these industries.
Segment Assets
Segment assets are measured based on all assets (including goodwill) of a segment, as included in the internal
management reports that are reviewed by the Group’s Executive Directors. Segment assets are used to measure the
return of assets of each segment.
Segment Liabilities
Segment liabilities are measured based on all liabilities of a segment, as included in the internal management
reports that are reviewed by the Group’s Executive Directors. Segment liabilities are used to measure the gearing of
each segment.
Segment Capital Expenditure
Segment capital expenditure is the total cost incurred during the financial year/period to acquire property, plant and
equipment and intangible assets other than goodwill.
Segment 1: Integrated manufacturing services
Segment 2: Resources
Segment 3: Investment holding
Integrated
manufacturingInvestment
servicesResources
holdingTotal
Year ended 30.6.2013RM’000RM’000RM’000RM’000
Segment
Profit/(Loss)
6,524
59
(21,626)
Income/(Expenses) included in the
measure of Segment Profit are:
Revenue from external customers
381,584
6,232
59
Inter-segment revenue
-
-
5,252
Bad
debt written off
(721)
-
Change in fair value of contingent
consideration payable
-
-
4,449
Change
in fair value of other investments
-
(142)
Depreciation
and amortisation
(26,207)
(1,148)
(218)
Finance
costs
(2,784)
(1,267)
(934)
Finance income
454
-
140
biological assets
-
591
-
(15,043)
387,875
5,252
(721)
4,449
(142)
(27,573)
(4,985)
594
591
101
102
27.Operating segments (cont’d)
Segment Profit/(Loss) (cont’d)
Integrated
manufacturingInvestment
servicesResources
holdingTotal
Year ended 30.6.2013RM’000RM’000RM’000RM’000
Impairment
loss on goodwill
-
(20,546)
controlled entity
(2,883)
-
-
Impairment
loss on trade and other
receivables
(1,704)
-
-
Inventories
written off
(1,434)
-
-
(20,546)
(2,883)
(1,704)
(1,434)
1.1.2011 to 30.6.2012
Segment Profit
9,257
89
4,731
Income/(Expenses) included in the
measure of Segment Profit are:
Revenue from external customers
217,251
555
2,713
Inter-segment revenue
-
- 13,036
Change in fair value of other investment
-
- 10,326
(22,129)
(30)
(10)
Depreciation
and amortisation
(1,022)
(109)
(1,646)
Finance
costs
Finance income
217
- 226
Impairment loss on trade and
(402)
(839)
other receivables
- (201)
Inventories
written off
- -
14,077
220,519
13,036
10,326
(22,169)
(2,777)
443
(1,241)
(201)
30.6.2013
Segment assets
Included in the measure of segment assets are:
Additions to non-current assets
other than financial instruments
and deferred tax assets
Segment liabilities
388,062
68,627
23,509
480,198
11,931
155
383
12,469
111,226
24,675
14,137
150,038
396,851
69,162
24,456
490,469
14,400
2
30
14,432
106,425
25,277
27,627
159,329
30.6.2012
Segment assets
Included in the measure of segment assets are:
Additions to non-current assets
other than financial instruments
and deferred tax assets
Segment liabilities
Reconciliation of Segment Profit and Assets
Reconciliation to Consolidated Profit before Tax
Group
Year ended
1.1.2011 to
30.6.2013
30.6.2012
RM’000RM’000
Total Segment (Loss)/Profit
Elimination of inter-segment profits
Consolidated (loss)/profit before tax
Reconciliation to Consolidated Total Assets
(14,787)
-
(14,787)
14,077
(144)
13,933
Group
30.6.2013
30.6.2012
1.1.2011
RM’000RM’000RM’000
Total segment assets
Goodwill on consolidation
Consolidation adjustments
480,198
74,343
-
490,469
94,889
(36)
205,549
4,326
(3)
Consolidated total assets
554,541
585,322
209,872
Geographical Segments
In presenting information on the basis of geographical segments, segment revenue is based on geographical location
of customers. Segment assets are based on the geographical location of the assets. The amounts of non-current
assets do not include financial instruments (including investments in associate and deferred tax assets).
The geographical information in regards to revenue, non-current assets (excluding financial instruments) and trade
receivables of the Group can be shown as follows:
Non-currentTrade
Revenue
assets
receivables
Year ended 30.6.2013RM’000RM’000RM’000
Malaysia
United Kingdom
Singapore
Taiwan
United States of America
Indonesia
The People’s Republic of China
Other countries
238,132
514
20,607
28,616
19,617
52,033
15,719
12,637
290,359
-
-
-
-
61,703
22,821
-
42,364
895
3,232
8,081
1,723
6,073
3,924
2,115
387,875
374,883
68,407
103
104
Geographical Segments (cont’d)
Non-currentTrade
Revenue
assets receivables
1.1.2011 to 30.6.2012RM’000RM’000RM’000
(restated)
Malaysia
United Kingdom
Singapore
Taiwan
United States of America
Indonesia
The People’s Republic of China
Other countries
92,806
18,223
15,434
53,399
28,005
4,894
3,614
4,144
330,311
-
-
-
-
56,942
23,912
-
39,721
717
2,420
9,701
4,523
6,814
2,990
1,758
220,519
411,165
68,644
Major Customers
The following are major customers with revenue equal or more than 10% of the Group’s total revenue:
Year ended
15.7.2011 to
30.6.2013
30.6.2012
Number ofNumber of
customersRM’000
customersRM’000
Segment
Integrated manufacturing services 1
114,264
1
39,144
28.Capital commitments
Group
30.6.2013
30.6.2012
1.1.2011
RM’000RM’000RM’000
Capital expenditure commitments in respect
of property, plant and equipment
Approved but not contracted for
Approved and contracted for
Lease agreement ^
3,831
2,914
4,798
2,537
2,710
6,223
21,637
486
-
11,543
11,470
22,123
^ Based on the remaining lease obligation of AIC with CIMB Islamic Trustee Berhad (As Trustee for the Amanah Raya
Real Estate Investment Trust) (“CIMB Trustee”) to lease certain leasehold land and buildings from CIMB Trustee.
105
29.Related parties
29.1Identity of Related Parties
For the purposes of these financial statements, parties are considered to be related to the Group or the Company
if the Group or the Company has the ability, directly or indirectly, to control the party or exercise significant
influence over the party in making financial and operating decisions, or vice versa, or where the Group or the
Company and the party are subject to common control or common significant influence. Related parties may be
individuals or other entities.
Key management personnel are defined as those persons having authority and responsibility for planning,
directing and controlling the activities of the Group either directly or indirectly. Key management personnel
include all the Directors of the Group and certain members of senior management of the Group.
29.2Other Related Party Transactions
The significant related party transactions of the Group, other than key management personnel compensation
(see Note 24) are as follows:
GroupGross balanceAllowance forNet balanceImpairment
AmountDebit/(Credit)
impairmentDebit/(Credit)
loss
transacted outstanding at
loss at outstanding at recognised
for the year
year end
year end
year end for the year
Year ended 30.6.2013RM’000RM’000RM’000RM’000RM’000
Consultancy fees paid/ payable
to a company in which a
person related to a Director
of the Company has interest
Sales to minority shareholders
of subsidiaries
Sales to a company in which
a person related to a Director
Sales commission paid/payable
to a company in which a person
related to a Director of the
Company has interest
Sales to companies in which
a director of certain subsidiaries
is also a director and substantial
shareholder
certain Directors have interest
Sales commission receivable from
the joint venture partner of
a jointly controlled entity
Purchases from companies in
which a director of certain
subsidiaries is also a director and
substantial shareholder
Purchases from a minority
shareholder of a subsidiary
Purchases from the joint venture
partner of a jointly controlled
entity
33
33
-
33
-
11,046
1,447
-
1,447
-
73
-
-
-
-
152
-
-
-
-
468
125
-
125
-
104
-
-
-
-
7
-
-
-
-
1,313
(318)
-
(318)
-
2,527
(209)
-
(209)
-
31
-
-
-
-
106
29.Related parties (cont’d)
29.2Other Related Party Transactions (cont’d)
GroupGross balanceAllowance forNet balanceImpairment
AmountDebit/(Credit)
impairmentDebit/(Credit)
loss
transacted outstanding at
loss at outstanding at recognised
for the year
year end
year end
year end for the year
Year ended 30.6.2013RM’000RM’000RM’000RM’000RM’000
Royalty fee payable to a minority
shareholder of a subsidiary
Rental income receivable from
a company in which a director
of a subsidiary has interest
1.1.2011 to 30.6.2012
Sales to a minority shareholder
of a subsidiary
a person related to a Director
Sales commission paid/payable
to a company in which a
person related to a Director
Sales to companies in which
a director of certain subsidiaries
is also a director and substantial
shareholder
Purchases from companies in
which a director of certain
subsidiaries is also a director
and substantial shareholder
Consultancy fees paid/payable
to a company in which a person
related to a Director of the
Company has interest
Company
250
-
-
-
-
5
-
-
-
-
16,758
1,123
1,123
-
146
12
-
12
-
159
-
-
-
-
71
182
-
182
-
131
(464)
-
(464)
-
- 414
-
-
-
-
539
502
-
502
-
430
180
-
180
-
3,000
-
-
-
-
Year ended 30.6.2013
Management fee received/
receivable from subsidiaries
Rental received/receivable from
subsidiaries
Dividend income received from
a subsidiary
There are no significant related party transactions of the Company in the preceding period from 15 July 2011,
being the date of incorporation to 30 June 2012.
107
29.Related parties (cont’d)
29.2Other Related Party Transactions (cont’d)
All of the outstanding balances are expected to be settled in cash by the related parties.
The non-trade balances with subsidiaries are as disclosed in Note 13 and 20.
30.Financial instruments
30.1Categories of Financial Instruments
The table below provides an analysis of financial instruments categorised as follows:
(a)
(b)
(c)
Loans and receivables (“L&R”)
Fair value through profit or loss (“FVTPL”)
- Designated upon initial recognition (“DUIR”)
- Held for trading (“HFT”)
Other finance liabilities measured at amortised cost (“OL”)
30.6.2013CarryingFVTPL
amountL&R/OLHFT
RM’000RM’000RM’000
Financial assets
Group
Other investment
Trade and other receivables, including derivatives
Company
Financial liabilities
Group
Borrowings
Trade and other payables, including derivatives
Company
Trade and other payables
407
75,229
38,212
-
75,229
38,212
407
-
113,848
113,441
407
3,978
107
3,978
107
-
70,658
59,386
70,658
54,136
5,250
130,044
124,794
5,250
9,232
3,982
5,250
108
30.Financial instruments (cont’d)
30.1Categories of Financial Instruments (cont’d)
30.6.2012CarryingFVTPL
amountL&R/OLHFT
RM’000RM’000RM’000
Financial assets
Group
Other investment
732
77,545
30,790
-
77,545
30,790
732
-
109,067
108,335
732
17
*
17
*
-
70,084
67,713
70,084
57,972
9,741
137,797
128,056
9,741
Company
Borrowings
Trade and other payables, restated
1,409
10,224
1,409
525
9,699
11,633
1,934
9,699
Group
Other investment
13,456
39,497
16,697
-
39,372
16,697
13,456
125
-
69,650
56,069
13,581
Group
Borrowings
28,321
27,269
28,321
27,269
-
55,590
55,590
-
Company
* Denotes RM90.
Group
Borrowings
Trade and other payables, including derivatives, restated
1.1.2011
Financial assets
109
30.2Net Gains and Losses Arising from Financial Instruments
Group
Company
Year ended
15.7.2011 to
30.6.2013
30.6.2012
30.6.2013
30.6.2012
RM’000RM’000RM’000RM’000
Net gains/(losses) on:
Fair value through profit or loss:
Designated upon initial recognition
- Fair value (loss)/gain on other
investment
- Fair value gain/(loss) on derivatives
Loans and receivables
- Impairment loss on trade and other
receivables
(142)
8
10,326
(134)
-
-
-
(1,704)
(1,241)
-
-
(1,838)
8,951
-
-
30.3Financial Risk Management
The Company has exposure to the following risks from its use of financial instruments:
•
•
•
Credit risk
Liquidity risk
Market risk
30.4Credit Risk
Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations. The Group’s exposure to credit risk arises principally from its receivables from
customers. The Company’s exposure to credit risk arises principally from advances to subsidiaries and the
corporate guarantees given to banks for credit facilities granted to subsidiaries.
(a) Receivables
Risk management objectives, policies and processes for managing the risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis.
Normally financial guarantees given by banks, shareholders or directors of customers are obtained, and
credit evaluations are performed on customers requiring credit over a certain amount.
Exposure to credit risk, credit quality and collateral
As at the end of the reporting year, the maximum exposure to credit risk arising from receivables is
represented by the carrying amounts in the statement of financial position and the Group has no significant
concentration of credit risk.
Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired
are stated at their realisable values. A significant portion of these receivables are regular customers that
have been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of the
receivables. Any receivables having significant balances past due more than 120 days, which are deemed
to have higher credit risk, are monitored individually.
The exposure of credit risk for receivables as at the end of the reporting year by geographic region is as
disclosed in Note 27.
110
30.4Credit Risk (cont’d)
(a) Receivables (cont’d)
Impairment losses
The ageing of trade receivables of the Group as at the end of the reporting year was:
IndividualCollective
GroupGross
impairment impairmentNet
RM’000RM’000RM’000RM’000
30.6.2013
Not past due
Past due 0 – 30 days
Past due more than 120 days
53,040
9,828
5,113
2,724
-
-
-
(2,077)
-
-
-
-
53,040
9,828
5,113
647
70,705
(2,077)
-
68,628
-
-
-
(910)
-
-
-
-
52,950
9,159
4,283
2,252
(910)
-
68,644
-
-
-
(180)
-
-
-
-
19,992
9,066
5,632
319
(180)
-
35,009
30.6.2012
Not past due
52,950
9,159
4,283
3,162
69,554
1.1.2011
Not past due
19,992
9,066
5,632
499
35,189
The movements in the allowance for impairment losses of trade receivables during the year/period were:
Group
30.6.2013
30.6.2012
RM’000RM’000
Acquisition through business combinations (Note 33)
Impairment loss recognised
Impairment loss reversed
Impairment loss written off
910
-
1,448
-
(281)
180
487
423
(21)
(159)
At 30 June
2,077
910
The allowance account in respect of receivables is used to record impairment losses. Unless the Group is
satisfied that recovery of the amount is possible, the amount considered irrecoverable is written off against
the receivable directly.
30.4Credit Risk (cont’d)
(b) Investment and Other Financial Assets
Investments are allowed only in liquid securities and only with counterparties that have a credit rating equal
to or better than the Group. Transactions involving derivative financial instruments are with approved
financial institutions.
As at the end of the reporting year, the Group has only invested in domestic listed securities. The maximum
exposure to credit risk is represented by the carrying amounts in the statement of financial position.
In view of the sound credit rating of counterparties, management does not expect any counterparty to fail
to meet its obligations.
The investments and other financial assets are unsecured.
(c) Financial Guarantees
The Company provides unsecured corporate guarantees to banks in respect of banking facilities granted to
the subsidiaries and jointly-controlled entity. The Company monitors on an ongoing basis the results of the
subsidiaries and jointly-controlled entity and repayments made by the subsidiaries and jointly-controlled
entity.
As at 30 June 2013, the Company had executed corporate guarantees in favour of licensed financial
institutions of up to a limit of RM103.4 million for credit facilities granted to subsidiaries and a jointly
controlled entity. Out of the total banking facilities secured by corporate guarantees by the Company, a total
of RM49.2 million was outstanding at the year end.
The corporate guarantee of RM5.0 million to the jointly controlled entity, together with advances amounting
to RM0.8 million as at 30 June 2013 by the Group to the jointly controlled entity, represents a form of
provision of financial assistance by the Company in accordance to paragraph 8.23(1)(ii) of the Listing
Requirements. Out of the total banking facilities granted to the jointly controlled entity and secured by a
corporate guarantee by the Company, a total of RM3.6 million was outstanding at the year end.
As at the end of the reporting year, there was no indication that the subsidiaries and jointly-controlled entity
would default on repayment of their outstanding credit facilities. The corporate guarantees have not been
recognised since the fair value on initial recognition was not material.
30.5Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group’s exposure to liquidity risk arises principally from its various payables and borrowings.
Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents and the availability of
funding through an adequate amount of committed credit facilities. Due to the dynamic nature of the underlying
businesses, the Group aims at maintaining flexibility in funding by maintaining committed credit lines available.
In addition, the objective for debt maturities is to ensure that the amount of debt maturing in any one year is not
beyond the Group’s means to repay and/or refinance.
111
The table below summarises the maturity profile of the Group’s and Company’s financial liabilities as at the end of the reporting period based on
undiscounted contractual payments:
Derivative financial liabilities
Forward exchange contracts
(gross settled):
Outflow
Inflow
Group
Non-derivative financial liabilities
Secured term loans
– fixed rate
– floating rate
Trade financing
Murabahah capital financing
Bank overdrafts
Trade and other payables*
4.00
2.69 – 10.50
3.23 – 10.50
5.01
2.36 – 6.79
7.60 – 8.10
-
-
-
-
124,794
917
42,497
14,590
294
3,436
8,924
54,136
-
-
-
132,448
951
49,223
14,630
297
3,656
9,555
54,136
-
-
-
93,725
951
13,851
12,904
297
2,031
9,555
54,136
-
-
-
14,235
-
11,559
1,726
-
950
-
-
-
-
-
22,845
-
22,170
-
-
675
-
-
-
-
1,643
1,643
-
CarryingContractualContractualUnder 1
1 - 2
2 - 5More than
amounts
interest rate
cash flows
year
years
years
5 years
30.6.2013RM’000
%RM’000RM’000RM’000RM’000RM’000
Maturity Analysis
30.5Liquidity Risk (cont’d)
112
4,548
-
* The contractual cash flows of trade and other payables exclude derivatives, and where applicable accruals for interest on borrowings
have been included in the contractual cash flows of the respective financial liabilities.
-
-
19,650
-
-
1,561
-
-
(42)
(42)
(42)
-
-
15,164
842
12,512
-
-
1,810
-
-
-
95,346
1,123
20,507
10,308
565
2,321
2,550
57,972
(gross settled):
Outflow
-
-
(42) (3,831)
(3,831)
Inflow
-
3,789
3,789
-
-
136,270
1,965
57,217
10,308
565
5,693
2,550
57,972
4,548
4.00
4.00 – 10.50
4.75 – 10.50
2.38 – 3.83
2.34 – 6.75
8.10
-
128,056 1,859
49,764
10,300
565
5,225
2,371
57,972
21,211
Group
Secured term loans
– fixed rate
– floating rate
Trade financing
Murabahah capital financing
Bank overdrafts
1 - 2
2 - 5More than
amounts
interest rate
cash flows
year
years
years
5 years
30.6.2012RM’000
%RM’000RM’000RM’000RM’000RM’000
Maturity Analysis
113
(gross settled):
Outflow
Inflow
1,409
525
30.6.2013
Other payables
30.6.2012
Secured term loans
– floating rate
Other payables
7.35
-
-
1,444
525
3,982
(125)
5,558
(5,683)
58,807
3,744
24,243
3,551
27,269
1,444
525
3,982
(125)
5,558
(5,683)
40,004
1,123
10,473
1,139
27,269
-
-
-
-
-
-
11,600
1,123
9,338
1,139
-
-
-
-
-
-
-
7,203
1,498
4,432
1,273
-
* The contractual cash flows of trade and other payables exclude derivatives, and where applicable, accruals for interest on borrowings
have been included in the contractual cash flows of the respective financial liabilities.
3,982
Company
(125)
-
(125)
55,590
4.00
7.80
2.34 - 3.75
-
3,437
21,821
3,063
27,269
Group
Term loans - secured
– fixed rate
– floating rate
-
-
-
-
-
-
1 - 2
2 - 5More than
amounts
interest rate
cash flows
year
years
years
5 years
1.1.2011RM’000
%RM’000RM’000RM’000RM’000RM’000
114
115
30.6Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other
prices that will affect the Group’s financial position or cash flows.
(a) Currency Risk
The Group is exposed to foreign currency risk on sales, purchases and borrowings that are denominated in
a currency other than the respective functional currencies of Group entities. The currencies giving rise to
this risk are primarily the United States Dollar (“USD”), Singapore Dollar (“SGD”), Euro (“EUR”), Japanese
Yen (“JPY”) and Australian Dollar (“AUD”).
The Group maintains a natural hedge, whenever possible, by buying material and selling its products and
services in currencies other than its functional currency. In addition to the management of foreign currency
risk, the Group enters into foreign currency forward contracts in the normal course of business, where
appropriate, to manage its exposure against foreign currency fluctuations on sales and purchases
transactions denominated in foreign currencies.
The Group and the Company are also exposed to foreign currency risk in respect of their investment in
foreign subsidiaries. The Group does not hedge this exposure by having foreign currency borrowings but
keeps this policy under review and will take necessary action to minimise the exposure of this risk.
Exposure to foreign currency risk
The Group’s exposure to foreign currency (a currency which is other than the currency of the Group
entities) risk, based on carrying amounts as at the end of the reporting year/period was:
Assets/(Liabilities) denominated in
GroupUSDSGDEUR
JPYAUD
RM’000RM’000RM’000RM’000RM’000
30.6.2013
20,353
450
172
431
Secured bank loans
-
-
-
(4,109)
(6,719)
(39)
(449)
-
6,245
1,578
171
-
Net exposure
15,770
1,989
343
(18)
30.6.2012
23,605
430
206
24
Secured bank loans
(4,364)
-
-
-
(12,886)
(91)
(152)
(293)
5,064
1,810
203
20
Net exposure
11,419
2,149
257
(249)
20
20
525
-
(232)
293
116
30.6Market Risk (cont’d)
(a) Currency Risk (cont’d)
Assets/(Liabilities) denominated in
GroupUSDSGDEUR
JPYAUD
RM’000RM’000RM’000RM’000RM’000
1.1.2011
Net exposure
26,401
(14,004)
6,372
-
-
-
-
-
-
-
-
-
-
18,769
-
-
-
-
Currency risk sensitivity analysis
Foreign currency risk arises from Group entities which have a RM functional currency. The exposure to
currency risk of Group entities which do not have a RM functional currency is not material and hence,
sensitivity analysis is not presented.
A 10% (30.6.2012: 10%) strengthening of RM against the following currencies at the end of the reporting
year would have increased/(decreased) profit for the year/period by the amounts shown below. This
analysis assumes that all other variables, in particular interest rates, remain constant and ignores any
impact of forecasted sales and purchases.
Group
30.6.2013
30.6.2012
1.1.2011
RM’000RM’000RM’000
USD
1,143
(1,046)
SGD
199
(215)
EUR
34
(26)
JPY
(2)
25
AUD
2
(29)
(1,233)
-
A 10% (30.6.2012: 10%) weakening of RM against the above currencies at the end of the reporting year
would have had equal but opposite effect on the above currencies to the amount shown above, on the basis
that all other variables remain constant.
(b) Interest Rate Risk
The Group’s fixed rate borrowings are exposed to a risk of change in their fair value due to changes in
interest rates. The Group’s variable rate borrowings are exposed to a risk of change in cash flows due to
changes in interest rates.
Investments in equity securities and short term receivables and payables are not significantly exposed to
interest rate risk.
The Group’s income and operating cash flows are substantially independent of changes in market interest
rates. Interest rate exposure arises from the Group’s borrowings and deposits, and is managed through
the use of fixed and floating rate borrowings and deposits. The Group does not use derivative financial
instruments to hedge its interest rate risk.
117
(b) Interest Rate Risk (cont’d)
Exposure to interest rate risk
The interest rate profile of the Group’s and the Company’s significant interest-bearing financial instruments,
based on carrying amounts as at the end of the reporting year was:
GroupCompany
30.6.2013 30.6.2012
1.1.2011 30.6.2013 30.6.2012
RM’000RM’000RM’000RM’000RM’000
Fixed rate instruments
Financial asset
-
-
-
-
(4,353)
(7,084)
(6,500)
-
Floating rate instruments
Financial assets
15,864
8,809
13,215
-
(66,305)
(63,000)
(21,821)
-
(1,409)
(54,794)
(61,275)
(15,106)
-
(1,409)
-
Interest rate risk sensitivity analysis
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or
loss. Therefore, a change in interest rates at the end of the reporting year would not affect profit or loss.
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points (“bp”) in interest rates at the end of the reporting year would have increased/
(decreased) profit for the year/period by the amounts shown below. This analysis assumes that all other
variables, in particular foreign currency rates, remain constant.
100 bp
100 bp
increase
decrease
RM’000RM’000
2013
Group
(668)
668
Company
-
-
2012
Group
(477)
477
Company
(4)
4
118
(c) Other Price Risk
Equity price risk arises from the Group’s investments in equity securities.
Management of the Group monitors the equity investments on a portfolio basis. Material investments
within the portfolio are managed on an individual basis and all buy and sell decisions are approved by the
Directors of the Group entities.
Equity price risk sensitivity analysis
This analysis assumes that all other variables remained constant and the Group’s equity investments
moved in correlation with FTSE Bursa Malaysia KLCI (“FBMKLCI”).
A 10% (30.6.2012:10%) strengthening in FBMKLCI at the end of the reporting year would have
increased profit for the year/period by RM41,000 (1.1.2011 to 30.6.2012: RM73,000) for investment
classified as fair value through profit or loss. A 10% weakening in FBMKLCI would have had an equal but
opposite effect on profit for the year/period respectively.
30.7Fair Value of Financial Instruments
The carrying amounts of investment in quoted shares, cash and cash equivalents, forward contracts, short term
receivables and payables and short term borrowings approximate fair values due to the relatively short term
nature of these financial instruments.
The fair values of other financial assets and liabilities, together with the carrying amounts shown in the statement
of financial position, are as follows:
30.6.2013
30.6.2012
1.1.2011
CarryingFairCarryingFairCarryingFair
amount
value
amount
value
amount
value
RM’000RM’000RM’000RM’000RM’000RM’000
Group
Secured term loans
- fixed rate
- floating rate
Secured trade financing
Secured Murabahah capital
financing
Secured bank overdrafts
Company
Secured term loans
- floating rate
917
42,497
14,590
917
42,497
14,590
1,859
49,764
10,300
1,859
49,764
10,300
3,437
21,821
-
3,437
21,821
-
294
3,436
8,924
294
3,436
8,924
565
5,225
2,371
565
5,003
2,371
-
3,063
-
3,063
-
-
-
1,409
1,409
-
-
119
30.7Fair Value of Financial Instruments (cont’d)
The following summarises the methods used in determining the fair value of financial instruments reflected in
the above table:
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future
principal and interest cash flows, discounted at the market rate of interest at the end of the reporting year. For
finance leases, the market rate of interest is determined by reference to similar lease agreements.
As for the long-term borrowings with fixed interest rates, the Directors are of the opinion that the fair values
approximate the carrying amounts. The fair values of these long-term borrowings have been determined by
discounting the relevant cash flows using current interest rates for similar instruments at the end of reporting
date.
In respect of long term borrowings with variable interest rates, the carrying amounts approximate fair value as
they are re-priced to market interest rates for liabilities with similar risk profiles.
Interest rates used to determine fair value
The interest rate used to discount estimated cash flows, when applicable, are as follows:
30.6.2013
Secured term loan, fixed rate
Finance lease
4.00%
2.36% - 6.79%
30.6.2012
1.1.2011
4.00%
2.34% - 6.75%
7.80%
3.42%
30.7.1 Fair Value Hierarchy
The table below analyses financial instruments carried at fair value, by valuation method. The different levels
have been defined as follows:
•
Level 1:
•
Level 2:
•
Level 3:
Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
Level 1Level 2Level 3Total
GroupRM’000RM’000RM’000RM’000
30.6.2013
Financial assets
Investment in quoted shares
407
-
-
407
-
-
-
-
30.6.2012
Financial assets
Investment in quoted shares
732
-
-
732
-
42
-
42
120
31.Capital management
The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s ability to
continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain future
development of the business. The Directors monitor and are determined to maintain an optimal debt-to-equity ratio
that complies with debt covenants and regulatory requirements.
The Group’s debt-to-equity ratios at 30 June 2013 were as follows:
Group
30.6.2013
30.6.2012
1.1.2011
RM’000RM’000RM’000
(restated)
Total borrowings (Note 17)
Less: Cash and cash equivalents (Note 14)
Net debt
Total equity attributable to owners of the Company
Debt-to-equity ratio (times)
70,658
(38,212)
70,084
(30,790)
28,321
(16,697)
32,446
39,294
11,624
382,311
403,734
134,161
0.08
0.10
0.09
There were no changes in the Group’s approach to capital management during the year.
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 percent of the issued and paid-up capital (excluding
treasury shares, if any) and such shareholders’ equity is not less than RM40 million. The Company has complied with
this requirement.
32.Operating leases
Leases as Lessee
Non-cancellable operating lease rentals are payable as follows:
Group
30.6.2013
30.6.2012
1.1.2011
RM’000RM’000RM’000
Less than one year
Between one and five years
More than five years
1,504
3,294
-
1,425
4,798
-
1,425
5,922
1,013
4,798
6,223
8,360
The Group leases two factory facilities under operating leases. The leases typically run for a year of 10 years, with a
remaining year of 4 years at end of year and an option to renew the lease after that date. Lease payments are
increased every 3 to 4 years to reflect market rentals. None of the leases includes contingent rentals.
33.Business combinations
In the prior year, the Company entered into a business combination exercise with AIC Corporation Berhad (now known
as AIC Corporation Sdn. Bhd.) (“AIC”), Jotech Holdings Berhad (now known as Jotech Holdings Sdn. Bhd.) (“Jotech”)
and AutoV Corporation Berhad (now known as AutoV Corporation Sdn. Bhd.) (“AutoV”), hereinafter referred to as “the
Acquisition”.
33.1Purchase of Subsidiaries Made Prior to the Acquisition
(i)
On 22 March 2011, Jotech completed the acquisition of the entire equity interest in Malgreen Progress
Sdn. Bhd. (“MPSB”) and Cergas Fortune Sdn. Bhd. (“CFSB”) for purchase considerations of RM23.10
million satisfied by RM8.10 million in cash and the issuance of 150.00 million new ordinary shares of
RM0.10 each in Jotech (“Jotech Shares”) and RM4.06 million satisfied by RM1.06 million in cash and the
issuance of 30.00 million new Jotech Shares respectively, from the vendors of MPSB and CFSB.
The vendors of MPSB and CFSB have provided Jotech profit guarantees that MPSB and CFSB shall
attain earnings before interest and tax amounting to RM2.7 million and RM0.3 million respectively per
year, for three years from the financial year ended 31 December 2011 to 2013.
Should the shortfall in profit guarantee, if any, be compensated by the vendors, adjustments may be
required to the purchase consideration and goodwill.
(ii) On 9 November 2011, AutoV completed the acquisition of the entire equity interest in Proreka (M) Sdn.
Bhd. and its subsidiaries (“Proreka”) for a purchase consideration of RM27,880,000 which was satisfied
by the following:
(a)
(b)
(c)
Cash payment of RM2,788,000;
The issuance of 6,525,000 new ordinary shares of RM1.00 each in AutoV (“AutoV Shares”) at an
issue price of RM1.44 each; and
The issuance of 10,900,000 redeemable convertible preference shares (“RCPS”) of RM0.01 each
in Auto V Systems Sdn. Bhd. (“ASSB”) (“ASSB RCPS”) at an issue price of RM1.44 each.
The vendors of Proreka have given AutoV a profit guarantee that Proreka shall attain a consolidated profit
after tax of RM4.5 million for each of the financial years ended 31 December 2011 and 2012 or a cumulative
consolidated profit after tax of RM9.0 million for the two financial years ended 31 December 2012. In
the event of a shortfall in the said profit guarantee amount and which shortfall has not been made good by
the vendors of Proreka, all ASSB RCPS issued shall be disqualified from conversion until such shortfall
is paid. The ASSB RCPS are convertible to the Company’s shares at a conversion ratio of 119 shares for
every 6 ASSB RCPS held.
5.45 million of the ASSB RCPS are convertible at the option of the vendors of Proreka during the conversion
year from 1 April 2012 to 31 December 2013 whereas another 5.45 million of the ASSB RCPS are
convertible at the option of the vendors of Proreka during the conversion year from 1 April 2013 to 31
December 2013. Any unconverted ASSB RCPS shall be automatically redeemed at the par value of
RM0.01 per unit upon the expiry of the respective conversion period.
33.2Background Information of the Acquisition
On 29 July 2011, the Company made simultaneous offers with similar terms and conditions (“the Offer”)
to Jotech, AIC and AutoV to acquire their respective entire business and undertakings, including all assets and
liabilities of Jotech (“Jotech Business”), AIC (“AIC Business”) and AutoV (“AutoV Business”) for the purposes
of achieving the combination of the businesses and undertakings of Jotech, AIC and AutoV (collectively known
as “Target Companies”) in accordance with the terms of the Acquisition Agreement, to create an integrated
manufacturing services group with the combined businesses of precision metal, plastic parts to high volume
manufacturing and assembly as well as logistics management.
121
122
33.Business combinations (cont’d)
33.2Background Information of the Acquisition (cont’d)
On 22 August 2011, the non-interested directors of AutoV accepted the offer from the Company whereas on 24
August 2011, the non-interested Directors of AIC and Jotech also accepted their respective offers.
On 15 September 2011, the Company, Jotech, AIC and AutoV entered into a definitive acquisition agreement
in relation to the Acquisition.
The Acquisition entailed the following:
i)
ii)
iii)
iv)
These are further described below:
i)Business Purchases
Business Purchases;
Distributions by the Target Companies;
Warrant Schemes by Jotech and AIC; and
Share Issues by the Target Companies
The Business Purchases involved the acquisitions by the Company of the Jotech Business, AIC Business
and AutoV Business at a total consideration of RM632.84 million (the “Aggregate Offer Consideration”)
which was satisfied in the following manner:
•
Acquisition of the Jotech Business
(a)
RM0.18 for each ordinary share of RM0.10 in Jotech (“Jotech Share”), being 20.00% above the
volume weighted average market price (“VWAMP”) of the Jotech Shares for the five (5) market
days up to and including 26 July 2011, being the last trading day prior to the Offer, of RM0.15,
multiplied by the total number of outstanding Jotech Shares as at 11 May 2012; and
(b)
RM0.09 for each warrant in Jotech (“Jotech Warrant”), being 16.88% above the VWAMP of the
Jotech Warrants for the five (5) market days up to and including 26 July 2011, being the last
trading day prior to the Offer, of RM0.077, multiplied by the total number of outstanding Jotech
Warrants as at 11 May 2012;
•
Acquisition of the AIC Business
(a)
RM1.80 for each ordinary share of RM1.00 each in AIC (“AIC Share”), being 20.00% above the
VWAMP of the AIC Shares for the five (5) market days up to and including 26 July 2011, being the
last trading day prior to the Offer, of RM1.50, multiplied by the total number of outstanding AIC
Shares as at 11 May 2012; and
(b)
RM1.00 for each warrant in AIC (“AIC Warrant”), being 17.37% above the VWAMP of the AIC
Warrants for the five (5) market days up to and including 26 July 2011, being the last trading day
prior to the Offer, of RM0.852, multiplied by the total number of outstanding AIC Shares as at 11
May 2012;
•
Acquisition of the AutoV Business
RM2.38 per ordinary share of RM1.00 each in AutoV (“AutoV Share”), being 20.20% above the VWAMP
of the AutoV Shares for the five (5) market days up to and including 26 July 2011, being the last trading
day prior to the Offer, of RM1.98, multiplied by the total number of outstanding AutoV Shares as at 11
May 2012.
The Aggregate Offer Consideration was satisfied by the issuance of 5,273,646,228 new Shares to the
Target Companies at an issue price of RM0.12 each.
33.2Background Information of the Acquisition (cont’d)
ii)Distributions by the Target Companies (“Distributions”)
•
Upon completion of the Business Purchases, Jotech, AIC and AutoV implemented the Distributions
comprising:
(a)
a capital reduction exercise in accordance with Section 64 of the Companies Act, 1965 (“Act”),
involving a reduction of the share capital and/or share premium reserve (if applicable) of Jotech,
AIC and AutoV via cancellation of the respective issued and paid-up share capital, which have
obtained confirmation from the High Court of Malaya pursuant to Section 64 of the Act; and
(b) a capital repayment exercise involving:
–
distribution-in-specie to all the entitled shareholders of the Shares received by Jotech, AIC
and AutoV upon completion of the Business Purchases; and
–
distribution-in-specie to all the entitled shareholders of the Shares received by Jotech and
AIC arising from their respective entitlement to the Shares (as shareholders of AIC and
AutoV respectively) pursuant to the Distributions undertaken by AIC and AutoV
respectively.
iii)Warrant Schemes by the Target Companies
In conjunction with the Business Purchases, Jotech and AIC carried out schemes of arrangements under
Section 176 of the Act to pay the warrant holders their entitlements to the Aggregate Offer Consideration
in consideration for the cancellation of the exercise rights pursuant to the Jotech Warrants and the AIC
Warrants and thereafter proceed to cancel all the Jotech Warrants and the AIC Warrants so that all the
outstanding Jotech Warrants and AIC Warrants are effectively and validly cancelled.
iv)Share Issues by the Target Companies
In connection with the Business Purchases, the Company had simultaneously with the implementation of
the Distributions, subscribed for, and Jotech, AIC and AutoV had issued twenty (20) Jotech Shares, two
(2) AIC Shares and two (2) AutoV Shares to the Company, resulting in Jotech, AIC and AutoV becoming
wholly owned subsidiaries of the Company.
The Business Purchases and Distributions, Share Issues and Warrant Schemes by the Target Companies
were completed on 25 May 2012.
Upon completion of the Acquisition, shareholders of AIC, Jotech and AutoV became the shareholders of the
Company. AIC, Jotech and AutoV separately applied to Bursa Malaysia to be delisted from the Main Market of
Bursa Malaysia and thereafter the Company was listed on the Main Market of Bursa Malaysia on 31 May 2012.
33.3Acquisition of Subsidiaries, Jotech and AutoV, and Reverse Acquisition of AIC
In accordance with MFRS 3, Business Combinations, the Acquisition in the previous period was accounted for
using the reverse acquisition method with the Company being the accounting acquiree and AIC being the
accounting acquirer.
123
124
33.3Acquisition of Subsidiaries, Jotech and AutoV, and Reverse Acquisition of AIC (cont’d)
The acquirees contributed the following results to the Group for the financial period ended 30 June 2012:
RM’000
Revenue
Profit attributable to owners of the Company
22,593
72
If the Acquisition had been completed on 1 January 2011, management estimated that consolidated revenue of
the Group would have been RM550.74 million and consolidated profit attributable to owners of the Company
would have been RM8.83 million.
The following summarises the major classes of consideration transferred, and the recognised amounts of assets
acquired and liabilities assumed at the acquisition date:
Other
AIC subsidiaries
RM’000RM’000
Fair value of consideration transferred
Nominal value of Shares issued
Fair value adjustment on Shares issued as consideration
311,595
311,595
321,242
(40,155)
281,087
Identifiable Assets Acquired and Liabilities Assumed:
RecognisedRecognised
values on
values on
Note
acquisition
acquisition
RM’000RM’000
(as previously
(restated)
stated)
3
Biological assets
4
Development cost
6
Customer relationships
6
Investment in jointly controlled entity
9
Deferred tax assets
11
Other investments
Inventories
Current tax assets
Borrowings
Government grants
18
19
129,705
38,020
1,098
-
7,221
725
832
732
51,197
30,471
4,638
25,529
(58,593)
(203)
(1,123)
129,705
38,020
1,098
31,499
7,221
725
832
732
51,197
30,471
4,638
25,529
(58,593)
(203)
(1,123)
Identifiable Assets Acquired and Liabilities Assumed (cont’d):
RecognisedRecognised
values on
values on
Note
acquisition
acquisition
RM’000RM’000
(as previously
(restated)
stated)
Contingent consideration payable
Tax liabilities
Deferred tax liabilities
11
(39,738)
-
(749)
(8,560)
(39,738)
(9,699)
(749)
(8,560)
Total identifiable net assets
181,202
203,002
Pre-acquisition carrying amounts were determined based on applicable MFRSs immediately before the
completion of the Acquisition. The values of assets and liabilities recognised on acquisition were generally their
estimated fair values with the properties and biological assets being valued by independent registered valuers
on an open market value basis.
Purchase Price Allocation Exercise
Upon the completion of the purchase price allocation exercise in May 2013, the following restatements were
made to the prior period total identifiable net assets acquired:
(i)
The fair value of customer relationships was determined at RM31,499,000. This relates to the substantial
non-contractual customer relationships which Jotech Group and AutoV Group have with selected established
long term customers. The valuation was determined based on discounted future cash flows.
(ii) The fair value of the contingent consideration payable was determined at RM9,699,000 being the net fair
value at 31 May 2013, of the ordinary shares of the Company to be issued upon the full conversion of the
ASSB RCPS. Details of the ASSB RCPS are disclosed in Note 33.1 (ii).
Goodwill
With the completion of the purchase price allocation exercise in May 2013, the provisional goodwill recognised
as a result of the Acquisition has been restated as follows:
RM’000 RM’000
(as previously
(restated)
stated)
Fair value of consideration transferred
Non-controlling interests, based on their
proportionate interest in the recognised amounts of the
assets and liabilities of the acquirees
Fair value of identifiable net assets
Goodwill
281,087
281,087
12,478
(181,202)
12,478
(203,002)
112,363
90,563
125
126
Goodwill (cont’d)
The goodwill is attributable mainly to the skills and technical capabilities of the Jotech and AutoV work force, and
the synergies expected to be achieved from integrating these companies into the Group’s existing manufacturing
business. None of the provisional goodwill recognised is expected to be deductible for income tax purposes.
Net Cash Arising from Acquisition
As the consideration was satisfied in the form of Shares, the net cash inflow on the Acquisition were as follows:
RM’000
Cash and cash equivalents acquired
Deposits pledged
Bank overdrafts 25,529
(3,091)
(2,456)
Net cash arising from Acquisition
19,982
Business Combination Deficit
Business Combination Deficit arose as a result of the reverse acquisition as follows:
AIC
RM’000
Nominal value of consideration transferred
Net assets of AIC Group (accounting acquirer)
311,595
(154,531)
Business Combination Deficit
As AIC is the accounting acquirer, a deficit on business combination was recognised instead of a goodwill.
Acquisition-related Costs
157,064
In the previous period, acquisition-related costs of RM3,005,000 were charged out as administrative expenses
mainly to legal and professional fees, fees paid to authorities and due diligence costs.
34.Explanation of transition to MFRSs
As stated in Note 1, these are the first financial statements of the Group and of the Company prepared in accordance
with MFRSs.
The transition to MFRSs does not have financial impact to the separate financial statements of the Company.
In preparing the opening consolidated statement of financial position at 1 January 2011, the Group has adjusted
amounts reported previously in financial statements prepared in accordance with previous FRSs. An explanation of
the cause of the adjustment are as follows:
Property, Plant and Equipment
Under FRSs, the Group measured its land and building at valuation. Valuations for the Group were carried out in May
2012 as well as in 2006.
Upon transition to MFRSs, the Group elected to apply the optional exemption to use the previous revaluation carried
out in 2006 as deemed cost under MFRSs. The revaluation reserves of RM1,302,000 at 1 January 2011 was reclassified
to retained earnings, whilst the revaluation reserve of RM4,257,000 arising in May 2012 was reclassified against
property, plant and equipment.
34.1Reconciliation of Financial Position
The accounting policies set out in Note 2 have been applied in preparing the financial statements of the Group and
of the Company for the financial year ended 30 June 2013, the comparative information presented in these financial
statements for the financial year ended 30 June 2012 and in the preparation of the opening MFRS statement of
financial position at 1 January 2011 and 15 July 2011 respectively (the Group’s date of transition to MFRSs).
1.1.2011 30.6.2012
Effect ofEffect of
transition transition
GroupFRSs to MFRSsMFRSsFRSs to MFRSsMFRSs
RM’000RM’000RM’000RM’000RM’000RM’000
Assets Property, plant and equipment
104,175
-
104,175
231,426
(5,841)
Biological assets
-
-
-
38,020
- Investment property
11,033
-
11,033
11,045
- Intangible assets
4,326
-
4,326
118,117
9,699*
-
-
-
7,221
- Investment in jointly controlled entity
-
-
-
646
- Other investments
13,456
-
13,456
-
- Deferred tax assets
-
-
-
832
- 225,585
38,020
11,045
127,816
7,221
646
832
Total non-current assets
132,990
-
132,990
407,307
411,165
Inventories
Other investments
Trade and other receivables,
including derivatives
Current tax assets
19,901
-
-
-
19,901
-
50,772
732
- - 50,772
732
40,139
145
16,697
-
-
-
40,139
145
16,697
86,324
5,539
30,790
- - - 86,324
5,539
30,790
Total current assets
76,882
-
76,882
174,157
- 174,157
Total assets
209,872
-
209,872
581,464
3,858
3,858
585,322
127
128
34.Explanation of transition to MFRSs (cont’d)
34.1Reconciliation of financial position (cont’d)
1.1.2011 30.6.2012
Effect ofEffect of
transition transition
GroupFRSs to MFRSsMFRSsFRSs to MFRSsMFRSs
RM’000RM’000RM’000RM’000RM’000RM’000
Equity
Share capital
173,873
- 173,873
527,365
- 527,365
Share premium
4,437
- 4,437
105,473
- 105,473
Capital reserves
6,041
- 6,041
6,041
- 6,041
Revaluation
reserves
1,302
-
5,559
(1,302)
(5,559)
Other
reserves
-
- -
- (197,172)
(197,172)
Accumulated
1,302
1,302
losses
(51,492)
(50,190)
(39,275)
(37,973)
Total equity attributable to
owners of
the Company
134,161
- 134,161
407,991
(4,257)
Non-controlling
interest
10,108
- 10,108
22,382
(123)
403,734
22,259
Total
equity
144,269
- 144,269
425,993
430,373
(4,380)
Liabilities
Borrowings
17,283
- 17,283
35,398
- 35,398
Government grants
-
-
-
137
-
137
Deferred
tax liabilities
8,791
- 8,791
17,346
(1,461)
15,885
Total
non-current liabilities
26,074
- 26,074
52,881
(1,461)
51,420
Borrowings
Government grants
Trade and other payables,
including derivatives
Tax liabilities
11,038
-
-
-
-
-
11,038
-
-
34,686
1,282
57
34,686
1,282
57
27,751
740
-
-
27,751
740
60,583
1,602
9,699*
-
70,282
1,602
Total current liabilities
39,529
-
39,529
98,210
9,699
107,909
Total liabilities
65,603
-
65,603
151,091
8,238
159,329
209,872
-
209,872
581,464
3,858
585,322
Total equity and liabilities
*
-
-
-
This adjustment relates to the contingent consideration arising from the completion of the purchase price
allocation within the measurement period. Please refer Note 33.3.
34.Explanation of transition to MFRSs (cont’d)
34.2Reconciliation of Profit or Loss and Other Comprehensive Income for the Period Ended 30 June 2012
GroupEffect of
transition to
FRSsMFRSsMFRSs
RM’000RM’000RM’000
Revenue
220,519
-
220,519
(166,762)
Cost of sales
(21,306)
Other costs
(188,068)
-
(188,068)
Gross profit
32,451
-
Administrative expenses
(23,374)
Distribution expenses
(2,205)
Other operating expenses
(4,786)
Other operating income
14,260
-
32,451
(23,374)
(2,205)
(4,786)
14,260
Results from operating activities
16,346
-
Finance income
443
-
Finance costs
(2,777)
-
16,346
443
(2,777)
Operating profit
14,012
-
Share of loss of equity-accounted investees, net of tax
(79)
14,012
(79)
Profit before tax
13,933
-
Income tax expense
(2,062)
13,933
(2,062)
Profit for the year
11,871
-
Other comprehensive income, net of tax
Foreign currency translation differences for foreign operations
66
- Revaluation surplus arising on revaluation of property
4,380
(4,380)
(4,380)
Total comprehensive income for the year
16,317
(166,762)
(21,306)
11,871
66
11,937
34.3Material Adjustments to the Statement of Cash Flows for 2011
There are no material differences between the statement of cash flows presented under MFRSs and the statement
of cash flows presented under FRSs.
129
130
35.Comparatives
35.1In accordance with MFRS 3, Business Combinations, the Acquisition in May 2012 was accounted for using the
reverse acquisition method with the Company being the accounting acquiree and AIC being the accounting
acquirer.
The implication of the reverse acquisition accounting, on the presentation of the comparative consolidated
financial statements was as follows:
(i)
The consolidated statements of profit or loss and other comprehensive income and cash flows of the Group
for the prior reporting period comprise the consolidation of:
•
•
•
•
(ii) The consolidated statement of changes in equity for the prior reporting period, comprises:
•
•
•
•
the financial results and cash flows of AIC and its group of companies (“AIC Group”) for the period from
1 January 2011 to 30 June 2012;
the financial results and cash flows of Jotech and its group of companies (“Jotech Group”) and AutoV
and its group of companies (“AutoV Group”) for the period from 25 May 2012, being the date of
completion of the Acquisition, to 30 June 2012;
the financial results and cash flows of Globaltec Plantations Sdn. Bhd. (“GPSB”), a wholly owned
subsidiary of the Company, from 15 June 2012, being the date of its acquisition to 30 June 2012, and
the financial results and cash flows of the Company since its incorporation on 15 July 2011 to 30 June
2012.
the opening equity balances of AIC Group as at 1 January 2011 and the equity transactions for the
period from 1 January 2011 to 30 June 2012;
equity transactions of AutoV Group and Jotech Group from the date of completion of the Acquisition,
to 30 June 2012;
equity transactions of GPSB from the date of its acquisition to 30 June 2012; and
equity transactions of the Company since incorporation.
35.2Certain comparatives have been restated to conform with current year’s presentation due to the following:
(i)
Transition to MFRS as explained in Notes 3 & 34.
(ii) Completion of purchase price allocation exercise as explained in Note 6, 20 and 33.3
131
36.Supplementary financial information on the breakdown of realised and unrealised
profits or losses
On 25 March 2011, Bursa Malaysia issued a directive to all listed issuers pursuant to Paragraphs 2.06 and 2.23 of Bursa
Malaysia’s Listing Requirements. The directive requires all listed issuers to disclose the breakdown of the unappropriated
profits or accumulated losses as at the end of the reporting year, into realised and unrealised profits or losses.
On 20 December 2011, Bursa Malaysia further issued another directive on the disclosure and the prescribed format
of presentation.
The breakdown of the accumulated losses of the Group and of the Company as at 30 June 2013, into realised and
unrealised losses, pursuant to the directive, is as follows:
Group
Company
Year ended
15.7.2011 to
30.6.2013
30.6.2012
30.6.2013
30.6.2012
RM’000RM’000RM’000RM’000
(restated) ^
The retained profit/(accumulated losses) of the
Company and its subsidiaries:
- Realised
(47,008)
(29,637)
- Unrealised
(8,882)
(8,135)
(137,954)
-
(1,930)
-
(137,954)
(1,930)
(55,890)
(37,772)
The share of accumulated losses from
jointly controlled entity:
- Realised
(1,842)
(79)
The share of accumulated losses from associate:
-
- Realised
(69)
Less:
Consolidation adjustments
(870)
(122)
Total
accumulated losses (58,671)
(37,973)
-
-
-
-
-
-
(137,954)
(1,930)
^
The determination of realised and unrealised profits is based on the Guidance of 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, issued by Malaysian Institute of Accountants on 20 December 2010.
Accumulated losses have been restated due to the transition to MFRSs. Please refer Note 34.
132
statement by directors
Pursuant to Section 169(15) of the Companies Act, 1965
In the opinion of the Directors, the financial statements set out on pages 47 to 130 are drawn up in accordance with
Malaysian Financial Reporting Standards, International Financial Reporting Standards and the Companies Act, 1965 in
Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 30 June 2013
and of their financial performance and cash flows for the year then ended.
In the opinion of the Directors, the information set out in Note 36 to the financial statements has been compiled in accordance
with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits and Losses in the Context
of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of
Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
Chen Heng Mun
Shah Alam,
Statutory Declaration
Pursuant to Section 169(16) of the Companies Act, 1965
I, Leong Lup Yan, the officer primarily responsible for the financial management of Globaltec Formation Berhad, do solemnly
and sincerely declare that the financial statements set out on pages 47 to 131 are, to the best of my knowledge and belief,
correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of
the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the above named in Kuala Lumpur on 25 October 2013.
Leong Lup Yan
Before me:
Lee Chin Hin
Commissioner for Oaths (W493)
Independent Auditors’ Report
To the members of Globaltec Formation Berhad
Report on the Financial Statements
We have audited the financial statements of Globaltec Formation Berhad, which comprise the statements of financial
position as at 30 June 2013 of the Group and of the Company, and the statements of profit or loss and other comprehensive
income, changes in equity and cash flows of the Group and of the Company for the year then ended, and notes, comprising
a summary of significant accounting policies and other explanatory information, as set out on pages 47 to 130.
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 the 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 entity’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 entity’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 of the Company
as of 30 June 2013 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 accounts and the auditors’ report 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 accounts 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 accounts of the subsidiaries did not contain any qualification or any adverse comment made
under Section 174(3) of the Act except as disclosed in note 7 to the financial statements.
133
134
Independent Auditors’ Report (cont’d)
To the members of Globaltec Formation Berhad
Other Reporting Responsibilities
Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The information
set out in Note 36 on page 131 to the financial statements has been compiled by the Company as required by the Bursa
Malaysia Securities Berhad Listing Requirements and is not required by the Malaysian Financial Reporting Standards or
International Financial Reporting Standards. We have extended our audit procedures to report on the process of compilation
of such information. In our opinion, the information has been properly compiled, in all material respects, 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, issued by the Malaysian Institute of
Accountants and presented based on the format prescribed by Bursa Malaysia Securities Berhad.
Other Matters
As stated in Note 1(a) to the financial statements, Globaltec Formation Berhad adopted Malaysian Financial Reporting
Standards (“MFRS”) and International Financial Reporting Standards (“IFRS”) on 1 July 2012 with a transition date of
1 January 2011 for the Group while the Company adopted MFRS since its incorporation date of 15 July 2011. These
standards were applied retrospectively by the Directors to the comparative information in these financial statements,
including the statements of financial position as at 30 June 2012 and 1 January 2011, and the statements of profit or
loss and other comprehensive income, changes in equity and cash flows for the year ended 30 June 2012 and related
disclosures. We were not engaged to report on the comparative information that is prepared in accordance with MFRS
and IFRS, and hence it is unaudited. Our responsibilities as part of our audit of the financial statements of the Group and
the Company for the year ended 30 June 2013 have, in these circumstances, included obtaining sufficient appropriate
audit evidence that the opening balances as at 1 July 2012 do not contain misstatements that materially affect the financial
position as of 30 June 2013 and financial performance and cash flows for the year then ended.
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.
KPMGChew Beng Hong
Firm Number: AF 0758
Approval Number: 2920/02/14(J)
Chartered Accountants
Chartered Accountant
Petaling Jaya, Malaysia
other information
Required Under The Listing Requirements of Bursa Malaysia Securities Berhad
Share Buyback
There were no share buyback transactions entered into by the Company during the financial year.
Options or Convertible Securities
Save as disclosed below, the Company has not granted any options nor issued any convertible securities in the Company
as at 30 June 2013.
In conjunction with the acquisition of Proreka (M) Sdn. Bhd. and its subsidiaries (“Proreka”) by AutoV Corporation Berhad
(now known as AutoV Corporation Sdn. Bhd.) (“AutoV”) in November 2011, 10.9 million redeemable convertible preference
shares (“RCPS”) of RM0.01 each were issued by Auto V Systems Sdn. Bhd. (“ASSB”), a wholly owned subsidiary (“ASSB
RCPS”) as part of the purchase consideration. The ASSB RCPS are convertible to the Company’s shares (“Shares”) at
a conversion ratio of 119 shares for every 6 ASSB RCPS held. The conversion period for the ASSB RCPS is up to 31
December 2013, upon inter-alia the profit guarantee from the vendors of Proreka is met. Any unconverted ASSB RCPS
shall be automatically redeemed at the par value of RM0.01 per unit upon expiry of the conversion period.
American Depository Receipt (“ADR”) or Global Depository Receipt (“GDR”) Programme
During the financial year, the Company did not sponsor any ADR or GDR programme.
Imposition of Sanctions and Penalties
There were no material sanctions or penalties imposed on the Company and its subsidiaries, Directors or management
by the relevant regulatory bodies during the financial year.
Non-audit Fees
Non-audit fees paid/payable to the external auditors by the Group and by the Company for the financial year amounted
to RM115,000 and RM50,000 respectively.
Variation in Results from Profit Estimates, Forecasts or Projections, or Unaudited Results Announced
There were no variances of 10% or more between the results for the financial year and the unaudited results previously
announced. There were no profit forecasts or projections issued by the Group during the financial year.
Profit Guarantee
Save as disclosed below, there were no profit guarantees given or received by the Group during the financial year.
i)
In 2011, Jotech Holdings Berhad (now known as Jotech Holdings Sdn Bhd) (“Jotech”), a wholly owned subsidiary
of the Company, completed the acquisition of Malgreen Progress Sdn Bhd (“MPSB”) and Cergas Fortune Sdn Bhd
(“CFSB”). As part of the acquisition, the vendors of MPSB and CFSB have provided Jotech a profit guarantee
that MPSB and CFSB shall attain earnings before interest and tax amounting to RM2.7 million and RM0.3 million
per year respectively for three (3) years from the financial year ended 31 December 2011 to 2013. In the event the
profit guarantees of MPSB and CFSB for any of the financial years ended 31 December 2011 to 2013 are not
achieved, the vendors are required to make good of such shortfall by way of cash to the Group.
135
136
other information (cont’d)
Required Under The Listing Requirements of Bursa Malaysia Securities Berhad
Profit Guarantee (cont’d)
ii)
In 2011, AutoV completed the acquisition of Proreka. The vendors of Proreka have given AutoV a profit guarantee
that Proreka shall attain a consolidated profit after tax of RM4.5 million for each of the financial years ended
31 December 2011 and 2012 or a cumulative consolidated profit after tax of RM9.0 million for the two (2) financial
years ended 31 December 2012. In the event of a shortfall in the said amount of profit guarantee which has not
been made good by the vendors of Proreka, all ASSB RCPS issued shall be disqualified from conversion until such
shortfall is paid. The ASSB RCPS is convertible at the option of the vendors of Proreka during the specified conversion
period. In addition, in the event Proreka and its group of companies achieve profit after tax exceeding the amount of
profit guarantee for the financial year ended 31 December 2011, such excess shall be carried forward and may be
utilised to make good any subsequent shortfall for the financial year ended 31 December 2012. Any unconverted
ASSB RCPS shall be automatically redeemed upon the expiry of the respective conversion periods.
Utilisation of Proceeds from Proposals
There were no proposals for the raising of funds during the financial period.
Material Contracts
There were no material contracts entered into by the Company and its subsidiaries involving Directors and substantial
shareholders either subsisting at the end of the financial year ended 30 June 2013 or entered into since the end of the
previous financial period.
Recurrent Related Party Transactions
On 28 November 2012, the Company had obtained the approvals from the shareholders to enter into Recurrent
Transactions (“RRPT”) of a revenue or trading nature in its ordinary course of business with certain related parties in
compliance with paragraph 10.09 of the listing requirements of Bursa Malaysia Securities Berhad.
The relationships of the related parties pursuant to the aforesaid shareholders’ mandate for the RRPT:
Related PartyRelationship with the Group
Atmel Corporation
Sprintex Ltd
Holds 6.1% ordinary equity interest in AIC Semiconductor Sdn Bhd (“AICS”) and 19.9% of the
convertible redeemable preference shares in AICS
Holds 50% ordinary equity interest in Proreka Sprintex Sdn Bhd (“PSSB”)
Details of the RRPT pursuant to the aforesaid shareholders’ approvals, for the year ended 30 June 2013 are as follows:
Aggregate value of RRPT from
Vendor/
Purchaser/
1 July 2012 to 30 June 2013
Transaction
Provider
Recipient
RM’000
Assembly and testing of integrated circuit chips
Assembly and sale of superchargers and its
related components
AICS Atmel Corporation
PSSB
Sprintex Ltd
6,154
716
137
statistics on shareholdings
As at 30 September 2013
Authorised Share Capital
:
RM1,000,000,000
Class of Shares
:
Issued and Fully Paid-up Shares
Voting Rights
:
:
RM527,364,625
One vote per ordinary share
analysis by size of holdings
Size of ShareholdingsNo. ofNo. of
Holders
%
Shares
%
1 – 99
100 – 1,000
1,001 – 10,000
10,001 – 100,000
100,001 – 263,682,311 *
263,682,312 and above **
356
340
1,118
5,510
2,169
6
3.748
3.579
11.770
58.006
22.834
0.063
16,878
114,026
6,098,584
228,490,715
3,193,931,233
1,844,994,812
0.000
0.002
0.116
4.333
60.564
34.985
Total
9,499
100.000
5,273,646,248
100.000
*
**
Less than 5% of issued shares
5% and above of issued shares
list of top 30 holders
% of Issued
No.Name
Shares heldCapital
1.
Kong Kok Keong
351,153,178
6.659
2.
Alliancegroup Nominees (Tempatan) Sdn Bhd
326,938,291
6.199
Pledged Securities Account for Goh Tian Chuan (8026702)
3.
Lembaga Tabung Angkatan Tentera
300,000,000
5.689
4.
Hsbc Nominees (Asing) Sdn Bhd
299,258,127
5.675
Exempt an for Bsi Sa (Bsi Bk Sg-nr)
5.
Darulnas (M) Sdn. Bhd.
298,000,000
5.651
6.
Amsec Nominees (Tempatan) Sdn Bhd
269,645,216
5.113
Pledged Securities Account for Goh Tian Chuan
7.
Maybank Nominees (Tempatan) Sdn Bhd
193,120,143
3.662
Pledged Securities Account for Goh Tian Chuan
8.
Kong Kok Keong
150,041,666
2.845
9.
Goh Tian Chuan
125,800,600
2.385
10.
Kong Kok Keong
114,554,833
2.172
138
statistics on shareholdings (cont’d)
list of top 30 holders (cont’d)
% of Issued
No.Name
Shares heldCapital
11.
Loke Mei Ping
89,953,000
1.706
12.
Cimsec Nominees (Tempatan) Sdn Bhd
82,116,396
1.557
Cimb Bank For Jasen Vun Vui Fen (MQ0083)
13.
Loke Mei Ling
78,468,705
1.488
14.
Cimsec Nominees (Asing) Sdn Bhd
76,166,580
1.444
Bank of Singapore Limited for Tjin Tju Susanto
15.
70,950,000
1.345
Pledged Securities Account for Juddy Chu Yen Tien
16.
Antara Reka Sdn. Bhd.
69,189,150
1.312
17.
Yong Nam Yun
67,708,342
1.284
18.
Ooi Boon Pin
67,500,000
1.280
19.
66,000,000
1.252
Pledged Securities Account for George Chee Tat Min
20.
Malacca Equity Nominees (Tempatan) Sdn Bhd
58,290,385
1.105
58,005,520
1.100
54,500,860
1.033
21.
Amsec Nominees (Asing) Sdn Bhd
Pledged Securities Account for Lim Siok Hui
22.
Cimb Bank For Goh Tian Chuan (MQ0008)
23.
Hiew Yon Fo
52,500,000
0.996
24.
52,000,000
0.986
Pledged Securities Account for Liew Cheng York
25.
Alliancegroup Nominees (Tempatan) Sdn Bhd
49,824,902
0.945
Pledged Securities Account for Juddy Chu Yen Tien (8026715)
26
Sarip Bin Hamid
44,900,284
0.851
27.
43,892,200
0.832
42,664,450
0.809
38,459,000
0.729
36,740,033
0.697
3,628,341,861
68.801
Pledged Securities Account for Cheong Yen Yoon
28.
29.
Pledged Securities Account for Liaw Kit Siong
30.
Cimb Bank for Juddy Chu Yen Tien (MQ0109)
Total
139
statistics on shareholdings (cont’d)
SUBSTANTIAL SHAREHOLDERS AS PER THE REGISTER OF SUBSTANTIAL SHAREHOLDERS
AS AT 30 SEPTEMBER 2013
No. of Shares
No. of Shares
NameDirect
%Indirect
1.
2.
3.
4.
Kong Kok Keong
Lembaga Tabung Angkatan Tentera Darulnas Sdn. Bhd.
1,050,033,251
615,749,677
300,000,000
298,000,000
19.91
11.68
5.69
5.65
10
298,000,000
-
-
%
0.00
5.65
0.00
0.00
(1)
(2)
Note:
(1)
(2)
Deemed interest by virtue of his son’s interest.
Deemed interest by virtue of his shareholdings in Darulnas Sdn. Bhd.
DIRECTORS’ SHAREHOLDINGS AS PER THE REGISTER OF DIRECTORS’ SHAREHOLDINGS
AS AT 30 SEPTEMBER 2013
No. of Shares
No. of Shares
NameDirect
%Indirect
1.
2.
3.
4.
5.
6.
7.
8.
9.
Kong Kok Keong
Ooi Boon Pin
Lim Siok Hui
Chen Heng Mun
Ash’ari bin Ayub
Ng Kok Hok
Wong Zee Shin
Mej Jen Dato’ Mokhtar B. Perman (Rtd)
1,050,033,251
615,749,677
78,035,580
58,005,520
1,862,180
-
10,713
19,327
-
19.91
11.68
1.48
1.10
0.04
-
*
0.00
-
10 (1)
387,953,000 (2)
19,285,800 (3)
-
2,004,716 (4)
-
10,713 (5)
-
-
%
0
7.36
0.37
0.04
*
-
Notes:
(1)
(2)
(5)
*
(3)
(4)
Deemed interested pursuant to Section 6A of the Companies Act 1965 by virtue of his son’s interest
Deemed interested pursuant to Section 134 of the Companies Act 1965 by virtue of his spouse’s interest and shareholdings in
Darulnas Sdn Bhd.
Deemed interested pursuant to Section 134 of the Companies Act 1965 by virtue of his spouse’s interest.
Negligible
140
properties of the group
As at 30 June 2013
LAND and BUILDINGS
Description/
Existing
Use
Land Built Up
Area
Area
(Sq. Ft.) (Sq. Ft.)
Lot 26 & 27
Zone Perindustrian
Phase 1
Kulim Hi-Tech
Industrial Park
09000 Kedah
Malaysia
Office building
annexed to a factory
building/Currently
used for assembly
and test of integrated
circuit chips
513,140
Plot 78
Lintang Bayan
Lepas 7
Phase IV
Kawasan
Perindustrian Bayan
Lepas
11900 Pulau Pinang
Malaysia
Office building
annexed to a factory
building/Currently
used for manufacture
of tooling products,
automation systems
and precision
machining
Country Lease
No.: 015028234
Kg Gudon
Jalan UMS (KKSulaman Highway)
Kota Kinabalu
Sabah
Malaysia
Location/
Address
Age
of
Building
Plant 1:
95,000
Plant 1: 16
years
Plant 2:
89,000
Plant 2: 12
years
66,000
51,000
15 years
Vacant land
designated within
an area zoned
for “High Density
Residential Use”/The
land is purchased for
investment purposes
and currently there is
no existing use
7.808
acres
N/A
Lot 27217, Jalan Haji
Abdul Manan
Batu 51/2
Off Jalan Meru
41050 Klang
Selangor Darul
Ehsan
Malaysia
Single storey
detached factory
with a double storey
office/Currently used
for manufacturing
of automotive
components
53,604
37,502
18 years
Lot 6, Jalan 6/4
Kawasan
Perindustrian
Seri Kembangan
43300 Seri
Kembangan
Petaling Jaya
Selangor
Malaysia
Single storey
detached factory
with a double storey
office/Currently used
for metal stamping
operations
48,319
29,881
Tenure/
Date of
Expiry
of
Lease
Net Book
Values as
at
30 June
2013
RM’000
Latest
Date of
Revaluation *
/Date of
Purchase
Lease
over 60
years/
19.8.2056
33,946
20 October
2011 *
Lease
over 60
years/
10.7.2057
5,667
2 May
2012 *
N/A Lease over
999 years/
13.10.2924
11,045
2 February
2010
Freehold
5,621
25 May
2012
24 years Lease over
99 years/
10.1.2089
5,938
25 May
2012
properties of the group (cont’d)
As at 30 June 2013
141
LAND and BUILDINGS (cont’d)
Location/
Address
Description/
Existing
Use
Land Built Up
Area
Area
(Sq. Ft.) (Sq. Ft.)
Age
of
Building
Tenure/
Date of
Expiry
of
Lease
Net Book
Values as
at
30 June
2013
RM’000
Latest
Date of
Revaluation *
/Date of
Purchase
No. 20 & 22
Jalan Masyhur 1
Taman Perindustrian
Cemerlang
81800 Ulu Tiram
Johor
Malaysia
3-storey office
with single
storey detached
factory building/
Currently used
for manufacturing
and fabrication of
tools and dies and
precision stamping
parts for electronic
and electrical
industries
78,400
63,000
16 years
Freehold
7,452
25 May
2012
No. 24
Jalan Masyhur 1
Taman Perindustrian
Cemerlang
81800 Ulu Tiram
Johor
Malaysia
3-storey office
with single
storey detached
factory building/
Currently used
for manufacturing
and fabrication of
tools and dies and
precision stamping
parts for electronic
and electrical
industries
39,200
25,052
21 years
Freehold
4,355
25 May
2012
Kawasan Industri
KIIC, Lot C-7C
Jln. Tol
Jakarta-Cikampek
KM 47 Teluk Jambe
Karawang 41361
Jawa Barat
Indonesia
2-storey office
with single
storey detached
factory building/
Currently used
for manufacturing
and fabrication
of tools and dies
and precision
stamping parts for
the electronic and
automotive industries
79,040
46,228
16 years
Lease
over 30
years/
24.9.2021
2,352
25 May
2012
142
As at 30 June 2013
LAND and BUILDINGS (cont’d)
Tenure/
Date of
Expiry
of
Lease
Net Book
Values as
at
30 June
2013
RM’000
Latest
Date of
Revaluation *
/Date of
Purchase
Description/
Existing
Use
Land Built Up
Area
Area
(Sq. Ft.) (Sq. Ft.)
Age
of
Building
Kong Yue
Industrial Park
18 Kong Yue Road
XinHui District
JiangMen City
GuangDong
Province
People’s Republic
of China
2-storey office
with single
storey detached
factory building/
Currently used
for manufacturing
and fabrication
of tools and dies
and precision
stamping parts for
the electronic and
electrical industries
358,793
93,076
10 years
Lease
over 50
years/
11.5.2053
14,054
25 May
2012
Kawasan Industri
KIIC, Lot E-4B
Jln. Tol
Jakarta-Cikampek
KM47 Teluk Jambe
Karawang, 41361
Jawa Barat
Indonesia
Construction of
a 2-storey office
and single storey
detached factory/
To be used for
manufacturing
and fabrication
of tools and dies
and precision
stamping parts for
the electronic and
automotive industries
107,639
44,627
1 year
Lease
over 30
years/
24.9.2025
6,686
25 May
2012
Plot 321 being part
of Mukim 13
Daerah Tengah
Seberang Perai
Tengah
Penang
Malaysia
Vacant land
174,719
N/A
N/A
Lease
over 60
years/
25.1.2072
2,980
October
2011
Location/
Address
As at 30 June 2013
143
PLANTATION ESTATES
Location/Address
Title Type
Division 1,
Bukit Garam/
Sg. Lokan
Off KM 76.5
Sandakan-Lahad
Datu Highway
Kinabatangan
Sabah, Malaysia
Country Lease
(“CL”)
and Native Title
(“NT”)
Crop
Planted
Land
Area
Hectares
(“ha.”)
Oil palm
(i) CL: 142.883
Tenure/
Date of
Expiry of
Lease
(i) 17.293 ha.
Leasehold/ 31.12.2081
Net Book
Value as at
30 June
2013
RM’000
13,843
Latest
Date of
Revaluation *
/Date of
Purchase
25 May
2012
(Biological
assets:
3 August
2013*)
(ii) 59.570 ha.
(iii) 5.830 ha.
(iv) 36.200 ha.
(v) 23.990 ha.
Division 2
Bukit Garam/
Sg. Lokan
Off KM 76.5
Sandakan-Lahad
Datu Highway
Kinabatangan
Sabah, Malaysia
NT, Provisional
List (“PL”) and
Field Register
(“FR”)
Oil palm
(ii) NT: 40.510
Perpetual/ 31.05.2039
(i) NT: 225.219
(i) 205.829 ha.
Perpetual/
12.12.2098
(ii) 19.390 ha.
Perpetual/
31.05.2039
(ii)
FR: 4.828
Perpetual/
31.05.2039
(iii)
PL : 9.801
21,433
25 May
2012
(Biological
assets:
3 August
2013*)
144
As at 30 June 2013
PLANTATION ESTATES (cont’d)
Location/Address
Title Type
Crop
Planted
Land
Area
Hectares
(“ha.”)
Tenure/
Date of
Expiry of
Lease
Division 3
Bukit Garam/
Sg. Lokan
Off KM 76.5
Sandakan- Lahad
Datu Highway
Kinabatangan
Sabah, Malaysia
CL and NT
Oil palm
(i) CL: 24.270
(ii) NT: 364.534
(i) 361.271 ha.
Perpetual/
31.05.2039
Bukit Garam/
Sg. Lokan
Off KM 76.5
Sandakan – Lahad
Datu Highway
Kinabatangan
Sabah, Malaysia
NT
Net Book
Value as at
30 June
2013
RM’000
25,141
NT: 104.205
(i) 97.185 ha.
Perpetual/
07.12.2040
(ii) 7.020 ha.
Perpetual/ 18.12.2038
25 May
2012
(Biological
assets:
3 August
2013*)
(ii) 3.263 ha.
Perpetual/
13.07.2040
Oil palm
Latest
Date of
Revaluation *
/Date of
Purchase
6,871
25 May
2012
(Biological
assets:
3 August
2013*)
NOTICE OF THE second
ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Second Annual General Meeting of the
Company will be held at Concorde III, Level 2, Concorde Hotel Shah Alam, 3,
Jalan Tengku Ampuan Zabedah C9/C, 40100 Shah Alam, Selangor Darul Ehsan on
Wednesday, 27 November 2013 at 10.00 a.m. for the following businesses:
AGENDA
Resolution No.
1.
To receive the Audited Financial Statements of the Company for the financial year ended
30 June 2013 together with the Directors’ and Auditors’ Reports thereon.
2.
To re-elect the following Directors retiring in accordance with the Company’s Articles of
Association:
(i)
(ii)
(iii)
3.
To consider and if thought fit, to pass the following Ordinary Resolution in accordance with
Section 129 of the Companies Act, 1965:
“THAT Tuan Haji Ash’ari bin Ayub, retiring pursuant to Section 129 of the Companies Act,
1965, be and is hereby re-appointed a Director of the Company to hold office until the next
annual general meeting.”
4
4.
To appoint Messrs KPMG as Auditors of the Company for the ensuing year and to authorise
the Directors to fix their remuneration.
5
5.
As Special Business to consider and if thought fit, to pass the following Ordinary Resolutions,
with or without modifications:
ORDINARY RESOLUTION - AUTHORITY TO ISSUE SHARES
“THAT subject always to the Companies Act, 1965 (“Act”) and the approvals of the relevant
governmental and/or regulatory authorities, the Directors be and are hereby empowered,
pursuant to Section 132D of the Act, to issue shares in the Company from time to time at
such price, upon such terms and conditions, for such purposes and to such person or persons
whomsoever as the Directors may in their absolute discretion deem fit provided that the
aggregate number of shares issued pursuant to this Resolution does not exceed ten percentum
(10%) of the issued share capital of the Company for the time being and that the Directors
be and are also empowered to obtain the approval from Bursa Malaysia Securities Berhad
for the listing of and quotation for the additional shares so issued and that such authority shall
continue in force until the conclusion of the next Annual General Meeting of the Company.”
Mr. Kong Kok Keong under Article 77
Mr. Lim Siok Hui under Article 77
Mej Jen Dato’ Mokhtar B. Perman (Rtd) under Article 83
1
2
3
6
145
146
NOTICE OF THE second ANNUAL GENERAL MEETING (cont’d)
ORDINARY RESOLUTION

– PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT
RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE WITH ATMEL
CORPORATION
“THAT approval be and is hereby given to the Company and/or its subsidiaries to enter into
recurrent related party transactions of a revenue or trading nature as set out in Section 2.2 of
the Circular to Shareholders dated 1 November 2013 with Atmel Corporation, provided that
such transactions are undertaken in the ordinary course of business, on arm’s length basis, on
normal commercial terms which are not more favourable to the related party than those
generally available to the public and are not detrimental to the minority shareholders; AND
THAT the Directors and/or any of them be and are hereby authorised to complete and do
all such acts and things (including executing such documents as may be required) as they
may consider expedient or necessary or in the interest of the Company to give effect to the
transactions contemplated and/or authorised by this ordinary resolution;
7
AND THAT such approval shall continue to be in force until the earlier of:
(i)
the conclusion of the next Annual General Meeting (“AGM”) of the Company following
the forthcoming AGM at which the proposed new shareholders’ mandate for recurrent
related party transactions of a revenue or trading nature with Atmel Corporation is
approved, at which time it will lapse, unless by a resolution passed at the meeting, the
authority is renewed;
(ii)
the expiration of the period within which the next AGM after the date it is required to be
held pursuant to Section 143(1) of the Companies Act, 1965 (“Act”) (but shall not
extend to such extension as may be allowed pursuant to Section 143(2) of the Act);
or
(iii) is revoked or varied by resolution passed by the shareholders of the Company in
general meeting.”

ORDINARY RESOLUTION
– PROPOSED NEW SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY
TRANSACTIONS OF A REVENUE OR TRADING NATURE WITH MANDO CORPORATION
“THAT approval be and is hereby given to the Company and/or its subsidiaries to enter into
recurrent related party transactions of a revenue or trading nature as set out in Section 2.2
of the Circular to Shareholders dated 1 November 2013 with Mando Corporation, provided
that such transactions are undertaken in the ordinary course of business, on arm’s length
basis, on normal commercial terms which are not more favourable to the related party than
those generally available to the public and are not detrimental to the minority shareholders;
AND THAT the Directors and/or any of them be and are hereby authorised to complete and
do all such acts and things (including executing such documents as may be required) as
they may consider expedient or necessary or in the interest of the Company to give effect to
the transactions contemplated and/or authorised by this ordinary resolution;
AND THAT such approval shall continue to be in force until the earlier of:
(i)
the conclusion of the next Annual General Meeting (“AGM”) of the Company following
the forthcoming AGM at which the proposed new shareholders’ mandate for recurrent
related party transactions of a revenue or trading nature with Mando Corporation is
approved, at which time it will lapse, unless by a resolution passed at the meeting, the
authority is renewed;
(ii)
the expiration of the period within which the next AGM after the date it is required to be
held pursuant to Section 143(1) of the Companies Act, 1965 (“Act”) (but shall not
extend to such extension as may be allowed pursuant to Section 143(2) of the Act);
or
(iii) is revoked or varied by resolution passed by the shareholders of the Company in
general meeting.”
8
NOTICE OF THE second ANNUAL GENERAL MEETING (cont’d)
6.
To transact any other business for which due notice shall have been given.
BY ORDER OF THE BOARD
Seow Fei San
Law Mee Poo
Leong Lup Yan
Secretaries
Petaling Jaya
1 November 2013
NOTES:
1.
2.
3.
4.
5.
6.
7.
Only depositors whose names appear on the Record of Depositors as at 21 November 2013 shall be entitled
to attend, speak and vote at the Annual General Meeting.
A member of the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint a
proxy/proxies, to attend, speak and vote instead of him. 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. There shall be
no restriction as to the qualification of the proxy.
A member may appoint not more than two (2) proxies to attend and vote instead of him. Where a member
appoints two (2) proxies, the appointments shall be invalid unless he/she specifies the proportions of his/her
holdings to be represented by each proxy. Where a member of the Company is an authorised nominee as
defined under the Securities Industry (Central Depository) Act 1991, it may appoint at least 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. Where a member of the Company is an exempt authorised nominee which holds
ordinary share in the Company for multiple beneficial owners in one securities account (omnibus account),
there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each
omnibus account it holds.
The instrument appointing a proxy shall be in writing under the hand of the appointor or of his/her attorney duly
authorised in writing or, if the appointor is a corporation, either under seal or under the hand of an officer or
attorney duly authorised.
The instrument appointing a proxy shall be deposited at the Company’s Share Registrar’s Office at Tricor
Investor Services Sdn. Bhd., Level 17, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra,
59200 Kuala Lumpur, at least forty-eight (48) hours before the time set for holding the meeting or any
adjournment thereof.
The proposed Ordinary Resolution 6, if passed, will empower the Directors of the Company to allot and
issue not more than 10% of the issued share capital of the Company subject to the approvals of all the relevant
governmental and/or other regulatory bodies and for such purposes as the Directors consider would be in the
interest of the Company. This authorisation will, unless revoked or varied by the Company in a general
meeting, expire at the next Annual General Meeting of the Company. As at the date of this Notice, no new
shares in the Company were issued pursuant to the authority granted to the Directors at the First Annual
General Meeting held on 28 November 2012 and which will lapse at the conclusion of the Second Annual
General Meeting. 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 proposed Ordinary Resolutions 7 and 8, if passed, will allow the Group to enter into Recurrent Transactions
pursuant to paragraph 10.09 of the Main Market Listing Requirements. Further information on the Proposed
Renewal and New Shareholders’ Mandate for Recurrent Transactions is set out in the Circular to Shareholders
dated 1 November 2013, which is despatched together with the Company’s Annual Report 2013.
147
148
This page has been intentionally left blank
Form of proxy
Number of Shares Held
I/We
(BLOCK LETTERS)
of
NRIC No./Company No.
being (a) Member(s) of GLobaltec Formation BERHAD (953031-A) hereby appoint the following person(s):
Name of proxy, NRIC No.
No. of shares to be represented by proxy
1.
2.
or failing him/her,
1.
2.
or failing him/her, THE CHAIRMAN OF THE MEETING as my/our proxy to vote for me/us on my/our behalf at the Second
Annual General Meeting of the Company to be held at Concorde III, Level 2, Concorde Hotel Shah Alam, 3, Jalan Tengku
Ampuan Zabedah C9/C, 40100 Shah Alam, Selangor Darul Ehsan on Wednesday, 27 November 2013 at 10.00 a.m. and
at any adjournment thereof and to vote as indicated below:
Resolution No.ForAgainst
1
2
3
4
5
6
7
8
Please indicate with an “X” in the space above on how you wish to cast your vote. In the absence of specific directions,
your proxy will vote or abstain as he/she thinks fit.
Dated this
day of
2013
Signature/Seal of Member
Notes:
1.
2.
3.
4.
5.
Only depositors whose names appear on the Record of Depositors as at 21 November 2013 shall be entitled to attend, speak and
vote at the Annual General Meeting.
A member of the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy/proxies, to attend,
speak and vote instead of him. 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. There shall be no restriction as to the qualification of the proxy.
A member may appoint not more than two (2) proxies to attend and vote instead of him. Where a member appoints two (2) proxies,
the appointments shall be invalid unless he/she specifies the proportions of his/her holdings to be represented by each proxy. Where
a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depository) Act 1991, it may
appoint at least 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. Where a member of the Company is an exempt authorised nominee which holds ordinary share
in the Company for multiple beneficial owners in one securities account (omnibus account), there is no limit to the number of proxies
which the exempt authorized nominee may appoint in respect of each omnibus account it holds.
The instrument appointing a proxy shall be in writing under the hand of the appointor or of his/her attorney duly authorised in writing
or, if the appointor is a corporation, either under seal or under the hand of an officer or attorney duly authorised.
The instrument appointing a proxy shall be deposited at the Company’s Share Registrar’s Office at Tricor Investor Services Sdn.
Bhd., Level 17, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, at least forty-eight (48) hours
before the time set for holding the meeting or any adjournment thereof.
Fold Here
Stamp
GLOBALTEC FORMATION BERHAD (953031-A)
c/o Tricor Investor Services Sdn. Bhd.
Level 17, The Gardens North Tower, Mid Valley City
Lingkaran Syed Putra, 59200 Kuala Lumpur
Malaysia
Fold Here