NOTES TO THE FINANCIAL STATEMENTS - Integrax Berhad

Transcription

CORPORATE
INFORMATION
BOARD OF DIRECTORS
Dato’ Seri DiRaja Mohamad
Tajol Rosli bin Mohd Ghazali
Independent Non-Executive Chairman
Encik Amin bin Halim Rasip
Non-Independent Non-Executive
Deputy Chairman
Encik Azman Shah bin Mohd Yusof
Executive Director
Mr. Paul Chan Wan Siew
Senior Independent Non-Executive Director
Datuk Shireen Ann Zaharah
binti Muhiudeen
Independent Non-Executive Director
Laksamana Tan Sri
Dato’ Seri Ilyas bin Hj Din
Non-Independent Non-Executive Director
Mr. Loong Foo Ching
Ir. Abdul Manap bin Ali Hasan
Dato’ Abd Manaf bin Hashim
Encik Fazlur Rahman
bin Zainuddin
AUDIT COMMITTEE
Mr. Paul Chan Wan Siew (Chairman)
Mr. Loong Foo Ching
Encik Fazlur Rahman bin Zainuddin
GOVERNANCE AND NOMINATION
COMMITTEE
binti Muhiudeen (Chairman)
Mr. Loong Foo Ching
REMUNERATION COMMITTEE
Mr. Loong Foo Ching (Chairman)
RISK MANAGEMENT COMMITTEE
Laksamana Tan Sri Dato’ Seri Ilyas
bin Hj Din (Chairman)
TENDER COMMITTEE
Laksamana Tan Sri
Dato’ Seri Ilyas bin Hj Din (Chairman)
binti Muhiudeen
Encik Fazlur Rahman
bin Zainuddin
COMPANY SECRETARY
Lim Hooi Mooi (MAICSA 0799764)
Wong Wai Foong (MAICSA 7001358)
STOCK EXCHANGE LISTING
Main Board
Bursa Malaysia Securities Berhad
Stock Short Name: INTEGRA
Stock Code: 9555
REGISTERED OFFICE / DOMICILE
#36.01, Level 36
Cap Square Tower
No. 10 Jalan Munshi Abdullah
50100 Kuala Lumpur
Malaysia
Tel. No.: 603-2693 7728
603-2141 7728
Fax No.: 603-2141 2995
Website: www.integrax.com.my
SHARE REGISTRAR
Symphony Share
Registrars Sdn Bhd
Level 6, Symphony House
Jalan PJU 1A/46
47301 Petaling Jaya
Selangor Darul Ehsan, Malaysia
Tel. No.: 603-7841 8000
Fax No.: 603-7841 8008
Website: www.symphony.com.my
AUDITORS
Deloitte & Touche (AF 0834)
Chartered Accountants
Level 19, Uptown 1
Damansara Uptown
1, Jalan SS 21/58
47400 Petaling Jaya
Selangor Darul Ehsan, Malaysia
Tel. No.: 603-7723 6500
Fax No.: 603-7726 3986
Website: www.deloitte.com
PRINCIPAL BANKERS
Hong Leong Bank Berhad
CIMB Bank Malaysia Berhad
HSBC Bank Malaysia Berhad
SOLICITORS
Messrs. Dorairaj Low & Teh
Messrs. Azmi & Associates
Messrs. Raslan Loong
Messrs. Ainul Azam & Co.
IN T EGR AX BER H A D A n n u a l R e p o rt 2 0 1 2
Contents
section one:
section two:
Corporate Information
Financials Statements
Five-Year Financial Summary
2
Directors’ Report
42
Financial Indicators and Ratios
2
Statement by Directors
46
Group Corporate Structure
3
Statutory Declaration
46
Lumut Port
- Lekir Bulk Terminal
- Lumut Maritime Terminal
4
5
7
Independent Auditors’ Report
47
Statements of Comprehensive Income
49
Statements of Financial Position
50
Statements of Changes in Equity
53
Statements of Cash Flow
54
Notes to the Financial Statements
56
99
Profile of Directors
10
Chairman’s Statement
16
Corporate Governance Statement
21
Statement on Risk Management and
Internal Control
30
Properties Owned by the Group
Audit Committee Report
32
Analysis of Shareholdings
Statement on
Corporate Social Responsibility
36
Section Three:
Notice of Annual General Meeting
Corporate Calendar
Integrax in the News
100
39
27th Annual General Meeting
Venue : Junior Ballroom
InterContinental Kuala Lumpur Hotel
165 Jalan Ampang, 50450 Kuala Lumpur
Malaysia
Date : Wednesday, 19th June 2013
Time : 10.00 a.m.
103
Proxy Form
105
01
02
I N T E G R A X B E R H A D A nnual Repor t 2012
5-YEAR FINANCIAL SUMMARY
100.0
90.0
85.3
88.1
85.3
80.0
76.1
71.9
68.5
70.0
69.2
60.7
60.0
60.2
59.2
55.8
52.0
50.0
50.3
47.2
49.5
44.1
42.9
41.6
40.0
30.0
90.7
87.9
37.1
47.7
43.8
39.6
36.0
41.7
30.2
20.0
10.0
11.9
2.6
0
(3.1)
2008
2009
2010
2011
2012
2008
2009
2010
2011
2012
85.3
30.2
41.6
11.9
2.6
(3.1)
85.3
68.5
47.2
52.0
42.9
37.1
88.1
76.1
36.0
60.7
55.8
50.3
87.9
71.9
44.1
60.2
49.5
43.8
90.7
69.2
39.6
59.2
47.7
41.7
2008
2009
2010
2011
2012
Total assets (RM million)
755.7
773.0
802.9
746.8
720.8
Total borrowings (RM million)
168.5
135.4
99.9
62.9
4.5
Shareholders’ equity (RM million)
474.3
512.8
554.6
559.7
591.2
Return on equity (%)
(0.7)
7.2
9.1
7.8
7.0
Return on total assets (%)
0.3
5.5
6.9
6.6
6.6
Interest cover (times)
2.2
6.1
9.0
12.8
35.2
Net earnings per share (sen)
(1.0)
12.3
16.7
14.6
14.0
Gross dividend per share (sen)
2.7
-
3.0
16.0
4.1
Gross dividend yield (%)
5.7
-
1.8
12.0
2.9
(45.4)
7.3
9.9
9.1
9.5
0.4
0.3
0.2
0.1
0.0
1.58
1.70
1.84
1.86
1.97
Revenue
EBITDA
Operating profit
Profit before tax
Profit after tax
Profit attributable to shareholders
FINANCIAL INDICATORS
Price earning (PE) ratio (times)
Gearing ratio (times)
Net assets per share (RM)
GROUP CORPORATE STRUCTURE
Pelabuhan Lumut
Sdn. Bhd.
Segmen Kembara
Sdn. Bhd. (Dormant)
100%
100%
Lekir Bulk Terminal
Sdn. Bhd.
Lumut Maritime
Terminal Sdn. Bhd.
Trek Kembara
Sdn. Bhd. (Dormant)
80%
50% less 1 share
100%
LMT Capital
Sdn. Bhd.
LBT Two
Sdn. Bhd. (Dormant)
100%
100%
GROUP ORGANISATIONAL STRUCTURE
BOARD
OF DIRECTORS
Risk Management
Committee
Governance &
Nomination
Committee
Remuneration
Committee
Statutory Auditors
Internal Auditors
Executive
Director
Corporate
Services
Finance
Audit
Committee
Tender
Committee
Business
Development
Port Operations
03
04
LUMUT PORT
FACILITIES AND SERVICES
Lumut Port is located on the west coast of Peninsular Malaysia in the State
of Perak directly off the Straits of Malacca. Lumut Port comprises two (2)
terminals, Lekir Bulk Terminal (LBT) and Lumut Maritime Terminal (LMT).
Strategically located to serve nearer trades within South-East Asia, Myanmar,
Bangladesh, India, Sri Lanka, Pakistan, and farther trades with the Far East
region, Australia / Pacific region, Africa/Mid East region and EU region.
TERMINAL LOCATION COORDINATES
Terminal Location Coordinates are as follows:
Terminal Location
Coodinates
LMT
LBT
Latitude
Longitude
04° 15.3’ N
04° 08.7’ N
100° 39.6’ E
100° 37.3’ E
Pilot Station
Located at latitude 4° 10.5 minutes north and longitude 100° 35 minutes
east (south of Pulau Pangkor). The Pilot Station is within 10.5 nautical miles
of Lumut Maritime Terminal and within 3 nautical miles of Lekir Bulk Terminal.
LEKIR BULK TERMINAL (LBT)
LBT DEVELOPMENT HISTORY
Consequent to the in-principle indicative approval of the State Government
of Perak of the Lekir Coastal Development Project (“Lekir Coastal Project”) in
1996, two companies were formed by three partners to promote, develop and
implement the Lekir Coastal Project, which comprised two related developments:
Desa Kilat Sdn. Bhd. (DKSB)
The promotion and development of the Lekir Coastal Project comprising the
reclamation of land from the sea in the form of islands and the sale of these
islands. Total area available for reclamation was 20,000 acres.
DKSB commenced reclamation of the First Island (of 325 hectares) in
July 1997 in waters of depth 0.5m to 2.0m ACD. The scope of works
included reclamation of land, slope protection and the construction of
a bunded enclosed body of water.
Lekir Bulk Terminal Sdn. Bhd. (LBT)
The promotion and development of a very deep water bulk terminal,
complementary in nature to LMT and the Lekir Coastal Project.
The founding promoters of DKSB and LBT were:
Perbadanan Kemajuan Negeri Perak
Halim Rasip Holdings Sdn. Bhd.
Malakoff Berhad
The current shareholders of DKSB and LBT are:
DKSB
The founding promoters
LBT
Integrax Berhad and Malakoff Berhad
The First Island was completed on 31 August 1999, and was handed
over to its purchasers, TNB Janamanjung Sdn. Bhd. for the purposes
of construction and operation of a coal-fired 2,100 MW Power Station,
and LBT, for the purposes of its very deep water bulk terminal,
pursuant to Site Acquisition Agreements executed in January 1999.
LBT executed a Jetty Terminal Usage Agreement with TNB
Janamanjung Sdn. Bhd. in August 1999 for the provision of coal
unloading and delivery services to the Power Station, thus securing
an anchor customer. LBT commenced the construction of Phase
I of the dry bulk terminal in May 2000, comprising berths able to
accommodate Capemax and Panamax vessels with water depths
alongside of 20m ACD, a 2,000m trestle, 2 grab discharge cranes,
mechanised handling equipment and controls and appropriate
onshore support facilities.
In 30 June 2000, LBT achieved financial close with the issue of an
RM445 million Serial Bond rated AA3 by Rating Agency Malaysia Bhd
on a non-recourse project finance basis.
05
06
LEKIR BULK TERMINAL (LBT)
(Continued)
Nature of Terminal
Common User Port designed to handle dry bulk and
liquid bulk. Gazzetted Customs Port.
_________________________________________________________________________________
Port Operation Working Hours 3 Shifts, 24 Hours Per Day, 365 Days Per Year.
_________________________________________________________________________________
Administrative Working Hours
Mondays to Fridays 08:30 am - 17:00 pm
Saturdays 08:30 am - 12:00 noon
Closed Sundays and Public Holidays
_________________________________________________________________________________
Navigable Channel
Directly off the Straits of Malacca
Minimum Depth - 20m at all times
_________________________________________________________________________________
Berths
South Berths
Length : 530m
Draft : 20m ACD
North Berths
Length : 250m
Draft : 18m ACD
_________________________________________________________________________________
Vessel / Size / Parameters
Vessels / Maximum 180,000 DWT
Barges / Minimum 7,000 DWT
_________________________________________________________________________________
Services To Vessels
Tuggage required, Pilotage compulsory
Port Agency available
_________________________________________________________________________________
Dry Bulk Facilities
Unloading Equipment
2 Grab ship unloaders with 1,500 mt/hour rated capacities feeding 2 import conveyors, with each conveyor having 3,800
MT / hour rated capacity (inclusive of provision for extra grab unloader in future), integrated with a transfer station system
with alternative routing capability.
Direct Transhipment Capability - Under Development
Direct transhipment at berth possible using existing unloaders for direct ship / barge to ship / barge transfer between north and
south berths, tied in with open and covered storage area of total 200,000 sq. metres to be equipped with appropriate stock piling
and reclaiming equipment for integration into existing transfer station system. Estimated storage capacity up to 1.5 million MT.
Ship Loading Capability - Under Development
Plans for future export berth for vessels / barges with 15m ACD water alongside, with export conveyors integrated with existing
transfer station system. Loading rate of 2,500 MT / hour contemplated.
Mobile Equipment
Wheel loaders, dozers, mobile feed / stacker, etc. to suit requirements.
______________________________________________________________________________________________________________________________
Liquid Bulk Facilities
Pipeline wayleaves and tank areas available for direct vessel-to-plant / tank transfer by negotiation.
LUMUT MARITIME TERMINAL (LMT)
LMT DEVELOPMENT HISTORY
Subsequent to execution of the Privatisation Agreement with the State
Government of Perak in February 1993, construction of LMT commenced in
November 1993 on a turnkey design-build basis.
The scope of works included the filling of some 70 acres, a 200m marginal wharf,
a 58m marginal barge berth, open and covered storage facilities, appropriate
infrastructure and an administrative building for a value for RM60 million.
It was completed in July 1995 and was officially opened on 24 July 1995 by the
then Prime Minister of Malaysia, Tun Dr. Mahathir Mohamad in the presence
of the Chief Minister of Perak, Tan Sri Ramli Ngah Talib, many dignitaries, over
12,000 citizens, 4 helicopters, 1 float plane, a 100 foot yacht and the 12,000
DWT MV KOTA MAWAR being the first vessel alongside.
Since 1995 the LMT Terminal has improved and extended its facilities with
additional open and covered storage, handling equipment and, in 2001,
an extension to the Main Berth of 280m, with depth alongside of 12m ACD,
resulting in a total overall straight-line berth length of 500m.
07
08
LUMUT MARITIME TERMINAL (LMT)
(Continued)
Nature of Terminal
Common User Port designed and equipped to handle dry bulk, liquid bulk, containers,
all conventional cargo and project cargoes. Gazzetted Customs Port
___________________________________________________________________________________________________________________________
Port
Operation Working Hours
3 Shifts, 24 Hours Per Day, 365 Days Per Year
___________________________________________________________________________________________________________________________
Administrative Working Hours
Mondays to Fridays
: 08:30 am - 17:00 pm
Saturdays
: 08:30 am - 12:00 noon
Sundays
&
Public
Holidays
:
Closed
___________________________________________________________________________________________________________________________
Navigable Channel
Within Dindings River off the Straits of Malacca
Minimum
depth - 9m, maximum depth - 12m at high tide
___________________________________________________________________________________________________________________________
Berths
South Berths Length : 200m
Draft : 10m ACD
North Berths Length : 280m
Draft : 12m ACD
Barge Berths Two barges longitudinally moored
Draft : 3.5m ACD
___________________________________________________________________________________________________________________________
Vessel / Size / Parameters
Vessels / maximum 35,000 DWT alongside > 35,000 DWT with lighterage
Barges / maximum 8,000 DWT LOA / maximum 230m
___________________________________________________________________________________________________________________________
Services
to Vessels
• Tuggage required • Pilotage compulsory • Port Agency available
___________________________________________________________________________________________________________________________
Container Facilities
Storage
Container Yard storage of 6,000 sq. metres
Reefer Points (by nego.)
Equipment
High Stacker 1
Prime Movers 4
Trailers:
6
x
40
ft
/
14
x
20
ft
Mobile
Crane 1
___________________________________________________________________________________________________________________________
Dry Bulk Facilities
Storage
Mobile Equipment
Covered Storage 8,000 sq. metres.
Wheel Loaders / Excavators
11
Open Storage 100,000 sq. metres.
Tipper Trucks
15
Leased areas for specialised cargo owner /
Hoppers 38 cbm
4
operated facilities and conveyor way
Mobile Conveyors 150 mt/hr 3
leaves by negotiation.
300 mt/hr 2
Grabs:
- 5 cbm
4
8
cbm
4
___________________________________________________________________________________________________________________________
Liquid
Bulk Facilities
Pipeline way leaves and tank areas available for direct vessel-to-plant / tank transfer by negotiation
___________________________________________________________________________________________________________________________
Conventional Cargo Facilities Storage
Equipment
Covered storage 6,200 sq. metres.
Mobile Cranes
Capacities on request
Dedicated Storage
Forklifts
To suit
Leased areas available for specialised cargo storage /
Gear
To suit
re-packing owner operated facilities by negotiation.
09
10
PROFILE OF DIRECTORS
Dato’ Seri Diraja Mohamad Tajol Rosli bin Mohd Ghazali
Malaysian, aged 69, appointed as an Independent Non-Executive Director on 24 May 2011 and subsequently as the
Chairman of the Company on 21 June 2011.
Dato’ Seri holds a Bachelor of Commerce Degree from the University of Melbourne. Dato’ Seri was formerly the Chief Minister of
the State of Perak and had held various portfolios in the Government namely as Parliamentary Secretary of Rural Development
in 1983, Deputy Minister of National and Rural Development in 1986, Deputy Minister of Energy, Telecommunications and Post in
1990, Deputy Minister of Housing and Local Government in 1995, Deputy Minister of Home Affairs in 1997 and Minister in the Prime
Minister’s Department in January 1999. Dato’ Seri has been an assemblyman since he was first elected in 1977 until his retirement
in 2012 and a Member of Parliament from 1978 to 1999. Apart from his extensive contribution to the public administration, Dato’ Seri
has also played a very active role in the development and activities of youth within Malaysia and the Asian region.
He was the President of the Malaysian Youth Council and the Secretary General of the Working Committee for ASEAN
Youth Council from 1982 to 1986. From 1988 to 1991, he was the President of the Asian Youth Council. Besides his career
in the public sector, Dato’ Seri had also served in the private sector in various capacities for 15 years. Amongst the position
he had held are Director of Applied Management Consultant Sdn Bhd, an IT consultancy company and Managing Director
of Rosli, Gan & Co., which specialized in outsourcing of accounting and company secretarial services.
Dato’ Seri is currently the Chairman of Pengurusan Aset Air Berhad. He has no family relationship with any Director and/or
major shareholders and he does not have any conflict of interest with the Company.
Dato’ Seri attended all seven (7) Board Meetings held during the financial year ended 31 December 2012.
Amin bin Halim Rasip
Non-Independent Non-Executive Deputy Chairman
Malaysian, aged 58, Non-Executive Deputy Chairman, appointed to the Board on 29 May 2001 and was redesignated as the Non-Independent Non-Executive Deputy Chairman of the Company on 14 February 2012.
He graduated from the University of Newcastle, Australia in 1978 with a Bachelor of Engineering Degree in Naval
Architecture. He also holds a Master of Science Degree from the Massachusetts Institute of Technology (MIT) in
United States of America where he specialised in Finance and Risk Analysis.
His commercial, financial and business creation strengths have been involved in various business sectors as an
entrepreneur for more than 27 years starting out as a shipowner and operator of a fleet up to 6 vessels, and active
in upstream and downstream oil and gas industry in Malaysia through the provision of high precision manufacturing
and machine-shop services, repair, maintenance and offshore marine services.
Gradually over time, a shift was made into the port logistics and infrastructure development and he was one of the
original founding members of the creation of Lumut Maritime Terminal and Lekir Bulk Terminal which form the core
assets of the Company.
His core strengths include extensive engineering knowledge and ‘hands on’ practical operational experience in
several engineering disciplines, acquired from over 27 years involvement in various sectors including ship design,
ship building, ship management, steel fabrication, maintenance systems, control systems, quality assurance,
manufacturing, integrated logistics systems, system reliability, subsea engineering, offshore oil and gas industry,
bulk material systems, industrial plants and consultancy.
He also has a thorough understanding and capability in respect of detailed financial analysis and risk assessment of
projects, contract law, construction contracts, marine charter parties and legal documentation in industry.
His focus going forward is to bring greater value to the LMT and LBT Terminal infrastructure by way of building
in the capability and versatility to handle a full range of dry and liquid cargoes at Lumut and integrating such into
the various related raw material value chains of dry and liquid bulk raw material Suppliers and Users on a long
term sustainable basis.
He is deemed a connected party to Golden Initiative Sdn Bhd, a major shareholder of Integrax. He does not hold directorships in any other public company.
His indirect interest in the shares of Integrax is disclosed in the Director’s Report shown on page 102 of this Annual Report.
Save as disclosed, he does not have any conflict of interest with the Company.
He attended all seven (7) Board of Directors’ meetings held during the financial year ended 31 December 2012.
11
(Continued)
Azman Shah bin Mohd Yusof
Executive Director
Malaysian, aged 44, Executive Director, appointed to the Board on 6 May 2011 as Independent Non-Executive Director
and re-designated as Executive Director on 2 April 2012.
Azman graduated with a Bachelor’s Degree in Economics from London School of Economics, UK in 1992 and completed
an Executive Programme in Macroeconomic Policy and Management at Harvard University, USA in 1996.
He has had more than 10 years of experience serving the Government, holding various senior positions at Bank Negara
Malaysia and Pengurusan Danaharta Nasional Berhad.
Subsequently in 2002, Azman became a corporate advisor and company director for companies involved in property
development, REIT management, hotel management, media, radio broadcasting, information technology and agriculture.
Prior to taking the helm of the Company as Executive Director, Azman was the Head of Marketing and Corporate
Services at Bolton Berhad, a property development company, overseeing the marketing and corporate services
including corporate planning and strategy, communications, branding, marketing and customer relations.
He has firm family roots in Ipoh, Perak and is active in social work, including alumni associations, Parent-Teachers’
Associations and residents association.
En. Azman attended all seven (7) Board Meetings held during the financial year ended 31 December 2012.
He has no family relationship with any Director and/or major shareholder and he does not have any conflict of interest with the
Company.
He does not hold directorships in any other public company incorporated in Malaysia. His direct interests in the shares
of Integrax is as disclosed in the Directors’ Report shown on page 102 of this Annual Report.
Paul Chan Wan Siew
Malaysian, aged 62, Senior Independent Non-Executive Director, appointed to the Board on 6 May 2011. He is the
Chairman of the Audit Committee of the Board and a member of the Governance Committee, Risk Committee and
Tender Committee.
Professionally, Paul is a Chartered Accountant, a Fellow Member of the Association of Chartered Certified
Accountants (UK), the Institute of Chartered Secretaries and Administrators (UK), and the CPA Australia. He is also
a Certified Financial Planner and Chartered Financial Consultant (USA).
Currently, he serves as an Independent Non-Executive Director in various capacities on the Audit, Risk Management,
Nomination, and Remuneration Committees in several Public Company Boards namely Prestariang Berhad,
Luxchem Corporation Berhad and Prudential Assurance Malaysia Berhad.
Paul’s professional and business experience spans over 35 years across areas of accounting, corporate, financial
and business advisory services. He is the President of Business Transitions Asia Sdn Bhd, a company that provides
business advisory services to businesses in transition, serving the business-owners as an independent advisor in
managing the value of their business.
He is active in serving various professional and Non-Governmental Organizations (NGO). He is the Founding
Deputy President of MACD (Malaysian Alliance of Corporate Directors and serves on the Executive Committees of
FPLC (Federation of Public Listed Companies (FPLC), MIA (Malaysian Institute of Accountants) and GNDI (Global Network of Director Institutes). He is also an
NACD Governance Fellow of the National Association of Corporate Directors, USA, and an FMM (Federation of Malaysian Manufacturers) Governance & Ethics
Committee Member.
He had served as the President of ACCA Malaysia (Association of Chartered Certified Accountants), President of MAICSA (Malaysian Institute of Chartered
Secretaries & Administrators), Founding Board Member/Vice President of FPAM (Financial Planning Association of Malaysia) and Secretary General of MICG
(Malaysian Institute of Corporate Governance).
Paul attended all seven (7) Board Meetings held during the financial year ended 31 December 2012.
He has no family relationship with any Director and/or major shareholder and he does not have any conflict of interest with the Company.
12
(Continued)
Datuk Shireen Ann Zaharah binti Muhiudeen
Independent Non-Executive Director, appointed to the Board on 6 May 2011. She is the Chairman of the Governance
Committee and a member of the Tender Committee.
Datuk Shireen founded Corston-Smith Asset Management, which emphasizes governance and responsible investments
in the ASEAN region. Prior to Corston-Smith, Datuk Shireen was the CEO of AIG Investment Corporation (Malaysia), and
has over 25 years experience in managing funds. She formerly served on the Malaysian Tourism Board
Datuk Shireen authors the popular monthly column “Governance Matters”, which is published in the largest English
Malaysian daily. In 2007, she authored a self-help financial handbook for young adults.
Datuk Shireen accepts speaking engagements whenever she can to reinforce her commitments, such as the United
Nations Entity for Gender Equality and Empowerment of Women (2012), 4th Asian World Corporate Governance Summit
(2012), the Asian Corporate Governance Association Members’ Briefing (2012), the Securities Commission Malaysia panel
discussion on the Malaysian Code on Corporate Governance 2012, Singapore Institute of Directors Global Conference
On Women In The Boardroom (2012), John Hopkins University Global Conference On Women In The Boardroom (2012),
the 2012 Annual Meetings of The Boards of Governors of The International Monetary Fund and The World Bank Group
and the Ministry of Women, Family & Community Development’s Director Convention (2012).
Datuk Shireen also co-chaired at the 2012 Pacific Pension Institute’s Asian Roundtable – “Managing Risk in a Rebalancing
World” which was held in Jakarta in November 2012.
Datuk Shireen was named one of the 25 most influential women in Asia Pacific for Asset Management by Asian Investor in June 2011.
Datuk Shireen attended six (6) out of the total seven (7) Board Meetings held during the financial year ended 31 December 2012.
She does not sit on the board of any public listed companies and has no family relationship with any Director and/or major shareholder nor does she have any
conflict of interest with the Company.
Her deemed interest in the shares of the Company is by virtue of her being the Managing Director of Corston-Smith Asset Management Sdn Bhd is disclosed in
the Director’s Shareholding Report shown on pages 102 of this Annual Report.
Loong Foo Ching
Malaysian, aged 63, Independent Non-Executive Director, appointed to the Board on 6 May 2011. He is the
Chairman of the Remuneration Committee and a member of the Audit Committee and Governance Committee.
Mr. Loong is an advocate and solicitor and holds a Bachelor of Laws (LLB) - honours degree from University of
London and a Master of Laws (LLM) degree from University of Malaya. He is also an associate member of the
Chartered Institute of Bankers, London (now under the official brand name of Institute of Financial Services)
and a member of Institut Bank-Bank Malaysia.
Prior to legal practice, Mr Loong has served a total of 25 years in the banking and finance industry initially with
HSBC Bank Group and later with Sabah Development Bank Group.
Mr. Loong is also an Independent Non-Executive Director of Bertam Alliance Berhad and ELK-Desa
Resources Berhad.
Mr. Loong attended all seven (7) Board Meetings held during the financial year ended 31 December 2012.
He has no family relationship with any Director and/or major shareholder and he does not have any conflict
of interest with the Company.
13
(Continued)
Laksamana Tan Sri Dato’ Seri Ilyas bin Hj. Din
Malaysian, aged 62, Non-Independent Non-Executive Director, appointed to the Board on 25 July 2011 and
is the Chairman of the Risk Committee and the Tender Committee.
Laksamana Tan Sri Dato’ Seri Ilyas received his early education at Sultan Abdul Hamid College, Alor Setar.
He then continued his studies at the Royal Military College, Sungai Besi. He joined Angkatan Tentera Laut
DiRaja Malaysia (“TLDM”) in 1970 and was sent for training at Britannia Royal Naval College, Darmouth.
He completed his training in January 1972. His highest academic qualification is Post Graduate Diploma in
Engineering Business Management.
Laksamana Tan Sri Dato’ Seri Ilyas is the 13th Chief of TLDM. He retired as a Four-Star Admiral, where his
last position in TLDM was Chief of Navy, the highest ranking officer in TLDM.
During his service with TLDM since 1970, Laksamana Tan Sri Dato’ Seri Ilyas has had an extensive track
record. He was the commanding officer of KD Sri Selangor, KD Ganas, KD Gempita and frigate KD Hang
Tuah. He was also the commanding officer of Markas Pendidikan dan Latihan TLDM. He was appointed
as Chief of Navy Region I in Kuantan before being promoted to Rear Admiral. In August 2003, he was
appointed as Deputy Chief of Navy and then promoted to Chief of Navy in April 2005.
Laksamana Tan Sri Dato’ Seri Ilyas is currently the Chairman of Perbadanan Hal Ehwal Bekas Tentera
(PERHEBAT). He does not sit on the board of any other public listed companies.
He is the nominee Director of Perbadanan Kemajuan Negeri Perak, a major shareholder of the Company.
Save as disclosed he has no family relationship with any Director and/or other major shareholder nor does
he have any conflict of interest with the Company.
Laksamana Tan Sri Dato’ Seri Ilyas attended all seven (7) Board Meetings held during the financial year
ended 31 December 2012.
Malaysian, aged 57, Non-Independent Non-Executive Director, appointed to the Board on 25 July 2011. He is a member
of the Company’s Risk Committee and Remuneration Committee.
Dato’ Abd Manaf bin Hashim holds a Higher National Diploma in Engineering from Thames Valley University (Slough
Campus).
Dato’ Abd Manaf was a member of the Suruhanjaya Perkhidmatan Awam Negeri Perak from 2009 to 2012 and has
served as Chairman in several private companies involved in the construction, telecommunications and solar hybrid
sectors since 1993. Prior to that, Dato’ Abd Manaf held various positions in Shapadu Decloedt Dredging Sdn Bhd (19901992), Industrial Boilers and Allied Equipment (IBAE) (1984-1986), Hakasa Sdn Bhd (1983-1984) and Asie Sdn Bhd
(1982-1983).
Dato’ Manaf was elected as State Assemblyman for Pengkalan Baharu, Perak at the recent General Elections held on
5th May 2013.
Dato’ Manaf also sits on the Board of Tenaga Nasional Berhad and several other private companies.
Dato’ Manaf is the nominee Director of Tenaga Nasional Berhad, a major shareholder of the Company. Save as disclosed
Dato’ Manaf has no family relationship with any Director and/or other major shareholders and he does not have any
conflict of interest with the Company.
Dato’ Manaf attended six (6) out of a total seven (7) Board Meetings held during the financial year ended 31 December
2012.
14
(Continued)
Fazlur Rahman bin Zainuddin
Malaysian, aged 44, Non-Independent Non-Executive Director, appointed to the Board on 21 November
2012. He is a member of the Audit Committee, Risk Committee and Tender Committee.
Fazlur was appointed as the Chief Financial Officer of Tenaga Nasional Berhad (“TNB”) on 11 June 2012.
Prior to joining TNB, Fazlur was Chief Financial Officer for the Naza Group of Companies since 2010, and
was formerly with the TM Berhad Group and Shell Malaysia. Fazlur is also a fellow of the Association of
Chartered Certified Accountants (ACCA), United Kingdom.
Fazlur is the nominee Director of Tenaga Nasional Berhad, a major shareholder of the Company. Save as
disclosed, Fazlur has no family relationship with any Director and/or other major shareholders and he does
not have any conflict of interest with the Company.
As he was only appointed in November 2012, Fazlur did not attend any of the Board Meetings held during
the financial year ended 31 December 2012.
Malaysian, aged 66, Independent Non-Executive Director, appointed to the Board on 6 May 2011. He is a member of the
Company’s Audit Committee, Risk Committee and Remuneration Committee.
Ir. Abdul Manap holds a Bachelor of Science (Hons) from the University of Glasgow majoring in Ocean Engineering. He is
also a Professional Engineer of Malaysia, a Fellow of Institute of Marine Engineering, Science and Technology (UK) and a
member of the Royal Institution of Naval Architects (UK) and Chartered Engineer (UK).
He has held professional positions as Chairman of the Joint Branch for Royal Institution of Naval Architects and The
Institute of Marine Engineering Science and Technology (UK).
He has more than 25 years’ experience in shipbuilding, ship repair, oil and gas production platform fabrication, crane
fabrication and pressure vessel fabrication.
Ir. Abdul Manap has also been involved in tug operations. In 1993-1995 he was responsible for the privatization of Naval
Dockyard Sdn Bhd. As Vice President Special Projects at Penang Shipbuilding & Construction Sdn Bhd (“PSC”), he was
responsible for the development of new business, joint ventures, acquisitions of companies related to the shipbuilding and
marine engineering sector of the group.
He also sat on the boards of companies such as Wave Master International Pty Ltd, Australia, Trencless Technology
Sdn Bhd, VE Metal Building System Sdn Bhd, TC Gallaghan (M) Sdn Bhd, Naval Dockyard Sdn Bhd, Malaysia Maritime
Academy and PSC Defense Technologies Sdn Bhd.
In 1997 he left the PSC group of companies to pursue his own consultancy business. He has 5 years’ experience in consultancy work providing services related to
the shipping, ports, leisure, fisheries and oil and gas sectors.
In 2003-2004 he took up a position of Vice President – Fleet Management Division at KIC Oil & Gas Ltd a company which operates a VLCC as a Floating
Fuel Oil Processing Terminal and a 30,000 dwt product tanker which trades internationally. In 2006 he joined MRR Consult as Senior Consultant and
Chief Operating Officer.
Ir. Manap attended all seven (7) Board Meetings held during the financial year ended 31 December 2012. He does not sit on the board of any public listed companies
and has no family relationship with any Director and/or major shareholder nor does he have any conflict of interest with the Company.
** None of the Directors have been convicted of any offences within the past ten (10) years other than traffic offences, if any.
15
16
CHAIRMAN’S STATEMENT
DEAR SHAREHOLDERS,
For and on behalf of the Board of Directors, I am pleased to present to you our Annual Report for
the financial year ended 31 December 2012.
FINANCIAL PERFORMANCE
Integrax continues to be a fundamentally strong company with a consistent revenue stream, good
profitability and a solid balance sheet. Integrax’s revenue increased to RM90.7 million in 2012
(RM87.9 million in 2011) on the back of a record-breaking year for cargo throughput at Lekir Bulk
Terminal in 2012.
Profit from operations declined to RM39.6 million due to higher depreciation charges and an
increase in administrative expenses. Profit for the year declined to RM47.7 million compared with
the RM49.5 million recorded the previous year.
Our shareholders’ funds strengthened further to RM591.2 million. We are in a very comfortable cash
position of RM124.1 million, having made the last payment of RM40 million of the 12 ½ years RM445
million zero coupon Serial Bonds in July 2012. The Net Assets of the Company is RM1.96 per share.
OPERATIONAL PERFORMANCE
Lumut Port, which comprises of Lekir Bulk Terminal located at Pulau Lekir Satu, Sri Manjung
(“LBT”) and Lumut Maritime Terminal located at Kg Acheh, Sitiawan (“LMT”), recorded its best ever
performance by handling 10.16 million tonnes in 2012, an increase of 9.8% from 2011. Integrax
owns 80% of LBT through its subsidiary Lekir Bulk Terminal Sdn Bhd (“LBTSB”) and 50% less 1
share in LMT through its associate company, Lumut Maritime Terminal Sdn Bhd (“LMTSB”).
Lumut Port is managed by LMTSB, and under the stewardship of its Chief Executive Officer, Amin
Halim Rasip, has continued to grow from strength to strength over the years to become one of the
most efficient port operators in the country.
(Continued)
LBT and LMT Cargo Throughput
Million MT
12.00
10.00
10.16
9.62
9.25
6.32
6.07
7.02
8.53
8.58
5.50
5.31
3.03
3.27
3.30
3.18
3.14
2008
2009
2010
2011
2012
8.00
6.00
4.00
2.00
0.00
LBT, our deepwater terminal which handles the unloading and delivery of
coal to the Sultan Azlan Shah Power Station in Manjung, recorded cargo
throughput of 7.02 million tonnes, an increase of 15.6% from 2011. LBT
recorded profit after tax of RM30.4 million in 2012 (RM28.2 million in 2011) on
the back of RM90.7 million revenue (RM87.9 million).
Year
LBT Throughput
2008
5.50
2009
5.31
2010
6.32
2011
6.07
2012
7.02
LMT Throughput
3.03
3.27
3.30
3.18
3.14
Cargo Throughout Analysis
By Cargo Type
2012
2011
Conventional / Break Bulk
211,192
188,068
Liquid Bulk
916,104
983,142
LMT, which is owned by our associate company, LMTSB, achieved a cargo
throughput of 3.1 million MT in 2012. Throughput at LMT consisted of dry bulk
(limestone, coal, cement, clinker, pet coke and animal feed among others) which
made up 63.3% of throughput, and liquid bulk (palm oil and petroleum products)
which made up 29.1% of throughput.
LMT Dry Bulk
2,011,974
2,004,403
LMT Sub-Total
3,139,270
3,175,613
LMT achieved a profit after tax of RM35.5 million on the back of RM98.3 million
revenue in 2012.
LBT Dry Bulk
7,020,423
6,073,865
Total
10,159,693
9,249,478
2012
2011
Chemicals
527,190
598,332
Mining
700,981
714,654
Agriculture
794,991
760,190
1,011,757
1,046,916
104,351
55,521
LMT Sub-Total
3,139,270
3,175,613
Energy (LBT)
7,020,423
6,073,865
Total
10,159,693
9,249,478
Percentage of
Exports and Imports
2012
2011
Imports
83.8%
80.6%
Exports
16.2%
19.4%
By Industry Sector
Construction Materials
Others
17
18
(Continued)
A YEAR OF CONSOLIDATION AND PLANNING
In my report to shareholders last year, I had said that the year 2011 was a
year of transition as the new Board of Directors worked on strengthening
the governance structure of the company and tried to resolve all the
legacy issues which had overshadowed Integrax’s true potential. I am
pleased to report that we have completed this transition phase and
resolved most of the outstanding operational and non-operational issues
that had plagued us in the past.
coal through LBT for the new 1,010 MW coal-fired unit of the existing power
plant (“Manjung 4 Unit”) for an initial period which will expire on 30 March
2040. The agreement is a natural progression of the long-term partnership
between Integrax and TNB and is critical towards meeting the energy needs
of Peninsular Malaysia.
In May 2012, we held our first ever Board and Management Offsite Meeting
to chart our growth and development plans moving forward, using the tools of
“Blue Ocean Strategy”. We now have a roadmap which will not only chart the
future growth of Integrax, but will also contribute to the development of Lumut
as the “New Economic Capital of Perak”. Our plans include optimizing the
usage of the two Lumut Port Terminals and providing value-added services
to existing and future customers.
We have also begun to take steps to review our operations, especially our
infrastructure needs in light of our growth plans. Last year, we replaced
the trestle conveyor belts at LBT at a cost of RM17.6 million and we will
be making further improvements and upgrades of our equipment and
software over the next 18 months.
On 27th July 2012, our subsidiary, LBTSB entered into a new Jetty
Terminal Usage Agreement with TNB Janamanjung Sdn Bhd (“TNBJ”),
a wholly-owned subsidiary of Tenaga Nasional Berhad (“TNB”) for
the provision of infrastructure and handling services for the import of
The agreement entails the provision of coal unloading and delivery services
including the installation of a new additional grab ship unloader for the
importation of coal by TNBJ specifically for the operation of the new power
plant. The new Manjung 4 Unit, once operational, is estimated to add a
further 3 million tonnes of coal to LBT’s throughput.
(Continued)
Our corporate governance was further strengthened
with the signing of the “Corporate Integrity Pledge
and Anti-Corruption Principles for Corporations in
Malaysia” (“CIP”) in Ipoh, Perak, on 17th July 2012.
We are one of the first 200 corporations in Malaysia
to have executed the CIP. The CIP is a unilateral
pledge made by companies in collaboration with the
Corporate Integrity Roundtable Members who are
Institut Integriti Malaysia, Bursa Malaysia, Securities
Commission, Malaysian Anti-Corruption Commission,
Transparency International, Suruhanjaya Syarikat
Malaysia and PEMANDU. The Group is further
enhancing its internal controls and level of integrity
through continuous assessment of its corporate
integrity using the tools recommended under the
CIP and has already introduced a Code of Ethics for
companies wanting to do business with the Group as
well as a Code of Conduct for our employees.
We have also begun engaging with the media and the investment community,
and received positive media coverage and visits from institutional fund managers,
both local and foreign. Our Corporate Social Responsibility initiatives have begun
to bear fruit, and the Board has mandated Management to look into formulating
long-term CSR initiatives which will benefit the community which we operate in.
In December 2012, Integrax shifted to its new office in Cap Square
Tower in Jalan Munshi Abdullah, located in the central business district of
Kuala Lumpur. It is hoped that the new office will inspire and motivate the
management and staff to take the company to greater heights.
GOING FORWARD – THE VALUE CHAIN INTEGRATION PARTNER
The Blue Ocean Strategy that we have charted for Integrax consists of plans to expand our port facilities and integrate our operations along the value
chains of the many raw materials which flow through our ports. We plan to reposition and strengthen Lumut Port’s position as a “Value Chain Integration
Partner” and provide added value services to our customers. Our ability to move along the value chain of various types of raw materials and provide
integration solutions is made possible by our approach of “Smart Partnership”.
LBT is a terminal with a design configuration that can accommodate several users. Plans are in place to equip LBT with new material handling
equipment in a configuration that can cater for the needs of multiple users including all the current and future needs of our customers. The usage of
stockyard space in LBT which is currently underutilized will also generate additional revenue for LBT.
These expansion plans are currently being finalised and the Tender
Committee and the Risk Management Committee will be evaluating these
plans for Board approval. The Management team is also in negotiations with
several potential users and customers of Lumut Port with the aim of increasing
the cargo throughput.
The Management team has set themselves an internal target which is called
“Vision 20:2020” which is to achieve cargo throughput of 20 million tonnes
by the year 2020. I am sure that with the cooperation and effort of the Board,
the management and the staff, this target will be achieved. Our team is hard
at work making these ambitious plans a reality. We hope to give you positive
news in the not too distant future…..
19
20
(Continued)
ACKNOWLEDGEMENT
I would like to put on record my sincere
appreciation and gratitude to the
directors, management and staff who
have worked tirelessly and diligently
throughout the year to consolidate the
Group’s position and formulate strategic
plans for our future growth.
I would like to thank my fellow Board
members who went beyond the call of
duty in providing guidance and insight
to the management team in helping to
resolve the legacy issues, and in creating
a strong governance structure which
will prove invaluable as the Company
embarks on its growth plans.
I would like to thank Encik Mohamed
Rafique Merican bin Mohd Wahiduddin
Merican who served as our Board
member during the transition phase of
the company until his resignation on 20th July 2012. I wish him every
success in his new role as Chief Financial Officer of Maybank Berhad.
I would also like to welcome his replacement, Encik Fazlur Rahman bin
Zainuddin who was appointed to the Board on 22nd November 2012 as
a representative of Tenaga Nasional Berhad.
Overall, the achievements of the Company would not have been possible
without the strong relationship which we continue to enjoy with the Perak
State Government, especially Perbadanan Kemajuan Negeri Perak
(“PKNP”) and its subsidiaries, as well as the assistance from Majlis
Perbandaran Manjung, Jabatan Kastam, Jabatan Laut, Unit Perancang
Ekonomi and Pejabat Tanah dan Galian.
The continued mandate given to Barisan Nasional during the 13th
General Elections to govern the Perak State Government provides
continuity and stability and augurs well for our future development plans.
I would also like to take this opportunity to congratulate my fellow Board
member, YB Dato’ Abdul Manaf bin Hashim on winning the Pengkalan
Baharu Perak State Assembly seat.
I wish to thank the management team and staff of Integrax for their hard
work and dedication throughout the year. Under the focused leadership
of the new Executive Director, Encik Azman Shah bin Mohd Yusof, and
coupled with the vision and technical expertise of our Deputy Chairman,
Encik Amin bin Halim Rasip, I believe that Integrax is ready to move
forward and achieve greater success.
To the shareholders of Integrax, I thank you for your unwavering
support and loyalty, your rewards will come in the not too distant future.
We are already on the Blue Ocean, sailing into a vast sea of “Value
Innovation”. Sail with us through thick and thin and together we can
achieve our very own Vision 20:2020!
Tajol Rosli
Chairman
10 May 2013
CORPORATE GOVERNANCE STATEMENT
A. INTRODUCTION
The Board of Directors is committed to ensuring that the highest standard of corporate governance is practiced throughout the Group. This is fundamental
in discharging its fiduciary responsibilities to enhance the shareholders’ value and the Group’s financial performance.
To this end the Board of Directors fully subscribes to and supports the recommendations of the Malaysian Code on Corporate Governance 2012 (“Code”).
The Directors are pleased to set out below how the Company has applied the principles set out in the Code. Except for matters specifically identified, the
Board of Directors has complied with the best practices set out in the Code.
The code recommends that the Board assumes the following responsibilities:•
•
•
•
•
•
To review and adopt strategic plans for the Company;
To oversee the conduct of the Company’s business to evaluate whether the business is properly managed;
To identify principal risks and ensure the appropriate systems to manage these risks;
To implement succession planning, including appointing, training, fixing the compensation of and where appropriate, replacing senior management;
To develop and implement an investor relations programme or shareholder communications policy for the Company; and
To review the adequacy and the integrity of the Company’s internal control system.
B. BOARD OF DIRECTORS
1. COMPOSITION AND BOARD BALANCE
As at 31 December 2012, the Board has a total of ten (10) members, comprising four (4) Non-Independent Non-Executive Directors, five (5) Independent
Non-Executive Directors and one (1) Executive Director.
In the financial year under review, the Directors who have served on the Board of the Company were as follows:Name of Director
Current Position
Date of Appointment
1
En. Amin bin Halim Rasip
Non-Independent Non-Executive Deputy Chairman
29 May 2001
2
Datuk Shireen Ann Zaharah bt Muhiudeen
6 May 2011
3
6 May 2011
4
Mr. Loong Foo Ching
6 May 2011
5
En. Azman Shah bin Mohd Yusof
Executive Director
6 May 2011
6
6 May 2011
7
Dato’ Seri DiRaja Mohamad Tajol Rosli bin Mohd
Ghazali
24 May 2011
8
Laksamana Tan Sri Dato’ Seri Ilyas bin Hj Din
25 July 2011
9
25 July 2011
10 En. Fazlur Rahman bin Zainuddin
22 November 2012
A brief profile of each Director is set out on pages 10 to 14 of the annual report.
En. Amin bin Halim Rasip was re-designated as the Non-Independent Non-Executive Deputy Chairman of the Company on 14 February 2012.
En. Azman Shah bin Mohd Yusof, who was appointed as an Independent Non-Executive Director of the Company on 6 May 2011, was re-designated
as the Executive Director of the Company on 2 April 2012.
En. Mohamed Rafique Merican bin Mohd Wahiduddin Merican, resigned as Non-Independent Non-Executive Director of the Company on 20 July 2012.
As at the time of this report, the following Directors are Independent Non-Executive Directors of the Company:1.
2.
3.
4.
5.
Dato’ Seri DiRaja Mohamad Tajol Rosli Mohd Ghazali;
Datuk Shireen Ann Zaharah bt Muhiudeen;
Mr. Paul Chan Wan Siew;
Mr. Loong Foo Ching; and
Ir. Abdul Manap bin Ali Hasan.
21
22
CORPORATE GOVERNANCE STATEMENT (Continued)
B. BOARD OF DIRECTORS (Continued)
With the above-mentioned Independent Directors, the Board complies with paragraph 15.02 of the Listing Requirements which requires that at least
two (2) directors or one-third (1/3) of the Board, whichever is the higher, are independent Directors. No individual or group of individuals dominates the
Board’s decision making. The Board has consistently had non-executive directors constituting a majority.
The Board through the process of an annual evaluation exercise, assesses the independence of its Independent Non-Executive Directors annually.
Based on the assessment carried out for the year 2012, the Board is generally satisfied with the level of independence demonstrated by the Independent
Non-Executive Directors and their ability to act in the best interest of the Company.
Non-executive directors should be persons of calibre, credibility and possess the necessary skills and experience to form an independent judgment on
issues of strategy, performance and resources, including key appointments and standards of conduct.
The appointment of Directors is governed by a stringent evaluation process based on criteria such as leadership experience, business acumen, financial
expertise, operational and technical skills, industry experience and regulatory experience, irrespective of gender, race or religion. The process involves
the thorough evaluation of the candidates by the Governance and Nomination Committee using the Board Evaluation Matrix. The approved candidate(s)
are then recommended to the Board for their consideration and approval for appointment.
2. MEETINGS
During the financial year 2012, the Board held seven (7) meetings. The attendance records of Directors at Board Meetings held during the financial year
ended 31 December 2012 were as follows:Director
No. of Meetings Attended /
Held during office
Dato’ Seri DiRaja Mohamad Tajol Rosli Mohd Ghazali
7/7
7/7
7/7
6/7
7/7
Mr. Loong Foo Ching
7/7
7/7
Laksamana Tan Sri Dato’ Seri Ilyas bin Hj Din
7/7
6/7
En. Mohamed Rafique Merican bin Mohd Wahiduddin Merican (resigned on 20 July 2012)
5/5
En. Fazlur Rahman bin Zainuddin (appointed on 22 November 2012)
0/0
3. SUPPLY OF INFORMATION TO THE BOARD MEMBERS
All Directors are provided with an Agenda and Board papers on a timely basis prior to the meeting to enable them to deliberate on an informed basis on
the issues to be raised. The Board papers include, among others, the following details:•
•
•
•
•
Confirmed minutes of meetings of all Committees of the Board
Operational and financial reporting of the Group
Business development of the Group
Audit Committee reporting
Regulatory and other administrative matters
All proceedings of Board Meetings are minuted and signed by the Chairman of the Meeting in accordance with the provision of Section 156 of the
Companies Act, 1965.
The Directors have unrestricted access to all information within the Group whether as a full board or in their individual capacity, in furtherance of their duties.
The Directors also have access to the advice and services of the Company Secretary who ensures that all documentation is in place for the purpose of
meeting statutory obligations. The Directors also have access to independent professionals’ advice and services should the need arises.
Newly-appointed Directors are provided a Directors’ On-Boarding Kit and a briefing session by the Executive Director and senior management upon
appointment to the Board. The newly appointed Directors are encouraged to visit the Group’s operating sites to familiarize themselves with the operations
of the Group.
The Company organised a “Charting Blue Ocean Strategy for Integrax Berhad” Board and management offsite training in May 2012 where the Management
presented its growth strategy and business development proposals for the Board’s information and input. These annual sessions are useful for the Board
members to enable them to play their role in the development of the Company’s overall strategy going forward.
4. DIRECTORS’ TRAINING
Directors are encouraged to attend continuous education programmes to keep them abreast of changes in legislation and regulation that affect the
business operations. As at 31 December 2012, all the Directors on the Board of the Company, except for En. Fazlur Rahman bin Zainuddin, who was
appointed on 22 November 2012, had attended and completed the Mandatory Accreditation Programme (MAP).
Following the repeal of Practice Note No. 15/2003 on Continuing Education Programme (“CEP”) prescribed by Bursa Malaysia Securities Berhad
(“BMSB”), the Board of Directors of each listed issuer has a duty to evaluate and determine the training needs of its Directors on a continuous basis.
The training must be one that aids the Director in the discharge of his/her duties as a Director.
For the year under review as at 31 December 2012, the Directors attended the following conferences, dialogues and seminars:Directors
Conference Attended
Dato’ Seri DiRaja Mohamad Tajol Rosli bin
Mohd Ghazali
•
Charting Blue Ocean Strategy for Integrax Berhad
•
•
•
•
EU-Asia Biomass Best Practices and Business Partnering Conference 2012
Presentation and Discussion on Perak Port Authority and Future Direction
Seminar dan Bengkel Cadangan Pembangunan Wilayah Baru Negeri Perak
•
•
•
•
•
•
•
•
•
•
•
•
Internal Financial Reporting Standards (IFRS) Conference 2012
EU-Asia Biomass Best Practices and Business Partnering Conference 2012
Presentation and Discussion on Perak Port Authority and Future Direction
Politics Decoded - Implications on Financial Markets
Handling Press Conferences, Media Interviews and Tricky Media Questions
Corporate Integrity System Malaysia Engagement Programme
MOGSEC 2012 - Malaysia’s Transformation into Asia’s Oil and Gas Hub
3rd International Green Tech Conference IGEM 2012 - Greentech for Growth
ICBBVAP 2012 - Biomass for Biofuels and Value-added Products
Seminar dan Bengkel Cadangan Pembangunan Wilayah Baru Negeri Perak
ISES 2012 - Empowering Nations via Sustainable Energy
23
24
Directors
Conference Attended
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
2nd Annual Women in Leadership Forum Asia 2012
Women Directors On boarding Training Programme
Gender Equality for Sustainable Business Event
4th Corporate Governance Summit Kuala Lumpur 2012
Asia Corporate Governance Association (ACGA) Members’ Briefing
Raising the Bar: The Malaysian Code on Corporate Governance 2012
Growth Through Innovation
SID Directors Conference 2012 Corporate Governance In The New Normal
SAIS Global Conference On Women In The Boardroom
Khazanah Megatrends Forum 2012
Women Business Leaders – Shaping the future
2012 Asian Pension Fund Roundtable - Managing Risk in a Rebalancing World
Asian Business Dialogue on Corporate Governance 2012 - The Governance of Economic and
Financial Integration in Southeast Asia
Women Directors Convention - Corporate Peak Performance Through Gender Diversity
The Growing Importance of Women on Corporate Boards
2013 San Francisco Roundtable - A Connected World, Capital Pools and the Future of Technology
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
The Case for Diversity in the Boardroom
IFAC Small and Medium Practices Forum 2012
Accountants in Business Symposium 2012
Professionalism in Directorship Programme
Institute of Directors Conference 2012
Charting Blue Ocean Strategy Workshop Integrax Berhad
MINDA-ASLI Directors Summit 2012 MINDA-ASLI
Malaysian Code on Corporate Governance 2012
MAICSA Annual Conference 2012
16th Malaysian Banking Summit 2012
Singapore Institute of Directors Annual Conference 2012
OECD Asian Roundtable on Corporate Governance
Asian Corporate Governance Association (ACGA) 12th Annual Conference 2012
Malaysian Institute of Accountants Annual Conference 2012
Mr. Loong Foo Ching
•
•
Director And Senior Executives Compensation Seminar
•
Forensic Accounting for Non-Executive Directors
Laksamana Tan Sri Dato’ Seri Ilyas bin Hj Din •
McCloskey South African Coal Exports Conference 2012
Board Development Program 2012: “Electricity Industry Reform, Markets and Strategy
Discussions on Maintaining the Vertically Integrated Utility” by Dr. Fereidoon P. Sioshansi,
President of Menlo Energy Economics, USA
Seminar On Regulatory Updates Governance And Current Issues For Directors Of PLCs And
Body Corporate 2012
•
•
•
En. Fazlur Rahman bin Zainuddin
Was appointed to the Board on 22 November 2012. He attended the Mandatory Accreditation
Programme in April 2013.
5. RE-ELECTION OF DIRECTORS
In accordance with Article 87 of the Company’s Articles of Association, all newly appointed Directors are subject to re-election by shareholders at the first
Annual General Meeting (“AGM”) after their appointment. At every AGM one third (1/3) but not exceeding one third (1/3) of the existing Directors retire from
office in accordance with Article 8C the Company’s Articles of Association and all Directors retire from office at least once every three (3) years but shall be
eligible for re-election. Directors who attain an age of over seventy (70) years retire at every AGM pursuant to Section 129(2) of the Companies Act, 1965.
The following Directors will be standing for re-election at the forthcoming Twenty-Seventh Annual General Meeting of the Company to be held on 19
June 2013:Directors retiring in accordance with Article 80 of the Company’s Articles of Association
1. Datuk Shireen Ann Zaharah bt Muhiudeen
2. En. Azman Shah bin Mohd Yusof
3. Ir. Abdul Manap bin Ali Hasan
Directors retiring in accordance with Article 87 of the Company’s Articles of Association
1. En. Fazlur Rahman bin Zainuddin
The relevant information of the retiring Directors can be found in the Profiles of Directors.
None of the Independent Directors have served on the Board of the Company for more than nine (9) years.
6. BOARD COMMITTEES
The Board has appointed a number of committees in order to effectively discharge its roles and responsibilities. These committees have the full authority
and support of the Board to carry out its duties as stipulated under the respective Committee’s Terms of Reference and are required to report back to
the Board with their recommendation and/or course of action.
6.1 Audit Committee
The composition and terms of reference of the Audit Committee together with its report are presented on page 32 to 35 of the annual report.
6.2 Governance and Nomination Committee
The Board formed the Governance Committee on 24 May 2011 to assist the Board to review the Company, corporate governance system, process
and guidelines. The Governance Committee was subsequently renamed as the Governance and Nomination Committee (“GNC”). GNC is also
tasked with the review of the Charters of other Board Sub-Committees and to recommend to the Board any necessary changes to the SubCommittee’s assignments.
The Board, with the input and recommendation from GNC, made the following changes the Board Sub-Committees:6.2.1
The dual role of the Nomination and Remuneration Committee was discontinued. The nomination function is now an integral role of the GNC.
6.2.2
The Remuneration Committee was formed to ensure remuneration packages for Senior Executives and Directors are appropriately structured
in alignment with the Shareholders’ interests.
6.2.3
The Investment Committee was also discontinued and its functions are undertaken by the newly reconstituted Risk Committee.
6.2.4
The Tender Committee was formed to establish the framework for tender policies and procedures.
As at the date of this report, the GNC oversaw and mediated towards the resolution and conclusion of all the legal issues the Company was
embroiled in, the appointment of one (1) Director (to replace a director who had resigned in July 2012) representing one (1) of the Company’s
substantial shareholders and finalised the appointment of the Executive Director for the Company which took effect on 2 April 2012.
The GNC also introduced a Board Charter which provided a concise overview of:•
the roles, functions, responsibilities and powers of the Board and the senior management of the Group;
•
the powers delegated to various Board Committees of the Group through their respective Terms of Reference; and
•
the policies and practices of the Board in respect of matters such as corporate governance, code of conduct, conflicts and declaration of interest,
board meeting procedures, the appointment of directors and performance evaluation of Board members.
25
26
The GNC was also tasked with the evaluation of the performance of the Board as a whole, the Board Committees and the performance and
contribution of each director to ensure that the board governance system of the Company is effective.
The GNC held a total of eight (8) meetings in the financial year under review. The members of the GNC comprise of the following Independent NonExecutive Directors and their respective meeting attendance record are as follows:Director
1. Datuk Shireen Ann Zaharah bt Muhiudeen as Chairman
Held during office
8/8
2. Mr. Paul Chan Wan Siew
8/8
3. Mr. Loong Foo Ching
8/8
4. En. Azman Shah bin Mohd Yusof - vacated the position on 14 February 2012
1/1
6.3 Remuneration Committee
The Remuneration Committee was formed on 7 June 2011. The primary objective of the Remuneration Committee (“RC”) is to recommend the
necessary remuneration packages to attract, retain and motivate Senior Executives and Executive Directors with the required expertise to manage
the Company’s business in alignment with the shareholders’ interests. The RC also assists the Board in assessing the Non-Executive Directors’
remuneration packages to reflect the responsibility and commitment undertaken by the Board members.
The RC held three (3) meetings in the financial year under review. The RC comprises of the following Directors and their respective meeting
attendance record are as follows:Director
1. Mr. Loong Foo Ching as Chairman
3. Mr. Paul Chan Wan Siew - vacated the position on 2 April 2012
4. Dato’ Abd Manaf bin Hashim
Held during office
3/3
3/3
2/2
1/1
Appointed on 2 April 2012
6.4 Risk Management Committee
The Board is responsible for ensuring that business risks are properly managed and will require evidence that risks are being identified, assessed,
measured and duly mitigated. For this purpose, the Risk Management Committee was established on 7 June 2011 with its primary objective to review
the existing controls, evaluating the risk management strategies, policies and measures, and assessing the risk tolerance of the Group.
On 10 January 2012, the roles of the reconstituted Risk Management Committee (“RMC”) were expanded to include rendering assistance to the
Board in the evaluation of project papers, business plans and budgets for the Group, assuming the role of the previous Investment Committee which
was discontinued.
The RMC held one (1) meeting in the financial year under review. The members of the reconstituted RMC comprise of the following Directors and
their respective meeting attendance record are as follows:Director
1. Laksamana Tan Sri Dato’ Seri Ilyas bin Hj Din as Chairman
2. Dato’ Abd Manaf bin Hashim
3. Mr. Paul Chan Wan Siew - vacated the position on 2 April 2012
(appointed on 7 June 2011 and vacated the position on 2 April 2012)
6. En. Azman Shah bin Mohd Yusof
(appointed on 7 June 2011 as Chairman and vacated the position
as Chairman and member on 14 February 2012)
Held during office
1/1
1/1
n/a
1/1
0/0
0/0
6.5 Tender Committee
The Tender Committee (“TC”) was formed by the Board on 10 January 2012 to assist the Board in establishing a framework and procedure for
tender and procurement for the Group’s projects and to evaluate the tender bids for recommendation to the Board for approval.
As at the date of this report, the TC had presided over the evaluation of bids for a new grab ship unloader which will be required under the Jetty
Terminal Usage Agreement for Manjung 4 unit which was signed on 27 July 2012.
The TC held two (2) meetings in the financial year under review. The members of the TC comprise of the following Directors and their respective
meeting attendance record are as follows:No. of Meetings Attended /
Held during office
Director
1. Laksamana Tan Sri Dato’ Seri Ilyas bin Hj Din as Chairman
(appointed on 6 August 2012 and appointed as Chairman on 19 November 2012)
2/2
2/2
3. Mr. Paul Chan Wan Siew
2/2
(appointed on 6 August 2012)
2/2
5. En. Mohamed Rafique Merican bin Mohd Wahiduddin Merican
(resigned and vacated position on 20 July 2012)
0/0
7. DIRECTORS’ REMUNERATION
The Board as a whole determines the remuneration of Directors with the individual Directors abstaining from discussing their own remuneration.
The Executive Director’s remuneration is linked to commitment, experience, service seniority, scope of responsibilities, individual performance and
corporate performance.
Non-Executive Directors do not receive any performance related remuneration. Non-Executive Directors are remunerated by way of fees based on
the roles and level of responsibilities undertaken by the particular Non-Executive Director concerned. Directors are reimbursed reasonable expenses
incurred by them in the course of carrying out their duties or behalf of the Company.
Fees payable to Directors are subject to shareholders’ approval at the Annual General Meeting.
Remuneration of all Directors, who were on Board in 2012 (including Directors who resigned in 2012), falling within the following bands are:Band (RM)
Executive Directors
Non-Executive Directors
Total
Less than 50,000
-
2
2
50,001 – 100,000
-
5
5
100,001 – 200,000
-
4
4
600,001 – 650,000
1
-
-
The aggregate remuneration paid or payable to all Directors is further categorized into the following components: Executive Directors
Non-Executive Directors
Total
Salaries (RM)
Fees (RM)
Benefits in kind (RM)
Total (RM)
623,968
-
15,231
639,199
-
940,625
-
940.625
623,968
940,625
15,231
1,579,824
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28
C. SHAREHOLDERS
1. COMMUNICATION BETWEEN THE COMPANY AND SHAREHOLDERS
The Board and Management convey information about the Company performance, and other matters affecting shareholders’ interests through corporate
announcements released to BMSB and via the Company’s website at www.integrax.com.my. A copy of the Annual Report is sent to all our shareholders.
Information on the development of Lumut Port can be accessed from the website at www.lumutport.com.my.
Shareholders may contact the Executive Director for any enquiries at (email) [email protected]. (tel) 603-21417728 or (fax) 603-21412995.
Shareholders may also contact the Senior Independent Director at (email) [email protected] for any enquiries, or the Company Secretary at
(email) [email protected] for information on the Company.
2. ANNUAL GENERAL MEETING
In accordance with the Company’s Articles of Association, Notice of the Annual General Meeting for each financial year end together with the related
papers were sent out to shareholders at least 21 days before the date of the meeting.
At the Annual General Meeting, shareholders are encouraged to ask questions both about the resolutions being proposed or about the Group’s operations,
plans and prospects in general. The Executive Director and, where appropriate, the Chairman, will respond to shareholders’ questions during the meeting.
Where appropriate, the Chairman will undertake to provide a written response to any significant question that cannot be readily answered at the meeting.
Each item of special business included in the Notice of the Annual General Meeting will be accompanied by a full explanation of the effects of a proposed
resolution. Separate resolutions are proposed for substantially separate issues at each meeting and the Chairman shall declare the number of proxy
votes received both for and against each separate resolution.
The Company will provide shareholders, upon written request, with a summary of the discussions held at the Annual General Meeting.
During the Annual General Meeting, the questions submitted by the Minority Shareholders Watchdog Group are presented to the shareholders and the
Executive Director will provide answers to these questions for the benefit of all shareholders present.
D. ACCOUNTABILITY AND AUDIT
1. FINANCIAL REPORTING
The Board takes due care and responsibility for presenting a balanced and understandable assessment of the Group’s position and prospects each
time it releases its quarterly and annual financial statements to shareholders. The Audit Committee will assist the Board to oversee the Group’s financial
reporting processes and the quality of its financial reporting.
2. RISK MANAGEMENT AND INTERNAL CONTROL
The Group’s Statement of Risk Management and Internal Control is set out on page 30 to 31 of the annual report.
3. RELATIONSHIP WITH THE AUDITORS
The role of the Audit Committee in relation to the external auditors is stated on page 32 to 35 of the annual report.
4. DIRECTORS’ RESPONSIBILITY STATEMENT FOR PREPARING THE ANNUAL FINANCIAL STATEMENTS
The Directors are required by Part VI Division 1 of the Companies Act, 1965 to prepare financial statements for each financial year which are to be
made out in accordance with the applicable approved accounting standards for entities other than private entities issued by the Malaysian Accounting
Standards Board and to give a true and fair view of the state of affairs of the Group and the Company at the end of the financial year and of the results
and cash flows of the Group and Company for the financial year.
In preparing the financial statements for the financial year ended 31 December 2012, the Directors have used appropriate accounting policies and applied
them consistently:• made judgments and estimates that are reasonable and prudent;
• stated whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial
statements; and
• prepared financial statements on the going concern basis as the Directors have a reasonable expectation, having made enquiries, that the Group
and Company have adequate resources to continue in operational existence for the foreseeable future.
The Directors have responsibility for ensuring that the Company keeps proper accounting records which disclose with reasonable accuracy the financial
position of the Group and Company, and which enable them to ensure that the financial statements comply with Part VI Division 1 of the Companies Act, 1965.
The Directors have the general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group, and to detect
and prevent fraud and other irregularities.
E OTHER INFORMATION
1. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES
The Company did not issue/exercise any options or warrants and convertible securities during the financial year.
2. IMPOSITION OF SANCTIONS AND / OR PENALTIES
There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or Management by any relevant regulatory bodies
during the financial year.
3. NON-AUDIT FEES
During the financial year, non-audit fees paid to the external auditors amounted to RM42,500 (2011: RM7,500) as disclosed in Note (8) to the
financial statements. These fees were in respect of the services rendered in connection with the review of financial statements for compliance with
Financial Reporting Standards of the Company and the certification of net operating cash flows of a subsidiary company.
4. MATERIAL CONTRACTS
Other than those mentioned herein and disclosed in the Note (17) to the Financial Statement, there were no material contracts entered into by the
Company and its subsidiaries involving Directors’ and major shareholders’ interests during the financial year.
On 27th July 2012, Lekir Bulk Terminal Sdn Bhd had entered into a new Jetty Terminal Usage Agreement with TNB Janamanjung Sdn Bhd (“TNBJ”),
a wholly-owned subsidiary of Tenaga Nasional Berhad (“TNB”) for the provision of infrastructure and handling services for the import of coal through
Lekir Bulk Terminal for the new 1,010 MW coal-fired unit of the existing Sultan Azlan Shah Power Station in Manjung (“Manjung 4 Unit”) for an initial
period which will expire on 30 March 2040.
5. DISCONTINUED LITIGATION
There was one discontinued litigation case during the financial year under review.
Kuala Lumpur High Court Suit No. 22NCC-762-2011 between Tenaga Nasional Berhad (“TNB”) and the Company and 6 others
• The Company was served with a Writ of Summons and Statement of Claim by TNB on 10 May 2011. The Company was only a nominal
defendant in this suit with no allegation of wrongdoings in TNB’s Statement of Claim against the Company. TNB withdrew the Writ of Summons
on 1 March 2012 with no liberty to file afresh.
6. SHARE BUY-BACKS
There were no share buy-backs during the financial year in review.
7. DEPOSITORY RECEIPT PROGRAMME
There were no Depository Receipt Programmes sponsored by the Company during the financial year in review.
8. VARIATION IN RESULTS
There was no material variances between the result for the financial year and unaudited result previously announced.
9. PROFIT GUARANTEE
There were no profit guarantees given by the Company during the financial year in review.
10. RECURRENT RELATED PARTY TRANSACTIONS
Other than those disclosed in the Financial Statements (Note 17), there were no material recurrent related party transactions of revenue in nature
during the financial year in review.
29
30
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
BOARD RESPONSIBILITY
The Board of Directors recognises its responsibility for the Group’s system of internal control and for reviewing its adequacy and integrity in order to safeguard
shareholders’ interests and the assets of the Group as prescribed by the Malaysian Code of Corporate Governance.
The Board has established on-going processes for identifying, evaluating and managing the significant risks encountered by the Group and periodically reviews
these processes. The Board has also established procedures to implement the recommendations of the “Statement on Internal Controls Guidance for Directors
of Public Listed Companies”.
The Board has adopted a Board Charter which provides a concise overview of:•
the roles, functions, responsibilities and powers of the Board and the senior management of the Group;
•
the powers delegated to various Board Committees of the Group through their respective Terms of Reference; and
•
the policies and practices of the Board in respect of matters such as corporate governance, code of conduct, conflicts and declaration of interest, board
meeting procedures, the appointment of directors and performance evaluation of Board members.
The Board places great importance on governance and intends that the Group complies and adopts the best practice principles and all applicable laws, including
but not limited to the requirements of the Securities Commission, the Bursa Malaysia Listing Guidelines and the Companies Act 1965.
On 17th July 2012, the Group signed the “Corporate Integrity Pledge and Anti-Corruption Principles for Corporations in Malaysia” (“CIP”) in Ipoh, Perak, along
with 16 other Perak State Government-Linked Companies. The Group is one of the first 200 corporations in Malaysia to have executed the CIP. The CIP is
a unilateral pledge made by companies in collaboration with the Corporate Integrity Roundtable Members who are Institut Integriti Malaysia, Bursa Malaysia,
Securities Commission, Malaysian Anti-Corruption Commission, Transparency International, Suruhanjaya Syarikat Malaysia and PEMANDU. The Group is
further enhancing its internal controls and level of integrity through continuous assessment of its corporate integrity using the tools recommended under the CIP.
The Board is of the opinion that the implementation of best practice corporate governance is a performance enhancement opportunity for effective implementation
rather than just an act of compliance.
While acknowledging its responsibility to maintain a sound system of risk management and internal control to safeguard the Group’s interests, the Board is aware
that such a system is designed to manage rather than eliminate risks and therefore cannot provide absolute assurance against material misstatement, fraud or loss.
RISK MANAGEMENT
The Board is responsible for ensuring that business risks are properly managed and that risks are being identified, assessed, measured and duly mitigated. The
Board has assigned the Risk Management Committee (RMC) with the duty of reviewing the existing controls, evaluating the risk management strategies, policies
and measures and assessing the risk tolerance levels of the Group. During the financial year, the role of the RMC was expanded to include rendering assistance
to the Board in the evaluation of project papers and business plans for the Group.
The Group has in place a Risk Management Framework for its operating companies which is a tool to assess the various types of risk namely business and
commercial risk, operational risk, marketing and reputational risk, environmental risk, safety and security risk, financial risk, human resource risk and information
technology risk. The Framework is used to identify the risk parameters, assesses the impact of these risks and the likelihood of occurrence, and to formulate risk
mitigation steps. The Framework is discussed and deliberated at the management level and is reviewed by the RMC on a quarterly basis.
INTERNAL CONTROL
The Board has assigned the Audit Committee (AC) with the duty of reviewing and monitoring the effectiveness of the Group’s system of internal control. The
AC reviews the Internal Audit Department’s work which is currently outsourced to a firm of professional service providers, which adopts a risk-based approach
business life cycle approach, in accordance with an agreed frequency.
During the year 2012, an internal audit review was conducted on the “Procure to Pay Cycle” process of associate company, Lumut Maritime Terminal Sdn Bhd
(LMTSB) and the main operating subsidiary company, Lekir Bulk Terminal Sdn Bhd (LBTSB). Apart from the internal auditors of the group, the operations of
associate company, LMTSB, are also audited by the other shareholder’s internal auditors.
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (Continued)
INTERNAL CONTROL (Continued)
The External Auditors form an opinion on the financial statements of the Group based on their annual statutory audit. Any significant errors and misstatements
identified during the course of the statutory audit by External Auditors are brought to the attention of the AC through management letters or are articulated at the
AC meetings. The AC also holds two (2) meetings with the External Auditors without the presence of the Executive Director or management. Minutes and/or
matters arising from the AC meetings are brought to the attention of the Board.
The Report of the AC is set out on pages 32 to 35 of the Annual Report.
OTHER KEY ELEMENTS OF RISK MANAGEMENT AND INTERNAL CONTROL
The other key elements of the Group’s risk management and internal control systems are as follows:Organisational Structure
• There is in place an organisation structure, which clearly defines the lines of responsibility and delegation of authority.
Limits of Authority
• The Group has clearly defined delegated limits of authority which determines the approving authorities and authority limits for various transactions.
•
Major capital expenditure, acquisition and disposal of investment interests are approved by the Board after thorough deliberation by the various Board
Committees and/or by the Board of Directors of the major operating subsidiary company, LBTSB, before being carried out.
Planning and Monitoring
• There is a strategic planning, annual budgeting and target setting process, which includes forecasts for each area of business with detailed reviews at
all levels of operations.
•
There is a management reporting system whereby comprehensive management reports are prepared and reviewed on a regular basis. Performance
and results are monitored on a regular basis ensuring all major variances and critical operational issues are being followed up with actions taken
thereon.
Policies and Procedures
• Documented internal policies and procedures are set out in several manuals and are implemented throughout the Group. The following policies have
been approved and implemented:~ Corporate Communications Guidelines and Policies;
~ Code of Ethics document (an Integrity Pact signed by business partners of the Group as a guideline for doing business with the Group); and
•
The Board has also introduced a Code of Conduct for employees of the Group which includes policies on Whistle-Blowing, effective April 2013.
•
These policy and procedural documents are subject to periodic review and continuous improvement.
CONCLUSION
The Board believes that the existing level of system of risk management and internal control is reasonable to enable the Group to achieve its business
objectives. Nonetheless, the Board recognises that the system of internal control should be continuously improved and conducts periodic reviews on the
adequacy and effectiveness of the risk management and internal control so as to be in line with the evolving business development.
REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS
The External Auditors have reviewed this Statement on Risk Management and Internal Control for inclusion in the Annual Report of the Group for the
financial year ended 31 December 2012 and reported to the Board that nothing has come to their attention that causes them to believe that the Statement
is inconsistent with their understanding of the process that the Board has adopted in the review of the adequacy and integrity of the system of risk
management and internal control within the Group.
31
32
AUDIT COMMITTEE REPORT
1. ESTABLISHMENT AND MEMBERSHIP
The Audit Committee is appointed by the Board of Directors (Board) from amongst its members and comprises non-executive directors, all of whom are
independent directors.
The members of the Audit Committee during the financial year ended 31 December 2012 were as follows:Mr. Paul Chan Wan Siew, Chairman (Independent Non-Executive Director)
appointed on 6 May 2011
Mr. Loong Foo Ching (Independent Non-Executive Director)
appointed on 6 May 2011
Ir. Abdul Manap bin Ali Hasan (Independent Non-Executive Director]
appointed on 14 February 2012
appointed on 6 May 2011 and vacated the position on 14 February 2012
following his appointment as Executive Director on 2nd April 2012
At the time of this report, the Audit Committee comprises the following members:1.
2.
3.
4.
Mr. Paul Chan Wan Siew, Chairman (Independent Non-Executive Director);
Mr. Loong Foo Ching (Independent Non-Executive Director);
Ir. Abdul Manap bin Ali Hasan (Independent Non-Executive Director); and
En. Fazlur Rahman bin Zainuddin (Non-Independent Non-Executive Director, appointed on 21 February 2013).
2. TERMS OF REFERENCE
The policy of the Audit Committee is to ensure that internal and external audit functions are properly conducted and that audit recommendations are being
carried out effectively by the Group. The Audit Committee’s functions include:a. to assist the Board to fulfill its fiduciary responsibilities relating to internal controls, financial and accounting records and policies, as well as financial
reporting practices of the Group, and will report to the Board on the nature and extent of the functions performed by it. All findings by the Audit Committee
will be reported to the Board;
b. to assure the shareholders of the Company that the Directors of the Company have complied with Malaysian financial standards and required disclosure
policies developed and administered by Bursa Malaysia Securities Berhad (“Bursa Securities”);
c. to ensure consistency with Bursa Securities’ commitment to encourage high standards of corporate disclosure and to adopt best practices aimed at
maintaining appropriate standards of corporate responsibility, integrity and accountability to all the Company’s shareholders; and
d. to relieve the full Board from detailed involvement in the review of the results of internal and external audit activities and yet ensure that audit findings are
brought to the highest level for consideration.
3. MEMBERSHIP
The Audit Committee shall be appointed by the Board from amongst the Directors of the Company except Alternate Directors. The Audit Committee shall
comprise of at least three [3] non-executive directors the majority of whom, including the Chairman, shall be independent directors. All members of the Audit
Committee shall be financially literate with at least one member being a member of the Malaysian Institute of Accountants or fulfills such other requirements
as prescribed or approved by Bursa Malaysia Securities.
The Board shall review the term of office and performance of the Audit Committee and each of its members at least once every three (3) years to determine
whether such Audit Committee and members have carried out their duties in accordance with their terms of reference.
4. MEETINGS
4.1 The Committee shall meet at least four (4) times a year and such additional meetings as the Chairman shall decide. The Chairman may call a meeting of
the Audit Committee if a request is made by any Audit Committee member or the internal auditors if they consider it necessary. In addition, the Chairman
shall convene a meeting with the External Auditors to consider any matter which the External Auditors believe should be brought to the attention of the
Directors or Shareholders.
AUDIT COMMITTEE REPORT (Continued)
4. MEETINGS (Continued)
4.2 Meetings will be attended by the members of the Audit Committee and the Company Secretary who shall act as the Secretary of the Audit Committee
and record the proceedings of the meeting thereat.
4.3 Participants may be invited from time to time to attend the meeting depending on the nature of the subject under review. These participants may
include the Directors, General Managers, Division Heads, representatives from the Finance Department, Internal Audit Departments and/or the External
Auditors.
4.4 The Audit Committee shall meet with the External Auditors at least twice a year, without the presence of Executive Directors or Management.
4.5 The quorum for each meeting shall consist of at least two (2) members, both of whom shall be Independent Directors.
4.6 Recommendations of the Audit Committee are submitted to the Board for adoption.
5. RIGHTS AND AUTHORITY
5.1 In carrying out its duties and responsibilities, the Audit Committee will have the following rights:(a) explicit authority to investigate any matter within its terms of reference;
(b) the resources which are required to perform its duties;
(c) full, free and unrestricted access to any information, records, properties and personnel of the Company and of any other company within its Group;
(d) direct communication channels with the External Auditors and person(s) carrying out the internal audit function or activity;
(e) be able to obtain independent professional or other advice and to invite outsiders with relevant experience to attend the Audit Committee’s
meetings (if required) and to brief the Audit Committee;
(f) be able to convene meetings with the External Auditors, the internal auditors or both, excluding the attendance of other Directors and employees
of the Company, whenever deemed necessary; and
(g) regulate the manner of proceedings of its meetings, having regard to normal conventions on such matter.
5.2 The attendance at any particular Audit Committee meeting by other Directors and employees of the Company shall be at the Audit Committee’s
invitation and discretion, and must be for the specific agenda to the relevant meeting.
5.3 Where the Audit Committee is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the Listing
Requirements of Bursa Securities, the Audit Committee has the responsibility to promptly report such matter to Bursa Securities.
6. DUTIES AND RESPONSIBILITIES
The main duties and responsibilities of the Audit Committee include:(a) To discuss and liaise with External Auditors before the audit commences, the nature and scope of their audit plan to ensure smooth implementation
of the audit of the Group, to discuss problems and reservations arising from the audits and any matter the auditors may wish to discuss and to review
and evaluate their findings on the internal control system and the audit reports on the financial statements of the Company and the Group;
(b) To review the quarterly and year-end financial statements and prior to the approval by the Board of Directors. The review will include an assessment
on changes in or implementation of major accounting policies and practices, significant and unusual events, significant audit adjustments arising from
an audit, the going concern assumption and compliance with accounting standards and other legal requirements;
(c) To review the External Auditors’ management letter and Management’s response and to discuss problems and reservations arising from the interim
and final audits and any matter the auditors may wish to raise, in the absence of management where necessary;
(d) To review with the External Auditors the draft statement to be made by the Board with regard to the state of internal control of the Company and its
Group, and report the results thereof to the Board;
(e) To review the assistance given by the employees of the Company and the Group to the External Auditors;
33
34
6. DUTIES AND RESPONSIBILITIES (Continued)
(f) To review and assess the appropriateness of the Group’s accounting policies and the adequacy of management reporting requirements;
(g) To establish an internal audit function which is independent of the activities it audits. Where the internal audit function is undertaken by external
consultants: • review the 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;
• review the internal audit programme, processes, the results of the internal audit programme, processes or investigation undertaken and whether or
not appropriate action is taken on the recommendations of the internal audit function;
• review any appraisal or assessment of the performance of the internal audit function; and
• approve any appointment or termination of the internal auditors.
(h) To review any related party transactions and conflict of interest situation that may arise within the Company and the Group including any transaction,
procedure or course of conduct that raises questions of management integrity;
(i) To review the Group’s business ethics and compliance with the law;
(j) To consider the major findings of internal investigations and management’s response;
(k) To consider the resignation, appointment and annual reappointment of the External Auditors, audit fees and any questions of resignation or dismissal;
(l) To recommend the nomination of a person or persons as External Auditors;
(m) To review the Audit Committee’s terms of reference as conditions dictate; and
(n) To perform any other such functions as may be agreed by the Audit Committee and the Board.
7. PROCEDURES OF THE AUDIT COMMITTEE
7.1 CALLING OF MEETINGS
The members may meet together for the dispatch of business, adjourn and otherwise regulate their meetings as they think fit, provided that they shall
have a minimum of four (4) meetings in a financial year. The Secretary shall on the requisition of a member summon a meeting of the Audit Committee.
7.2 NOTICE OF MEETING
Notice of a meeting of the Audit Committee shall be given to all the members in writing. Unless otherwise determined by the Board of Directors from time
to time, seven (7) days’ notice shall be given, except in the case of an emergency, shorter notice may be given.
7.3 VOTING AND PROCEEDING OF MEETING
The decision of the Audit Committee shall be by a majority of votes and the determination by a majority of the members shall for all purposes be deemed
a determination of the Audit Committee. In case of an equality of votes, the Chairman of the meeting shall have a second or casting vote.
Circular Resolutions signed by all the members shall be valid and effective as if it had been passed at a meeting of the Audit Committee.
7.4 KEEPING OF MINUTES
The Secretary shall maintain minutes of the proceedings of the meetings and circulate such minutes to all members of the Audit Committee. Such
minutes shall be signed by the Chairman of the meeting at which the proceedings were held or by the Chairman of the next succeeding meeting.
The minutes of proceedings of the Audit Committee shall be kept by the Secretary at the registered office of the Company, and shall be circulated with
the papers of the next Board meeting and the Audit Committee chairman will provide an update to the Board on their contents.
8. SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE DURING THE FINANCIAL YEAR
8.1 During the financial year ended 31 December 2012, six (6) Audit Committee meetings were held. A record of the attendance to these meeting is as
follows:
Name of Audit Committee Member
No. of Meetings Attended / Held during his office
Mr. Paul Chan Wan Siew, Chairman
6/6
Mr. Loong Foo Ching
6/6
5/6
Appointed on 14 February 2012
n/a
Vacated position on 14 February 2012
The Executive Director, senior management staff, External and Internal Auditors were in attendance at the meetings, where appropriate.
8.2 The activities undertaken by the Audit Committee for the financial year were as follows:(a) Reviewed the group’s financial management, assessment measures and made recommendations to the Board in relation thereto;
(b) Reviewed the adequacy and relevance of the scope, functions, resources, risk based internal audit plan and results of the internal audit processes
with the external consultant for internal audit services;
(c) Considered the appointment of the External Auditors and audit fees;
(d) Reviewed with the External Auditors, the audit plan of the Company and of the Group for the year (inclusive of risk and audit approach, system
evaluation, issues raised and management responses) prior to the commencement of the annual audit;
(e) Discussed and reviewed with External Auditors their evaluation of internal control systems of the Group;
(f) Reviewed the extent of assistance rendered by management and issues and reservations arising from audits with the External Auditors without the
presence of management staff and the Executive Directors;
(g) Reviewed the results of each quarter with management and reviewed the financial statements for the financial year ended 31 December 2012 with
management and the External Auditors before recommending them to the Board of Directors for approval and release to Bursa Securities;
(h) Reviewed the related party transactions and conflict of interest situation that may arise within the Company and the Group including any transaction,
procedure or course of conduct that raises questions of management integrity;
(i) Reported to the Board on significant issues and concerns discussed during the Audit Committee’s meetings together with applicable
recommendations for substantive action to be taken. Minutes of meetings were also tabled to the Board; and
(j) Reviewed and approved the Audit Committee Report for inclusion in the Company’s 2012 Annual Report.
9. TRAINING
Training courses attended by Audit Committee members during the financial year are reported in the Corporate Governance Statement on pages 23 to
24 of the Annual Report.
10. INTERNAL AUDIT FUNCTION
The Company outsourced its internal audit function to an external consultancy firm which has adequate resources and appropriate standing to undertake
its activities independently and objectively to assist the Audit Committee in discharging its duties and responsibilities more effectively. The external
consultant responsible for the internal audit function reports directly to the Audit Committee. As at 31 December 2012, the fees for the internal audit
function is RM45,700 (2011: RM34,000).
The internal audit approach, scope of work and plans of the external consultant are submitted to the Audit Committee for approval before the commencement
of any reviews. The reports of the external consultant are presented to the Audit Committee together with presentations at the appropriate meetings.
Further details of the activities of the internal audit function are set out in the Statement on Risk Management and Internal Control on pages 30 to 31 of the
Annual Report.
35
36
STATEMENT ON CORPORATE SOCIAL RESPONSIBILITY
As a responsible corporate citizen, Integrax has embedded the principles of corporate social responsibility (“CSR”) into our day-to-day operations.
Sustainable and ethical ways of doing business are at the core of our Group’s initiatives. In order to achieve business success and growth in the
long term, we recognise that we must continue to foster and nurture meaningful relationships with our stakeholders.
During the year under review, our initiatives were focused on four key areas - Community Services, Human Capital Development and Staff Well-Being,
Marketplace and Communication and Engagement.
COMMUNITY SERVICES
At the heart of our CSR initiatives is our sense of responsibility
in contributing towards the community in which we operate, as
well as towards deserving or under-served causes. The Group
has throughout the year, contributed to the community through
corporate sponsorships, donations to charitable causes, and
participation in community events such as sports.
The Group spent approximately RM100,000 for community
programmes such as the “Majlis Korban Perdana Hari Raya
Aidiladha 2012” organised by the Yayasan Kemajuan Islam Perak
Darul Ridzuan in aid of the poor citizens of Perak, and for fund–
raising activities organised by The Andersonians Club and the
Persatuan Alumni Universiti Islam Antarabangsa. At the national
level, the Group were one of the sponsors of the “Kejohanan Silat
Kebangsaan ke-16” held in Kuala Lumpur in April 2012. The Group
also sponsored a friendly golf tournament organised by Persatuan
Golf Daerah Manjung.
STATEMENT ON CORPORATE SOCIAL RESPONSIBILITY (Continued)
HUMAN CAPITAL DEVELOPMENT AND STAFF WELL-BEING
Our staff are invaluable assets to the Group, and at Integrax, we
believe in adding value to our assets by nurturing their talents and
developing their potential, hence we continuously invest in human
capital development. Staff participation in external training, seminars
and courses are encouraged and their participation is factored into
the annual staff performance appraisal exercise. In 2012, Integrax
won the Federation of Public Listed Companies Award for the Top 10
Most Active Public Listed Companies in Professional Development.
Management is also currently working on identifying and developing
career paths for its staff.
In December 2012, Integrax shifted to its new office in Cap Square Tower
in Jalan Munshi Abdullah, located in the central business district of Kuala
Lumpur. As staff safety and well-being are paramount to the Group, the
location of the new office was based on connectivity and proximity to public
transportation, and the safety and security features of the building.
MARKETPLACE
Our business is centred on our customers and our
goal is to offer them value-added services across
the product value chain, in line with our tagline of
becoming a “Value Chain Integration Partner”. By
conducting our business responsibly and building
sustainable working relationships in the marketplace
with customers, suppliers and contractors as well
as the business community at large, we believe that
we will be well-positioned to achieve our business
objectives.
Integrax endeavours to nurture and cultivate a
culture of compliance with all the requirements of the
laws, rules, regulations and corporate governance
best practices. To this end, we have introduced the
Code of Ethics of doing business with Integrax for our
suppliers, customers and contractors, who are asked
to sign a declaration to comply with this code before
doing business with us.
Integrax looks upon itself as more than just a logistics
service provider. We are firm in our belief that there
exist ways of adding value to our customers and our business community by analysing the respective
value chains of our customers and introducing or initiating innovative methods and strategies to create
and build value. To this end, Management has bolstered its business development personnel who are
tasked with studying the respective value chains of our customers to propose value creation through
areas such as renewable energy, energy efficiency and technological innovation. This is in line with our
plans to create an Eco-Industrial Zone in the vicinity of Lumut Port.
37
38
STATEMENT ON CORPORATE SOCIAL RESPONSIBILITY (Continued)
COMMUNICATION AND ENGAGEMENT
As a public-listed company and as a Federal and State Government
investee company, Integrax realises the importance of engaging
and communicating with all of its stakeholders, including our 3,065
shareholders and investors, the regulatory authorities and policy-makers,
our customers, suppliers and service providers. Integrax participates
actively in seminars and forums organised by the State Government
agencies particularly on matters of public policy. This is in line with our
objective of partnering the State Government in promoting sustainable
development in the Lumut / Manjung area.
We also communicate with our shareholders and present briefings to
fund managers who are keen to learn about our company and at the
same time, we espouse the potential growth opportunities in Lumut and
Perak through active investor relations initiatives. We also engage with
the media and have been proud sponsors of the Inter-Media Bowling
Tournament organised by the Federation of Public Listed Companies for
the last two years.
GOING FORWARD
The Group is working on long-term CSR initiatives in areas
such as education and the environment for the benefit of all our
stakeholders to be implemented in the future.
INTEGRAX IN THE NEWS
The Edge Financial Daily, Monday, 27 August 2012
12
btu, 25 Ogos 20
Berita Harian, Sa
, 27 August 2012
The Sun, Monday
, 27 August 2012
The Sun, Monday
The Star, Tuesday, 28 August 2012
39
I NT E G RA X B E RHA D A nnual Report 2012
C O R P O R AT E C A L E N D A R 2 0 1 2
Share Price
RM
1.50
27 July
LBT signs Jetty Terminal
Usage Agreement for Manjung
power plant unit 4 with TNB
Janamanjung S/B (JTUA 2)
1.40
C O R P O R AT E C A L E N D A R 2 0 1 2
5 June
Annual Report
FY2011
released
18-20 May 2012
“Charting Blue Ocean Strategy For Integrax Berhad ”
Officiated by: YAB Dato’ Seri Diraja Dr. Zambry bin Abd Kadir
Menteri Besar Perak Darul Ridzuan
G Tower Hotel, Kuala Lumpur
6 August
Q2 2012 results:
Revenue RM22.3 mil
and PAT RM12.5 mil
1.30
1.20
14 February
Dissolution of Executive
Committee and appointment
of new Executive Director
30 April
2011 Audited Accounts:
Revenue RM87.9 mil
and PAT RM49.5 mil
28 February
Q4 2011 results:
Revenue RM22.1 mil and
PAT RM14.0 mil
24 August
Extraordinary General Meeting to approve JTUA 2
6 July
Payment of final tranche
of LBT Serial Bonds
25 May
Q1 2012 results:
Revenue RM23.0 mil
and PAT RM10.5 mil
21 June
Interim Dividend:
4.1 sen per share
for FY2012
17 July
Integrax signed “Corporate Integrity Pledge
and Anti-Corruption Principles for Corporations
in Malaysia” in Ipoh
1.10
1 March
TNB withdraws suit
against ITB and 7 others last legacy issue resolved
1.00
17 December
Integrax moves to Cap Square Tower
19 June
Integrax won Federation of Public Listed Companies Award
for Top 10 Most Active PLC in Professional Development
11-14 December
Site visit to China:
Bidders for Ship Unloader Construction Contract
27 June
26th Annual General Meeting, Prince Hotel, Kuala Lumpur
0.00
31
Jan
29
Feb
31
Mar
30
April
31
May
30
June
Year 2012
31
July
31
Aug
30
Sept
31
Oct
30
Nov
31
Dec
42
FINANCIAL STATEMENTS
CONTENTS
PAGE (S)
Directors’ Report
42
Statement by Directors
46
Declaration by the Officer Primarily Responsible
for the Financial Management of the Group and
of the Company
46
Independent Auditors’ Report
47
Statements of Comprehensive Income
49
Statements of Financial Position
50
Statements of Changes in Equity
53
Statements of Cash Flows
54
Notes to the Financial Statements
56
Properties Owned by the Group
99
Analysis of Shareholdings
100
41
42
DIRECTORS’ REPORT
The directors of INTEGRAX BERHAD, have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the
financial year ended December 31, 2012.
PRINCIPAL ACTIVITIES
The Company is an investment holding company and the principal activities of the subsidiary companies are stated in Note 17 to the financial statements.
There have been no significant changes in the nature of the principal activities of the Company and its subsidiary companies during the financial year.
RESULTS OF OPERATIONS
The results of operations of the Group and of the Company for the financial year are as follows:
The
Group
RM
The
Company
RM
Profit for the year
47,715,699
25,528,253
Profit attributable to:
Equity holders of the Company
Non-controlling interests
41,668,324
6,047,375
25,528,253
-
47,715,699
25,528,253
In the opinion of the directors, the results of operations of the Group and of the Company during the financial year have not been substantially affected by any item,
transaction or event of a material and unusual nature.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements.
DIVIDENDS
Since the end of the previous financial year, an interim dividend of 4.1 sen per share less 25% income tax, amounting to RM9,249,781 in respect of the financial
year ended December 31, 2012 was paid on July 23, 2012.
No further dividends have been recommended by the directors for the financial year ended December 31, 2012.
ISSUE OF SHARES AND DEBENTURES
There were no changes in the authorised, issued and paid-up capital of the Company during the financial year. The Company did not issue any debentures during
the financial year.
SHARE OPTIONS
No options were granted to any person to take up unissued shares of the Company during the year.
DIRECTORS’ REPORT
43
(Continued)
OTHER STATUTORY INFORMATION
Before the statements of comprehensive income and the statements of financial position of the Group and of the Company were made out, the directors took
reasonable steps:
(a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and have satisfied
themselves that all known bad debts have been written off and that adequate allowance for doubtful debts has been made; and
(b) to ensure that any current assets which were unlikely to realise their book values in the ordinary course of business have been written down to their estimated
realisable values.
At the date of this report, the directors are not aware of any circumstances:
(a) which would render the amount of bad debts written off or the amount of allowance for doubtful debts in the financial statements of the Group and of the
Company inadequate to any substantial extent; or
(b) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or
(c)
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
(d) not otherwise dealt with in this report or financial statements which would render any amount stated in the financial statements of the Group and of the
Company misleading.
At the date of this report, there does not exist:
(a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which secures the liability of any other person;
or
(b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.
No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year
which, in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.
In the opinion of the directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the
date of this report which is likely to affect substantially the results of operations of the Group and of the Company for the financial year in which this report is made.
DIRECTORS
The following directors served on the Board of the Company since the date of the last report:
Dato’ Seri Diraja Mohamad Tajol Rosli Bin Mohd Ghazali
Amin Bin Halim Rasip
Datuk Shireen Ann Zaharah Binti Muhiudeen
Chan Wan Siew
Loong Foo Ching
Azman Shah Bin Mohd Yusof
Abdul Manap Bin Ali Hasan
Laksamana Tan Sri Dato’ Seri Ilyas Bin Hj. Din
Dato’ Abd Manaf Bin Hashim
Fazlur Rahman Bin Zainuddin (Appointed on November 22, 2012)
Mohamed Rafique Merican Bin Mohd Wahiduddin Merican (Resigned on July 20, 2012)
In accordance with Article 80 of the Company’s Articles of Association, Datuk Shireen Ann Zaharah Binti Muhiudeen, Azman Shah Bin Mohd Yusof and Abdul Manap
Bin Ali Hasan shall retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election.
Fazlur Rahman Bin Zainuddin who was appointed to the board since the last Annual General Meeting shall retire in accordance with Article 87 of the Company’s
Articles of Association and, being eligible, offers himself for re-election at the forthcoming Annual General Meeting.
44
DIRECTORS’ REPORT
(Continued)
DIRECTORS’ INTERESTS
The shareholdings in the Company and its related companies of those who were directors at the end of the financial year, as recorded in the Register of Directors’
Shareholdings kept by the Company under Section 134 of the Companies Act, 1965, are as follows:
Number of ordinary shares of RM1.00 each
Balance at
1.1.2012
Bought
Balance at
31.12.2012
Sold
Direct interest
Company
Azman Shah Bin Mohd Yusof
1,000
-
-
1,000
Company
Amin Bin Halim Rasip
- Own (i)
- Others (ii)
51,508,942
4,347,826
11,887,367
-
-
63,396,309
4,347,826
Datuk Shireen Ann Zaharah Binti Muhiudeen (iii)
13,095,000
2,948,700
-
16,043,700
Indirect/Deemed interest
Number of LBT RCCPS (iv) of RM0.01 each
Balance at
1.1.2012
Bought
Balance at
31.12.2012
Sold
Deemed interest
Lekir Bulk Terminal Sdn Bhd (“LBTSB”)
Amin Bin Halim Rasip (i)
16,000,000
-
-
16,000,000
(i)
Indirect interest by virtue of his shareholdings in Golden Initiative Sdn Bhd, Jurukapal Marine Services Sdn Bhd, Shafston Group Limited and Rakewood
Enterprise Ltd who are all shareholders of Integrax Berhad.
(ii)
Refers to shareholding held by spouse of Amin Bin Halim Rasip. In accordance with Section 134(12)(c) of the Companies Act, 1965, the direct interest of
the spouse in the shares of Integrax Berhad shall be treated as the deemed interest of Amin Bin Halim Rasip.
(iii)
Deemed interest in the shares of the Company by virtue of Datuk Shireen Ann Zaharah Binti Muhiudeen, being the Managing Director of Corston-Smith
Asset Management Sdn Bhd, the fund manager for the ordinary shares of the Company held on behalf of British Columbia Investment Management
Corporation (bcIMC) and Corston-Smith ASEAN Corporate Governance Fund.
(iv)
Redeemable cumulative convertible preference share(s) of RM0.01 each in LBTSB issued at a premium of RM0.99 each.
By virtue of the above directors’ interest in the shares of the Company, they are deemed to have an interest in the shares of subsidiary companies to the extent that
the Company has interest.
DIRECTORS’ REPORT
45
(Continued)
DIRECTORS’ BENEFITS
Since the end of the previous financial year, none of the directors of the Company has received or become entitled to receive any benefits (other than the benefits
included in the aggregate of emoluments received or due and receivable by directors as shown in the financial statements of the Group and of the Company) by
reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which
the director has a substantial financial interest other than any benefits which may be deemed to have arisen by virtue of the transactions as disclosed in Note 17
to the financial statements.
During and at the end of the financial year, no arrangement subsisted to which the Company was a party whereby the directors of the Company might acquire
benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.
SIGNIFICANT EVENT
The significant event during the financial year is as disclosed in Note 36 to the financial statements.
SUBSEQUENT EVENTS
The significant events subsequent to the date of financial position are as disclosed in Note 37 to the financial statements.
AUDITORS
The auditors, Messrs. Deloitte & Touche, have indicated their willingness to continue in office.
Signed on behalf of the Board
in accordance with a resolution of the Directors,
(Signed)
(Signed)
DATO’ SERI DIRAJA MOHAMAD
TAJOL ROSLI BIN MOHD GHAZALI
AZMAN SHAH BIN MOHD YUSOF
Kuala Lumpur,
April 24, 2013
46
STATEMENT BY DIRECTORS
The directors of INTEGRAX BERHAD, state that, in their opinion, the accompanying financial statements are drawn up in accordance with Malaysian Financial
Reporting Standards, International Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view
of the financial position of the Group and of the Company as of December 31, 2012 and of the financial performance and the cash flows of the Group and of the
Company for the year ended on that date.
The information set out in Note 39 to the financial statements has been compiled in accordance with the Guidance on Special Matter No.1, Determination of
Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the
Malaysia Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.
Signed on behalf of the Board
in accordance with resolution of the Directors,
(Signed)
(Signed)
DATO’ SERI DIRAJA MOHAMAD
TAJOL ROSLI BIN MOHD GHAZALI
AZMAN SHAH BIN MOHD YUSOF
Kuala Lumpur,
April 24, 2013
DECLARATION BY THE OFFICER PRIMARILY RESPONSIBLE
FOR THE FINANCIAL MANAGEMENT OF THE GROUP AND OF THE COMPANY
I, THERESA KONG LYE FUN, the officer primarily responsible for the financial management of INTEGRAX BERHAD, do solemnly and sincerely declare that the
accompanying financial statements are, in my opinion, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of
the provisions of the Statutory Declaration Act, 1960.
(Signed)
THERESA KONG LYE FUN
Subscribed and solemnly declared by the
abovenamed THERESA KONG LYE FUN at
KUALA LUMPUR this 24th day of April, 2013.
Before me,
(Signed)
COMMISIONER FOR OATHS
INDEPENDENT AUDITORS’ REPORT
47
TO THE MEMBERS OF INTEGRAX BERHAD (Incorporated in Malaysia)
Report on the Financial Statements
We have audited the financial statements of INTEGRAX BERHAD, which comprise the statements of financial position of the Group and of the Company as at
December 31, 2012 and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company
for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 56 to 98.
Directors’ Responsibility for the Financial Statements
The directors of the Company are responsible for the preparation of these 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 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 the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those
risk assessments, the auditors 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 that 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 December 31, 2012 and its 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 subsidiary companies have been
properly kept in accordance with the provisions of the Act;
(b)
We are satisfied that the accounts of the subsidiary companies that have been consolidated with the financial statements of the Company are in form and
content appropriate and proper for the purposes of the preparation of the consolidated financial statements, and we have received satisfactory information
and explanations as required by us for these purposes; and
(c)
Our auditors’ report on the accounts of the subsidiary companies were not subject to any qualification and did not include any adverse comment made under
Section 174(3) of the Act.
48
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF INTEGRAX BERHAD (Incorporated in Malaysia)
(Continued)
Other Reporting Responsibilities
The supplementary information set out in Note 39 to the financial statements has been compiled by the Group and the Company as required by Bursa Malaysia
Securities Berhad Listing Requirements and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information
in accordance with guidance on Special Matter No.1 “Determination of Realised and Unrealised Profit or Losses in the Context of Disclosure Pursuant to Bursa
Malaysia Securities Berhad Listing Requirements” as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia
Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of
Bursa Malaysia Securities Berhad.
Other matters
1.
As stated in Note 3 to the financial statements, the Group and the Company adopted Malaysian Financial Reporting Standards on January 1, 2012 with
a transition date of January 1, 2011. These standards were applied retrospectively by the directors to the comparative information in these financial
statements, including the statements of financial position as of December 31, 2011 and January 1, 2011, and the statement of comprehensive income,
statement of changes in equity and statement of cash flows for the year ended December 31, 2011 and related disclosures. The application of these
standards has not affected the comparative information as previously reported in accordance with Financial Reporting Standards. We were not engaged to
report on this comparative information which is now presented in accordance with the Malaysian Financial Reporting Standards and hence, it is unaudited.
Our responsibilities as part of our audit of the financial statements of the Group and of the Company for the year ended December 31, 2012, in these
circumstances, included obtaining sufficient appropriate audit evidence that the opening balances as of January 1, 2012 do not contain misstatements that
materially affect the financial position as of December 31, 2012 and financial performance and cash flows for the year then ended.
2.
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 towards any other person for the contents of this report.
(Signed)
(Signed)
DELOITTE & TOUCHE
AF 0834
Chartered Accountants
KAMARUL BAHARIN BIN TENGKU ZAINAL ABIDIN
Partner - 2903/11/13 (J)
Chartered Accountant
April 24, 2013
STATEMENTS OF COMPREHENSIVE INCOME
49
FOR THE YEAR ENDED DECEMBER 31, 2012
The Group
The Company
2012
2011
RM
RM
Note
2012
RM
2011
RM
7
90,706,908
87,930,499
28,650,000
44,100,000
(32,131,702)
(11,870,928)
(29,326,113)
(9,850,545)
-
-
46,704,278
(8,233,063)
(261,664)
1,421,182
48,753,841
(8,090,054)
(2,441,483)
5,865,130
28,650,000
(4,710,504)
(333,552)
238,073
44,100,000
(5,398,538)
(33,602)
4,639,330
39,630,733
3,763,120
(1,968,559)
17,732,040
-
44,087,434
4,055,727
(5,613,960)
17,662,210
-
23,844,017
2,184,183
(29,621)
-
43,307,190
1,596,676
(32,541)
817,259
59,157,334
(11,441,635)
60,191,411
(10,709,527)
25,998,579
(470,326)
45,688,584
(377,167)
PROFIT FOR THE YEAR
47,715,699
49,481,884
25,528,253
45,311,417
Other comprehensive income
Exchange differences on translating foreign operations
(1,068,857)
(2,583,911)
-
-
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
46,646,842
46,897,973
25,528,253
45,311,417
Profit attributable to:
Non-controlling interest
41,668,324
6,047,375
43,813,938
5,667,946
Profit for the year
47,715,699
49,481,884
Total comprehensive income attributable to:
40,598,632
6,048,210
41,229,281
5,668,692
46,646,842
46,897,973
13.9
14.6
Revenue
Cost of services
- Contracted services
- Depreciation of property, plant and equipment
Gross profit
Administrative expenses
Other operating expenses
Other operating income
Profit from operations
Interest income
Finance costs
Share of profit after tax of equity accounted associates
Allowances for doubtful debts written back
Profit before tax
Income tax expense
Basic Earnings per share (sen)
The accompanying Notes form an integral part of these Financial Statements.
8
10
11
13
50
STATEMENTS OF FINANCIAL POSITION
AS AT DECEMBER 31, 2012
Note
December 31, 2012
RM
December 31, 2011
RM
January 1, 2011
RM
The Group
ASSETS
Non-current Assets
Property, plant and equipment
Goodwill on consolidation
Investment in associates
Other investment
337,555,679
128,029,993
108,879,891
10,029,999
331,901,799
128,029,993
106,147,850
10,029,999
343,016,451
128,658,222
98,485,640
10,029,999
584,495,562
576,109,641
580,190,312
21
9,281,768
2,103,181
732,329
124,140,076
8,565,738
15,157,445
146,990,883
9,710,389
11,406,052
150,590
160,882,569
22
136,257,354
-
170,714,066
-
182,149,600
40,557,687
Total Current Assets
136,257,354
170,714,066
222,707,287
Total Assets
720,752,916
746,823,707
802,897,599
300,805,917
46,891,043
243,475,886
300,805,917
47,850,352
211,057,343
300,805,917
50,435,009
203,340,115
591,172,846
559,713,612
554,581,041
59,775,208
56,765,549
61,945,395
650,948,054
616,479,161
616,526,436
52,097,000
40,000
3,960,000
364,423
52,210,000
40,000
3,960,000
364,382
53,684,000
53,279,643
40,000
3,960,000
497,966
56,461,423
56,574,382
111,461,609
15
16
18
19
Total Non-current Assets
Current Assets
Trade receivable
Other receivables and prepaid expenses
Amount owing by associate
Tax recoverable
Cash and bank balances
Assets classified as held for sale
EQUITY AND LIABILITIES
Capital and reserves
Share capital
Reserves
Retained earnings
20
20
18
23
24
25
Equity attributable to equity holders of the Company
26
Total Equity
Non-current Liabilities
Deferred tax liabilities
Serial bonds
Preference share capital
Preference share premium
Hire-purchase payables
Total Non-current Liabilities
27
28
29
30
33
51
AS AT DECEMBER 31, 2012 (Continued)
Note
December 31, 2012
RM
December 31, 2011
RM
January 1, 2011
RM
The Group (Continued)
Current Liabilities
Trade payable
Other payables and accrued expenses
Serial bonds
Current tax liabilities
9,533,462
3,630,938
179,039
8,681,612
5,155,898
58,461,063
1,338,007
133,584
8,346,064
24,330,442
42,000,000
107,573
125,475
Total Current Liabilities
13,343,439
73,770,164
74,909,554
Total Liabilities
69,804,862
130,344,546
186,371,163
720,752,916
746,823,707
802,897,599
Total Equity and Liabilities
31
32
28
33
52
AS AT DECEMBER 31, 2012 (Continued)
Note
December 31, 2012
RM
December 31, 2011
RM
January 1, 2011
RM
The Company
ASSETS
Non-current Assets
Investment in subsidiary companies
Other investment
834,425
272,074,080
16,000,000
713,892
274,555,540
16,000,000
896,782
303,732,367
16,000,000
288,908,505
291,269,432
320,629,149
1,166,630
17,652,834
67,065
71,038,770
454,918
1,600,000
69,386,251
266,062
3,131,907
150,590
165,867
31,789,416
89,925,299
71,441,169
35,503,842
378,833,804
362,710,601
356,132,991
300,805,917
46,705,593
28,236,762
300,805,917
46,705,593
11,958,290
300,805,917
46,705,593
2,743,583
375,748,272
359,469,800
350,255,093
364,423
364,382
497,966
364,423
364,382
497,966
1,114,703
1,427,367
179,039
1,220,917
1,436,649
85,269
133,584
2,239,784
3,014,673
125,475
Total Current Liabilities
2,721,109
2,876,419
5,379,932
Total Liabilities
3,085,532
3,240,801
5,877,898
378,833,804
362,710,601
356,132,991
15
17
19
Total Non-current Assets
Current Assets
Other receivables and prepaid expenses
Amount owing by subsidiary companies
Tax recoverable
20
17
18
21
Total Current Assets
Total Assets
EQUITY AND LIABILITIES
Capital and reserves
Share capital
Reserves
Retained earnings
23
24
25
Total Equity
Non-current Liabilities
33
Total Non-current Liabilities
Current Liabilities
Amount owing to subsidiary companies
Current tax liabilities
Total Equity and Liabilities
32
33
STATEMENTS OF CHANGES IN EQUITY
Note
The Group
Balance as of January 1, 2011
Non-distributable
Capital
redemption
Translation
Share premium
reserve
reserve
RM
RM
RM
Share
capital
RM
53
Distributable
Retained
earnings
RM
Total
RM
Non-controlling
interests
RM
Total
equity
RM
300,805,917
46,705,593
185,450
3,543,966
203,340,115
554,581,041
61,945,395
616,526,436
-
-
-
(2,584,657)
43,813,938
-
43,813,938
(2,584,657)
5,667,946
746
49,481,884
(2,583,911)
-
-
-
(2,584,657)
-
43,813,938
(36,096,710)
-
41,229,281
(36,096,710)
-
5,668,692
(2,723,538)
(8,125,000)
46,897,973
(2,723,538)
(36,096,710)
(8,125,000)
Balance as of December 31, 2011
300,805,917
46,705,593
185,450
959,309
211,057,343
559,713,612
56,765,549
616,479,161
300,805,917
46,705,593
185,450
959,309
211,057,343
559,713,612
56,765,549
616,479,161
-
-
-
(1,069,692)
41,668,324
-
41,668,324
(1,069,692)
6,047,375
835
47,715,699
(1,068,857)
-
-
-
(1,069,692)
110,383
-
41,668,324
(9,249,781)
-
40,598,632
110,383
(9,249,781)
-
6,048,210
(38,551)
(3,000,000)
46,646,842
71,832
(9,249,781)
(3,000,000)
300,805,917
46,705,593
185,450
243,475,886
591,172,846
59,775,208
650,948,054
Profit for the year
Total comprehensive income
for the year
Disposal of subsidiary company
Dividend to owners of the Company
Dividend to non-controlling interest
Profit for the year
Total comprehensive income
for the year
Liquidation of subsidiary companies
Dividend to owners of the Company
Dividend to non-controlling interest
14
14
Note
-
Non-distributable
share premium
RM
Distributable
retained earnings
RM
The Company
Share capital
RM
Total comprehensive income for the year
Dividend paid
300,805,917
-
46,705,593
-
2,743,583
45,311,417
(36,096,710)
350,255,093
45,311,417
(36,096,710)
300,805,917
46,705,593
11,958,290
359,469,800
Total comprehensive income for the year
Dividend paid
300,805,917
-
46,705,593
-
11,958,290
25,528,253
(9,249,781)
359,469,800
25,528,253
(9,249,781)
300,805,917
46,705,593
28,236,762
375,748,272
14
14
Total equity
RM
54
STATEMENTS OF CASH FLOWS
The Group
The Company
2012
2011
RM
RM
2012
RM
2011
RM
59,157,334
60,191,411
25,998,579
45,688,584
12,123,742
1,968,559
(3,763,120)
(669,257)
29,880
(17,732,040)
-
10,069,637
5,613,960
(1,925,673)
(722,489)
(4,055,727)
2,408,896
(17,662,210)
(1,453)
252,814
(28,650,000)
29,621
(2,184,183)
333,552
29,880
-
204,729
(44,100,000)
32,541
(2,152,942)
(1,596,676)
(817,259)
(1,586,889)
1,015
82
51,115,098
53,916,352
(4,189,737)
(4,326,815)
11,288,012
(4,371,016)
(711,713)
(187,887)
1,275,450
(16,758,322)
( 106,214)
(1,018,867)
Cash From/(Used In) Operations
Tax paid
Tax refunded
63,678,560
(13,626,973)
2,002
32,787,014
(11,000,580)
50,527
( 5,007,664)
(624,662)
2,002
(5,533,569)
(126,031)
-
Net Cash From/(Used In) Operating Activities
50,053,589
21,836,961
(5,630,324)
(5,659,600)
(17,607,502)
(157,250)
3,763,120
14,999,999
(3,873,110)
41,280,176
2,172,197
4,055,727
10,000,000
(203,227)
1,514,286
2,184,183
621,507
12,600,000
(22,854)
9,602,519
1,596,676
25,684,230
42,500,000
998,367
53,634,990
16,716,749
79,360,571
Note
CASH FLOWS FROM/ (USED IN) OPERATING ACTIVITIES
Profit before tax
Adjustments for:
Depreciation of property, plant and equipment
Dividend income
Finance costs
Gain on disposal of subsidiary company
Gain on disposal of associate
Interest income
(Gain)/loss on liquidation of subsidiary companies
Allowance for doubtful debts written back
Waiver of inter company balances
Property, plant and equipment written off
Share of profit after tax of equity accounted associate
Unrealised (gain)/loss on foreign exchange
Movement in working capital:
Decrease/(Increase) in:
Trade receivable, other receivables and prepaid expenses
Increase/(Decrease) in:
Trade payables, other payables and accrued expenses
Cash Flows From/(Used In) Investing Activities
Acquisition of property, plant and equipment
Proceeds from liquidation of subsidiary companies
Proceeds from disposal of associate
Proceeds from disposal of subsidiary company
Interest received
Decrease in advances to subsidiary companies
Dividend received
Net Cash From Investing Activities
(ii)
12
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2012 (Continued)
The Group
Note
Cash Flows From/(Used In) Financing Activities
Decrease in debt service reserve account
Decrease in amount owing by associate
Dividend paid to shareholders
Dividend paid to non-controlling interests
Redemption of serial bonds
Redeemable cumulative convertible preference
share dividends paid
Repayment of hire-purchase
Hire-purchase interest paid
Net Cash Used In Financing Activities
Net Increase/(Decrease) in cash and cash equivalents
Effect of foreign currency translation in consolidation
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS AT END OF YEAR
(i)
55
(i)
The Company
2012
2011
RM
RM
2012
RM
2011
RM
27,314,405
(9,249,781)
(3,000,000)
(60,000,000)
1,595,077
(36,096,710)
(8,125,000)
(42,000,000)
(9,249,781)
-
150,590
(36,096,710)
-
(400,000)
(154,504)
(29,621)
(400,000)
(125,475)
(32,541)
(154,504)
(29,621)
(125,475)
(32,541)
(45,519,501)
(85,184,649)
(9,433,906)
(36,104,136)
5,532,455
(1,068,857)
(9,712,698)
(2,583,911)
1,652,519
-
37,596,835
-
119,670,764
131,967,373
69,386,251
31,789,416
124,134,362
119,670,764
71,038,770
69,386,251
Cash and cash equivalents
Cash and cash equivalents included in the statements of cash flows comprise the following amounts as disclosed in Note 21:
The Group
Deposits with licensed banks
Less:
Amounts held in a Bond Redemption account:
- Cash and bank balances
- Deposits with licensed banks
Deposits pledged
(ii)
The Company
2012
2011
RM
RM
2012
RM
2011
RM
735,076
123,405,000
9,852,633
137,138,250
538,770
70,500,000
336,251
69,050,000
124,140,076
146,990,883
71,038,770
69,386,251
(714)
(5,000)
(7,295,119)
(20,020,000)
(5,000)
-
-
124,134,362
119,670,764
71,038,770
69,386,251
Acquisition of property, plant and equipment
During the year, the Group and the Company acquired property, plant and equipment with an aggregate cost of RM17,807,502 (2011: RM3,873,110) and
RM403,227 (2011: RM22,854) respectively of which RM200,000 (2011: RMNil), were acquired by the Group and the Company by means of hire-purchase
plans.
56
NOTES TO THE FINANCIAL STATEMENTS
1.
GENERAL INFORMATION
The Company is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main Market of Bursa Malaysia Securities Berhad.
The principal activity of the Company is investment holding. The principal activities of the subsidiary companies are stated in Note 17.
There have been no significant changes in the nature of the principal activities of the Company and its subsidiary companies during the financial year.
The principal place of business and the registered office of the Company is located at #36.01, Level 36, Cap Square Tower, No. 10, Jalan Munshi Abdullah,
50100 Kuala Lumpur.
The financial statements of the Group and the Company were authorised for issuance by the Board of Directors in accordance with a resolution of the
directors on April 24, 2013.
2.
BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
The financial statements of the Group and the Company have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRS”),
International Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia.
3.
CHANGES IN ACCOUNTING POLICIES RESULTING FROM ADOPTION OF NEW AND REVISED MALAYSIAN FINANCIAL
REPORTING STANDARDS
These are the Group’s and the Company’s first financial statements prepared in accordance with MFRSs. In the previous years, these financial statements
were prepared in accordance with Financial Reporting Standards (“FRSs”). The transition to MFRSs is accounted for in accordance with MFRS 1 First-time
Adoption of Malaysian Financial Reporting Standards, with January 1, 2011 as the date of transition. There were no significant changes in accounting policies
of the Group and the Company and there was no significant financial impact on the financial statements of the Group and the Company for the current and
prior years as a consequence of the transition to MFRSs.
Accounting Standards Issued But Not Yet Effective
The directors anticipate that the relevant new and revised MFRSs and IC Interpretations which have been issued but not yet effective will be adopted in the
financial statements of the Company when they become effective and that the adoption of these MFRSs and IC Interpretations will have no material financial
impact on the financial statements in the period of initial application.
4.
SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Group and of the Company have been prepared under the historical cost convention unless otherwise indicated in the
accounting policies below.
Basis of Consolidation
Subsidiary companies are those entities controlled by the Group and the Company. Control exists when the Group and the Company have the power to
govern the financial and operational policies of an enterprise so as to obtain benefits from its activities. Control is presumed to exist when the Group owns,
directly or indirectly through subsidiary companies, more than half of the voting power of the entity.
The consolidated financial statements include the financial statements of the Company and entities controlled by the Company (its subsidiary companies)
as mentioned in Note 17 made up to December 31, 2012. The financial statements of the subsidiary companies are prepared for the same reporting date
as the Company.
All subsidiary companies are consolidated using the acquisition method of accounting. On acquisition, the assets, liabilities and contingent liabilities of the
relevant subsidiary companies are measured at their fair values at the date of acquisition. The results of the subsidiary companies acquired or disposed
during the year are included in the consolidated statement of comprehensive income from the date of their acquisitions or up to the effective date of their
disposals.
All significant inter-company transactions and balances are eliminated on consolidation. Uniform accounting policies are adopted in the consolidated financial
statements for like transactions and events in similar circumstances.
4.
57
(Continued)
(Continued)
Basis of Consolidation (Continued)
Non-controlling interests in the net assets of consolidated subsidiary companies are identified separately from the Group’s equity therein. Non-controlling
interests consist of the amount of these interests at the date of the original business combination and the non-controlling share of subsequent changes in
equity since the date of acquisition.
The interest of non-controlling interests in the acquired subsidiary company is initially measured at the non-controlling proportion of fair value of the net assets
acquired.
Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised
directly in equity and attributed to the owners of the Company.
Increases or decreases in ownership interests in subsidiary companies that do not result in the Group losing control over the subsidiary companies are dealt
with in equity and attributed to the owners of the parent, with no impact on goodwill or profit or loss. When control of a subsidiary company is lost as a result of
a transaction, event or other circumstance, the Group derecognises all assets, liabilities and non-controlling interests at their carrying amounts. Any retained
interest in the former subsidiary company is recognised at its fair value at the date when control is lost, with the resulting gain or loss being recognised in
profit or loss.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations (including comparatives) are
expressed in Ringgit Malaysia using exchange rates prevailing at the end of the reporting period. Income and expense items (including comparatives) are
translated at the average exchange rates for the financial year, unless exchange rates fluctuated significantly during that financial year, in which case the
exchange rates at the dates of the transactions are used.
The results of foreign associates are translated at the average rate of exchange for the financial year.
Exchange differences arising, if any, are classified as equity and transferred to the Group’s translation reserve. Such translation differences are recognised
in the consolidated statement of comprehensive income in the period in which the foreign operation or foreign associate is disposed of.
Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The
following specific recognition criteria must also be met before revenue is recognised:
(i)
Port Services
Income from port services is recognised in profit or loss once the service is rendered. Revenue arising from the fixed portion of the port service revenue
is recognised on an accrual basis.
(ii)
Dividend Income
Dividend income is recognised when the right to receive payment is established.
(iii)
Office Facility Fees
Office facility fees are recognised in profit or loss upon the provision of the facility. Office facility fees are recognised on an accrual basis.
(iv)
Rental Income
Rental income is recognised in profit or loss as it accrues.
Foreign Currency
(i)
Functional and Presentation Currencies
The individual financial statements of each entity in the Group are presented in the currency of the primary economic environment in which the entity
operates (“the functional currency”). For the purposes of the consolidated financial statements, the results and the financial position of each group
entity are expressed in Ringgit Malaysia (“RM”) which is the functional currency of the Company and the presentation currency for the consolidated
financial statements.
58
4.
(Continued)
(Continued)
Foreign Currency (Continued)
(ii)
Foreign Currency Transactions
In preparing the financial statements of the individual entities, transactions in foreign currencies other than the entity’s functional currency (i.e. foreign
currencies) are recorded at the rates prevailing on the dates of the transactions. At the end of each reporting period, monetary items denominated in
foreign currencies are translated at the rates prevailing on that date. Non-monetary items carried at fair value that are denominated in foreign currencies
are translated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost
in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are included in profit or loss for the period.
Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except for
differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such nonmonetary items, any exchange component of that gain or loss is also recognised directly in equity.
Employee Benefits
(i)
Short-Term Employee Benefits
Wages, salaries, bonuses and non-monetary benefits are accrued for in the period in which the associated services are rendered by the employees
of the Group.
(ii)
Defined Contribution Plan
The Group makes contributions to the Employees’ Provident Fund (“EPF”) and the contributions to the EPF are charged to the income statements in
the period in which they relate. Once the obligations have been paid, the Group has no further payment obligations. The Group’s contributions to EPF
are included under personnel expenses as disclosed in Note 8.
Income Taxes
Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the
taxable profit for the year and is measured using the tax rates that have been enacted or substantively enacted at the end of the reporting period.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying
amounts of assets and liabilities in the financial statements and their corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are generally recognised for all deductible
temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the
deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises
from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither the
accounting profit nor taxable profit.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised, based on the tax rates
that have been enacted or substantially enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of
its assets and liabilities.
Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items that are recognised outside profit or
loss (whether in other comprehensive income or directly in equity), in which case the tax is also recognised in other comprehensive income or directly in
equity respectively. Where current or deferred tax arises from the initial accounting for a business combination, the tax effect is included in accounting for the
business combination.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they
relate to income taxes by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
4.
59
(Continued)
(Continued)
Discontinued Operations
A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of operations that
has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon
disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the
comparative statements of comprehensive income is restated as if the operation had been discontinued from the start of the comparative period.
Property, Plant and Equipment and Depreciation
(i)
Recognition and Measurement
Items of property, plant and equipment are stated at cost less any accumulated depreciation and any accumulated impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset and any other costs directly 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. The cost of self-constructed
assets also includes the cost of materials and direct labour and, for qualifying assets, borrowing costs are capitalised in accordance with the Group’s
accounting policy. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.
When significant parts of property, plant and equipment are required to be replaced in intervals, such parts are recognised as individual items of
property, plant and equipment with specific useful lives and depreciation is charged respectively. Gains and losses on disposal of an item of property,
plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are
recognised net within other income or other operating expenses respectively in profit and loss.
(ii)
Subsequent Cost
The cost of replacing part 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 and its cost can be measured reliably. The carrying amount of the replaced part is
derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
(iii)
Depreciation
Leasehold land is amortised in equal instalments over the period of the lease of ninety-nine years.
Buildings and renovations are depreciated over a period of 50 years and 3 years respectively.
The estimated useful lives and depreciation methods of other items of property, plant and equipment for current and comparative periods are as follows:
Industrial building, civil works and
infrastructure
Gross Post Construction dry bulk cargo and infrastructure throughput expressed in metric tonnes to-date
allocated over a prudent estimate of the total gross post construction throughput capacity expressed in
metric tonnes over 50 years.
Plant and machinery, tools, office equipment Gross Post Construction dry bulk cargo and infrastructure throughput expressed in metric tonnes to-date
and furniture
allocated over a prudent estimate of the total gross post construction throughput capacity expressed in
metric tonnes over 10 to 30 years.
The estimation of the total gross post construction throughput capacity is based on the historical actual throughput and the estimated throughput over
the estimated useful lives. As such, this involves estimation uncertainty and critical judgement as the actual throughput in the future might differ from
the estimated future throughput capacity.
Other property, plant and equipment are depreciated on a straight-line basis to write off the cost of each asset to their residual value over their estimated
useful life, at the following annual rates:
Furniture and fittings
Motor vehicles
Office equipment
10%
20%
20%
Depreciation methods, useful lives and residual values are reassessed at each reporting date.
60
4.
(Continued)
(Continued)
Goodwill on Consolidation
Goodwill on consolidation represents the excess of the cost of acquisition of subsidiaries over the Group’s interest in the net fair value of the identifiable
assets, liabilities and contingent liabilities of the subsidiary companies at the date of acquisition. Goodwill is initially recognised as an asset at cost and is
subsequently measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the
combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication
that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is
allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying
amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.
On disposal of a subsidiary company, the attributable amount of goodwill is included in the determination of profit or loss on disposal.
Investment in Subsidiary Companies
A subsidiary company is an entity over which the Group has power to exercise control over the financial and operating policies so as to obtain benefits from
its activities.
Subsidiary companies are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control
ceases.
Investment in subsidiary companies, which is eliminated on consolidation, is stated at cost less impairment losses, if any, in the Company’s separate financial
statements.
Investment in Associates
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence
is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting, except when the
investment is classified as held for sale, in which case it is accounted for in accordance with MFRS 5: Non-current Assets Held for Sale and Discontinued
Operations. Under the equity method, investments in associates are carried in the consolidated statements of financial position at cost as adjusted for postacquisition changes in the Group’s share of the net assets of the associate, less any impairment in the value of individual investments. Losses of an associate
in excess of the Group’s interest in that associate (which includes any long-term interests that, in substance, form part of the Group’s net investment in the
associate) are recognised only to the extent that the Group has incurred legal or constructive obligation or made payments on behalf of that associate.
Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate
recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for
impairment as part of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over
the cost of acquisition, after reassessment, is recognised immediately in profit or loss.
Investment in associates is stated at cost less impairment losses, if any, in the Company’s separate financial statements.
Other Investment
Other investment in unquoted shares is stated at cost less any impairment loss.
Assets Classified As Held For Sale
Assets are classified as held for sale if their carrying amount is expected to be recovered principally through a sale transaction rather than through continuing
use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition subject only
to terms that are usual and customary.
Immediately before classification as held for sale, the measurement of the assets is brought up-to-date in accordance with applicable MFRSs. Then, upon
initial classification as held for sale, (other than deferred tax assets, employee benefit assets, financial assets and inventories) these assets are measured in
accordance with MFRS 5 and that is the lower of carrying amount and fair value less cost to sell. Any differences are included in profit or loss.
4.
61
(Continued)
(Continued)
Compound Financial Instruments
A compound financial instrument is a non-derivative financial instrument that contains both a liability and an equity component.
The liability component of a compound financial instrument is recognised initially at the fair value of a similar liability that does not have an equity conversion
option. The equity component is recognised initially as the difference between the fair value of the compound financial instrument as a whole and the fair value
of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying
amounts.
Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest method.
The equity component of a compound financial instrument is not remeasured subsequent to initial recognition.
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 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.
Impairment of Assets
(i)
Financial Assets
All financial assets (except for those carried at fair value through profit or loss and investment in subsidiary companies) are assessed at each reporting
date for 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 investment in an equity instrument, a significant or
prolonged decline in the fair value below its cost is an objective evidence of impairment.
An impairment loss in respect of loans and receivables and held-to-maturity investments 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 available-for-sale financial assets is recognised in profit or loss and is measured as the difference between the asset’s
acquisition cost (net of any principal repayment and amortisation) and the asset’s current fair value, less any impairment loss previously recognised in
other comprehensive income, the cumulative loss in other comprehensive income is reclassified from equity and recognised to profit or loss.
An impairment loss in respect of unquoted equity instruments carried at cost 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 current market rate of return for a similar financial
asset.
Impairment losses recognised in profit and loss for investment in equity instruments are not reversed through profit or loss.
If in a subsequent period, 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)
Non-Financial Assets
The carrying amount of non-financial assets (except for inventories and non-current assets (or disposal groups) classified as held for sale) are reviewed
at the end of each reporting period to determine whether there are any indications of impairment.
If any such indications exist, then the asset’s recoverable amount is estimated. 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 group of
assets (“cash-generating unit”). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating
units that are expected to benefit from the synergies of the combination.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset.
62
4.
(Continued)
(Continued)
Impairment of Assets (Continued)
(ii)
Non-Financial Assets (Continued)
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying
amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of 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 periods are assessed at
each reporting date for any indications that the losses have decreased or no longer exist. 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 year in which the reversals are recognised.
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other
leases are classified as operating leases.
Payments made under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease. Benefits received and
receivable as an incentive to enter into an operating lease are also spread evenly over the lease term.
Financial Instruments
Financial instruments are recognised in the statements of financial position when, and only when the Group and the Company become a party to the
contractual provisions of the financial instruments.
(a)
Financial Assets
Financial assets are classified into the following specified categories: financial assets at fair value through profit or loss (FVTPL), held-to-maturity
investments, available-for-sale (AFS) financial assets and loans and receivables. The classification depends on the nature and purpose of the financial
assets and is determined at the time of initial recognition.
(i)
Effective Interest Method
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant
period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all transaction costs and other premiums
or discounts) through the expected life of the financial asset, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
(ii)
Financial Assets at FVTPL
Financial assets are classified as FVTPL when the financial asset is either held for trading or it is specially designated into this category upon initial recognition.
A financial asset is classified as held for trading if:
•
•
•
it has been acquired principally for the purpose of selling it in the near term; or
on initial recognition it is part of a portfolio of identified financial instruments that the Group and the Company manage together and has a
recent actual pattern of short-term profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument.
Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain
or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset. Fair value is determined in the manner
described in Note 34.
(iii)
AFS Financial Assets
AFS financial assets are non-derivatives that are either designated as available-for-sale or are not classified as loans and receivables, held-tomaturity investments or financial assets at FVTPL. All AFS assets that have a quoted market price in an active market are measured at fair value
at the end of the reporting period. Fair value is determined in the manner disclosed in Note 34. Gains and losses arising from changes in fair
value are recognised in other comprehensive income and accumulated in the investments revaluation reserve, with the exception of impairment
losses and interest calculated using the effective interest method. Where the investment is disposed of or is determined to be impaired, the
cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss.
AFS equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are
measured at cost less any identified impairment losses at the end of the reporting period.
4.
63
(Continued)
(Continued)
Financial Instruments (Continued)
(a)
Financial Assets (Continued)
(iv)
Receivables
Receivables that have fixed or determinable payments that are not quoted in an active market are categorised as loan and receivables. Loans
and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by
applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
(v)
Impairment of Financial Assets
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are
considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the
financial asset, the estimated future cash flows of the financial asset have been affected.
Receivables assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of
impairment for a portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an increase in the
number of delayed payments in the portfolio past the average credit period, as well as observable changes in the national or global economic
conditions that correlate with default on receivables.
In respect of receivables carried at amortised cost, the amount of impairment loss recognised is the difference between the asset’s carrying
amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables,
where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written
off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes
in the carrying amount of the allowance account are recognised in profit or loss.
When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognised in other comprehensive income are
reclassified to profit or loss in the period. When an impairment loss subsequently reverses, impairment loss previously recognised in profit or loss
are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised in other comprehensive income.
(vi)
Derecognition of Financial Assets
The Group and the Company derecognise a financial asset only when the contractual rights to the cash flows from the asset expire, or when they
transfer the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group and the Company
neither transfer nor retain substantially all the risks and rewards of ownership and continue to control the transferred asset, the Group and the
Company recognise its retained interest in the asset and an associated liability for amounts they may have to pay. If the Group and the Company
retain substantially all the risks and rewards of ownership of a transferred financial asset, the Group and the Company continue to recognise the
financial asset and also recognise a collateralised borrowing for the proceeds received.
(b)
Financial Liabilities and Equity Instruments
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.
(i)
Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group and of the Company after deducting all of its
liabilities. Equity instruments issued by the Group and the Company are recognised at the proceeds received, net of direct issue costs.
(ii)
Financial Liabilities
Financial liabilities are classified as either financial liabilities at FVTPL or other financial liabilities.
64
4.
(Continued)
(Continued)
Financial Instruments (Continued)
(b) Financial Liabilities and Equity Instruments (Continued)
(iii)
Financial Liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is specially designated into this category
upon initial recognition.
A financial liability is classified as held for trading if:
•
•
•
it has been acquired principally for the purpose of repurchasing it in the near term; or
on initial recognition it is part of a portfolio of identified financial instruments that the Group and the Company manage together and has a
recent actual pattern of short-term profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net
gain or loss recognised in profit or loss incorporates any interest paid on the financial liability. Fair value is determined in the manner described
in Note 34.
(iv)
Other Financial Liabilities
Other financial liabilities, including payables and borrowings, are initially measured at fair value, net of transaction costs. They are subsequently
measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the
relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the
financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
(v)
Derecognition of Financial Liabilities
The Group and the Company derecognise financial liabilities when, and only when, the Group’s and the Company’s obligations are discharged,
cancelled or they expire.
Cash and Cash Equivalents
The Group and the Company adopts the indirect method in the preparation of the statements of cash flows.
Cash equivalents are short-term, highly liquid investments with maturities of six months or less from the date of acquisition and are readily convertible to cash
without significant risks of changes in value.
5.
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Group’s accounting policies, which are described in Note 4, the directors are required to make judgements, estimates and assumptions
about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based
on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future
periods.
Critical judgements in applying accounting policies
In the process of applying the Group’s and the Company’s accounting policies, management is of the opinion that there are no instances of application of
judgement which are expected to have a significant effect on the amounts recognised in the financial statements except as discussed below.
5.
65
(Continued)
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (Continued)
Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a
significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year.
(i)
The depreciation of property, plant and equipment is based on the estimation of the total gross post construction throughput capacity. This is based on
the historical actual throughput and the estimated throughput over the estimated remaining useful lives. As such, this involves estimation uncertainty
and critical judgement as the actual throughput in the future might differ from the estimated future throughput capacity.
(ii)
Valuation of the recoverable amount for cash-generating unit
The value in use of the cash generating units is based on management’s cash flow projections covering a period of 28 years. Discount rates of 4.5%
per annum and 7.5% per annum were applied over the period of the cash flow projections. Management believes that a period of 28 years used for
the cash flow projections is justified as income derived from the extended period can be supported by Jetty Terminal Usage Agreements which expire
in the years 2031 and 2040.
6.
SEGMENTAL REPORTING
Segment information is presented in respect of the Group’s business and geographical segments. No segment information on the basis of geographic
segments is presented as all of the external customers and segment assets are located in Malaysia. The primary format using business segments is based
on the Group’s management and internal reporting structure. Inter-segment pricing is determined based on negotiated terms.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated
items mainly comprise interest-earning assets and revenue and interest-bearing loans, borrowings, financial instruments and expenses.
Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one period.
The Group comprises the following main business segments:
Port operations
Ownership and operation of 2 port facilities, Lekir Bulk Terminal (“LBT”) (port facility for dry and liquid bulk) and Lumut
Maritime Terminal (“LMT”) (port facility for dry and liquid bulk, break bulk and containers) collectively known as Lumut Port
Investment holding
Investment in ordinary shares of subsidiary companies, LBTSB Redeemable Cumulative Convertible Preference Shares
(“RCCPS”), LMT Redeemable Preference Share (“RPS”) and other unquoted shares
Industrial property
Sale of industrial property
66
6.
(Continued)
SEGMENTAL REPORTING (Continued)
The Group
December 31, 2012
Business segments
Revenue from external customers
Inter-segment revenue
Share of revenue of associate
Port
operations
RM
Investment
holding
RM
Industrial
property
RM
Elimination
RM
Consolidated
RM
90,706,908
37,659,233
28,650,000
-
11,493,713
(28,650,000)
-
90,706,908
49,152,946
128,366,141
(37,659,233)
28,650,000
-
11,493,713
(11,493,713)
(28,650,000)
-
139,859,854
(49,152,946)
Total segment revenue
90,706,908
28,650,000
-
(28,650,000)
90,706,908
Segment results
43,652,800
24,627,933
-
(28,650,000)
39,630,733
Results from operations
Interest income
Finance costs
43,652,800
1,493,173
(3,538,938)
24,627,933
2,269,947
(29,621)
-
(28,650,000)
1,600,000
39,630,733
3,763,120
(1,968,559)
Operating profit
Share of profit after tax of equity
accounted associate
41,607,035
26,868,259
-
(27,050,000)
41,425,294
12,499,204
-
5,232,836
Profit before tax
Tax expense
54,106,239
(10,951,892)
26,868,259
(489,743)
5,232,836
-
(27,050,000)
-
59,157,334
(11,441,635)
Net profit for the year
43,154,347
26,378,516
5,232,836
(27,050,000)
47,715,699
Segment assets
384,606,977
71,185,673
227,266,048
-
37,694,218
-
611,873,025
108,879,891
Total assets
455,792,650
227,266,048
37,694,218
-
720,752,916
Total liabilities
68,128,097
1,676,765
-
-
69,804,862
11,870,928
252,814
-
-
12,123,742
Gross segment revenue
-
17,732,040
Business segments
6.
67
(Continued)
The Group
December 31, 2011
Business segments
Revenue from external customers
Inter-segment revenue
Port
operations
RM
Investment
holding
RM
Industrial
property
RM
Elimination
RM
Consolidated
RM
87,930,499
34,564,151
44,100,000
-
14,034,800
(44,100,000)
-
87,930,499
48,598,951
122,494,650
(34,564,151)
44,100,000
-
14,034,800
(14,034,800)
(44,100,000)
-
136,529,450
(48,598,951)
Total segment revenue
87,930,499
44,100,000
-
(44,100,000)
87,930,499
Segment results
43,871,347
44,316,087
-
(44,100,000)
44,087,434
Results from operations
Interest income
Finance costs
43,871,347
2,307,126
(7,181,419)
44,316,087
1,748,601
(32,541)
-
(44,100,000)
1,600,000
44,087,434
4,055,727
(5,613,960)
Operating profit
Share of profit after tax of equity
accounted associate
38,997,054
46,032,147
-
(42,500,000)
42,529,201
11,958,076
-
5,704,134
Profit before tax
Tax expense
50,955,130
(10,613,473)
46,032,147
(96,054)
5,704,134
-
(42,500,000)
-
60,191,411
(10,709,527)
Net profit for the year
40,341,657
45,936,093
5,704,134
(42,500,000)
49,481,884
Segment assets
429,542,905
68,199,994
211,132,952
-
37,947,856
-
640,675,857
106,147,850
Total assets
497,742,899
211,132,952
37,947,856
-
746,823,707
Total liabilities
128,485,134
1,859,412
-
-
130,344,546
9,850,545
219,092
-
-
10,069,637
Gross segment revenue
-
17,662,210
Business segments
68
6.
The Group
January 1, 2011
7.
(Continued)
Port
operations
RM
Marine
services
RM
Investment
holding
RM
Industrial
property
RM
Business segments
Segment assets
Assets classified as held for sale
475,262,463
67,383,875
-
11,788,212
-
176,803,597
-
31,101,765
-
Total assets
542,646,338
11,788,212
176,803,597
Total liabilities
161,735,513
525,542
24,110,108
Metal
RM
Elimination
RM
Consolidated
RM
40,557,687
-
663,854,272
98,485,640
40,557,687
31,101,765
40,557,687
-
802,897,599
-
-
-
186,371,163
REVENUE
Revenue of the Group and the Company consist of the following:
The Group
Port operations income
Single tier tax exempt dividend income from subsidiary companies
The Company
2012
2011
RM
RM
2012
RM
2011
RM
90,706,908
-
87,930,499
-
28,650,000
44,100,000
90,706,908
87,930,499
28,650,000
44,100,000
8.
69
(Continued)
PROFIT FROM OPERATIONS
Profit from operations is stated after charging/(crediting):
The Group
Audit fee:
Current year
Underprovision in prior years
Other services
Depreciation of property, plant, and equipment (Note 15)
Personnel expenses:
Salaries and allowances
Contribution to Employees Provident Fund
Management fees
Gain on disposal of associate
Gain on disposal of subsidiary company
(Gain)/Loss on liquidation of subsidiary companies
Office facilities fees
Rental income
Property, plant and equipment written off
(Gain)/Loss on foreign exchange:
Realised
Unrealised
Allowance for doubtful debts written back
Waiver of inter company balances
The Company
2012
2011
RM
RM
2012
RM
2011
RM
110,600
42,500
12,123,742
110,735
937
7,500
10,069,637
70,000
40,000
252,814
63,000
5,000
204,729
960,288
116,885
(669,257)
(643,112)
29,880
650,480
75,709
150,000
(722,489)
(1,925,673)
(41,400)
2,408,896
960,288
116,885
333,552
29,880
650,480
75,709
150,000
(2,152,942)
(41,400)
1,015
4,127
-
(2,403,578)
(1,453)
-
(61,960)
-
(105,624)
82
(817,259)
(1,586,889)
The remuneration of members of key management, other than the directors of the Company as disclosed in Note 9, are as follows:
The Group
Salaries and allowances
Contribution to Employees Provident Fund
2012
RM
2011
RM
The Company
2012
2011
RM
RM
623,968
74,877
931,730
76,906
623,968
74,877
931,730
76,906
698,845
1,008,636
698,845
1,008,636
70
9.
(Continued)
DIRECTORS’ REMUNERATION
The Group
Directors’ fees
Directors’ allowances
2012
RM
2011
RM
The Company
2012
2011
RM
RM
700,000
312,500
855,517
386,000
700,000
296,000
840,740
386,000
1,012,500
1,241,517
996,000
1,226,740
10. FINANCE COSTS
The Group
2012
RM
Interest:
LBT Serial Bonds interest expense
Finance lease
Share of LBT RCCPS dividend to non-controlling interests
2011
RM
The Company
2012
2011
RM
RM
1,538,938
29,621
400,000
5,181,419
32,541
400,000
29,621
-
32,541
-
1,968,559
5,613,960
29,621
32,541
71
(Continued)
11. INCOME TAX EXPENSE
The Group
2012
RM
Income tax payable:
Malaysian
Foreign
(Over)/Underprovision in prior years
Deferred tax (Note 27):
Recognised in profit or loss
Income tax expense
2011
RM
The Company
2012
2011
RM
RM
11,778,695
8,085
(232,145)
12,463,921
34,117
(314,511)
432,936
37,390
360,756
16,411
-
11,554,635
12,183,527
470,326
377,167
(113,000)
(1,474,000)
-
-
11,441,635
10,709,527
470,326
377,167
A reconciliation of income tax expense applicable to profit before tax at the applicable statutory income tax rates to income tax expense at the effective
income tax rates of the Group and of the Company is as follows:
The Group
The Company
2012
2011
RM
RM
2012
RM
2011
RM
Profit before tax
59,157,334
60,191,411
25,998,579
45,688,584
Taxation at applicable rate of 25%
Effect of tax rates in foreign jurisdictions
Tax of equity accounted associates
Tax effects of:
Non-deductible expenses
Non-taxable income
Tax exempt income
(Over)/Underprovision in prior years
14,789,334
8,085
(4,433,010)
15,047,853
34,117
(4,415,589)
6,499,645
-
11,422,146
16,411
-
1,309,371
(232,145)
1,398,484
(856,061)
(184,766)
(314,511)
1,095,791
(7,162,500)
37,390
1,083,334
(934,958)
(11,209,766)
-
11,441,635
10,709,527
470,326
377,167
72
(Continued)
12. DISPOSAL OF SUBSIDIARY COMPANY
On February 10, 2011, the Company accepted an offer from Equatorex Sdn Bhd to acquire the entire 70.31% interest of the Company in INDX. Accordingly,
this disposal had resulted in the classification of INDX’s operations as discontinued operations in 2011.
The effects of the disposal of INDX on the financial position of the Group were as follows:
2012
RM
2011
RM
Goodwill on acquisition
Current assets
Current liabilities
Non-controlling interests
-
2,509,410
628,229
9,347,082
(2,084,337)
(2,723,538)
Net assets
Gain on disposal
Consideration received
Cash and cash equivalents disposed of
-
7,676,846
1,925,673
9,602,519
(7,430,322)
Net cash inflow
-
2,172,197
13. EARNINGS PER ORDINARY SHARE
The calculation of basic earnings per share is based on the consolidated profit attributable to equity holders of the Company and the weighted average
number of ordinary shares outstanding during the year as follows:
The Group
Earnings used in the calculation of basic earnings per share (RM)
Number of ordinary shares in issue (Units)
Basic earnings per ordinary share (Sen)
2012
2011
41,668,324
43,813,938
300,805,917
300,805,917
13.9
14.6
73
(Continued)
14. DIVIDENDS
The Group and The Company
2012
RM
2011
RM
9,249,781
-
Interim dividend of 4.1 sen per share less 25% income tax
Special interim dividend of 16 sen per share less 25% income tax
36,096,710
Since the end of the previous financial year, an interim dividend of 4.1 sen per share less 25% income tax, which amounted to RM9,249,781 in respect of the
financial year ended December 31, 2012 was paid on July 23, 2012.
No further dividends have been recommended by the directors for the financial year ended December 31, 2012.
15. PROPERTY, PLANT AND EQUIPMENT
Industrial
buildings,
Buildings
civil
and
works and
renovations infrastructure
RM
RM
Motor
vehicles
RM
Plant and
equipment,
furniture
and fittings
RM
Vessel
RM
Total
RM
The Group
Cost
Leasehold
land
RM
Balance at January 1, 2011
Additions
Written off
18,758,729
-
597,448
(46,766)
155,057,605
366,500
-
788,718
-
221,111,194
3,506,610
(3,005,455)
(37,489)
2,476,905
(2,476,905)
398,790,599
3,873,110
(3,005,455)
(2,561,160)
Balance at December 31, 2011
18,758,729
550,682
155,424,105
788,718
221,574,860
-
397,097,094
Additions
Written off
Liquidation of subsidiary company
18,758,729
-
550,682
(408,458)
(67,224)
155,424,105
65,000
-
788,718
366,944
-
221,574,860
17,375,558
(141,458)
(43,982)
-
397,097,094
17,807,502
(549,916)
(111,206)
18,758,729
75,000
155,489,105
1,155,662
238,764,978
-
414,243,474
74
(Continued)
15. PROPERTY, PLANT AND EQUIPMENT (Continued)
The Group
Accumulated Depreciation
Leasehold
land
RM
Industrial
buildings,
Buildings
civil
and
works and
renovations infrastructure
RM
RM
Motor
vehicles
RM
Plant and
equipment,
furniture
and fittings
RM
Vessel
RM
Total
RM
Depreciation for the year
Written off
Effect of movement in exchange rate
1,673,951
189,480
-
494,393
10,296
(3,897)
(111)
15,316,005
2,734,800
-
105,705
157,746
-
38,158,293
6,977,315
(596,559)
(22,052)
(70)
25,801
(25,801)
-
55,774,148
10,069,637
(596,559)
(51,750)
(181)
1,863,431
500,681
18,050,805
263,451
44,516,927
-
65,195,295
Written off
Liquidation of subsidiary company
1,863,431
189,480
-
500,681
1,500
(408,458)
(67,224)
18,050,805
3,159,014
-
263,451
206,669
-
44,516,927
8,567,079
(111,578)
(43,982)
-
65,195,295
12,123,742
(520,036)
(111,206)
2,052,911
26,499
21,209,819
470,120
52,928,446
-
76,687,795
Net Book Value
17,084,778
103,055
139,741,600
683,013
182,952,901
2,451,104
343,016,451
16,895,298
50,001
137,373,300
525,267
177,057,933
-
331,901,799
16,705,818
48,501
134,279,286
685,542
185,836,532
-
337,555,679
A private caveat over LBTSB’s leasehold land had been lodged by the Bank providing the Bank Guarantee to the LBT Serial Bondholders as disclosed in
Note 28.
As at December 31, 2012, the leasehold land had an unexpired lease period of 88 years (December 31, 2011: 89 years).
75
(Continued)
15. PROPERTY, PLANT AND EQUIPMENT (Continued)
The Company
Cost
Motor
vehicles
RM
Furniture
and fittings
RM
Office
equipment
RM
Total
RM
Buildings
RM
Renovation
RM
Additions
Written off
75,000
-
408,458
-
788,718
-
154,426
7,769
-
208,481
15,085
(2,909)
1,635,083
22,854
(2,909)
75,000
408,458
788,718
162,195
220,657
1,655,028
Additions
Written off
75,000
-
408,458
(408,458)
788,718
366,944
-
162,195
1,380
(56,779)
220,657
34,903
(85,269)
1,655,028
403,227
(550,506)
75,000
-
1,155,662
106,796
170,291
1,507,749
Accumulated Depreciation
Written off
23,499
1,500
-
408,458
-
105,705
157,746
-
72,583
15,958
-
128,056
29,525
(1,894)
738,301
204,729
(1,894)
24,999
408,458
263,451
88,541
155,687
941,136
Written off
24,999
1,500
-
408,458
(408,458)
263,451
206,669
-
88,541
15,838
(41,566)
155,687
28,807
(70,602)
941,136
252,814
(520,626)
26,499
-
470,120
62,813
113,892
673,324
Net Book Value
51,501
-
683,013
81,843
80,425
896,782
50,001
-
525,267
73,654
64,970
713,892
48,501
-
685,542
43,983
56,399
834,425
76
(Continued)
16. GOODWILL ON CONSOLIDATION
The Group
Cost
Accumulated impairment losses
December 31,
2012
RM
December 31,
2011
RM
January 1,
2011
RM
128,029,993
-
128,029,993
-
134,259,902
(5,601,680)
128,029,993
128,029,993
128,658,222
December 31,
2012
RM
December 31,
2011
RM
January 1,
2011
RM
90,208,779
37,821,214
-
90,208,779
37,821,214
-
90,208,779
37,821,214
628,229
128,029,993
128,029,993
128,658,222
The carrying amount of goodwill is attributable to cash-generating units as follows:
The Group
Lumut Maritime Terminal Sdn Bhd (“LMTSB”)
PT Indoexchange Tbk (“INDX”)
Key assumptions used in value in use calculations
The value in use of the cash generating units is based on management’s cash flow projections covering a period of 28 years. Discount rates of 4.5% per
annum and 7.5% per annum were applied over the period of the cash flow projections. Management believes that a period of 28 years used for the cash flow
projections is justified as income derived from the extended period can be supported by Jetty Terminal Usage Agreements which expire in the years 2031
and 2040.
77
(Continued)
17. INVESTMENT IN SUBSIDIARY COMPANIES
The Company
December 31,
2012
RM
December 31,
2011
RM
January 1,
2011
RM
At cost:
Unquoted shares
Quoted shares outside Malaysia
137,503,632
-
139,351,469
-
139,351,469
14,449,577
Less: Impairment loss
137,503,632
-
139,351,469
-
153,801,046
(7,000,000)
Advances to subsidiary companies
Less: Allowance for doubtful debts
137,503,632
134,570,448
-
139,351,469
135,204,071
-
146,801,046
159,549,321
(2,618,000)
272,074,080
274,555,540
303,732,367
-
-
7,288,984
Market value:
Quoted shares outside Malaysia
(based on last traded value on December 30, 2010)
Details of the Company’s subsidiary companies at December 31, 2012 are as follows:
Name of subsidiary company
Proportion of ownership interest
Country of December 31, December 31,
January 1,
2012
incorporation
2011
2011
%
%
%
Principal activity
Pelabuhan Lumut Sdn Bhd (“PLSB”)
Malaysia
100
100
100
Investment holding
Segmen Kembara Sdn Bhd (“SKSB”)
Malaysia
100
100
100
Dormant
Trek Kembara Sdn Bhd (“TKSB”)
Malaysia
100
100
100
Dormant
LBT Two Sdn Bhd (“LBT2”)
Malaysia
100
100
100
Dormant
Integrax Resources Pte Ltd (“IRPL”)
Singapore
-
100
100
Struck-off on November 6, 2012
PT Integra Jasa Energi (“PTIJE”)
Indonesia
-
95
95
Placed under liquidation on
November 17, 2012
PT Integrax Indonesia (“PTITB”)
Indonesia
-
100
100
Placed under liquidation on
October 17, 2012
PT. Indoexchange Tbk (“INDX”) #
Indonesia
-
-
70.31
Integrax Philippines, Inc (“ITP”)
Philippines
-
-
99
Investment holding
Placed under liquidation on April 3, 2012
78
(Continued)
17. INVESTMENT IN SUBSIDIARY COMPANIES (Continued)
Name of subsidiary company
Country of December 31, December 31,
January 1,
incorporation
2011
2011
2012
%
%
%
Principal activity
Subsidiary of PLSB
Malaysia
80
80
80
Development, ownership and management
of a dry bulk terminal
Radikal Rancak Sdn Bhd (“RRSB”)#
Malaysia
-
-
70
Provision of tuggage services
PT Nexia Sourcing Indonesia #
Indonesia
-
-
64
Textile portal services
PT Icorp Asia #
Indonesia
-
-
70
Mining portal services
PT Pelayaran Indx Lines #
Indonesia
-
-
99
Provision of marine services
Subsidiaries of INDX
# The Company had disposed of its entire investment in INDX on February 10, 2011.
The amount owing by/(to) subsidiary companies, which are non-trade in nature, are unsecured, interest free and repayable on demand.
For the purposes of these financial statements, parties are considered to be related to the Company if 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 Company and the
party are subject to common control or common significant influence. Related parties may be individuals or other entities.
Controlling related party relationships are in respect of:
(i)
The Company’s subsidiary companies as disclosed above.
(ii)
A director of the Company, Amin Bin Halim Rasip, who is deemed to be an interested party by virtue of his shareholdings in Golden Initiative Sdn Bhd
(“GISB”), Jurukapal Marine Services Sdn Bhd (“JMS”), Shafston Group Limited and Rakewood Enterprise Ltd.
Significant inter-company transactions of the Company are as follows:
The Company
2012
RM
2011
RM
27,050,000
42,500,000
1,600,000
1,600,000
236,868
227,760
Telephone charges received from RRSB (former subsidiary company)
-
2,786
Sundry expenses received from RRSB (former subsidiary company)
-
3,482
Office rental received from RRSB (former subsidiary company)
-
4,179
Electricity received from RRSB (former subsidiary company)
-
696
Web maintenance charge paid to INDX (former subsidiary company)
-
6,919
Interest income received from INDX (former subsidiary company)
-
46,847
Ordinary dividend received from PLSB
Preference dividend receivable from LBTSB
Administrative fee receivable from LBTSB
79
(Continued)
17. INVESTMENT IN SUBSIDIARY COMPANIES (Continued)
Set out below are the significant related party transactions in the normal course of business for the financial year (in addition to related party disclosures
mentioned elsewhere in the financial statements).
Significant related party transactions of the Company were as follows:
2012
RM
Office facilities fees receivable from Petrokapal Sdn Bhd (“PKS”), a company in which a director
(Amin bin Halim Rasip) previously has interest
2011
RM
-
41,400
Significant transactions of the subsidiary, LBTSB with a subsidiary of a substantial shareholder, Tenaga Nasional Berhad (TNB) were as follows:
The Group
2012
RM
Revenue receivable
90,706,908
2011
RM
87,930,499
The revenue receivable was in respect of provision of port services to TNB Janamanjung Sdn Bhd (TNBJ), a subsidiary of TNB.
The terms and conditions for the above transactions were based on contracted terms. All the above amounts outstanding as at December 31, 2012 were
unsecured and have been fully settled subsequent to the year end.
Significant transactions with an associate, LMTSB were as follows:
The Group
2012
RM
Dividend received
Operations and maintenance fees payable
Tuggage services received
14,999,999
32,131,702
-
2011
RM
9,999,999
29,326,113
704,500
The operations and maintenance fees payable were in respect of the operations of the port belonging to LBTSB which is managed by LMTSB.
The terms and conditions for the above transactions were based on contracted terms. All the above amounts outstanding as at December 31, 2012 were
unsecured and have been fully settled subsequent to the year end.
80
(Continued)
18. INVESTMENT IN ASSOCIATE
The Group
At cost:
Unquoted shares - LMTSB
Group’s share of post-acquisition reserves
Less: Dividends
December 31,
2012
RM
December 31,
2011
RM
January 1,
2011
RM
70,590,502
110,539,226
70,590,502
92,807,186
70,590,502
75,144,976
181,129,728
163,397,688
145,735,478
(72,249,837)
(57,249,838)
(47,249,838)
108,879,891
106,147,850
98,485,640
Details of the Group’s associates as at December 31, 2012 are as follows:
Name of associate
Country of December 31, December 31, January 1,
2012
incorporation
2011
2011
%
%
%
Principal activity
LMTSB (held through PLSB)
Malaysia
50% less one
(1) share
50% less one
(1) share
50% less one Development of an integrated privatised
(1) share
project encompassing ownership and
operations of multi-purpose port facilities,
operation and maintenance of a bulk
terminal, sales and rental of port related
land and other ancillary activities
LMTC (held through LMTSB)
Malaysia
50% less one
(1) share
50% less one
(1) share
50% less one Dormant
(1) share
81
(Continued)
18. INVESTMENT IN ASSOCIATE (Continued)
A summary of financial information of the Group’s associates as at the end of the reporting period is as follows:
December 31, 2012
Revenue
for the year
ended
(100%)
RM
Profit for the
year ended
(100%)
RM
Total
assets
(100%)
RM
Total
liabilities
(100%)
RM
LMTSB
LMTC
98,325,558
#
35,471,173
#
212,987,324
#
70,817,297*
#
98,325,558
35,471,173
212,987,324
70,817,297*
97,217,346
#
35,331,486
#
220,217,113
#
83,158,259*
#
97,217,346
35,331,486
220,217,113
83,158,259*
207,204,727
#
85,837,359*
#
207,204,727
85,837,359*
December 31, 2011
LMTSB
LMTC
January 1, 2011
LMTSB
LMTC
# LMTC is held as an associate through LMTSB. Its financial information is consolidated with LMTSB.
* Included in total liabilities is preference share premium of RM19,800,000
19. OTHER INVESTMENT
The Group
Non-current
LMT Redeemable Preference Shares (“RPS”)
December 31,
2012
RM
December 31,
2011
RM
10,029,999
10,029,999
December 31,
2012
RM
December 31,
2011
RM
16,000,000
16,000,000
January 1,
2011
RM
10,029,999
The Company
Non-current
LBT Redeemable Cumulative Convertible Preference Shares (“RCCPS”)
January 1,
2011
RM
16,000,000
82
(Continued)
20. TRADE RECEIVABLE, OTHER RECEIVABLES AND PREPAID EXPENSES
The Group
Trade receivable
December 31,
2012
RM
December 31,
2011
RM
9,281,768
8,565,738
January 1,
2011
RM
9,710,389
Trade receivable is measured at amortised cost, less impairment losses.
No interest is charged on trade receivable for the first 60 days from the date of invoices. Thereafter, interest is charged at 2% per annum above the prevailing
base lending rate as quoted by a local bank on the outstanding balance. They are recognised at their original invoiced amounts which represent their fair
values on initial recognition.
Receivables that are neither past due nor impaired
The Group’s trade receivable is owed by TNB Janamanjung Sdn Bhd (“TNBJ”) which has a good collection track record with the Group. The Group’s trade
receivable that is neither past due nor impaired has not been renegotiated during the financial year.
The Group does not hold any collateral or other credit enhancements over these balances nor do they have a legal right to offset against any amounts owed
by the Group to the counterparty.
An analysis of the trade receivable is as follows:
The Group
December 31,
2012
RM
December 31,
2011
RM
January 1,
2011
RM
Neither past due nor impaired
Past due but not impaired
9,281,768
-
8,565,738
-
9,710,389
-
Total trade receivable, net
9,281,768
8,565,738
9,710,389
December 31,
2011
RM
January 1,
2011
RM
327,366
406,226
298,317
521,753
549,519
349,743
583,343
113,229
4,380,000
9,731,130
1,380,543
484,453
137,585
9,403,471
2,103,181
15,157,445
11,406,052
Other receivables and prepaid expenses consist of the following:
The Group
December 31,
2012
RM
Prepaid expenses
Interest receivable
Refundable deposits
Deposits for property, plant and equipment
Other receivables
83
(Continued)
20. TRADE RECEIVABLE, OTHER RECEIVABLES AND PREPAID EXPENSES (Continued)
The Company
Prepaid expenses
Interest receivable
Refundable deposits
Deposits for property, plant and equipment
Other receivables
December 31,
2012
RM
December 31,
2011
RM
38,086
327,611
278,317
19,823
298,574
93,229
64,428
35,371
91,729
521,753
863
43,292
74,534
1,166,630
454,918
266,062
January 1,
2011
RM
Included in other receivables of the Group is an amount of RMNil (December 31, 2011: RM8,850,663; January 1, 2011: RM8,589,648) representing a payment
made to LMTSB for the sole purpose of procuring parts, tools and equipment expressly for the operation and maintenance of the LBTSB as stipulated under
Clause 6.7 of the Operations and Maintenance Agreement dated June 30, 2000 between the LBTSB and LMTSB.
21. CASH AND BANK BALANCES
The Group
December 31,
2012
RM
December 31,
2011
RM
735,076
123,405,000
9,852,633
137,138,250
6,733,821
154,148,748
124,140,076
146,990,883
160,882,569
December 31,
2012
RM
December 31,
2011
RM
538,770
70,500,000
336,251
69,050,000
726,997
31,062,419
71,038,770
69,386,251
31,789,416
January 1,
2011
RM
The Company
January 1,
2011
RM
Included in fixed deposits of the Group is an amount of RM5,000 (December 31, 2011: RM5,000; January 1, 2011: RM5,000) which has been pledged by
LBTSB with a bank for guarantee facilities for the purpose of a bond required by Kastam Diraja Malaysia in respect of its dry bulk terminal’s customs legal
landing point status.
Included in deposits with licensed banks and cash and bank balances are amounts of RMNil (December 31, 2011: RM20,020,000; January 1, 2011:
RM28,900,000) and RM714 (December 31, 2011: RM7,295,119; January 1, 2011: RM10,196) respectively held in a Bond Redemption Account maintained
by LBTSB for the settlement of its Serial Bonds.
84
(Continued)
22. ASSETS CLASSIFIED AS HELD FOR SALE
On October 19, 2010, the Company’s wholly owned subsidiary company, Integrax Philippines Inc. entered into a Conditional Share Purchase Agreement
for the disposal of its 20.01% shareholding in PGMC for a total gross consideration of USD13,962,210 (equivalent to RM43,150,211). The legal title and
ownership of these was transferred to the buyer in 2011.
23. SHARE CAPITAL
Authorised:
470,000,000 ordinary shares of RM1.00 each
300,000,000 Irredeemable Convertible Preference Shares
(“ICPS”) of RM0.10 each
Issued and fully paid:
300,805,917 ordinary shares of RM1.00 each
December 31,
2012
RM
December 31,
2011
RM
470,000,000
470,000,000
470,000,000
30,000,000
30,000,000
30,000,000
300,805,917
300,805,917
300,805,917
December 31,
2012
RM
December 31,
2011
RM
46,705,593
185,450
-
46,705,593
185,450
959,309
46,705,593
185,450
3,543,966
46,891,043
47,850,352
50,435,009
December 31,
2012
RM
December 31,
2011
RM
46,705,593
46,705,593
January 1,
2011
RM
24. RESERVES
The Group
Non-distributable:
Share premium
Capital redemption reserve
Translation reserve
January 1,
2011
RM
The Company
Non-distributable:
Share premium
January 1,
2011
RM
46,705,593
Capital redemption reserve
The capital redemption reserve was created as a consequence of the redemption of the LBT Redeemable Non-Cumulative Preference Shares (“RNCPS”) by
a transfer of the required nominal amount redeemed from retained earnings.
Translation reserve
Exchange differences relating to the translation of the net assets of the Group’s foreign operations from their functional currencies to the Group’s presentation
currency are recognised directly in other comprehensive income and accumulated in the translation reserve. Exchange differences previously accumulated
in the translation reserve are reclassified to profit or loss on the disposal or partial disposal of the foreign operation.
85
(Continued)
24. RESERVES (Continued)
The Group
2012
RM
Balance at January 1
Exchange differences arising on translating the net
assets of foreign operations
2011
RM
959,309
3,543,966
(1,069,692)
110,383
(2,584,657)
-
-
959,309
Balance at December 31
25. RETAINED EARNINGS
Distributable reserves are those available for distribution by way of cash dividends.
In accordance with the Finance Act 2007, the single tier income tax system became effective from year of assessment 2008. Under this new system, tax
on a company’s profit is a final tax, and dividends paid are exempted from tax in the hands of the shareholders. Unlike the previous imputation system, the
recipient of the dividend would no longer be able to claim any tax credit.
Companies with Section 108 tax credit balance will automatically move to the single tier tax system on January 1, 2008. However, companies with such tax
credits are given irrevocable options to elect for the single tier tax system and disregard the tax credit or to continue to use the tax credits under Section 108
account to frank the payment of cash dividends on ordinary shares for a period of 6 years ending December 31, 2013 or until the tax credits are fully utilised,
whichever comes first. During the transitional period, any tax paid will not be added to the Section 108 account and any tax credits utilised will reduce the tax
credit balance. All companies will automatically move to the new system on January 1, 2014.
As of December 31, 2012, the Company has not elected for the irrevocable option to disregard Section 108 tax credits. Accordingly, subject to the agreement
of the Inland Revenue Board and based on the prevailing tax rate applicable to dividend and estimated tax credits, the Company has sufficient Section 108
tax credits to frank dividends amounting to approximately RM65,412 out of its retained earnings as of December 31, 2012 without additional tax liability being
incurred. The Company may distribute the balance of retained earnings of approximately of RM28,171,350 as dividend under the single tier system.
26. NON-CONTROLLING INTERESTS
The Group
2012
RM
2011
RM
At January 1
Share of profit for the year
Share of other comprehensive income for the year
Dividend paid
56,765,549
6,047,375
835
(38,551)
(3,000,000)
61,945,395
5,667,946
746
(2,723,538)
(8,125,000)
At December 31
59,775,208
56,765,549
86
(Continued)
27. DEFERRED TAX LIABILITIES
The Group
2012
RM
2011
RM
At January 1
Recognised in profit or loss (Note 11)
52,210,000
(113,000)
53,684,000
(1,474,000)
At December 31
52,097,000
52,210,000
Deferred tax liabilities are attributable to the following:
Temporary differences arising on property, plant and equipment
December 31,
2012
RM
December 31,
2011
RM
52,097,000
52,210,000
January 1,
2011
RM
53,684,000
28. SERIAL BONDS
On July 7, 2000, LBTSB issued zero coupon Serial Bonds with a nominal value of RM445,000,000 to finance the construction of its jetty terminal. The Serial
Bond’s average effective interest rate determined by reference to the yield to maturity was 8% (December 31, 2011: 8%; January 1, 2011: 8%) per annum.
These Serial Bonds were fully repaid during the financial year.
December 31,
2012
RM
Serial bonds
Less: Unamortised discount on issuance
December 31,
2011
RM
January 1,
2011
RM
-
60,000,000
(1,538,937)
102,000,000
(6,720,357)
-
58,461,063
95,279,643
The serial bonds are payable as follows:
December 31,
2012
RM
Less than one year
Within two to five years
December 31,
2011
RM
January 1,
2011
RM
-
58,461,063
-
42,000,000
53,279,643
-
58,461,063
95,279,643
87
(Continued)
28. SERIAL BONDS (Continued)
In September 2011, RAM Rating Services Berhad (“RAM”) reaffirmed their enhanced rating of AAA(bg) for these Serial Bonds with a stable outlook. These
Serial Bonds were secured by a guarantee issued by a Bank rated AAA (bg) by RAM. The Serial Bondholders and the guarantee provider shared a charge
over the Jetty Terminal Usage Agreement (“JTUA”) signed by LBTSB and TNB Janamanjung Sdn Bhd, and a designated bank account of LBTSB, with the
Serial Bondholders ranked after the guarantee provider. LBTSB was obligated to ensure on a progressive basis over a period of six months, that an amount
was accumulated in the designated bank account which was equivalent to the serial bond due at the end of each six-month period.
The Bank Guarantee facility was secured by the following:
(i)
A private caveat over land owned by LBTSB;
(ii)
Assignment of the Jetty Terminal Usage Agreement; and
(iii)
Assignment of the Bond Redemption Account
The main covenants of the Bank Guarantee facility were as follows:
(i)
LBTSB had to maintain a Debt to Equity ratio of not more than 2:1 at all times;
(ii)
LBTSB to open and maintain a Bond Redemption Account which was to be operated solely by the Bank Guarantor or such party appointed by the Bank
Guarantor. This Bond Redemption Account was for the purpose of capturing all periodic payments due to LBTSB under the JTUA; and
(iii)
LBTSB had to ensure that at all times the balance standing to the credit of the Bond Redemption Account was of an amount equivalent to the Minimum
Balance required under the Facility Agreement plus any outstanding Bank Guarantee fee which was due and payable to the Bank Guarantor.
The Bank Guarantee facility was fully discharged subsequent to the year ended December 31, 2012.
29. PREFERENCE SHARE CAPITAL
The Group
Authorised:
Redeemable Non-cumulative Convertible Preference Shares of
RM0.01 each (LBT RNCPS)
Redeemable Cumulative Convertible Preference Shares of
RM0.01 each (LBT RCCPS)
Issued and fully paid:
LBT RCCPS
December 31,
2012
RM
December 31,
2011
RM
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
2,000,000
2,000,000
2,000,000
40,000
40,000
40,000
January 1,
2011
RM
The LBT RCCPS have the following rights:
(i)
As to income
LBTSB shall pay to the holders of the RCCPS out of profits of the LBTSB resolved under the Articles of Association of the company to be distributed
in respect of each financial year in priority to all dividends declared on Ordinary Shares in issue, a fixed cumulative preferential dividend at the rate of
ten percent (10%) per annum on the RCCPS then in issue.
88
(Continued)
29. PREFERENCE SHARE CAPITAL (Continued)
(ii)
As to redemption
(a)
LBTSB shall have the right, at any time after the allotment of any RCCPS (provided it is fully paid) to redeem such shares and in the case of a
partial redemption proportionately in respect of each holding of RCCPS but in any event, LBTSB shall be obliged to redeem all of the RCCPS
which are then in issue not later than fourteen (14) days prior to a proposed listing of, merger or amalgamation of or reconstruction exercise
undertaken by LBTSB unless otherwise agreed by the holders of the Preference Shares then in issue in the case of a merger, amalgamation or
other reconstruction exercise; and redeem all of the RCCPS which are then in issue on the date expiring fifteen (15) years from May 21, 2002
(“Redemption Date”).
Any such redemption shall include the nominal amount and a premium of Sen Ninety-Nine (RM0.99) per share payable to the holder.
(iii)
As to conversion
(a)
If LBTSB fails to redeem the RCCPS in accordance with its Articles of Association; or
(b)
Fails to redeem all of the RCCPS on the Redemption Date;
Whichever is the earlier, then on the date of such failure, the holders of the RCCPS may convert any of the RCCPS into Ordinary Shares on the
basis of one (1) RCCPS for one (1) Ordinary Share provided that if the Ordinary Shares are consolidated or sub-divided at any time prior to the
Conversion Date, the number of Ordinary Shares into which the RCCPS are converted shall be adjusted accordingly.
30. PREFERENCE SHARE PREMIUM
The preference share premium account arose from the following:
The Group
4,000,000 LBT RCCPS at a premium of RM0.99 each
December 31,
2012
RM
December 31,
2011
RM
3,960,000
3,960,000
January 1,
2011
RM
3,960,000
31. TRADE PAYABLE
The Group’s trade payable is owing to LMTSB. The credit period granted is 60 days. No interest is charged by the trade creditor for the first 60 days from the
date of invoices. Thereafter, interest is charged at 2% per annum above the prevailing base lending rate as quoted by a local bank on the outstanding balance.
The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.
32. OTHER PAYABLES AND ACCRUED EXPENSES
Other payables and accrued expenses comprise the following:
The Group
December 31,
2012
RM
Other payables
Accrued expenses
Dividend payable
December 31,
2011
RM
January 1,
2011
RM
2,078,469
1,152,469
400,000
4,755,898
400,000
21,111,967
2,818,475
400,000
3,630,938
5,155,898
24,330,442
89
(Continued)
32. OTHER PAYABLES AND ACCRUED EXPENSES (Continued)
The Company
December 31,
2012
RM
December 31,
2011
RM
1,114,703
1,220,917
December 31,
2012
RM
December 31,
2011
RM
Total outstanding
Less:Interest-in-suspense
588,177
(44,715)
548,502
(50,536)
706,518
(83,077)
Principal outstanding
543,462
497,966
623,441
(179,039)
(133,584)
(125,475)
364,423
364,382
497,966
December 31,
2012
RM
December 31,
2011
RM
179,039
133,584
125,475
364,423
364,382
497,966
543,462
497,966
623,441
Accrued expenses
January 1,
2011
RM
2,239,784
33. HIRE-PURCHASE PAYABLES
January 1,
2011
RM
Less:
Portion due within the next 12 months (shown under current liabilities)
Non-current portion
The hire-purchase creditors are repayable as follows:
Not later than 1 year
Later than 1 year and not more than 5 years
January 1,
2011
RM
The interest rates are fixed at the inception of the hire-purchase arrangement. It is the Group’s policy to acquire certain of its property, plant and equipment
under hire-purchase agreement. The average basis term is 5 years. For the year ended December 31, 2012, the average effective borrowing rate was 2.8%
p.a. (December 31, 2011: 3% p.a.)
90
(Continued)
34. FINANCIAL INSTRUMENTS
Capital Risk Management
The objective of the Group’s capital management is to safeguard the Group’s ability to continue as a going concern while maximising the return to shareholders
through the optimisation of debt and equity balance. The Group’s overall strategy remains unchanged from prior year.
The capital structure of the Group consists of serial bonds (as disclosed in Note 28) and equity of the Group (comprising share capital, reserves, retained
earnings and non-controlling interest as detailed in Notes 23 to 26). The Group is not subject to any externally imposed capital requirements.
Gearing Ratio
The gearing ratio at end of the reporting period is as follows:
The Group
December 31,
2012
RM
Debt
Equity
December 31,
2011
RM
January 1,
2011
RM
-
58,461,063
95,279,643
650,948,054
616,479,161
616,526,436
-
9.48
15.45
Debt to equity ratio (%)
The Company
December 31,
2012
RM
Debt
Equity
Debt to equity ratio (%)
December 31,
2011
RM
January 1,
2011
RM
-
-
-
375,748,272
359,469,800
350,255,093
-
-
-
(i)
Debt comprised of the LBTSB Serial Bonds as disclosed in Note 28.
(i)
Equity includes all capital and reserves of the Group and of the Company that are managed as capital.
Significant Accounting Policies
Details of the significant accounting policies and methods adopted (including the criteria for recognition, the bases of measurement, and the bases for
recognition of income and expenses), for each class of financial asset, financial liability and equity instrument are disclosed in Note 4.
91
(Continued)
34. FINANCIAL INSTRUMENTS (Continued)
Categories of financial instruments
The table below provides an analysis of financial instruments categorised as follows:
(i)
(ii)
(iii)
(iv)
Available-for-sale financial assets
Loans and receivables
Held to maturity
Other financial liabilities measured at amortised cost
The Group
December 31,
2012
RM
Financial assets
Other investment
Loan and receivables:
Trade receivable
Other receivables
Financial liabilities
At amortised cost:
Preference share capital premium
Trade payable
Serial bonds
December 31,
2011
RM
January 1,
2011
RM
10,029,999
10,029,999
10,029,999
9,281,768
1,775,815
-
8,565,738
14,807,702
-
9,710,389
10,025,509
150,590
124,140,076
146,990,883
160,882,569
40,000
3,960,000
9,533,462
3,630,938
543,462
40,000
3,960,000
8,681,612
5,155,898
58,461,063
497,966
40,000
3,960,000
8,346,064
24,330,442
95,279,643
623,441
92
(Continued)
The Company
December 31,
2012
RM
Financial assets
Other investment
Other receivables
At amortised cost:
Amount owing to subsidiary
companies
December 31,
2011
RM
January 1,
2011
RM
16,000,000
16,000,000
16,000,000
1,128,544
152,223,282
-
435,095
136,804,071
-
201,634
160,063,228
150,590
71,038,770
69,386,251
31,789,416
1,114,703
543,462
1,220,917
497,966
2,239,784
623,441
1,427,367
1,436,649
3,014,673
Financial Risk Management Objectives
The Group’s corporate treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and
manages the financial risks relating to the operations of the Group. These risks include market risk, credit risk and liquidity risk.
The Group seeks to minimise the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives
is governed by the Group’s policies approved by the board of directors, which provide written principles on foreign exchange risk, interest rate risk, credit
risk, the use of financial derivatives and the investment of excess liquidity. The Group does not enter into or trade financial instruments, including derivative
financial instruments, for speculative purposes.
93
(Continued)
Credit risk
The Group’s primary exposure to credit risk arises through its trade receivables. Appropriate informal credit evaluations were performed on customers prior
to entering into contractual agreements with them or with customers requiring credit over a certain amount. The exposure to credit risk is monitored by
management on an on-going basis.
At the end of the reporting period, 100% (December 31, 2011: 100%; January 1, 2011:86%) of the trade receivable is owed by TNBJ which is the current
sole customer of LBTSB. The maximum exposure to credit risk is represented by the carrying amount of each financial asset presented on the statement of
financial position.
Market Risk
The Group’s and the Company’s activities expose them primarily to the financial risks of changes in foreign exchange rates and interest rates.
Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.
The carrying amounts of the Group and the Company’s monetary assets and liabilities are denominated in Ringgit Malaysia, which is also the functional and
presentation currency of the Group and the Company. As such, the Group and the Company are not exposed to any significant foreign currency risk.
No sensitivity analysis is prepared as the Group and the Company did not have significant foreign currency denominated monetary assets nor monetary
liabilities at the end of this reporting period.
Interest rate risk
The Group and the Company place cash balances with reputable licensed banks to generate interest income for the Group and the Company. The Group and
the Company manage their interest rate risk by placing such balances in deposits with maturities ranging from 1 week to 6 months at interest rates ranging
from 2.30% to 3.15% per annum.
94
(Continued)
Effective interest rate analysis
In respect of interest-earning financial assets and interest-bearing financial liabilities, the following table indicates their average effective interest rates at the
end of the reporting period and the periods in which they mature:
The Group
December 31, 2012
Fixed rate instruments
Fixed deposits and REPO with licensed banks
December 31, 2011
January 1, 2011
Fixed deposit and REPO with licensed banks
Effective
interest rate
%
2.90
10.00
10.00
3.07
10.00
10.00
2.48
10.00
10.00
Total
RM
Less than
1 year
RM
More than
5 years
RM
123,405,000
(40,000)
(3,960,000)
123,405,000
-
(40,000)
(3,960,000)
119,405,000
123,405,000
(
)
(4,000,000)
137,138,250
(40,000)
(3,960,000)
137,138,250
-
(40,000)
(3,960,000)
133,138,250
137,138,250
(4,000,000)
154,148,748
(40,000)
(3,960,000)
154,148,748
-
(40,000)
(3,960,000)
150,148,748
154,148,748
(4,000,000)
The Company
December 31, 2012
3.09
70,500,000
70,500,000
-
December 31, 2011
3.19
69,050,000
69,050,000
-
January 1, 2011
2.31
31,062,419
31,062,419
-
Fair values of financial instruments
The carrying amounts of cash and bank balances, trade and other current receivables and payables, and other liabilities and amounts payable approximate
their respective fair values due to the relatively short-term maturity of these financial instruments.
95
(Continued)
The fair values of other classes of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position, are as
follows:
December 31, 2012
Carrying
Fair
Amount
value
RM
RM
December 31, 2011
Carrying
Fair
amount
value
RM
RM
January 1, 2011
Carrying
Fair
amount
value
RM
RM
10,029,999
See (i) below
10,029,999
See (i) below
10,029,999
See (i) below
Trade receivable
Other receivables
9,281,768
1,775,815
-
9,281,768
1,775,815
-
8,565,738
14,807,702
-
8,565,738
14,807,702
-
9,710,389
10,025,509
150,590
9,710,389
10,025,509
150,590
124,140,076
124,140,076
146,990,883
146,990,883
160,882,569
160,882,569
9,533,462
3,630,938
543,462
40,000
3,960,000
9,533,462
3,630,938
513,005
See (ii) below
( ) below
See (ii)
8,681,612
5,155,898
58,461,063
497,966
40,000
3,960,000
8,681,612
5,155,898
58,461,063
464,937
See (ii) below
See (ii) below
8,346,064
24,330,442
95,279,643
623,441
40,000
3,960,000
8,346,064
24,330,442
95,279,643
604,808
See (ii) below
See (ii) below
16,000,000
See (iii) below
16,000,000
See (iii) below
16,000,000
See (iii) below
1,128,544
152,223,282
-
1,128,544
152,223,282
-
435,095
136,804,071
-
435,095
136,804,071
-
201,634
160,063,228
150,590
201,634
160,063,228
150,590
71,038,770
71,038,770
69,386,251
69,386,251
31,789,416
31,789,416
1,114,703
1,427,367
543,462
1,114,703
1,427,367
513,005
1,220,917
1,436,649
497,966
1,220,917
1,436,649
464,937
2,239,784
3,014,673
623,441
2,239,784
3,014,673
604,808
The Group
Financial assets
Available-for-sale financial assets:
Other investment
At amortised cost:
Trade payable
Serial bonds
Hire purchase payables
The Company
Financial assets
Other investment
Other receivables
At amortised cost:
Amount owing to subsidiary companies
Hire purchase payables
96
(Continued)
The fair values of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference
to quoted market prices.
Significant assumptions used in determining the fair value of other financial assets and liabilities are as follows:
(i)
LMT RPS
It is not practicable to estimate the fair value of this investment representing 50% less one (1) share of the issued and paid-up LMT RPS capital
of this unquoted company. This investment is carried at its original cost of RM10,029,999 (December 31, 2011: RM10,029,999; January 1, 2011:
RM10,029,999) in the statement of financial position.
The LMTSB RPS are non-cumulative and may be redeemed out of the retained earnings of LMTSB at LMTSB’s shareholders’ option.
(ii)
Preference share capital and share premium held by minority shareholders
It is not practicable to estimate the fair value of this financial liability representing 20% of the issued and paid-up LBTSB RCCPS capital. This financial
liability is carried at its original cost in the statement of financial position.
The principal terms of the LBT RCCPS are disclosed in Notes 29 and 30.
(iii)
LBT RCCPS
It is not practicable to estimate the fair value of this investment representing 80% of the issued and paid-up LBT RCCPS capital. This investment is
carried at its original cost of RM16,000,000 (December 31, 2011: RM16,000,000; January 1, 2011: RM16,000,000) in the statement of financial position.
As at December 31, 2012, the net tangible assets reported by LBTSB were RM299,235,779 (December 31, 2011: RM283,457,771; January 1, 2011:
RM295,926,950).
The principal terms of the LBT RCCPS are disclosed in Notes 29 and 30 to these financial statements.
As at the end of the reporting period, there were no unrecognised financial instruments.
35. COMMITMENTS
(i)
Capital Commitment
As at the end of the reporting period, the Group and the Company have the following capital commitment in respect of the acquisition of property, plant
and equipment:
2012
RM
Approved and contracted for
Approved and not contracted for
(ii)
2011
RM
800,000
200,000
14,600,000
-
1,000,000
14,600,000
Operating lease arrangement
During the financial year, the Company entered into a non-cancellable operating lease agreement for the use of certain office premises. This lease term
is for 10 years which expires in November 2022.
97
(Continued)
35. COMMITMENTS (Continued)
(ii)
Operating lease arrangement (Continued)
The future minimum lease payments under a non-cancellable operating lease contracted for as at the balance sheet date but not recognised as liabilities are
as follows:
2012
RM
Not later than 1 year
Later than 1 year and not more than 5 years
Later than 5 years
2011
RM
313,833
2,876,803
2,458,358
-
5,648,994
-
36. SIGNIFICANT EVENT
On July 27, 2012, LBTSB entered into a new Jetty Terminal Usage Agreement (“JTUA-M4”) with TNB Janamanjung Sdn. Bhd. (“TNBJ”) for the provision of
handling services for the import of coal for TNBJ’s new 1,010 Megawatt coal fired power plant (“M4 Power Plant”) located at Pulau Lekir 1, Telok Rubiah,
District of Manjung in Perak for an initial period which will expire on March 30, 2040.
37. SUBSEQUENT EVENTS
(i)
On March 13, 2013, LBTSB entered into a construction contract for the design, supply, erection, installation and hook up, and the commissioning of a
new Additional Grab Ship Unloader (“SUL 3”). The contract price is RM37.75 million and a performance security bond of 10% of the contract price has
been provided by the contractor to LBTSB. A design bond of 1.5% of the contract price will also be provided by the contractor to LBTSB. The SUL 3 is
expected to be delivered by January 2014.
(ii)
On March 28, 2013, LBTSB entered into a Facilities Agreement with Hong Leong Bank Berhad and Hong Leong Investment Bank Berhad for facilities
totalling RM90 million to finance the capital expenditure of LBTSB for the purposes of expanding the infrastructure and facilities of LBTSB’s deep water
bulk terminal.
38. PUT OPTION
A right has been granted to the single minority shareholder of LBTSB to sell (put) to the Company its 20% stake of 13,600,000 ordinary shares of RM1.00
each in LBTSB at fair value upon the redemption of all classes of preference shares issued by LBTSB after 15 years from May 21, 2002 provided it remains
the sole beneficial owner of the 20% stake. The Directors are of the opinion that the value of this put option cannot be reliably measured.
98
(Continued)
39. SUPPLEMENTARY INFORMATION ON THE BREAKDOWN OF REALISED AND UNREALISED PROFITS OR LOSSES
On March 25, 2010, Bursa Malaysia Securities Berhad (“Bursa Malaysia”) issued a directive to all listed issuers pursuant to Paragraphs 2.06 and 2.23
of Bursa Malaysia Main Market Listing Requirements. This directive requires all listed issuers to disclose the breakdown of the unappropriated profits or
accumulated losses as at the end of the reporting period, into realised and unrealised profits or losses.
On December 20, 2010, Bursa Malaysia further issued another directive on the disclosure and the prescribed format of presentation.
The breakdown of the retained earnings of the Group and of the Company as at December 31, 2012, into realised and unrealised profits, pursuant to the
directive, is as follows:
2012
2011
The
The
The
The
Group
Company
Group
Company
RM
RM
RM
RM
Total retained earnings of the Company
and its subsidiary companies:
Realised
300,939,541
28,236,762
267,740,619
11,958,290
Unrealised
(41,677,600)
(41,768,000)
259,261,941
28,236,762
225,972,619
11,958,290
113,066,306
(2,527,080)
-
95,551,637
(2,744,451)
-
110,539,226
-
92,807,186
-
Less: Consolidation Adjustments
(126,325,281)
-
(107,722,462)
-
Total retained earnings as per statement of
financial position
243,475,886
28,236,762
211,057,343
11,958,290
Total share of retained earnings from associates:
Realised
Unrealised
The determination of realised and unrealised profits or losses is based on Guidance of Special Matter No. 1 “Determination of Realised and Unrealised Profits
or Losses in the Context of Disclosure Pursuant to Bursa Securities Listing Requirements” as issued by the Malaysian Institute of Accountants on December
20, 2010. A charge or credit to the profit or loss of a legal entity is deemed realised when it resulted from the consumption of resource of all types and form,
regardless of whether is the recovery consumed in the ordinary course of business or otherwise. Resources may be consumed through sale or use. Where
a credit or a charge to the profit or loss upon initial recognition or subsequent measurement of an asset or a liability is not attributed to the consumption of
resources, such credit or charge should not be deemed as realised until the consumption of resources could be demonstrated.
This supplementary information have been made solely for complying with the disclosure requirements as stipulated in the directive of Bursa Malaysia
Securities Berhad and is not made for any other purposes.
99
PROPERTIES OWNED BY THE GROUP AS AT 31 DECEMBER 2012
No.
Lot No./Location
Description
1.
H.S. (D) 17396
P.T. 24776
Mukim of Sitiawan
District of Manjung
Perak Darul Ridzuan
Bulk terminal, berths, trestle
and mechanical handling
equipment and structures,
office and maintenance
buildings, land and
waterbody
2.
H.S. (D) 75362
P.T. 2193
Mukim of Setul
District of Seremban
Negeri Sembilan
3 units of low cost flats
Date of
Acquisition
Land area /
(built- up area)
sq metres
Tenure / (Age of
building)
Net book value
RM
25 February 2002
1,088,866.73
(4,662)
99 years
Leasehold expiring
24/2/2101
(10 years)
150,985,104
19 May 1995
190
(190)
Freehold
(17 years)
48,501
Notes:
(1) No revaluation was done on the abovementioned properties.
(2) Property No. 1 is being utilised for bulk terminal activities.
(3) Property No. 2 is currently not being utilised for any purpose.
(4) The list excludes industrial properties on which are located the port facilities of Lumut Maritime Terminal owned by Lumut Maritime Terminal Sdn Bhd, an
associate company as set out below:Approximate
Land Area
(acres)
No.
Description of Title/Mukim
Description
Tenure / (Age of Building)
1.
H.S. (D) Dgs 7105, PT 6973
Mukim Lumut
Perak Darul Ridzuan
Wharfs, Open Storage Areas,
Warehouses and Office Building
72.54
Leasehold – 99 years
Expiring on 21 December 2094
(18 years)
2.
H.S. (D) Dgs 6247, PT 2273
Mukim Lumut
Perak Darul Ridzuan
Waterbody
27.46
Leasehold – 99 years
Expiring on 18 December 2093
100
ANALYSIS OF SHAREHOLDINGS AS AT 10 MAY 2013
Authorized share capital
Issued and paid-up share capital
Class of share
Voting rights
:
:
:
:
RM470,000,000
RM300,805,917
Ordinary shares of RM1.00 each
One vote per ordinary share on a poll
One vote per shareholder on a show of hands
BREAKDOWN OF SHAREHOLDINGS
1. Analysis by Size of Shareholdings
Size of Holdings
No. of Holders
%
No. of Holdings
%
75
2.45
2,752
0.00
851
27.77
802,495
0.27
1,527
49.82
7,049,553
2.34
10,001 - 100,000
492
16.05
16,016,037
5.32
100,001 - less than 5% of issued shares
116
3.78
128,304,999
42.65
4
0.13
148,630,081
49.41
3,065
100
300,805,917
100
Holdings
%
1. Tenaga Nasional Berhad
66,538,269
22.12
2. Golden Initiative Sdn Bhd
37,146,595
12.35
3. CIMB Group Nominees (Tempatan) Sdn Bhd
CIMB Bank Bhd for Taipan Merit Sdn Bhd
24,945,217
8.29
4. CIMB Group Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Taipan Merit Sdn Bhd
20,000,000
6.65
5. TSM Global Berhad
12,000,000
3.99
6. Amanahraya Trustees Berhad
Public Smallcap Fund
11,247,100
3.74
7. Cartaban Nominees (Tempatan) Sdn Bhd
Corston-Smith Asset Management Sdn Bhd for Corston-Smith ASEAN Corporate Governance Fund
11,222,100
3.73
8. Jurukapal Marine Services Sdn Bhd
10,640,000
3.54
9. HSBC Nominees (Asing) Sdn Bhd
Exempt An For Credit Suisse
6,100,000
2.03
Shafston Group Limited
5,980,065
1.99
Rakewood Enterprises Ltd
5,907,302
1.96
1 - 99
100 - 1,000
1,001 - 10,000
5% and above of issued shares
Total
2. List of Top 30 Shareholders as at 30 April 2013
No. Name
101
ANALYSIS OF SHAREHOLDINGS AS AT 10 MAY 2013 (Continued)
BREAKDOWN OF SHAREHOLDINGS (Continued)
2. List of Top 30 Shareholders as at 30 April 2013 (Continued)
No. Name
Holdings
%
12. DB (Malaysia) Nominee (Tempatan) Sendirian Berhad
iCapital Biz Berhad
4,884,500
1.62
13. Cartaban Nominees (Asing) Sdn Bhd
Exempt An For RBC Investor Services Trust (Clients Account)
4,826,600
1.60
14. Nor’aini binti Hashim
4,347,826
1.45
15. Golden Initiative Sdn Bhd
3,722,347
1.24
16. Taipan Merit Sdn Bhd
2,396,426
0.80
17. Kenanga Nominees (Asing) Sdn Bhd
Cantal Capital Inc.
2,100,000
0.70
18. Ng Chee Hua
1,524,000
0.51
Exempt An For HSBC Private Bank (Suisse) S.A.
1,500,000
0.50
20. Marathon Capital Sdn Bhd
1,500,000
0.50
21. HDM Nominees (Tempatan) Sdn Bhd
Pledged Securities Account For Ng Wymin
1,348,400
0.45
22. Lim Gaik Bway @ Lim Chiew Ah
1,346,000
0.45
23. Amanahraya Trustees Berhad
Public Strategic Smallcap Fund
1,333,700
0.44
Exempt An For Coutts & Co. Ltd (HK Branch)
1,200,000
0.40
25. Tan Suan Huat
1,020,000
0.34
26. Maybank Nominees (Tempatan) Sdn Bhd
Yeoh Ah Tu
1,011,700
0.34
27. HDM Nominees (Tempatan) Sdn Bhd
Pledged Securities Account For Mohamad Razman bin Rahim
1,000,000
0.33
28. Kenanga Nominees (Asing) Sdn Bhd
Emmel Inc.
1,000,000
0.33
29. HSBC Nominees (Tempatan) Sdn Bhd
HSBC (M) Trustee Bhd For OSK-UOB Smart Treasure Fund
956,000
0.32
30. Citigroup Nominees (Asing) Sdn Bhd
CBNY For Dimensional Emerging Markets Value Fund
936,300
0.31
102
ANALYSIS OF SHAREHOLDINGS AS AT 10 MAY 2013 (Continued)
BREAKDOWN OF SHAREHOLDINGS (Continued)
3. List of Substantial Shareholders
Direct
Name of Substantial Shareholder
Indirect
No. of Shares
%
No. of Shares
%
66,538,269
22.12
-
-
Khazanah Nasional Berhad
-
-
66,538,269 1
22.12
Amin bin Halim Rasip
-
-
63,396,309 2
21.08
40,868,942
13.59
-
-
Nor’aini binti Hashim
4,347,826
1.45
51,508,942 3
17.12
Taipan Merit Sdn Bhd
47,341,643
15.74
-
-
Perak Corporation Berhad
-
-
47,341,643 4
15.74
Perbadanan Kemajuan Negeri Perak
-
-
47,341,643 5
15.74
Tenaga Nasional Berhad
Golden Initiative Sdn Bhd
Notes:1. Deemed interested by virtue of its shareholding in Tenaga Nasional Berhad.
2. Deemed interested by virtue of his shareholding in Golden Initiative Sdn Bhd, Jurukapal Marine Services Sdn Bhd, Shafston Group Limited and Rakewood
Enterprises Ltd.
3. Deemed interested by virtue of her shareholding in Golden Initiative Sdn Bhd and Jurukapal Marine Services Sdn Bhd.
4. Deemed interested by virtue of its shareholding in Taipan Merit Sdn Bhd.
5. Deemed interested by virtue of its indirect shareholding in Taipan Merit Sdn Bhd via Perak Corporation Berhad.
4. Directors’ Shareholdings
Direct
Name of Substantial Shareholder
Indirect
No. of Shares
%
No. of Shares
%
Dato’ Seri DiRaja Mohamad Tajol Rosli bin Mohd. Ghazali
-
-
-
-
-
-
67,744,135 1
22.52
1,000
0.0
-
-
-
-
16,043,700 2
5.33
-
-
-
-
Mr. Loong Foo Ching
-
-
-
-
-
-
-
-
Laksamana Tan Sri Dato’ Seri Ilyas bin Hj. Din
-
-
-
-
Dato’ Abdul Manaf bin Hashim
-
-
-
-
En. Fazlur Rahman bin Zainuddin
-
-
-
-
En. Azman Shah bin Mohd. Yusof
Notes:
1. Deemed interested by virtue of his shareholding in Golden Initiative Sdn Bhd, Jurukapal Marine Services Sdn Bhd, Shafston Group Limited, Rakewood
Enterprises Ltd and shares held by spouse.
2. Deemed interested by virtue of her being the Managing Director of Corston-Smith Asset Management Sdn Bhd, the fund manager for the ordinary shares
of the Company held on behalf of British Columbia Investment Management Corporation (bcIMC) and Corston-Smith ASEAN Corporate Governance Fund.
103
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Twenty-Seventh Annual General Meeting of the Company will be held at the Junior Ballroom, InterContinental Kuala Lumpur
Hotel, 165 Jalan Ampang, 50450 Kuala Lumpur, Malaysia on Wednesday, 19 June 2013 at 10.00 a.m. for the following purposes:1) To receive and consider the Audited Financial Statements for the financial year ended 31 December 2012 together with the Reports
of the Directors and Auditors thereon. (Please refer to Note (1))
2) To re-elect the following Directors retiring in accordance with Article 80 of the Company’s Articles of Association:2.1 Datuk Shireen Ann Zaharah bt Muhiudeen
Ordinary Resolution 1
2.2 En. Azman Shah bin Mohd Yusof
2.3 Ir. Abdul Manap bin Ali Hasan
3) To re-elect the following Director retiring in accordance with Article 87 of the Company’s Articles of Association:3.1 En. Fazlur Rahman bin Zainuddin
4) To approve the Directors’ fees of RM912,500 (2011:RM840,740) for the financial year ended 31 December 2012.
5) To re-appoint Messrs Deloitte & Touche as Auditors of the Company and to authorise the Directors to fix their remuneration.
6) As special business, to consider and if thought fit, to pass, with or without any modifications, the following resolutions:6.1 PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR SHARE BUY-BACK BY THE COMPANY
“THAT subject to the Company’s compliance with all applicable rules, regulations, orders and guidelines made pursuant to the
Companies Act, 1965, the provisions of the Company’s Memorandum and Articles of Association and the requirements of the
Main Market Listing requirement of Bursa Malaysia Securities Berhad (“BMSB”) and other applicable laws, rules, regulations
and approvals of all relevant regulatory authorities, authority be given to the Directors for the Company to buy back such amount
of ordinary share of RM1.00 each in the Company (“Authority to Buy-Back Shares”) as may be determined by the Directors of
the Company from time to time through the BMSB upon such terms and conditions as the Directors may deem fit and expedient
in the interest of the Company provided that:
(a) the maximum number of shares which may be purchased and/or held by the Company at any point of time pursuant to this
resolution shall not exceed ten percent (10%) of the total issued and paid-up share capital of the Company for the time being
quoted on BMSB;
(b) the maximum amount of funds to be allocated for the Authority to Buy-Back Shares shall not exceed the sum of retained
profits and the share premium account of the Company based on its latest audited financial statements available up to the
date of a transaction pursuant to the Authority to Buy-Back Shares;
THAT at the discretion of the Directors of the Company, the shares purchased by the Company pursuant to the Authority to
Buy-Back Shares may be dealt with in all or any of the following manner:
(i) the shares so purchased maybe cancelled; and/or
(ii) the shares so purchased may be retained as treasury shares in accordance with the relevant rules of BMSB for distribution
as dividend to the shareholders and/or resell through BMSB and/or subsequently cancelled; and/or
(iii) part of the shares so purchased may be retained as treasury shares with the remainder being cancelled;
THAT such authority shall commence upon the passing of this resolution, until the conclusion of the next Annual General
Meeting of the Company or the expiry of the period within which the next Annual General Meeting is required by law to be
held unless revoked or varied by ordinary resolution of the shareholders of the Company in general meeting but so as not to
prejudice the completion of a purchase made before such expiry date;
104
NOTICE OF ANNUAL GENERAL MEETING
(Continued)
AND THAT the Directors of the Company be and are hereby authorized to take all steps as are necessary or expedient to
implement or to give effect the Authority to Buy-Back Shares with full powers to amend and/or assent to any conditions,
modifications, variations or amendments (if any) as may be imposed by the relevant governmental/regulatory authorities from
time to time and with full power to do all such acts and things thereafter in accordance with the Companies Act, 1965, the
provisions of the Company’s Memorandum and Articles of Association and the requirements of the BMSB and all other relevant
governmental/regulatory authorities.”
7) To transact any other business of which due notice shall have been given.
By Order of the Board
Lim Hooi Mooi (MAICSA 0799764)
Wong Wai Foong (MAICSA 7001358)
Joint Secretaries
Kuala Lumpur
28 May 2013
Notes:
1.
The proposed Agenda 1 above is meant for discussion only. The provisions of Section 169 of the Companies Act, 1965 (“the Act”) and the Articles of Association
of the Company require that the Audited Financial Statements and the Reports of the Directors and Auditors thereon be laid before the Company at its Annual
General Meeting. As such, this Agenda item is not a business which requires a resolution to be put to vote by shareholders.
2.
With respect to deposited securities, only members whose names appear in the Record of Depositors on 12 June 2013 (General Meeting Record of Depositors)
shall be eligible to attend the meeting or to appoint proxy(ies) to attend and/or vote on his behalf.
3.
A proxy may but does not need to be a member of the Company and Section 149(1)(b) of the Companies Act, 1965 (“the Act”) shall not apply.
4.
The instrument appointing a proxy must be deposited at the Registered Office of the Company at #36.01, Level 36, Cap Square Tower, No 10 Jalan Munshi
Abdullah, 50100 Kuala Lumpur, Malaysia not less than 48 hours before the time appointed for holding the meeting.
5.
A member shall be entitled to appoint more than one proxy to attend and vote at the same meeting. Where a member of the Company is an authorized nominee,
as defined under the Central Depositories Act 1991, it may appoint at least one 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 authorized nominee which holds the ordinary shares
of the Company for multiple beneficial owners in one securities account (“omnibus account”) there is no limit to the number of proxies it may appoint in respect to
the omnibus account.
6.
Where a member, or an authorised nominee or an exempt authorized nominee appoints more than one proxy the appointments shall be invalid unless he specifies
the proportions of his holdings to be represented by each proxy.
7.
If the appointor is a corporation, the proxy form must be executed under its common seal or under the hand of its attorney.
8.
Explanatory Notes on Special Business –
8.1. Ordinary Resolution 7 – Proposed Renewal of Shareholders’ Mandate for Share Buy-Back Authority
The Ordinary Resolution proposed in Agenda 6.1 above, if passed, will empower the Directors of the Company to purchase up to ten percent (10%) of the
issued and paid-up share capital of the Company by utilising the funds allocated which shall not exceed the total retained profits and share premium of the
Company. This authority will, unless revoked or varied at a General Meeting, expire at the conclusion of the next AGM of the Company.
Further information on the Proposed Renewal of Shareholders’ Mandate for Share Buy-Back Authority are set out in the Circular to Shareholders of the
Company which is despatched together with the Company’s 2012 Annual Report.
STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING
There is no person seeking election as director at the Annual General Meeting.
105
PROXY FORM
I / We ___________________________________________________________________________________________________________________________
(name of shareholder as per NRIC / passport / certificate of incorporation in capital letters)
with (NEW NRIC NO.) ________________________________________________ (OLD NRIC NO.) _______________________________________________
(PASSPORT NO.) ___________________________________________________ (COMPANY NO.) _______________________________________________
of _____________________________________________________________________________________________________________________________
(full address)
being a member(s) of abovementioned Company, hereby appoint ____________________________________________________________________________
(name of proxy as per NRIC / passport in capital letters)
with (NEW NRIC No.) __________________________ (OLD NRIC NO.) ___________________________ (PASSPORT NO.) ____________________________
of _____________________________________________________________________________________________________________________________
(full address)
or failing him / her _________________________________________________________________________________________________________________
(name of proxy as per NRIC / passport in capital letters)
with (NEW NRIC No.) __________________________ (OLD NRIC NO.) ___________________________ (PASSPORT NO.) ____________________________
of _____________________________________________________________________________________________________________________________
(full address)
or failing him / her, the Chairman of the Meeting as my / our proxy to vote for me / us on my / our behalf at Twenty-Seventh (27th) Annual General Meeting of the
Company to be held at the Junior Ballroom, InterContinental Kuala Lumpur Hotel, 165 Jalan Ampang, 50450 Kuala Lumpur on Wednesday, 19 June 2013 at
10.00 am and at any adjournment thereof.
My / Our proxy is to vote as indicated below:
Please indicate with an “X” in the spaces as provided below how you wish to cast your votes. If no specific direction as to voting is given, the proxy will vote or
abstain from voting at his / her discretion.
No.
1.
2.
3.
4.
5.
6.
7.
Resolutions
Re-election of Datuk Shireen Ann Zaharah bt Muhiudeen
Re-election of En. Azman Shah bin Mohd Yusof
Re-election of Ir. Abdul Manap bin Ali Hasan
Re-election of En. Fazlur Rahman bin Zainuddin
To approve the payment of Directors’ Fees
Re-appointment of Messrs Deloitte & Touche as Auditors
Proposed Renewal of Shareholders’ Mandate for Share Buy-Back Authority
Signature(s) / Common Seal of Member(s)
Date
CDS Account No.
No. of Shares
:
:
:
For
Against
For appointment of two (2) proxies, percentage of shareholdings to be represented by the proxies:
No of shares
Percentage
Proxy 1
Proxy 2
Total
%
%
100%
Notes:
1. With respect to deposited securities, only members whose names appear in the Record of Depositors on 12 June 2013 (General Meeting Record of Depositors) shall be eligible to attend the meeting
or to appoint proxy(ies) to attend and/or vote on his behalf.
2. A proxy may but does not need to be a member of the Company and Section 149(1)(b) of the Companies Act, 1965 (“the Act”) shall not apply.
3. The instrument appointing a proxy must be deposited at the Registered Office of the Company at #36.01, Level 36, Cap Square Tower, No 10 Jalan Munshi Abdullah, 50100 Kuala Lumpur, Malaysia
not less than 48 hours before the time appointed for holding the meeting.
4. A member shall be entitled to appoint more than one proxy to attend and vote at the same meeting. Where a member of the Company is an authorized nominee, as defined under the Central
Depositories Act 1991, it may appoint at least one 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 authorized nominee which holds the ordinary shares of the Company for multiple beneficial owners in one securities account (“omnibus account”) there is no
limit to the number of proxies it may appoint in respect to the omnibus account.
5. Where a member, or an authorized nominee or an exempt authorized nominee appoints more than one proxy the appointments shall be invalid unless he specifies the proportions of his holdings to
be represented by each proxy.
6. If the appointor is a corporation, the proxy form must be executed under its common seal or under the hand of its attorney.
IMPORTANT NOTICE
With regard to the TWENTY-SEVENTH ANNUAL GENERAL MEETING OF INTEGRAX BERHAD
Registration will start from 9.00 am onwards
The meeting will start punctually at 10.00 am
Late-comers will not be entertained
Stamp
The Company Secretary
INTEGRAX BERHAD (48317-W)
#36.01, Level 36
Cap Square Tower
No. 10, Jalan Munshi Abdullah
50100 Kuala Lumpur
Please Fold Here

NOTES TO THE FINANCIAL STATEMENTS - Integrax Berhad

Transcription

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