Annual Report 2013

Transcription

Annual Report 2013

(Company No.: 507785-P)
MEDA INC. BERHAD (Company No.: 507785-P)
|
ANNUAL REPORT 2013
www.meda.com.my
NO. 11, USJ Sentral, Jalan USJ Sentral 3, Persiaran Subang,
47600 Subang Jaya, Selangor Darul Ehsan, Malaysia
T | 03 8024 8866 F | 03 8024 8966
Annual Report
2013
Our
Vision
Our
Mission
To establish the Group’s reputation as a pioneer in
perfecting innovative development concept and a
leading developer of projects with excellent location
and value.
To create and introduce innovative concepts and solutions to all the
Company’s businesses via exemplary and dynamic leadership and
consultative networking.
To strive and thrive hard in order to achieve excellence and carve a
reputation as an ‘innovative, reliable and dependable’ developer.
To constantly provide expedient and effective services to our customers at
all levels of operations.
To continually deliver good and quality products as promised and on time.
To create, develop and provide challenging and rewarding careers for all
employees as well as safeguard and enhance the interests of the
stakeholders.
To remain creative, firm, adventurous and dynamic as a leading developer.
Contents
02
Corporate Profile
03
Corporate Information
04
Corporate Structure
05
Five - Year Group Statistic
06
Chairman’s Statement
10
Board of Directors
11
Profile of Board of Directors
15
Corporate Social Responsibility
17
Statement on Corporate Governance
26
Statement of Directors’ Re
Resp
Responsibilities
spon
onsib
ibilitities
es
27
Audit Commit
Committee
tte
tee Repo
Report
ort
31
Statement on Risk M
Management
ana
nage
geme
ment
n
and
an
d IInternal
nttern
nal
a Control
34
3
4
Information
Other Info
forrmatio
on
37
Financial
Statements
Financia
iall St
Stat
atements
131
Analysis of Shareholdings
134
Analysis of Warrantholdings
140
List of Properties
141
Notice of Annual General Meeting
Form of Proxy
2
Meda Inc. Berhad (507785-P)
Corporate
Profile
Meda was listed on the Main Board of the Bursa Malaysia
Securities Bhd under the property sector on 19th March
2002. The Group’s core activities are property
development, investment of properties and hotel business.
The Group has successfully completed the development of
several properties such as The Summit Subang USJ, The
Summit Bukit Mertajam, Aman Larkin and 10 Semantan.
Strong customer orientation and innovative products and
services are the foundation of Meda’s business. Meda is
committed to the timely delivery of quality products and
services. Meda aspires to be a leader in the market by
adding value in its core businesses and meeting
customers’ needs.
The Group views its human capital as the primary source of
success towards achieving its vision and mission. The
Group’s employees have diverse educational and
operational background and are capable to lead the Group.
The overall thrust of Meda Human Resource Strategy is to
recruit, reward and retain the best employees.
As Meda moves ahead, it will continue to focus on creating
innovative concepts and solutions to its customers and
stakeholders whilst maintaining the highest degree of
professionalism and integrity.
Annual Report 2013
Corporate
Information
BOARD OF DIRECTORS
AUDITORS
Dato’ Dr. Mohd Ariff Bin Araff
Independent Non-Executive Director/Chairman
Baker Tilly Monteiro Heng
Baker Tilly MH Tower
Level 10, Tower 1, Avenue 5
Bangsar South City
59200 Kuala Lumpur
Tel
: 603-2297 1000
Fax
: 603-2282 9980
Dato’ (Dr.) Teoh Seng Foo
Executive Director/Deputy Chairman
Teoh Seng Kian
Executive Director/Managing Director
Ooi Giap Ch’ng
Independent Non-Executive Director
Chin Wing Wah
Mohd Nor Bin Ibrahim
Lim Chang Moh
Executive Director/Chief Executive Officer
REGISTRAR
Boardroom Corporate Services (KL) Sdn Bhd
Lot 6.05, Level 6, KPMG Tower
8 First Avenue
Bandar Utama
47800 Petaling Jaya
Selangor Darul Ehsan
Tel
: 603-7720 1188
Fax
: 603-7720 1111
BANKERS
COMPANY SECRETARY
Tan Shim Chieng
(MAICSA 7013540)
REGISTERED OFFICE
No. 11, USJ Sentral
Jalan USJ Sentral 3
Persiaran Subang
47600 Subang Jaya
Malaysia
Tel
: 603-8024 8866
Fax
: 603-8024 8966
Website : www.meda.com.my
STOCK EXCHANGE LISTING
Bursa Malaysia Securities Berhad
Main Board
Malaysia Building Society Berhad
Bank Islam Malaysia Berhad
United Overseas Bank (Malaysia) Berhad
Affin Bank Berhad
Public Bank Berhad
3
4
Corporate
Structure
100%
Xperential Dynamics Sdn Bhd
100%
ZKP Development Sdn Bhd
100%
Cemerlang Land Sdn Bhd
100%
Pesona Alfa Sdn Bhd
100%
100%
Maju Puncakbumi Sdn Bhd
Sri Lingga Sdn Bhd
40%
(Company No.: 507785-P)
Nusarhu Sdn Bhd
100%
Nandex Land Sdn Bhd
100%
Meda Project Management Sdn Bhd
100%
MIB Construction Sdn Bhd
100%
Golden Sceptre (MM2H) Sdn Bhd
100%
Litaran Bayu Sdn Bhd
100%
Gaya Pustaka Sdn Bhd
100%
Virtue Property Sdn Bhd
100%
Purple Heights Sdn Bhd
52%
Meda ZCH Joint Venture Sdn Bhd
Annual Report 2013
Five - Year
Group Statistic
Revenue
Profit/(Loss) Before Taxation
Shareholders’ Funds
(RM million)
(RM million)
(RM million)
40
0
-10
-20
10
11
12
13
09
166.9
136.6
100
150.4
231.0
23.4
13.9
150
(22.6)
82.3
67.3
48.4
09
0
200
213.9
35.3
20
10
100
50
250
30
10.0
150
181.4
170.6
200
50
10
11
12
0
13
09
10
11
12
13
Year ended 31 December
2009
2010
2011
2012
2013
Revenue
(RM Million)
48.4
67.3
82.3
170.6
181.4
Profit / (Loss) Before Taxation
(RM Million)
(22.6)
13.9
10.0
35.3
23.4
Profit / (Loss) Attributable to Shareholders
(RM Million)
(23.5)
13.8
6.8
27.8
18.5
Shareholders’ Funds
(RM Million)
136.6
150.4
166.9
213.9
231.0
Total Assets Employed
(RM Million)
307.2
311.5
328.5
366.2
390.7
Basic Earnings / (Loss) Per Share
(Sen)
(5.51)
3.23
1.57
6.14
4.03
Net Assets Per Share
(Sen)
0.32
0.35
0.37
0.47
0.49
Number of Shares in Issue During the Year
(Units Million)
426.9
426.9
446.9
453.4
460.2
Treasury Shares
(Units Million)
-
-
0.8
3.1
5.1
5
6
CHAIRMAN’S
STATEMENT
Dear shareholders, I am greatly pleased to present to
you the performance of Meda Inc. Berhad and its
subsidiaries (the Group) for the financial year ended
31 December 2013 (FY2013).
Annual Report 2013
Chairman’s
Statement
Cont’d
OPERATING ENVIRONMENT
In early 2013, the global economy has seen a virtual
meltdown in the Eurozone (European Union member
countries which use the Eurodollar as a common
currency); Greece, Cyprus, Spain and Portugal are
just a few of the countries which have been affected.
As the year progressed, there have been tentative
signs of recovery in the United States of America and
the Eurozone (e.g. in Ireland); nevertheless, the global
economy outlook remains somewhat uncertain.
The adoption of revised Financial Reporting Standards
(FRS), primarily of FRS 10 Consolidated Financial
Statements, will benefit shareholders in which they
promote for greater transparency as well as more
comprehensive financial reporting. As a result, the
comparatives in the current year financial report are
restated. However, this should not have any significant
impact on the underlying fundamentals and performance
of the Group, which remain healthy.
OPERATIONAL OVERVIEW
2013 in Malaysia has additionally been marked by the
much-anticipated General Election 13 and the resulting
uncertainties in various transaction approvals and
lowered business sentiments, which affected the Group’s
overall performance. In addition, 2013 saw the Ministry
of Finance (MOF) and Bank Negara Malaysia (BNM)
implement several cooling measures, including the
introduction of even higher Real Property Gains Tax for
properties which were sold within 5 years of acquisition,
as well as stricter lending requirements to help ensure
property buyers purchase only what they can afford.
In the face of these factors, the Malaysia economy
registered a slower growth of 4.7% (2012: 5.6%).
FINANCIAL PERFORMANCE
I am delighted to report that the Group achieved
satisfactory results at the end of the FY2013, despite
the uncertainties of the global economy and Malaysia’s
financial landscape. The Group posted a net profit
after tax of RM18.5 million, with total revenues of
RM181.4 million; an increase of RM10.8 million (6.3%)
compared to RM170.6 million in 2012. Revenues were
mainly (80%) derived from our property development
activities in Cyberjaya and Johor Bahru. The Group’s
hospitality segment also contributed significantly (18%)
to the revenues achieved. This consistent growth in our
revenues bodes well for our continuing success.
Property Development
Property development is the Group’s primary focus
and remains the primary source of contribution to the
Group’s revenues and profits. In FY2013, the property
development segment contributed revenues of RM145.1
million, a growth of 6.8% or RM9.3 million compared to
FY2012’s revenues of RM135.8 million. The segment’s
results have similarly jumped by 21.3% to RM29.1 million
as compared to FY2012’s profits of RM24.0 million.
7
8
Chairman’s
Statement
Cont’d
Blocks A and B of The Arc@Cyberjaya, a servicedapartment development on a freehold land located to
the west of the Multimedia University Malaysia campus,
have successfully obtained vacant possession status in
January of 2014. These blocks have since occupied by
students from various institutions of higher education
within the surrounding areas.
Certificates of Fitness have been issued for terrace
houses in Aman Larkin, the Group’s flagship housing and
commercial mixed development project in Johor Bahru.
As such, the success of Aman Larkin project has become
a catalyst for the Group to continue its role in offering
more affordable houses to the Johor Bahru population. In
2013, we witnessed the commencement of construction
activities for both the Scott Towers condominium and the
Scott Garden townhouses.
Hospitality & Property Investment
The Summit Hotel Subang USJ, Summit Hotel Bukit
Mertajam and Peninsula Residence All Suite Hotel remain
the major hotels operated by the Group in 2013. The
average occupancy rate for the Group’s hotels dipped
slightly in 2013 to 64%, as compared to 66% in 2012.
Nevertheless, revenues externally generated from the
hospitality segment have gone up by 5.9% from RM30.6
million to RM32.4 million, a testament to the Group’s
marketing strategies.
Meanwhile, the property investment segment generated
RM3.0 million worth of revenues to the Group, a sizable
increase of 36.4% from 2012’s figure of RM2.2 million.
The primary contributor to the revenues from this
segment, The Summit Bukit Mertajam (also known as
BM Plaza), registered an occupancy rate of 75% of all
shoplots as of the end of FY2013.
INCREASING SHAREHOLDER VALUE
Acquisitions & Corporate Exercises
On 15 July 2013, one of our wholly-owned subsidiary
companies, Purple Heights Sdn. Bhd., entered into
a conditional Sales and Purchase agreement with
Signature Cabinet Sdn. Bhd., a wholly-owned subsidiary
of Signature International Bhd., for a proposed
acquisition of two parcels of contiguous land in Kota
Damansara, measuring (in aggregate) approximately
7.34 acres, for a total consideration of RM75.2 million.
This purchase price consists of RM50.4 million (67% of
the purchase price) in cash and RM24.8 million (33% of
the purchase price) by payment-in-kind i.e. commercial
building(s) to be constructed on part of the land.
Both pieces of land are leasehold, with a 99-year term
expiring on 18 October 2106. Subsequently, an EGM
was convened on 2 December 2013 where this proposed
acquisition was approved by shareholders.
We intend to develop this land into a mixed
development, comprising high- and low-rise service
apartments and shoplots, for a total gross development
value of RM400 million with an expected date of
commencement in 2015. This land acquisition is part of
our plan to selectively replenish our land bank, especially
in the Klang Valley, in order to sustain our core business
as a property developer. We also believe the new
development has good prospects and will contribute
positively to our future earnings.
Dividend
A single-tier interim dividend of RM0.02 per ordinary
share was declared on 30 July 2013 and was paid out
on 27 August 2013. The Board has also recommended
a final single-tier dividend of RM0.01 per ordinary
share for FY2013, which subjected to the shareholders’
approval. These dividends are paid out in recognition of
the support, confidence and trust which you, the Group’s
shareholders, have shown us over the past few years
during our time of transition.
Annual Report 2013
Chairman’s
Statement
Cont’d
CORPORATE CITIZENSHIP
The Group is cognisant of our responsibilities not only to
our shareholders, but to our various stakeholders in the
communities which we operate in. To this end, the Group
undertakes various annual corporate social responsibility
initiatives, and I am proud to announce that these
activities have been successfully carried out and warmly
received once again in FY2013. These activities include:
-
-
-
Chinese New Year charitable visit to Rumah Charis
by The Summit Hotel Subang USJ staff
Joint blood donation campaign with the National
Blood Centre at The Summit Hotel Subang USJ
“Majlis Amal Berbuka Puasa” with more than 50
children and staff from Rumah Amal Limpahan
Kasih
Ramadhan “Buka Puasa” for the children from
Sekolah Pendidikan Khas (OKU) Bandar Tasek
Mutiara, Simpang Empat
Deepavali luncheon at Pusat Jagaan Siddharthan
Christmas party at The Summit Hotel Subang USJ
for the children of Shechem Home.
Similarly, we realise that our vision of establishing the
Group as a pioneer of innovation and reliability requires
a continuing effort to minimise the impact our activities
have on the surrounding environment. The Group is
committed towards maintaining the highest industry
standards of ecologically-sound, sustainable business
and development practices, to ensure that we leave
behind a heritage our next generations can be proud of.
With Budget 2014 further introduces anti-speculation
features like restricting foreign investors to property
purchases priced above RM1 million and other property
cooling measures, we are anticipating lukewarm
demand for residential properties and the restriction
will deter foreigners from investing in mid-cost property
segment, which the Group focuses on. As a result, our
strategic direction moving forward will be to focus on
developments on prime land with quick turnaround
involving value creation, as exemplified by the proposed
purchase of approximately 20.55 acres of freehold
land in Melaka. In addition, the Group is venturing into
student hospitality services, part of which involves the
continuation of The Arc@Cyberjaya project.
We are expecting 2014 to be an interesting year, and
remain ready to tackle any unexpected twists and turns
in the property development market which may come
our way. The Group will focus on aggressive marketing
strategies for the Scott Towers residential units and the
Scott Garden townhouses in Johor Bahru, both of which
have already achieved take-up rates in excess of 50%,
whilst capitalising on our unique one-stop student hostel
service solutions to draw in more tenants for The Arc
Guaranteed Rental Return phase.
Given the many challenges which the Group will face, we
have made the decision to continue strengthening our
financial position through the careful management of our
land bank and strategic property development plans, as
well as to build up brand equity and recognition. All of
the activities which the Group has embarked on and will
undertake have these objectives in mind.
PROSPECTS
ACKNOWLEDGEMENTS
With the corporate restructuring exercises of the past
years providing better-than-expected results, I am
confident that the Group is well-positioned to take
advantage of the appropriate opportunities vis-à-vis the
property development and other segments which we
operate in. Indeed, in keeping with our Annual Report’s
theme of continuing growth, the Group is now a rapidly
maturing entity which still has plenty of scopes for future
expansion. However, various economic factors beyond
our control may have an impact on our profitability in the
short- to medium-term.
I wish to express my appreciation to all our shareholders,
customers, business partners and all other stakeholders
for their unwavering support during FY2013.
I would like to take this opportunity to thank all Meda
Inc. employees, whose hard work and dedication in the
financial year under review have contributed significantly
to the Group’s revenues and profits. It is through their
commitment and efforts which the Group is poised to
become a noteworthy name in the property development
industry.
9
10
BOARD OF
DIRECTORS
standing from left to right
Chin Wing Wah
Ooi Giap Ch’ng
Teoh Seng Kian
Lim Chang Moh
Dato' (Dr.) Teoh Seng Foo
Annual Report 2013
Profile of
Board of Directors
Dato’ Dr. Mohd Ariff Bin Araff, aged 69, was appointed to the Board as a
Director and Chairman on 2 November 2009. He holds a PhD. (Electrical
Engineering) from Brunel University, United Kingdom, Bachelor of Science
Engineering (Hons.) from University of Brighton in United Kingdom, MIEM
(Malaysia), P.Eng., MIEE, C. Eng. (United Kingdom), MIEEE (USA), SMP
(Harvard), AMP (INSEAD), DSNS, SPTJ.
Dato’ has extensive experience in Electric Utility Engineering and Management.
He has worked in various capacities in Generation, Transmission and
Distribution Divisions of Tenaga Nasional Bhd (“TNB”), the biggest electric
utility in Malaysia. In the 32 years he has worked with TNB, Dato’ has completed
many varied assignments in areas of Generation and Transmission Projects,
Generation Operation, Utility Planning, Transmission and Distribution
Management, IT Applications in Distribution, Corporate Management,
Research and Development and Commercialization of Research Products.
DATO’ DR. MOHD ARIFF
BIN ARAFF
Chairman
(Independent / Non-Executive)
Malaysian
Retired from TNB in April 2000 as Managing Director/CEO of TNB Research
Sdn. Bhd. (“TNB Research”) and was reappointed as an Advisor to TNB
Research on contract basis for two years and was appointed as a Director to
the Board of TNB Research from 1997 until now. He is a member of ASEAN
Working Group on Utility Standards as well as the Working Group on
Research, Development and Engineering. Internationally, he is a registered
UNIDO Expert on Energy Audit and Energy Conservation and UNCTAD Expert
on Power Generation and Transmission Equipments.
In 1998, Dato’ was appointed as a Board Member of Malaysia Energy Centre
(Pusat Tenaga Malaysia/PTM) till recently. Using his vast experiences in
Power Engineering and Management, he helps to steer PTM to become a
premier Power Research Institute. He was appointed Chairman of MIMOS
Berhad (“MIMOS”), a premier government-owned R&D establishment for ICT
since October 2000 until 30th December 2004. In 2002 while as Chairman of
MIMOS, he was conferred the prestigious award SPTJ.
Dato’ is Co-Chairman of Doble International Engineering Committee (USA) for
Transformers. He was once the President of TNB Senior Officers Association (a
Trade Union) and currently holds several positions as Advisor/Chairman/Board
Member of private corporations and banking institutions. He currently sits on
the Board of Eduspec Holding Berhad.
Dato’ is the Chairman of the Nominating Committee of the Company.
Dato’ does not hold any shares in the Company and subsidiaries.
11
12
Profile of
Board of Directors
Cont’d
Dato’ (Dr.) Teoh Seng Foo, aged 58, was appointed to the Board as
President on 28 December 2001. Dato’ was appointed Chairman of the
Board on 29 June 2007 and subsequently re-designated to the position of
President on 2 November 2009. On 1 June 2012, Dato’ was re-designated
to Executive Director/Deputy Chairman.
An Accountant by profession, Dato’ is a Chartered Accountant of the
Malaysian Institute of Accountants, a Fellow Member of the Chartered
Institute of Management Accountants, United Kingdom and a Chartered
Global Management Accountant.
Dato’ has wide corporate experience, having held senior management
positions in multi-national corporations such as Intel Technology, Woodward
& Dickerson Inc., PricewaterhouseCoopers and Esquel Group.
DATO’ (DR.) TEOH SENG FOO
Deputy Chairman
(Executive)
Malaysian
Dato’ was conferred the Honorary Doctorate in Business Administration by
University of Abertay Dundee, United Kingdom. Currently, Dato’ is also a
Patron of the University of Abertay Foundation based in United Kingdom.
Presently, Dato’ holds board position in EcoFirst Consolidated Berhad as
Executive Director.
Dato’ is the Chairman of the Remuneration Committees of the Company.
Dato’ is a brother to Teoh Seng Aun, a substantial shareholder of the
Company and Teoh Seng Kian, the Director cum substantial shareholder of
the Company.
Dato’ has not entered into any transaction, whether directly or indirectly,
which have a conflict of interest with the Company, other than those
disclosed in Note 38 in the accompanying financial statements.
Teoh Seng Kian, aged 54, was appointed to the Board on 28 December
2001. He graduated with a Bachelor of Engineering (Mechanical) degree
from Australia in 1984.
He started his career with an Australian company specializing in
manufacturing of building materials. Upon returning to Malaysia, he served
as a director in a company involved in quarrying and infrastructure
construction. He has been with the Meda Inc. Group since 1993 as the
Group Project Director. He is currently an alternate director in EcoFirst
Consolidated Berhad.
He is also the Chairman of the Risk Management and Tender Committees of
the Company.
TEOH SENG KIAN
Managing Director
(Executive)
Malaysian
He is a brother to Dato’ (Dr.) Teoh Seng Foo, the Deputy Chairman cum
substantial shareholder and Teoh Seng Aun, a substantial shareholder of the
Company.
He has not entered into any transaction which have a conflict of interest with
the Company, other than those disclosed in Note 38 in the accompanying
financial statements.
Annual Report 2013
Profile of
Board of Directors
Cont’d
Lim Chang Moh, aged 47, was appointed as Chief Executive Officer of the
Company on 8 January 2013 and to the Board on 24 April 2013. He holds a
Master of Business Administration from Nanyang Technological University,
Singapore and a Bachelor of Building from University of New South Wales,
Sydney, Australia. He has more than 25 years of experience in property
development and construction. He was the Malaysia Country Head for a
Singapore based company that is one of the largest business space
developers in Asia-Pacific region. Prior to that, he was the Executive
Assistant to the Chairman with a major local listed developer in charge of
business development and operations.
He is a member of the Risk Management and Tender Committees of the
Company.
He does not hold any shares in the Company and subsidiaries.
LIM CHANG MOH
Chief Executive Officer
(Executive)
Malaysian
Chin Wing Wah, aged 50, was appointed to the Board on 1 August 2012.
He is a Chartered Accountant of the Malaysian Institute of Accountants and
an associate member of the Chartered Institute of Management
Accountants (“ACMA”), United Kingdom.
He has more than 26 years of experience in finance and treasury
management and corporate matter. He started his career in 1985 as an
auditor in public accounting firms for a few years and subsequently joined
Mahajaya Berhad group as an assistant accountant before he left to join
Crimson Land Berhad. Currently he is overseeing the corporate division of a
private group and held the position of Chief Operating Officer of the private
group.
He is the Chairman of the Audit Committee and a member of the
Remuneration and Risk Management Committees of the Company.
CHIN WING WAH
Director
(Independent/Non-Executive)
Malaysian
13
14
Profile of
Board of Directors
Cont’d
Ooi Giap Ch’ng, aged 55, was appointed to the Board on 28 December 2001.
He graduated with a Bachelor of Law degree and a Bachelor of Economics
degree from the Australian National University and was called to the Malaysian
Bar in 1987. He has more than 27 years’ experience in law practice, mainly in
area of commercial, property and corporate law. He is partner of a legal firm in
Kuala Lumpur.
He is also a member of the Audit, Nominating and Remuneration Committees
of the Company.
OOI GIAP CH’NG
Director
Malaysian
Mohd Nor Bin Ibrahim, aged 56, was appointed to the Board on 22 October
2008. He graduated with a Diploma in Marketing from Institute of Marketing,
United Kingdom in 1985. He also holds a Postgraduate Diploma in
Management Studies from Council of National Academy Awards, United
Kingdom.
He has wide experience in operations, finance and corporate services. He was
a senior management staff from PSC Industries Berhad and Putera Capital
Berhad, among others. He is currently an adviser of a few private limited
companies.
He is the member of the Audit and Nominating Committees of the Company.
MOHD NOR BIN IBRAHIM
Director
Malaysian
Save as disclose above, none of the Director has :
z
z
z
any family relationship with any Director and/or major shareholder of the Company;
any conflict of interest with the Company; and
any conviction for offences within the past 10 years other than traffic offences, if any.
Annual Report 2013
Corporate
Social Responsibility
MAJLIS AMAL BERBUKA PUASA
BERSAMA ANAK YATIM
SUMMIT HOTEL SUBANG USJ
CHINESE NEW YEAR VISIT TO
RUMAH CHARIS
On February 16, 2013, in conjunction
with the Chinese New Year
celebration, Summit Hotel Subang
USJ staff and the members of
Rumah Charis house enjoyed a fun
filled afternoon with karaoke session,
Yee Sang toasting and were also
treated to a lovely Hi-tea for the day.
Ang Pows were handed out to all
the members of the home together
with electrical home appliances and
sundry goods.
BLOOD DONATION CAMPAIGN
The National Blood Centre jointly
organized a blood donation
campaign with Summit Hotel
Subang USJ on the 28th June, 2013.
The response was overwhelming,
however only 39 people comprising
the staff of the Hotel, Summit
Complex, Associate Companies and
the general public had qualified as
blood donors during the campaign.
On Thursday 18th July 2013, Summit
Hotel Subang USJ & Peninsula
Residence All Suite Hotel jointly
hosted a breaking fast dinner for
more than 50 children and staff from
Rumah Amal Limpahan Kasih held
at the Grand Ballroom of Summit
Hotel. They were treated to a
mouth-watering spread of local and
international cuisine and in return the
children from the Home entertained
those present with an array of songs
during the night. The Management
also presented ‘Duit Raya’ and
contributed sundry goods to the
home.
15
16
Corporate
Social Responsibility
Cont’d
DEEPAVALI LUNCHEON AT
PUSAT JAGAAN SIDDHARTHAN
The Management and staff of
Summit Hotel Subang USJ hosted
a luncheon at Pusat Jagaan
Siddharthan, Petaling Jaya to
celebrate Deepavali with the children
of the Home. The children enjoyed
a delicious spread of food while
being entertained by a magic show
performance and fun games that
were organized by the staff of the
Hotel. Sundry goods was contributed
towards the home while the children
were each given a goodie bag as
part of our Company’s CSR effort.
This event was held on the 27
November, 2013.
SUMMIT HOTEL BUKIT
MERTAJAM
RAMADHAN CHARITY PROGRAM
2013
CHRISTMAS PARTY AT THE
HOTEL
In conjunction with the Christmas
celebration, Summit Hotel Subang
USJ & Peninsula Residence All Suite
Hotel jointly organised a Christmas
party for the children of SHECHEM
Home on the 19 December, 2013.
More than 70 children together
with the Hotel staff took part in
carolling during the luncheon and
later adjourned to the Cineplex at
Summit Complex to watch “Walking
with Dinosaurs”. Each child went
home with a goodie bag and ‘Ang
Pow’ while the Hotel donated sundry
goods to the home.
On Monday 15th July 2013, children
from Sekolah Pendidikan Khas (OKU)
Bandar Tasek Mutiara, Simpang
Empat, were invited to the hotel
for a special “Buka Puasa” treat.
45 children and 5 teachers were
delighted to be invited to this event.
They were welcomed by the Hotel
Manager, Head of Departments and
staff. The hotel generously presented
the children with duit raya and some
stationeries set. Chef Ismail and his
crews prepared a delicious buffet
dinner for the attendees. Highlight
of the event included presentation of
a mock cheque worth RM500 to aid
the school.
Annual Report 2013
Statement on
Corporate Governance
The Board of Directors (“Board”) support high standard of corporate governance and is fully committed to ensure that
good corporate governance is being practiced throughout the Group so that the affairs of the Group are conducted
in a transparent and objective manner with full accountability and integrity to safeguard shareholders’ investment and
ultimately enhance their value and the financial performance of the Group.
The Board is working towards ensuring full compliance with principles and best practices of Malaysian Code on
Corporate Governance 2012 (“Code 2012”). An indication of the Board’s commitment is reflected in the incorporation
of various policies and processes and the establishment of the relevant committees. The Board is pleased to report on
how the Company and Group have applied the principles set out in Code 2012 to its particular circumstances, having
regard to the recommendations and best practices stated under each principle.
The following paragraphs describe how the Group has applied the principles set out in Code 2012.
A
BOARD OF DIRECTORS
Board Composition and Balance
The Board of Meda currently consists of seven (7) members of which three (3) are Executive Directors and the
balance four (4) Directors are Independent Non-Executive Director.
The Board composition complies with the Main Market Listing Requirements of Bursa Malaysia Securities
Berhad (“Bursa Securities”) (“Listing Requirements”) that requires at least two (2) or one-third (1/3) of the Board,
whichever is the higher are independent directors. The Board has maintained its mix of Directors from diverse
professional background with a wide range of experience and expertise in the field of business, legal, economics,
finance and accounting.
The Board comprises Directors from different professional backgrounds and collectively bring with them depth
and diversity in experience and expertise to the Group’s operation. The Directors’ wide-ranging experience and
expertise provide the Group with the strategic thinking which is vital to ensure successful direction of the Group.
In line with Code 2012, the Company through its Nominating Committee conducted annual assessment of the
independence of the Independent Directors and is satisfied that the Independent Directors are independent as
they fulfilled the required criteria stipulated in the Listing Requirements. All the Independent Directors provided
the Nominating Committee with written confirmations on their independence during the annual assessment
exercise conducted in the financial year.
Pursuant to Code 2012 the tenure of an independent director should not exceed a cumulative term of nine
(9) years. However, the Nominating Committee and Board have assessed, reviewed and determined that the
independence of Mr. Ooi Giap Ch’ng, who has served on the Board for more than 11 years, remain objective and
independent based on the following justifications/ aspects contributed by Mr. Ooi Giap Ch’ng, as a member of
the Board and Board Committees:a.
b.
c.
d.
e.
f.
he has fulfilled the criteria under the definition of Independent Director pursuant to the Listing Requirements
of Bursa Securities;
he has ensured effective check and balance in the proceedings of the Board and the Board Committees;
he has actively participated in Board deliberations, provided objectivity in decision making and an
independent voice to the Board and contributed in preventing Board domination by any single party;
his vast legal experience would enable him to provide the Board with a diverse set of experience, expertise
and independent judgement to better manage and run the Company;
he has devoted sufficient time and attention to his responsibilities as an Independent Non-Executive
Director of the Company;
he has exercised his due care in the interest of the Company and shareholders during his tenure as an
Independent Non-Executive Director of the Company.
The Board is satisfied that the current Board composition adequately protects the interests of minority
shareholders of the Company. The Board is also comfortable with its size which allows active participation and
meaningful contribution by each member to ensure its effectiveness in discharging its duties. The profiles of the
members of the Board are provided in the Annual Report.
17
18
Statement on
Cont’d
A
BOARD OF DIRECTORS cont’d
Board Composition and Balance cont’d
The Board has identified Mr. Chin Wing Wah as the Chairman of Audit Committee to whom concerns may be
conveyed where it could be appropriate for the concerns to be dealt with by the Chairman and the Managing
Director. The Chairman of Audit Committee may be contacted at tel: 603-80248866.
Board Responsibilities
The Company is led by a Board with a wide spectrum of skills and experience that provides strength required
to lead the Group towards its objective and enable the Group to rely on the firm control of an accountable and
competent Board.
The Board is overall responsible for the Group’s overall strategies and objectives, its acquisition and divestment
policy, financial policy and major capital, expenditure projects and the consideration of significant financial
matters. The Board’s key responsibilities reflect the recommendation prescribed by Code 2012. In performing
its duties, the Board has access to the advice and services of the Company Secretary and, if necessary, may
seek independent professional advice about the affairs of the Group. The Board is assisted by several Board
Committees namely, Audit Committee, Nominating Committee, Tender Committee, Risk Management Committee
and Remuneration Committee.
The Independent Non-Executive Director provides for effective check and balance in the functioning of the Board
as well as ensuring corporate accountability as they provide an essential source of impartial and professional
advice and judgement.
There is a clear division of responsibilities between the Chairman and the Managing Director to ensure a balance
of power and authority. The Chairman is responsible for ensuring Board effectiveness and standards of conduct.
The Managing Director has overall responsibility for the Group’s business operations, organizational effectiveness
and the implementation of Board policies, decision, and day-to-day management of the Company. The Managing
Director and the senior management team remain accountable to the Board for the authority that is delegated.
Generally, the Executive Directors are responsible for making and implementing operational and corporate
decisions. Non-Executive Directors play key supporting roles, contributing their knowledge and experience
towards the formulation of policies and in the decision-making process. They do not engage in day-to-day
management of the Company and do not participate in any business dealings and are not involved in any other
relationship with the Company. This is to facilitate the Non-Executive Directors to discharge their duties and
responsibilities effectively, void of conflict of interest situations.
Pursuant to Code 2012, the Company has established a Board Charter which sets out the Board’s functions and
responsibilities, including division of responsibilities between the Board, the different Board Committees, the
Chairman and the Group Managing Director and Directors’ Code of Ethics and Conducts formalizes the standard
of ethical values and behavior that is expected of its directors at all times.
The Group is also committed towards sustainable development. Employees’ welfare, environment and
community responsibilities are integral to the conduct of the Group’s business. The corporate social
responsibilities report is set out on pages 15 to 16 of this Annual Report.
Annually, the Directors individually complete a formal written assessment of the Board, its performance,
composition and conduct. The Nominating Chairman collates the opinions and responses of Directors and tables
the results for review, comment and recommendation by the Board.
Board Meetings
The Board schedules at least four (4) meetings a year at quarterly intervals. Board meetings are also held when
warranted by situations such as to deliberate urgent proposals or matters that require the expeditious direction
of the Board.
Annual Report 2013
Statement on
Cont’d
A
Board Meetings cont’d
During the financial year under review, the Board met five (5) times and the attendance record for each Director
is as follows:Name of Directors
Total Attendance
% of Attendance
Dato’ Dr. Mohd Ariff bin Araff
5/5
100
5/5
100
Teoh Seng Kian
5/5
100
Ooi Giap Ch’ng
5/5
100
Mohd Nor bin Ibrahim
5/5
100
Chin Wing Wah
5/5
100
Lim Chang Moh
(Appointed on 24 April 2013)
3/3
100
Dates for Board and Board Committee meetings for 2013 were scheduled in advance before in consultation with
the Board, particularly meetings to consider the announcement of quarterly and annual financial results, internal
audit annual plan and audit planning memorandum.
The Board ensures that its decision as well as the deliberations and issues discussed before arriving at those
decisions are properly documented.
Supply of Information
The Directors have full and timely access to all information pertaining to the Group’s business and affairs to
enable them to discharge their duties.
All Directors are provided with the agenda together with Board papers in advance of Board Meetings to enable
them to consider and deliberate knowledgeably on issues and to facilitate informed decision making.
The Directors are also given sufficient time to obtain further explanation or clarification. In furtherance of their
duties, the Directors have access to the advice and services of the Company Secretary and to all information
within the Company whether as a full Board or in their individual capacity.
The Board is regularly updated and advised by the Company Secretary on new statutes and directives issued by
regulatory authorities, and the resultant implications to the Company and the Directors in relation to their duties
and responsibilities. The Company Secretary also serves notice to the Directors on closed period for trading in
Meda shares, in accordance with the black-out periods stated in Bursa Securities Listing Requirements.
Where necessary, the Directors are at a liberty to engage independent professionals for advice at the Company’s
expense to enable them to discharge their duties with full knowledge of the cause and effect.
Appointments to the Board
The appointment of new Board members are considered and evaluated by the Nominating Committee prior to
the recommendation to the Board for approval. The actual decision as to who should be nominated shall be
the responsibility of the Board after considering the recommendations from the Nominating Committee. The
Company Secretary will ensure that all the appointments are properly made in accordance with the relevant
regulatory requirements.
19
20
Statement on
Cont’d
A
Re-election of Directors
The Articles of Association (“the Articles”) of the Company provides that at every Annual General Meeting of the
Company, one third (1/3) of the Directors for the time being and those appointed during the financial year shall
retire from office and shall be eligible for re-election. The Articles further provides that all Directors shall retire
from office at least once every three (3) years but shall be eligible for re-election.
The Nominating Committee will review and assess annually the retiring Directors who seek for re-election at
the Annual General Meeting of the Company and thereafter submit its recommendation to the Board on the
proposed re-election of Directors for consideration before tabling the same for shareholders’ approval.
At the forthcoming 14th Annual General Meeting, Mr. Teoh Seng Kian and Mr. Ooi Giap Ch’ng are due for
retirement pursuant to Article 96(1) of the Articles of the Company. Both of them have offered themselves for reelection.
Board Committees
The Board has delegated specific responsibilities to the established Board Committees in order to ensure
effective discharge of its fiduciary duties while retaining full responsibility for the direction and control of the
group. Each committee operates under their respective approved terms of reference. These committees have the
authority to examine particular issues and report to the Board their recommendations and the Board also review
the minutes of the Board Committee meetings. The ultimate responsibility for the decisions lies with the Board.
These committees are:a)
Audit Committee
The composition, terms of reference of the Audit Committee are set out separately in the Audit Committee
Report.
b)
Nominating Committee
The Board considers that the membership of the Committee is in compliance with Code 2012’s
recommendation. The Nominating Committee (“NC”) oversees the overall composition of the Board in term
of the appropriate size and skills as well as the balance between Executive Directors, Non-Executive and
Independent Directors, and mix of skills and other core competencies required to be deemed fit and proper
to be appointed as Director in accordance with Listing Requirements and Code 2012.
In making the selection, NC considers the following aspects:i)
Probity, Personal Integrity and Reputation
-
ii)
Competence and Capability
-
iii)
the person must have key qualities such as honesty and integrity
the person must have the appropriate qualification, training, skills, practical experience and
commitment to effectively fulfill the role and responsibilities of the position
Financial Integrity
-
the person must manage his debts or financial affairs prudently
Annual Report 2013
Statement on
Cont’d
A
Board Committees cont’d
b)
Nominating Committee cont’d
The Board also established a clear and transparent Nominating Process for the Appointment of Director of
the Group. The Nominating Process involves the following stages:i)
ii)
iii)
iv)
v)
Identification of candidates(s);
Evaluation of suitability of candidates;
Meeting up with candidates;
Final deliberation by NC; and
Recommendation to Board
The Committee also carries out documented annual evaluation on the effectiveness of the whole Board,
the various Committees and each individual Directors, including Independent Non-Executive Directors’
contribution to the effectiveness of the Board’s decision-making process.
The members of the Committee are:
1.
Dato’ Dr. Mohd Ariff bin Araff – Chairman
(Independent Non-Executive Director)
2.
Ooi Giap Ch’ng
3.
The terms of reference of NC are set out on page 23.
c)
Remuneration Committee
The Remuneration Committee (“RC”) reviews the remuneration of the Directors annually and submits
its recommendations to the Board on specific adjustments and/or reward payments that reflect their
respective contributions throughout the year, and are also competitive and are in tandem with the Group’s
corporate objectives, culture and strategy.
The following process is to be considered by the RC in developing the remuneration package:i)
ii)
iii)
iv)
This policy relates to all the Directors;
Determine Company’s performance indicators via revenue, profit before tax, profit after tax, earnings
per share, return on equity etc;
RC to review Company’s performance and NC’s annual assessment on each Director and develop the
remuneration package taking into consideration the performance, achievement and time commitment
of each director; and
Propose the recommendation of the remuneration package to the Board for approval.
The Committee meets at least once a year to deliberate on the remuneration framework and make
recommendations to the Board on structuring Directors’ remuneration package. The Executive Director
does not participate in decisions relating to his remuneration. The Board as a whole determines the
remuneration of Non-Executive Directors with the Director concerned abstaining from participating in
decisions in respect of his individual remuneration.
The remuneration (inclusive of basic salary and benefits-in-kind) for the Executive Director is recommended
by the Remuneration Committee, taking into account the individual responsibility, contribution and
performance, additional responsibilities of the Director, as well as the performance of the company and the
market-rate for similar positions in comparable companies.
21
22
Statement on
Cont’d
A
Board Committees cont’d
c)
Remuneration Committee cont’d
For Non-Executive Directors they are paid annual fees, this level of remuneration is reflective of their
experience and level of responsibilities. All Non-Executive Directors are paid meeting allowance of RM1,000
each for every meeting that they attended.
The member of the Committee comprises the following:1.
Dato’ (Dr.) Teoh Seng Foo - Chairman
(Executive Director)
2.
Ooi Giap Ch’ng
3.
Chin Wing Wah
The terms of reference of the RC are set out on page 23.
The details relating to the remuneration of Directors of the Company for the financial year under review are
as follows:
Executive Director
Non-Executive Directors
Salary
Fees
Benefits
in kind
Statutory
Contribution
Total
(RM)
(RM)
(RM)
(RM)
(RM)
1,112,968
-
-
134,797
1,247,765
-
189,000
-
-
189,000
The number of Directors whose total remuneration fall within the following bands:
Number of Directors
Range of Remuneration
Executive
Non-Executive
Below RM50,000
-
3
RM50,001 to RM100,000
-
1
RM150,001 to RM200,000
1
-
RM450,001 to RM500,000
2
-
Directors’ Training
All existing Directors have completed the Mandatory Accreditation Programme prescribed by Bursa Malaysia
Securities Berhad and are encouraged to attend the continuous education programmes and seminars to keep
abreast with the latest developments in the market place and to further enhance their business acumen and
professionalism in discharging their duties and responsibilities towards the group as well as new regulations and
statutory requirements.
A dedicated training budget for Directors’ continuing training is provided each year to ensure the Directors are
well equipped with the relevant skills and knowledge to meet the challenges ahead.
Annual Report 2013
Statement on
Cont’d
A
Directors’ Training cont’d
During financial year ended 31 December 2013, the Directors attended various seminars and courses to keep
abreast with general economic, industry and technical developments as well as changes in legislation and
regulations affecting the Group’s operations. In addition, Directors education also includes briefings by the
External Auditors and the Company Secretary on the relevant updates on statutory and regulatory requirements
from time to time during the Audit Committee meetings and Board meetings.
Talks, seminars and training programmes attended by Directors in 2013 are as follows:z
z z z z z z z z z z z z z z Board Oversight Responsibilities for Merger & Acquisition - Passion Beyond Numbers
Advocacy Sessions on Corporate Disclosure for Directors of Listed Issuers
Board Chairman Session
Nominating Committee Program
Navigating The Global Economic Fragility : Implications on Malaysian Business
Government Intervention in Business: Some Public Policy Issues
Recent Legal Developments & its Impact on Professional Practices
Recent Court and Rulings on Laws Affecting Housing Development in Malaysia : Impact on Developers,
Bankers and Purchasers
Real Estate CEO Forum
23rd National Real Estate Convention (Real Estate Realities – 2014 and Beyond)
2014 Tax & Budget Outlook
Launch of The Statement on Risk Management and Internal Control Guidelines for Director
Effective Corporate Mergers & Acquisitions – From Complexity to Execution Excellence
Related Party Transaction from Governance Challenges to Impactful Results
16th National Housing & Property Summit 2013
The terms of reference for Board Committees are as follows:i)
Nominating Committee
z z z z z ii)
To identify and nominate candidates to fill vacancies on the Board and puts in place succession plans
where and when appropriate.
To assess the effectiveness of the board and the contribution of individual directors.
To annually review its required mix of skills and experience and other qualities, including core
competencies, which non-executive directors should bring to the board.
To review the Board structure, size and composition and makes relevant recommendations to the
Board.
To consider, in making its recommendations, candidates proposed by the Chief Executive Officer, by
any director or shareholder.
Remuneration Committee
z
z z To establish a competitive compensation package, which reflects market value, sustained individual
performance, job responsibilities and the group’s performance against financial objectives.
To review the directors’ performance in line with the corporate objectives and decide upon the
remuneration package of the executive directors.
To establish a formal and transparent procedure for developing policies on executive remuneration.
23
24
Statement on
Cont’d
B
RELATIONSHIP WITH SHAREHOLDERS AND INVESTORS
The Group recognises the importance of keeping shareholders and investors informed of the Group’s
business activities, corporate development and financial performance. Such information is disseminated via
the Company’s Annual Report, quarterly financial results and various announcements made through Bursa
Malaysia. Currently, information is disseminated through various disclosures and announcements made to Bursa
Securities. The latest updates and development of the Group can also be found at the Company’s website,
www.meda.com.my.
Shareholders and members of the public may access the Group’s website at www.meda.com.my and Bursa
Malaysia’s website to obtain the latest information on the Group.
Annual General Meeting
The annual general meeting (AGM) remains the principal forum for dialogue with shareholders. It provides
shareholders with an opportunity to seek clarifications on the Group’s business and performance. Shareholders
are encouraged to meet and communicate with the Board at AGM and to vote on all resolutions.
Corporate Disclosure Policy
Along with good corporate governance practices, the Company is committed to provide stakeholders
with comprehensive, accurate and quality material information on a timely and even basis. In line with this
commitment and in order to enhance transparency and accountability, the Board has established a Corporate
Disclosure Policy to facilitate the handling and disclosure of material information in a timely and accurate
manner. The Corporate Disclosure Policy aims to ensure the Company’s compliance with the disclosure
requirements as set out in the Bursa Securities’ Listing Requirements and other applicable law.
C
ACCOUNTABILITY AND AUDIT
Financial Reporting
The Company’s financial statements are prepared in accordance with the requirements of the applicable
approved Financial Reporting Standards (“FRS”), the approved accounting standards for entities other than
private entities issued by the Malaysian Accounting Standards Board in Malaysia and the provisions of the
Companies Act, 1965. The Board is responsible to ensure that the financial statements of the Group and the
Company give a true and fair view of the state of affairs of the Group and the Company.
The Company presents the Group’s financial results on a quarterly basis as well as on an annual basis via public
announcements. The Audit Committee assists the Board to ensure accuracy and adequacy of all information for
disclosure.
Internal Control
The Board is responsible for maintaining a sound system of internal control, which provides reasonable
assessment of effective and efficient operations, internal financial controls and compliance with laws and
regulations as well as with internal procedures and guidelines. A Statement on Risk Management and Internal
Control of the Group is set out on page 31 of the Annual Report.
The Board and Management developed an ongoing process for identifying, evaluating and managing significant
risks that may be faced by the Company.
The Risk Management Committee comprises the following members:
1.
2.
3.
4.
Teoh Seng Kian (Chairman)
Chin Wing Wah
Lim Chang Moh
An Siew Chong (Appointed on 11.4.2014)
Annual Report 2013
Statement on
Cont’d
C
ACCOUNTABILITY AND AUDIT
Internal Control cont’d
The purpose of the Risk Management Committee is to assist in:
z z z z Maintaining integrity and confidence among shareholders and the public;
Strengthening the Group’s competitive, strategic and operational efficiency to enhance the shareholders’
value;
Minimizing unexpected adverse impact to earnings and returns to shareholders; and
Safeguarding the assets and resources within the Group.
Relationship with Auditors
The Board maintains a transparent and professional relationship with the Auditors, through the Audit Committee
and the Board. The Audit Committee is conferred with the authority to directly liaise with both the External and
Internal Auditors. The Board, through the Audit Committee, seeks the External Auditors’ professional advice
in ensuring compliance with the provisions of the Companies Act, 1965 and applicable Financial Reporting
Standards in Malaysia.
It is a policy of the Audit Committee that it meets with the External Auditors at least twice a year to discuss
their audit plan, audit findings and the Company’s financial statements as well as any other issues without any
Executive Directors or Management present. During the year under review, the Audit Committee held five (5)
meetings out of which two (2) meetings were held with the presence of representatives of the External Auditors,
Messrs Baker Tilly Monteiro Heng, at which private sessions independent of the management, were held.
The roles of the Audit Committee in relation to the external auditors are further described in the Audit Committee
Report in this Annual Report.
Compliance Statement
The Board is satisfied that in 2013 the Company has complied with the best practices of Code 2012.
25
26
Statement of Directors’ Responsibilities
in respect of the Audited Financial Statements
The Directors are legally required to prepare financial statements for each financial year which have been made out
in accordance with the applicable approved accounting standards and give a true and fair view of the state of affairs
of the Group and the Company at the end of the financial year end of the results and cash flows of the Group and
Company for the financial year.
In preparing the financial statements, the Directors have used appropriate accounting policies that are consistently
applied and supported by reasonable as well as prudent judgement and estimates, and that all accounting standards
which they consider applicable have been followed during the preparation of the financial statements.
The Directors are responsible for ensuring that the Group 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 applicable approved accounting standards.
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.
Annual Report 2013
Audit
Committee Report
MEMBERSHIP AND MEETINGS
The Audit Committee had five (5) meetings during the year ended 31 December 2013. The members of the Audit
Committee and the record of their attendances are as follow:
Number of Audit Committee Meetings
Composition of Audit Committee Members
Chin Wing Wah – Chairman
Held
Attended
%
5
5
100
Ooi Giap Ch’ng
5
5
100
5
5
100
The Chief Executive Officer (CEO), Chief Financial Officer (CFO), Finance Senior Manager and internal auditors
attended the meetings to brief the Audit Committee on the activities involving theirs areas of responsibilities.
The external auditors were present at three (3) Audit Committee meetings during the financial year. The Audit
Committee met twice with representatives of the external auditors separately, without the present of management.
TERMS OF REFERENCE OF THE AUDIT COMMITTEE
The Board from amongst its Directors (except alternate directors) which fulfils the following requirements shall appoint
the Committee:a)
b)
c)
The audit committee must be composed of no fewer than three (3) members;
All the audit committee members must be non-executive directors, with a majority of them being independent
directors; and
All members of the Committee should be financially literate and at least one member of the audit committee:
i.
ii.
iii.
Must be a member of the Malaysian Institute of Accountants; or
If he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years’ working
experience and
I.
He must have passed the examination specified in Part I of the 1st Schedule of the Accountants Act
1967, or
II.
He must be a member of one of the associations of accountants specified in Part II of the 1st
Schedule of the Accountants Act 1967
Fulfils such other requirements as prescribed or approved by the Exchange.
The members of the Committee shall select a Chairman from among their number who shall be an independent
director.
The Board shall within three (3) months of a vacancy occurring in the Committee which result in the number
of members reduced below three (3), appoint such number of new members as may be required to make up the
minimum number of three (3) members.
The Board shall review the term of office and performance of the Committee and each of its members at least once
every three (3) years.
27
28
Audit
Committee Report
Cont’d
TERMS OF REFERENCE OF THE AUDIT COMMITTEE cont’d
Authority
The Committee shall, in accordance with the procedure determined by the Board and at the cost of the Company:
a)
b)
c)
d)
e)
f)
Have authority to investigate any matter within its terms of reference;
Have the resources, which are required to perform its duties;
Have full and unrestricted access to any information pertaining to the Company;
Have direct communication channels with the external auditors and person(s) carrying out the internal audit
function or activity;
Be able to obtain independent professional or other advice; and
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.
Functions
The functions of the Committee shall include the following:
a)
b)
to review the following and report the same to the Board
i.
With the external auditor, the audit plan;
ii.
With the external auditor, his evaluation of the system of internal controls;
iii.
With the external auditors, his audit report;
iv.
The assistance given by the employees of the Company to the external auditor;
v.
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;
vi.
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;
vii. The quarterly results and year-end financial statements, prior to the approval by the Board, focusing
particularly on:
I.
Changes in or implementation of major accounting policy changes
II.
Significant and unusual events
III. Compliance with accounting standards and other legal requirements
viii. Any related party transactions and conflict of interest situation that may arise within the Company or Group
including any transaction, procedure or course of conduct that raises questions of management integrity;
ix.
Any letter of resignation from the external auditors of the Company; and
x.
Whether there is reason (supported by grounds) to believe that the Company’s external auditor is not
suitable for re-appointment.
To consider the nomination of a person or persons as auditors together with such other functions as may be
agreed to by the Audit Committee and the Board of Directors.
Meetings
Meetings of the Committee shall be held not less than four (4) times a year. The external auditors may request a
meeting if they consider that one is necessary and shall have the right to appear and be heard at any meeting of the
Committee. The Chairman shall convene a meeting whenever any member of the Committee requests for a meeting
by giving not less than three (3) clear days notice thereof unless such requirement is waived by all members. Written
notice of the meeting together with the agenda shall be given to the members and external auditors where applicable.
The quorum for a meeting for the Committee shall be two (2), provided always that the majority members present must
be independent directors.
The Chairman of the Committee should engage on a continuous basis with senior management, such as CEO, CFO,
Finance Senior Manager, internal auditors and the external auditors in order to be kept informed of matters affecting
the company.
The Committee meet with the external auditors without Executive Board members and management present at least
twice a year.
Annual Report 2013
Audit
Committee Report
Cont’d
TERMS OF REFERENCE OF THE AUDIT COMMITTEE cont’d
Meetings cont’d
Other Board members and employees may attend any particular meeting only at the Committee’s invitation.
The Chairman shall not have a casting vote.
Reporting procedures
The Secretary shall maintain minutes of the proceedings of the meetings of the Committee and circulate such minutes
to all members of the Board.
SUMMARY OF ACTIVITIES DURING THE FINANCIAL YEAR
The Audit Committee is empowered to carry out the following duties in accordance with its terms of reference:
z
z z z z z z z z z z Reviewed the external auditors’ scope of work and audit plans for the financial year. Prior to the audit,
representatives from the external auditors presented their audit strategy and plan.
Reviewed with the external auditors the results of the audit and the audit report.
Reviewed the Group’s internal audit plan.
Assessed the effectiveness of the system of internal control of the Group by reviewing the internal audit reports
and management responses and ensuring significant findings are adequately addressed by management.
Reviewed the audited financial statements of the Company prior to submission to the Board for their
consideration and approval. The review was to ensure that the audited financial statements were drawn up in
accordance with the provisions of the Companies Act 1965 and the applicable Financial Reporting Standards
in Malaysia (“FRS”), the approved accounting standards for entities other than private entities issued by the
Malaysian Accounting Standards Board.
Reviewed the Group’s compliance in particular the quarterly and year-end financial statements with the Listing
Requirements of the Bursa Malaysia Securities Berhad, FRS and other relevant legal and regulatory requirements.
Reviewed pertinent issues of the Group, which had a significant impact on the results of the Group.
Reviewed the quarterly unaudited financial results announcements before recommending them for the Board’s
approval. The review and discussions were conducted with the Managing Director, CFO and Finance Senior
Manager.
Reviewed and report to the Board the extent of the Group’s compliance with the provisions set out under Part
2 Guideline BB of the Malaysian Code on Corporate Governance for preparing the Corporate Governance
Statement and Statement on Internal Control pursuant to the Bursa Malaysia Securities Berhad Listing
Requirements.
Discussed Policy and Procedures on Auditors’ Independence before recommending the policy for the Board’s
approval.
Assessed auditors’ independence for current financial year 2013.
29
30
Audit
Committee Report
Cont’d
TRAINING
Listed below are the trainings, which the members attended to keep abreast of latest developments:
Training Programme/Course
Date
Launch of The Statement On Risk Management and Internal Control Guidelines For
Director
16.1.2013
Recent Legal Developments & its Impact on Professional Practices
29.3.2013
Board Oversight Responsibilities For Merger & Acquisition - Passion Beyond Numbers
18.4.2013
Effective Corporate Mergers & Acquisitions – From Complexity to Execution Excellence
14.8.2013
Related Party Transaction from Governance Challenges to Impactful Results
9.9.2013
Recent Court and Rulings on Laws Affecting Housing Development in Malaysia : Impact
on Developers, Bankers and Purchasers
10.9.2013
Real Estate CEO Forum
19.9.2013
Navigating The Global Economic Fragility : Implications on Malaysian Business
22.10.2013 & 12.12.2013
23rd National Real Estate Convention (Real Estate Realities – 2014 and Beyond)
24.10.2013
2014 Tax & Budget Outlook
30.10.2013
SUMMARY OF ACTIVITIES OF THE INTERNAL AUDIT FUNCTION DURING THE YEAR ENDED 31 DECEMBER
2013
The internal audit function of the Group is outsourced to independent consulting firm. The independent consulting firm
acts as internal auditor and reports directly to the Audit Committee. The internal auditor has undertaken independent
and systematic reviews of the system of internal controls to provide reasonable assurance that such system continues
to operate effectively and efficiently. In attaining such objectives, the following activities carried out by internal auditor
in 2013:
a)
b)
c)
d)
e)
f)
Reviewed critical business processes, identified risks and internal control gaps, assessed the effectiveness
and adequacy of the existing state of internal control of the major subsidiaries and recommended possible
improvements to the internal control process;
Ascertained the extent of compliance with established policies, procedures and statutory requirements;
Appraised the policies, procedures and management control to ensure that the activities were properly managed
and to promote effective controls at reasonable cost;
Identified opportunities to improve the operations and processes within the Group;
Recommended improvements to the existing systems of controls to minimize wastage, extravagance and fraud
and to enhance efficiencies by way of issuing audit reports to the appropriate level of management capable of
achieving satisfactory results and ensured corrective actions were taken; and
Follow-up visits carried out to ensure weaknesses identified have been or are being addressed. Periodic audit
reports and status report on follow up actions were tabled to the Audit Committee and Board during its quarterly
meetings.
The total cost incurred by the Internal Audit Department in relation to the conduct of the internal audit functions of the
Group during the financial year 2013 amounted to RM44,200.00.
Annual Report 2013
Statement on
Risk Management and Internal Control
INTRODUCTION
The Board of Directors (“the Board”) is pleased to provide the following Statement on Risk Management and Internal
Control, which outlines the features of internal controls within Meda Inc Berhad and subsidiaries (the Group), the
Group to safeguard shareholders’ investment and Group’s assets for the financial year ended 31 December 2013.
This disclosure on the Group’s state of internal controls fulfils Chapter 15.26 (b) of the Listing Requirements of Bursa
Malaysia Securities Berhad.
RESPONSIBILITY
The Board of Directors acknowledges its responsibility to maintain a sound system of internal control and risk
management practices within the Group in accordance with the Malaysian Code on Corporate Governance 2012.
The Board’s responsibility includes the establishment of appropriate control and framework as well as reviewing the
adequacy and integrity of the system in managing the Group’s business risks. A sound system of internal control
is important to safeguard the shareholders’ investment and the Group’s assets. The system of internal control, due
to its inherent limitations, is designed to manage and control risk rather than eliminate the risk of failure to achieve
business objectives. Accordingly, the system can only provide reasonable and not absolute assurance against material
misstatement or loss or the occurrence of unforeseeable circumstances.
RISK MANAGEMENT
The Board confirms that there is an on-going process of identifying, assessing and responding to risks to achieve the
objectives of the Group for the financial year under review. The process is in place for the year under review and up to
the date of issuance of the Statement on Risk Management and Internal Control.
The process of identifying, evaluating, monitoring and managing significant risks is embedded in the various business
processes and procedures of the respective operational functions and management team. The management has been
vested the responsibility for managing risks and internal controls associated with the operations of the Group and for
ensuring compliance with the applicable laws and regulations. Any significant issues and controls implemented were
discussed at management meetings and quarterly Audit Committee meetings.
The key elements of the Group’s risk management framework include:
•
Senior executive management team to identify and evaluate all present and potential risks faced by operating
units of the Group, and to formulate actions plans to manage or mitigate those identified risks.
•
To determine the risk appetite for business units of the Group, and ensure that risks are managed and
maintained at acceptable levels.
•
Continuous monitoring of existing as well as new business activities taking into cognizance changes in the
business environment to update key risks and reviewing the appropriateness of the mitigation action plans.
•
The Risk Management Committee to update the Board on the Group’s risk profile and to report of any new
significant risks at the quarterly Audit Committee meeting.
The Board had received assurance from the senior executive management team that the Group’s risk management
and internal control is operating adequately and effectively, in all material aspects, based on the risk management and
internal control system of the Group.
31
32
Statement on
Cont’d
OTHER KEY ELEMENTS OF INTERNAL CONTROL
The control environment of the Group comprises the following elements:
•
Group Vision, Mission and Strategic Objectives which are communicated to employees;
•
Human resource policy and management system with defined authorities and responsibilities as well as
segregation of duties;
•
The Group’s organization structure that is aligned to business and operational requirements;
•
Board participation at the macro perspective in the performance monitoring of all divisions under the Group;
•
Emphasise on the quality and competency of employees through continuing education, training and development
schemes and programme;
•
Delegation of responsibilities to committees of the Board, management and operating units including
authorisation levels for all aspects of business;
•
Budgeting process with approval both at the respective operating units level and by the key personnel
management;
•
Proper identification of accountabilities and segregation of duties in terms of purchases of goods and services
and capital expenditure for each level of management within the Group;
•
Operational Meeting which involves the Managing Director and/or the Chief Executive Officer/Executive Director
and key management team, are held in order to identify and address any problems encountered by the Group for
adequate actions to be taken;
•
An internal audit function carries out quarterly risk based internal audit to ascertain the adequacy of and to
monitor the effectiveness of operational and financial procedures. The internal audit also reviews and assesses
risks faced by the Group and reports directly to the Audit Committee on a quarterly basis;
•
Reporting of financials, operations and legal issues to the Board on a quarterly basis. Budgets for the financial
year are also reviewed on a yearly basis and major variances are followed up and remedial actions are taken
where necessary;
•
Regular internal audit visits to monitor compliance with policies and procedures to assess the integrity of both
financial and non-financial information provided; and
•
Follow-up visits are then subsequently conducted by the internal auditors to ensure proper implementation of
agreed action plans by the respective process owners.
INTERNAL AUDIT FUNCTION
During the financial year, the internal auditor reviewed key business processes, identified risks and internal
control gaps, assessed the effectiveness and adequacy of the existing state of internal control of the Group and
recommended possible improvements to the internal control process.
This is to provide reasonable assurance that such system continue to operate satisfactorily and effectively within the
Group. Follow-up visits were also carried out to ensure weaknesses identified have been or are being addressed.
Periodic audit reports and status report on follow up actions were tabled to the Audit Committee and Board during
its quarterly meetings. For the financial year ended 31 December 2013, RM44,200 was incurred for the outsourced
internal audit function.
Annual Report 2013
Statement on
Cont’d
CONCLUSION
Pertaining the adequacy and effectiveness of the risk management and internal control system, the Chief Executive
Officer had provided the assurance to the Board of Directors that the systems are adequately and effectively
implemented. The Board is satisfied that the existing system of internal control is adequate and properly implemented
and there are no major weaknesses at the existing level of operations of the Group. Because of the changing
circumstances and conditions, the effectiveness of an internal control system may vary over time.
The Board continually evaluates and takes measures to strengthen the internal control systems. This statement is
made in accordance with the minutes of the Board of Directors Meeting held on 25 April 2014.
REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS
The external auditors have reviewed this Statement on Risk Management and Internal Control for the inclusion in the
annual report for the year ended 31 December 2013 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 adopted by the
Board in reviewing the adequacy and integrity of the system of internal controls.
33
34
Other
Information
In Compliance with the Listing Requirements of Bursa Malaysia Securities Berhad
SHARE BUYBACK
During the year ended 31 December 2013, the Company bought back 1,965,300 of its own ordinary shares of RM0.50
each at the total consideration of RM1,453,359. The shares bought back were held as treasury shares in accordance
with Section 67A of the Companies Act 1965.
None of the shares purchased were being cancelled during the year.
Details of the movement of treasury shares during the year were as follows:Average
Price
Per Share
Total
Highest
RM
RM
0.68
0.72
0.70
499,330
146,000
0.70
0.70
0.70
101,966
440,200
0.67
0.80
0.72
317,018
Purchase/Sale
Price Per Share (RM)
No. of Shares
Purchased/
(sold)
Lowest
January
712,100
March
May
July
Monthly breakdown
Shares bought back
590,000
0.78
0.85
0.81
476,290
August
35,000
0.77
0.83
0.81
28,250
October
42,000
0.72
0.74
0.73
30,505
1,965,300
0.67
0.85
0.74
1,453,359
As at 31 December 2013, the total treasury shares held by the Company was 5,072,300 shares.
OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES
17,450,100 of Warrant A and 1,089,550 of Warrant B were exercised during the financial year ended 31 December
2013. The total number of warrants exercised up to 31 December 2013 for Warrant A and Warrant B are 27,359,500
and 1,089,800 respectively.
The Company did not issue any convertible securities.
AMERICAN DEPOSITORY RECEIPT (“ADR”) OR GLOBAL DEPOSITORY RECEIPT (“GDR”) PROGRAMME
The Company did not sponsor any ADR or GDR programme during the financial year ended 31 December 2013.
SANCTIONS AND/OR PENALTIES
There were no public sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or
management by any relevant regulatory bodies during the financial year ended 31 December 2013.
Annual Report 2013
Other
Information
In Compliance with the Listing Requirements of Bursa Malaysia Securities Berhad
Cont’d
NON-AUDIT FEES
Other than the following, there were no non-audit fees paid to the external auditors for the financial year 31 December
2013: Auditors
Services Amount Paid
(RM’000)
Messrs Baker Tilly Monteiro Heng
Review of the Internal Control
4
Messrs Baker Tilly Monteiro Heng
Review of the Supplementary Information on the
Disclosure of Realised and Unrealised Profits or losses
6
10
VARIATION IN RESULTS
There were no material variations between the audited results for the financial year ended 31 December 2013 and the
unaudited results released for the financial quarter ended 31 December 2013.
PROFIT GUARANTEE
There was no shortfall in the profit guarantee received by the Company during the financial year.
MATERIAL CONTRACTS
Other than as disclosed in Note 38 Significant Related Party Disclosure, there were no material contracts subsisting
as at 31 December 2013 or if not then subsisting, entered into since the end of the previous financial year by the
Company or its subsidiaries which involved the interests of Directors or substantial shareholders.
REVALUATION POLICY ON LANDED PROPERTIES
It is the policy of the Group to revalue landed properties by registered independent valuers at regular intervals of at
least once in every five years with additional valuations in the intervening years where market conditions indicate that
the carrying values of the revalued landed properties materially differ from the market values.
Investment properties are revalued annually by registered independent valuers having appropriate recognized
professional qualifications and recent experience in the location and category of the properties being valued.
RECURRENT RELATED PARTY TRANSACTION OF A REVENUE NATURE
There were no recurrent related party transaction of a revenue nature which requires shareholders’ mandate during the
financial year ended 31 December 2013.
UTILISATION OF PROCEEDS
The Company did not implement any fund raising exercise during the year.
35
Financial
Statements
38
Directors’ Report
44
Statements of Financial Position
46
Statements of Profit or Loss and Other
Comprehensive Income
47
Statements of Changes In Equity
49
Statements of Cash Flows
53
Notes to the Financial Statements
127
Information
Supplementary Informat
atio
ion
n on
n the Disclosure
Unrealised
Profits
of Realised an
and Unre
eal
alis
ised P
r fits or Losses
ro
128
Statement
Statemen
e t by Directors
Dirrec
ecto
t rs
8
128
Statutoryy Declaration
D clarattio
De
ion
9
129
Indepe
pend
ndent Au
Audi
dito
tors’ Report
Independent
Auditors’
38
Directors’
Report
The directors hereby present their report to the members together with the audited financial statements of the Group
and of the Company for the financial year ended 31 December 2013.
PRINCIPAL ACTIVITIES
The principal activity of the Company is that of investment holding. The principal activities of its subsidiaries are set
out in Note 5 to the financial statements.
There have been no significant changes to the nature of these principal activities during the financial year.
RESULTS
Group
Company
RM’000
RM’000
18,526
16,283
Owners of the Company
18,526
16,283
Non-controlling interests
-
-
18,526
16,283
Profit for the financial year
Profit attributable to:-
DIVIDENDS
The Company declared a single-tier interim dividend of 2 sen per ordinary shares totalling of RM9,379,888/-, declared
on 30 July 2013 and paid on 27 August 2013.
A final single-tier dividend in respect of the financial year ended 31 December 2013, of 1 sen per ordinary share will
be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this
proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation
of retained earnings in the financial year ended 31 December 2014.
RESERVES AND PROVISIONS
All material transfers to and from reserves and provisions during the financial year have been disclosed in the financial
statements.
BAD AND DOUBTFUL DEBTS
Before the statements of profit or loss and other comprehensive income and statements of financial position of the
Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been
taken in relation to the writing off of bad debts and the making of allowance for doubtful debts, and had satisfied
themselves that all known bad debts had been written off and adequate allowance had been made for doubtful debts.
At the date of this report, the directors are not aware of any circumstances that would render the amount written off
for bad debts, or the amount of the allowance for doubtful debts, in the financial statements of the Group and of the
Company inadequate to any substantial extent.
Annual Report 2013
Directors’
Report
Cont’d
CURRENT ASSETS
Before the statements of profit or loss and other comprehensive income and statements of financial position of the
Group and of the Company were made out, the directors took reasonable steps to ensure that any current assets,
other than debts, which were unlikely to be realised in the ordinary course of business, their values as shown in
the accounting records of the Group and of the Company had been written down to an amount that they might be
expected to be realised.
At the date of this report, the directors are not aware of any circumstances that would render the values attributed to
the current assets in the financial statements of the Group and of the Company misleading.
VALUATION METHODS
At the date of this report, the directors are not aware of any circumstances which have arisen which render
adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or
inappropriate.
CONTINGENT AND OTHER LIABILITIES
At the date of this report, there does not exist:(i)
any charge on the assets of the Group and of the Company that has arisen since the end of the financial year
which secures the liabilities of any other person; or
(ii)
any contingent liabilities in respect of the Group and of the Company that has arisen since the end of the
financial year.
No contingent liabilities or other liabilities of the Group and of the Company 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.
CHANGE OF CIRCUMSTANCES
At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with in this report
or the financial statements of the Group and of the Company that would render any amount stated in the financial
statements misleading.
ITEMS OF AN UNUSUAL NATURE
In the opinion of the directors, other than as disclosed in Note 32 to the financial statements, the results of the
operations of the Group and of the Company for the financial year were not substantially affected by any item,
transaction or event of a material and unusual nature.
There has not arisen in the interval between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the
results of the operations of the Group and of the Company for the financial year in which this report is made.
39
40
Directors’
Report
Cont’d
WARRANTS
Warrants A
By virtue of a Deed Poll executed on 11 August 2011 for the 80,000,000 Warrants A issued in connection with the
Private Placement allotted and credited on 16 October 2011, each Warrants A entitles the registered holder the right at
any time during the exercise period to subscribe in cash for 1 new ordinary share at an exercise price of RM0.50 each
and will be expired on 15 August 2021.
During the financial year, there were 17,450,100 Warrants A exercised at RM0.50. Total proceeds from the conversion
of Warrants amounting to RM8,725,050/-.
Warrants B
By virtue of a Deed Poll executed on 23 March 2012 for the 114,021,616 free warrants (“Warrants B”) issued
in connection with the bonus issue, each Warrants B entitles the registered holder the right at any time during the
exercise period to subscribe in cash for 1 new ordinary share at an exercise price of RM0.60 each at a step-up
mechanism whereby the exercise price will be adjusted upwards by RM0.10 at the expiry of every 2 anniversary years
from the date of issuance on the basis of 1 free warrant for every 4 existing shares held and will be expired on 23 April
2022.
During the financial year, there were 1,089,550 Warrants B exercised at RM0.60. Total proceeds from the conversion
of Warrants amounting to RM653,730/-.
ISSUE OF SHARES AND DEBENTURES
During the financial year, the issued and paid-up capital of the Company was increased from RM228,425,296/- to
RM237,695,121/- via the issuance of:(i)
17,450,100 new ordinary shares of RM0.50 each in conjunction with the exercise of Warrants A; and
(ii)
1,089,550 new ordinary shares of RM0.50 each in conjunction with the exercise of Warrants B.
The new shares rank pari passu with the existing shares of the Company.
During the financial year, the Company did not issued any debentures.
TREASURY SHARES
During the financial year, the Company repurchased 1,965,300 of its issued ordinary shares from the open market at
the average price of RM0.74 per share. The total consideration paid for the repurchase including the transaction costs
was RM1,453,359/-. The shares repurchased are being held as treasury shares in accordance with Section 67A of the
Companies Act, 1965 in Malaysia.
As at 31 December 2013, the Company held as treasury shares a total of 5,072,300 of its 475,390,242 issued ordinary
shares. Such treasury shares are held at a carrying amount of RM3,416,779/- and further relevant details are disclosed
in Note 18 to the financial statements.
Annual Report 2013
Directors’
Report
Cont’d
DIRECTORS
The directors in office since the date of the last report and the date of this report are:Dato’ Dr. Mohd Ariff Bin Araff
Teoh Seng Kian
Ooi Giap Ch’ng
Chin Wing Wah
Lim Chang Moh
DIRECTORS’ INTERESTS
According to the register of directors’ shareholdings kept by the Company under Section 134 of the Companies Act,
1965 in Malaysia, the interests of those directors who held office at the end of the financial year in shares in the
Company and its related corporations during the financial year ended 31 December 2013 are as follows:
Number of ordinary shares of RM0.50 each
At
1.1.2013
Acquired
Disposed
At
31.12.2013
The Company
Direct Interest
18,942,000
-
(1,280,000)
17,662,000
Teoh Seng Kian
52,115,024
2,630,000
(305,000)
54,440,024
Chin Wing Wah
1,020,200
-
-
1,020,200
16,144,158
-
(6,408,158)
9,736,000
6,208,158
-
(6,208,158)
-
Deemed Interest
Dato’ (Dr.) Teoh Seng Foo #
Teoh Seng Kian ^
Number of Warrants A Issued Pursuant
To Deed Poll Executed on 11 August 2011
At
1.1.2013
Acquired
Disposed
At
31.12.2013
767,700
-
-
767,700
Teoh Seng Kian
2,373,700
-
-
2,373,700
Chin Wing Wah
580,000
-
-
580,000
993,300
-
-
993,300
The Company
Direct Interest
Deemed Interest
41
42
Directors’
Report
Cont’d
DIRECTORS’ INTERESTS cont’d
Number of Warrants B Issued Pursuant To
Deed Poll Executed on 23 March 2012
At
1.1.2013
Acquired
Disposed
At
31.12.2013
4,735,500
-
-
4,735,500
12,337,500
-
-
12,337,500
3,374,377
-
(2,422,377)
952,000
Teoh Seng Kian ^
2,422,377
-
(2,422,377)
-
The Company
Direct Interest
Teoh Seng Kian
Deemed Interest
#
Deemed interested by virtue of Dato’ (Dr.) Teoh Seng Foo’s shareholding in EcoFirst Consolidated Berhad and its wholly owned
subsidiary, Sawitani Sdn. Bhd. and his spouse, Cheam Shaw Fin.
^
Deemed interested by virtue of Mr. Teoh Seng Kian’s shareholdings in EcoFirst Consolidated Berhad and its wholly owned
subsidiary, Sawitani Sdn. Bhd.
By virtue of their interest in shares of the Company, Dato’ (Dr.) Teoh Seng Foo and Mr. Teoh Seng Kian are deemed to
be interested in the shares of all the subsidiaries to the extent that the Company has a substantial interest.
Other than as disclosed above, none of the other directors in office at the end of the financial year held any interest in
the shares of the Company and its related corporations.
DIRECTORS’ BENEFITS
Since the end of the previous financial year, no director of the Company has received or become entitled to receive a
benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by the
directors shown in the financial statements) 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.
Neither during nor at the end of the financial year was the Company or any of its related corporations a party to any
arrangement whose object was to enable the directors to acquire benefits by means of the acquisition of shares in, or
debentures of, the Company or any other body corporate.
SIGNIFICANT EVENTS
Significant events that occurred during and after the financial year are disclosed in Note 45 to the financial statements.
Annual Report 2013
Directors’
Report
Cont’d
AUDITORS
The auditors, Messrs. Baker Tilly Monteiro Heng, have expressed their willingness to continue in office.
On behalf of the Board,
TEOH SENG KIAN
DirectorDirector
Kuala Lumpur
Date: 25 April 2014
43
44
Statements of
Financial Position
As at 31 December 2013
Group
Note
31.12.2013
RM’000
31.12.2012
RM’000
1.1.2012
RM’000
(Restated)
(Restated)
Company
31.12.2013
RM’000
31.12.2012
RM’000
(Restated)
ASSETS
Non-current assets
Property, plant and equipment
4
42,190
44,265
43,537
292
227
Investments in subsidiaries
5
-
-
-
99,393
78,568
Investments in an associate
6
-
-
-
-
-
Investment properties
7
115,904
115,334
111,770
-
-
Land held for property
development
8(a)
41,599
43,872
19,935
-
-
Goodwill on consolidation
9
5,977
5,977
5,977
-
-
Trade receivables
10
132
-
-
-
-
Other receivables
11
1,270
-
-
1,270
-
207,072
209,448
181,219
100,955
78,795
Current assets
Property development costs
8(b)
89,775
78,108
66,143
-
-
Inventories
12
11,627
10,772
8,846
-
-
-
-
3
-
-
Trade receivables
10
56,591
42,019
37,925
-
3
Other receivables, deposits and
prepayments
11
19,190
18,637
27,088
1,192
2,352
Amount due from subsidiaries
13
-
-
-
106,720
113,285
Amount due from customers
for contract works
Amount due from an associate
Tax recoverable
-
-
-
-
-
1,442
1
111
-
-
Deposits placed with licensed
banks
14
131
126
121
-
-
Cash and bank balances
15
4,883
7,138
7,113
468
19
183,639
156,801
147,350
108,380
115,659
-
-
18,000
-
-
183,639
156,801
165,350
108,380
115,659
390,711
366,249
346,569
209,335
194,454
Assets held for sale
TOTAL ASSETS
Annual Report 2013
Statements of
Financial Position
Cont’d
Group
Note
31.12.2013
RM’000
Company
31.12.2012
RM’000
1.1.2012
RM’000
(Restated)
(Restated)
31.12.2013
RM’000
31.12.2012
RM’000
(Restated)
EQUITY AND LIABILITIES
Equity attributable to owners
of the Company
Share capital
16
237,695
228,425
223,470
237,695
228,425
Share premium
17
11,115
8,020
6,325
11,115
8,020
Treasury shares
18
(3,417)
(1,964)
(366)
(3,417)
(1,964)
Warrants reserve
19
9,007
11,993
13,688
9,007
11,993
Revaluation reserve
20
6,064
6,117
6,170
-
-
Accumulated losses
(29,460)
(38,659)
(66,554)
(49,646)
(56,549)
Total Equity
231,004
213,932
182,733
204,754
189,925
Non-current liabilities
Borrowings (secured)
21
10,140
11,892
15,407
-
-
Deferred tax liabilities
25
14,054
13,903
13,459
-
-
24,194
25,795
28,866
-
-
Current liabilities
Trade payables
26
66,467
46,743
27,794
495
495
Other payables, deposits and
accruals
27
34,868
30,607
39,764
876
998
Provision for liability
28
557
-
-
-
-
Amount due to subsidiaries
13
-
-
-
3,210
3,036
21
22,124
27,715
46,676
-
-
11,497
21,457
20,736
-
-
135,513
126,522
134,970
4,581
4,529
Total Liabilities
159,707
152,317
163,836
4,581
4,529
TOTAL EQUITY AND
LIABILITIES
390,711
366,249
346,569
209,335
194,454
Tax payables
The accompanying notes form an integral part of these financial statements.
45
46
Statements of Profit or Loss and
Other Comprehensive Income
For the financial year ended 31 December 2013
Group
2013
Note
RM’000
Company
2012
2013
2012
RM’000
RM’000
RM’000
(Restated)
Revenue
29
181,408
170,648
17,402
-
Cost of sales
30
(114,378)
(107,820)
-
-
67,030
62,828
17,402
-
553
18,757
13,276
3,602
GROSS PROFIT
Other income
Selling and distribution expenses
Administrative expenses
(4,282)
(7,534)
-
-
(37,827)
(35,932)
(14,395)
(4,341)
25,474
38,119
16,283
(739)
Finance costs
31
(2,105)
(2,820)
-
-
PROFIT/(LOSS) BEFORE TAXATION
32
23,369
35,299
16,283
(739)
Taxation
33
(4,843)
(7,457)
-
2
18,526
27,842
16,283
(737)
53
53
-
-
18,579
27,895
16,283
(737)
18,526
27,842
16,283
(737)
-
-
-
-
18,526
27,842
16,283
(737)
18,579
27,895
16,283
(737)
-
-
-
-
18,579
27,895
16,283
(737)
PROFIT/(LOSS) FOR THE FINANCIAL YEAR
OTHER COMPREHENSIVE INCOME
- amortisation of revaluation reserve
20
TOTAL COMPREHENSIVE INCOME/(LOSS)
FOR THE FINANCIAL YEAR
Profit/(loss) attributable to:
Total comprehensive income/(loss)
attributable to:
Earnings per share attributable to owners
of the Company (sen):
Basic, earnings per ordinary share
34(i)
4.03
6.14
Diluted, earnings per ordinary share
34(ii)
3.68
5.71
Annual Report 2013
Statements of
Changes in Equity
Attributable to Equity Holders of the Company
Non-distributable
Share
Note
Share
Warrant Revaluation
Accumulated Treasury
Total
Capital Premium
Reserve
Reserve
Losses
Shares
Equity
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
223,470
6,325
13,688
6,170
(82,394)
(366)
166,893
-
-
-
-
15,840
-
15,840
223,470
6,325
13,688
6,170
(66,554)
(366)
182,733
Group
Balance as at 1 January 2012,
as previously stated
- Effect of adoption of FRS 10
44
Balance as at 1 January 2012,
as restated
Exercise of Warrants
4,955
1,695
(1,695)
-
-
-
4,955
18
-
-
-
-
-
(1,598)
(1,598)
Amortisation of revaluation reserve 20
-
-
-
(53)
-
-
(53)
Total comprehensive income for
the financial year
-
-
-
-
27,895
-
27,895
228,425
8,020
11,993
6,117
(38,659)
(1,964)
213,932
9,270
3,095
(2,986)
-
-
-
9,379
Arising from shares Buy-Back
Balance as at 31 December 2012
18
-
-
-
-
-
(1,453)
(1,453)
Amortisation of revaluation reserve 20
-
-
-
(53)
-
-
(53)
Total comprehensive income
for the financial year
-
-
-
-
18,579
-
18,579
-
-
-
-
(9,380)
-
(9,380)
237,695
11,115
9,007
6,064
(29,460)
(3,417)
231,004
Dividends
35
47
48
Statements of
Changes in Equity
Cont’d
Attributable to Equity Holders of the Company
Non-distributable
Note
Share
Capital
Share
Premium
Warrant
Reserve
Accumulated
Losses
Treasury
Shares
Total
Equity
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
223,470
6,325
13,688
(55,812)
(366)
187,305
4,955
1,695
(1,695)
-
-
4,955
Company
Balance as at 1 January 2012
-
-
-
-
(1,598)
(1,598)
Total comprehensive loss for the
financial year
18
-
-
-
(737)
-
(737)
228,425
8,020
11,993
(56,549)
(1,964)
189,925
9,270
3,095
(2,986)
-
-
9,379
-
-
-
-
(1,453)
(1,453)
-
-
-
16,283
-
16,283
-
-
-
(9,380)
-
(9,380)
237,695
11,115
9,007
(49,646)
(3,417)
204,754
18
Total comprehensive income for
the financial year
Dividends
35
Annual Report 2013
Statements of
Cash Flows
Group
2013
RM’000
Company
2012
2013
RM’000
RM’000
(Restated)
2012
RM’000
(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit before taxation
23,369
35,299
16,283
(739)
- amount due from subsidiaries
-
-
-
108
- investments in subsidiaries
-
-
9,675
-
1,970
-
-
-
746
-
-
-
1,281
5,391
158
-
29
212
3
-
Depreciation for property, plant and equipment
1,859
1,466
58
46
Interest expenses
Adjustments for:Allowance for impairment loss:-
- property, plant and equipment
- trade receivables
- other receivables and deposits
Bad debts written off
2,105
2,820
-
-
Net loss on financial assets measured at amortised
costs
256
-
227
-
Provision for liquidated and ascertained damages
557
-
-
-
-
-
(17,402)
-
(88)
(1,058)
-
-
-
(133)
-
-
(218)
(63)
-
-
Dividend income
Gain on disposal of:- property, plant and equipment
- investment properties
Interest income
Reversal of allowance no longer required:- amount due from subsidiaries
-
-
(9,675)
-
(3,361)
(816)
-
-
- impairment losses of receivables
-
(24)
-
-
- land held for property development
-
(9,101)
-
-
- property development costs
-
(6,228)
-
-
Waiver of amount due from other receivables
-
(2)
-
(2)
28,505
27,763
(673)
(587)
- foreseeable losses
Operating cash flows before working capital changes
49
50
Statements of
Cash Flows
Cont’d
Group
2013
RM’000
Company
2012
2013
RM’000
RM’000
(Restated)
2012
RM’000
(Restated)
Changes In Working Capital:Property development costs
Inventories
Balances with customers for contract works
(6,033)
(1,757)
-
-
(855)
(1,926)
-
-
-
3
-
-
Receivables
(18,864)
(1,213)
(495)
1,644
Payables
23,985
9,792
(122)
130
26,738
32,662
(1,290)
1,187
Interest paid
(84)
(49)
-
-
Interest received
218
63
-
-
-
114
-
93
(16,068)
(6,303)
-
-
10,804
26,487
(1,290)
1,280
(570)
(4,931)
-
-
Addition in investment in subsidiary
-
-
(30,500)
(3,400)
Dividend received
-
-
17,402
-
-*
-*
-
-
(1,124)
(1,417)
(123)
(82)
268
1,353
-
-
Tax refund
Tax paid
Net Operating Cash Flows
CASH FLOWS FROM INVESTING ACTIVITIES:
Addition in investment properties
Net cash outflows on:- acquisition of subsidiaries (Note A)
Purchase of property, plant and equipment (Note B)
Proceeds from disposal of:- property, plant and equipment
Withdrawal/(placement) of deposit held as security
Repayment from/(advance to) subsidiaries
Net Investing Cash Flows
-
1,500
-
-
2,724
(725)
-
-
-
-
16,414
(1,153)
1,298
(4,220)
3,193
(4,635)
Annual Report 2013
Statements of
Cash Flows
Cont’d
Group
2013
RM’000
Company
2012
2013
RM’000
RM’000
(Restated)
2012
RM’000
(Restated)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividend paid
(9,380)
-
(9,380)
-
Proceeds from issuance of shares via exercise of
warrants
9,379
4,955
9,379
4,955
Interest paid
(2,021)
(2,771)
-
-
Purchase of treasury shares
(1,453)
(1,598)
(1,453)
(1,598)
Drawdown of bank loan
7,585
8,704
-
-
Net repayment to:- bank loans
(15,404)
(31,530)
-
-
- hire purchase liabilities
(334)
(169)
-
-
Net Financing Cash Flows
(11,628)
(22,409)
(1,454)
3,357
474
(142)
449
2
CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE FINANCIAL YEAR
(11,116)
(10,974)
19
17
CASH AND CASH EQUIVALENTS AT THE END OF
THE FINANCIAL YEAR
(10,642)
(11,116)
468
19
4,883
7,138
468
19
131
126
-
-
(14,447)
(14,447)
-
-
(9,433)
(7,183)
468
19
(131)
(126)
-
-
(1,078)
(3,807)
-
-
(10,642)
(11,116)
468
19
NET CHANGE IN CASH AND CASH EQUIVALENTS
ANALYSIS OF CASH AND CASH EQUIVALENTS:Cash and bank balances
Deposits placed with licensed banks
Bank overdrafts - secured
Less: Deposits held as security value (Note 14)
Less: Housing Development Accounts held as
security value (Note 15)
*
Represent amount less than RM1,000/-.
51
52
Statements of
Cash Flows
Cont’d
A.
SUMMARY OF EFFECTS ON ACQUISITIONS OF SUBSIDIARIES
Group
2013
On 6 March 2013, the Company had acquired 2 ordinary shares of RM1/- each representing 100% equity
interest in Purple Heights Sdn. Bhd. for a total cash consideration of RM2/- each.
B.
PURCHASE OF PROPERTY, PLANT AND EQUIPMENT
Group
During the financial year, the Group and the Company made the following cash payments to purchase property,
plant and equipment:Group
2013
RM’000
Company
2012
2013
2012
RM’000
RM’000
RM’000
(Restated)
Purchase of property, plant and equipment
Financed by hire purchase arrangements
Cash payment on purchase of property,
plant and equipment
1,934
2,489
123
82
(810)
(1,072)
-
-
1,124
1,417
123
82
Annual Report 2013
Notes to the
Financial Statements
1.
GENERAL INFORMATION
The principal activity of the Company is that of investment holding. The principal activities of its subsidiaries are
set out in Notes 5 to the financial statements.
There have been no significant changes to the nature of these principal activities during the financial year.
The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the
Main Market of Bursa Malaysia Securities Berhad.
The registered office of the Company and its principal place of business are located at No. 11, USJ Sentral,
Jalan USJ Sentral 3, Persiaran Subang, 47600 Subang Jaya, Selangor Darul Ehsan.
The financial statements are expressed in Ringgit Malaysia “RM” and all values are rounded to the nearest
thousand (RM’000).
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of
the directors on 25 April 2014.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of Preparation
The financial statements of the Group and of the Company have been prepared in accordance with the
Financial Reporting Standards (“FRSs”) and the requirements of the Companies Act, 1965 in Malaysia.
The financial statements of the Group and of the Company have been prepared under the historical cost
basis, except as disclosed in the significant accounting policies in Note 2.3 to the financial statements.
The preparation of financial statements in conformity with FRSs requires the use of certain critical
accounting estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial statements, and the reported
amounts of the revenue and expenses during the reported period. It also requires directors to exercise their
judgment in the process of applying the Group’s and the Company’s accounting policies. Although these
estimates and judgment are based on the directors’ best knowledge of current events and actions, actual
results may differ.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates
are significant to the financial statements are disclosed in Note 3 to the financial statements.
53
54
Notes to the
Cont’d
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES cont’d
2.2 New and Revised FRSs, Amendments/Improvements to FRSs, New IC Interpretations (“IC Int”),
Amendments to IC Int and New Malaysian Accounting Standards Board (“MASB”) Approved
Accounting Standards, Malaysian Financial Reporting Standards (“MFRSs”)
(a) Adoption of New and Revised FRSs, Amendments/Improvements to FRSs, New IC Int and
Amendments to IC Int
The Group and the Company had adopted the following new and revised FRSs, amendments/
improvements to FRSs, new IC Int and amendments to IC Int that are mandatory for the current
financial year:New FRSs
FRS 10
FRS 11
FRS 12
FRS 13
Consolidated Financial Statements
Joint Arrangements
Disclosure of Interests in Other Entities
Fair Value Measurement
Revised FRSs
FRS 119
FRS 127
FRS 128
Employee Benefits
Separate Financial Statements
Investments in Associates and Joint Ventures
Amendments/Improvements to FRSs
FRS 1
First-time Adoption of Financial Reporting Standards
FRS 7
Financial Instruments: Disclosures
FRS 10
FRS 11
Joint Arrangements
FRS 12
FRS 101
Presentation of Financial Statements
FRS 116
Property, Plant and Equipment
FRS 132
Financial Instruments: Presentation
FRS 134
Interim Financial Reporting
New IC Int
IC Int 20
Stripping Costs in the Production Phase of a Surface Mine
Amendments to IC Int
IC Int 2
Members’ Shares in Co-operative Entities & Similar Instruments
The adoption of the above new and revised FRSs, amendments/improvements to FRSs, new IC Int
and amendments to IC Int do not have any effect on the financial statements of the Group and of the
Company except for those as discussed below:-
FRS 10 Consolidated Financial Statements and FRS 127 Separate Financial Statements
(Revised)
FRS 10 replaces the consolidation part of the former FRS 127 Consolidated and Separate Financial
Statements. The revised FRS 127 will deal only with accounting for investment in subsidiaries, joint
controlled entities and associates in the separate financial statements of an investor and require
the entity to account for such investments either at cost, or in accordance with FRS 139 Financial
Instruments: Recognition and Measurement.
Annual Report 2013
Notes to the
Cont’d
2.
Accounting Standards, Malaysian Financial Reporting Standards (“MFRSs”) cont’d
Amendments to IC Int cont’d
FRS 10 Consolidated Financial Statements and FRS 127 Separate Financial Statements
(Revised) cont’d
FRS 10 brings about convergence between FRS 127 and IC Int 12 Consolidation-Special Purpose
Entities, which interprets the requirements of FRS 10 in relation to special purpose entities. FRS 10
introduces a new single control model to identify a parent-subsidiary relationship by specifying that
“an investor controls an investee when the investor is exposed, or has rights, to variable returns from
its involvement with the investee and has the ability to affect those returns through its power over
the investee”. It provides guidance on situations when control is difficult to assess such as those
involving potential voting rights, or in circumstances involving agency relationships, or where the
investor has control over specific assets of the entity, or where the investee entity is designed in such
a manner where voting rights are not the dominant factor in determining control.
Upon the effective date of FRS 10, the directors assessed the Group’s investment in subsidiaries
and associates. The Group’s investments in Nusarhu Sdn. Bhd. held through Sri Lingga Sdn. Bhd.
was previously accounted for as an associate in the Group’s financial statements. As a results of the
directors’ assessment, Nusarhu Sdn. Bhd. is the subsidiary of the Group.
Accordingly, the Group has consolidated the financial statements of Nusarhu Sdn. Bhd.
retrospectively during the financial year. The assets, liabilities and equity of Nusarhu Sdn. Bhd. have
been retrospectively consolidated in the financial statements of the Group. The opening balance at
1 January 2012 and comparative information for financial year ended 31 December 2012 have been
restated in the consolidated financial statements. The quantitative impact on the financial statements
is disclosed in Note 44 to the financial statements.
FRS 12 Disclosures of Interests in Other Entities
FRS 12 is a single disclosure standard for interests in subsidiaries, jointly controlled entities,
associates and unconsolidated structured entities. The disclosure requirements in this FRS are aimed
at providing standardised and comparable information that enable users of financial statements to
evaluate the nature of, and risks associated with, the entity’s interests in other entities, and the effects
of those interests on its financial position, financial performance and cash flows. The requirements in
FRS 12 are more comprehensive than the previously existing disclosure requirements for subsidiaries.
FRS 13 Fair Value Measurement
FRS 13 defines fair value and sets out a framework for measuring fair value, and the disclosure
requirements about fair value. This standard is intended to address the inconsistencies in the
requirements for measuring fair value across different accounting standards. As defined in this
standard, fair value is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date. As a result of the
guidance in FRS 13, the Group reassessed its policies for measuring fair values, in particular, its
valuation inputs such as non-performance risk for fair values measurement of liabilities.
Application of FRS 13 has not materially impacted the fair value measurements of the Group. FRS
13 requires more extensive disclosures. Additional disclosures where required, are provided in the
individual notes relating to the assets and liabilities whose fair values were determined.
55
56
Notes to the
Cont’d
2.
Amendments to FRS 101 Presentation of Financial Statements
The amendments to FRS 101 introduces a grouping of items presented in other comprehensive
income. Items that will be reclassified to profit or loss at future point in time have to be presented
separately from items that will not be reclassified.
These amendments also clarify the difference between voluntary additional comparative information
and the minimum required comparative information. An entity must include comparative information
in the related notes to the financial statements when it voluntarily provides comparative information
beyond the minimum required comparative period. The amendments clarify that the opening
statements of financial position presented as a result of retrospective restatement or reclassification
of items in financial statements does not have to be accompanied by comparative information in the
related notes. As a result, the Group has not included comparative information in the related notes in
respect of the opening statements of financial position as at 1 January 2012.
The amendments also introduce new terminology, whose use is not mandatory, for the statement
of comprehensive income and income statement. Under the amendments, the ‘statement of
comprehensive income’ is renamed as the ‘statement of profit or loss and other comprehensive
income’.
The above amendments affect presentation only and have no impact on the Group’s financial position
or performance.
FRS 128 Investments in Associates and Joint Ventures (Revised)
FRS 128 (Revised) incorporates the requirements for accounting for joint ventures into the same
accounting standard as that for accounting for investments in associates, as the equity method was
applicable for both investments in joint ventures and associates. However, the revised standard
exempts the investor from applying equity accounting where the investment in the associate or joint
venture is held indirectly via venture capital organisations or mutual funds, unit trusts and similar
entities. In such cases, the entity shall measure the investment at fair value through profit or loss, in
accordance with FRS 139 Financial Instruments: Recognition and Measurement.
Amendments to FRS 1 First-time Adoption of Financial Reporting Standards
Amendments to FRS 1 requires first-time adopters to apply the requirements FRS 139 Financial
Instruments: Recognition and Measurement and FRS 120 Accounting for Government Grants and
Disclosure of Government Assistance, prospectively to government loans existing at the date of
transition to FRSs and shall not recognise the corresponding benefit of the government loan at a
below-market rate of interest as a government grant. Entities may choose to apply the requirements
of FRS 139 Financial Instruments: Recognition and Measurement and FRS 120 to any government
loans originated before the date of transition to FRSs retrospectively provided that the information
needed to do so had been obtained at the time of initially accounting for that loan. The exception
would give the first-time adopters relief from retrospective measurement of government loans with a
below-market rate of interest.
Amendments to FRS 1 also clarifies that an entity that has applied IFRSs in a previous reporting
period, but whose most recent previous annual financial statements did not contain an explicit and
unreserved statement of compliance with IFRSs, has the option to apply this FRS 1 or apply FRSs
retrospectively in accordance with FRS 108 Accounting Policies, Changes in Accounting Estimates
and Errors as if it had never stopped applying IFRSs.
Annual Report 2013
Notes to the
Cont’d
2.
Amendments to FRS 7 Financial Instruments: Disclosures
Amendments to FRS 7 addresses disclosures to include information that will enable users of an
entity’s financial statements to evaluate the effect or potential effect of netting arrangements,
including rights of set-off associated with the entity’s recognised financial assets and recognised
financial liabilities, on the entity’s financial position.
Amendment to FRS 116 Property, Plant and Equipment
Amendment to FRS 116 clarifies that items such as spare parts, stand-by equipment and servicing
equipment are recognised as property, plant and equipment when they meet the definition of
property, plant and equipment. Otherwise, such items are classified as inventory.
Amendments to FRS 10 Consolidated Financial Statements, FRS 11 Joint Arrangements and
FRS 12 Disclosure of Interests in Other Entities
Amendments to FRS 10 clarifies that the date of initial application is the beginning of the annual
reporting period for which this FRS is applied for the first time. Consequently, an entity is not required
to make adjustments to the previous accounting if the consolidation conclusion reached upon the
application of FRS 10 is the same as previous accounting or the entity had disposed of its interests
in investees during a comparative period. When applying FRS 10, these amendments also limit the
requirement to present quantitative information required by Paragraph 28(f) of FRS 108 Accounting
Policies, Changes in Accounting Estimates and Errors to the annual period immediately preceding the
date of initial application. A similar relief is also provided in FRS 11 and FRS 12. Additionally, entities
would no longer be required to provide disclosures for unconsolidated structure entities in periods
prior to the first annual period that FRS 12 is applied.
If, upon applying FRS 10, an entity conclude that it shall consolidate an investee that was not
previously consolidated and that control was obtained before the effective date of the revised
versions of these standards issued by the Malaysian Accounting Standards Board in November
2011, these amendments also clarify that an entity can apply the earlier versions of FRS 3 Business
Combinations and FRS 127 Consolidated and Separate Financial Statements.
Amendment to FRS 132 Financial Instruments: Presentation
Amendment to FRS 132 clarifies that income tax relating to distributions to holders of an equity
instrument and to transaction costs of an equity transaction shall be accounted for in accordance
with FRS 112 Income Taxes.
Amendment to FRS 134 Interim Financial Reporting
To be consistent with the requirements in FRS 8 Operating Segments, the amendment to FRS 134
clarifies that an entity shall disclose the total assets and liabilities for a particular reportable segment
only when the amounts are regularly provided to the chief operating decision maker and there has
been a material change from the amount disclosed in the last annual financial statements for that
reportable segment.
57
58
Notes to the
Cont’d
2.
(b) New FRS, Amendments/Improvements to FRSs and New IC Int that are issued, but not yet
effective and have not been early adopted
The Group and the Company have not adopted the following new FRS, amendments/improvements
to FRSs and new IC Int hat have been issued by the Malaysian Accounting Standards Board
(“MASB”) as at the date of authorisation of these financial statements but are not yet effective for the
Group and the Company:Effective for financial
periods beginning on
or after
New FRS
FRS 9
Financial Instruments
Amendments/Improvements to FRSs
FRS 1
First-time Adoption of Financial Reporting Standards
FRS 2
Share-based Payment
FRS 3
Business Combinations
FRS 7
Financial Instruments: Disclosures
FRS 8
FRS 9
Operating Segments
FRS
FRS
FRS
FRS
FRS
FRS
FRS
FRS
FRS
FRS
FRS
FRS
Fair Value Measurement
Property, Plant and Equipment
Employee Benefits
Related Party Disclosures
Separate Financial Statements
Financial Instruments: Presentation
Impairment of Assets
Intangible Assets
Financial Instruments: Recognition and Measurement
Financial Instruments: Recognition and Measurement
10
12
13
116
119
124
127
132
136
138
139
139
FRS 140
Investment Property
New IC Int
IC Int 21
Levies
To be announced by
the MASB
1 July 2014
1 July 2014
1 July 2014
Applies when FRS 9 is
applied
1 July 2014
To be announced
by the MASB
1 January 2014
1 January 2014
1 July 2014
1 July 2014
1 July 2014
1 July 2014
1 January 2014
1 January 2014
1 January 2014
1 July 2014
1 January 2014
Applies when FRS 9 is
applied
1 July 2014
1 January 2014
A brief discussion on the above significant new FRS, amendments/improvements to FRSs and new IC
Int are summarised below. Due to the complexity of these new standards, the financial effects of their
adoption are currently still being assessed by the Group and the Company.
Annual Report 2013
Notes to the
Cont’d
2.
effective and have not been early adopted cont’d
FRS 9 Financial Instruments
FRS 9 specifies how an entity should classify and measure financial assets and financial liabilities.
This standard requires all financial assets to be classified based on how an entity manages its
financial assets (its business model) and the contractual cash flow characteristics of the financial
asset. Financial assets are to be initially measured at fair value. Subsequent to initial recognition,
depending on the business model under which these assets are acquired, they will be measured at
either fair value or at amortised cost.
In respect of the financial liabilities, the requirements are generally similar to the former FRS 139
Financial Instruments: Recognition and Measurement. However, this standard requires that for
financial liabilities designated as at fair value through profit or loss, changes in fair value attributable
to the credit risk of that liability are to be presented in other comprehensive income, whereas the
remaining amount of the change in fair value will be presented in the profit or loss.
FRS 9 Financial Instruments (Hedge Accounting and amendments to FRS 9, FRS 7 and FRS
139)
The new hedge accounting model represents a substantial overhaul of hedge accounting that will
enable entities to better reflect their risk management activities in their financial statements. The most
significant improvements apply to those that hedge non-financial risk, and they are expected to be
of particular interest to non-financial institutions. As a result of these changes, users of the financial
statements will be provided with better information about risk management and about the effect
of hedge accounting on the financial statements. The FRS 9 hedge accounting model, if adopted,
applies prospectively with limited exceptions.
As part of the Amendments, an entity is now allowed to change the accounting for liabilities that it has
elected to measure at fair value, before applying any of the other requirements in FRS 9. This change
in accounting would mean that gains caused by a worsening in the entity’s own credit risk on such
liabilities are no longer recognised in profit or loss. The Amendments will facilitate earlier application
of this long-awaited improvement to financial reporting.
The Amendments also remove the mandatory effective date from FRS 9.
Amendments to FRS 1 First-time Adoption of Financial Reporting Standards
Amendments to FRS 1 relates to the IASB’s Basis for Conclusions which is not an integral part of the
Standard. The Basis for Conclusions clarifies that a first-time adopter is permitted but not required to
apply a new or revised Standard that is not yet mandatory but is available for early application.
Amendments to FRS 3 Business Combinations
Amendments to FRS 3 clarifies that when contingent consideration meets the definition of financial
instrument, its classification as a liability or equity is determined by reference to FRS 132 Financial
Instruments: Presentation. It also clarifies that contingent consideration that is classified as an asset
or a liability shall be subsequently measured at fair value at each reporting date and changes in fair
value shall be recognised in profit or loss.
59
60
Notes to the
Cont’d
2.
Amendments to FRS 3 Business Combinations cont’d
In addition, amendments to FRS 3 clarifies that FRS 3 excludes from its scope the accounting for the
formation of all types of joint arrangements (as defined in FRS 11 Joint Arrangements) in the financial
statements of the joint arrangement itself.
Amendments to FRS 8 Operating Segments
Amendments to FRS 8 requires an entity to disclose the judgements made by management in
applying the aggregation criteria to operating segments. This includes a brief description of the
operating segments that have been aggregated and the economic indicators that have been assessed
in determining that the aggregated operating segments share similar economic characteristics.
The Amendments also clarifies that an entity shall provide reconciliations of the total of the reportable
segments’ assets to the entity’s assets if the segment assets are reported regularly to the chief
operating decision maker.
Amendments to FRS 10 Consolidated Financial Statements, FRS 12 Disclosure of Interests in
Other Entities and FRS 127 Separate Financial Statements
Amendments to FRS 10 introduces an exception to the principle that all subsidiaries shall be
consolidated. The amendments define an investment entity and require a parent that is an
investment entity to measure its investment in particular subsidiaries at fair value thorough profit
or loss in accordance with FRS 139 Financial Instruments: Recognition and Measurement instead
of consolidating those subsidiaries in its consolidated financial statements. Consequently, new
disclosure requirements related to investment entities are introduced in amendments to FRS 12 and
FRS 127.
In addition, amendments to FRS 127 also clarifies that if a parent is required, in accordance with
paragraph 31 of FRS 10, to measure its investment in a subsidiary at fair value through profit or loss
in accordance with FRS 139, it shall also account for its investment in that subsidiary in the same way
in its separate financial statements.
Amendments to FRS 13 Fair Value Measurement
Amendments to FRS 13 relates to the IASB’s Basis for Conclusions which is not an integral part of
the Standard. The Basis for Conclusions clarifies that when IASB issued IFRS 13, it did not remove
the practical ability to measure short-term receivables and payables with no stated interest rate at
invoice amounts without discounting, if the effect of discounting is immaterial.
The Amendments also clarifies that the scope of the portfolio exception of FRS 13 includes all
contracts accounted for within the scope of FRS 139 Financial Instruments: Recognition and
Measurement or FRS 9 Financial Instruments, regardless of whether they meet the definition of
financial assets or financial liabilities as defined in FRS 132 Financial Instruments: Presentation.
Annual Report 2013
Notes to the
Cont’d
2.
Amendments to FRS 116 Property, Plant and Equipment and FRS 138 Intangible Assets
Amendments to FRS 116 and FRS 138 clarifies the accounting for the accumulated depreciation/
amortisation when an asset is revalued. It clarifies that:-
l
l
the gross carrying amount is adjusted in a manner that is consistent with the revaluation of the
carrying amount of the asset; and
the accumulated depreciation/amortisation is calculated as the difference between the gross
carrying amount and the carrying amount of the asset after taking into account accumulated
impairment losses.
Amendments to FRS 119 Employee Benefits
Amendments to FRS 119 provides a practical expedient in accounting for contributions from
employees or third parties to defined benefit plans.
If the amount of the contributions is independent of the number of years of service, an entity is
permitted to recognise such contributions as a reduction in the service cost in the period in which the
related service is rendered, instead of attributing the contributions to the periods of service.
However, if the amount of the contributions is dependent on the number of years of service, an entity
is required to attribute those contributions to periods of service using the same attribution method
required by FRS 119 for the gross benefit (i.e. either based on the plan’s contribution formula or on a
straight-line basis).
Amendments to FRS 124 Related Party Disclosures
Amendments to FRS 124 clarifies that an entity providing key management personnel services to the
reporting entity or to the parent of the reporting entity is a related party of the reporting entity.
Amendments to FRS 132 Financial Instruments: Presentation
Amendments to FRS 132 does not change the current offsetting model in FRS 132. The amendments
clarify the meaning of ‘currently has a legally enforceable right of set-off, that the right of set-off must
be available today (not contingent on a future event) and legally enforceable for all counterparties in
the normal course of business’. The amendments clarify that some gross settlement mechanisms with
features that are effectively equivalent to net settlement will satisfy the FRS 132 offsetting criteria.
Amendments to FRS 136 Impairment of Assets
Amendments to FRS 136 clarifies that disclosure of the recoverable amount (based on fair value
less costs of disposal) of an asset or cash generating unit is required to be disclosed only when an
impairment loss is recognised or reversed. In addition, there are new disclosure requirements about
fair value measurement when impairment or reversal of impairment is recognised.
61
62
Notes to the
Cont’d
2.
Amendments to FRS 139 Financial Instruments: Recognition and Measurement
Amendments to FRS 139 provides relief from discontinuing hedge accounting in a situation where
a derivative, which has been designated as a hedging instrument, is novated to effect clearing with
a central counterparty as a result of laws or regulation, if specific conditions are met. As a result
of the amendments, continuation of hedge accounting is permitted if as a consequence of laws or
regulations, the parties to hedging instrument agree to have one or more clearing counterparties
replace their original counterparty and the changes to the terms arising from the novation are
consistent with the terms that would have existed if the novated derivative were originally cleared with
the central counterparty.
Amendments to FRS 140 Investment Property
Amendments to FRS 140 clarifies that the determination of whether an acquisition of investment
property meets the definition of both a business combination as defined in FRS 3 and investment
property as defined in FRS 140 requires the separate application of both Standards independently of
each other.
IC Int 21 Levies
IC Int 21 addresses the accounting for a liability to pay a government levy (other than income taxes
and fine or other penalties that imposed for breaches of the legislation) if that liability is within the
scope of FRS 137 Provisions, Contingent Liabilities and Contingent Assets. This interpretation clarifies
that an entity recognises a liability for a levy when the activity that triggers the payment of the levy,
as identified by the relevant legislation, occurs. It also clarifies that a levy liability is recognised
progressively only if the activity that triggers payment occurs over a period of time, in accordance
with the relevant legislation. For a levy that is triggered upon reaching a minimum threshold, the
interpretation clarifies that no liability should be recognised before the specific minimum threshold is
reached.
MASB Approved Accounting Standards, MFRSs
(c)
In conjunction with the planned convergence of FRSs with International Financial Reporting Standards
as issued by the International Accounting Standards Board on 1 January 2012, the MASB had on 19
November 2011 issue a new MASB approved accounting standards, MFRSs (“MFRSs Framework”)
for application in the annual periods beginning on or after 1 January 2012.
The MFRSs Framework is mandatory for adoption by all Entities Other Than Private Entities for
annual periods beginning on or after 1 January 2012, with the exception of entities subject to the
application of MFRS 141 Agriculture and/or IC Int 15 Agreements for the Construction of Real Estate
(“Transitioning Entities”). The Transitioning Entities are given an option to defer adoption of the
MFRSs framework, and continue to adopt the existing FRSs framework until the MFRSs framework is
mandated by the MASB. Transitioning Entities also includes those entities that consolidate or equity
account or proportionately consolidate another entity that has chosen to continue to apply the FRSs
framework for annual periods beginning on or after 1 January 2012.
Accordingly, the Group and the Company which are Transitioning Entities have chosen to defer
the adoption of the MFRSs framework. The Group and the Company will prepare their first MFRSs
financial statements using the MFRSs framework when the MFRSs framework is mandated by the
MASB.
Annual Report 2013
Notes to the
Cont’d
2.
(c)
MASB Approved Accounting Standards, MFRSs cont’d
As at 31 December 2013, all FRSs issued under the existing FRSs framework are equivalent to
the MFRSs issued under MFRSs framework except for differences in relation to the transitional
provisions, the adoption of MFRS 141 Agriculture and IC Int 15 Agreements for the Construction of
Real Estate as well as differences in effective dates contained in certain of the existing FRSs. As
such, other than those as discussed below, the main effects arising from the transition to the MFRSs
Framework has been discussed in Note 2.2(b) to the financial statements. The effect is based on the
Group’s and the Company’s best estimates at the reporting date. The financial effect may change or
additional effects may be identified, prior to the completion of the Group’s and the Company’s first
MFRSs based financial statements.
Application of MFRS 1: First-time Adoption of Malaysian Financial Reporting Standards
(“MFRS 1”)
MFRS 1 requires comparative information to be restated as if the requirements of MFRSs have always
been applied, except when MFRS 1 allows certain elective exemptions from such full retrospective
application or prohibits retrospective application of some aspects of MFRSs. The Group and the
Company are currently assessing the impact of adoption of MFRS 1, including identification of the
differences in existing accounting policies as compared to the new MFRSs and the use of optional
exemptions as provided for in MFRS 1. As at the date of authorisation of issue of the financial
statements, accounting policy decisions or elections have not been finalised. Thus, the impact of
adoption of MFRS 1 cannot be determined and estimated reliably until the process is completed.
MFRS 141 Agriculture
MFRS 141 requires a biological asset shall be measured on initial recognition and at the end of each
reporting period at its fair value less costs to sell, except where the fair value cannot be measured
reliably. MFRS 141 also requires agricultural produce harvested from an entity’s biological assets shall
be measured at its fair value less costs to sell at the point of harvest. Gains or losses arising on initial
recognition of a biological asset and the agricultural produce at fair value less costs to sell and from a
change in fair value less costs to sell of a biological asset shall be included in the profit or loss for the
period in which it arises. The Group does not expect any impact on the financial statements arising
from the adoption of this standard.
IC Int 15 Agreements for the Construction of Real Estate
IC Int 15 establishes that the developer will have to evaluate whether control and significant risks
and rewards of the ownership of work in progress, can be transferred to the buyer as construction
progresses before revenue can be recognised. The Group is currently assessing the impact of the
adoption of this Interpretation.
63
64
Notes to the
Cont’d
2.
2.3 Significant Accounting Policies
(a)
Basis of Consolidation
(i)
Subsidiaries
Subsidiaries are entities, including structured entities, controlled by the Company. The financial
statements of subsidiaries are included in the consolidated financial statements from the date
that control commences until the date that control ceases.
The Group adopted FRS 10, Consolidated Financial Statement in the current financial year. This
resulted in changes to the following policies:-
l
Control exists when the Group is exposed, or has the rights, to variable returns from its
involvement with the entity and has the ability to affect those returns through its power
over the entity. In the previous financial years, control exists when the Group has the
ability to exercise its power to govern the financial and operating policies of an entity so as
to obtain benefits from its activities.
l
Potential voting rights are considered when assessing control only when such rights are
substantive. In the previous financial years, potential voting rights are considered when
assessing control when such rights are presently exercisable.
l
The Group considers it has de factor power over an investee when, despite not having the
majority of voting rights, it has the current ability to direct the activities of the investee that
significantly affect the investee’s return. In the previous financial years, the Group did not
consider de facto power in its assessment of control.
The change in accounting policy has been made retrospectively and in accordance with the
transitional provision of FRS 10. The effects from the adoption of FRS 10 are disclosed in Note
44 to the financial statements.
Investments in subsidiaries are measured in the Company’s statement of financial position
at cost less any impairment losses, unless the investment is classified as held for sale or
distribution.
(ii)
Business Combinations
Business combinations are accounted for using the acquisition method from the acquisition
date, which is the date on which control is transferred to the Group.
For new acquisitions, the Group measures the cost of goodwill at the acquisition date as:-
l
the fair value of the consideration transferred; plus
l
the recognised amount of any non-controlling interests in the acquiree; plus
l
if the business combination is achieved in stages, the fair value of the existing equity
interest in the acquire; less
l
the net recognised amount (generally fair value) of the identifiable assets acquired and
liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or
loss.
Annual Report 2013
Notes to the
Cont’d
2.
2.3 Significant Accounting Policies cont’d
(a)
Basis of Consolidation cont’d
(ii)
Business Combinations cont’d
For each business combination, the Group elects whether it measures the non-controlling
interests in the acquiree either at fair value or at the proportionate share of the acquire either
at the fair value or at the proportionate share of the acquiree’s identifiable net assets at the
acquisition date.
Acquisition of Non-controlling Interests
(iii)
The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss
of control as equity transactions between the Group and its non-controlling interest holders.
Any difference between the Group’s share of net assets before and after the change, and any
consideration received or paid, is adjusted to or against Group reserves.
(iv)
Loss of Control
Upon the loss of control of a subsidiary, the Group derecognizes the assets and liabilities of
the former subsidiary, any non-controlling interests and the other components of equity related
to the former subsidiary from the consolidated statement of financial position. Any surplus
or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any
interest in the former subsidiary, then such interest is measured at fair value at the date that
control is lost. Subsequently, it is accounted for as an equity accounted investee or as an
available-for-sale financial asset depending on the level of influence retained.
(v)
Non-controlling Interests
Non-controlling interests at the end of the reporting period, being the equity in a subsidiary
not attributable directly or indirectly to the equity holders of the Company, are presented in the
consolidated statement of financial position and statement of changes in equity within equity,
separately from equity attributable to the owners of the Company. Non-controlling interests in
the results of the Group is presented in the consolidated statement of profit or loss and other
comprehensive income as an allocation of the profit or loss and the comprehensive income for
the year between non-controlling interests and owners of the Company.
Losses applicable to the non-controlling interests in a subsidiary are allocated to the noncontrolling interests even if doing so causes the non-controlling interests to have a deficit
balance.
(vi) Transactions Eliminated on Consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from
intra-group transactions, are eliminated in preparing the consolidated financial statements.
Unrealised gains arising from transactions with equity-accounted associates and joint ventures
are eliminated against the investment to the extent of the Group’s interest in the investees.
Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that
there is no evidence of impairment.
65
66
Notes to the
Cont’d
2.
(b)
Goodwill on Consolidation
Goodwill is measured as the excess of consideration transferred, any non-controlling interest and
the acquisition date fair value of any previously-held equity interest over the fair value of the Group’s
share of the identifiable net assets acquired.
Goodwill is stated at cost less any accumulated impairment losses. For the purpose of impairment
assessment, goodwill is allocated to cash-generating units (“CGU”) which are expected to benefit
from the synergies of the business combination. Each CGU represents the lowest level at which the
goodwill is monitored for internal management purposes and is not larger than an operating segment
in accordance with MFRS 8 Operating Segments. The carrying amount of goodwill is assessed
annually for impairment, or more frequently if events or changes in carrying amount of its net assets,
including attributable goodwill. Gains and losses on the disposal of an entity include the carrying
amount of goodwill relating to the entity sold.
Where the fair value of the Group’s share of identifiable net assets acquired exceed the amount
of consideration transferred, any non-controlling interest and the acquisition-date fair value of any
previously-held equity interest, the entire resulting gain is recognised immediately in the profit or loss.
Property, Plant and Equipment and Depreciation
(c)
Property, plant and equipment are initially stated at cost. Freehold land and hotel buildings which
have been subsequently revalued are stated at valuation less accumulated depreciation and
impairment loss, if any. All other property, plant and equipment are stated at cost less accumulated
depreciation and impairment losses, if any. Cost includes expenditure that is directly attributable to
the acquisition of the items. The policy for the recognition and measurement of impairment losses is
in accordance with Note 2.3(o) to the financial statements.
The cost of replacing part of an item of property, plant and equipment is included in the asset’s
carrying amount or recognised as a separate asset, as appropriate, only when it is probable that the
future economic benefits associated with the part will flow to the Group and its cost can be measured
reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance
are charged to profit or loss as incurred.
Freehold land is not depreciated as it has an infinite useful life. Capital work-in-progress is also not
depreciated as these assets are not available for use.
All other property, plant and equipment are depreciated on straight line basis to write off the cost of
each asset to its residual value over the estimated useful lives of the assets concerned. The principal
annual rates used for this purpose are as follows:Hotel buildings
Leasehold land and buildings
Renovation
Furniture, fittings, office and other equipment
Motor vehicles
Show village and sales office
1% - 2%
2%
10% - 33 1/3%
2.5% - 50%
20%
10% - 20%
The residual values and useful lives of property, plant and equipment are reviewed, and adjusted if
appropriate, at each reporting date. The effects of any revisions of the residual values and useful lives
are included in profit or loss for the financial year in which the changes arise.
Fully depreciated assets are retained in the accounts until the assets are no longer in use.
Annual Report 2013
Notes to the
Cont’d
2.
(c)
Property, Plant and Equipment and Depreciation cont’d
An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset
is included in profit or loss in the financial year the asset is derecognised.
Revaluation of Assets
(d)
Freehold land and hotel buildings at valuation are revalued at a regular interval of at least once in
every five years with additional valuations in the intervening years where market conditions indicate
that the carrying values of the revalued land and buildings materially differ from the market values.
Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying
amount of the asset and the net amount is restated to the revalued amount of the asset. Any surplus
or deficit arising from the revaluations will be dealt with in the Revaluation Reserve Account. Any
deficit is set-off against the Revaluation Reserve Account only to the extent of the surplus credited
from the previous revaluation of the land and buildings and the excess of the deficit is charged to
profit or loss. Upon disposal or retirement of an asset, any revaluation reserve relating to the
particular asset is transferred directly to retained profits.
(e)
Property Development Activities
(i)
Land held for property development
Land held for property development consists of land on which no significant development work
has been undertaken or where development activities are not expected to be completed within
normal operating cycle. Land held for property development is classified as non-current asset
and carried at cost less any accumulated impairment losses. The policy for the recognition and
measurement of impairment losses is in accordance with Note 2.3(o) to the financial statements.
Cost comprises the cost of land and all related costs incurred on activities necessary to prepare
the land for its intended use. Where the Company had previously recorded the land at a
revalued amount, it continues to retain this amount as its surrogate cost as allowed by FRS 201
Property Development Activities.
Land held for property development is transferred to property development costs (under current
assets) when development activities have commenced and is expected to be completed within
the normal operating cycle.
(ii)
Property
activities
costs of
common
development costs comprise costs that are directly attributable to the development
or that can be allocated on a reasonable basis to such activities. They comprise the
land under development, construction costs and other related development costs
to the whole project including administrative overheads and borrowing costs.
When the outcome of the development activity can be estimated reliably, property development
revenue and expenses are recognised by using the stage of completion method. The stage
of completion is measured by reference to the proportion that property development costs
incurred bear to the estimated total costs for the property development.
When the outcome of a development activity cannot be reliably estimated, property
development revenue is recognised only to the extent of property development costs incurred
that is probable will be recoverable, and property development costs on properties sold are
recognised as an expense in the period in which they are incurred.
67
68
Notes to the
Cont’d
2.
(e)
Property Development Activities cont’d
(ii)
Property development costs cont’d
Any foreseeable loss on a development project, including costs to be incurred over the defects
liability period, is recognised as an expense immediately in profit or loss.
Property development costs not recognised as an expense is recognised as an asset, which is
measured at the lower of cost and net realisable value. Upon the completion of development,
the unsold completed development properties are transferred to inventories.
Where revenue recognised in profit or loss exceeds billings to purchasers, the balance is shown
as accrued billings under receivables (within current assets). Where the billings to purchasers
exceed revenue recognised in profit or loss, the balance is shown as progress billings under
payables (within current liabilities).
(f)
Investment Properties
Investment properties are properties which are held to earn rentals or for capital appreciation
or for both. Investment properties are initially measured at cost, which includes transaction costs.
After initial recognition, investment properties are stated at fair value. The fair value of investment
properties are the prices at which the properties could be exchanged between knowledgeable,
willing parties in an arm’s length transaction. The fair value of investment properties reflected market
conditions at the reporting date, without any deduction for transaction costs that may be incurred on
sale or other disposal.
Fair values of investment properties are arrived at by reference to market evidence of transaction
prices for similar properties.
Where the fair value of the investment property under construction is not reliably determinable, the
investment property under construction is measured at cost until either its fair value becomes reliably
determinable or construction is complete, whichever is earlier.
A gain or loss arising from a change in the fair value of investment properties is recognised in profit or
loss for the period in which it arises.
Investment properties are derecognised when either they have been disposed of or when they are
permanently withdrawn from use and no future economic benefit is expected from their disposal.
The gains or losses arising from the retirement or disposal of investment property is determined as
the difference between the net disposal proceeds, if any, and the carrying amount of the asset and is
recognised in profit or loss in the period of the retirement or disposal.
(g)
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on a first-infirst-out basis and comprises the original cost of purchase plus the cost of bringing the inventories to
their present location and condition.
Completed properties held for sale are stated at the lower of cost and net realisable value. Cost
consists of costs associated with the acquisition of land, direct costs and an appropriate proportion
of common costs attributable to developing the properties to completion.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessary to make the sale.
Annual Report 2013
Notes to the
Cont’d
2.
(h)
Leases
(i)
As Lessee
Financial leases, which transfer to the Group substantially all the risks and rewards incidental to
ownership of the leased item, are capitalised at the inception of the lease at the fair value of the
leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct
costs are also added to the amount capitalised. Lease payments are apportioned between
the financial charges and reduction of the lease liability so as to achieve a constant rate of
interest on the remaining balance of the liability. Finance charges are charged to profit or loss.
Contingent rents, if any, are charged as expenses in the periods in which they are incurred.
Leased assets are depreciated over the estimated useful life of the asset. However, if there is no
reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset
is depreciated over the shorter of the estimated useful life and lease term.
Operating lease payments are recognised as an expense in profit or loss on a straight-line basis
over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as
a reduction of rental expense over the lease term on a straight-line basis.
(ii)
As Lessor
Leases where the Group retains substantially all the risks and rewards of the ownership of the
asset are classified as operating leases. Initial direct costs incurred in negotiating an operating
lease are added to the carrying amount of the leased asset and recognised over the lease term
on the same bases as rental income.
(i)
Construction Contracts
Construction works are stated at cost plus attributable profit less progress billings. Cost comprises
direct labour, material costs, sub-contract sum and an allocated proportion of directly related
overheads. Administrative and general expenses are charged to profit or loss as and when incurred.
When the outcome of a construction contract can be reliably estimated, contract revenue is
recognised by using the stage of completion method. The stage of completion is measured by
reference to the proportion that contract costs incurred for work performed to date bear to the
estimated total contract costs. Costs incurred in connection with future activity on a contract are
excluded from contract costs in determining the stage of completion. They are presented as
inventories, prepayments or other assets, depending on their nature.
When the outcome of a construction contract cannot be reliably estimated, contract revenue is
recognised only to the extent of contract costs incurred that is probable will be recoverable.
Irrespective of whether the outcome of a construction contract can be estimated reliably, when it is
probable that total contract costs will exceed total contract revenue, the expected loss is recognised
as an expense immediately. Provision is made for all anticipated losses on construction work.
When costs incurred on construction contracts plus recognised profits (less recognised losses)
exceed progress billings, the balance is shown as amount due from customers for contract works.
When progress billings exceed costs incurred plus recognised profits (less recognised losses), the
balance is shown as amount due to customers for contract works.
69
70
Notes to the
Cont’d
2.
(j)
Provisions for Liabilities
Provisions for liabilities are recognised when the Group has a present obligation as a result of a past
event, when it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation, and when a reliable estimate of the amount can be made. Where the Group
expects a provision to be reimbursed, the reimbursement is recognised as a separate asset but only
when the reimbursement is virtually certain. Provisions are not recognised for future operating losses.
Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.
Where the effect of the time value of money is material, provisions are discounted using a current pretax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used,
the increase in the provision due to the passage of time is recognised as finance cost.
(k)
Revenue Recognition
(i)
Sale of property development projects
Revenue from sale of property development projects is recognised on the percentage of
completion method. No profit is recognised where development is in its initial stage or has
not reached a stage of completion where it is possible to determine the financial outcome of
the development with reasonable accuracy. Provision for foreseeable losses is made when
estimated future revenue realisable are lower than the carrying amount of the project.
Sale of hotel rooms, food and beverages and other ancillary services
(ii)
Revenue from services rendered in respect of sale of hotel rooms, food and beverages and
other ancillary services is recognised in profit or loss upon rendering of services.
Revenue from construction contract
(iii)
Revenue from construction contracts is accounted for by the stage of completion method as
described in Note 2.3(i) to the financial statements.
(iv) Sale of fresh fruit bunches
Revenue from sales of fresh fruit bunches is the consideration receivable and is recognised in
profit or loss upon delivery of goods and customers’ acceptance.
Collection from car park operations
(v)
Collection from car park operations is recognised on receipt basis except for season parking of
which accrual basis is used.
(vi)
Interest income
Interest income is recognised on a time proportion basis taking into account the effective yield
of the assets.
(vii)
Rental income
Rental income is recognised on the accrual basis. Inter-company sales are excluded from the
revenue of the Group.
Annual Report 2013
Notes to the
Cont’d
2.
(l)
Borrowing Costs
Cost incurred on borrowings to finance the acquisition, construction or production of a qualifying
asset is capitalised as part of the cost of asset until when substantially all the activities necessary to
prepare the asset for its intended use or sale are completed, after which such expense is charged to
profit or loss. Investment income earned on the temporary investment of specific borrowings pending
their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
Borrowing costs are charged to profit or loss as an expense in the period which they are incurred.
(m)
Income Tax
The tax expense in profit or loss represents the aggregate amount of current tax and deferred tax.
Current tax is the expected amount of income taxes payable in respect of the taxable profit for the
financial year and is measured using the tax rates that have been enacted at reporting date.
Deferred tax is provided for, using the liability method, on temporary differences at the reporting
date arising between the tax bases of assets and liabilities and their carrying amounts in the financial
statements. In principle, deferred tax liabilities are recognised for all taxable temporary differences
and deferred tax assets are recognised for all deductible temporary differences, unused tax losses
and unused tax credits to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, unused tax losses and unused tax credit can be utilised.
Deferred tax is not recognised if the temporary difference arises from goodwill or bargain purchase or
from the initial recognition of an asset or liability in a transaction which is not a business combination
and at time of the transaction, affects neither accounting profit nor taxable profit.
Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is
realised or the liability is settled, based on tax rates that have been enacted or substantively enacted
at the reporting date. Deferred tax is recognised as income or an expense and included in profit or
loss for the period, except when it arises from a transaction which is recognised directly in equity,
in which case the deferred tax is also charged or credited directly in equity, or when it arises from a
business combination that is an acquisition, in which case the deferred tax is included in the resulting
goodwill or the amount of any excess of the acquirer’s interest in the net fair value of the acquiree’s
identifiable assets, liabilities and contingent liabilities over the cost of the combination.
(n)
Financial instruments are recognised in the statements of financial position when, and only when, the
Group and the Company become a party to the contract provisions of the financial instrument.
A financial instrument is recognised initially, at its fair value, plus, in the case of a financial instrument
not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition
or issue of the financial instrument.
An embedded derivative is recognised separately from the host contract and accounted for as
a derivative if, and only if, it is not closely related to the economic characteristics and risks of the
host contract and the host contract is not categorised at fair value through profit or loss. The host
contract, the event an embedded derivative is recognised separately, is accounted for in accordance
with policy applicable to the nature of the host contract.
71
72
Notes to the
Cont’d
2.
(n)
Financial Instruments cont’d
The Group and the Company categorise the financial instruments as follows:-
(i)
Financial Assets
Financial Assets at Fair Value through Profit or Loss
Financial assets are classified as fair value through profit or loss if they are held for trading,
including derivatives, or are designated as such upon initial recognition.
Subsequent to initial recognition, financial assets at fair value through profit or loss are
measured at fair value with the gain or loss recognised in profit or loss. Exchange differences,
interest and dividend income on financial assets at fair value through profit or loss are
recognised as other gains or losses in profit or loss.
Loans and Receivables
Financial assets with fixed or determinable payments that are not quoted in an active market,
trade and other receivables and cash and cash equivalents are classified as loans and
receivables.
Subsequent to initial recognition, loans and receivables are measured at amortised cost using
the effective interest method. Gains and losses are recognised in profit or loss when the loans
and receivables are derecognised or impaired, and through the amortisation process.
Held-to-maturity Investments
Financial assets with fixed or determinable payments and fixed maturity that are quoted in an
active market and the Group have the positive intention and ability to hold the investment to
maturity is classified as held-to-maturity.
Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost
using the effective interest method. Gains and losses are recognised in profit or loss when
the held-to-maturity investments are derecognised or impaired, and through the amortisation
process.
Available-for-sale Financial Assets
Available-for-sale financial assets are financial assets that are designated as available for sale or
are not classified in any of the three preceding categories.
After initial recognition, available-for-sale financial assets are measured at fair value with
the gain or loss recognised in other comprehensive income, except for impairment losses,
foreign exchange gains and losses on monetary instruments and interest calculated using the
effective interest method are recognised in profit or loss. The cumulative gain or loss previously
recognised in other comprehensive income is reclassified from equity to profit or loss as a
reclassification adjustment when the financial asset is derecognised.
Investments in equity instruments whose fair value cannot be reliably measured are measured at
cost less impairment loss.
Annual Report 2013
Notes to the
Cont’d
2.
(n)
Financial Instruments cont’d
(ii)
Financial Liabilities
All financial liabilities are subsequently measured at amortised cost other than those categorised
as fair value through profit or loss.
Fair value through profit or loss comprises financial liabilities that are held for trading, derivatives
(except for a derivative that is a financial guarantee contract or a designated and effective
hedging instrument) or financial liabilities that are specifically designated as fair value through
profit or loss upon initial recognition.
Derivatives that are linked to and must be settled by delivery of unquoted equity instruments
whose fair values cannot be reliably measured are measured at cost.
Other financial liabilities categorised as fair value through profit or loss is subsequently
measured at their fair values with the gain or loss recognised in profit or loss.
(iii)
Financial Guarantee Contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments
to reimburse the holder for a loss it incurs because a specified debtor fails to make payment
when due in accordance with the original or modified terms of a debt instrument.
Financial guarantee contracts are classified as deferred income and are amortised to profit or
loss over the contractual period or, upon discharge of the guarantee. When settlement of a
financial guarantee contract becomes probable, an estimate of the obligation is made. If the
carrying value of the financial guarantee contract is lower than the obligation, the carrying value
is adjusted to the obligation amount and accounted for as a provision.
(iv) Regular Way Purchase or Sale of Financial Assets
A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose
terms require delivery of the asset within the time frame established generally by regulation or
convention the marketplace concerned.
A regular way purchase or sale of financial asset is recognised and derecognised, as applicable,
using trade date accounting. Trade date accounting refers to:-
(i)
the recognition of an asset to be received and the liability to pay for it on the trade date,
and
(ii)
derecognition of an asset that is sold, recognition of any gain or loss on disposal and the
recognition of a receivable from the buyer for payment on the trade date.
(v)
Derecognition
A financial asset is derecognised when the contractual right to receive cash flows from the asset
has expired or is transferred to another party without retaining control or substantially all risks
and rewards of the asset. On derecognition of a financial asset, the difference between the
carrying amount and the sum of the consideration received and any cumulative gain or loss that
had been recognised in other comprehensive income is recognised in profit or loss.
A financial liability is derecognised when the obligation specified in the contract is discharged or
cancelled or expires. On derecognition of a financial liability, the difference between the carrying
amount and the consideration paid is recognised in profit or loss.
73
74
Notes to the
Cont’d
2.
(o)
Impairment
(i)
Impairment of Financial Assets
All financial assets (except for financial assets categorised as fair value through profit or loss
and investment in subsidiaries) are assessed at each reporting date whether there is any
objective evidence of impairment as a result of one or more events having an impact on the
estimated future cash flows of the asset. Losses expected as a result of future events, no matter
how likely, are not recognised. For an equity instrument, a significant or prolonged decline in the
fair value below its cost is an objective evidence of impairment.
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 the 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. Where a decline in the fair value of an available-for-sale financial
asset has been recognised in the 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 instrument that is 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 or loss for an investment in an equity instrument is not
reversed through the 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 the profit or
loss.
(ii)
Non-financial Assets
The Group assesses at each reporting date whether there is an indication that an asset may be
impaired. If any such indication exists, or when an annual impairment assessment for an asset is
required, the Group makes an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less cost to sell
and its value in use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current market assessments of
the time value of money and the risk specific to the asset. Where the carrying amounts of an
asset exceed its recoverable amount, the asset is considered impaired and is written down to its
recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are
allocated first to reduce the carrying amount of any goodwill allocated to those units or groups
of units and then, to reduce the carrying amount of the other assets in the unit or groups of
units on a pro-rata basis.
Annual Report 2013
Notes to the
Cont’d
2.
(o)
Impairment cont’d
(ii)
Non-financial Assets cont’d
An impairment loss is recognised in the profit or loss in the period in which it arises.
Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an
asset other than goodwill is reversed if, and only if, there has been a change in the estimates
used to determine the asset’s recoverable amount since the last impairment was recognised.
The carrying amount of an asset other than goodwill is increased to its revised recoverable
amount, provided that this amount does not exceed its carrying amount that would have been
determined (net of amortisation or depreciation) had no impairment loss been recognised for the
asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised
in the profit or loss.
(p)
Employees Benefits
(i)
Short Term Employee Benefits
Wages, salaries, social security contribution, bonuses and non-monetary benefits are
recognised as an expense in the period in which the associated services are rendered by
the employees. Short term non-accumulating compensated absences such as sick leave are
recognised when the absences occur.
Bonuses are recognised as an expense when there is a present, legal or constructive obligation
to make such payments, as a result of past events and when a reliable estimate can be made of
the amount of the obligation.
(ii)
Post-employment Benefits
The Group contributes to the Employees’ Provident Fund, the national defined contribution plan.
The contributions are charged to profit or loss in the period to which they are related. Once the
contributions have been paid, the Group has no further payment obligations.
(q)
Share Capital
Ordinary shares are classified as equity. Dividends on the ordinary shares are recognised as liabilities
when proposed or declared before the reporting date. A dividend proposed or declared after the
statement of financial position date, but before the financial statements are authorised for issue, is not
recognised as a liability at reporting date.
The transaction costs of an equity transaction are accounted for as deductions from equity, net of
tax. Equity transaction costs comprise only those incremental external costs directly attributable to
the equity transaction which would otherwise have been avoided.
Cash and Cash Equivalents
(r)
For the purpose of statements of cash flows, cash and cash equivalents consist of cash in hand,
demand deposits, balances with banks and other short term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in
value. Cash and cash equivalents are stated net of bank overdrafts which are repayable on demand.
75
76
Notes to the
Cont’d
2.
(s)
Operating Segments
A segment was distinguishable component of the Group that was engaged either in providing
products or services (business segment), or in providing products or services within a particular
economic environment (geographical segment) which was subject to risks and rewards that were
different from those of other segments.
An operating segment is a component of the Group that engages in business activities from which it
may earn revenues and incur expenses, including revenues and expenses that relate to transactions
with any of the Group’s other components. An operating segment’s operating results are reviewed
regularly by the chief operating decision maker, to make decisions about resources to be allocated to
the segment and assess its performance, and for which discrete financial information is available.
Segment revenue, expense, assets and liabilities are determined before intra group balances and intra
group transactions are eliminated as part of the consolidation process.
Fair Value Measurements
(t)
From 1 January 2013, the Group adopted FRS 13, Fair Value Measurement which prescribed that fair
value of an asset or a liability, except for share-based payment and lease transactions, is determined
as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The measurement assumes that
the transaction to sell the asset or transfer the liability takes place either in the principal market or in
the absence of a principal market, in the most advantageous market.
For non-financial asset, the fair value measurement takes into account a market participant’s ability to
generate economic benefits by using the asset in its highest and best use or by selling it to another
market participant that would use the asset in its highest and best use.
In accordance with the transitional provision of FRS 13, the Group applied the new fair value
measurement guidance prospectively, and has not provided any comparative fair value information
for new disclosures. The adoption of FRS 13 has not significantly affected the measurements of the
Group’s assets or liabilities other than the additional disclosures.
Annual Report 2013
Notes to the
Cont’d
3.
SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Group’s financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure
of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates
could result in outcomes that could require a material adjustments to the carrying amount of the asset or liability
affected in the future.
3.1 Judgements Made in Applying Accounting Policies
In the process of applying the Group’s and the Company’s accounting policies, which are described in
Note 2.3 above, the directors are 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 for the matter discussed below:-
(i)
Classification between operating lease and finance lease for leasehold land
The Group and the Company have developed certain criteria based on FRS 117 Leases in making
judgement whether a leasehold land should be classified either as operating lease or finance lease.
Finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of
an assets and operating lease is a lease that does not transfer substantially all the risks and rewards
incidental to ownership. If the leasehold land meets the criteria of the finance lease, the lease will
be classified as property, plant and equipment if it is for own use or will be classified as investment
property if it is to earn rentals or for capital appreciation or both. Judgements are made on the
individual leasehold land to determine whether the leasehold land qualifies as operating lease or
finance lease.
The Group determines that all leasehold land as disclosed in Note 4 to the financial statements that
had an indefinite economic life and title was not expected to pass to the lessees by the end of the
lease term are classified as finance leases.
3.2 Key Sources of Estimation Uncertainty
The key assumption concerning the future and other key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are as stated below:-
(i)
Revenue Recognition on Property Development Projects
The Group recognises property development projects in profit or loss by using the percentage of
completion method.
The percentage of completion is determined by the proportion that property development and
contract costs incurred for work performed to date over to the estimated total property development
and contract costs. Estimated losses are recognised in full when determined. Property development
projects and expenses estimates are reviewed and revised periodically as work progresses and as
variation orders are approved.
Estimation is required in determining the percentage of completion, the extent of the property
development projects incurred, the estimated total property development and contract revenue and
costs as well as the recoverability of the project undertaken. In making the judgement, the Group
evaluates based on past experience and by relying on the work of specialists.
77
78
Notes to the
Cont’d
3.
SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES cont’d
3.2 Key Sources of Estimation Uncertainty cont’d
(ii)
Investment Properties
As several of the Group’s directors are professionals who are experienced in the developed property
industry, periodic assessments are made on the current market values of the Group’s property assets.
In determining the fair values of these properties, the management takes into consideration valuations
carried out by professional valuers, replacement costs and transaction prices of similar assets in
comparable locations.
(iii) Useful Lives of Property, Plant and Equipment
The Group estimates the useful lives of property, plant and equipment based on the period over
which the assets are expected to be available for use. The estimated useful lives of property, plant
and equipment are reviewed periodically and are updated if expectations differ from previous
estimates due to physical wear and tear, technical or commercial obsolescence and legal or
other limits on the relevant assets. In addition, the estimation of useful lives of property, plant
and equipment are based on internal technical evaluation and experience with similar assets. It is
possible, however, that future results of operations could be materially affected by changes in the
estimates brought about by changes in these factors mentioned above.
The amounts and timing of recorded expenses for any period would be affected by changes in
these factors and circumstances. A reduction in the estimated useful lives of the property, plant and
equipment would increase the recorded expenses and decrease the non-current assets.
(iv) Impairment of Property, Plant and Equipment
The Group assesses impairment of assets whenever the events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable i.e. the carrying amount of the asset is
more than the recoverable amount.
Recoverable amount is measured at the higher of the fair value less cost to sell for that asset and
its value-in-use. The value-in-use is the net present value of the projected future cash flow derived
from that asset discounted at an appropriate discount rate. Projected future cash flows are based
on Group’s estimates calculated based on historical, sector and industry trends, general market and
economic conditions, changes in technology and other available information.
Impairment of Goodwill
(v)
The Group determines whether goodwill is impaired at least on an annual basis. This requires an
estimation of the value in use of the cash-generating units (“CGU”) to which goodwill is allocated.
Estimating a value in use amount requires management to make an estimation of the expected future
cash flows from the CGU and also to choose a suitable discount rate in order to calculate the present
value of those cash flows.
(vi) Impairment of Investment in Subsidiaries
The Company carried out the impairment test based on a variety estimation of including the valuein-use of the cash generating unit. Estimating a value-in-use amount requires the Company to make
an estimation of the expected future cash flows from the cash generating unit and also to choose a
suitable discount rate in order to calculate the present value of those cash flows.
The management determined the recoverable amount of the investment in subsidiaries based on the
individual assets’ value in use and the probability of the realisation of the assets. The present value
of the future cash flows to be generated by the asset is the asset’s value in use, and it is assumed
to be the same as the net worth of the asset as at reporting date. An impairment loss is recognised
immediately in the profit or loss if the recoverable amount is less than the carrying amount.
Annual Report 2013
Notes to the
Cont’d
3.
SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES cont’d
3.2 Key Sources of Estimation Uncertainty cont’d
(vii) Allowance for Impairment of Receivables
(viii) Net Realisable Value for Inventories
The Group makes allowances for impairment based on an assessment of the recoverability of
receivables. Allowances are applied to receivables where events or changes in circumstances indicate
that the carrying amounts may not be recoverable. Management specifically analysed historical bad
debts, customer credit creditworthiness, current economic trends and changes in customer payment
terms when making a judgement to evaluate the adequacy of the allowance for impairment of
receivables. Where the expectation is different from the original estimate, such difference will impact
the carrying value of receivables.
Reviews are made periodically by management on damaged, obsolete and slow-moving inventories.
These reviews require estimates. Possible changes in these estimates could result in revisions to the
valuation of inventories.
(ix) Deferred Tax Assets
Deferred tax assets are recognised for all unutilised tax losses and unabsorbed capital allowances to
the extent that it is probable that taxable profit will be available against which the losses and capital
allowances can be utilised. Significant management judgement is required to determine the amount
of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable
profits together with future tax planning strategies.
(x)
Income Taxes
Significant judgement is required in determining the capital allowances and deductibility of certain
expenses during the estimation of the provision for income taxes. There are many transactions
and calculations for which the ultimate tax determination is uncertain during the ordinary course of
business. Where the final tax outcome of these matters is different from the amounts that were initially
recorded, such differences will impact the income tax and deferred income tax provisions in the
period in which such determination is made.
(xi) Provision for Liquidated and Ascertained Damages
Provision for liquidated and ascertained damages (“LAD”) is in respect of projects undertaken by
certain subsidiaries and is recognised for expected LAD claims based on the terms of the applicable
sale and purchase agreements. Significant judgement is required in determining the amount of
provision for LAD to be made. The Group evaluates the amount of provision required based on
past experience, industry norm and the results from continuous dialogues held with the affected
purchasers who are seeking indulgence and extension of time to complete the affected projects and
waive their LAD claim.
(xii)
Contingent Liabilities
Determination of the treatment of contingent liabilities is based on management’s view of the
expected outcome of the contingencies after consulting legal counsel for litigation cases and internal
and external experts to the Group for matters in the ordinary course of business.
79
80
Notes to the
Cont’d
4.
PROPERTY, PLANT AND EQUIPMENT
Group
2013
Cost/Valuation
At 1 January 2013,
- At cost
- At valuation
Freehold
Land and
Hotel
Buildings
RM’000
Leasehold
Land and
Buildings Renovation
RM’000
RM’000
Furniture,
Fittings,
Office and
Other
Equipment
RM’000
Motor
Vehicles
RM’000
Show
Village
and
Capital
Sales Work In
Office Progress
RM’000
RM’000
Total
RM’000
28,168
4,720
-
2,072
-
13,360
-
2,307
-
837
-
113
-
23,409
28,168
28,168
4,720
2,072
13,360
2,307
837
113
51,577
-
21,730
-
4
-
-
-
21,734
At 1 January 2013,
as restated
Additions
Disposals
28,168
-
26,450
-
2,072
452
-
13,364
506
(22)
2,307
976
(328)
837
-
113
-
73,311
1,934
(350)
At 31 December 2013
28,168
26,450
2,524
13,848
2,955
837
113
74,895
Representing:- At cost
- At valuation
28,168
26,450
-
2,524
-
13,848
-
2,955
-
837
-
113
-
46,727
28,168
28,168
26,450
2,524
13,848
2,955
837
113
74,895
13,707
733
1,134
10,924
583
837
-
27,918
-
1,125
-
3
-
-
-
1,128
13,707
1,858
1,134
10,927
583
837
-
29,046
274
226
316
571
472
-
-
1,859
-
1,970
-
-
(16)
(154)
-
-
1,970
(170)
At 31 December 2013
13,981
4,054
1,450
11,482
901
837
-
32,705
Carrying Amount
At 31 December 2013
- At cost
- At valuation
14,187
22,396
-
1,074
-
2,366
-
2,054
-
-
113
-
28,003
14,187
14,187
22,396
1,074
2,366
2,054
-
113
42,190
- Effect of adoption of
FRS 10
Accumulated
Depreciation and
Impairment Losses
At 1 January 2013,
FRS 10
At 1 January 2013,
as restated
Depreciation for the
financial year
Impairment loss for
the financial year
Disposals
Annual Report 2013
Notes to the
Cont’d
4. PROPERTY, PLANT AND EQUIPMENT cont’d
Group
2012
Freehold
Land and
Hotel
Buildings
Leasehold
Land and
Buildings Renovation
Furniture,
Fittings,
Office and
Other
Equipment
Motor
Vehicles
Show
Village
and
Capital
Sales Work In
Office Progress
Total
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
Cost/Valuation
At 1 January 2012,
- At cost
- At valuation
FRS 10
At 1 January 2012,
as restated
-
5,020
1,496
13,011
994
837
113
21,471
28,168
-
-
-
-
-
-
28,168
28,168
5,020
1,496
13,011
994
837
113
49,639
-
21,479
-
4
-
-
-
21,483
28,168
26,499
1,496
13,015
994
837
113
71,122
Additions
-
251
576
349
1,313
-
-
2,489
Disposals
-
(300)
-
-
-
-
-
(300)
28,168
26,450
2,072
13,364
2,307
837
113
73,311
-
26,450
2,072
13,364
2,307
837
113
45,143
28,168
-
-
-
-
-
-
28,168
28,168
26,450
2,072
13,364
2,307
837
113
73,311
13,433
660
921
10,415
341
837
-
26,607
-
975
-
3
-
-
-
978
13,433
1,635
921
10,418
341
837
-
27,585
274
228
213
509
242
-
-
1,466
-
(5)
-
-
-
-
-
(5)
13,707
1,858
1,134
10,927
583
837
-
29,046
-
24,592
938
2,437
1,724
-
113
29,804
14,461
-
-
-
-
-
-
14,461
14,461
24,592
938
2,437
1,724
-
113
44,265
At 31 December 2012
Representing:- At cost
- At valuation
Accumulated
Depreciation and
Impairment Losses
At 1 January 2012,
FRS 10
At 1 January 2012,
as restated
Depreciation for the
financial year
Disposals
At 31 December 2012
Carrying Amount
At 31 December 2012
- At cost
- At valuation
81
82
Notes to the
Cont’d
4.
PROPERTY, PLANT AND EQUIPMENT cont’d
Furniture,
Fittings,
Office and
Other
Equipment
Renovation
Total
RM’000
RM’000
RM’000
At 1 January 2013
168
185
353
Additions
123
-
123
At 31 December 2013
291
185
476
At 1 January 2013
70
56
126
Depreciation for the financial year
36
22
58
106
78
184
185
107
292
At 1 January 2012
86
185
271
Additions
82
-
82
168
185
353
At 1 January 2012
46
34
80
Depreciation for the financial year
24
22
46
At 31 December 2012
70
56
126
98
129
227
Company
2013
Cost
Accumulated Depreciation
At 31 December 2013
Carrying Amount
At 31 December 2013
2012
Cost
At 31 December 2012
Accumulated Depreciation
Carrying Amount
At 31 December 2012
(i)
The freehold land and hotel buildings of the Group were revalued on December 2013 and January 2014 by
the directors based on independent professional valuations on the open market value basis.
Annual Report 2013
Notes to the
Cont’d
4.
PROPERTY, PLANT AND EQUIPMENT cont’d
(ii)
Had the revalued assets been carried at cost less accumulated depreciation, the carrying amounts would
have been as follows:Group
Freehold land and hotel buildings
2013
2012
RM’000
RM’000
23,798
24,072
(iii) The freehold land and hotel buildings of the Group at the carrying amount of RM14.187 million (2012:
RM14.461 million) are charged to financial institutions as security for banking facilities granted to the Group
as stated at Note 24 and Note 36 to the financial statements. The legal title for the freehold land of hotel
buildings has yet to be transferred to the Group.
(iv) Included in property, plant and equipment of the Group are assets acquired under hire purchase instalment
plans with carrying amount as follows:Group
Motor vehicles
(v)
2013
2012
RM’000
RM’000
1,873
1,661
Included in property, plant and equipment of the Group are fully depreciated assets which are still in use,
with a cost as follows:Group
Renovation
Furniture, fittings, office and other equipment
2013
2012
RM’000
RM’000
574
444
8,853
8,449
Motor vehicles
119
86
Show village and sales office
837
837
10,383
9,816
(vi) Fair value of property, plant and equipment are categorised as follows:2013
Level 1
Level 2
Level 3
RM’000
RM’000
RM’000
-
14,187
-
Group
At Fair Value
The fair value policy of the Group is disclosed in Note 7 to the financial statements.
83
84
Notes to the
Cont’d
5.
INVESTMENTS IN SUBSIDIARIES
Company
2013
2012
RM’000
RM’000
126,804
123,404
30,500
3,400
-*
-*
157,304
126,804
(48,236)
(48,236)
(9,675)
-
(57,911)
(48,236)
99,393
78,568
Unquoted Shares At Cost
At 1 January
Add: Addition in investment in subsidiaries
Add: Acquisition of a subsidiary
At 31 December
Less: Accumulated Impairment Losses
At 1 January
Add: Allowance for impairment loss
At 31 December
Carrying Amounts
At 31 December
*
Represent amount less than RM1,000/-.
The Company’s equity interest in the subsidiaries which are all incorporated in Malaysia and their respective
principle activities are as follows:
Name of Companies
Effective
Equity Interest
Principle Activities
2013
2012
%
%
ZKP Development
Sdn. Bhd. (“ZKP”)
100
100
Property investment, operation of a hotel and
car park.
Litaran Bayu Sdn. Bhd.
(“LB”)
100
100
Investment holding.
Cemerlang Land
Sdn. Bhd. (“CL”)
100
100
Property development.
Meda Project Management
Sdn. Bhd. (“MPM”)
100
100
Project management services.
MIB Construction
Sdn. Bhd. (“MIBC”)
100
100
Building contractor.
Nandex Land Sdn. Bhd.
(“NL”)
100
100
Direct subsidiaries
#
Annual Report 2013
Notes to the
Cont’d
5.
INVESTMENTS IN SUBSIDIARIES cont’d
Name of Companies
Effective
Equity Interest
Principle Activities
2013
2012
%
%
Sri Lingga Sdn. Bhd. (“SLSB”)
100
100
Property development and cultivation of oil
palm.
Golden Sceptre (MM2H)
Sdn. Bhd. (“GS”)
100
100
Provision of services in relation to Malaysia
My Second Home Program.
Xperential Dynamics
Sdn. Bhd. (“XD”)
100
100
Provision of adventure facilities, design
and installation, management training and
consultancy services, operation of a hotel
and car park.
Pesona Alfa Sdn. Bhd.
(“PASB”)
100
100
Investment holding.
Gaya Pustaka Sdn. Bhd.
(“GP”)
100
100
Property investment.
Virtue Property Sdn. Bhd.
(“VP”) ^
100
100
Property investment.
Purple Heights Sdn. Bhd.
(“PH”) ¥
100
-
100
100
40
40
Direct subsidiaries cont’d
Indirect subsidiaries
Subsidiary of PASB
Maju Puncakbumi Sdn. Bhd.
(“MPSB”)
Indirect subsidiaries
Subsidiary of SLSB
Nusarhu Sdn. Bhd. (“NSB”) *
Operation of a resort hotel and chalets under
construction.
#
In current financial year, the Company had increased its investment in CL from RM10,324,078/- to RM40,324,078/-.
^
In current financial year, the Company had increased its investment in VP from RM2/- to RM500,000/-.
*
The Group consolidated 100% of NSB as the remaining 60% was held by their trustee.
¥
On 6 March 2013, the Company acquired 2 ordinary shares of RM1/- each representing 100% equity interest in Purple
Heights Sdn. Bhd. (“PH”) for a total cash consideration of RM2/- each. Upon the acquisition, PH became a subsidiary of
the Group.
Effect of Adoption of FRS 10
The Group has consolidated the financial statements of Nusarhu Sdn. Bhd. retrospectively during the financial
year. The assets, liabilities and equity of Nusarhu Sdn. Bhd. have been retrospectively consolidated in
the financial statements of the Group. The opening balance at 1 January 2012 and comparative information
for financial year ended 31 December 2012 have been restated in the consolidated financial statements. The
quantitative impact on the financial statements is disclosed in Note 44 to the financial statements.
85
86
Notes to the
Cont’d
6.
INVESTMENTS IN AN ASSOCIATE
Group
2013
2012
RM’000
RM’000
(Restated)
At Cost
7.
Unquoted shares
-
3,600
Share of post-acquisition results
-
(1,139)
As previously stated
-
2,461
Less: Effect of adoption of FRS 10
-
(2,461)
As restated
-
-
INVESTMENT PROPERTIES
Group
A.
2013
2012
RM’000
RM’000
9,790
9,790
67,768
69,135
Less: Disposals
-
(1,367)
At 31 December
67,768
67,768
1,993
1,753
-
240
1,993
1,993
35,783
31,092
570
4,691
36,353
35,783
115,904
115,334
Investment properties stated at fair values represent:Shop Lot at 10 Semantan Avenue, Kuala Lumpur
At 1 January/At 31 December
A 5-storey shopping complex together with a 10-storey office tower
known as The Summit, Bukit Mertajam Plaza (Note 7(i))
At 1 January
Retail shop lots at Bandar Bukit Mertajam, Seksyen 4 Daerah Seberang
Perai Tengah, Pulau Pinang
At 1 January
Add: Addition during the financial year
At 31 December
B.
Investment properties under construction stated at cost represent:A badminton academy complex together with 4 institutional blocks,
Cyberjaya
At 1 January
Add: Addition during the financial year
At 31 December
Annual Report 2013
Notes to the
Cont’d
7.
INVESTMENT PROPERTIES cont’d
(i)
The land titles for The Summit Bukit Mertajam Plaza have yet to be transferred to the Group.
(ii)
The investment properties with carrying amount of RM69.77 million (2012: RM69.77 million) were charged
as securities for banking facilities granted to the Group are stated in Note 24 to the financial statements.
(iii) The investment properties were revalued by the directors on December 2013, January 2014 and March
2014 based on independent professional valuations on the open market value basis.
(iv) Certain investment properties are currently under construction are carried at cost and the fair value of the
property is unable to be determined as there are uncertainties in estimating its fair value. The investment
property under construction at cost will be carried at cost until its fair value becomes readily determinable
or when the construction is completed, whichever is earlier. The estimated fair value of the investment
properties carried at costs are as follows:Group
2013
RM’000
2012
RM’000
31,260
31,092
Level 1
RM’000
2013
Level 2
RM’000
Level 3
RM’000
-
79,551
31,260
Investment properties under construction
Land
(v) Fair value of investment properties are categorised as follows:
Group
Assets for which fair values are disclosed
Policy on Transfer between Levels
The fair value on an asset to be transferred between levels is determined as of the date of the event or
change in circumstances that caused the transfer.
Level 1 Fair Value
Level 1 fair value is derived from quoted price (unadjusted) in active markets for identical properties that the
entity can access at the measurement date.
Level 2 Fair Value
Level 2 fair value is estimate using inputs other than quoted prices included within Level 1 that are
observable for the property, either directly or indirectly.
Level 2 fair value of land and buildings have been generally derived using the sales comparison approach.
Sales price of comparable properties in close proximity are adjusted for differences in key attributes
such as property size. The most significant input into this valuation approach is price per square foot of
comparable properties.
Transfer between Level 1 and Level 2 fair values
There is no transfer between Level 1 and Level 2 fair values during the financial year.
87
88
Notes to the
Cont’d
7.
INVESTMENT PROPERTIES cont’d
(v)
Fair value of investment properties are categorised as follows:- cont’d
Level 3 Fair Value
Level 3 fair value is estimated using unobservable inputs for the investment property.
8.
PROPERTY DEVELOPMENT ACTIVITIES
(a)
Land Held for Property Development
Group
Long Term
Leasehold
Land
Freehold
Land
Development
Rights
Development
Expenditures
Total
RM’000
RM’000
RM’000
RM’000
RM’000
2013
- At valuation
21,236
-
-
-
21,236
-
576
4,470
17,590
22,636
21,236
576
4,470
17,590
43,872
- Transfer to property
development costs
-
-
(2,273)
-
(2,273)
At 31 December 2013
21,236
576
2,197
17,590
41,599
21,236
-
-
-
21,236
-
576
2,197
17,590
20,363
21,236
576
2,197
17,590
41,599
10,152
-
-
-
10,152
-
576
4,470
4,737
9,783
10,152
576
4,470
4,737
19,935
- Transfer from assets
held for sale
11,084
-
-
12,853
23,937
At 31 December 2012
21,236
576
4,470
17,590
43,872
- At cost
At 1 January 2013
Add:
Carrying Amount
- At valuation
- At cost
At 31 December 2013
2012
- At valuation
- At cost
At 1 January 2012
Add:
Carrying Amount
- At valuation
- At cost
At 31 December 2012
21,236
-
-
-
21,236
-
576
4,470
17,590
22,636
21,236
576
4,470
17,590
43,872
Annual Report 2013
Notes to the
Cont’d
8.
PROPERTY DEVELOPMENT ACTIVITIES cont’d
(a)
Land Held for Property Development cont’d
The long term leasehold land stated at valuation was land previously used for plantation purposes which
was reclassified from property, plant and equipment in the financial year 2001 for the commencement
of property development activities. This land was revalued by the directors based on an independent
professional valuation carried out in 1996 on the open market value basis. As allowed by the transitional
provision of FRS 201 – Property Development Activities, the carrying amount of this land shown at valuation
has been retained on the basis of its previous revaluation as its surrogate cost.
The development rights included in land held for property development and property development cost
were acquired from Kumpulan Prasarana Rakyat Johor Sdn. Bhd. (“KPRJ”), the registered land owner of
one of the Group’s development projects known as Aman Larkin Project.
The freehold and long term leasehold land have been charged as securities for banking facilities granted to
the Group as stated in Note 23 and 24 to the financial statements.
Property Development Costs
(b)
Long Term
Leasehold
Land
Freehold
Land
Development
Rights
Development
Expenditures
Total
RM’000
RM’000
RM’000
RM’000
RM’000
11,024
-
-
-
11,024
-
57,454
1,938
236,635
296,027
At 1 January 2013, as
previously stated
11,024
57,454
1,938
236,635
307,051
Prior year adjustments
(39)
-
-
(1,683)
(1,722)
At 1 January 2013,
as restated
10,985
57,454
1,938
234,952
305,329
Reclassification
14,598
(18,956)
-
4,358
-
-
-
2,273
-
2,273
348
-
-
106,918
107,266
348
-
2,273
106,918
109,539
- Transfer to inventories
-
-
-
(4,924)
(4,924)
- Phased off projects
-
-
-
(68,623)
(68,623)
-
-
-
(73,547)
(73,547)
25,931
38,498
4,211
272,681
341,321
Group
2013
- At valuation
- At cost
Add:
- Transfer from land held for
property development
- Incurred during the
financial year
Less:
At 31 December 2013
89
90
Notes to the
Cont’d
8.
(b)
Property Development Costs cont’d
Long Term
Leasehold
Land
RM’000
Freehold
Land
RM’000
Development
Rights
RM’000
Development
Expenditures
RM’000
Total
RM’000
-
-
-
4,982
4,982
-
-
-
810
810
- Reversal of foreseeable
losses no longer required
-
-
-
(3,361)
(3,361)
-
-
-
(2,431)
(2,431)
At 31 December 2013
-
-
-
-
-
-
6,464
1,938
213,837
222,239
556
4,559
1,939
90,876
97,930
-
-
-
(68,623)
(68,623)
556
11,023
3,877
236,090
251,546
Group
2013
Accumulated Foreseeable
Losses
At 1 January 2013
Add:
- Allowance of foreseeable
losses during the financial
year
Less:
Accumulated Development
Expenditures recognised
in Profit or Loss
At 1 January 2013
Add:
- Development expenditures
recognised during the
financial year
Less:
- Phased off projects
At 31 December 2013
Carrying Amount
- At valuation
- At cost
At 31 December 2013
25,375
-
-
-
25,375
-
27,475
334
36,591
64,400
25,375
27,475
334
36,591
89,775
Annual Report 2013
Notes to the
Cont’d
8.
(b)
Long Term
Leasehold
Land
RM’000
Freehold
Land
RM’000
Development
Rights
RM’000
Development
Expenditures
RM’000
Total
RM’000
7,580
-
-
-
7,580
-
38,536
1,938
137,274
177,748
7,580
38,536
1,938
137,274
185,328
-
18,918
-
93,413
112,331
3,444
-
-
5,948
9,392
3,444
18,918
-
99,361
121,723
(39)
-
-
(1,683)
(1,722)
10,985
57,454
1,938
234,952
305,329
At 1 January 2012
-
-
-
5,798
5,798
Less: Reversal of
foreseeable losses no longer
required
-
-
-
(816)
(816)
At 31 December 2012
-
-
-
4,982
4,982
-
6,464
-
106,923
113,387
-
-
1,938
106,914
108,852
-
-
1,938
106,914
108,852
-
6,464
1,938
213,837
222,239
10,985
-
-
-
10,985
-
50,990
-
16,133
67,123
10,985
50,990
-
16,133
78,108
Group
2012
- At valuation
- At cost
At 1 January 2012, as
previously stated
Add:
- Incurred during the
financial year
- Transfer from asset held
for sale
Less:
At 31 December 2012,
as restated
Accumulated Foreseeable
Losses
Accumulated Development
Expenditures recognised
in Profit or Loss
At 1 January 2012
Add:
- Development expenditures
recognised during the
financial year
At 31 December 2012
Carrying Amount
- At valuation
- At cost
At 31 December 2012
91
92
Notes to the
Cont’d
8.
(b)
The long term leasehold land valued at cost which is under property development have been charged
as securities for banking facilities granted to the Group as stated in Note 23 and 24 to the financial
statements.
Included in the development expenditure are borrowing costs capitalised during the financial year
amounting to RM1.036 million (2012: RM1.094 million).
9.
GOODWILL ON CONSOLIDATION
Group
2013
RM’000
2012
RM’000
5,977
5,977
At Cost
The key assumptions used for value-in-use calculations are:-
l
l
A pre-tax discount rate of 7.9% was used in determining the value-in-use. The discount rate was estimated
based on the Group’s weighted average cost of capital.
l
The anticipated annual revenue growth included in the cash flow projections was based on the
management’s estimation of the completion period of the potential projects. Management plans to
achieve revenue of approximately RM86 million in the next financial year of business, and at the end of the
completion of potential projects, the accumulated revenue will be at approximately RM380 million.
l
Budgeted gross margins are based on average values achieved in the potential projects which are
estimated at 34%.
The values assigned to the above key assumptions represent the management’s assessment of future trends in
the industry and are based on both external sources and internal sources of information.
Sensitivity analysis for key assumption
A cash generating unit is particularly sensitive in the revenue, as a decrease in sales by 10% would result in an
impairment loss of approximately RM5.17 million.
Based on the sensitivity analysis, the management believes that no reasonably possible change in base case
key assumptions would cause the carrying values of the cash-generating unit (“CGU”) to exceed its recoverable
amounts of the remaining subsidiary.
The recoverable amounts of cash-generating units (“CGUs”) are determined based on value in use using
cash flows projections on financial budgets approved by management covering a 5 years period. The cash
flows were projected by the directors based on past experiences, actual operating results and the 5 years
business plan.
Annual Report 2013
Notes to the
Cont’d
10. TRADE RECEIVABLES
Group
Company
2013
2012
2013
2012
RM’000
RM’000
RM’000
RM’000
132
-
-
-
Trade receivables
13,787
21,480
-
3
Less: Allowance for impairment loss
(4,271)
(3,525)
-
-
9,516
17,955
-
3
47,075
24,064
-
-
56,591
42,019
-
3
56,723
42,019
-
3
Non-current
Trade receivables
Current
Accrued billings in respect of property
development costs
Total Trade Receivables
(i)
The credit terms offered by the Group in respect of trade receivables are 7 days (2012: 7 days) and 21 days
(2012: 21 days) for property buyers. Other credit terms are assessed and approved on a case-by-case
basis.
(ii)
Included in trade receivables are amounts of RM204,728/- (2012: RM108,962/-) due from companies in
which certain directors of the Company have substantial financial interests.
The amounts due by these companies are trade in nature, unsecured and interest-free.
Ageing analysis of trade receivables are as follows:-
(iii)
Group
Company
2013
2012
2013
2012
RM’000
RM’000
RM’000
RM’000
3,165
9,317
-
-
Past due 1 to 30 days
780
2,417
-
-
221
493
-
-
385
364
-
-
412
534
-
-
4,685
4,830
-
3
6,483
8,638
-
3
4,271
3,525
-
-
13,919
21,480
-
3
Neither past due nor impaired
Past due but not impaired
Past due more than 121 days
Impaired
93
94
Notes to the
Cont’d
10. TRADE RECEIVABLES cont’d
(iii)
Ageing analysis of trade receivables are as follows:- cont’d
a.
Receivables that are neither past due nor impaired
The trade receivables from property development segment is due within 21 days as stipulated in sale
and purchase agreements. The retention sums which are included in the trade receivables are due
upon the expiry of the defect liability period stated in the sale and purchase agreements.
Other trade receivables are collectible within 30 days.
Receivables that are past due but not impaired
b.
The Group has not made any allowance for impairment for receivables that are past due but not
impaired as there has not been a significant change in the credit quality of these receivables and the
amounts due are still recoverable.
In determining the recoverability of a trade receivable, the Group considers any change in the credit
quality of the trade receivable from the date the credit was initially granted up to the reporting date.
The Group has policies in place to ensure that credit is extended only to customers with acceptable
credit history and payment track records. Allowances for impairment are made on specific trade
receivables when there is objective evidence that the Group will not be able to collect the amounts
due.
c.
Receivables that are impaired
The Group’s trade receivables that are impaired at the reporting date are as follows:Group
Company
2013
2012
2013
2012
RM’000
RM’000
RM’000
RM’000
Individually impaired
Trade receivables
- nominal amounts
4,271
3,525
-
-
(4,271)
(3,525)
-
-
-
-
-
-
Trade receivables are individually determined to be impaired at the reporting date which are in
significant financial difficulties and have defaulted on payments. These receivables are not secured by
any collateral or credit enhancements.
The movement of the allowance accounts used to record the impairment are as follows:Group
At 1 January
Add: charge for the year
Less: reversal of impairment no longer
required
At 31 December
Company
2013
2012
2013
2012
RM’000
RM’000
RM’000
RM’000
3,525
3,549
-
-
746
-
-
-
-
(24)
-
-
4,271
3,525
-
-
Annual Report 2013
Notes to the
Cont’d
11. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS
Group
Company
2013
2012
2013
2012
RM’000
RM’000
RM’000
RM’000
1,270
-
(Restated)
Non-current
Other receivables
1,270
-
Current
Other receivables
27,555
28,311
5,913
7,380
(13,729)
(12,596)
(5,343)
(5,185)
13,826
15,715
570
2,195
5,137
2,320
612
148
(148)
-
-
-
4,989
2,320
612
148
375
602
10
9
19,190
18,637
1,192
2,352
20,460
18,637
2,462
2,352
Deposits
Prepayments
Total other receivables
Group
(i)
Included in other receivables is an amount of RM2.517 million (2012: RM3.291 million) due by companies in
which certain directors of the Company have substantial financial interests.
The amounts due by these companies are unsecured, interest-free and repayable on demand.
(ii)
Included in other receivables is development expenditure of RM5.668 million (2012: RM5.713 million) on
relocation of squatters recoverable from KPRJ in accordance with the development agreement as disclosed
in Note 8(a) to the financial statements, net of KPRJ entitlement on the sale value.
(iii) Included in deposits is an amount of RM1.504 million paid for the acquisition of two pieces of leasehold
land at located at Pekan Baru Sungai Buloh, Petaling, Selangor Darul Ehsan as disclosed in Note 37 to
the financial statements. The land is measuring approximately 29,728 square metres with a total purchase
consideration of RM75.2 million.
95
96
Notes to the
Cont’d
12.INVENTORIES
Group
2013
2012
RM’000
RM’000
(Restated)
At Cost
Completed development properties
Food and beverages
Room supplies and consumables
5,651
10,437
91
95
228
240
5,970
10,772
5,657
-
11,627
10,772
At Net Realisable Value
Completed development properties
Certain of the completed development properties have been charged as securities for banking facilities granted
to the Group as stated in Note 24 to the financial statements.
The legal title for certain completed development properties amounting to RM3.164 million (2012: RM4.786
million) has yet to be transferred to the Group.
13. AMOUNT DUE FROM/(TO) SUBSIDIARIES
Company
2013
RM’000
2012
RM’000
(Restated)
113,815
130,055
(7,095)
(16,770)
106,720
113,285
The amount due from/(to) subsidiaries represents advances and payments made on behalf which are unsecured,
interest free and repayable on demand.
14. DEPOSITS PLACED WITH LICENSED BANKS
Group
The deposits placed with licensed banks amounting to RM131,483/- (2012: RM125,596/-) are pledged to certain
banks to secure banking facilities granted to the Group as disclosed in Note 36 to the financial statements.
The deposits placed with licensed banks bear interest rates of 3.05% (2012: 3.05%) per annum.
Annual Report 2013
Notes to the
Cont’d
15. CASH AND BANK BALANCES
Group
Company
2013
2012
2013
2012
RM’000
RM’000
RM’000
RM’000
(Restated)
Housing Development Accounts (“HDA”)
1,975
3,807
-
-
Cash in hand and bank balances
2,908
3,331
468
19
4,883
7,138
468
19
The housing development accounts of the Group are maintained pursuant to Section 7A of the Housing
Development (Control and Licensing) Act, 1966 in Malaysia. These accounts, which consist of monies received
from purchasers, are for the payment of property development costs incurred and are restricted from use in
other operations. The surplus monies, if any, will be released to the respective subsidiaries upon the completion
of the property development projects and after all property development costs have been fully settled.
Included in cash and bank balances held under Housing Development Accounts is an amount of RM1.078
million (2012: RM3.807 million) pledged to licensed banks to secure banking facilities as stated in Note 24 to the
financial statements.
16. SHARE CAPITAL
Group and Company
2013
2012
Number
of Shares
Number
of Shares
Unit ’000
RM’000
Unit ’000
RM’000
1,000,000
500,000
1,000,000
500,000
456,850
228,425
446,940
223,470
Exercise of Warrants A
17,450
8,725
9,910
4,955
Exercise of Warrants B
1,090
545
-
-
Ordinary shares of RM0.50/- each
Authorised:
Issued and fully paid:
At 1 January
At 31 December
475,390
237,695
456,850
228,425
During the financial year, the issued and paid-up capital of the Company was increased from RM228,425,296/to RM237,695,121/- via the issuance of:
(i)
17,450,100 new ordinary shares of RM0.50 each in conjunction with the exercise of Warrants A; and
(ii)
1,089,550 new ordinary shares of RM0.50 each in conjunction with the exercise of Warrants B.
The shares rank pari passu with the existing shares of the Company.
97
98
Notes to the
Cont’d
17. SHARE PREMIUM
Group and Company
2013
2012
RM’000
RM’000
8,020
6,325
2,986
1,695
Exercise of Warrants B
109
-
11,115
8,020
At 1 January
At 31 December
18. TREASURY SHARES
Group and Company
2013
2012
Number
of Shares
Number
of Shares
Unit ’000
RM’000
At 1 January
3,107
1,964
763
366
Shares purchased during the financial year
1,965
1,453
2,344
1,598
3,417
3,107
1,964
At 31 December
5,072
The details of shares purchased during the financial year are as follows:-
Unit ’000
RM’000
Number of
shares
Total
consideration
Unit ’000
RM’000
January 2013
712
499
March 2013
146
102
May 2013
440
317
July 2013
590
476
August 2013
35
28
October 2013
42
31
1,965
1,453
Shares Purchased
At the Extraordinary General Meeting held on 4 August 2011, the shareholders approved the Company to buy
back the Company’s own shares based on the following terms:-
(i)
The maximum aggregate number of shares to be held or purchased by the Company must not exceed 10%
of the total issued and paid-up shares capital of the Company at any point in time.
(ii)
The share buy-back will be financed through internally generated funds and/or external borrowings. The
funds to be allocated by the Company for the share buyback will be made wholly out of retained profits
and/or the share premium account. The account to be utilised shall not exceed the total audited retained
profits and share premium account of the Company.
Annual Report 2013
Notes to the
Cont’d
18. TREASURY SHARES cont’d
At the Extraordinary General Meeting held on 4 August 2011, the shareholders approved the Company to buy
back the Company’s own shares based on the following terms:- cont’d
(iii) The Company may retain the shares purchased as treasury shares, or to cancel the shares purchased
or a combination of both as defined under Section 67A of the Companies Act, 1965 in Malaysia. The
purchased shares held as treasury shares may either be distributed as share dividends, resold on Bursa
Malaysia Securities Berhad in accordance with the relevant rules of Bursa Malaysia Securities Berhad
or subsequently cancelled. The distribution of treasury shares as share dividends may be applied as a
reduction of retained profits or share premium account of the Company subject to applicable prevailing
laws.
All the shares purchased during the financial year were retained as treasury shares in accordance with Section
67A of the Companies Act, 1965 in Malaysia.
19. WARRANTS RESERVE
Group and Company
2013
2012
RM’000
RM’000
At 1 January
11,993
13,688
(2,986)
(1,695)
At 31 December
9,007
11,993
Warrants A
On 16 August 2011, the Company increased its issued and paid up share capital to RM223.47 million by way of
private placement of 20,000,000 ordinary shares of RM0.50 each, attached together with the private placement
is 80,000,000 free detachable warrants in the Company on the basis of 4 free warrants for 1 placement share
subscribed.
The Company had recognised the warrant reserve by debiting the share premium account and crediting the
warrants reserve.
Fair value of warrants and assumptions
Fair value of Warrants A at issuance date :
RM0.1711/
(16 August 2011)
Share price
:
RM0.365/- (as at 16 August 2011) Exercise price
:
RM0.50/- Expiry date
:
15 August 2021 (10 years) Volatility
:
Historical volatility of 1 year (253 trading days) of 66.81%
Dividend
:
No dividend Interest rate
:
3.7% per annum
(as extracted from Bloomberg as at 16 August 2011) 99
100
Notes to the
Cont’d
19. WARRANTS RESERVE cont’d
Warrants B
By virtue of a Deed Poll executed on 23 March 2012 for the 114,021,616 free warrants (“Warrants B”) issued in
connection with the bonus issue, each Warrants B entitles the registered holder the right at any time during the
exercise period to subscribe at an exercise price of RM0.60 per ordinary share of RM0.50 each at a step-up
mechanism whereby the exercise price will be adjusted upwards by RM0.10 at the expiry of every 2 anniversary
years from the date of issuance on the basis of 1 free warrant for every 4 existing shares held.
20. REVALUATION RESERVE
Group
At 1 January
Less: Amortisation of revaluation reserve
At 31 December
2013
2012
RM’000
RM’000
6,117
6,170
(53)
(53)
6,064
6,117
21. BORROWINGS (SECURED)
Group
Current liabilities (secured)
Hire purchase liabilities (Note 22)
Bank overdrafts (Note 23)
Bank loans (Note 24)
- Fixed
- Floating
Non-current liabilities (secured)
- Fixed
- Floating
Total borrowings
Bank overdrafts (Note 23)
- Fixed
- Floating
2013
RM’000
2012
RM’000
(Restated)
375
14,447
327
14,447
172
7,130
226
12,715
22,124
27,715
1,676
1,248
1,620
6,844
1,720
8,924
10,140
11,892
2,051
14,447
1,575
14,447
1,792
13,974
1,946
21,639
32,264
39,607
Annual Report 2013
Notes to the
Cont’d
21. BORROWINGS (SECURED) cont’d
(i)
The loans and borrowings at the end of the reporting period bore interest rate as follows:Group
Effective
Interest Rate
Hire purchase liabilities
Interest Rate
2013
2012
2013
2012
%
%
%
%
2.31 to 5.75
2.33 to 5.75
-
-
8.60
8.60
BLR+2.0
BLR+2.0
3.75
3.75
3.75
3.75
8.10 to 8.60
8.10 to 8.60
BLR+1.5 to 2.0
BLR+1.5 to 2.0
Bank overdrafts
Bank loans
- Fixed
- Floating
22. HIRE PURCHASE LIABILITIES
Group
2013
2012
RM’000
RM’000
Future minimum hire purchase payments
- not later than one year
- later than one year but not later than five years
- later than five years
Future interest charges
Present value of hire purchase liabilities
466
399
1,410
1,216
466
177
2,342
1,792
(291)
(217)
2,051
1,575
375
327
1,227
1,079
449
169
1,676
1,248
2,051
1,575
Current
Non-current
The obligations under hire purchase are as follows:
(i)
Interest rates are fixed at the inception of the hire purchase arrangement;
(ii)
Certain hire purchase arrangements of the Group are secured by joint and several guarantee by the
directors of the Company; and
(iii) The hire purchase liabilities are effectively secured on the rights of the assets under hire purchase
arrangement.
101
102
Notes to the
Cont’d
23. BANK OVERDRAFTS
The bank overdrafts of the Group are secured by way of:-
(i)
first legal charges over the Group’s land held for property development and land under development as
disclosed in Note 8 to the financial statements;
(ii)
corporate guarantees by the Company;
(iii)
joint and several guarantees by several directors of the Company; and
(iv) corporate guarantees by a company in which the directors of the Company have interests.
24. BANK LOANS – Secured
Group
2013
2012
RM’000
RM’000
(Restated)
Current liabilities
7,302
12,941
7,528
10,055
936
589
8,464
10,644
15,766
23,585
Non-current liabilities
The bank loans are secured by way of:
(i)
first and second legal charges over the entire land held for property development of the Group as disclosed
in Note 8(a) to the financial statements;
(ii)
first legal charges over certain of the Group’s land under development, included in property development
costs as disclosed in Note 8(b) to the financial statements;
(iii) first and second legal charges over the Group’s freehold land and hotel buildings (Note 4), investment
properties (Note 7) and completed development properties (Note 12);
(iv) joint and several guarantees by certain directors of the Company;
(v)
(vi) corporate guarantees by the Company as disclosed in Note 36 to the financial statements; and
(vii) corporate guarantees by a company in which the directors of the Company have interests.
memorandum of charge over the Housing Development Account as disclosed in Note 15 to the financial
statements;
Annual Report 2013
Notes to the
Cont’d
25. DEFERRED TAX LIABILITIES
(a)
The deferred tax asset and liabilities are made up of the following:Group
At 1 January
2013
2012
RM’000
RM’000
13,903
13,459
159
417
(8)
27
151
444
14,054
13,903
Recognised in profit or loss (Note 33)
- current year
- over accrual in prior years
At 31 December
Presented after appropriate offsetting as follows:Deferred tax asset
(8)
(8)
14,062
13,911
14,054
(b) The deferred tax asset and liabilities as at the end of the financial year comprise the following:-
13,903
Group
Unrealised
profit
arising from
elimination of
intercompany
transaction
Revaluation
of assets
Property,
plant and
equipment/
Investment
properties
Total
RM’000
RM’000
RM’000
RM’000
(8)
-
-
(8)
1,887
11,438
142
13,467
417
-
27
444
2,304
11,438
169
13,911
231
-
(80)
151
2,535
11,438
89
14,062
Deferred tax asset
At 1 January 2012
Recognised in profit or loss
At 31 December 2012
Recognised in profit or loss
At 31 December 2013
103
104
Notes to the
Cont’d
25. DEFERRED TAX LIABILITIES cont’d
(c)
Deferred tax asset have not been recognised for the following items:Group
Company
2013
2012
2013
2012
RM’000
RM’000
RM’000
RM’000
Taxable temporary differences
(5,017)
(5,442)
(154)
(150)
Unabsorbed tax losses
46,553
61,896
3,766
3,375
Unutilised capital allowances
17,196
17,222
52
-
557
-
-
-
As at 31 December
59,289
73,676
3,664
3,225
Potential deferred tax assets not
recognised at 24% (2012: 25%)
14,229
18,419
879
806
Provision for liquidated and ascertained
damages
26. TRADE PAYABLES
Group
2013
RM’000
Company
2012
2013
2012
RM’000
RM’000
RM’000
(Restated)
Trade payables
Progress billings in respect of property
development costs
66,467
45,681
495
495
-
1,062
-
-
66,467
46,743
495
495
(i)
The credit terms available to the Group in respect of trade payables range from 14 to 60 days (2012: 14 to
60 days) from the date of invoices and progress billings.
(ii)
Included in trade payables is an amount of RM1.148 million (2012: RM1.289 million) which represents the
amount due to house buyers.
(iii) Included in trade payables are amounts of Nil (2012: RM1.353 million) due to companies in which certain
directors of the Company have substantial financial interests.
The amounts due to these companies are unsecured, interest-free and repayable on demand.
Annual Report 2013
Notes to the
Cont’d
27. OTHER PAYABLES, DEPOSITS AND ACCRUALS
Group
Company
2013
2012
2013
2012
RM’000
RM’000
RM’000
RM’000
539
539
(Restated)
Other payables
20,975
20,077
Deposits
1,672
1,668
-
-
Accruals
9,055
8,862
337
459
Accrued costs to completion of projects
3,166
-
-
-
34,868
30,607
876
998
(i) All the above amounts are unsecured, interest-free and are to be settled in accordance with the normal
credit terms ranging from 14 to 60 days (2012: 14 to 60 days) from the date of invoices.
(ii)
Included in other payables are amounts of RM596,750/- (2012: RM2.776 million) due to companies in which
certain directors of the Company have substantial financial interests. The amounts due are unsecured,
interest-free and repayable on demand.
(iii)
Included in the accruals are amounts representing the following:
Group
2013
RM’000
2012
RM’000
(Restated)
Tax penalty
Bank overdraft interest
Term loan and bridging loan interest
(iv) Accrued Costs to Completion of Projects
4,642
4,642
127
108
146
75
Accrued costs to completion of projects represent development costs identified to be incurred for
completed projects.
28. PROVISION FOR LIABILITY
Group
2013
2012
RM’000
RM’000
-
-
557
-
Provision for Liquidated and Ascertained Damages
At 1 January
Addition during the financial year
At 31 December
557
Provision for liquidated and ascertained damages is recognised in respect of the delayed projects undertaken by
certain subsidiaries. The provision has been recognised for the expected liquidated ascertained damages claims
based on the applicable terms and conditions stated in the sale and purchase agreements.
105
106
Notes to the
Cont’d
29.REVENUE
Group
Company
2013
2012
2013
2012
RM’000
RM’000
RM’000
RM’000
145,114
135,844
-
-
32,350
30,596
-
-
-
-
17,402
-
Gross rental income
2,978
2,151
-
-
Car park operations
147
304
-
-
Sale of fresh fruit bunches
819
1,753
-
-
181,408
170,648
17,402
-
Revenue of development properties
Sale of hotel rooms, food and beverages
and other ancillary services
Dividend income from subsidiaries
30. COST OF SALES
Group
Company
2013
2012
2013
2012
RM’000
RM’000
RM’000
RM’000
Costs of development properties
97,930
90,347
-
-
Costs of hotel services rendered
13,384
14,217
-
-
Properties letting direct expenses
2,621
2,315
-
-
47
101
-
-
396
840
-
-
114,378
107,820
-
-
Costs of car park operations
Costs of sales for fresh fruit bunches
31. FINANCE COSTS
Group
Company
2013
2012
2013
2012
RM’000
RM’000
RM’000
RM’000
(Restated)
Bank loans interests
Hire purchase interests
2,021
2,771
-
-
84
49
-
-
2,105
2,820
-
-
Annual Report 2013
Notes to the
Cont’d
32. PROFIT/(LOSS) BEFORE TAXATION
Profit/(loss) before taxation has been arrived at:
Group
2013
RM’000
Company
2012
2013
2012
RM’000
RM’000
RM’000
(Restated)
After charging:Allowance of impairment loss on:- amount due from subsidiaries
-
-
-
108
- investments in subsidiaries
-
-
9,675
-
1,970
-
-
-
746
-
-
-
1,281
5,391
158
-
200
167
36
36
18
12
24
17
54
54
54
54
- property, plant and equipment
- trade receivables
- other receivables and deposits
Auditors’ remuneration:- Statutory:
- current year
- under accrual in prior years
- Non statutory
Depreciation
29
212
3
-
1,859
1,466
58
46
Directors’ remuneration:- fees
189
289
189
229
1,173
575
1,113
475
- others
182
50
182
50
Net loss on financial assets measured at
amortised cost
256
-
227
-
Provision for liquidated and ascertained damages
557
-
-
-
- equipment
28
10
16
-
- motor vehicles
50
24
58
95
9,114
10,433
138
138
10,874
8,360
1,536
1,119
678
616
260
125
2,043
1,745
463
254
- salaries, bonuses and allowances
Rental of:
- premises
Staff costs:- salaries, overtime and allowance
- defined contribution plan
- other employee benefits
107
108
Notes to the
Cont’d
32. PROFIT/(LOSS) BEFORE TAXATION cont’d
Profit/(loss) before taxation has been arrived at:- cont’d
Group
2013
RM’000
Company
2012
2013
2012
RM’000
RM’000
RM’000
(Restated)
And crediting:Gain on disposal of:- property, plant and equipment
Interest income
(88)
(1,058)
-
-
-
(133)
-
-
(218)
(63)
-
-
-
-
(9,675)
-
Reversal of allowance no longer required:- amount due from subsidiaries
- impairment losses of trade receivables
-
(24)
-
-
(3,361)
(816)
-
-
- land held for property development
-
(9,101)
-
-
-
(6,228)
-
-
Waiver of amount due from other receivables
-
(2)
-
(2)
33.TAXATION
Group
Company
2013
2012
2013
2012
RM’000
RM’000
RM’000
RM’000
(3,837)
(7,372)
-
-
(780)
359
-
2
(4,617)
(7,013)
-
2
(159)
(417)
-
-
8
(27)
-
-
(151)
(444)
-
-
(75)
-
-
-
(4,843)
(7,457)
-
2
Income tax:- current year
- (under)/over accrual in prior year
Deferred tax (Note 25):- current year
- over/(under) accrual in prior year
Real property gain tax:- under accrual in prior year
The income tax is calculated at the Malaysian statutory rate of 25% (2012: 25%) of the estimated assessable
profit for the year. The statutory tax rate will be reduced to 24% from the current year’s rate of 25% effective
year of assessment 2016.
Annual Report 2013
Notes to the
Cont’d
33. TAXATION cont’d
A reconciliation of income tax expense applicable to profit/(loss) before tax at the statutory income tax rate to
income tax expense at the effective income tax rate of the Group and of the Company are as follows:
Group
Company
2013
2012
2013
2012
RM’000
RM’000
RM’000
RM’000
(Restated)
Profit/(loss) before taxation
23,369
35,299
16,283
(739)
Tax at the applicable tax rate of 25% (2012: 25%)
(5,842)
(8,825)
(4,071)
185
841
3,401
6,769
-
- non-deductible expenses
(2,592)
(1,387)
(2,588)
(123)
- (reversal)/originations of deferred tax assets
not recognised in the financial statements
4,190
(978)
(73)
(62)
(772)
332
-
2
- under accrual in prior year
(75)
-
-
-
- effect of changes in tax rate
(593)
-
(37)
-
(4,843)
(7,457)
-
2
Tax effects arising from:- non-taxable income
- (under)/over accrual in prior year
- Real property gain tax
Tax expense for the financial year
34. EARNINGS PER ORDINARY SHARE
(i)
Basic Earnings Per Share
Basic earnings per share is calculated by dividing the profit net of tax for the financial year attributable to
owners of the Company by the weighted average number of ordinary shares in issue during the financial
year.
Group
2013
2012
RM’000
RM’000
(Restated)
Profit net of tax attributable to owners of the Company
Weighted average number of ordinary shares in issue
18,526
27,842
Number of
shares
Number of
shares
Units ’000
Units ’000
460,236
453,405
4.03
6.14
Profit per ordinary share attributable to owners of Company (sen)
- Basic
109
110
Notes to the
Cont’d
34. EARNINGS PER ORDINARY SHARE cont’d
(ii)
Diluted Earnings per Shares
Group
2013
RM’000
2012
RM’000
(Restated)
Profit net of tax attributable to owners of the Company
Weighted average number of ordinary shares in issue
Add: Effect of dilution of share warrants
At 31 December
18,526
27,842
Number of
shares
Number of
shares
Units ’000
Units ’000
460,236
453,405
43,810
34,530
504,046
487,935
3.68
5.71
Profit per ordinary share attributable to owners of Company (sen)
- Diluted
For the diluted earnings per share calculation, the weighted average number of ordinary shares in issue
is adjusted to assume conversion of all dilutive potential ordinary shares. The Group’s dilutive potential
ordinary shares are Warrants A and Warrants B.
35.DIVIDENDS
In respect of the financial year ended 31 December 2013:
Company
2013
2012
RM’000
RM’000
9,380
-
Dividends:Single-tier interim dividend of 2 sen per ordinary shares of RM0.50 each
A final single-tier dividend in respect of the financial year ended 31 December 2013, of 1 sen per ordinary share
will be proposed for shareholders’ approval. The financial statements for current financial year do not reflect
this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an
appropriation of retained earnings in the financial year ended 31 December 2014.
Annual Report 2013
Notes to the
Cont’d
36. FINANCIAL GUARANTEES
As at 31 December 2013, the Group’s and the Company’s financial guarantees are as follows:
Group
2013
RM’000
Company
2012
2013
RM’000
RM’000
(Restated)
Guarantees issued in favour of third parties
Guarantees given to financial institutions for
credit facilities granted to subsidiaries
2012
RM’000
(Restated)
1,400
1,340
-
-
-
-
30,213
38,032
1,400
1,340
30,213
38,032
The bank guarantees are secured by way of:
(i)
fixed charges over certain properties of the Group as disclosed in Note 4 to the financial statements;
(ii)
deposits placed with the licensed banks as disclosed in Note 14 to the financial statements; and
(iii)
joint and several guarantees by certain directors of the Company.
37. COMMITMENTS
(a)
Capital Commitment
Group
2013
2012
RM’000
RM’000
73,696
-
Capital expenditure approved and contracted but not provided for:- Land held for property development
On 15 July 2013, a wholly owned subsidiary of the Company, namely Purple Heights Sdn. Bhd. entered
into a Sale and Purchase agreement with Signature Cabinet Sdn. Bhd., a wholly-owned subsidiary of
Signature International Berhad to acquire two parcels of leasehold land located at Pekan Baru Sungai
Buloh, Petaling, Selangor Darul Ehsan. A deposit of RM1.504 million has been paid and included in
deposits as disclosed in Note 11 to the financial statements.
Operating Lease Commitment – As Lessee
(b)
The Group has entered into commercial property leases on its investment properties. These noncancellable leases have remaining lease terms of between 2014 and 2020 years. All lease include a clause
to enable upward revision of the rental charge on an annual basis based on prevailing market conditions.
111
112
Notes to the
Cont’d
37. COMMITMENTS cont’d
(b)
Operating Lease Commitment – As Lessee cont’d
Future minimum rentals receivables under non-cancellable operating lease at the reporting date are as
follows:
Group
Company
2013
2012
2013
2012
RM’000
RM’000
RM’000
RM’000
Not later than 1 year
6,637
8,424
138
138
Later than 1 year but not later than 5 years
3,427
9,145
92
230
350
370
-
-
10,414
17,939
230
368
Later than 5 years
(c) Operating Lease Commitment – As Lessor
The Group leases out certain of its investment properties. The future minimum lease receivables under noncancellable leases are as follows:
Group
2013
2012
RM’000
RM’000
Not later than 1 year
3,389
1,781
Later than 1 year but not later than 5 years
1,407
2,027
4,796
3,808
38. SIGNIFICANT RELATED PARTY DISCLOSURES
(a)
Identities of Related Parties
Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to
control the party or exercise significant influence over the party in making financial and operational
decisions, or vice versa, or where the Group and the party are subject to common control significant
influence. Related parties may be individuals or other entities.
Related parties of the Group include:-
(i)
Directors;
(ii)
Subsidiaries;
(iii) Companies in which certain directors of the Company and his brothers have substantial financial
interests;
(iv) Companies in which subsidiaries’ directors have substantial financial interests; and
(v)
Key management personnel which comprise persons (including the directors of the Company) have
the authority and responsibility for planning, directing, controlling the activities of the Group directly or
indirectly.
Annual Report 2013
Notes to the
Cont’d
38. SIGNIFICANT RELATED PARTY DISCLOSURES cont’d
(b)
Significant Related Party Transactions and Balances
In the normal course of business, the Group undertakes transactions with some of its related parties listed
above. Set out below are the significant related party transactions for the financial year (in addition to
related party disclosures mentioned elsewhere in the financial statements).
Hotel and related services rendered
(c)
Group
Company
2013
2012
2013
2012
RM’000
RM’000
RM’000
RM’000
21
109
84
-
Rental of motor vehicle
-
208
66
95
Administrative fees received from
subsidiaries
-
-
(3,600)
(3,600)
Dividend received
-
-
(17,402)
-
Key Management Personnel Compensation
The remuneration of key management during the year financial is as follows:
Group
Company
2013
2012
2013
2012
RM’000
RM’000
RM’000
RM’000
1,113
1,963
1,113
926
135
231
135
108
Key management personnel:- short-term employee benefits
- defined contribution plan
1,248
2,194
1,248
1,034
Key management personnel comprise persons including the directors of the Group entities, having authority
and responsibility for planning, directing and controlling the activities of the Group entities either directly or
indirectly.
113
114
Notes to the
Cont’d
39. SEGMENT INFORMATION
FRS 8 requires the identification of operating segments on the basis of internal reports that are regularly
reviewed by the Group’s chief operating decision maker in order to allocate resources to the segments and
assess their performance.
a.
b.
General Information
The Group’s operations comprise the following business segments:
Property development
:
Development of residential and commercial properties and agricultural lots.
Property investment
:
Rental collection from investment properties.
Hotel operations
:
Hotel operations.
Others
:
Business involved in cultivation of oil palm, project management services,
building contractor and operation of car park in commercial properties.
Measurement of Reportable Segments
Segment profit or loss is profit earned or loss incurred by each segment without allocation of central
administrative costs, finance costs and income tax expense. There are no significant changes from prior
financial year in the measurement methods used to determine reported segment profit or loss.
All the Group’s assets are allocated to reportable segments other than assets used centrally for the Group,
current and deferred tax assets. Jointly used assets are allocated on the basis of the revenues earned by
individual segments.
All the Group’s liabilities are allocated to reportable segments other than liabilities incurred centrally for
the Group, current and deferred tax liabilities. Jointly incurred liabilities are allocated in proportion to the
segment assets.
Segment capital expenditure is the total cost incurred during the financial year to acquire segment assets
that are expected to be used for more than one year.
Annual Report 2013
Notes to the
Cont’d
39. SEGMENT INFORMATION cont’d
2013
Property
Hotel
Property
Development Operations Investment
RM’000
RM’000
RM’000
Others Elimination
RM’000
RM’000
Consolidated
RM’000
Revenue
External sales
Inter-segment sales
145,114
-
32,350
94
2,978
-
966
127,221
(127,315)
Total
145,114
32,444
2,978
128,187
(127,315)
181,408
29,069
2,596
(1,324)
383
(830)
(3)
(1,649)
(737)
(654)
(939)
(2,419)
(124)
-
26,864
(1,390)
(2,105)
Results
Segment results
Unallocated items
Finance costs
A
181,408
-
Taxation
23,369
(4,843)
Profit after taxation
18,526
Assets
Segment assets
Tax assets
185,839
1,442
22,418
-
121,607
-
131,059
-
(71,654)
-
B
Total assets
Liabilities
Segment liabilities
Tax liabilities
389,269
1,442
390,711
63,798
5,904
10,286
49
6,980
6,968
53,093
-
(1)
12,630
C
Total liabilities
Other segment information
Capital expenditure
1,018
Depreciation
(429)
Non cash items other
than depreciation:Allowance of impairment
loss on:- property, plant and
equipment
- trade receivables
- other receivables and
deposits
(209)
Net loss on financial assets
measured at amortised cost
Provision for liquidated and
ascertained damages
(557)
Gain on disposal of:- property, plant and
equipment
1
Reversal of allowance no
longer required for foreseeable
losses
3,361
134,156
25,551
159,707
465
(912)
898
(32)
123
(486)
-
D
2,504
(1,859)
(124)
(622)
(1,970)
-
-
(1,970)
(746)
(696)
(18)
(107)
(8)
(269)
(3)
-
(1,281)
(29)
(4)
-
(252)
-
(256)
-
-
-
-
(557)
12
-
75
-
88
-
-
-
-
3,361
115
116
Notes to the
Cont’d
2012
Property
Hotel
Property
Development Operations Investment
RM’000
RM’000
RM’000
Others Elimination
RM’000
RM’000
Consolidated
RM’000
Revenue
External sales
Inter-segment sales
135,844
-
30,596
-
2,151
-
2,057
84,389
(84,389)
Total
135,844
30,596
2,151
86,446
(84,389)
170,648
24,040
10,568
(1,409)
341
1,058
(4)
1,018
133
(1,285)
961
(122)
-
26,360
11,759
(2,820)
Results
Segment results
Unallocated items
Finance costs
A
170,648
-
Taxation
35,299
(7,457)
Profit after taxation
27,842
Assets
Segment assets
Tax assets
154,259
-
20,740
1
125,382
-
120,017
-
(54,150)
-
B
Total assets
Liabilities
Segment liabilities
Tax liabilities
366,248
1
366,249
38,820
19,495
8,146
-
17,186
7,765
44,082
(840)
8,723
8,940
C
Total liabilities
Other segment information
Capital expenditure
1,022
371
Depreciation
(208)
(789)
Non cash items other than
depreciation:Allowance of impairment
loss on:- other receivables and
deposits
(5,391)
(212)
Gain on disposal of:- property, plant and
equipment
1,058
Reversal of allowance no
longer required:- impairment losses of trade
receivables
24
816
- land held for property
development
9,101
6,228
Waiver of amount due from
other receivables
2
116,957
35,360
152,317
4,935
(2)
1,092
(467)
-
D
7,420
(1,466)
-
-
-
(5,391)
(212)
133
-
-
1,058
133
-
-
-
24
816
-
-
-
9,101
6,228
-
-
-
2
Annual Report 2013
Notes to the
Cont’d
Note:Nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial
statements.
A
Inter-segment revenues are eliminated on consolidation.
B
Tax assets represent the followings:
Tax recoverable
Group
2013
2012
RM’000
RM’000
1,442
1
C
Tax liabilities represent the followings:
Group
2013
2012
RM’000
RM’000
14,054
13,903
Tax payables
11,497
21,457
25,551
35,360
D
Additions of capital expenditure consists of:
Group
2013
2012
RM’000
RM’000
1,934
2,489
570
4,931
2,504
7,420
Geographical Information
The Group operates principally in Malaysia and has not ventured into any operations outside Malaysia during the
financial year.
Information about Major Customers
Information about major customers are not presented as major customers for the Group mainly derived from the
property development segment and hotel operations which does not exceed 10% of total revenue of the Group.
117
118
Notes to the
Cont’d
40. FAIR VALUE OF FINANCIAL INSTRUMENTS
(a)
The following are classes of financial instruments that are not carried at fair value and whose carrying
amounts are reasonable approximation of fair value:Note
Financial assets
Trade receivables
10
Other receivables and deposits
11
13
Deposits placed with licensed banks
14
15
Financial liabilities
Amount due to subsidiaries
13
21
Trade payables
26
Other payables and deposits
27
The carrying amounts of the current portion of loans and borrowings are reasonable approximations of fair
values due to the insignificant impact of discounting.
The carrying amounts of cash and cash equivalents, receivables, payables and short term borrowings
approximate their fair values due to the relatively short term nature of these financial instruments.
The fair value of other financial assets and liabilities together with the carrying amount shown in the
statements of financial position are as follows:2013
2012
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
RM’000
RM’000
RM’000
RM’000
Group
Financial assets
Non-current
Trade receivables
132
132
-
-
Other receivables
1,270
1,270
-
-
Hire purchase liabilities
2,051
2,031
1,575
1,571
Bank loans - fixed
1,792
1,436
1,946
1,531
1,270
1,270
-
-
Financial liabilities
Company
Financial assets
Non-current
Other receivables
Annual Report 2013
Notes to the
Cont’d
40. FAIR VALUE OF FINANCIAL INSTRUMENTS cont’d
(b)
Fair Value Hierarchy
The fair values of current loans and borrowings are estimated by discounting expected future cash flows
at market incremental lending rates for similar types of lending, borrowing or leasing arrangements at the
reporting date.
The Group classifies fair value measurements using a fair value hierarchy that reflects the significance of
the inputs used in making the measurements. The fair value hierarchy has the following levels:l
Level 1 –
quoted prices (unadjusted) in active markets for identical assets or liabilities.
l
Level 2 –
inputs other than quoted prices included within Level 1 that are observable for the asset
or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
l
Level 3 –
inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values,
either due to their short-term nature or that they are floating rate instruments that are re-priced to market
interest rates on or near the reporting date.
The financial assets and liabilities of the Group and of the Company are not carried at fair value by any
valuation method, therefore fair value hierarchy analysis are not presented.
41. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The operations of the Group and of the Company are subject to a variety of financial risks, including interest
rate risk, credit risk and liquidity risk. The Group and the Company have adopted a financial risk management
framework whose principal objective is to minimise the Group’s and the Company’s exposure to risks and/or
costs associated with the financing, investing and operating activities of the Group and of the Company.
(i)
Credit Risk
Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations. The Group’s exposure to credit risk arises primarily from trade
and receivables. The Company’s exposure to credit risk arises principally from advances and financial
guarantees to subsidiaries.
The management has a credit policy in place to monitor and minimise the exposure of default. The
management has in place a credit procedure to monitor and minimise the exposure of default. Trade and
other receivables are monitored on a regular and an ongoing basis. Credit evaluations are performed on all
customers requiring credit over certain amount.
a.
Exposure to credit risk
At the reporting date, the Group’s and Company’s maximum exposure to credit risk is represented by
the carrying amount of trade and other receivables recognised in the statements of financial position.
Information regarding credit enhancements for trade receivables is disclosed in Note 10 to the
119
120
Notes to the
Cont’d
41. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES cont’d
(i)
Credit Risk cont’d
b.
Credit risk concentration profile
The Group determines concentrations of credit risk by monitoring the country profile of its trade
receivables on an ongoing basis. The Group’s trade receivables credit risk is concentrated in
Malaysia.
The significant concentration of credit risk of the Group is disclosed in Note 10 to the financial
statements. The maximum exposures to credit risk are represented by the carrying amounts of the
financial assets in the statements of financial position.
Financial assets that are neither past due nor impaired
c.
Information regarding trade receivables that are neither past due nor impaired is disclosed in Note 10
to the financial statements.
Deposits with banks and other financial institutions are placed with or entered into with reputable
financial institutions with high credit ratings and no history of default.
Financial assets that are either past due or impaired
d.
Information regarding financial assets that are past due or impaired is disclosed in Note 10 to the
e.
Intercompany balances
The Company provides unsecured loans and advances to subsidiaries. The Company monitors the
results of the subsidiaries regularly.
As at the end of the reporting period, the maximum exposure to credit risk is represented by their
carrying amounts in the statement of financial position.
f.
Financial guarantee
The Company provides unsecured financial guarantees to financial institution in respect of bank
facilities granted to certain subsidiaries. The Company monitors on an ongoing basis the results of the
subsidiaries and repayments made by the subsidiaries.
As at the end of the reporting period, there was no indication that any subsidiary would default on
repayment.
The financial guarantees have not been recognised since the fair value on initial recognition was not
material.
Annual Report 2013
Notes to the
Cont’d
(ii)
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The
Group’s exposure to liquidity risk arises principally from its various payables, loans and borrowings.
The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the
management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they
fall due.
Maturity analysis
The maturity profile of the Group’s and the Company’s financial liabilities based on undiscounted
contractual repayment at the reporting date are as follows:-
Carrying
Amount
Contractual
Interest
Rate
Contractual
Cash
Flows
On
demand
or within
1 year
2 to 5
years
More
than
5 years
RM’000
%
RM’000
RM’000
RM’000
RM’000
Group
2013
Trade payables
66,467
-
66,467
66,467
-
-
Other payables and
deposits
22,647
-
22,647
22,647
-
-
2,051
2.31 to 5.75
2,342
466
1,410
466
14,447
8.60
14,559
14,559
-
-
- bank overdrafts
- bank loans (fixed)
- bank loans (floating)
1,792
3.75
2,168
226
905
1,037
13,974
8.10 to 8.60
15,306
7,907
7,399
-
123,489
112,272
9,714
1,503
121,378
2012
Trade payables
46,743
-
46,743
46,743
-
-
Other payables and
deposits
21,745
-
21,745
21,745
-
-
1,575
2.33 to 5.75
1,792
399
1,216
177
14,447
8.60
14,559
14,559
-
-
1,946
3.75
2,394
226
905
1,263
21,639
8.10 to 8.60
22,344
16,286
6,058
-
109,577
99,958
8,179
1,440
- bank overdrafts
- bank loans (fixed)
- bank loans (floating)
108,095
121
122
Notes to the
Cont’d
(ii)
Liquidity Risk cont’d
Maturity analysis cont’d
Carrying
Amount
Contractual
Interest
Rate
Contractual
Cash
Flows
On
demand
or within
1 year
2 to 5
years
More
than
5 years
RM’000
%
RM’000
RM’000
RM’000
RM’000
Company
2013
Trade payables
495
-
495
495
-
-
Other payables
539
-
539
539
-
-
Amount due to
subsidiaries
3,210
-
3,210
3,210
-
-
4,244
4,244
-
-
4,244
2012
Trade payables
495
-
495
495
-
-
Other payables
539
-
539
539
-
-
Amount due to
subsidiaries
3,036
-
3,036
3,036
-
-
4,070
4,070
-
-
4,070
(iii) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments will
fluctuate because of changes in market interest rates.
The Group’s and the Company’s exposure to interest rate risk arises primarily from their loans and
borrowings.
The Group manages the net exposure to interest rate risks by maintaining sufficient lines of credit
to obtain acceptable lending costs and by monitoring the exposure to such risks on an ongoing basis.
The Management does not enter into interest rate hedging transactions as the cost of such instruments
outweighs the potential risk of interest rate fluctuation.
The information on maturity dates and effective interest rate of financial assets and liabilities are disclosed
in their respective notes.
Annual Report 2013
Notes to the
Cont’d
(iii) Interest Rate Risk cont’d
Sensitivity analysis for interest rate risk
Fair value sensitivity analysis for fixed rate instruments
The Group and the Company do not account for any fixed rate financial assets at fair value through profit or
loss and equity. Therefore a change in interest rates at the reporting date would not affect profit or loss and
equity.
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased)
equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in
particular foreign currency rates, remain constant.
Profit or Loss/Equity
2013
2012
100bp
Increase
100bp
Decrease
100bp
Increase
100bp
Decrease
RM’000
RM’000
RM’000
RM’000
(284)
284
(361)
361
Group
Variable rate instruments
42. CAPITAL MANAGEMENT
The primary objective of the Group’s capital management is to ensure that it maintains a strong capital base and
safeguard the Group’s ability to continue as a going concern, so as to maintain investor, creditor and market
confidence and to sustain future development of the business. The directors monitor and determine to maintain
an optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements.
The debt-to-equity ratios at 31 December 2013 were as follows:
Group
2013
RM’000
2012
RM’000
(Restated)
Total borrowings
32,264
39,607
231,004
213,932
Gearing ratio
0.14
There was no change in the Group’s approach to capital management during the financial year.
0.19
Shareholders’ funds
The Group is also required to comply with the disclosure and necessary capital requirements as prescribed in the
Main Market Listing Requirements of Bursa Malaysia Securities Berhad.
123
124
Notes to the
Cont’d
43. PROFIT GUARANTEE
In consideration of the acquisition of Cemerlang Land Sdn. Bhd. (“CL”), a subsidiary of the Company, from the
substantial shareholder of the Company, Ecofirst Consolidated Berhad (“ECO”), ECO had granted a guarantee
via a profit guarantee agreement (“PGA”) dated 27 December 2001 that the aggregate audited profit after tax
of CL for the three financial years commencing from 1 January 2002 or until the termination of the development
agreement with Kumpulan Prasarana Rakyat Johor Sdn. Bhd. (“KPRJ”), the registered land owner of the project
of CL, whichever is earlier, shall not be less than RM6.0 million.
The PGA expired on 31 December 2004 and the shortfall of the profit guarantee is determined at RM4,531,073/-.
In the financial year 2006, ECO transferred a land lot from its investment property worth RM2,341,922/- to Majlis
Perbadanan Subang Jaya as partial settlement of the amount due to the Company. The transfer was treated
as part settlement of the profit guarantee and ECO intended to settle the balance of RM2,189,151/- by way of
transfer of another land lot from the same investment property.
The Company is in the midst of negotiation with ECO on the revision to the terms of the settlement.
44. PRIOR YEAR ADJUSTMENTS
(i)
Effect of Adoption of FRS 10
The Group adopted FRS 10 in the current financial year as disclosed in Note 5 to the financial statements.
Thereto, the assets, liabilities and equity of Nusarhu Sdn. Bhd. have been retrospectively consolidated in
the financial statements of the Group. The opening balance at 1 January 2012 and comparative information
for financial year ended 31 December 2012 have been restated in the consolidated financial statements.
The quantitative impact on the financial statements are disclosed below.
Change in Comparative Financial Information
(ii)
The presentation and classification of items in the current year financial statements have been consistent
with the previous financial year except that certain comparative amounts have been restated to conform
with current year’s presentation.
As
Previously
Reported
RM’000
Group
Investments in an associate
Inventories
prepayments
Accumulated losses
Trade payables
Other payables, deposits and and accruals
Effect of
Adoption of
Change in
FRS 10 Comparative
RM’000
RM’000
Note (i)
Note (ii)
As
Restated
RM’000
23,659
2,461
79,830
9,050
20,606
(2,461)
-
(1,722)
1,722
44,265
78,108
10,772
21,332
565
7,136
54,322
(49,506)
(30,566)
(37,661)
110
(565)
2
(15,663)
(42)
(41)
(1,946)
(2,805)
2,805
-
18,637
7,138
38,659
(46,743)
(30,607)
(39,607)
Annual Report 2013
Notes to the
Cont’d
44. PRIOR YEAR ADJUSTMENTS cont’d
(ii)
Change in Comparative Financial Information cont’d
As
Previously
Reported
RM’000
Effect of
Adoption of
Change in
FRS 10 Comparative
As
Restated
RM’000
RM’000
RM’000
Note (i)
Note (ii)
23,032
20,505
-
43,537
2,579
(2,579)
-
-
26,978
110
-
27,088
Group
As at 1 January 2012
Investment in an associate
prepayments
7,112
1
-
7,113
Accumulated losses
82,394
(15,840)
-
66,554
Trade payables
(27,713)
(81)
-
(27,794)
Other payables, deposits and and accruals
(39,741)
(23)
-
(39,764)
(59,990)
(2,093)
-
(62,083)
(35,716)
(216)
-
(35,932)
(2,741)
(79)
-
(2,820)
(118)
118
-
-
28,074
(1,587)
-
26,487
Investing activities
(5,469)
1,249
-
(4,220)
Financing activities
(22,748)
339
-
(22,409)
113,225
-
60
113,285
60
-
(60)
-
Group
Statement of Profit or Loss and Other
Comprehensive Income
Administrative expenses
Finance costs
Share of results of an associate
Group
Statements of Cash Flows
Operating activities
Company
Statement of Financial Position
125
126
Notes to the
Cont’d
45. SIGNIFICANT EVENTS DURING AND AFTER THE FINANCIAL YEAR
(i)
Proposed Acquisition of a Wholly-owned Subsidiary
On 6 March 2013, the Company had acquired 2 ordinary shares of RM1/- each of Purple Heights Sdn. Bhd.
(“PHSB”) with a purchase consideration of RM2/-.
The acquisition resulted in PHSB becoming a wholly-owned subsidiary of the Company.
Proposed Acquisition of a Land Held for Development
(ii)
(iii) Proposed Free Warrants Issued – Warrants C
On 15 July 2013, a wholly-owned subsidiary of the Company, namely Purple Heights Sdn. Bhd. had
entered into a Sale and Purchase agreement with Signature Cabinet Sdn. Bhd., a wholly-owned subsidiary
of Signature International Berhad to acquire two parcels of leasehold land located at Pekan Baru Sungai
Buloh, Petaling, Selangor. The land is measuring approximately 29,728 square metres with a total purchase
consideration of RM75.2 million.
On 5 March 2014, the Company proposed to issue free warrants of up to 64,096,256 new warrants on the
basis of one free warrant for every ten existing ordinary shares at an exercise price of RM0.70 per ordinary
share of RM0.50 each.
(iv) Proposed Acquisition of a Land Held for Development
On 15 April 2014, a wholly-owned subsidiary of the Group, namely Maju Puncakbumi Sdn. Bhd. had
entered into a Sale and Purchase agreement with Ganesha Sdn. Bhd., for the proposed acquisition of
a freehold land located at Pekan Tanjong Kling, Seksyen II, Daerah Melaka Tengah, Melaka. The land is
measuring approximately 83,160 square metres with a total purchase consideration of RM23.2 million.
Proposed Acquisition of a Subsidiary
(v)
On 18 April 2014, a wholly-owned subsidiary of the Group, namely MIB Construction Sdn. Bhd. had
acquired 52 ordinary shares of RM1/- each of Meda ZCH Joint Venture Sdn. Bhd. (formerly known
as Ritzfield Acres Sdn. Bhd.) (“MZJV”) representing 52% equity interest in MZJV with a purchase
consideration of RM52/-.
The acquisition resulted in MZJV becoming a subsidiary of the Group.
Annual Report 2013
Supplementary
Information
on the Disclosure of Realised and Unrealised Profits or Losses
On 25 March 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. The directive requires all
listed issuers to disclose the breakdown of the retained profits or accumulated losses as at the end of the reporting
period, into realised and unrealised profits and losses.
On 20 December 2010, Bursa Malaysia further issued guidance on the disclosure and the format required.
Pursuant to the directive, the amounts of realised and unrealised profits or losses included in the accumulated losses
of the Group and the Company as at 31 December 2013 are as follows:Group
Company
RM’000
RM’000
Realised
(12,848)
(49,646)
Unrealised
(16,612)
-
(29,460)
(49,646)
The determination of realised and unrealised profits or losses is based on Guidance on Special Matter No. 1,
Determination of Realised and Unrealised Profits and Losses in the Context of Disclosure Pursuant to Bursa Malaysia
Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants on 20 December 2010.
The disclosure of realised and unrealised profits or losses above is solely for complying with the disclosure
requirements stipulated in the directive of Bursa Malaysia and should not be applied for any other purposes.
127
128
Statement
by Directors
We, DATO’ (DR.) TEOH SENG FOO and TEOH SENG KIAN, being two of the directors of Meda Inc. Berhad, do
hereby state that in the opinion of the directors, the accompanying financial statements set out on page 44 to 126 are
properly drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31
December 2013 and of the financial performance and cash flows of the Group and of the Company for the financial
year ended on that date in accordance with the Financial Reporting Standards and the requirements of the Companies
Act, 1965 in Malaysia.
The supplementary information set out on page 127 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 Disclosure Pursuant to
Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants.
On behalf of the Board,
TEOH SENG KIAN
DirectorDirector
Kuala Lumpur
Date: 25 April 2014
Statutory
Declaration
I, AN SIEW CHONG, being the officer primarily responsible for the financial management of Meda Inc. Berhad,
do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements and the
supplementary information set out on page 127 are correct, and I make this solemn declaration conscientiously
believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.
AN SIEW CHONG
Subscribed and solemnly declared by the abovenamed at Kuala Lumpur in the Federal Territory on 25 April 2014.
Before me,
ZULKIFLA MOHD DAHLIM
Commissioner for Oaths
Licence No. W541
Annual Report 2013
Independent
Auditors’ Report
To the Members of Meda Inc. Berhad
(Incorporated in Malaysia)
REPORT ON THE FINANCIAL STATEMENTS
We have audited the financial statements of Meda Inc. Berhad, which comprise the statements of financial position as
at 31 December 2013 of the Group and of the Company, and the statements of profit or loss and other comprehensive
income, statements of changes in equity and statements of cash flows of the Group and of the Company for the
financial year then ended, and a summary of significant accounting policies and other explanatory information, as set
out on pages 44 to 126.
Directors’ Responsibility for the Financial Statements
The directors of the Company are responsible for the preparation of financial statements so as to give a true and
fair view in accordance with the Financial Reporting Standards and the requirements of the Companies Act, 1965 in
Malaysia. The directors are also responsible for such internal controls as the directors determine are necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit
in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on our judgement, including the assessment of risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we
consider internal controls relevant to the Company’s preparation of financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal controls. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the
Company as at 31 December 2013 and of their financial performance and cash flows for the financial year then ended
in accordance with the 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 Companies Act, 1965
in Malaysia to be kept by the Company and its subsidiaries have been properly kept in accordance with the
provisions of the Companies Act, 1965 in Malaysia.
(b) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the
Company’s financial statements are in form and content appropriate and proper for the purposes of the
preparation of the financial statements of the Group and we have received satisfactory information and
explanations required by us for those purposes.
(c)
Our audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse
comment made under Section 174(3) of the Companies Act, 1965 in Malaysia.
129
130
Independent
Auditors’ Report
To the Members of Meda Inc. Berhad
Cont’d
OTHER REPORTING RESPONSIBILITIES
The supplementary information set out on page 127 is disclosed to meet the requirement of Bursa Malaysia
Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of
the supplementary information in accordance with the Guidance on Special Matter No. 1, Determination of Realised
and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing
Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa
Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in
accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.
OTHER MATTERS
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the
Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for
the contents of this report.
Baker Tilly Monteiro Heng
No. AF 0117
Chartered Accountants
Kuala Lumpur
Date: 25 April 2014
Michael Joseph Monteiro
No. 828/05/14 (J/PH)
Chartered Accountant
Annual Report 2013
Analysis of
Shareholdings
As at 15 April 2014
ORDINARY SHARES OF RM0.50 EACH
Authorised Share Capital
Issued and Fully Paid-up Share Capital
No. of Shareholders
Voting Rights
*
:
:
:
:
RM500,000,000.00
RM240,305,796*
10,659
Every member present in person or by proxy and represented by
attorney shall have one (1) vote and upon a poll, every such member
shall have one (1) vote for every share held.
inclusive of 5,764,300 treasury shares
DISTRIBUTION SCHEDULE OF SHAREHOLDINGS
No. of
Shareholders
Total
Shareholdings
% of issued
capital
43
1,191
0.00
100 – 1,000
7,799
7,746,104
1.63
1,001 – 10,000
2,178
8,992,142
1.89
509
15,709,705
3.31
125
375,376,150
79.05
2
67,022,000
14.11
10,656
474,847,292
100.00
Size of shareholdings
1 – 99
10,001 – 100,000
100,001 – 23,742,363
(+)
23,742,364 and above
(++)
Total
Remarks : + Less than 5% of issued shares excluding treasury shares
++ 5% and above of issued shares excluding treasury shares
DIRECTORS’ SHAREHOLDINGS
No. of shares held
Direct
Interest
Name of Directors
(%)
(A)
No. of shares held
Indirect
Interest
Total
Interest
(%)
(B)
-
-
-
-
17,662,000
(3.72)
9,736,000
Teoh Seng Kian
56,670,324
(11.93)
Ooi Giap Ch’ng
-
-
Chin Wing Wah
1,020,200
(%)
(A + B)
-
-
(2.05)
27,398,000
(5.77)
-
-
56,670,324
(11.93)
-
-
-
-
(0.21)
-
-
1,020,200
(0.21)
(1)
-
-
-
-
-
-
Lim Chang Moh
-
-
-
-
-
-
131
132
Analysis of
Shareholdings
As at 15 April 2014
Cont’d
SUBSTANTIAL SHAREHOLDERS
According to the register required to be kept under Section 69L of the Companies Act, 1965, the substantial
shareholders (beneficial owners only) of the Company are as follows:
Name of Substantial
Shareholders
No. of shares held
Direct
Interest
(%)
(A)
No. of shares held
Indirect
Interest
Total
Interest
(%)
(B)
17,662,000
(3.72)
9,736,000
Teoh Seng Aun
66,894,988
(14.09)
-
Teoh Seng Kian
56,670,324
(11.93)
-
Tan Kim Seng
43,150,000
(9.09)
Dato’ Tiong Kwing Hee
29,475,500
One Sierra Sdn Bhd
40,571,000
(A + B)
(2.05)(1)
(%)
27,398,000
(5.77)
-
66,894,988
(14.09)
-
56,670,324
(11.93)
-
-
43,150,000
(9.09)
(6.21)
-
-
29,475,500
(6.21)
(8.54)
-
-
40,571,000
(8.54)
Notes :
(1)
Indirect interest held through his spouse, Cheam Shaw Fin
THIRTY (30) LARGEST SHAREHOLDERS
No. Name
Shareholding
%
1.
Amsec Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for One Sierra Sdn Bhd
36,819,000
7.750
2.
Teoh Seng Aun
30,203,000
6.357
3.
Teoh Seng Kian
23,344,000
4.913
4.
RHB Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Chen Sau Mou
22,365,400
4.707
5.
Kenanga Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Tan Kim Seng
17,300,000
3.641
6.
RHB Capital Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Tiong Kwing Hee (DHG)
16,836,000
3.543
7.
TA Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Wawasan Fokus Sdn Bhd
15,795,500
3.324
8.
Pledged Securities Account for Teoh Seng Aun (STG)
13,662,000
2.875
9.
13,023,692
2.741
10.
HLIB Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Teoh Seng Foo (MG0176-182)
11,272,000
2.372
11.
Energy Junction Sdn. Bhd.
10,829,000
2.279
12.
Alliancegroup Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Tan Kim Seng (8056704)
10,700,000
2.252
13.
10,258,000
2.159
Annual Report 2013
Analysis of
Shareholdings
As at 15 April 2014
Cont’d
THIRTY (30) LARGEST SHAREHOLDERS cont’d
No. Name
Shareholding
%
14.
Maybank Securities Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Teoh Seng Aun
9,223,900
1.941
15.
Pledged Securities Account for Teoh Seng Kian (Margin)
8,907,300
1.874
16.
Icon Advantage Sdn Bhd
8,560,100
1.801
17.
M & A Nominee (Tempatan) Sdn Bhd
Pledged Securities Account for Teoh Seng Kian (M&A)
7,860,000
1.654
18.
Pledged Securities Account for Tiong Kwing Hee (8068389)
7,584,500
1.596
19.
Pledged Securities Account for LT Travel & Tours (M) Sdn Bhd (030)
7,370,800
1.551
20.
Koperasi Permodalan Felda Malaysia Berhad
7,000,000
1.473
21.
Majestic Wizard Sdn Bhd
6,763,900
1.423
22.
Teoh Seng Foo
6,390,000
1.345
23.
Cheam Shaw Fin
6,128,000
1.289
24.
HLB Nominees (Tempatan) Sdn Bhd
6,030,000
1.269
25.
Pelaburan Mara Berhad
6,000,000
1.262
26.
Pledged Securities Account for Teoh Seng Kian (DHG)
5,733,000
1.206
27.
Pan Joy Marketing Sdn Bhd
5,559,200
1.170
28.
Maybank Nominees (Tempatan) Sdn Bhd
5,500,000
1.157
29.
LT Travel & Tours (M) Sdn Bhd
5,006,000
1.053
30.
EB Nominees (Tempatan) Sendirian Berhad
Pledged Securities Account for Teoh Seng Kian (SFC)
4,490,000
0.945
346,514,292
72.939
Total
133
134
Analysis of
Warrantholdings
As at 15 April 2014
WARRANTS 2011/2021 (WARRANTS A)
Number of Outstanding Warrants
Exercise Price of Warrants
Exercise Period of Warrants
Voting Rights at Meeting of Warrantholders
:
:
:
:
52,070,100
RM0.50 for each warrant exercise
16 August 2011 to 15 August 2021
Every warrantholder present in person or proxy shall have one (1)
vote and upon a poll, every warrantholder shall have one (1) vote for
each warrant held in the meeting of the warrantholders.
DISTRIBUTION SCHEDULE OF WARRANTHOLDINGS
No. of
Warrantholders
Total
Warrantholdings
% of outstanding
warrants
7
276
0.00
100 – 1,000
505
209,606
0.40
1,001 – 10,000
220
829,805
1.59
95
3,606,930
6.93
53
27,848,383
53.48
3
19,575,100
37.59
883
52,070,100
100.00
Size of Warrantholdings
1 – 99
10,001 – 100,000
100,001 – 2,603,504
(*)
2,603,505 and above
(**)
TOTAL
Remarks : *
**
Less than 5% of outstanding warrants
5% and above of outstanding warrants
DIRECTORS’ WARRANTHOLDINGS
No. of warrants held
Direct
Interest
Name of Directors
(A)
(%)
Indirect
Interest
(B)
-
-
-
-
767,700
(1.47)
993,300
Teoh Seng Kian
2,373,700
(4.56)
Ooi Giap Ch’ng
-
-
Chin Wing Wah
Total
Interest
(%)
(%)
(A + B)
-
-
(1.91)
1,761,000
(3.38)
-
-
2,373,700
(4.56)
-
-
-
-
(1)
580,000
(1.11)
-
-
580,000
(1.11)
-
-
-
-
-
-
Lim Chang Moh
-
-
-
-
-
-
Notes :
(1)
Annual Report 2013
Analysis of
Warrantholdings
As at 15 April 2014
Cont’d
THIRTY (30) LARGEST WARRANTHOLDERS
No. Name
Warrantholding
%
1.
8,300,000
15.940
2.
TA Nominees (Tempatan) Sdn Bhd
6,115,100
11.743
3.
5,160,000
9.909
4.
Pledged Securities Account for Tan Kim Seng (Margin)
2,533,782
4.866
5.
Pledged Securities Account for LT Travel & Tours (M) Sdn Bhd (030)
2,530,177
4.859
6.
1,633,732
3.137
7.
Yong Lee Thieng
1,200,000
2.304
8.
Teoh Seng Aun
1,121,300
2.153
9.
Hong Leong Bank Bhd for Chooi Giap Kee
1,085,800
2.085
10.
Energy Junction Sdn Bhd
1,025,300
1.969
11.
971,000
1.864
12.
800,000
1.536
13.
Pledged Securities Account for Tan Kim Seng (8096891)
800,000
1.536
14.
Teoh Seng Foo
767,000
1.473
15.
Amara Investment Management Sdn Bhd for Teoh Seng Kian
721,400
1.385
16.
Cheam Shaw Fin
612,800
1.176
17.
598,700
1.149
18.
Teo Boon Tong
590,400
1.133
19.
Pledged Securities Account for Chin Wing Wah (8057372)
580,000
1.113
20.
HLIB Nominee (Tempatan) Sdn Bhd
Pledged Securities Account for Chu Sai Boon (CCTS)
564,000
1.083
21.
Dan Yoke Pyng
545,000
1.046
22.
Energy Junction Sdn Bhd
500,000
0.960
23.
Hong Lee Ching
500,000
0.960
135
136
Analysis of
Warrantholdings
As at 15 April 2014
Cont’d
THIRTY (30) LARGEST WARRANTHOLDERS cont’d
No. Name
Warrantholding
%
24.
Tang Suan Faa
463,000
0.889
25.
PM Nominees (Tempatan) Sdn Bhd
Pledged Securities Account for Tang Teck Sun (B)
420,000
0.806
26.
Pledged Securities Account for Teoh Seng Kian (Margin)
400,000
0.768
27.
400,000
0.768
28.
Pledged Securities Account for Teoh Seng Aun (SFC)
387,400
0.743
29.
Pledged Securities Account for Chu Sai Boon
360,000
0.691
30.
Teo Boon Tong
353,700
0.679
42,039,591
80.737
Total
Annual Report 2013
Analysis of
Warrantholdings
As at 15 April 2014
Cont’d
WARRANTS 2012/2022 (WARRANTS B)
Number of Outstanding Warrants
Exercise Price of Warrants
:
:
Exercise Period of Warrants
Voting Rights at Meeting of Warrantholders
:
:
108,280,866
RM0.60 only for each new share at a step-up mechanism adjusted
upwards by RM0.10 at the expiry of every two (2) anniversary years
from 24 April 2012 in accordance with the Memorandum of the
Deed Poll, where applicable, that is :1. RM0.60 from 24 April 2012 to 23 April 2014
2. RM0.70 from 24 April 2014 to 23 April 2016
24 April 2012 to 23 April 2022
Every warrantholder present in person or proxy shall have one (1)
vote and upon a poll, every warrantholder shall have one (1) vote for
each warrant held in the meeting of the warrantholders.
DISTRIBUTION SCHEDULE OF WARRANTHOLDINGS
No. of
Warrantholders
Size of Warrantholdings
1 – 99
100 – 1,000
1,001 – 10,000
10,001 – 100,000
100,001 – 5,414,042
(*)
5,414,043 and above
(**)
TOTAL
Remarks : *
**
Total
Warrantholdings
% of outstanding
warrants
176
6,226
0.01
10,251
3,094,498
2.86
1,190
3,492,301
3.23
367
14,250,274
13.16
124
74,565,967
68.86
2
12,871,600
11.89
12,110
108,280,866
100.00
Less than 5% of outstanding warrants
5% and above of outstanding warrants
DIRECTORS’ WARRANTHOLDINGS
Direct
Interest
Name of Directors
(A)
(%)
Indirect
Interest
Total
Interest
(%)
(B)
-
-
-
-
4,735,500
(4.37)
952,000
Teoh Seng Kian
2,501,500
(2.31)
-
(%)
(A + B)
-
-
(0.88)
5,687,500
(5.25)
-
2,501,500
(2.31)
(1)
Ooi Giap Ch’ng
-
-
-
-
-
-
Chin Wing Wah
-
-
-
-
-
-
-
-
-
-
-
-
Lim Chang Moh
-
-
-
-
-
-
Notes :
(1)
137
138
Analysis of
Warrantholdings
As at 15 April 2014
Cont’d
THIRTY (30) LARGEST WARRANTHOLDERS
No. Name
Warrantholding
%
1.
One Sierra Sdn Bhd
7,000,000
6.464
2.
Pledged Securities Account for Tan Kang Seng (CCTS)
5,871,600
5.422
3.
Wawasan Fokus Sdn Bhd
4,507,400
4.162
4.
4,334,000
4.002
5.
Kenanga Nominees (Temptan) Sdn Bhd
4,325,000
3.994
6.
Pledged Securities Account for Teoh Seng Foo (MG0176-182)
2,818,000
2.602
7.
2,812,500
2.597
8.
2,564,500
2.368
9.
2,408,000
2.223
10.
Pledged Securities Account for Goh Poh Eng (Margin)
2,355,000
2.174
11.
Teoh Seng Foo
1,917,500
1.770
12.
1,896,125
1.751
13.
Cheam Shaw Fin
1,532,000
1.414
14.
Lim Chin Aik
1,250,000
1.154
15.
Pledged Securities Account for Neoh Guan Kie (CEB)
1,220,850
1.127
16.
Dan Yoke Pyng
1,215,000
1.122
17.
Luo Weiqian
1,210,000
1.117
18.
CIMSEC Nominees (Temptan) Sdn Bhd
CIMB Bank for Tang Eng Hooi (MP0188)
1,179,000
1.088
19.
Neoh Guan Kie
1,164,000
1.074
20.
1,122,500
1.036
21.
Pledged Securities Account for Wong Fon Ying (CEB)
1,106,500
1.021
22.
Tang Suan Faa
1,053,200
0.972
23.
Yong Lee Thieng
1,019,000
0.941
Annual Report 2013
Analysis of
Warrantholdings
As at 15 April 2014
Cont’d
THIRTY (30) LARGEST WARRANTHOLDERS cont’d
No. Name
Warrantholding
%
24.
Lam Yen Ling
1,000,000
0.923
25.
1,000,000
0.923
26.
Pledged Securities Account for Tan Kim Seng (Margin)
975,000
0.900
27.
Pledged Securities Account for Lim Seng Chai (Margin)
971,200
0.896
28.
Pledged Securities Account for Cheam Shaw Fin (MG0033-182)
902,000
0.833
29.
Lee Yong Wah
850,000
0.784
30.
Pledged Securities Account for Teoh Seng Aun (SFC)
843,500
0.778
62,423,375
57.649
Total
139
140
List of
Properties
Lot No./Location
1
Lot 2020, Geran 61288,
Bandar Bukit Mertajam,
Seksyen 4, Daerah
Seberang Perai Tengah,
Pulau Pinang
2
Description
Built-Up/
Land Area
Tenure
Approximate
Age of
Building
Net Book
Value
as at
31.12.13
(Year)
(RM’000)
Shopping Mall,
office tower and
hotel
4.25
acres
Freehold
16
85,116
Lot PT Nos, 893 -1373, 1621 1638, 1648 - 1757
1759, 1760, 1762 - 1784, 1826,
1827, 1829
1427 - 1429, 676 - 892, 1271 1306, 1374- 1376,
1382, 1384, 1396, 1397, 1400,
1409, 1410, 1411,
1413, 1415, 1416, 1423, 1428,
1429, 1437,1443,
1494, 1830 - 1832, 2059 - 2108,
Mukim of Kuala
Linggi and Lot PT Nos. 1313,
1314, 1318, 1332,
1361, 1367, 1392, 1393, 1408,
1413, 1422 - 1426
Mukim of Kuala Sungei Baru, all
held under
District of Alor Gajah, State of
Melaka.
Orchard land,
mixed
development
and resort
under
development
576.25
acres
Freehold
&
Leasehold
99 years
N/A
67,595
3
H.S. (D) 28787 PT 41469
Mukim Dengkil, Daerah
Sepang, Negeri Selangor
Land under
mixed
development
14.58
acres
Freehold
N/A
37,926
4
Mukim of Kuala Lumpur,
District of Kuala Lumpur,
Federal Territory of
Kuala Lumpur
PN 46470, Lot 58296
PN 46471, Lot 58297
Retail Lots
2.25
acres
Leasehold
99 years
N/A
10,762
5
15 retails shoplots at Bandar
Bukit Mertajam, Seksyen 4
Daerah Seberang Perai Tengah,
Retail Shoplots
593
sq. metres
Freehold
16
1,993
6
H.S.(D) 15024 PT No. 13677
H.S.(D) 15026 PT No. 13679
Mukim of Sungai Siput,
District of Kuala Kangsar,
Perak Darul Ridzuan.
Land under
mixed
development
256.04
acres
Leasehold
99 years
N/A
14,390
230,782
Annual Report 2013
Notice of
NOTICE IS HEREBY GIVEN that the 14th Annual General Meeting of the Company will be held at Ballroom 1, Level
5, The Summit Hotel Subang USJ, Persiaran Kewajipan, USJ 1, 47600 UEP Subang Jaya, Selangor Darul Ehsan on
Thursday, 26 June 2014 at 10:00 a.m.
AGENDA
1.
To receive the Audited Financial Statements for the year ended 31 December 2013
together with the Directors’ and Auditors’ Reports thereon.
[Please refer to
Explanatory Notes]
2.
To declare a Final Single Tier Dividend of 1 sen per ordinary share of RM0.50 each
for the year ended 31 December 2013.
[Ordinary Resolution 1]
3.
To approve the payment of Directors’ fees.
4.
To re-elect the following Directors who retire in accordance with Article 96(1) of the
Company’s Articles of Association:(a)
(b)
5.
6.
Mr. Teoh Seng Kian
Mr. Ooi Giap Ch’ng
To re-appoint Messrs Baker Tilly Monteiro Heng as Auditors of the Company and
authorize the Directors to fix their remuneration.
As SPECIAL BUSINESS, to consider and if thought fit, to pass the following
Ordinary Resolutions:-
ORDINARY RESOLUTION 6
PROPOSED RETENTION OF INDEPENDENT DIRECTOR
To retain Mr. Ooi Giap Ch’ng who has served as an Independent Non-Executive
Director of the Company for a cumulative term of more than nine (9) years to
continue to act as an Independent Non-Executive Director of the Company in
accordance with the Malaysian Code on Corporate Governance 2012.
AUTHORITY TO ALLOT AND ISSUE SHARES PURSUANT TO SECTION 132D OF
THE COMPANIES ACT, 1965
“That, subject to the Companies Act, 1965 and the Articles of Association of the
Company and approvals from the Securities Commission and Bursa Malaysia
Securities Berhad and other relevant governmental or regulatory authorities, the
Directors be and are hereby empowered pursuant to Section 132D of the Companies
Act, 1965 to allot and issue shares in the capital of the Company from time to time
upon such terms and conditions and for such purposes as the Directors may in their
discretion deem fit provided that the aggregate number of shares issued pursuant to
this resolution does not exceed 10% of the issued share capital of the Company for
the time being and that such authority shall continue in force until the conclusion of
the next Annual General Meeting of the Company.”
141
142
Notice of
Cont’d
PROPOSED RENEWAL OF AUTHORITY FOR SHARE BUY-BACK
“That, subject to the provisions of the Companies Act, 1965, the Memorandum and
Articles of Association of the Company, the Listing Requirements of Bursa Malaysia
Securities Berhad and any applicable laws, rules, orders, requirements, regulations
and guidelines for the time being in force or as may be amended, modified or reenacted from time to time and the approvals of all relevant governmental and/or
regulatory authorities (if any), the Company be and is hereby authorised to purchase
such number of ordinary shares of RM0.50 each in the Company as may be
determined by the Directors of the Company (“Directors”) from time to time through
Bursa Malaysia Securities Berhad upon such terms and conditions as the Directors
may deem fit, necessary and expedient in the interest of the Company provided that
the total aggregate number of shares purchased pursuant to this resolution shall
not exceed ten percent (10%) of the total issued and paid-up share capital of the
Company at any point in time of the said purchase(s); and that the Directors of the
Company shall allocate an amount of funds not exceeding the retained profits or
share premium, or both, of the Company for the Proposed Renewal of Authority for
Share Buy-Back.
That upon completion of the purchase by the Company of its own Shares, the
Directors are authorised to decide at their discretion to cancel all or part of the
Shares so purchased and/or to retain all or part of the Shares so purchased as
treasury shares of which may be distributed as dividends to shareholders and/or to
resell on the market of Bursa Malaysia Securities Berhad and/or to retain part thereof
as treasury shares and cancel the remainder.
That the Directors be and are hereby authorised and empowered to do all acts and
things and to take all such steps and to enter into and execute all commitments,
transactions, deeds, agreements, arrangements, undertakings, indemnities, transfers,
assignments and/or guarantees as they may deem fit, necessary, expedient and/
or appropriate in order to implement, finalise and give full effect to the Proposed
Renewal of Authority for Share Buy-Back with full powers to assent to any
conditions, modifications, revaluations, variations and/or amendments, as may be
required or imposed by any relevant authority or authorities.
And that the Directors be and are hereby empowered immediately upon the passing
of this Ordinary Resolution until the conclusion of the next annual general meeting
of the Company at which time the authority shall lapse unless by ordinary resolution
passed at a general meeting, the authority is renewed either unconditionally or
subject to conditions; or the expiration of the period within which the next annual
general meeting of the Company is required by law to be held; or the earlier
revocation or variation of their authority through a general meeting whichever is the
earliest, but not so as to prejudice the completion of purchase(s) by the Company
before the aforesaid expiry date.”
7.
To transact any other business of which due notice shall have been given.
Annual Report 2013
Notice of
Cont’d
NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT
NOTICE IS HEREBY GIVEN that a Final Single Tier Dividend of 1 sen per ordinary share of RM0.50 in respect of the
financial year ended 31 December 2013, if approved, will be paid on 19 September 2014 to depositors whose names
appear in the Record of Depositors at the close of business on 25 August 2014.
A depositor shall qualify for entitlement to the dividend only in respect of:(a)
Shares transferred to the depositor’s securities account before 4.00 p.m. on 25 August 2014 in respect of
ordinary transfers; and
(b)
Shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa
Malaysia Securities Berhad.
BY ORDER OF THE BOARD
TAN SHIM CHIENG (MAICSA 7013540)
Secretary
Subang Jaya, Selangor
20 May 2014
Notes:
(a)
In respect of deposited securities, only members whose names appear in the Record of Depositors on 19 June 2014 (“General
Meeting Record of Depositors”) are entitled to attend, speak and vote at the Company’s 14th Annual General Meeting to be
held on 26 June 2014.
(b)
A member entitled to attend and vote at the meeting is entitled to appoint not more than two (2) proxies to attend and vote
in his stead. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the
proportion of his holdings to be represented by each proxy.
(c)
A proxy need not be a member of the Company and Section 149(1) of the Companies Act, 1965 shall not apply.
Notwithstanding this, a member entitled to attend and vote at the Meeting is entitled to appoint any person as his proxy to
attend and vote instead of the member at the Meeting. There shall be no restriction as to the qualification of the proxy.
(d)
In the case of a corporate body, the proxy appointed must be in accordance with the Articles of Association and the instrument
appointing a proxy shall be given under the company’s common seal or under the hand of an officer or attorney of the
corporation duly authorized.
(e) Where a member of the Company is an exempt authorized nominee as defined under the Securities Industry (Central
Depositories) Act, 1991, which holds ordinary shares in the Company for multiple beneficial owners in one securities account
(omnibus account), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respects of
each omnibus account it holds.
(f)
The Form of Proxy must be deposited at the Company’s Registrar, Boardroom Corporate Services (KL) Sdn Bhd, Lot 6.05,
Level 6, KPMG Tower, 8 First Avenue, Bandar Utama, 47800 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48)
hours before the time set for holding the meeting or at any adjournment thereof.
(g)
Any alteration in the Form of Proxy must be initialed.
143
144
Notice of
Cont’d
EXPLANATORY NOTES
1.
To receive the Audited Financial Statements
This Agenda Item is meant for discussion only as the provision of Section 169(1) of the Companies Act 1965 does not require a
formal approval of the shareholders and hence is not put forward for voting.
2.
Ordinary Resolution 6
- Proposed Retention of Independent Director
The proposed Ordinary Resolution No. 6, if passed, will allow the independent director to be retained and continue acting as
independent director to fulfill the requirements of Paragraph 3.04 of the Main Market Listing Requirements and in line with the
recommendation Nos. 3.2 and 3.3 of the Malaysian Code on Corporate Governance 2012. The full details of the justification and
recommendations for the retention is set out in the Statement of Corporate Governance in the Annual Report 2013 on page 17.
3.
- Authority to allot and issue shares pursuant to Section 132D of the Companies Act, 1965
The proposed Ordinary Resolution No. 7, if passed, will authorize the directors to issue shares up to 10% of the issued and
paid-up capital of the Company for the time being for such purposes as the directors consider would be in the best interest of
the Company. The purpose for the renewal of a general mandate is to avoid any delay and cost in convening a general meeting
to specifically approve such an issue of shares for any possible fund raising activities (excluding placing of shares) for the
purpose of funding future investment projects, additional working capital etc.
This authority, unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company.
The Company did not issue any new shares pursuant to the mandate granted to the directors at the last Annual General
Meeting held on 20 June 2013 which will lapse at the conclusion of the forthcoming Annual general Meeting.
4.
- Proposed Renewal of Authority for Share Buy-Back
The proposed Ordinary Resolution 8, if passed, will prepare our Company with a further option to utilize our financial resource
more efficiently. It is also intended to stabilize the supply and demand as well as the Company’s shares prices.
The mandate shall continue to be in force until the date of the next Annual General Meeting of the Company unless earlier
revoked or varied by ordinary resolution of the Company in a general meeting and is subject to annual renewal.
Further information on this resolution is set out in the Share Buy-Back Statement dated 20 May 2014, despatched together with
this Annual Report.
Form of Proxy
Number of Shares Held
(507785-P)
I/We NRIC No./Passport No./Company No. of being a member/members of MEDA INC. BERHAD hereby appoint:FIRST PROXY
Full Name (in Block)
NRIC/Passport No.
Proportion of Shareholdings
No. of Shares
%
Address
If you wish to appoint a second proxy, this section must also be completed, otherwise it should be deleted.
SECOND PROXY
Full Name (in Block)
NRIC/Passport No.
Proportion of Shareholdings
No. of Shares
%
Address
or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the 14th
Annual General Meeting of the Company to be held at Ballroom 1, Level 5, The Summit Hotel Subang USJ, Persiaran
Kewajipan, USJ 1, 47600 UEP Subang Jaya, Selangor Darul Ehsan on Thursday, 26 June 2014 at 10:00 a.m. and at
any adjournment thereof.
First Proxy
Resolutions
For
Against
Second Proxy
For
Against
Ordinary Resolution 1 Payment of a final dividend
Ordinary Resolution 2 Payment of Directors’ fees
Ordinary Resolution 3 Re-election of Mr. Teoh Seng Kian as Director
Ordinary Resolution 4 Re-election of Mr. Ooi Giap Ch’ng as Director
Ordinary Resolution 5 Re-appointment of Auditors
Ordinary Resolution 6 Proposed Retention of Independent Director
Ordinary Resolution 7 Authority pursuant to Section 132D of the Companies
Act, 1965 for Directors to issue shares
Ordinary Resolution 8 Proposed Renewal of Authority for Share Buy-Back
*
Please indicate with an “X” in the appropriate space how you wish your proxy to vote. If you do not indicate how you wish your
proxy to vote on any resolution, the proxy shall vote as he thinks fit or, at his discretion, abstain from voting.
Dated this day of 2014
* Signature/Common Seal of Shareholder
(* Delete if not applicable)
NOTES:
(a)
In respect of deposited securities, only members whose names appear in the Record of Depositors on 19 June 2014 (“General Meeting Record of
Depositors”) are entitled to attend, speak and vote at the Company’s 14th Annual General Meeting to be held on 26 June 2014.
(b)
A member entitled to attend and vote at the meeting is entitled to appoint not more than two (2) proxies to attend and vote in his stead. Where a
member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportion of his holdings to be represented by
each proxy.
(c)
A proxy need not be a member of the Company and Section 149(1) of the Companies Act, 1965 shall not apply. Notwithstanding this, a member
entitled to attend and vote at the Meeting is entitled to appoint any person as his proxy to attend and vote instead of the member at the Meeting.
There shall be no restriction as to the qualification of the proxy.
(d)
In the case of a corporate body, the proxy appointed must be in accordance with the Articles of Association and the instrument appointing a
proxy shall be given under the company’s common seal or under the hand of an officer or attorney of the corporation duly authorized.
(e) Where a member of the Company is an exempt authorized nominee as defined under the Securities Industry (Central Depositories) Act, 1991,
which holds ordinary shares in the Company for multiple beneficial owners in one securities account (omnibus account), there is no limit to the
number of proxies which the exempt authorised nominee may appoint in respects of each omnibus account it holds.
(f)
The Form of Proxy must be deposited at the Company’s Registrar, Boardroom Corporate Services (KL) Sdn Bhd, Lot 6.05, Level 6, KPMG Tower,
8 First Avenue, Bandar Utama, 47800 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time set for holding the
meeting or at any adjournment thereof.
(g)
Any alteration in the Form of Proxy must be initialed.
Fold This Flap For Sealing
Then Fold Here
AFFIX
POSTAGE
STAMP
The Company’s Registrar
MEDA INC. BERHAD
(Co. No. 507785-P)
Lot 6.05, Level 6, KPMG Tower
8 First Avenue, Bandar Utama
47800 Petaling Jaya
Malaysia
1st Fold Here

Annual Report 2013

Transcription

Similar documents

Zhulian-USM Joint Laboratory - School of Industrial Technology

progressive impact corporation berhad (“picorp”) a total

frs_brz_sheet

State Water Supply Concession awarded to SAJ Holdings

FA Newsletter 3rd edition

Wait - RAYMA Sdn Bhd

Meda Inc. Berhad Annual Report For Year 2005 (Page 01-31)

student management system (sms)

Corporate Responsibility - National University of Singapore

abc company - pcs rakyat sdn bhd