Ewein Berhad Annual Report 2015

Transcription

ANNUAL REPORT 2015
CONTENTS
02 CORPORATE INFORMATION
03 - 04 CHAIRMAN’S STATEMENT
05 - 09 DIRECTORS’ PROFILE
10 CORPORATE STRUCTURE
11 - 25 STATEMENT ON CORPORATE GOVERNANCE
26 - 27 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
28 - 31 AUDIT COMMITTEE REPORT
32 - 120 FINANCIAL STATEMENTS
121 STATEMENT BY DIRECTORS
122 STATUTORY DECLARATION
123 - 124 INDEPENDENT AUDITORS’ REPORT
125 - 130 LIST OF PROPERTIES
131 - 136 ANALYSIS OF SHAREHOLDINGS
137 - 141 NOTICE OF ANNUAL GENERAL MEETING
142 NOTICE OF DIVIDEND ENTITLEMENT
PROXY FORM
02 CORPORATE INFORMATION
Board of Directors
Dato’ Seri Ewe Tiong Hor
(Non-Independent Non-Executive Chairman)
Dato’ Ewe Swee Kheng
(Deputy Chairman and Group Managing Director)
Mr Chuah Poh Lim
(Deputy Managing Director)
Mr Poh Chee Kwan
(Non-Independent Non-Executive Director)
Ms Ewe Lay Khim
Dato’ Khor Ah Hua @ Khor Choo Fong
(Independent Non-Executive Director)
Mr Tan Yen Yeow
Company Secretary
Mr Chee Wai Hong (BC/C/1470)
Registered Office
51-13-A Menara BHL Bank
Jalan Sultan Ahmad Shah, 10050 Penang
Tel: 604-228 9700
Fax: 604-227 9800
Email: [email protected]
Corporate Office
Plot 317 & 318, Tingkat Perusahaan Tiga, MK 1
Kawasan Perindustrian Prai
13600 Prai, Penang
Tel: 604-399 2122 (Hunting Line)
Fax: 604-398 9129/399 7548
Email: [email protected]
Website: http://www.eweinberhad.com/
Audit Committee
Chairman
Mr Tan Yen Yeow
Members
Ms Ewe Lay Khim
Principal Bankers
OCBC Bank (Malaysia) Bhd
No. 36, Beach Street
10300 Penang
Tel: 1300887000
Fax: 604-261 7332
RHB Bank Bhd
No. 21, 23 & 25,
Jalan Lembah Permai
14000 Bukit Mertajam
Pulau Pinang
Tel: 1-300-88-8742
Fax: 604-508 5288
Public Bank Berhad
Bukit Mertajam Branch
2644 - 2648, Jalan Che Bee Noor
14000 Bukit Mertajam
Pulau Pinang
Tel: 604-539 2212
Fax: 604-539 2164
Auditors
KPMG (AF0758)
Level 18, Hunza Tower
163E Jalan Kelawei
10250 Penang
Tel: 604-238 2288
Fax: 604- 238 2222
Share Registrar
Mega Corporate Services Sdn Bhd (187984-H)
Level 15-2, Faber Imperial Court
Jalan Sultan Ismail
50250 Kuala Lumpur
Tel: 603-2692 4271
Fax: 603-2732 5388, 2732 5399
Stock Exchange Listing
Main Market of Bursa Malaysia Securities Berhad
Stock Short Name:
Share: EWEIN (Code : 7249)
Warrant: EWEIN-WA (Code : 7249WA)
CHAIRMAN’S STATEMENT
On behalf of the Board of Directors of Ewein Berhad, I am pleased to present
herewith the Annual Report and Audited Financial Statements of the Company and
of the Group for the financial year ended 31 December 2015.
GROUP PERFORMANCE
For financial year ended 31 December 2015, the Group posted a revenue of RM87.7
million, a 96.6% surge from RM44.6 million reported last year. In turn, profit before
tax rose by 421% to RM18.6 million, from RM3.57 million reported in the preceding
financial year. The improved sales performance was significantly contributed by
property development activities.
The Company has mobilized the development of its maiden property development
project “City of Dreams” with piling and substructure works and the project is
expected to be completed in 2020. The Group is continuing its efforts to seek and
to establish synergistic partnerships through joint ventures and expanding its land
banks.
CORPORATE DEVELOPMENTS
The Company did not have any corporate exercise during the financial year.
PROSPECTS
The gross domestic product growth in Malaysia for 2015 was at 5%, a decrease from 6% in year 2014 which is
mainly affected by the slowdown in domestic demand from tighter fiscal conditions. Residential property prices and
sales volume will likely to be subdued following the various cooling measures implemented. With a greater pool of
affordable housing coming into the market in the next few years, 2016 will be a challenging year for the residential
property market. Despite the downturn, the Group had demonstrated a great return in year 2015. The Board is
committed to the creation of a stable platform for future development in an effort to bring greater value to the Group
and its shareholders.
DIVIDENDS
The Board of Directors is pleased to recommend a first and final single tier dividend of half sen per share in respect
of the financial year ended 31 December 2015, amounting to RM1,108,534.43 million subject to the approval of the
shareholders at the forthcoming Annual General Meeting.
03
04 CHAIRMAN’S STATEMENT
(CONT’D)
APPRECIATION
The Board bade farewell to our former Independent Non-Executive Directors, Mr Lau Tiang Hua, DJN and Tan Sri
Dato’ Wong See Wah who retired at the last Annual General Meeting of the Company and recorded our sincere
appreciation to them for their invaluable guidance, advice and support to the Company. At the same time, the Board
is pleased to welcome their new directors, Ms Ewe Lay Khim and Mr Tan Yen Yeow who were appointed as a NonIndependent Non-Executive Director and Independent Non-Executive Director respectively on 27 May 2015.
I would also like to take this opportunity to extend my sincere thanks to my fellow directors for their collective wisdom,
sound judgement and practical advice in the past year. I would also like to thank our employees for their dedication,
loyalty and hard work to sustain the profitability of the Group. Last but not least on behalf of the Board, I would like
to thank our shareholders, bankers and regulatory bodies for your continued support during these challenging times.
Non-Independent Non-Executive Chairman
DIRECTORS’ PROFILE
Dato’ Seri Ewe Tiong Hor, DGPN, DSPN, DJN, PJK (male), a Malaysian, aged 80, was
appointed as the Non-Independent Non-Executive Chairman of Ewein on 11 January 2008.
Dato’ Seri Ewe Tiong Hor has over 37 years of experience in a wide array of businesses
including manufacturing, beverage bottling, trading and distribution, property development
and plantations. In 1977, Dato’ Seri Ewe Tiong Hor established his first company, Ewein Winery
(M) Sdn Bhd, which specialises in beverage bottling. He was appointed as the President of
Malaysia Liquor Manufacturers and Bottlers Association from 1997 to 2004. Presently, Dato’
Seri Ewe Tiong Hor is the Chairman of various companies such as Ewein Winery (M) Sdn
Bhd and Wen Ming Holding Sdn Bhd. Dato’ Seri Ewe Tiong Hor does not hold any other
directorships in other public companies.
Apart from business, Dato’ Seri Ewe Tiong Hor also plays an active role in social, educational
and religious activities. Dato’ Seri Ewe Tiong Hor is the Chairman of Hokkein Hoay Kuan,
Province Wellesley. He served as President of Hock Teik Cheng Sin Temple, Bukit Mertajam
from 2008 to 2014; Vice Chairman of the Governing Board of Sekolah Menengah Jit Sin
Persendirian Bukit Mertajam from 2005 to 2014; and Director of the Governing Boards of
Sekolah Menengah Jenis Kebangsaan Jit Sin Bukit Mertajam from 2002 to 2014 and Sekolah
Rendah Jenis Kebangsaan Jit Sin “B” Bukit Mertajam from 1997 to 2014.
For his exemplary services to society, Dato’ Seri Ewe Tiong Hor has been conferred numerous
accolades including the Darjah Gemilang Pangkuan Negeri in 2008, the Darjah Setia Pangkuan
Negeri in 1999, the Darjah Johan Negeri in 1992 and the Pingat Jasa Kebajikan in 1989 by the
Yang Terutama Yang di-Pertua Negeri Pulau Pinang.
Dato’ Seri Ewe Tiong Hor is the father of Ms Ewe Lay Khim and Dato’ Ewe Swee Kheng who is
also the Managing Director of the Company.
05
06 DIRECTORS’ PROFILE
Dato’ Ewe Swee Kheng, DSPN, DIMP (male), a Malaysian, aged 47, was appointed as the
Managing Director of Ewein on 11 January 2008. He is now the Deputy Chairman and Group
Managing Director and also a member of the Remuneration Committee of the Group. Dato’
Ewe Swee Kheng is the founder of the Ewein Group. Prior to establishing the Ewein Group, he
started his first business under Audio Tech Industries Sdn Bhd in 1989, which is engaged in the
manufacturing of speaker grilles for the consumer electronics market. In 1990, he established
PPISB to design and fabricate precision moulds, tools and dies for the sheet metal fabrication
industry. During the same year, he also established TASB as a pioneer in precision sheet metal
fabrication under MIDA’s promoted industry.
Dato’ Ewe Swee Kheng was appointed as a director for various companies namely, Vivani
Sdn Bhd (the franchisee of Versace), Tingkat Prestasi Sdn Bhd (the developer for the Palazzo,
Penang) and Ewein Winery (M) Sdn Bhd. He is also the committee member of the Penang
Chinese Chamber of Commerce (“PCCC”), PCCC Charity Fund Standing Committee, a director
of Penang Han Chiang Associated Chinese Schools Association, a General Committee Member
of Silver Jubilee Home for the Aged and a Director of Jemaah Pengurus SMJK Heng Ee. Dato
Ewe Swee Kheng does not hold any other directorships in other public companies.
Ewein Group is now transforming into a formidable player in the property development sector
whilst maintaining a reputable position in the precision sheet metal fabrication and precision
plastic injection moulding industry. Dato’ Ewe Swee Kheng’s innovative thinking and far
sightedness will continue to place the Group in a stronger footing in years to come.
Dato’ Ewe Swee Kheng is the son of Dato’ Seri Ewe Tiong Hor and brother of Ms Ewe Lay
Khim. Dato’ Ewe Swee Kheng is the Chairman and a major shareholder of Hijauwasa Sdn. Bhd.
which is a major shareholder of the Company.
DIRECTORS’ PROFILE (CONT’D)
Mr Chuah Poh Lim (male), a Malaysian, aged 47, was appointed as the Deputy Managing
Director of Ewein on 11 January 2008. He started his career with Philips Electronics (M) Sdn
Bhd as a Purchasing Assistant in 1986, where he was involved in the purchasing of mechanical
parts from both local and overseas vendors.
Mr Chuah Poh Lim joined TASB as a Purchasing Executive in 1990. He was promoted to
Material Control & Marketing Manager in 1993 and General Manager in 1998. As the General
Manager, he was responsible for the overall operation and administration of TASB. Due to his
hard work and invaluable experiences, he was later promoted to Deputy Managing Director of
TASB, where he oversees of the overall operations of TASB, PPISB, KPTSB, TISB & EZSB.
He does not hold any other directorships in other public companies. Mr Chuah Poh Lim has no
family relationship with any other Director and/or major shareholder of the Company.
Mr Poh Chee Kwan (male), a Malaysian, aged 53, was appointed as a Non-Independent
Non-Executive Director of Ewein on 30 June 2014. Mr. Poh Chee Kwan holds a Bachelor of
Engineering (Honours) degree from the National University of Singapore. He started as a
Project Engineer with a construction company and later joined the management of a private
equity company in Singapore. He returned to Malaysia and joined Med-Bumikar Mara Sdn Bhd
(MBM) Group in 1992. He held senior management positions within the MBM Group and is
currently the Group General Manager. He also acts as Director of several private companies
representing the MBM Group's interest in these companies. He does not hold any other directorships in other public companies. Mr Poh Chee Kwan has no
family relationship with any Director and/or major shareholder of the Company.
07
08 DIRECTORS’ PROFILE
(CONT’D)
Ms. Ewe Lay Khim (female), aged 56, was appointed as a Non-Independent Non-Executive
Director of Ewein on 27 May 2015. She is the Chairman of the Remuneration Committee and
is also a member of the Audit and Nominating Committee of the Group.
Ms Ewe graduated with a Bachelor of Science (Honours) degree in Chemistry from University
of Toronto, Canada in 1984 and went on to complete her internship at International Flavours
and Fragrances Inc., a leading global creator of flavours and fragrances, at their plant in Hazlet,
New Jersey, USA.
Upon returning to Malaysia, Ms. Ewe worked as a Food Technologist for Jamanis Sdn. Bhd. (of
the Soon Soon Group ) a manufacturer of High Fructose Corn Syrup (HFCS) and cornstarch. She
was involved in formulation and technical support for corporate clients and had the privilege of
working with the late Dr. Neoh Soon Kean in R&D of HFCS as a sugar substitute for food and
beverage manufacturers.
While juggling a career, she studied management accounting at the Malaysian Institute of
Training and Development. She pursued her education further and eventually obtained her
Master of Business Administration (MBA) degree from University of Portsmouth, U.K. in 1998.
Having specialized in Corporate Finance and International Marketing, Ms. Ewe was fortunate
to be mentored for her dissertation by Professor Geoff Gravil, who was then also an examiner
for the ACCA.
Ms Ewe joined Ewein Winery (M) Sdn. Bhd. in 1990 as a chemist but found her calling in
the field of management and finance. Ms Ewe is Information Technology (IT) savvy and was
instrumental in transforming the companies under her charge from manual bookkeeping to
a Microsoft DOS based environment in the early 1990's and eventually in keeping with the
pace of technology, their migration to a Windows-based Enterprise Resource Planning (ERP)
platform. She now heads the project team responsible for a GST-compliant ERP system.
She has 30 years of experience in a wide range of industries including manufacturing, trading,
property development and plantations. Ms Ewe is currently a director of various companies
including Ewein Winery (M) Sdn. Bhd., Ewein Holdings Sdn. Bhd., Wen Ming Holding Sdn. Bhd.
and Kirana Bumijaya Sdn. Bhd.
Ms. Ewe is currently the President of Persatuan Alumni Sekolah Convent Bukit Mertajam
and is actively involved in charity and social activities of her alma mater. She is also very
passionate about environmental issues and participated in the Penang State Government’s
‘Lab’ Pengasingan Sisa Di Punca in October 2015.
She does not hold any other directorships in other public companies. Ms Ewe Lay Khim is the
daughter of Dato’ Seri Ewe Tiong Hor and the sister of Dato’ Ewe Swee Kheng.
DIRECTORS’ PROFILE (CONT’D)
Dato’ Khor Ah Hua (male), a Malaysian, aged 68, was appointed as an Independent NonExecutive Director of Ewein on 11 January 2008. He is a businessman with vast experience in
the Motor Vehicle Industry. He completed the Management Development Programme at the
Asia Institute of Management, Philippines and Senior Management Development Programme
of Harvard Business School.
He is at present actively involved in the dealership and retail management of motor vehicles.
He has previously served in various senior positions including the position of an Executive
Director in Daihatsu (M) Sdn. Bhd, Board member of Hino Motors (Malaysia) Sdn Bhd and
Chairman of Federal Auto Holdings Berhad. He is currently on the board of LBI Capital Berhad
and Board Members of various private companies.
Dato’ Khor Ah Hua is a member of the Audit, Remuneration and Nominating Committee
of Ewein Berhad. He is not related to any other Director and /or major shareholder of the
Company.
Mr Tan Yen Yeow (male), a Malaysian, aged 45, was appointed as an Independent NonExecutive Director of Ewein Berhad on 27 May 2015. He is a member of the Malaysian Institute
of Accountants and The Institute of Internal Auditors Malaysia.
Mr Tan began his professional career with KPMG in 1990 as an articled student under the
MICPA programme. After serving for 9 years at KPMG, he left and set up his audit firm, Tan
Yen Yeow & Company in 2001. He has been involved in providing professional services which
include auditing, internal auditing and risk management.
Mr Tan Yen Yeow is the Chairman of the Audit Committee and Nominating Committee and a
member of the Remuneration Committee of the Group.
Mr Tan Yen Yeow is currently on the board of JMR Conglomeration Berhad and a board
member of two private companies. He is not related to any other Directors and/or any major
shareholders of the Company.
Note : Save as disclosed, the above directors have no conflict of interest with Ewein Berhad and have not been
convicted of any offence within the past 10 years.
09
10 CORPORATE STRUCTURE
100%
MBM INDUSTRIES
SDN BHD (MBM)
100%
TEKUN ASAS
SDN BHD (TASB)
100%
PRECISION PRESS INDUSTRIES
SDN BHD (PPISB)
100%
100%
70%
100%
THE ESPLANADE PARK
SDN BHD (EPSB)
50%
KOTA CORNWALLIS DINE &
COFFEE SDN BHD
60%
EWEIN ZENITH
SDN BHD (EZSB)
60%
EWEIN ZENITH II
SDN BHD (EZ II)
ASSOCIATE
EWEIN LAND
SDN BHD (ELSB)
TEKUN INNOVASI
SDN BHD (TISB)
KELPEN RESOURCES
SDN BHD (KRSB)
100% KELPEN PLASTICS TECHNOLOGY
SDN BHD (KPTSB)
STATEMENT ON CORPORATE GOVERNANCE
The Board is fully committed to developing and maintaining high standards of corporate governance by implementing
the prescriptions of the principles and best practices set out in the Malaysian Code of Corporate Governance 2012
(the “Code”). It recognizes that principles of good corporate governance and business integrity are fundamental to
the goals of enhancing shareholder value and protecting the interests of all stakeholders. The Board is pleased to
provide the following statement, which outlines the primary corporate governance practices consistently adopted by
the Group.
Principle 1 Establish clear roles and responsibilities
Composition of the Board/Board Balance
The Board currently consists of seven (7) members; comprising three (3) Non-Independent and Non-Executive Directors,
two (2) Executive Directors and two (2) Independent Non-Executive Directors. The Board consists of members from a
wide range of discipline and background, providing in-depth and diversity in experience to the Group’s operations. The
Board takes cognizance of the Chairman being not an Independent Director but of the view that there are sufficient
experiences and Independent non-Executive Directors on Board to provide assurance that there is adequate check and
balance. All Independent Non-Executive Directors are free from any business dealings and other relationships with the
Group and therefore play a crucial role in corporate accountability with their independent, unbiased views, advice and
judgment in the decision making process.
With Dato’ Seri Ewe Tiong Hor as the Group Non-Independent Non-Executive Chairman and Dato’ Ewe Swee Kheng
as the Group Managing Director, there is a clear division of responsibilities between these roles to ensure a balance
of power and authority. Furthermore, the complement of Non-Executive Directors provides an effective Board with a
mix of industry-specific knowledge, technical and commercial experience. This balance enables the Board to provide
a clear and effective leadership to the Company and to bring informed and independent judgment to various aspects
of the Company’s strategies and performance.
The Independent Non-Executive Directors further strengthen the Board in providing unbiased and independent views,
advice and judgement. They also contribute to the formulation of policies and decision-making though their expertise
and experience.
A brief profile of each Director is presented on page 5 to page 9 of this Annual Report.
Board Responsibilities and Duties
The Company is led by an experienced and dynamic Board. It has a balanced board composition with effective
independent directors. The Board takes full responsibility and retains full and effective control over the affairs of the
Group. The Board’s functions and responsibilities are as stipulated in the Board Charter, their primary focus is on
overall strategic planning including business plan and annual budget, performing quarterly review of business and
financial performance, reviewing risk management, exercising internal controls and enforcing legal and statutory
compliance.
Board Charter
The Board has established a Board Charter which sets out the duties and responsibilities of individual directors, Board
Committee and the Board as a whole in accordance with the principles of good corporate governance. The Board
Charter will be periodically reviewed and published on the Company’s corporate website: www.eweinberhad.com
11
12 STATEMENT ON CORPORATE GOVERNANCE
(CONT’D)
Principle 1 Establish clear roles and responsibilities (Cont'd)
The Board Charter covers the following key areas :
a) Establishing and reviewing the strategic direction of the Company;
b) Overseeing and evaluating the conduct of the Company’s businesses;
c) Identifying principal risks and ensuring that the risks are properly managed;
d) Establishing a succession plan;
e) Developing and implementing an investors relations programme or shareholder communication policy;
f) Reviewing the adequacy of the internal control policy.
Directors’ Code of Conduct/Ethics
The Board has adopted a Code of Ethics & Conduct for its Directors (“Code”), formulated to enhance the standard
of corporate governance and promote ethical conduct of the Directors. This Code complements the whistle blowing
policy which outlined the procedure on handling of any actual or potential fraud or breach of ethics involving the
employee, management or Director in the Group reported by the whistle blower.
Company Secretary
The Company Secretary provides support to the Board in fulfilling its fiduciary duties and leadership role in shaping the
CG of Ewein Group. In this respect, he plays an advisory role to the Board, particularly with regard to the Company’s
constitution, Board policies and procedures, and its compliance with regulatory requirements, codes, guidance and
legislations. The Company Secretary also supports the Board in managing the Group Governance Model to ensure its
relevance and effectiveness.
The Company Secretary ensure that deliberations at Board and Board Committee meetings are well documented,
and subsequently communicated to the relevant Management for appropriate actions. The Board is updated by the
Company Secretary on the follow-up of its decisions and recommendations by the Management.
The Company Secretary constantly keeps himself abreast of the evolving capital market environment, regulatory
changes and developments in CG through attendance at relevant conferences and training programmes. He has also
attended the relevant continuous professional development programmes as required by the Companies Commission
of Malaysia or MAICSA for practising company secretaries. The Board is satisfied with the performance and support
rendered by the Company Secretary to the Board in discharging its functions.
Strategies Promoting Sustainability
The Board recognizes the Group’s commitment toward sustainability and environmental, social and governance
performance as part of its broader responsibility to stakeholders, shareholders and communities in which it operates.
The Company’s approach to sustainability for the financial year under review is set out in the Corporate Social
Responsibility Statement in Page 24 of this Annual Report.
Supply of Information
Board reports are sent to the Directors prior to each meeting to enable the Directors to obtain explanations, where
necessary to allow them to effectively discharge their responsibilities. The Board has access to all information in
relation to the Group whether as a full Board or in their individual capacity to assist them in the furtherance of their
duties. Besides direct access to management staff, the Company Secretaries are also made available to render their
independent views and advice to the Board.
STATEMENT ON CORPORATE GOVERNANCE (CONT’D)
Principle 1 Establish clear roles and responsibilities (Cont'd)
Supply of Information (Cont'd)
In addition, the Directors, if necessary, may also seek professional advice, at the Company’s expense, if required. The
Directors may also consult the Chairman and other Board members prior to seeking any independent professional
advice.
Workforce Diversity
The Group has no immediate plan to implement a diversity policy or target as it is of the view that employment
is dependent on each candidate’s skills, experience, core competencies and other qualities regardless of gender,
ethnicity and age. The Group will provide equal opportunity to candidates with merit.
Principle 2 Strengthen Composition
Board Committees
The Board has delegated appropriate responsibilities to the Board Committees, namely Audit Committee, Nominating
Committee and Remuneration Committee, in order to enhance business and operational efficiency and efficacy. Terms
of references have been established for all Board Committees and the Board receives reports of their proceedings and
deliberations. The Chairman of the Committees report to the Board the outcome of the Committee meetings and
such reports are incorporated in the minutes of the full board meeting.
a)
Nominating Committee
Annual Assessment
The Nominating Committee reviews the composition of the Board Committees in accordance with the terms
of reference of the Board Committees. The Committee also reviews annually the effectiveness of the Board
as a whole, the Committees of the Board and contribution of each individual director through the annual
assessment questionnaire completed by each director. In determining candidates for appointment to the Board
Committees, various factors are considered, including the time commitment of the Board Committee members
in discharging their role and responsibilities through attendance at their respective meetings, their performance
and contribution to the achievement of the Board Committees’ goals and objectives, possession of the attributes,
capabilities and qualifications considered necessary or desirable for committee service and demonstration of
independence, integrity and impartiality in decision-making. The attendance at Board Committee meetings
during the financial year ended 31 December 2015 is provided under page 20 of this Corporate Governance
Statement.
Appointment and Re-election of Directors
The Board has delegated the Nominating Committee the responsibility of considering the appointment of
Directors, identifying and selecting potential new directors and proposing to the Board the appointment of new
directors.
The Nominating Committee had in February 2016 reviewed and assessed the directors who are newly appointed
during the year, namely Mr Tan Yen Yeow and Ms Ewe Lay Khims' performance and contribution. In the
respective assessment, the Nominating Committee considered various factors including the Directors’ annual
assessment results for decision making. The Board had on February 2016 approved the Nominating Committee’s
recommendation to seek for shareholdes’ approval to re-elect them as directors of the Company.
13
(CONT’D)
Principle 2 Strengthen Composition (Cont'd)
a)
Nominating Committee (Cont'd)
Appointment and Re-election of Directors (Cont'd)
All the members of the Nominating Committee are Non-Executive Directors and majority are independent. The
members of the Nominating Committee are as below:
Name of Director
Mr Tan Yen Yeow
(Appointed on 27 May 2015)
Ms Ewe Lay Khim
Mr Lau Tiang Hua, DJN
(Retired on 27 May 2015)
Tan Sri Dato’ Wong See Wah
Designation
Chairman, Independent Non-Executive Director
Member, Independent Non-Executive Director
Member, Non-Independent Non-Executive Director
The Articles of Association of the Company provide that one third (1/3) of the Directors are required to retire at
every Annual General Meeting (“AGM”), and be eligible for re-election provided that each Director shall retire
once in every three (3) years.
In accordance with Section 129(6) of the Companies Act, 1965, any Director who has attained the age of
seventy (>70) years and above is required to retire annually and shall be eligible for re-appointment.
Gender Diversity Policy
The Board has no immediate plans to implement a gender diversity policy. In its selection for Board appointment,
the Board believes in and provides equal opportunity to candidates who have the skills, experience, core
competencies and other qualities regardless of gender.
The Board strongly views that diversity of the Board’s Composition is important to facilitate optimal decisionmaking by harnessing different insights and perspective. In 2015, the Nominating Committee had nominated
the appointment of Ms Ewe Lay Khim, a female director of the Company.
Terms of reference
1.Membership
Members of the Nominating Committee shall be appointed by the Board. The Nominating Committee shall
be made up of at least 3 members, composed exclusively of non-executive directors of which a majority of
whom are independent. Only members of the Nominating Committee have the right to attend Nominating
Committee meetings. However, other individuals such as the Chief Executive, the head of human resources
and external advisers may be invited to attend for all or part of any meeting as and when appropriate.
a)
Terms of reference (Cont'd)
1. Membership (Cont'd)
The Board shall appoint a senior independent non-executive director identified by the Board to be Chairman
of the Nominating Committee. In the absence of the Nominating Committee Chairman and/or an appointed
deputy, the remaining members present shall elect one of themselves to chair the meeting.
2.Duties
As part of their nominating function, the Committee will :
a) determine the core competencies and skills required of Board members to best serve the business
and operations of the Group as a whole and the optimum size of the Board to reflect the desired skills
and competencies;
b) review the size of Non-Executive participation, Board balance and determine if additional Board
members are required and also to ensure that at least one-third (1/3) of the Board is independent;
c) recommend to the Board on the appropriate number of Directors to comprise the Board which
should fairly reflect the investments of the minority shareholders in the Company, and whether the
current Board representation satisfies this requirement;
d) recommend to the Board, candidates for all directorships to be filled by the shareholders or the Board;
e) consider in making its recommendations, candidates for directorships proposed by the Chief Executive
Officer/Managing Director and, within the bounds of practicability, by any other senior executive or
any Director or shareholder;
f) recommend to the Board, Directors or officers of the Company to fill the seats on Board Committees;
g) undertake an annual review of the required mix of skills and experience and other qualities of
Directors, including core competencies which the Directors should bring to the Board in order for the
Board to function efficiently and effectively and to disclose this in the Annual Report;
h) assist the Board to implement a procedure to be carried out by the Committee annually for
assessing the effectiveness of the Board as a whole, the Committees of the Board and for assessing
the contributions and performance of Directors and Board of Committee members;
i)
introduce such regulations or guidelines, procedures to function effectively and fulfill the Committee’s
objective;
j) ensure that all Directors receive appropriate training to facilitate the discharge of their duties;
k) facilitate Board induction and training programmes to newly appointed directors;
l) oversee appointment, management succession planning and performance evaluation of Key
Responsible Persons (other than Directors and Board Committee);
m) facilitate achievement of board gender diversity policies, targets and measures to achieve it;
n) ensure the Board carry out the annual assessment of the independence of independent directors;
o) develop, maintain and review the criteria to be used in the recruitment process and annual assessment
of directors.
15
(CONT’D)
a)
3. Minutes of Meetings
The Secretary shall minute the proceedings and resolutions of Nominating Committee meetings, including
the names of those present and in attendance. Minutes of Nominating Committee meetings shall be
circulated promptly to all members of the Committees and, once agreed, to all members of the Board,
unless a conflict of interest exists.
b)
Remuneration Committee
Directors’ Remuneration
The Remuneration Committee comprises a majority of Non-Executive Directors who are responsible for
recommending the remuneration packages of the Executive Directors of the Company to the Board on a yearly
basis. The Board determines the remuneration of Non-Executives Directors who abstain from deliberation
and decision made in respect of their individual remuneration. Currently, the members of the Remuneration
Committee are:
Name of Director
Ms Ewe Lay Khim
Mr Tan Yen Yeow
Mr Lau Tiang Hua, DJN
Tan Sri Dato’ Wong See Wah
Designation
Chairman, Non-Independent Non-Executive Director
Member, Deputy Chairman and Group Managing Director
17
b)
Remuneration Committee (Cont'd)
The details of the Directors’ remuneration for the financial year ended 31 December 2015 are as follows:
Remuneration
Salaries
Fees
Benefit-in-Kind
Remuneration
Below RM 50,000
RM 50,001 - RM100,000
RM100,001 - RM150,000
RM150,001 - RM200,000
RM200,001 - RM250,000
RM250,001 - RM300,000
Non-Executive Director
(RM)
108,000
-
Executive Director
(RM)
372,000
37,000
58,800
Number of Directors
Non Executive Director
Executive Director
(RM)
(RM)
1
1
-
Terms of Reference
1.Membership
Members of the Remuneration Committee shall be appointed by the Board. The Remuneration Committee
shall be made up of at least 3 members, composed wholly or mainly of non-executive directors. Only
members of the Remuneration Committee have the right to attend Remuneration Committee meetings.
However, other individuals such as the Chief Executive, the head of human resources and external advisers
may be invited to attend for all or part of any meeting as and when appropriate. The Board shall appoint
any non-executive directors identified by the Board to be chairman of Remuneration Committee. In the
absence of the Remuneration Committee Chairman and/or an appointed deputy, the remaining members
present shall elect one of themselves to chair the meeting.
2.Duties
As part of their remuneration function, the Committee will :
a) establish and recommend a framework of remuneration for the Board of Directors which include
but not limited to Directors’ fees, salaries, allowances, bonuses, options and benefits-in-kind;
b) review the annual remuneration packages for each of the Executive Director such that the levels of
remuneration are sufficient to attract and retain the necessary Executive Directors needed to manage
the Company;
(CONT’D)
b)
Remuneration Committee (Cont'd)
Terms of Reference (Cont'd)
2. Duties (Cont'd)
c)
d)
e)
f)
g)
h)
i)
j)
ensure that a fair differential between the remuneration of Board members and other levels of
management is maintained;
conduct continued assessment of individual Executive Directors to ensure that remuneration is directly
related to corporate and individual performance;
obtain the advice and information from external source, if necessary, to compare the remuneration
currently earned by the Executive Directors and those paid to Executive Directors of other companies
of a similar size in a comparable industry sector;
ensure that the base salary element is competitive but fair;
advise on and monitor, a suitable performance related formula ie. whether the formula is based on
individual performance, company profit performance, earnings per share, etc;
provide an objective and independent assessment of the benefits granted to Executive Directors;
introduce any policy or guidelines which would enable the smooth administration and effective
discharge of the Committee’s duties and responsibilities;
furnish a report to the Board of any findings of the Committee.
3. Minutes of Meetings
The Secretary shall minute the proceedings and resolutions of Remuneration Committee meetings, including
the names of those present and in attendance. Minutes of Remuneration Committee meetings shall be
circulated promptly to all members of the Committees and, once agreed, to all members of the Board,
unless a conflict of interest exists.
Principle 3 Reinforce Independence
Assessment of Independent Directors
The Board recognizes the importance of independence and objectivity in the decision making process. The Board and
its Nominating Committee in their annual assessment concluded that each of the two Independent Non-Executive
Directors continue to demonstrate conduct and behavior that are essential indicators of independence. Each of
them continues to fulfil the definitions and criteria of independence as set out in Bursa Malaysia Main Market Listing
Requirements.
Tenure of Independent Directors
The Board is of the opinion that the composition is balanced and in compliance with the Bursa Malaysia Main Market
Listing Requirements. The Nominating Committee had also assessed the independency of Dato’ Khor Ah Hua @ Khor
Choo Fong (“Dato’ Khor”) who is going to serve more than 9 years as an independent director of the Company.
Principle 3 Reinforce Independence (Cont'd)
Tenure of Independent Directors (Cont'd)
The Nominating Committee upon its assessment carried out is satisfied that Dato’ Khor has satisfactorily demonstrated
that he is independent from the management and free from any business dealings with the Group that could be
perceived to interfere in his exercised of independent judgement. The Board took note of recommendation of the
Code but immediate compliance with the said recommendation posed a disadvantage to the Company in terms of
losing an experienced independent director who over the years had contributed to the effectiveness of the Board as
a whole. Nevertheless, Dato’ Khor will be seeking shareholders’ approval on his re-appointment as an independent
director at the forthcoming Annual General Meeting. In view thereof, the Board recommends and supports his reappointment as an independent non-executive director of the Company at the forthcoming 10th Annual General
Meeting of the Company.
Chairman and Managing Director to be held by different Individuals
The positions of the Chairman and the Managing Director are held by two different individuals in line with the Code’s
Recommendations. There is a clear division of responsibility between the Non-Executive Chairman and the Managing
Director to ensure that there is a balance of power and authority.
The Chairman is responsible for leading the Board and ensuring its effectiveness whilst the Managing Director is
responsible for running the Group’s business.
Chairman to be a Non-Executive Director
The Chairman of the Company, Dato’ Seri Ewe Tiong Hor is a Non-Executive Director of the Board but is not an
independent director. The Board is aware that it is not in compliance with the best practices of the Code which
recommends that the Chairman of a company shall be a non-executive independent director.
However, the Board is satisfied with the Chairman in view of his experience and knowledge. The presence of the
two existing Independent Directors is sufficient to provide the required checks and balances on the decision making
process of the Board. The significant contributions of the Independent Directors in the decision making process is
evidenced in their participation as members of the various committees of the Board.
Principle 4 Foster Commitment
The Board recognizes the need for the directors to spend sufficient time and efforts in carrying out their responsibilities,
thus each director is expected to commit sufficient time in attending meetings for the Board, Board Committees as
well as external trainings to enhance their professional skills.
Board Meeting
During the financial year ended 31 December 2015 the Board met on 4 occasions. Meeting agendas included review
of quarterly financial results and announcements, plan and direction of the Group.
19
(CONT’D)
Principle 4 Foster Commitment (Cont'd)
Board Meeting (Cont'd)
The Board meetings are fixed in advance at the end of the preceding financial year to enable the Directors to plan
ahead and incorporate the year’s meetings into their own schedules. Board meetings are held every quarter and
additional meetings are held as and when necessary. Senior management are invited to attend board meetings to
furnish details or clarifications on matters tabled for the Board's consideration.
Where the Board is considering a matter in which a Director has an interest, such Director will abstain from all
deliberations and decision making on the subject matter. In the event any of the Directors are unable to attend Board
meetings physically, the Company’s Articles of Association allow for such meetings to be conducted via telephone,
video conference or any other form of electronic communication.
Details of each existing Director’s meeting attendances are as follows:
Name of Director
Mr Chuah Poh Lim
Mr Poh Chee Kwan
Mr Tan Yen Yeow (Appointed on 27 May 2015)
Ms Ewe Lay Khim (Appointed on 27 May 2015)
Mr Lau Tiang Hua, DJN (Retired on 27 May 2015)
Tan Sri Dato’ Wong See Wah (Retired on 27 May 2015)
Attendance
3/4
4/4
4/4
4/4
3/3
4/4
3/3
1/1
1/1
Protocol for the Appointment of Directors
To ensure that Directors have sufficient time to fulfill their roles and responsibilities effectively, the criterion as agreed
by the Board for determining candidates for the pool of potential Directors is that they must not hold directorships of
more than five PLCs (as prescribed in Paragraph 15.06 of the Main Market Listing Requirements).
Under Recommendation 4.1 of the Code, the Board should stipulate the expectations of time commitment for
members who accept a new directorship. The Protocol requires the Directors to notify the Chairman before accepting
any new directorship. This information will be shared with the Board, together with a quarterly update by individual
Directors on their directorships and shareholdings in Bursa Malaysia, to confirm the Board members’ commitment in
devoting sufficient time to carry out their responsibilities.
Such information is also used to monitor the number of directorships held by the Directors of Bursa Malaysia,
particularly those on PLCs, and to notify the Companies Commission of Malaysia of any changes in other directorships
on public companies.
Principle 4 Foster Commitment (Cont'd)
Directors’ Training
The Directors undergo training to equip themselves to effectively discharge their duties as Directors and for that
purpose they ensure that they attend such training programmes. All Directors of the Group have completed the
Mandatory Accreditation Programme (MAP) prescribed by Bursa Malaysia Securities Berhad. The Board encourages
its Directors to attend talks, seminars, workshops and conferences to update and enhance their skills and knowledge
to enable them to carry out their roles as directors effectively, more specifically in discharging their responsibilities
towards corporate governance and regulatory compliances.
During the financial year ended 31 December 2015, the seminars and training programmes attended by various
members of the Board included the followings:1. Mandatory Accreditation Programme for Directors of Public Listed Companies (MAP)
2. GST Implementation – Impact on Real Property Market
3. How To Prepare SOP for Property Development & Construction Project
4. Property Investment Convention
5. FX & Economic Outlook Briefing
6. Global Market Outlook
7. KarenSoft FAS4GST Training
Principle 5 Uphold integrity in financial reporting
Financial Reporting
The Board is responsible for ensuring that the Company’s financial statements are prepared in accordance with the
Financial Reporting Standards and the Companies Act, 1965. The Company publishes its financial statements annually
and quarterly as required by the Bursa Malaysia Securities Berhad. The Directors’ responsibility statement in respect of
the preparation of the audited financial statements it set out on page 24 of this Annual Report.
Relationship with Auditors
The Company’s external auditors continue to provide the independent assurance to shareholders on the Group’s and
the Company’s financial statements. The Board maintains a formal and transparent relationship with the auditors to
meet their professional requirements.
The role of the Audit Committee in relation to the internal and external auditors is described in the Audit Committee
Report section on pages 28 to 31 of this Annual Report.
21
(CONT’D)
Principle 5 Uphold integrity in financial reporting (Cont'd)
External Auditors
The Board maintains formal and transparent relationship with its External Auditors through the Audit Committee.
The Audit Committee has been conferred with the authority to directly liaise with both the External and Internal
Auditors. It is a policy of the Audit Committee that it meets with External Auditors at least twice a year to discuss
and review their audit plans, scope of audit and audit reports as well as their professional fees. The Audit Committee
will review the appointment and re-appointment of External Auditors and assess the performance and independency
of the External Auditors on an annual basis. The External Auditors is expected to report their findings to the Audit
Committee and to discuss with the Board of Directors on matters that necessitate the Board’s attention.
The existing auditors, Messrs. KPMG had confirmed to the Audit Committee in writing that they are, and have
been independent throughout the conduct of the audit engagement in accordance with the terms of all relevant
professional and regulatory requirements.
The Audit Committee, upon its recent annual assessment carried out, is satisfied with their work done and independence
and had recommended to the Board for their re-appointment at the forthcoming Annual General Meeting.
Principle 6 Recognise and manage risks
Internal Control
The Board has overall responsibility for maintaining a sound system of internal controls that provides reasonable
assurance of effective and efficient business operations, compliance with laws and regulations as well as internal
procedures and guidelines. The effectiveness of the system of internal controls of the Company and of the Group
is reviewed by the Audit Committee during its quarterly meetings. The review covers the financial, operational and
compliance controls as well as risk management functions. The Statement on Internal Control, which provides an
overview of the state of the internal control within the Company and the Group, is set out on pages 26 and 27 of
the Annual Report.
Principle 7 Ensure timely and high quality disclosure
The Board is aware of the need to establish corporate disclosure policies and procedures to enable comprehensive,
accurate and timely disclosure relating to the Company and its subsidiaries to be made to the regulators, shareholders,
and stakeholders.
Principle 7 Ensure timely and high quality disclosure (Cont'd)
Accordingly, the Board will consider developing pertinent corporate disclosure policies to enhance its existing
information disclosure practices adopted from the Listing Requirements.
The Company continues to recognise the importance of transparency and accountability to its shareholders
and investors. The Board endeavours to keep its shareholders and investors informed of its progress through a
comprehensive annual report and financial statements, circulars to shareholders, quarterly financial reports, periodic
press releases and the various announcements made during the year. These will enable the shareholders, investors
and members of the public to have an overview of the Group’s performance and operation.
The Group also maintains a corporate website at www.eweinberhad.com whereby shareholders as well as members
of the public may access for the latest information on the Group. Alternatively, they may obtain the Company’s latest
announcements via the website of Bursa Malaysia Securities Berhad at www.bursamalaysia.com.
The Company is guided by the Bursa Securities Listing Requirements in regards to the Corporate Disclosure policy.
Principle 8 Strengthen relationship between company and shareholders
Communication with Shareholders and Investors
The Board adheres to the disclosure requirements of Bursa Malaysia Securities Berhad and ensures timely release of
the financial results on a quarterly basis in order to provide its shareholders with an overview of the Group’s financial
and operational performance. In addition, it communicates with its shareholders, institutional and potential investors
through various announcements made during the year.
Investor relations
Information of the Group is also accessible through the Company’s website at www.eweinberhad.com which is
updated on a regular basis. Information available in the website includes among others the Group Annual Report,
quarterly financial announcements, major and significant announcements, press releases and latest corporate
developments of the Group.
Shareholder participation at general meeting
The forthcoming Annual General Meeting (“AGM”) is the Company’s Tenth AGM as a listed company and this will
provide the opportunity for shareholders to raise questions pertaining to issues in the Annual Report, Audited Financial
Statements and corporate developments in the Group, the resolutions being proposed and/or on the business of
the Group. At the AGM, shareholders are given direct access to the Board and are encouraged to participate in its
proceedings and seek clarification on the performance of the Group.
STATEMENT ON COMPLIANCE WITH THE BEST PRACTICES OF THE MALAYSIAN CODE ON CORPORATE
GOVERNANCE
Having reviewed the governance structure and practices of the Group, the Board considers that it has complied with
the best practices as set out in the Code throughout the financial year.
23
(CONT’D)
STATEMENT OF DIRECTORS’ RESPONSIBILITY
The Directors are required by the Companies Act, 1965 to prepare financial statements for the financial year which
have been made out in accordance with the applicable approved accounting standards in Malaysia 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 and the results
and cash flows of the Group and the Company for the financial year then ended.
In preparing the financial statements, the Directors have used appropriate and relevant Accounting policies that are
consistently applied and supported by reasonable as well as prudent judgments and estimates, and that all applicable
approved accounting standards in Malaysia have been complied with.
The Directors are responsible for ensuring that the Group and the Company keep proper accounting records which
disclose with reasonable accuracy the financial position of the Group and the Company and which enable them to
ensure that the financial statements comply with the Companies Act, 1965.
The Directors also have the general responsibility for taking such steps as are reasonably open to them to safeguard
the assets of the Group, to detect and prevent fraud and other irregularities.
The Directors’ Responsibility Statement in respect of the Audited Financial Statement for the year ended 31 December
2015 is set out in the Financial Statement section 169(16) of the Companies Act, 1965.
CORPORATE SOCIAL RESPONSIBILITY
Here in Ewein, we have always believed in sustainable growth, both economically and socially. We continued the
various programmes we initiated in previous years and started new ones with the aim of fulfilling our corporate
responsibility and more importantly, to give something back to the community.
While we understand that our sustainability and long-term success depend on our ability to gain access to new
business opportunities and the strength of our relationships with key stakeholders such as customers, employees,
suppliers, shareholders and regulators, we also recognise that our businesses have direct and indirect impact on the
societies in which we operate. Hence, besides conducting our business in a fair manner and respecting the local laws,
customs and traditions, looking after our employees and the community and ultimately improving the quality of life
for them are key areas for the Group.
In our effort to develop and retain quality employees, the Group provided in-house as well as out-sourced training
programmes for all skilled and non-skilled employees.
ADDITIONAL DISCLOSURE STATEMENTS
UTILISATION OF PROCEEDS
Otherwise as stated below, there were no proceeds raised by the Company from any corporate proposals during the
financial year:
As at 31 December 2015, the Company completed the listing and quotation of 655,194 new ordinary shares of
RM0.50 each pertaining to the conversion of Warrants. As at 31 December 2015, the gross proceeds have been fully
utilised by the Group for working capital purposes.
SHARE BUY-BACK
There were no Share Buy-Backs during the financial year.
OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES
During the financial year, there was issuance of 655,194 new ordinary shares of RM0.50 each arising from the
exercise of warrants at an exercise price of RM0.61 per ordinary share.
No issuance of option and covertible securities were made during the financial year.
AMERICAN DEPOSITORY RECEIPT (ADR) OR GLOBAL DEPOSITORY RECEIPT PROGRAMME (GDR) SPONSORED
BY THE COMPANY
During the financial year, the Company did not sponsor any ADR or GDR programme.
IMPOSITION OF SANCTIONS AND /OR PENALTIES
There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management by
the relevant regulatory bodies during the financial year.
NON-AUDIT FEES
There was non-audit fees paid totaling RM30,000 to the external auditors during the financial year. The taxation fees
totalling RM153,700 was payable to the external auditor during the financial year.
MATERIAL VARIANCE
There was no material variance between the results for the financial year and the unaudited results previously
announced by the Company.
PROFIT GUARANTEE
During the financial year, there was no profit guarantee received by the Company or its subsidiary companies.
MATERIAL CONTRACTS INVOLVING DIRECTORS AND MAJOR SHAREHOLDERS
There were no material contracts of the Company and its subsidiaries, involving Directors’ or major shareholders’
interests, still subsisting at the end of the financial year.
RECURRENT RELATED PARTY TRANSACTIONS OF REVENUE OR TRADING NATURE
Details of transactions with related parties undertaken by the Group during the financial year are disclosed in Note 26
of the Financial Statements.
EMPLOYEES’ SHARE OPTION SCHEME (”ESOS”)
The Company has not implemented any ESOS during the financial year.
25
26 STATEMENT ON RISK MANAGEMENT AND
INTERNAL CONTROL
Introduction
This Statement on Risk Management and Internal Control is made pursuant to Bursa Securities Listing Requirements
and formulated in accordance with Statement on Internal Control: Guidance for Directors of Public Listed Companies.
The statement outlines the scope of internal control within the Group.
The Board recognises the importance of a sound system of internal controls and an effective risk management
framework to good corporate governance. The Board also acknowledges its responsibility for maintaining a sound
system of internal controls, and for reviewing its adequacy and integrity. The Board of Directors is committed to
maintaining a system of internal controls which covers financial, operational and compliance controls as well as risk
management to achieve the following objectives:
• Safeguard assets of the Group and shareholders’ interest;
• Identify and manage risks affecting the Group;
• Ensure compliance with regulatory requirements; and
• Ensure operational results are closely monitored.
However, the Board recognises that reviewing the Group’s system of internal controls is a concerted and on-going
process, designed to manage rather than eliminate the risk of failure to comply with the Group’s policies and to
achieve business objectives. In pursuing these objectives, internal control can only provide reasonable and not absolute
assurance against material misstatements or losses.
In striving for continuous improvement, the Board will put in place appropriate action plans, when necessary, to
further enhance the Group’s system of internal controls.
Internal Control
The Group’s system of internal controls comprises the following key elements:
• Organisational structure and accountability levels
Key responsibilities and lines of accountability within the Group are defined, with clear reporting lines up to
the Senior Management of the Group and to the Board of Directors of the Company. The Group’s delegation
of authority sets out the decisions that need to be taken and the appropriate authority levels of Management
including matters that require Board approval.
• Control procedures
Operating Procedures Manual that sets out certain policies and procedures are maintained by certain companies
in the Group which were awarded the ISO 9001:2000 accreditation to ensure that accountability and standard
control procedures are in place.
STATEMENT ON RISK MANAGEMENT AND
INTERNAL CONTROL (CONT’D)
Internal Audit
The Group has engaged an external independent service provider firm (“the firm”) to carry out its internal audit
functions. During the financial year ended 31 December 2015, the firm had conducted an assessment of the risks
applicable to the operating subsidiaries of the Group. Risks are assessed in terms of their likelihood and impact to
the organisation. In addition, the firm had conducted internal audits on four of its operating subsidiaries. Arising
from the audit performed, the firm highlighted to the Management certain areas for improvement. The firm had also
presented their reports to the Audit Committee for deliberation. In turn, the Audit Committee had also reported to
the Board of Directors the internal audit findings, the recommendations for improvements and the response from
Management thereto.
The Board is of the view that there were no significant breakdowns or weaknesses in the system of internal controls
of the Group that resulted in material losses incurred by the Group for the financial year ended 31 December 2015
and the internal control system in place is effective up to the date of approval of this statement. The Group will
continue to take the necessary measures to ensure that the system of internal controls is in place and functioning
effectively in all material aspects.
Risk Management Framework
For long-term viability of the Group, it is crucial to achieve a critical balance between risks incurred and potential
returns. Taking cognizance of this, the Board has been mandated to drive the risk management process whilst
focusing on the critical business agenda of the Group. The Board, through the internal audits conducted, strives to
develop and implement internal controls at appropriate levels of the organisation.
The Group through the management meetings between the Deputy Managing Director and head of departments,
identifies and manages any operational risks faced by the Group.
The Board has received assurance from the Managing Director and Group Finance Manager that the Group’s risk
management and internal control system is operating adequately and effectively, in all material aspects based on the
risk management and internal control system adopted.
This Statement does not cover the associate of the Company, Kota Cornwallis Sdn. Bhd.
This Statement is issued in accordance with a resolution of the Directors dated 18 April 2016.
27
28 AUDIT COMMITTEE REPORT
COMPOSITION
Name of Director
Designation
Member, Non-Independent Non-Executive Director
TERMS OF REFERENCE
Objectives
The principal objective of the Audit Committee is to assist the Board of Directors in discharging its duties and
responsibilities in the area of corporate governance and internal audit with particular reference to the public
accountability of the Company and its subsidiaries.
Composition
The Audit Committee shall consist of at least three (3) members appointed by the Board from amongst the directors.
All the members of the Audit Committee must be Non-Executive Directors with a majority of them being Independent
Directors. All members of the Audit Committee shall be financially literate and at least one member shall be:
i) a member of the Malaysian Institute of Accountants; or
ii) if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years of working
experience; and:
a) he must have passed the examination specified in Part I of the 1st Schedule of the Accountants Act 1967; or
b) he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the
Accountants Act 1967.
iii) fulfils such other requirements as prescribed or approved by the Bursa Securities.
Members of the Audit Committee shall elect a Chairman, from amongst their members who must be an Independent
Non-Executive Director. An Alternate Director shall not be appointed as a member of the Audit Committee.
Authority
The Audit Committee is authorised by the Board to:
i) have authority to investigate any matter within its terms of reference;
AUDIT COMMITTEE REPORT (CONT’D)
TERMS OF REFERENCE (CONT'D)
Authority (Cont'd)
ii) have the resources which are required to perform its duties;
iii) have direct communication channels with the external auditors and person(s) carrying out the internal audit
function or activity;
iv) have full and unrestricted access to any information pertaining to the Group;
v) be able to obtain independent professional or other advise at a cost which is to be approved by the Board;
vi) be able to convene meetings with the external auditors, the internal auditors or both, with the exclusion of the
Executive Directors and management, whenever deemed necessary; and
vii)be able to invite outsiders with relevant experience to attend its meetings if necessary.
Duties and Responsibilities of the Audit Committee
The duties and responsibilities of the Audit Committee are to review the following and report the same to the Board:
a) with the external auditors, the audit plan;
b) with the external auditors, their evaluation of the system of internal controls;
c) with the external auditors, their audit report;
d) the external auditors’ management letter and management response;
e) the assistance provided by employees of the Company to the external auditors;
f) quarterly interim financial reports and year-end financial statements prior to the approval of the Board focusing
particularly on:
- changes in significant accounting policies;
- significant and unusual events;
- the going concern assumption; and
- compliance with accounting standards and other legal requirements.
g) any related party transactions and conflict of interest situation including any transaction, procedure or course of
conduct that raises questions of management integrity;
29
30 AUDIT COMMITTEE REPORT
(CONT’D)
TERMS OF REFERENCE (CONT'D)
Duties and Responsibilities of the Audit Committee (Cont'd)
h) any letter of resignation from the external Auditor of the Company;
i) whether there is reason (supported by grounds) to believe that the Company’s external Auditor is not suitable for
re-appointment;
j) recommend the nomination of a person(s) as external auditors;
k) any change of the chief financial officer.
MEETINGS HELD DURING THE FINANCIAL YEAR ENDED 31 DECEMBER 2015
During the financial year, four (4) meetings were held and the table of attendance of each committee member is as
follows:
Name of Director
Attendance
3/3
4/4
3/3
1/1
1/1
SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE
The activities of the Audit Committee for the financial year under review include the following:
i) Reviewing and recommending for the Board’s approval on the quarterly financial results and audited financial
statements.
ii) Reviewing the audit report and observations made by the external auditors on the annual financial statements
that require appropriate actions and the management’s response thereon and reporting them to the Board.
iii) Reviewing and recommending for the Board’s approval the audited annual financial statements.
iv) Reviewing and approving the internal audit plan and reviewing the internal audit report and the recommended
actions to be taken by the management.
v) Reviewing the adequacy of the scope, functions, competency and resources of the internal audit function.
vi) Submitting regular reports of matters discussed in the Audit Committee meeting to the Board of Directors for
information and review.
AUDIT COMMITTEE REPORT (CONT’D)
SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE (CONT'D)
vii) Having private discussion with the external auditors at least twice a year without the presence of the management
to discuss problems, issues and concerns arising from the interim and final audits, and any other relevant
matters.
viii) Reviewing the impact of new or proposed changes in accounting standards and regulatory requirements to the
Company.
ix) Reviewing any related party transactions and conflict of interest situation that may arise within the Company or
Group.
INTERNAL AUDIT FUNCTION AND SUMMARY OF ACTIVITIES
The Group had outsourced its internal audit function to an external services provider firm. The main role of the
internal audit is to review the effectiveness of the Group’s system of internal controls and this is performed with
impartiality, proficiency and due professional care.
The internal auditor reports directly to the Audit Committee the effectiveness of risk management, internal control
system and governance processes within the Group.
The internal audit adopts a risk based auditing approach by focusing on identifying high risk areas and to recommend
corrective measurements for compliance with control policies and procedures, identifying business risk which have
not been appropriately addressed and evaluating the adequacy and integrity of control.
The summary of main activities undertaken by the internal audit function during the financial year is as below:
i) Prepared the Group’s Internal Audit Plan for the Audit Committee’s approval;
ii) Carried out internal audits of the Company and its subsidiary companies to review the adequacy of internal
controls in the auditable areas such as Purchasing & Payment Management, Insurance & Risk Management,
Investment Property, Plant & Equipment Management and to assess consistency in the compliance with the
established policies and procedures;
iii) Performed ad hoc reviews of selected internal control system and procedures as requested by the Audit Committee;
iv) Reported the outcomes of audit conducted which highlight the effectiveness of the internal control system and
significant risks;
v) Monitored remedial actions taken by the management in response to the recommendations addressing the
internal control deficiencies; and
vi) Presented the internal audit reports at the Audit Committee meetings for the deliberation by its members, and
to follow up on the suggestions given by its members.
The internal audit costs incurred during the financial year were RM8,500.
31
FINANCIAL STATEMENTS
33 - 37 DIRECTORS’ REPORT
38 - 39 STATEMENTS OF FINANCIAL POSITION
40 - 41 STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
42 - 43 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
44 - 45 STATEMENT OF CHANGES IN EQUITY
46 - 49 STATEMENTS OF CASH FLOWS
50 - 120 NOTES TO THE FINANCIAL STATEMENTS
121 STATEMENT BY DIRECTORS
123- 124 INDEPENDENT AUDITORS’ REPORT
DIRECTORS’ REPORT
33
FOR THE YEAR ENDED 31 DECEMBER 2015
The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the
Company for the financial year ended 31 December 2015.
Principal activities
The Company is principally engaged in investment holding activities, whilst the principal activities of its subsidiaries
are as stated in Note 5 to the financial statements.
There has been no significant change in the nature of these activities during the financial year.
Results
Group
RM
Company
RM
Owners of the Company
11,383,588
(332,686)
Non-controlling interests
4,532,662
-
15,916,250
(332,686)
Profit/(Loss) for the year attributable to :
Reserves and provisions
There were no material transfers to or from reserves and provisions during the financial year under review except as
disclosed in the financial statements.
Dividends
Since the end of the previous financial year, the Company paid a first and final single tier dividend of 0.50 sen per
ordinary share totalling RM1,054,626 in respect of the financial year ended 31 December 2014 on 20 August 2015.
Subsequent to the end of the financial year, the Directors recommended a first and final single tier dividend of 0.50
sen per share in respect of the financial year ended 31 December 2015, subject to the approval of the shareholders
in the forthcoming annual general meeting.
Directors of the Company
Directors who served since the date of the last report are :
- Chairman
- Deputy Chairman and Group Managing Director
Chuah Poh Lim
34 DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 DECEMBER 2015 (CONT’D)
Directors of the Company (Cont'd)
Poh Chee Kwan
Ewe Lay Khim
Tan Yen Yeow
Lau Tiang Hua
Directors’ interests in shares
The interests and deemed interests in the ordinary shares and warrants of the Company and of its related corporations
(other than wholly-owned subsidiaries) of those who were Directors at financial year end (including the interests of
the spouses and/or children of the Directors who themselves are not Directors of the Company) as recorded in the
Register of Directors’ Shareholdings are as follows:
Number of ordinary shares of RM0.50 each
<_____________ Direct Interests ___________> <__________ Deemed Interests ____________>
Balance at
Transfer
Balance at
Balance at
Bought/
Balance at
1.1.2015
in/(out)
31.12.2015
1.1.2015
(Sold)
31.12.2015
30,000
-
-
-
Dato’ Ewe Swee Kheng - own
Dato’ Seri Ewe Tiong Hor - others #
300,000
60,000
-
300,000
90,517,909
-
90,517,909
Chuah Poh Lim - own
170,000
-
170,000
-
-
-
Poh Chee Kwan - own
20,000
-
20,000
-
-
-
-
^30,000
30,000
-
-
-
Ewe Lay Khim - own
~(30,000)
Number of warrants 2012/2017
<__________ Direct Interests __________>
<___________ Deemed Interests ____________>
Balance at
Transfer
Balance at
Balance at
Balance at
1.1.2015
in/(out)
31.12.2015
1.1.2015
Bought
(Sold)
31.12.2015
Dato’ Seri Ewe Tiong Hor - others #
Dato’ Ewe Swee Kheng - own
24,604
~(12,302)
12,302
-
-
-
120,007
-
120,007
32,980,403
3,618,586
Chuah Poh Lim - own
69,712
-
69,712
-
-
-
-
Poh Chee Kwan - own
8,202
-
8,202
-
-
-
-
-
^12,302
12,302
-
-
-
-
Ewe Lay Khim - own
(3,500,000)
33,098,989
^ At date of appointment
~ Consist of the interests of Ewe Lay Khim disclosed as her direct interests upon her appointment as a Director of
the Company
# These are shares and warrants held in the name of the children and are treated as the interests of the Director in
accordance with Section 134(12)(c) of the Companies Act, 1965
DIRECTORS’ REPORT
35
Directors’ interests in shares (Cont'd)
By virtue of his interests in the shares of the Company, Dato’ Ewe Swee Kheng is also deemed interested in the shares
of the subsidiaries during the financial year to the extent that the Company has an interest.
None of the other Directors holding office at 31 December 2015 had any interest in the ordinary shares and warrants
of the Company and of its related corporations during the financial year.
Directors’ benefits
Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive
any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable
by Directors as shown in the financial statements or the fixed salary of a full time employee of certain related
corporations) by reason of a contract made by the Company or a related corporation with the Director or with a firm
of which the Director is a member, or with a company in which the Director has a substantial financial interest other
than as disclosed in Note 26 to the financial statements.
There were no arrangements during and at the end of the financial year which had the object of enabling Directors of
the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other
body corporate except where the benefit is acquired through the Company’s warrants as disclosed in the financial
statements.
Issue of shares and debentures
There were no changes in the authorised, issued and paid-up capital of the Company other than the issuance of
655,194 new ordinary shares of RM0.50 each arising from the exercise of warrants at an exercise price of RM0.61
per ordinary share. No debentures were issued during the financial year.
Warrants
As at the end of the financial year, the Company has the following outstanding warrants :
Warrants
Warrants 2012/2017
Exercise price
per ordinary share
Expiry
date
Number of warrants
outstanding
as at 31.12.2015
RM0.61
13.6.2017
85,839,310
36 DIRECTORS’ REPORT
Warrants (Cont'd)
Warrants 2012/2017 were issued on 14 June 2012 pursuant to the Bonus Issue of 52,731,300 free warrants in the
Company on the basis of one free warrant for every two existing ordinary shares of RM0.50 each in the Company.
The number of warrants outstanding was adjusted during the financial year ended 31 December 2014 pursuant to
the Rights Issue and Bonus Issue of ordinary shares undertaken by the Company. The warrants entitle the holders
to subscribe for new ordinary shares in the Company on the basis of one new ordinary share of RM0.50 each for
every warrant held at an exercise price of RM0.61 per ordinary share within 5 years from the date of the issue of
the warrants. The exercise price of the warrants is subject to adjustment from time to time in accordance with the
conditions stipulated in the Deed Poll created on 22 May 2012.
Options granted over unissued shares
No options were granted to any person to take up unissued shares of the Company during the financial year apart
from the issue of warrants as disclosed in the financial statements.
Other statutory information
Before the financial statements of the Group and of the Company were made out, the Directors took reasonable
steps to ascertain that :
i)
all known bad debts have been written off and adequate provision made for doubtful debts, and
ii)
any current assets which were unlikely to be realised in the ordinary course of business have been written down
to an amount which they might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances :
i)
that would render the amount written off for bad debts or the amount of the provision for doubtful debts in
the Group and in the Company inadequate to any substantial extent, or
ii)
that would render the value attributed to the current assets in the financial statements of the Group and of the
Company misleading, or
iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the
Group and of the Company misleading or inappropriate, or
iv)
not otherwise dealt with in this report or the financial statements that would render any amount stated in the
financial statements of the Group and of the Company misleading.
DIRECTORS’ REPORT
Other statutory information (Cont'd)
At the date of this report, there does not exist :
i)
any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and
which secures the liabilities of any other person, or
ii)
any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial
year.
No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become
enforceable within the period of twelve months after the end of the financial year which, in the opinion of the
Directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as
and when they fall due.
In the opinion of the Directors, other than the unrealised loss on foreign exchange as disclosed in Note 20 to the
financial statements, the financial performance of the Group and of the Company for the financial year ended 31
December 2015 have not been substantially affected by any item, transaction or event of a material and unusual
nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and
the date of this report.
Significant events
The details of such events are disclosed in Note 34 to the financial statements.
Subsequent events
The details of such events are disclosed in Note 35 to the financial statements.
Auditors
The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors :
……………………………..……..
……………………………..……..
Chuah Poh Lim
Penang,
Date : 18 April 2016
37
38 STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2015
Group
Note
Company
2015
RM
2014
RM
2015
RM
2014
RM
Assets
Property, plant and equipment
3
15,548,109
18,518,202
-
-
Investment properties
4
81,337,076
65,569,750
-
-
Investments in subsidiaries
5
-
-
104,624,956
104,624,956
Investment in an associate
6
97,027
-
-
-
Other investments
7
-
952,272
-
-
Deferred tax assets
17
3,172,269
64,573
-
-
100,154,481
85,104,797
104,624,956
104,624,956
Total non-current assets
Inventories
8
4,099,409
4,486,503
-
-
Property development costs
9
153,001,696
-
-
-
160,923
558,688
-
-
Current tax assets
Trade and other receivables
10
58,129,447
47,643,254
64,798,911
62,654,607
Fixed deposits with a licensed bank
11
16,013,574
10,011,573
9,126,702
7,115,448
Cash and cash equivalents
12
26,154,242
18,032,272
2,131,375
5,574,566
Total current assets
257,559,291
80,732,290
76,056,988
75,344,621
Total assets
357,713,772
165,837,087
180,681,944
179,969,577
STATEMENTS OF FINANCIAL POSITION
39
AS AT 31 DECEMBER 2015 (CONT’D)
Group
Note
Company
2015
RM
2014
RM
2015
RM
2014
RM
Equity
Share capital
13
95,998,868
95,671,271
95,998,868
95,671,271
Reserves
14
28,223,143
14,853,290
32,699,167
34,014,408
124,222,011
110,524,561
128,698,035
129,685,679
5,753,905
421,243
-
-
129,975,916
110,945,804
128,698,035
129,685,679
39,316,142
-
-
Total equity attributable to
owners of the Company
Total equity
Liabilities
Loans and borrowings
15
97,531,308
Trade and other payables
16
44,802,980
824,626
-
-
Deferred tax liabilities
17
1,840,219
1,329,898
-
-
144,174,507
41,470,666
-
-
Total non-current liabilities
15
43,081,592
6,363,731
-
-
16
36,189,808
6,919,705
51,932,393
50,232,382
Current tax liabilities
4,291,949
137,181
51,516
51,516
Total current liabilities
83,563,349
13,420,617
51,983,909
50,283,898
Total liabilities
227,737,856
54,891,283
51,983,909
50,283,898
Total equity and liabilities
357,713,772
165,837,087
180,681,944
179,969,577
The notes on pages 50 to 120 are an integral part of these financial statements.
STATEMENTS OF PROFIT OR LOSS AND OTHER
40 COMPREHENSIVE INCOME
Group
Note
Company
2015
RM
2014
RM
2015
RM
2014
RM
Revenue
18
87,731,723
44,639,974
218,522
410,085
Cost of sales
19
(60,662,351)
(39,550,059)
-
-
Gross profit
27,069,372
5,089,915
218,522
410,085
Selling and distribution costs
(4,754,215)
(552,297)
-
-
Administrative expenses
(5,532,759)
(5,570,989)
(524,044)
(1,285,797)
Other expenses
(7,086,244)
(2,862,080)
-
(175,000)
9,613,661
7,846,411
-
-
Other income
Operating profit/(loss)
20
19,309,815
3,950,960
(305,522)
(1,050,712)
Finance costs
23
(720,688)
(655,488)
-
-
(2,973)
275,143
-
-
18,586,154
3,570,615
(305,522)
(1,050,712)
(2,669,904)
(685,583)
(27,164)
(13,347)
15,916,250
2,885,032
(332,686)
(1,064,059)
Share of (loss)/profit of equityaccounted associates, net of tax
Profit/(Loss) before tax
Tax expense
Profit/(Loss) for the year
24
STATEMENTS OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
41
Group
Note
2015
RM
Company
2014
RM
2015
RM
2014
RM
Other comprehensive expense,
net of tax
Item that will not be reclassified
subsequently to profit or loss
Revaluation of property, plant and
equipment at date of transfer to
investment properties
3,800,000
-
-
-
(831,180)
(102,370)
-
-
18,885,070
2,782,662
(332,686)
(1,064,059)
11,383,588
4,532,662
3,162,125
(277,093)
(332,686)
-
(1,064,059)
-
15,916,250
2,885,032
(332,686)
(1,064,059)
14,352,408
4,532,662
3,059,755
(277,093)
(332,686)
-
(1,064,059)
-
18,885,070
2,782,662
(332,686)
(1,064,059)
5.40
1.61
-
-
Item that is or may be reclassified
subsequently to profit or loss
Fair value of available-for-sale
financial assets
Total comprehensive income/
(expense) for the year
attributable to :
(expense) attributable to :
(expense) for the year
Basic earnings per ordinary
share (sen)
29
42 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
<_____________________________ Attributable to owners of the Company ____________________________>
<____________________ Non-distributable ___________________> Distributable
Reverse
acquisition
reserve
RM
Share
capital
RM
Share
premium
RM
52,731,300
-
-
-
-
-
-
-
-
-
-
-
-
-
Rights issue
(Note 13)
26,365,650
-
-
-
Bonus issue
(Note 13)
26,365,650
-
-
-
-
Total
transactions with
owners of the
Company
42,939,971
At 31 December
2014
95,671,271
-
Note 13
Note 14.1
1 January 2014
Profit for the year
Warrant
reserve
RM
(31,482,494) 12,128,199
Fair value Revaluation
reserve
reserve
RM
RM
Retained
earnings
RM
Total
RM
Noncontrolling
interests
RM
Total
equity
RM
933,550
-
47,843,227
82,153,782
698,336
82,852,118
-
-
3,162,125
3,162,125
(277,093)
2,885,032
(102,370)
-
-
(102,370)
-
3,162,125
3,059,755
-
-
-
26,365,650
-
26,365,650
-
-
-
-
-
-
-
9,791,329
-
-
-
-
-
-
-
-
-
-
(1,054,626)
-
-
9,791,329
-
-
(27,420,276)
831,180
-
23,585,076 110,524,561
Note 14.4
Note 14.5
Other
comprehensive
expense for the
year
- Fair value of
available-for-sale
financial assets
Total
comprehensive
(expense)/
income for
the year
Allocation of
value to warrant
reserve (Note 13)
Dividend to
owners of the
Company
(Note 25)
(9,791,329)
(31,482,494) 21,919,528
Note 14.2
Note 14.3
(26,365,650)
-
Note 14.6
(102,370)
(1,054,626)
25,311,024
-
(277,093)
(102,370)
2,782,662
-
(1,054,626)
-
25,311,024
421,243 110,945,804
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
43
FOR THE YEAR ENDED 31 DECEMBER 2015 (CONT'D)
<_____________________________ Attributable to owners of the Company ____________________________>
<____________________ Non-distributable ___________________> Distributable
Share
capital
RM
1 January 2015
Share
premium
RM
Reverse
acquisition
reserve
RM
95,671,271
-
-
-
-
- Revaluation of
property, plant
and equipment
at date of
transfer to
investment
properties
-
-
- Fair value of
available-for-sale
financial assets
-
Total
comprehensive
(expense)/
income for
the year
Profit for the year
Warrant
reserve
RM
(31,482,494) 21,919,528
Fair value Revaluation
reserve
reserve
RM
RM
Retained
earnings
RM
Total
RM
Noncontrolling
interests
RM
Total
equity
RM
831,180
-
23,585,076 110,524,561
421,243 110,945,804
-
-
-
11,383,588
11,383,588
4,532,662
15,916,250
-
-
-
3,800,000
-
3,800,000
-
3,800,000
-
-
-
(831,180)
-
-
(831,180)
-
(831,180)
-
-
-
-
(831,180)
3,800,000
11,383,588
14,352,408
4,532,662
18,885,070
-
399,668
Other
comprehensive
income/ (expense)
for the year
Shares issued
pursuant to
exercise of
warrants at
RM0.61
per share
327,597
72,071
-
-
-
-
-
399,668
Dividend to
owners of the
Company
(Note 25)
-
-
-
-
-
-
(1,054,626)
(1,054,626)
Subscription of
shares in
subsidiaries
-
-
-
-
-
-
-
-
800,000
800,000
Total
transaction with
owners of the
Company
327,597
72,071
-
-
-
-
(1,054,626)
(654,958)
800,000
145,042
At 31 December
2015
95,998,868
72,071
-
3,800,000
Note 13
Note 14.1
Note 14.4
Note 14.5
(31,482,494) 21,919,528
Note 14.2
Note 14.3
33,914,038 124,222,011
Note 14.6
-
(1,054,626)
5,753,905 129,975,916
44 STATEMENT OF CHANGES IN EQUITY
<_____________ Attributable to owners of the Company _____________>
<___ Non-distributable __> Distributable
Share
capital
RM
Share
premium
RM
Warrant
reserve
RM
Retained
earnings
RM
Total
equity
RM
52,731,300
-
12,128,199
40,579,215
105,438,714
-
-
-
(1,064,059)
(1,064,059)
13
13
26,365,650
26,365,650
-
-
(26,365,650)
26,365,650
-
13
(9,791,329)
-
9,791,329
-
-
25
-
-
-
(1,054,626)
(1,054,626)
Total transactions with
42,939,971
-
9,791,329
(27,420,276)
25,311,024
At 31 December 2014
95,671,271
-
21,919,528
12,094,880
129,685,679
Note 13
Note 14.1
Note 14.3
Note 14.6
Note
Company
At 1 January 2014
Loss for the year
representing total
comprehensive
income for the year
Rights issue
Bonus issue
Allocation of value to
warrant reserve
Dividend to owners of
the Company
STATEMENT OF CHANGES IN EQUITY
45
<_____________ Attributable to owners of the Company _____________>
<___ Non-distributable __> Distributable
Note
Share
capital
RM
Share
premium
RM
Warrant
reserve
RM
Retained
earnings
RM
Total
equity
RM
95,671,271
-
21,919,528
12,094,880
129,685,679
-
-
-
(332,686)
(332,686)
327,597
72,071
-
-
399,668
-
-
-
(1,054,626)
(1,054,626)
327,597
72,071
-
(1,054,626)
(654,958)
95,998,868
72,071
21,919,528
10,707,568
128,698,035
Note 13
Note 14.1
Note 14.3
Note 14.6
Company
At 1 January 2015
Loss for the year
representing total
comprehensive
expense for the year
Shares issued pursuant
to exercise of warrants
at RM0.61 per share
Dividends to owners
of the Company
Total transactions with
At 31 December 2015
25
46 STATEMENTS OF CASH FLOWS
Group
Note
Company
2015
RM
2014
RM
2015
RM
2014
RM
18,586,154
3,570,615
(305,522)
(1,050,712)
3
2,411,856
2,259,176
-
-
4
20
20
(6,300,674)
(40,383)
(487,749)
(5,437,960)
(341,534)
(440,091)
(28,898)
(189,624)
(192,147)
(217,938)
20
20
(915,730)
(1,333)
(379,954)
(4,045)
-
-
20
-
779,533
-
175,000
23
2,973
720,688
(275,143)
655,488
-
-
8,537,927
2,511,367
-
-
22,513,729
2,897,452
(524,044)
(1,285,797)
Cash flows from operating
activities
Profit/(Loss) before tax
Adjustments for :
Depreciation of property, plant and
equipment
Change in fair value of investment
properties
Dividend income
Interest income
Gain on disposal of :
- other investments
- plant and equipment
Loss on disposal of investment in
an associate
Share of loss/(profit) on
equity-accounted associates
Interest expense
Unrealised loss on foreign
currency exchange
- term loans
Operating profit/(loss) before
changes in working capital
STATEMENTS OF CASH FLOWS
47
Group
Company
2015
RM
2014
RM
2015
RM
2014
RM
387,094
(153,001,696)
(10,486,193)
29,450,682
(974,617)
(19,152,454)
(3,551,825)
(2,144,304)
1,700,011
(12,699,014)
(2,437,593)
(111,136,384)
(20,781,444)
(968,337)
(16,422,404)
(914,746)
(953,219)
28,898
(27,164)
192,147
(13,347)
(112,051,130)
(21,734,663)
(966,603)
(16,243,604)
(100,000)
40,383
-
341,534
-
-
(99,998)
Changes in working capital :
Inventories
Property development costs
Cash used in operations
Dividends received
Income tax paid
Net cash used in operating activities
Cash flows from investing activities
Acquisition of interest in an associate
Dividends received
Subscription of shares in a subsidiary
Proceeds from disposal of :
- investment in an associate
- other investments
- plant and equipment
Interest received
Purchase of property, plant and equipment
Additions to investment properties
Withdrawal/ (Placement) of fixed
deposits with a licensed bank
1,036,822
2,732
487,749
(2,672,488)
(2,237,326)
2,000,000
2,678,424
26,784
440,091
(1,212,226)
(901,250)
189,624
-
2,000,000
217,938
-
(6,002,001)
2,798,227
(2,011,254)
(5,712,114)
Net cash (used in)/from investing activities
(9,444,129)
6,171,584
(1,821,630)
(3,594,174)
48 STATEMENTS OF CASH FLOWS
Group
Company
2015
RM
2014
RM
2015
RM
2014
RM
800,000
-
-
-
43,797,775
-
-
-
54,260,500
(3,602,793)
(720,688)
399,668
(57,586)
119,750
(3,637,450)
(655,488)
26,365,650
-
399,668
26,365,650
-
(1,054,626)
(1,054,626)
(1,054,626)
(1,054,626)
93,879,836
21,080,250
(654,958)
25,311,024
(27,615,423)
5,517,171
(3,443,191)
5,473,246
15,347,547
9,830,376
5,574,566
101,320
(12,267,876)
15,347,547
2,131,375
5,574,566
Cash flows from financing
activities
Proceeds from issue of shares
to non-controlling interests
Advances for acquisition of
development land
Repayment of finance lease
obligations
Drawdown of term loans
Repayment of term loans
Interest paid
Proceeds from rights issue
Proceeds from exercise of warrants
Dividend paid to owners of the
Company (Note 25)
Net cash from/(used in)
financing activities
Net (decrease)/increase in cash
and cash equivalents
Cash and cash equivalents at
beginning of year
Cash and cash equivalents at
end of year (Note A)
STATEMENTS OF CASH FLOWS
49
NOTES
A.
Cash and cash equivalents included in the statements of cash flows comprise the following statements of
financial position amounts:
Group
Note
Short-term deposits with
licensed banks
Cash and bank balances
Bank overdraft
Less: Pledged deposits
12
12
15
11
Company
2015
2014
RM
RM
2015
RM
2014
RM
1,000,000
25,154,242
(38,149,631)
8,458,580
9,573,692
(2,412,238)
1,000,000
1,131,375
-
4,920,242
654,324
-
(11,995,389)
15,620,034
2,131,375
5,574,566
(272,487)
(272,487)
-
-
(12,267,876)
15,347,547
2,131,375
5,574,566
50 NOTES TO THE FINANCIAL STATEMENTS
Ewein Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main
Market of Bursa Malaysia Securities Berhad. The addresses of the principal place of business and registered office of
the Company are as follows :
Principal place of business
Plot 318, Tingkat Perusahaan 3
MK 1, Kawasan Perindustrian Prai
13600 Prai, Penang
Registered office
Jalan Sultan Ahmad Shah
10050 Penang
The consolidated financial statements of the Company as at and for the financial year ended 31 December 2015
comprise the Company and its subsidiaries (together referred to as “the Group” and individually referred to as “Group
entities”) and the Group’s interest in associates.
The Company is principally engaged in investment holding activities, whilst the principal activities of the other Group
entities are as stated in Note 5 to the financial statements.
These financial statements were authorised for issue by the Board of Directors on 18 April 2016.
1.
Basis of preparation
(a) Statement of compliance
The financial statements of the Group and of the Company have been prepared in accordance with
Malaysian Financial Reporting Standards (“MFRS”), International Financial Reporting Standards and the
requirements of the Companies Act, 1965 in Malaysia.
The following are accounting standards, amendments and interpretations that have been issued by the
Malaysian Accounting Standards Board (“MASB”) but have not been adopted by the Group and the
Company:
MFRSs, Interpretations and amendments effective for annual periods beginning on or after
1 January 2016
• MFRS 14, Regulatory Deferral Accounts*
NOTES TO THE FINANCIAL STATEMENTS (CONT'D)
1.
Basis of preparation (Cont'd)
(a) Statement of compliance (Cont'd)
1 January 2016 (Cont'd)
• Amendments to MFRS 5, Non-current Assets Held for Sale and Discontinued Operations (Annual
Improvements 2012-2014 Cycle)*
• Amendments to MFRS 7, Financial Instruments: Disclosures (Annual Improvements 2012-2014 Cycle)
• Amendments to MFRS 10, Consolidated Financial Statements, MFRS 12, Disclosure of Interests in
Other Entities and MFRS 128, Investments in Associates and Joint Ventures – Investment Entities:
Applying the Consolidation Exception
• Amendments to MFRS 11, Joint Arrangements – Accounting for Acquisitions of Interests in Joint
Operations*
• Amendments to MFRS 101, Presentation of Financial Statements – Disclosure Initiative
• Amendments to MFRS 116, Property, Plant and Equipment and MFRS 138, Intangible Assets –
Clarification of Acceptable Methods of Depreciation and Amortisation
• Amendments to MFRS 116, Property, Plant and Equipment and MFRS 141, Agriculture – Agriculture:
Bearer Plants*
• Amendments to MFRS 119, Employee Benefits (Annual Improvements 2012-2014 Cycle)
• Amendments to MFRS 127, Separate Financial Statements – Equity Method in Separate Financial
Statements
• Amendments to MFRS 134, Interim Financial Reporting (Annual Improvements 2012-2014 Cycle)
MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January
2017
• Amendments to MFRS 107, Statement of Cash Flows - Disclosure
• Amendments to MFRS 112, Income taxes - Recognition of Deferred Tax Assets for Unrealised Losses.
1 January 2018
• MFRS 9, Financial Instruments (2014)
1 January 2019
• MFRS 16, Leases
MFRSs, Interpretations and amendments effective for a date yet to be confirmed
• Amendments to MFRS 10, Consolidated Financial Statements and MFRS 128, Investments in Associates
and Joint Ventures – Sales or Contribution of Assets between an Investor and its Associate or Joint
Venture
51
1.
(a) Statement of compliance (Cont'd)
(CONT'D)
MFRSs, Interpretations and amendments effective for a date yet to be confirmed (Cont'd)
The Group and the Company plan to apply the abovementioned accounting standards, amendments and
interpretations:
• from the annual period beginning on 1 January 2016 for those accounting standards, amendments or
interpretations that are effective for annual periods beginning on or after 1 January 2016, except for
those marked “*” which are not applicable to the Group and the Company.
interpretations that are effective for annual periods beginning on or after 1 January 2017.
• from the annual period beginning on January 2019 for those accounting standards, amendments or
The initial application of the abovementioned accounting standards, amendments or interpretations are
not expected to have any material impacts to the current period and prior period financial statements of
the Group and the Company except as mentioned below:
MFRS 9, Financial Instruments
MFRS 9 replaces the guidance in MFRS 139, Financial Instruments: Recognition and Measurement on the
classification and measurement of financial assets and financial liabilities, and on hedge accounting.
The Group is currently assessing the financial impact that may arise from the adoption of MFRS 9.
MFRS 16, Leases
MFRS 16 replaces the guidance in MFRS 117, Leases, IC Interpretation 4, Determining whether an
Arrangement contains a Lease, IC Interpretation 115, Operating Leases – Incentives and IC Interpretation
127, Evaluating the Substance of Transactions Involving the Legal Form of a Lease.
The Group is currently assessing the financial impact that may arise from the adoption of MFRS 16.
Amendments to MFRS 10, Consolidated Financial Statements, MFRS 12, Disclosure of Interests in
Other Entities and MFRS 128, Investments in Associates and Joint Ventures - Investment Entities:
Applying the Consolidation Exception
The amendments to MFRS 10, MFRS 12 and MFRS 128 require an investment entity parent to fair value a
subsidiary providing investment-related services that is itself an investment entity, an intermediate parent
owned by an investment entity group can be exempt from preparing consolidated financial statements
and a non-investment entity investor can retain the fair value accounting applied by its investment entity
associate or joint venture.
The Group is currently assessing the financial impact that may arise from the adoption of the amendments.
1.
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2
to the financial statements.
(c) Functional and presentation currency
These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional
currency. All financial information is presented in RM, unless otherwise stated.
(d) Use of estimates and judgements
The preparation of financial statements in conformity with MFRSs requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimates are revised and in any future periods affected.
There are no significant areas of estimation uncertainty and critical judgements in applying accounting
policies that have significant effect on the amounts recognised in the financial statements other than those
disclosed in the following notes :
•
•
•
•
2.
Note 4 - Investment properties;
Note 9.2 - Recognition of property development revenue and expenses;
Note 17 - Deferred tax assets/(liabilities); and
Note 30.4 - Credit risk (financial guarantees)
Significant accounting policies
Except for the change as disclosed below, the Group has consistently applied the accounting policy to all periods
presented in these financial statements.
In 2015, the Company early adopted MFRS 15, Revenue from Contracts with Customers with a date of initial
application of 1 January 2015. MFRS 15 replaces the guidance in MFRS 11, Construction Contracts, MFRS
18, Revenue, IC Interpretation 13, Customer Loyalty Programmes, IC Interpretation 15, Agreements for
Construction of Real Estate, IC Interpretation 18, Transfer of Assets from Customers and IC Interpretation 131,
Revenue - Barter Transactions involving Advertising Services.
The effects of early adoption of MFRS 15 are set out in Note 36.
53
2.
(CONT'D)
Significant accounting policies (Cont'd)
(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 controls an entity when it is exposed, or has rights, to variable returns from its involvement
with the entity and has the ability to affect those returns through its power over the entity. Potential
voting rights are considered when assessing control only when such rights are substantive. The
Group also considers it has de facto power over an investee when, despite not having the majority
of voting rights, it has the current ability to direct the activities of the investee that significantly
affect the investee’s return.
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. The cost
of investments includes transaction costs.
(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 :
• the fair value of the consideration transferred; plus
• the recognised amount of any non-controlling interests in the acquiree; plus
• if the business combination is achieved in stages, the fair value of the existing equity interest in
the acquiree; less
• the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities
assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
For each business combination, the Group elects whether it measures the non-controlling interests
in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net
assets at the acquisition date.
Transaction costs, other than those associated with the issue of debt or equity securities, that the
Group incurs in connection with a business combination are expensed as incurred.
2.
(a) Basis of consolidation (Cont'd)
(iii)
Acquisitions of non-controlling interests
The Group accounts for all changes in its ownership interest in a subsidiary that do not result in a
loss of control as equity transactions between the Group and its non-controlling interest holders.
Any difference between the Group’s share of net assets before and after the change, and any
consideration received or paid, is adjusted to or against Group reserves.
(iv)
Loss of control
Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the
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)Associates
Associates are entities, including unincorporated entities, in which the Group has significant
influence, but not control, over the financial and operating policies.
Investments in associates are accounted for in the consolidated financial statements using the
equity method less any impairment losses, unless it is classified as held for sale or distribution. The
cost of the investment includes transaction costs. The consolidated financial statements include
the Group’s share of the profit or loss and other comprehensive income of the associates, after
adjustments if any, to align the accounting policies with those of the Group, from the date that
significant influence commences until the date that significant influence ceases.
When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that
interest including any long-term investments is reduced to zero, and the recognition of further losses
is discontinued except to the extent that the Group has an obligation or has made payments on
behalf of the associate.
When the Group ceases to have significant influence over an associate, any retained interest in
the former associate at the date when significant influence is lost is measured at fair value and
this amount is regarded as the initial carrying amount of a financial asset. The difference between
the fair value of any retained interest plus proceeds from the interest disposed of and the carrying
amount of the investment at the date when equity method is discontinued is recognised in the profit
or loss.
55
2.
(CONT'D)
(a) Basis of consolidation (Cont'd)
(v)
Associates (Cont'd)
When the Group’s interest in an associate decreases but does not result in a loss of significant
influence, any retained interest is not remeasured. Any gain or loss arising from the decrease in
interest is recognised in profit or loss. Any gains or loss previously recognised in other comprehensive
income are also reclassified proportionately to profit or loss if that gain or loss would be required to
be reclassified to profit or loss on the disposal of the related assets or liabilities.
Investments in associates 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. The cost of
investment includes transaction costs.
(vi) 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 non-controlling
interests even if doing so causes the non-controlling interests to have a deficit balance.
(vii) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intragroup transactions, are eliminated in preparing the consolidated financial statements.
Unrealised gains arising from transactions with equity-accounted associates are eliminated against
the investment to the extent of the Group’s interest in the investees. Unrealised losses are eliminated
in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
2.
(b) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at
exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are
retranslated to the functional currency at the exchange rate at that date.
Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the
reporting date, except for those that are measured at fair value are retranslated to the functional currency
at the exchange rate at the date that the fair value was determined.
Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences
arising on the retranslation of available-for-sale equity instruments or a financial instrument designated as
a hedge of currency risk, which are recognised in other comprehensive income.
In the consolidated financial statements, when settlement of a monetary item receivable from or payable
to a foreign operation is neither planned nor likely to occur in the foreseeable future, foreign exchange
gains and losses arising from such a monetary item are considered to form part of a net investment in a
foreign operation and are recognised in other comprehensive income, and are presented in the foreign
currency translation reserve in equity.
(c) Financial instruments
(i)
Initial recognition and measurement
A financial asset or a financial liability is recognised in the statement of financial position when,
and only when, the Group or the Company becomes a party to the contractual provisions of the
instrument.
A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument
not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition
or issue of the financial instrument.
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, in the event an embedded derivative is recognised separately, is accounted for in
accordance with policy applicable to the nature of the host contract.
57
2.
(CONT'D)
(c) Financial instruments (Cont'd)
(ii)
Financial instrument categories and subsequent measurement
The Group and the Company categorise financial instruments as follows:
Financial assets
(a)
Loans and receivables
Loans and receivables category comprises debt instruments that are not quoted in an active
market.
Financial assets categorised as loans and receivables are subsequently measured at amortised
cost using the effective interest method.
(b)
Available-for-sale financial assets
Available-for-sale category comprises investment in equity and debt securities instruments
that are not held for trading.
Investments in equity instruments that do not have a quoted market price in an active market
and whose fair value cannot be reliably measured are measured at cost. Other financial
assets categorised as available-for-sale are subsequently measured at their fair values with the
gain or loss recognised in other comprehensive income, except for impairment losses, foreign
exchange gains and losses arising from monetary items and gains and losses of hedged
items attributable to hedge risks of fair value hedges which are recognised in profit or loss.
On derecognition, the cumulative gain or loss recognised in other comprehensive income is
reclassified from equity into profit or loss. Interest calculated for a debt instrument using the
effective interest method is recognised in profit or loss.
All financial assets are subject to review for impairment (see Note 2(f)(i)).
Financial liabilities
All financial liabilities are subsequently measured at amortised cost.
2.
(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.
Fair value arising from financial guarantee contracts are classified as deferred income and is
amortised to profit or loss using a straight-line method over the contractual period or, when there
is no specified contractual period, recognised in profit or loss 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 in the marketplace concerned.
A regular way purchase or sale of financial assets is recognised and derecognised, as applicable,
using trade date accounting. Trade date accounting refers to:
(a) the recognition of an asset to be received and the liability to pay for it on the trade date, and
(b)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 or part of it is derecognised when, and only when the contractual rights to the
cash flows from the financial asset expire or control of the asset is not retained or substantially all
of the risks and rewards of ownership of the financial asset are transferred to another party. On
derecognition of a financial asset, the difference between the carrying amount and the sum of the
consideration received (including any new asset obtained less any new liability assumed) and any
cumulative gain or loss that had been recognised in equity is recognised in the profit or loss.
59
2.
(CONT'D)
(v)
Derecognition (Cont'd)
A financial liability or a part of it is derecognised when, and only when, the obligation specified
in the contract is discharged, cancelled or expires. On derecognition of a financial liability, the
difference between the carrying amount of the financial liability extinguished or transferred to
another party and the consideration paid, including any non-cash assets transferred or liabilities
assumed, is recognised in profit or loss.
(d) Property, plant and equipment
(i)
Recognition and measurement
Items of property, plant and equipment are measured at cost less any accumulated depreciation and
any accumulated impairment losses.
Cost includes expenditures that are directly attributable to the acquisition of the asset and any other
costs directly attributable to bringing the asset to working condition for its intended use, and the
costs of dismantling and removing the items and restoring the site on which they are located. The
cost of self-constructed assets also includes the cost of materials and direct labour.
Purchased software that is integral to the functionality of the related equipment is capitalised as
part of that equipment.
When significant parts of an item of property, plant and equipment have different useful lives, they
are accounted for as separate items (major components) of property, plant and equipment.
The gain or loss on disposal of an item of property, plant and equipment is determined by comparing
the proceeds from disposal with the carrying amount of property, plant and equipment and is
recognised net within “other income” and “other expenses” respectively in profit or loss.
(ii)
Subsequent costs
The cost of replacing a component of an item of property, plant and equipment is recognised in
the carrying amount of the item if it is probable that the future economic benefits embodied within
the component will flow to the Group or the Company, and its cost can be measured reliably. The
carrying amount of the replaced component is derecognised to profit or loss. The costs of the dayto-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
2.
61
(d) Property, plant and equipment (Cont'd)
(iii)Depreciation
Depreciation is based on the cost of an asset less its residual value. Significant components of
individual assets are assessed, and if a component has a useful life that is different from the
remainder of that asset, then that component is depreciated separately.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of
each component of an item of property, plant and equipment from the date that they are available
for use. Leased assets are depreciated over the shorter of the lease term and their useful lives unless
it is reasonably certain that the Group will obtain ownership by the end of the lease term. Property,
plant and equipment under construction are not depreciated until the assets are ready for their
intended use.
The principal annual rates used for the current and comparative periods are as follows :
Leasehold land
Factory and other buildings
Plant, machinery, tools and factory equipment
Furniture, fittings and office equipment
Motor vehicles
%
1
1 - 10
10 - 20
8 - 20
20
Depreciation methods, useful lives and residual values are reviewed at the end of the reporting
period, and adjusted as appropriate.
(e) Leased assets
(i)
Finance lease
Leases in terms of which the Group or the Company assumes substantially all the risks and rewards
of ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at
an amount equal to the lower of its fair value and the present value of the minimum lease payments.
Subsequent to initial recognition, the asset is accounted for in accordance with the accounting
policy applicable to that asset.
Minimum lease payments made under finance leases are apportioned between the finance expense
and the reduction of the outstanding liability. The finance expense is allocated to each period during
the lease term so as to produce a constant periodic rate of interest on the remaining balance of the
liability. Contingent lease payments are accounted for by revising the minimum lease payments over
the remaining term of the lease when the lease adjustment is confirmed.
2.
(CONT'D)
(e) Leased assets (Cont'd)
(i)
Finance lease (Cont'd)
Leasehold land which in substance is a finance lease is classified as property, plant and equipment,
or as investment property if held to earn rental income or for capital appreciation or for both.
(ii) Operating lease
Leases, where the Group or the Company does not assume substantially all the risks and rewards of
ownership are classified as operating leases and, except for property interest held under operating
lease, the leased assets are not recognised on the statement of financial position. Property interest
held under an operating lease, which is held to earn rental income or for capital appreciation or
both, is classified as investment property and measured using fair value model.
Payments made under operating leases are recognised in profit or loss on a straight-line basis over
the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of
the total lease expense, over the term of the lease. Contingent rentals are charged to profit or loss
in the reporting period in which they are incurred.
(f)Impairment
(i)
Financial assets
All financial assets, (except for investments in subsidiaries and investment in an associate) 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 investment in
an equity instrument, a significant or prolonged decline in the fair value below its cost is an objective
evidence of impairment. If any such objective evidence exists, then the impairment loss of financial
asset is estimated.
An impairment loss in respect of loans and receivables is recognised in profit or loss and is measured
as the difference between the asset’s carrying amount and the present value of estimated future
cash flows discounted at the asset’s original effective interest rate. The carrying amount of the asset
is reduced through the use of an allowance account.
An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and
is measured as the difference between the asset’s acquisition cost (net of any principal repayment
and amortisation) and the asset’s current fair value, less any impairment loss previously recognised.
Where a decline in the fair value of an available-for-sale financial asset has been recognised in
other comprehensive income, the cumulative loss in other comprehensive income is reclassified from
equity to profit or loss.
2.
(f)Impairment (Cont'd)
(i)
Financial assets (Cont'd)
An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in
profit or loss and is measured as the difference between the financial asset’s carrying amount and
the present value of estimated future cash flows discounted at the current market rate of return for
a similar financial asset.
Impairment losses recognised in profit or loss for an investment in an equity instrument classified as
available for sale is not reversed through profit or loss.
If, in a subsequent period, the fair value of a debt instrument increases and the increase can be
objectively related to an event occurring after the impairment loss was recognised in profit or loss,
the impairment loss is reversed, to the extent that the asset’s carrying amount does not exceed
what the carrying amount would have been had the impairment not been recognised at the date
the impairment is reversed. The amount of the reversal is recognised in profit or loss.
(ii) Other assets
The carrying amounts of other assets (except for inventories, deferred tax assets and investment
properties measured at fair value) are reviewed at the end of each reporting period to determine
whether there is any indication of impairment. If any such indication exists, then the asset’s
recoverable amount is estimated.
For the purpose of impairment testing, assets are grouped together into the smallest group of assets
that generates cash inflows from continuing use that are largely independent of the cash inflows of
other assets or cash-generating units.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair
value less costs of disposal. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset or cash-generating unit.
An impairment loss is recognised if the carrying amount of an asset or its related cash-generating
unit exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cashgenerating units are allocated first to reduce the carrying amount of any goodwill allocated to the
cash-generating unit (group of cash-generating units) and then to reduce the carrying amount of
the other assets in the cash-generating unit (groups of cash-generating units) on a pro rata basis.
63
2.
(CONT'D)
(f)Impairment (Cont'd)
(ii) Other assets (Cont'd)
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment
losses recognised in prior periods are assessed at the end of each reporting period for any indications
that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a
change in the estimates used to determine the recoverable amount since the last impairment loss
was recognised. An impairment loss is reversed only to the extent that the asset’s carrying amount
does not exceed the carrying amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited
to profit or loss in the financial year in which the reversals are recognised.
(g)Inventories
Inventories are measured at the lower of cost and net realisable value.
The cost of inventories is calculated using the first-in, first-out method, and includes expenditure incurred
in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to
their existing location and condition. In the case of work-in-progress and finished goods, cost includes an
appropriate share of production overheads based on normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs
of completion and the estimated costs necessary to make the sale.
(h) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, balances and deposits with banks (including the
accounts maintained pursuant to the Housing Developers (Housing Development Account)(Amendment)
Regulations 2002) and highly liquid investments which have an insignificant risk of changes in fair value
with original maturities of three months or less, and are used by the Group and the Company in the
management of their short term commitments. For the purpose of the statement of cash flows, cash and
cash equivalents are presented net of bank overdrafts and pledged deposits.
(i)Provision
A provision is recognised if, as a result a past event, the Group has a present legal or constructive obligation
that can be estimated reliably, and it is probably that an outflow of economic benefits will be required to
settle the obligation. Provision are determined by discounting the expected future cash flows as per-tax rate
that reflects current market assessments of the time value of money and the risks specific to the liability.
2.
(j) Contingent liabilities
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be
estimated reliably, the obligation is not recognised in the statements of financial position and is disclosed as
a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations,
whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events,
are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.
(k) Revenue and other income
(a)
Revenue from contracts with customers
Revenue which represents income arising in the course of the Group’s ordinary activities is recognised
by reference to each distinct performance obligation promised in the contract with the customer
when or as the Group transfers the control of the goods and services promised in the contract and
the customer obtains control of the goods or services.
Nature of goods and services
The following is a description of principal activities separated by reportable segments from which
the Group generates its revenue. For more detailed information about reportable segments, see
Note 27.
(i)
Manufacturing segment
The manufacturing segment of the Group is involved in the manufacturing of precision sheet
metal fabricated parts, precision injection moulding products and fabrication of moulds,
tools and dies. The products from this segment are sold separately but customised to the
specifications provided by the customers. Revenue is recognised over time as the Group’s
performance:
• creates and enhances an asset that the customer controls as the Group performs; or
• does not create an asset with an alternative use to the Group and the Group has
enforceable right to payment for performance completed to date.
Revenue is measured as the amount of consideration to which the Group expects to be
entitled net of discounts and rebates and excluding amounts collected on behalf of third
parties.
Majority of the contracts with customers include a standard warranty clause to provide
warranty of one year. No provision for warranty was made by the Group as the probability
of a defect arising from products sold was not material based on historical experience/data.
65
2.
(CONT'D)
(k) Revenue and other income (Cont'd)
(a)
Revenue from contracts with customers
(ii) Property development segment
Revenue is recognised over the period of the contract by reference to the progress towards
complete satisfaction of that performance obligation. The progress towards complete
satisfaction of the performance obligation is measure based on one of the following methods
that best depict the Group’s performance in satisfying the performance obligation:
• direct measurement of the value transferred by the Group to the customer (e.g. surveys
or appraisals of performance completed to date); or
• the Group’s efforts or inputs to the satisfaction of the performance obligation (e.g. by
reference to the property development costs incurred up to the end of the financial
reporting period as a percentage of total estimated costs for complete satisfaction of the
contract).
If the contract with customer contains more than one distinct performance obligation, the
amount of consideration is allocated to each distinct performance obligation based on the
relative stand-alone selling prices of the goods or services promised in the contract.
(iii) Property management and letting segment
The property management and letting segment is involved in managing and letting of office
space, managing of a heritage/cultural site and the car parks adjacent to the said properties.
This segment derives its revenue in the form of rental from letting of office space and use
of properties and sale of tickets for right of entry to the heritage/cultural site and car parks. (b)
Rental income
Rental income from investment property is recognised in profit or loss on a straight-line basis over
the term of the lease. Lease incentives granted are recognised as an integral part of the total rental
income, over the term of the lease. Rental income from sub-leased property is recognised as other
income.
(c)
Dividend income
Dividend income is recognised in profit or loss on the date that the Group’s or the Company’s right
to receive payment is established, which in the case of quoted securities is the ex-dividend date.
(d)
Interest income
Interest income is recognised as it accrues using the effective interest method in profit or loss.
2.
(k) Revenue and other income (Cont'd)
The estimated revenue relating to unfulfilled performance obligation at the end of the financial reporting
period amounted to RM3,392,000 and RM201,952,000 for the manufacturing and property development
segment respectively of the Group. The Group expects to recognise these revenue during the first quarter
of 2016 for its manufacturing segment and progressively over the normal operating cycle of the Group’s
development phase of approximately 4 years for its property development segment.
(l) Borrowing costs
Borrowing costs are recognised in profit or loss using the effective interest method. Borrowing costs
directly attributable to the acquisition, construction or production of qualifying assets, which are assets
that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised
as part of the cost of those assets.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure
for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to
prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended
or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use
or sale are interrupted or completed.
Investment income earned on the temporary investment of specific borrowings pending their expenditure
on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
(m) Income tax
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in
profit or loss except to the extent that it relates to a business combination or items recognised directly in
equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using
tax rates enacted or substantively enacted by the end of the reporting period, and any adjustment to tax
payable in respect of previous financial years.
Deferred tax is recognised using the liability method, providing for temporary differences between the
carrying amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred
tax is not recognised for the following temporary differences : the initial recognition of goodwill, the initial
recognition of assets or liabilities in a transaction that is not a business combination and that affects neither
accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be
applied to the temporary differences when they reverse, based on the laws that have been enacted or
substantively enacted by the end of the reporting period.
67
2.
(CONT'D)
(m) Income tax (Cont'd)
Where investment properties are carried at their fair value in accordance with the accounting policy set out
in note 2(r), the amount of deferred tax recognised is measured using the tax rates that would apply on
sale of those assets at their carrying value at the reporting date unless the property is depreciable and is
held with the objective to consume substantially all of the economic benefits embodied in the property over
time, rather than through sale. In all other cases, the amount of deferred tax recognised is measured based
on the expected manner of realisation or settlement of the carrying amount of the assets and liabilities,
using tax rates enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities
are not discounted.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable
entity, or on different tax entity, but they intend to settle current tax assets and liabilities on a net basis or
their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be
available against which the temporary difference can be utilised. Deferred tax assets are reviewed at the
end of each reporting period and are reduced to the extent that it is no longer probable that the related
tax benefit will be realised.
(n) Employee benefits
(i)
Short-term employee benefits
Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave
and sick leave are measured on an undiscounted basis and are expensed as the related service is
provided.
A liability is recognised for the amount expected to be paid under short-term cash bonus or profitsharing plans if the Group has a present legal or constructive obligation to pay this amount as a
result of past service provided by the employee and the obligation can be estimated reliably.
(ii)
State plans
The Group’s contributions to statutory pension funds are charged to profit or loss in the financial
year to which they relate. Prepaid contributions are recognised as an asset to the extend that a cash
refund or a reduction in future payments is available.
(o) Earnings per ordinary share
The Group presents basic and diluted earnings per share data for its ordinary shares (“EPS”).
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by
the weighted average number of ordinary shares outstanding during the period, adjusted for own shares
held.
Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the
weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects
of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to
employees.
2.
(p) Operating segments
An operating segment is a component of the Group that engages in business activities from which it
may earn revenues and incur expenses, including revenues and expenses that relate to transactions with
any of the Group’s other components. Operating segment results are reviewed regularly by the chief
operating decision maker, which in this case is the Managing Director of the Group, to make decisions
about resources to be allocated to the segment and to assess its performance, and for which discrete
financial information is available.
(q) Equity instruments
Instruments classified as equity are measured at cost on initial recognition and are not remeasured
subsequently.
(i)
Issue expenses
Costs directly attributable to the issue of instruments classified as equity are recognised as a deduction
from equity.
(ii)
Ordinary shares
Ordinary shares are classified as equity.
(iii)
Warrants reserve
The fair value relating to the issuance of warrants is credited to warrants reserve which is nondistributable. When the warrants are exercised or expire, the warrants reserve remains in equity,
although it may be transferred to another reserve account within equity.
(r) Investment properties
(i)
Investment properties carried at fair value
Investment properties are properties which are owned or held under a leasehold interest to earn rental
income or for capital appreciation or for both, but not for sale in the ordinary course of business, use
in the production or supply of goods or services or for administrative purposes.
Investment properties are measured initially at cost and subsequently at fair value with any change
therein recognised in profit or loss for the period in which they arise. 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.
Cost includes expenditure that is directly attributable to the acquisition of the investment property. The
cost of self-constructed investment property includes the cost of materials and direct labour, any other
costs directly attributable to bringing the investment property to a working condition for their intended
use and capitalised borrowing costs.
69
2.
(CONT'D)
(r) Investment properties (Cont'd)
(i)
Investment properties carried at fair value (cont'd)
An investment property is derecognised on its disposal, or when it is permanently withdrawn from
use and no future economic benefits are expected from its disposal. The difference between the net
disposal proceeds and the carrying amount is recognised in profit or loss in the period in which the
item is derecognised.
(ii)
Reclassification to/from investment property
When an item of property, plant and equipment is transferred to investment property following a
change in its use, any difference arising at the date of transfer between the carrying amount of the
item immediately prior to transfer and its fair value is recognised directly in equity as a revaluation
of property, plant and equipment. However, if a fair value gain reverses a previous impairment
loss, the gain is recognised in profit or loss. Upon disposal of an investment property, any surplus
previously recorded in equity is transferred to retained earnings; the transfer is not made through
profit or loss.
When the use of a property changes such that it is reclassified as property, plant and equipment or
inventories, its fair value at the date of reclassification becomes its cost for subsequent accounting.
(s) Property development costs
Property development costs comprise costs associated with the acquisition of land and all costs that
are directly attributable to development activities or that can be allocated on a reasonable basis to such
activities, including interest expense incurred during the period of active development.
Property development costs not recognised as an expense is recognised as an asset and is stated at the
lower of cost and net realisable value.
The excess of revenue recognised in profit or loss over billings to purchasers is shown as accrued billings
under trade and other receivables, and the excess of billings to purchasers over revenue recognised in profit
or loss is shown as progress billings under trade and other payables.
(t) Fair value measurement
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.
2.
71
(t) Fair value measurement (Cont'd)
When measuring the fair value of an asset or a liability, the Group uses observable market data as far as
possible. Fair value are categorised into different levels in a fair value hierarchy based on the input used in
the valuation technique as follows :
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can
access at the measurement date.
Level 2 : inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly.
Level 3 : unobservable inputs for the asset or liability.
The Group recognises transfers between levels of the fair value hierarchy as of the date of the event or
change in circumstances that caused the transfers.
3.
Property, plant and equipment - Group
Leasehold
land
RM
Factory
and other
buildings
RM
Plant,
machinery,
tools and
factory
equipment
RM
Furniture,
fittings
and office
equipment
RM
9,368,365
6,951,098
29,238,003
10,099,391
Additions
-
-
130,771
1,081,455
Disposals
-
-
(28,000)
9,368,365
6,951,098
-
-
Cost
At 1 January 2014
At 31 December 2014/
1 January 2015
Additions
Disposals
Transfer to investment
properties :
- Offset of accumulated
depreciation
- Revaluation of property
transferred
- Transfer of carrying
amount (Note 4)
1,480,000
At 31 December 2015
(188,165)
(320,388)
29,340,774
88,932
(1,400)
(2,680)
Motor
vehicles
RM
Total
RM
2,532,952
58,189,809
-
1,212,226
(37,135)
11,178,166
2,495,817
1,149,559
-
1,433,997
(10,000)
(67,815)
59,334,220
2,672,488
(11,400)
-
-
-
(508,553)
2,520,000
-
-
-
4,000,000
(2,674,850)
(4,554,476)
-
-
-
(7,229,326)
7,985,350
4,596,234
29,428,306
12,327,725
3,919,814
58,257,429
3.
(CONT'D)
Property, plant and equipment - Group (Cont'd)
Leasehold
land
RM
Factory
and other
buildings
RM
Plant,
machinery,
tools and
factory
equipment
RM
Furniture,
fittings
and office
equipment
RM
2,857,649
1,765,390
24,509,101
7,788,405
1,681,373
38,601,918
155,229
178,677
1,234,211
440,827
250,232
2,259,176
-
-
3,012,878
1,944,067
25,736,267
8,228,336
1,894,470
40,816,018
155,229
178,677
1,197,643
524,642
355,665
2,411,856
-
-
Motor
vehicles
RM
Total
RM
Accumulated depreciation
At 1 January 2014
Depreciation for the year
Disposals
1 January 2015
Depreciation for the year
Disposals
Offset of accumulated
depreciation on property
transferred to investment
property
At 31 December 2015
(188,165)
(320,388)
(7,045)
(555)
(896)
-
(37,135)
(9,446)
-
-
-
(45,076)
(10,001)
(508,553)
2,979,942
1,802,356
26,933,355
8,752,978
2,240,689
42,709,320
At 1 January 2014
6,510,716
5,185,708
4,728,902
2,310,986
851,579
19,587,891
1 January 2015
6,355,487
5,007,031
3,604,507
2,949,830
601,347
18,518,202
At 31 December 2015
5,005,408
2,793,878
2,494,951
3,574,747
1,679,125
15,548,109
Carrying amounts
3.1Security
Certain leasehold land, buildings and plant and machinery of the Group with an aggregate carrying amount
of RM3,173,313 (2014 : RM7,300,058) are charged to licensed banks as securities for term loans granted
to subsidiaries (Note 15).
3.
73
Property, plant and equipment - Group (Cont'd)
3.2 Leasehold land
Included in the carrying amounts of leasehold land are :
2015
RM
2014
RM
779,167
787,656
4,226,241
5,567,831
5,005,408
6,355,487
2015
RM
2014
RM
At 1 January
Additions
Transfer from property, plant and equipment (Note 3)
Change in fair value recognised in profit or loss
65,569,750
2,237,326
7,229,326
6,300,674
59,230,540
901,250
5,437,960
At 31 December
81,337,076
65,569,750
2015
RM
2014
RM
36,400,000
8,000,000
36,937,076
33,870,000
30,000,000
81,337,076
63,870,000
-
1,699,750
81,337,076
65,569,750
Land with unexpired lease period of more than 50 years
Land with unexpired lease period of less than 50 years
4. Investment properties - Group
Included in the above are :
At fair value :
Freehold land
Leasehold land
Buildings
At cost :
Building under construction
(CONT'D)
4. Investment properties - Group (Cont'd)
The investment properties comprise of :
i) a sixteen (16) storey office building and seven (7) storey car park, collectively known as Menara IJM Land
with a carrying amount of RM65.00 million (2014: RM60.00 million) that are leased to third parties;
ii) a semi-detached residential building with a carrying amount of RM4.40 million (2014: RM3.87 million) held
for capital appreciation;
iii) a townhouse with a carrying amount of RM3.94 million (2014 : RM1.70 million) held for capital appreciation;
and
iv) a short term leasehold land and factory building with a carrying amount of RM8.00 million (2014: Nil) that
are leased to third parties.
The following are recognised in profit or loss in respect of the investment properties :
Rental income
2015
RM
2014
RM
4,354,925
3,857,488
245,105
214,050
1,286
1,857
Direct operating expenses
- income generating investment properties
- non-income generating investment properties
4.1Security
All investment properties are charged for term loans granted to subsidiaries (Note 15).
4.2 Fair value information
Fair value of investment properties are categorised as follows :
Level 1
RM
Level 2
RM
Level 3
RM
Total
RM
-
40,337,076
41,000,000
81,337,076
-
33,870,000
30,000,000
63,870,000
2015
Land and buildings
2014
Land and buildings
75
4.2 Fair value information (Cont'd)
Level 2 fair value
Level 2 fair values of investment properties were 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 and location. The most significant input into this valuation approach is price per square foot which
would increase/(decrease) the estimated fair value if the price per square foot is higher/(lower).
Level 3 fair value
Level 3 fair value is estimated using unobservable inputs for land and buildings. The following table shows
a reconciliation of Level 3 fair values:
2015
RM
2014
RM
30,000,000
28,000,000
Transfer from property, plant and equipment
7,229,326
-
Gains and losses recognised in profit or loss
- Change in fair value - unrealised
3,770,674
2,000,000
41,000,000
30,000,000
At 1 January
At 31 December
Valuation process applied by the Group for Level 3 fair value
Investment method
Level 3 fair values of investment properties were derived by independent valuers using the income
capitalisation approach, also known as the investment approach. In the income capitalisation approach,
capitalisation rates are applied to the income of the investment properties to determine the value of the
investment properties.
The significant unobservable inputs are :
Significant unobservable inputs
Inter-relationship between significant unobservable
inputs and fair value measurement
The estimated fair value would increase/(decrease) if :
• Occupancy rate 95%
• Occupancy rate were higher/(lower)
• Expected growth rate 0%
• Expected market rental growth were higher/(lower)
• Risk-adjusted discount rates 6% - 6.5% • Risk-adjusted discount rates were (lower)/higher
(CONT'D)
Valuation process applied by the Group for Level 3 fair value (Cont'd)
The fair value of the investment properties is determined by external, independent property valuers, having
appropriate and recognised professional qualifications and recent experience in the location and category
of properties being valued. The property valuers provides fair value of the Group’s investment properties
annually. Changes in Level 3 fair values are analysed by the management after obtaining the valuation
reports from the property valuers.
5.
Investment in subsidiaries – Company
Unquoted shares, at cost
At 1 January
Addition
At 31 December
2015
RM
2014
RM
104,624,956
-
104,524,958
99,998
104,624,956
104,624,956
Details of the subsidiaries are as follows :
Name of entity
Principal place
of business/
country of
incorporation Principal activities
Tekun Asas Sdn. Bhd.
Malaysia
Manufacturing of precision sheet metal
fabricated parts used in audio, video and
acoustic equipment, satellite antennas,
electrical and electronics equipment,
KVM switches, computer monitors and
keyboards
Effective ownership
interest and voting
interest
2015
2014
%
%
100
100
Tekun Innovasi Sdn. Bhd. Malaysia
Manufacturing of fabricated sheet metals
70
70
Ewein Land Sdn. Bhd.
(“ELSB”)
Investment holding and property letting
100
100
Design and fabrication of precision
moulds, tools and dies
100
100
Malaysia
Precision Press Industries Malaysia
Sdn. Bhd.*
5.
77
Investment in subsidiaries – Company (Cont'd)
Name of entity
Principal place
of business/
country of
MBM Industries Sdn. Bhd.
Malaysia
Investment holding and trading in
construction materials
100
100
Kelpen Resources
Sdn. Bhd. (“KRSB”)*
Malaysia
Investment holding
100
100
The Esplanade Park Sdn. Bhd.
(“TEPSB”)
Malaysia
Managing a heritage and
cultural property and car park
management
100
100
Ewein Zenith Sdn. Bhd.
(“EZSB”) #
Malaysia
Property development, construction
and property investment
60
60
Ewein Zenith II Sdn. Bhd. ^
Malaysia
Property development, construction
and property investment
60
-
Malaysia
Ceased operations in
manufacturing of precision plastic
injection moulding products and
product finishing and commenced
business in property letting
100
100
Effective ownership
interest and voting
interest
2015
2014
%
%
Subsidiary of ELSB
Subsidiary of KRSB
Kelpen Plastics Technology
Sdn. Bhd.*
* Not audited by KPMG
^ Incorporated on 2 June 2015
# The shares are pledged as security for borrowings granted to EZSB
5.
(CONT'D)
Non-controlling interests in subsidiaries
The Group's subsidiaries that have material non-controlling interest (“NCI”) are as follows :
EZSB
RM
Other subsidiaries
with immaterial NCI
RM
Total
RM
40%
4,816,311
4,586,166
937,594
(53,504)
5,753,905
4,532,662
31 December 2015
NCI percentage of ownership interest and
voting interest
Carrying amount of NCI
Profit allocated to NCI
EZSB
RM
31 December 2015
Summarised financial information before intra-group elimination
As at 31 December
Non-current assets
Current assets
Non-current liabilities
Current liabilities
1,334,177
202,521,134
(95,840,312)
(95,974,221)
Net assets
12,040,778
Year ended 31 December
Revenue
Profit for the year
Total comprehensive income for the year
39,793,153
11,465,414
11,465,414
Cash flows used in operating activities
Cash flows used in investing activities
Cash flows from financing activities
Net decrease in cash and cash equivalents
Dividends paid to NCI
(122,004,594)
(1,412,367)
91,828,025
(31,588,936)
-
5.
79
Non-controlling interests in subsidiaries (Cont'd)
In financial year 2014 the Group’s subsidiaries do not have any non-controlling interests (“NCI”) that are
individually material as EZSB only commenced property development activities during the financial year ended
31 December 2015. The aggregate carrying amount of NCI and the loss allocated to NCI of those subsidiaries
with immaterial NCI are as follows:
2014
RM
Carrying amount of NCI
Loss allocated to NCI
421,243
(277,093)
Restriction imposed by shareholders’ agreement
The non-controlling shareholder of EZSB holds protective rights restricting the subsidiary from providing any
loans and advances in favour of the Group or any Director or persons connected to the Director unless approval
is obtained from the non-controlling interests shareholder.
6. Investment in an associate
Group
2015
RM
2014
RM
At 1 January
Addition
Disposal
100,000
-
2,175,000
(2,175,000)
At 31 December
100,000
-
(2,973)
-
97,027
-
Unquoted shares, at cost
Share of post-acquisition reserves
6.
(CONT'D)
Investments in associates (Cont'd)
Details of the associate are as follows :
Name of entity
Principal place
of business/
country of
Effective ownership
interest and voting
interest
2015
2014
%
%
Held through TEPSB, a wholly owned subsidiary of the Company
Kota Cornwallis Dine &
Coffee Sdn. Bhd. #
#
Malaysia
Operation of restaurant
50
-
Acquired on 28 September 2015 and not audited by KPMG
2015
Kota
Cornwallis
Dine & Coffee
Sdn. Bhd.
RM
Group
Summarised financial information
Loss from continuing operations representing total comprehensive expense
Included in the total comprehensive income is :
Revenue
(5,945)
143,115
Group’s share of results
Group’s share of loss from continuing operations representing Group’s share of
total comprehensive expense
(2,973)
6.
81
Investments in associates (Cont'd)
M-Itech Sdn.
Bhd. and its
subsidiary #
RM
2014
Group
Summarised financial information
Profit from continuing operations representing total comprehensive income
550,286
Included in the total comprehensive income is :
Revenue
12,831,782
Group’s share of results
Group’s share of profit from continuing operations representing Group’s share of
total comprehensive income
275,143
# Disposed of on 31 December 2014.
7.
Other investments - Group
2015
RM
2014
RM
Quoted shares in Malaysia
-
952,272
Market value of quoted shares
-
952,272
Non-current
Available-for-sale financial assets
8.
(CONT'D)
Inventories - Group
2015
RM
2014
RM
Raw materials
758,805
783,052
Work-in-progress
547,702
663,324
2,563,931
2,841,569
228,971
198,558
4,099,409
4,486,503
Manufactured inventories
Consumables
The cost of inventories recognised as expense in cost of sales during the financial year amounted to RM18,099,517
(2014 : RM15,430,337). Inventories written down during the financial year amounted to RM22,860 (2014 : Nil).
9.
Property development costs - Group
Note
2015
RM
2014
RM
-
-
172,485,487
(19,483,791)
-
153,001,696
-
At 31 December
153,001,696
-
Included in the above are :
Freehold land
Development costs
Accumulated costs charged to profit or loss
123,597,775
48,887,712
(19,483,791)
-
153,001,696
-
At 1 January
Add/(Less) :
Development costs incurred during the year
Costs charged to profit or loss
9.1
19
19
9.
Property development costs - Group (Cont'd)
9.1 Development costs incurred during the year
83
Included in development costs incurred during the year are the following :
Note
Staff costs
Interest expense
22
23
2015
RM
2014
RM
20,000
4,264,425
-
9.2 Estimates and judgements
The Group recognised property development revenue and expenses in profit or loss using the stage of
completion method. The stage of completion is determined by the proportion that property development
costs incurred for work performed to date compared to the estimated total property development costs.
Judgement is required in determining the stage of completion, the extent of the property development
costs incurred, the estimated total property development revenue and costs, as well as the recoverability
of the development project. In making these judgements, the Group evaluates based on reference to the
work of architect and quantitative surveyor.
9.3Security
The property development costs of the Group are pledged to a bank as security for borrowings granted to
a subsidiary as disclosed in Note 15 to the financial statements.
(CONT'D)
10. Trade and other receivables
Group
Note
Company
2015
2014
RM
RM
2015
RM
2014
RM
7,621,727
25,450,165
10,959,470
-
-
-
33,071,892
10,959,470
-
-
2,512,481
21,624,065
921,009
3,750,862
30,407,120
2,525,802
61,252,269
659,915
2,880,000
6,727
60,854,607
1,800,000
-
25,057,555
36,683,784
64,798,911
62,654,607
58,129,447
47,643,254
64,798,911
62,654,607
57,208,438
45,117,452
64,792,184
62,654,607
16,013,574
26,154,242
10,011,573
18,032,272
9,126,702
2,131,375
7,115,448
5,574,566
99,376,254
73,161,297
76,050,261
75,344,621
Trade
Trade receivables
Accrued billings
Non-trade
Amount due from subsidiaries
Other receivables
Deposits
Prepayments
10.1
10.2
Financial instruments :
(excluding prepayments)
Fixed deposits with a
licensed bank
12
Total loans and receivables
10.1 Amount due from subsidiaries
The non-trade amount due from subsidiaries is unsecured, interest-free and repayable on demand.
85
10. Trade and other receivables (Cont'd)
10.2 Deposits
(i)
On 28 December 2015, Ewein Zenith II Sdn. Bhd. (“EZIISB”), a 60% owned subsidiary of Ewein Land
Sdn. Bhd. who in turn is wholly owned by Ewein Berhad, entered into a Sales and Purchase
Agreement (“SPA”) with Consortium Zenith BUCG Sdn. Bhd. (“CZBUCG”) to acquire freehold land
measuring approximately 4.4252 acres for a purchase consideration of RM162 million of which,
EZIISB has paid a refundable deposit of RM16.2 million during the year.
(ii)
Included in deposits of the Group and of the Company is RM2.88 million (2014 : Nil) paid for the
purchase of 50% equity interest in UD Piles Sdn. Bhd. Subsequent to the end of the financial
reporting period, the Share Sale Agreement was terminated and the deposit paid was refunded to
the Group (Note 35).
(iii)
Included in deposits of the Group in 2014 was RM30.2 million representing installments paid for
the acquisition of a freehold land for a proposed mixed development pursuant to the Joint Venture
Agreement (“JVA”) entered into between Ewein Zenith Sdn. Bhd. (“EZSB”), a 60% owned subsidiary
of Ewein Land Sdn. Bhd. who in turn is wholly owned by Ewein Berhad with CZBUCG. The deposit
of RM30.2 million has been reclassified to property development costs in 2015 upon the land being
alienated to EZSB and the commencement of property development activities.
11. Fixed deposits with a licensed bank
Included in fixed deposits of the Group is RM272,487 (2014:RM272,487) pledged to a bank as security for
borrowings granted to a subsidiary as disclosed in Note 15 to the financial statements.
12. Cash and cash equivalents
Group
Note
Short term deposits
with licensed banks
12.1
Company
2015
2014
RM
RM
2015
RM
2014
RM
1,000,000
8,458,580
1,000,000
4,920,242
25,154,242
9,573,692
1,131,375
654,324
26,154,242
18,032,272
2,131,375
5,574,566
(CONT'D)
12. Cash and cash equivalents (Cont'd)
12.1 Cash and bank balances
Included in cash and bank balances of the Group is RM6,358,094 (2014: Nil) the utilisation of which is
subject to the Housing Developers (Housing Development Account) (Amendment) Regulations 2002.
13. Share capital – Group/Company
<__________ 2015 __________> <__________ 2014 __________>
Amount
Number of
Amount
Number of
RM
shares
RM
shares
Ordinary shares of RM0.50 each
Authorised
250,000,000
500,000,000
250,000,000
500,000,000
Issued and fully paid
At 1 January
Rights issue
Bonus issue
Exercise of warrants
Allocation of value to warrant reserve
95,671,271
327,597
210,925,192
655,194
-
52,731,300
26,365,650
26,365,650
(9,791,329)
105,462,600
52,731,296
52,731,296
-
At 31 December
95,998,868
211,580,386
95,671,271
210,925,192
-
During financial year 2014, the issued and paid-up share capital of the Company was increased from
RM52,731,300 comprising 105,462,600 number of ordinary shares of RM0.50 each to RM105,462,600
comprising 210,925,192 ordinary shares of RM0.50 each via the following :
(a)
A renounceable rights issue of RM26,365,650 comprising 52,731,296 number of ordinary shares of
RM0.50 each on the basis of one (1) Rights Share for every two (2) existing ordinary shares held in the
Company at an issue price of RM0.50 per Rights Share; and
(b)
A bonus issue of RM26,365,650 comprising 52,731,296 number of ordinary shares of RM0.50 each
on the basis of one (1) Bonus Share for every one (1) Rights Share subscribed through the capitalisation
of RM26,365,650 from retained earnings.
During the current financial year, 655,194 new ordinary shares of RM0.50 per share were issued at RM0.61 per
ordinary share arising from the exercise of warrants.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled
to one vote per share at meetings of the Company.
87
14.Reserves
Group
Company
Note
2015
RM
2014
RM
2015
RM
2014
RM
14.1
14.2
14.3
14.4
14.5
72,071
(31,482,494)
21,919,528
3,800,000
(31,482,494)
21,919,528
831,180
-
72,071
21,919,528
-
21,919,528
-
(5,690,895)
(8,731,786)
21,991,599
21,919,528
33,914,038
23,585,076
10,707,568
12,094,880
28,223,143
14,853,290
32,699,167
34,014,408
Non-distributable
Share premium
Reverse acquisition reserve
Warrant reserve
Fair value reserve
Revaluation reserve
Distributable
Retained earnings
14.6
14.1 Share premium
Share premium comprises the premium paid on subscription of shares in the Company over and above
the par value of the shares.
14.2 Reverse acquisition reserve
This relates to the acquisition of MBM Industries Sdn. Bhd. (“MBMI”), where upon the completion of
the said acquisition, the Company became the legal parent company of MBMI. However, due to the
relative value of MBMI, the former equity holders of MBMI became the majority equity holders of the
Company. Furthermore, the Company’s continuing operations and management are those of MBMI.
Accordingly, the substance of the business combination is that MBMI acquired the Company through a
reverse acquisition.
In accordance with MFRS 3, the amount recognised as issued equity instruments in the consolidated
financial statements is determined by adding the cost of the business combination to the issued equity
of MBMI (i.e. the legal subsidiary) immediately before the business combination. However, the equity
structure appearing in the consolidated financial statements (i.e. the number and type of equity instruments
issued) shall reflect the issued equity structure of the Company, including the equity instruments issued
by the Company to effect the combination.
(CONT'D)
14. Reserves (Cont'd)
14.3 Warrant reserve
14.4 Fair value reserve
The warrant reserve represents the fair value allocated to the Warrants 2012/2017 at the date of issue.
When the warrants are exercised or expire, the warrant reserve remains in equity, although it may be
transferred to another reserve account within equity.
The fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial
assets until the investments are derecognised or impaired.
14.5 Revaluation reserve
The revaluation reserve relates to the revaluation of a land and factory building of the Group immediately
prior to the reclassification as investment property.
14.6 Retained earnings
The entire retained earnings of the Company is eligible to be paid out as dividends under the single-tier
Company income tax system in accordance with The Finance Act, 2007.
15. Loans and borrowings - Group
2015
RM
2014
RM
4,931,961
38,149,631
3,951,493
2,412,238
43,081,592
6,363,731
97,531,308
39,316,142
140,612,900
45,679,873
Current, secured
Term loans - variable rate
Bank overdraft
Non-current, secured
Term loans - variable rate
Total loans and borrowings
Security
The term loans and bank overdrafts are secured by the leasehold land, buildings and certain plant and machinery
(Note 3.2), investment properties (Note 4.1), property development costs (Note 9.3) of the Group and corporate
guarantee from the Company.
The settlement or repayment of a loan granted to a subsidiary ranks in priority to the repayment of the amounts
owing by the subsidiary to Directors and shareholders of the subsidiary.
89
16. Trade and other payables
Group
Company
Note
2015
RM
2014
RM
2015
RM
2014
RM
16.1
16.2
1,005,205
43,797,775
824,626
-
-
-
44,802,980
824,626
-
-
17,417,142
9,834,187
4,362,602
-
-
-
27,251,329
4,362,602
-
-
7,108,549
1,640,877
189,053
1,306,696
962,118
288,289
51,724,819
19
207,555
-
50,024,819
207,563
-
8,938,479
2,557,103
51,932,393
50,232,382
36,189,808
6,919,705
51,932,393
50,232,382
80,992,788
7,744,331
51,932,393
50,232,382
80,992,788
140,612,900
7,744,331
45,679,873
51,932,393
-
50,232,382
-
221,605,688
53,424,204
51,932,393
50,232,382
Non-current
Deposits received
Other payables
Current
Trade
Trade payables
Trade accruals
Non-trade
Amount due to subsidiaries
Other payables
Accrued expenses
Deposits received
16.3
Financial instruments:
Total financial liabilities
measured at amortised cost
15
(CONT'D)
16. Trade and other payables (Cont'd)
16.1
Refundable deposits
Refundable deposits comprise of security deposits (office building, car park and renovation) and utility
deposits collected from tenants. 16.2 Other payables, non-current
The non-current other payables represent amount payable for the purchase of development land. The
amount is unsecured, interest-free and payable upon the completion of the Group’s mixed development
project in financial year ending 31 December 2019.
16.3
Amount due to subsidiaries
The non-trade amount due to subsidiaries is unsecured, interest-free and payable on demand.
17. Deferred tax assets/(liabilities) - Group
Deferred tax assets/(liabilities) are attributable to the following :
Assets
2015
RM
2014
RM
Liabilities
2015
2014
RM
RM
Net
2015
RM
2014
RM
Property, plant and
equipment
- Capital allowances
- Revaluation
Real Property Gains Tax
on change in fair value
of investment properties
Tax loss carry-forwards
Provisions
7,097
-
64,573
-
(894,287)
(200,000)
(899,000)
-
(887,190)
(200,000)
(834,427)
-
491,079
2,674,093
-
(745,932)
-
(430,898)
-
(745,932)
491,079
2,674,093
(430,898)
-
Tax assets/(liabilities)
3,172,269
64,573
(1,840,219)
(1,329,898)
1,332,050
(1,265,325)
(1,840,219)
(64,573)
1,840,219
64,573
-
-
1,332,050
-
-
(1,265,325)
1,332,050
(1,265,325)
Set-off of tax
Net deferred tax assets/
(liabilities)
91
17. Deferred tax assets/(liabilities) - Group (Cont'd)
Movements in the temporary differences during the year are as follows :
Recognised
in profit
or loss
(Note 24)
RM
At
1 January
2014
RM
At 31
December
2014/
1 January
2015
RM
Recognised
in profit
or loss
(Note 24)
RM
Recognised
in other
comprehensive
income
RM
At 31
December
2015
RM
Property, plant and
equipment
- Capital allowances
(914,026)
79,599
(834,427)
(52,763)
-
-
-
-
- Revaluation
Real Property Gains
Tax on change in fair
value of investment
properties
Tax loss carry-forwards
Provisions
(159,000)
(1,073,026)
(271,898)
(192,299)
(430,898)
(1,265,325)
(200,000)
(315,034)
-
491,079
2,674,093
-
2,797,375
(887,190)
(200,000)
(200,000)
(745,932)
491,079
2,674,093
1,332,050
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when the deferred taxes related to the same taxation authority. Deferred tax
assets are recognised to the extent that it is reasonable that future taxable profits will be available against which
the Company can utilise the benefits.
Unrecognised deferred tax assets
No deferred tax asset has been recognised in respect of the following item (stated at gross):
Group
Other deductible temporary differences
2015
RM
2014
RM
587,103
6,454,637
The deductible temporary differences do not expire under current legislation. Deferred tax assets have not been
recognised in respect of the above item because it is not probable that future taxable profits will be available
against which the Group can utilise the benefits therefrom.
(CONT'D)
18.Revenue
Group
Invoiced value of goods sold less
discounts and returns
Property development revenue
Rental income
Ticketing/Entrance fee
Dividend income
Interest income
Company
2015
RM
2014
RM
2015
RM
2014
RM
41,694,828
39,793,152
4,354,925
1,670,296
28,898
189,624
39,872,215
3,857,488
500,186
192,147
217,938
28,898
189,624
192,147
217,938
87,731,723
44,639,974
218,522
410,085
2015
RM
2014
RM
39,101,189
2,077,371
19,483,791
38,085,192
1,464,867
-
60,662,351
39,550,059
19. Cost of sales - Group
Note
Cost of goods sold
Property management expenses
Property development expenses
9
93
20. Operating profit/(loss)
Operating profit/(loss) is arrived at :
Group
Company
2015
RM
2014
RM
2015
RM
2014
RM
118,000
93,000
43,000
40,000
21,020
-
21,020
(1,000)
-
-
30,000
153,700
8,000
29,600
30,000
-
8,000
-
2,411,856
439,000
-
2,259,176
282,000
110,000
-
-
6,131,658
22,860
3,651,255
779,533
-
-
175,000
-
6,300,674
40,383
5,437,960
341,534
28,898
192,147
329,290
495,172
-
-
1,333
915,730
487,749
4,045
379,954
440,091
189,624
217,938
63,596
-
-
-
After charging :
Auditors’ remuneration :
Audit fees
- KPMG Malaysia
- Current year
- Other auditors
- Current year
- Prior year
Non-audit fees
- KPMG Malaysia
- Current year
- Local affiliate of KPMG Malaysia
Depreciation of property, plant and
equipment (Note 3)
Rental of premises
Impairment of non-trade receivables
Unrealised loss on foreign currency
exchange, net
Loss on disposal of an associate
Inventories written down (Note 8)
and after crediting :
Change in fair value of investment
properties
Dividend income from other investments
Realised gain on foreign currency
exchange, net
Gain on :
- disposal of plant and equipment
- disposal of other investments
Interest income
Reversal of impairment loss on
trade receivables
(CONT'D)
21. Key management personnel compensation
The key management personnel compensation are as follows :
2015
RM
2014
RM
145,000
372,000
46,200
58,800
145,000
372,000
46,200
58,800
622,000
622,000
144,000
17,280
144,000
17,280
161,280
161,280
145,000
145,000
2015
RM
2014
RM
8,101,271
7,145,497
(20,000)
-
8,081,271
7,145,497
Group
Directors of the Company
- Fees
- Other remunerations
- Contribution to Employees’ Provident Fund
- Estimated monetary value of benefits-in-kind
Other Director
- Other remunerations
- Contribution to Employees’ Provident Fund
Company
Directors
- Fees
22. Employee information - Group
Staff costs (excluding Directors’ emoluments)
Less : Capitalised under property development costs (Note 9.1)
Staff costs include contributions to the Employees’ Provident Fund of RM297,947 (2014 : RM294,372).
95
23. Finance costs - Group
2015
RM
2014
RM
1,627,276
2,781,906
575,931
220
71,592
583,676
-
4,985,113
655,488
(4,264,425)
-
720,688
655,488
Interest expense :
Finance lease obligations
Bank overdrafts
Term loans
Unwinding of discount on non-current payables
Less : Capitalised under property development costs (Note 9.1)
24. Tax expense
Group
Company
2015
RM
2014
RM
2015
RM
2014
RM
- Current year
- Prior year
5,018,170
449,109
828,372
(335,088)
27,164
13,347
Total current tax
5,467,279
493,284
27,164
13,347
(2,805,610)
8,235
125,299
67,000
-
-
(2,797,375)
192,299
-
-
2,669,904
685,583
27,164
13,347
-
16,853
-
-
2,669,904
702,436
27,164
13,347
Current tax expense
Deferred tax expense
- (Reversal)/Origination of
temporary differences
- Prior year
Total deferred tax
Share of tax of equity
accounted associate
Total tax expense
(CONT'D)
24. Tax expense (Cont'd)
Reconciliation of tax expense
Group
Company
2015
RM
2014
RM
2015
RM
2014
RM
Total tax expense
15,916,250
2,669,904
2,885,032
702,436
(332,686)
27,164
(1,064,059)
13,347
Profit/(Loss) excluding tax
18,586,154
3,587,468
(305,522)
(1,050,712)
4,646,539
398,479
(244,608)
896,867
861,629
(221,872)
(76,381)
83,606
(7,225)
(262,678)
310,715
(48,037)
(1,408,208)
579,387
-
-
(1,260,135)
72,043
(1,087,592)
-
-
-
743
7,707
(56,146)
(1,749)
-
-
2,212,560
970,524
-
-
457,344
(268,088)
27,164
13,347
2,669,904
702,436
27,164
13,347
Income tax using Malaysian tax rate of
25% (2014 : 25%)
Non-deductible expenses
Income not subject to tax
Effect of deferred tax assets previously
not recognised
Fair value gain on revaluation on
investment properties *
Effect of change in tax rate #
Difference in effective tax rate of equity
accounted associate
Others
Under/(Over) provision in prior year
Total tax expense
*
The Malaysian Budget 2014 announced the change in Real Property Gains Tax rate from 0% to 5% on
disposal of properties held for more than 5 years with effect from 1 January 2014.
#
The Malaysian Budget 2014 announced the reduction of corporate tax to 24% with effect from year of
assessment 2016. Consequently, deferred tax assets and liabilities which are expected to reverse in 2016
and beyond are measured using the tax rate of 24%.
97
25. Dividends - Group/Company
Dividends recognised by the Company are as follows :
Sen
per share
Amount
RM
Date of
payment
0.50
1,054,626
20 August 2015
0.50
1,054,626
22 August 2014
2015
First and final single tier dividend for
financial year ended 31 December 2014
2014
First and final tax exempt dividend for
financial year ended 31 December 2013
Subsequent to the end of the financial year, the Directors recommended a first and final single tier dividend
of 0.50 sen per share in respect of the financial year ended 31 December 2015, subject to the approval of the
shareholders in the forthcoming annual general meeting.
26. Related parties
26.1
For the purposes of these financial statements, parties are considered to be related to the Group if the
Group or the Company has the ability, directly or indirectly, to control or jointly control the party or
exercise significant influence over the party in making financial and operating decisions, or vice versa,
or where the Group or the Company and the party are subject to common control. Related parties may
be individuals or other entities and include the following :
i) Subsidiaries and associate of the Company as disclosed in the financial statements.
ii)
Significant investors of the Company and its subsidiaries namely, Hijauwasa Sdn. Bhd., Med-Bumikar
Mara Sdn. Bhd. and Consortium Zenith BUCG Sdn. Bhd..
iii) Key management personnel
Key management personnel are defined as those persons having authority and responsibility for
planning, directing and controlling the activities of the Group either directly or indirectly. The key
management personnel includes the executive Directors of the Group and of the Company.
(CONT'D)
26. Related parties (Cont'd)
26.2 Related party transactions
i)
Transactions with Directors
Group
Accrued billings on sale of development properties to
Directors of the Group
Accrued billings on sale of development properties to
companies in which certain Directors have substantial interest
2015
RM
2014
RM
2,352,983
-
320,550
-
ii) Remuneration package paid to key management personnel and Directors in accordance with the
terms of their employment as disclosed in Note 21 to the financial statements, the subscription
of shares pursuant to the Company’s rights issue and the issuance of additional warrants to certain
Directors.
iii) The non-trade balances of the Group and of the Company with related parties outstanding at the
end of the reporting period are disclosed in Note 10 and Note 16 to the financial statements. All the
amounts outstanding are unsecured and are expected to be settled in cash.
27. Operating segments - Group
The Group has three reportable segments as described below, which are the Group’s strategic business units.
The strategic business units offer different products and services, and are managed separately because they
require different technology and marketing strategies. For each of the strategic business units, the Chief
Operating Decision Maker (“CODM”) (i.e. the Group’s Managing Director) reviews internal management reports
on a monthly basis.
Performance is measured based on segment profit before tax, interest, depreciation and amortisation, as
included in the internal management reports that are reviewed by the CODM. Segment profit is used to measure
performance as management believes that such information is the most relevant in evaluating the results of
certain segments relative to other entities that operate within these industries.
27. Operating segments - Group (Cont'd)
The following summary describes the operations in each of the Group’s reportable segments :
•Manufacturing
Includes manufacturing of precision sheet metal fabricated parts, precision
plastic injection moulding products and design and fabrication of moulds,
tools and dies
• Property development
Development of residential properties
• Property management and
letting
Includes managing an office building, heritage and cultural property and car
parks
Other non-reportable segment comprise of investment holding activities which do not meet the quantitative
threshold for reporting.
Segment assets
Total segment asset is measured based on all assets of a segment, as included in the internal management
reports that are reviewed by the CODM. Segment total asset is used to measure the return on assets of each
segment.
Segment liabilities
Segment liabilities information is neither included in the internal management reports nor provided regularly to
the CODM. Hence, no disclosure is made on segment liability.
Segment capital expenditure
Segment capital expenditure is the total cost incurred during the financial year to acquire property, plant and
equipment.
99
(CONT'D)
Manufacturing
RM’000
Property
development
RM’000
Property
management
and letting
RM’000
Others
RM’000
Total
RM’000
3,022
15,726
144
(306)
18,586
42,067
-
39,817
-
5,629
(3)
219
-
87,732
(3)
-
-
6,301
-
6,301
64
-
-
-
64
Not included in the measure of
profit but provided to CODM
Depreciation and amortisation
Finance costs
Finance income
Tax expense
(2,125)
(159)
253
(690)
(127)
45
(4,247)
(160)
(562)
2,294
190
(27)
(2,412)
(721)
488
(2,670)
Segment assets
59,333
206,669
76,907
14,805
357,714
-
-
100
-
100
148
1,458
1,066
-
2,672
-
-
2,237
-
2,237
Group
2015
Segment profit/(loss)
before tax
Included in the measure of
segment profit are :
Revenue from external
customers
Share of loss of an associate
Change in fair value of
Reversal of impairment loss
on receivables
segment assets are:
- Investment in an associate
- Additions to property,
plant and equipment
- Additions to investment
properties
101
Manufacturing
RM’000
Property
development
RM’000
Property
management
and letting
RM’000
Others
RM’000
Total
RM’000
552
(156)
4,555
(1,380)
3,571
36,387
-
3,486
-
4,357
-
410
275
(780)
44,640
275
(780)
438
(110)
-
5,000
-
-
5,438
(110)
Not included in the measure of
segment profit but provided
to CODM
Depreciation and amortisation
Finance costs
Finance income
Tax expense
(2,233)
(195)
222
(145)
(63)
(26)
(460)
(513)
218
35
(2,259)
(655)
440
(686)
Segment assets
50,839
35,857
64,650
14,491
165,837
419
4
789
-
1,212
-
-
901
-
901
Group
2014
Segment profit/(loss)
before tax
segment profit/(loss) are :
Revenue from external
customers
Share of profit of an associate
Loss on disposal of an associate
Change in fair value of
Impairment loss on receivables
segment assets are:
- Additions to property,
plant and equipment
- Additions to investment
properties
(CONT'D)
Geographical segments
In presenting information on the basis of geographical segments, segment revenue is based on the geographical
location of customers. Segment assets are based on the geographical location of the assets. The amounts of
non-current assets do not include financial instruments (including investments in an associate) and deferred tax
assets.
Revenue
RM’000
Non-current
assets
RM’000
78,871
3,491
3,274
2,096
96,885
-
87,732
96,885
36,991
1,791
2,446
3,098
314
85,040
-
44,640
85,040
Geographical information
2015
Malaysia
United States of America
Romania
Peoples’ Republic of China
2014
Malaysia
Romania
Others
103
Major customer
There is one major customer under the Group’s manufacturing segment with revenue equal to or more than
10% of the Group’s total revenue as below :
Revenue
2015
RM’000
2014
RM’000
20,783
14,874
2015
RM
2014
RM
396,000
870,000
432,000
1,266,000
1,266,000
1,698,000
28. Operating leases - Group
Leases as lessee
Non-cancellable operating lease rentals are payable as follows :
Less than 1 year
Between 1 to 5 years
Certain subsidiaries leased a land, warehouse cum office building and a heritage/cultural property and car park
for a period of 2 to 5 years with an option to renew the leases upon the expiry of the initial lease period.
Leases as lessor
The Group leases out their investment properties (see Note 4). The future minimum lease receivables under
non-cancellable leases are as follows :
Less than one year
Between 1 to 5 years
2015
RM
2014
RM
4,010,490
4,968,253
3,443,682
8,870,831
8,978,743
12,314,513
(CONT'D)
29. Earnings per ordinary share - Group
Basic earnings per ordinary share
The calculation of basic earnings per ordinary share is based on the profit attributable to ordinary shareholders
of the Company of RM11,383,588 (2014 : RM3,162,125) and the weighted average number of ordinary shares
outstanding calculated as follows :
Weighted average number of ordinary shares at 31 December
2015
2014
Issued ordinary shares as at 1 January
Effect of rights issue during the year
Adjustment for bonus issue during the year
Effect of conversion of warrants
210,925,192
10,636
105,462,600
37,706,488
52,731,296
-
Weighted average number of ordinary shares at 31 December
210,935,828
195,900,384
Diluted earnings per ordinary share
The diluted earnings per share for the financial year ended 31 December 2015 is the same as the basic earnings
per share as the effect of anti-dilutive potential shares is ignored in calculating diluted earnings per ordinary
share in accordance with MFRS 133, Earnings per share. 30. Financial instruments
30.1 Categories of financial instruments
Trade and other receivables (excluding prepayments), fixed deposits with a licensed bank and cash and
cash equivalents are categorised as loans and receivables (Note 10) while trade and other payables and
loans and borrowings are categorised as financial liabilities measured at amortised cost (Note 16).
105
30. Financial instruments (Cont'd)
30.2 Net gains and losses arising from financial instruments
Group
Company
2015
RM
2014
RM
2015
RM
2014
RM
927,215
133,038
529,341
-
-
(831,180)
(235,408)
-
-
96,035
426,971
-
-
909,533
1,017,410
218,522
410,085
(11,116,771)
(4,306,743)
-
-
(10,111,203)
(2,862,362)
218,522
410,085
Net (losses)/gains on availablefor-sale financial assets
- recognised in other
comprehensive income
- recognised in profit and loss
- reclassified from equity to
profit or loss
Loans and receivables
Financial liabilities measured at
amortised cost
30.3 Financial risk management
The Group has exposure to the following risks from its use of financial instruments :
• Credit risk
• Liquidity risk
• Market risk
30.4 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 principally from its
receivables from customers. The Company’s exposure to credit risk arises principally from loans and
advances to subsidiaries and financial guarantee given to banks for credit facilities granted to subsidiaries.
(CONT'D)
30.4 Credit risk (Cont'd)
Receivables
Risk management objectives, policies and processes for managing the risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing
basis. Credit evaluations are performed on customers requiring credit over a certain amount.
Exposure to credit risk, credit quality and collateral
At the end of the reporting period, there was no significant concentration of credit risk other than
the trade receivables attributable to two customers from the Group’s manufacturing segment which
collectively accounted for approximately 14% (2014 : 34%) of the Group’s total gross trade receivables.
The maximum exposure to credit risk for the Group is represented by the carrying amounts in the
statements of financial position.
Management has taken reasonable steps to ensure that receivables that are neither past due nor
impaired are measured at their realisable values. A significant portion of the receivables from the Group’s
manufacturing segment are regular customers that have been transacting with the Group. The Group
uses ageing analysis to monitor the credit quality of the receivables. Any receivables having significant
balances past due more than 120 days, which are deemed to have higher credit risk, are monitored
individually.
The Group does not have any significant credit risk from its property development segment as the
properties are predominantly sold to a large number of purchasers with end financing facilities from
banks and financial institutions. Additionally, the credit risk is also mitigated as ownership and rights to
the properties revert to the Group in the event of default and the properties do not suffer from physical
or technological obsolescence.
A segment of the Group’s receivables arose from the renting out of an investment property. The credit
risk from rental revenue is minimal due to the fact that upon execution of the tenancy agreement, the
tenants are required to place security deposits equivalent to three (3) months’ rental.
107
Receivables (Cont'd)
Exposure to credit risk, credit quality and collateral (Cont'd)
The exposure of credit risk for trade receivables as at the end of the reporting period by geographic
region was :
2015
RM’000
2014
RM’000
6,650
368
142
462
9,513
391
289
766
7,622
10,959
Group
Malaysia
Romania
Impairment losses
The Group maintains an ageing analysis in respect of trade receivables only. The ageing of trade receivables
as at the end of the reporting period was:
Gross
RM
Individual
impairment
RM
Collective
impairment
RM
Net
RM
5,861,532
980,022
278,297
693,688
(191,812)
-
5,861,532
980,022
278,297
501,876
7,813,539
(191,812)
-
7,621,727
Group
2015
Not past due
Past due 1 - 30 days
Past due more than 120 days
(CONT'D)
Receivables (Cont'd)
Impairment losses (Cont'd)
Gross
RM
Individual
impairment
RM
Collective
impairment
RM
Net
RM
4,011,362
3,847,878
1,556,223
1,799,415
(255,408)
-
4,011,362
3,847,878
1,556,223
1,544,007
11,214,878
(255,408)
-
10,959,470
Group
2014
Not past due
Past due more than 120 days
The movements in the allowance for impairment losses of trade receivables during the financial year
were:
2015
RM
2014
RM
At 1 January
255,408
255,408
Impairment loss reversed
(63,596)
-
At 31 December
191,812
255,408
Group
The allowance account in respect of trade receivables is used to record impairment losses. Unless the
Group is satisfied that recovery of the amount is possible, the amount considered irrecoverable is written
off against the receivable directly.
Financial guarantees
The Company provides unsecured financial guarantees to banks in respect of banking facilities granted
to certain subsidiaries. The Company monitors on an ongoing basis the results of the subsidiaries and the
repayments made by the subsidiaries.
The maximum exposure to credit risk amounted to RM142,348,750 (2014 : RM45,679,873) representing
the outstanding banking facilities of the subsidiaries as at the end of the reporting period.
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.
Inter company balances
The Company provides unsecured advances to subsidiaries. The Company monitors the results of the
subsidiaries monthly.
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.
Impairment losses
As at the end of the reporting period, there was no indication that the advances to the subsidiaries
are not recoverable. The Company does not specifically monitor the ageing of the advances to the
subsidiaries. Nevertheless, these advances are not regarded as overdue and are repayable on demand.
109
(CONT'D)
30.5 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.
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or
at significantly different amounts. NOTES TO THE FINANCIAL STATEMENTS (CONT'D)
111
30.5 Liquidity risk (Cont'd)
Maturity analysis
The table below summarises the maturity profile of the Group’s and of the Company’s financial liabilities
as at the end of the reporting period based on undiscounted contractual payments :
Carrying
amount
Contractual
interest
rates
Contractual
cash flows
Under 1
year
1–2
years
2–5
years
More
than 5
years
RM
%
RM
RM
RM
RM
RM
38,149,631
7.10 - 7.60
38,149,631
38,149,631
-
-
-
2015
Group
Non-derivative
financial
liabilities
Bank overdraft
Term loans
102,463,269
Trade and
other
payables
80,992,788
1.30 - 5.33 122,343,131
-
221,605,688
80,992,788
241,485,550
8,555,234 8,161,023
36,189,808 1,005,205
70,427,729 35,199,145
43,797,775
-
82,894,673 9,166,228 114,225,504 35,199,145
Company
Financial
guarantees
Other payables
51,932,393
51,932,393
- 142,348,750 142,348,750
-
-
-
-
51,932,393
-
-
-
194,281,143 194,281,143
-
-
-
51,932,393
(CONT'D)
30.5 Liquidity risk (Cont'd)
Maturity analysis (Cont'd)
Carrying
amount
Contractual
interest
rates
Contractual
cash flows
Under 1
year
1–2
years
2–5
years
More
than 5
years
RM
%
RM
RM
RM
RM
RM
2,412,238
7.60 - 8.35
2,412,238
2,412,238
-
-
-
Term loans
43,267,635
1.38 - 5.08
49,811,180
Trade and
other
payables
7,744,331
-
7,744,331
2014
Group
Non-derivative
financial
liabilities
Bank overdrafts
53,424,204
4,473,788 4,496,129
6,919,705
824,626
59,967,749
13,805,731 5,320,755
12,209,234 28,632,029
-
-
12,209,234 28,632,029
Company
Non-derivative
financial
liabilities
Financial
guarantees
Other payables
-
-
45,679,873
45,679,873
-
-
-
50,232,382
-
50,232,382
50,232,382
-
-
-
95,912,255
95,912,255
-
-
-
50,232,382
113
30.6
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates
will affect the Group’s financial position or cash flows.
30.6.1 Interest rate risk
The Group’s variable rate borrowings are exposed to a risk of change in cash flows due to changes in
interest rates. The Group’s exposure to interest rate risk is also extended to interest earning deposits
placed with licensed banks. Short term receivables and payables are not significantly exposed to
interest rate risk.
Risk management objectives policies and processes for managing the risk
The Group and the Company are presently enjoying competitive interest rates which are reviewed and
negotiated on a yearly basis. The Group’s and the Company’s surplus funds are placed in fixed and
short term deposits with licensed banks.
Exposure to interest rate risk
The interest rate profile of the Group’s and the Company’s significant interest-earning and interestbearing financial instruments, based on carrying amounts as at the end of the reporting period was :
2015
RM’000
2014
RM’000
23,372
18,470
(140,613)
(45,680)
10,127
12,036
Group
Fixed rate instruments
Financial assets
Floating rate instruments
Financial liabilities
Company
Fixed rate instruments
Financial assets
(CONT'D)
30.6
Market risk (Cont'd)
30.6.1 Interest rate risk (Cont'd)
Interest rate risk sensitivity analysis
(a) Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through
profit or loss. Therefore, a change in interest rates at the end of the reporting period would not
affect profit or loss.
(b)
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points (bp) in interest rates at the end of the reporting period would have
increased/(decreased) the Group’s post-tax profit by the amounts shown below. This analysis
assumes that all other variables, in particular foreign currency rates, remained constant. There is
no impact on equity arising from exposures to interest rate risk.
Profit or loss
100bp
100bp
increase
decrease
RM’000
RM’000
Group
Variable rate instruments
2015
(1,055)
1,055
2014
(343)
343
30.6.2 Foreign currency risk
The Group is exposed to foreign currency risk on sales, purchases and term loans that are denominated
in a currency other than the functional currency of the Group entities. The currencies giving rise to this
risk is primarily the US Dollar (“USD”) and Singapore Dollar (“SGD”).
115
30.6
Market risk (Cont'd)
30.6.2 Foreign currency risk (Cont'd)
The Group does not hedge these exposures by purchasing forward currency contracts at present given
the current market condition. Where necessary, management will review this policy when the need
arises in the future.
Exposure to foreign currency risk
The Group’s exposure to foreign currency (a currency which is other than the currency of the Group
entities) risk, based on carrying amounts as at the end of the reporting period was:
2015
RM’000
2014
RM’000
1,520
(68)
7,920
(47,770)
1,874
(22)
4,773
(42,545)
(38,398)
(35,920)
-
115
(38,398)
(35,805)
Group
Amounts denominated in USD :
Term loans
Amount denominated in SGD :
Net exposure in the statement of financial position
Currency risk sensitivity analysis
A 5% strengthening of the Ringgit Malaysia (“RM”) against the above currencies at the end of the
reporting period would have increased the Group’s post-tax profit by approximately RM1,440,000
(2014 : RM1,343,000). This analysis assumes that all other variables, in particular interest rates,
remained constant and ignores any impact of forecasted sales and purchases. There is no impact to
equity arising from exposure to currency risk.
A 5% weakening of the RM against the above currencies at the end of the reporting period would
have had equal but opposite effect on the above currencies to the amounts shown above, on the basis
that all other variables remained constant.
(CONT'D)
30.7 Fair value information
The carrying amount of cash and cash equivalents, other receivables, payables and short-term borrowings
reasonable approximate fair values due to their relatively short term nature of these financial instruments.
The table below analyses financial instruments carried at fair value and those not carried at fair value for
which fair value is disclosed, together with their fair values and carrying amounts shown in the statement
of financial position.
Fair value of financial instruments
carried at fair value
Fair value of financial instruments not
carried at fair value
Total fair
Carrying
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
Total
value
amount
RM’000
RM’000
RM’000 RM’000 RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
Term loans variable rate
-
-
-
-
-
-
Other payables
-
-
-
-
-
-
(43,798)
(43,798)
(43,798)
(43,798)
Deposits received
-
-
-
-
-
-
(1,005)
(1,005)
(1,005)
(1,005)
-
-
-
-
-
-
-
-
-
-
952
-
Term loans variable rate
-
-
-
-
-
-
(43,268)
(43,268)
(43,268)
(43,268)
Deposits received
-
-
-
-
-
-
(825)
(825)
(825)
(825)
-
-
-
-
-
-
(44,093)
(44,093)
(44,093)
(44,093)
Total
Group
2015
Financial
liabilities
(102,463) (102,463)
(147,266) (147,266)
(102,463) (102,463)
(147,266) (147,266)
2014
Financial assets
Quoted shares
-
952
952
952
Financial
liabilities
Level 3 fair value
Level 3 fair value is estimated using unobservable inputs for the financial liabilities.
Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future
principal and interest cash flows, discounted at the market rate of interest at the end of the reporting
period. The carrying amount of floating rate term loans approximate their fair values as their effective
interest rate changes accordingly to movements in the market interest rate. In respect of non-current
other payables, the market rate of interest is determined by reference to similar borrowing arrangements
estimated to be 5.33% (2014: Nil).
Non-current deposits collected are refundable upon termination of the lease agreement by tenants
which the Directors do not expect their fair value to differ significantly from its carrying amount.
Transfers between fair values levels
The fair value of an asset to be transferred between levels is determined as of the date of the event or
change in circumstances that caused the transfer.
There has been no transfer between the fair value levels during the financial year (2014: no transfer in
either direction).
31. Capital management
The Group’s objectives when managing capital is to maintain a strong capital base and safeguard the Group’s
ability to continue as a going concern, so as to maintain investor, creditor and market confidence and to sustain
future development of the business. The Directors monitor and are determined to maintain an optimal debt-toequity ratio that complies with debt covenants and regulatory requirements.
117
(CONT'D)
32. Capital commitments
Group
2015
RM
2014
RM
-
2,230,250
145,800,000
102,800,000
145,800,000
105,030,250
Contracted but not provided for
- investment properties
- land held for future development
33. Contingent liabilities, unsecured
The Company has confirmed its continuing financial support to enable certain subsidiaries to meet their
financial obligations as and when they fall due.
34. Significant events
Significant events during the year are as follows :
(i)
On 2 June 2015, the Company through its wholly-owned subsidiary, Ewein Land Sdn. Bhd. incorporated
a 60% owned subsidiary named Ewein Zenith II Sdn. Bhd. (“EZIISB”). The issued and paid up capital of
EZIISB is RM1,000,000 represented by 1,000,000 ordinary shares of RM1.00 each. The principal activity of
EZIISB is property development, construction and property investment.
(ii)
On 13 August 2015, Ewein Zenith Sdn. Bhd. (“EZSB”) entered into a Memorandum of Understanding
(“MOU”) with Consortium Zenith BUCG Sdn. Bhd. (“CZBUCG”) for the proposed development of 3 parcels
of freehold land measuring in aggregate approximately 50 acres to be known as “Wellness City of Dreams”.
The MOU does not have any binding effect until both parties enter into an agreement that is expected to
be signed by both parties within 6 months from the date of the MOU.
(iii) On 28 September 2015, The Esplanade Park Sdn. Bhd., a wholly-owned subsidiary of the Company
acquired 100,000 ordinary shares of RM1.00 each, representing 50% equity interest in the share capital of
Kota Cornwallis Dine & Coffee Sdn. Bhd. (“Kota Cornwallis”) for a purchase consideration of RM100,000
upon which, Kota Cornwallis became an associate of Ewein Berhad.
(iv) On 23 December 2015, the Company’s securities were reclassified from the Industrial Products sector to
the Properties sector.
34. Significant events (Cont'd)
(v)
On 28 December 2015, EZIISB entered into a Sale and Purchase Agreement (“SPA”) with CZBUCG to
acquire a freehold land measuring approximately 4.4252 acres for a purchase consideration of
RM162,000,000 of which, EZIISB has paid a refundable deposit of RM16,200,000 during the financial year.
As at the date of this report, the SPA has yet to be completed.
(vi)
On 31 December 2015, the Company paid RM2,880,000 as deposit to acquire 1,000,000 ordinary shares
of RM1.00 each, representing 50% equity interest in UD Piles Sdn. Bhd. (“UD Piles”). The principal activities
of UD Piles are general contractor and sub-contractor for all kinds of construction work. The completion
of the Share Sales Agreement (“SSA”) is subject to the fulfillment of the conditions precedent contained in
the SSA.
35. Subsequent events
(i) On 14 January 2016, EZSB entered into a MOU as mentioned in Note 34 (ii) with CZBUCG to grant EZSB
the right to purchase 3 parcels of freehold land aggregating approximately 50 acres with vacant possession
at approximately RM2,831,400,000.
(ii) On 1 March 2016, the SSA with UD Piles as mentioned in Note 34 (vi) was terminated and deposit paid of
RM2,880,000 was refunded to the Group.
36. Change in accounting policy
The early adoption of MFRS 15 required the Group to review the measurement and timing of when revenue
is recognised. The adoption of MFRS 15 on the Group’s recognition of revenue and costs of sales affected its
property development activities, whereby:
i) The Group had identified separate performance obligations arising from its property development activities
and have deferred revenue for performance obligations that are only satisfied on delivery to its customers;
and
ii)
Expenses attributable to securing contracts with customers had been capitalised and expensed by reference
to the progress towards complete satisfaction of that performance obligation.
The new accounting policy had been adopted retrospectively. However, as the Group only commenced property
development activities in the current financial year, the adoption of MFRS 15 did not have any significant impact
on the comparative amounts and therefore, no restatement of comparative figures has been made.
The Group also applied MFRS 15 retrospectively using the practical expedient in paragraph C5(c) of MFRS 15,
under which the Group does not disclose the amount of consideration allocated to the remaining performance
obligations or an explanation of when the Group expects to recognise the amount as revenue for the reporting
periods presented before the date of the initial application - i.e. 1 January 2015.
119
(CONT'D)
37. Supplementary information on the breakdown of realised and unrealised profits or losses
The breakdown of the retained earnings of the Group and of the Company as at 31 December, into realised and
unrealised profits, pursuant to paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements,
are as follows :
Group
Company
2015
RM
2014
RM
2015
RM
2014
RM
43,561,510
(4,799,608)
28,813,885
(4,916,580)
10,707,568
-
12,094,880
-
38,761,902
23,897,305
10,707,568
12,094,880
(2,973)
-
-
-
38,758,929
23,897,305
10,707,568
12,094,880
Less : Consolidation adjustments
(4,844,891)
(312,229)
-
-
Total retained earnings
33,914,038
23,585,076
10,707,568
12,094,880
Total retained earnings of the
Company and its subsidiaries:
- Realised
- Unrealised
Total share of retained earnings
of associates
- Realised
The determination of realised and unrealised profits is based on the Guidance of Special Matter No. 1,
Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa
Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants on 20
December 2010.
STATEMENT BY DIRECTORS
PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965
In the opinion of the Directors, the financial statements set out on pages 38 to 119 are drawn up in accordance
with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of
the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of
the Company as of 31 December 2015 and of their financial performance and cash flows for the financial year then
ended.
In the opinion of the Directors, the information set out in Note 37 on page 120 to the financial statements has been
compiled in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits
or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by
the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities
Berhad.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors :
…………………………………..
…………………………………..
Chuah Poh Lim
Penang,
121
PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965
I, Dato’ Ewe Swee Kheng, the Director primarily responsible for the financial management of Ewein Berhad, do
solemnly and sincerely declare that the financial statements set out on pages 38 to 120 are, to the best of my
knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and
by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the above named at Georgetown in the State of Penang on 18 April 2016.
…..…..…..…..…..…..…..…..
Before me :
Goh Suan Bee
(No. P125)
Pesuruhjaya Sumpah
(Commissioner for Oaths)
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF EWEIN BERHAD
Report on the Financial Statements
We have audited the financial statements of Ewein Berhad, which comprise the statements of financial position as at
31 December 2015 of the Group and of the Company, and the statements of profit or loss and other comprehensive
income, changes in equity and cash flows of the Group and of the Company for the year then ended, and a summary
of significant accounting policies and other explanatory information, as set out on pages 38 to 119.
Directors’ Responsibility for the Financial Statements
The Directors of the Company are responsible for the preparation of financial statements so as to give a true and fair
view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and
the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal control
as the Directors determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit
in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on our judgement, including the assessment of risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we
consider internal control relevant to the entity’s preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating
the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the
Company as of 31 December 2015 and of their financial performance and cash flows for the year then ended
in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the
requirements of the Companies Act, 1965 in Malaysia.
123
124 INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF EWEIN BERHAD (CONT'D)
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:
a)
In our opinion, the accounting and other records and the registers required by the Act to be kept by the
Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with
the provisions of the Act.
b)
We have considered the accounts and the auditors’ reports of all the subsidiaries of which we have not acted
as auditors, which are indicated in Note 5 to the financial statements.
c)
We are satisfied that the accounts of the subsidiaries that have been consolidated with the Company’s financial
statements are in form and content appropriate and proper for the purposes of the preparation of the financial
statements of the Group and we have received satisfactory information and explanations required by us for
those purposes.
d)
The audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment
made under Section 174(3) of the Act.
Other Reporting Responsibilities
Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The
information set out in Note 37 on page 120 to the financial statements has been compiled by the Company as required
by the Bursa Malaysia Securities Berhad Listing Requirements and is not required by the Malaysian Financial Reporting
Standards or International Financial Reporting Standards. We have extended our audit procedures to report on the
process of compilation of such information. In our opinion, the information has been properly compiled, in all material
respects, in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits
or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by
the Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities
Berhad.
Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the
Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for
the content of this report.
KPMG Tai Yoon Foo
Firm No : AF 0758
Approval Number : 2948/05/16 (J)
Chartered Accountants
Chartered Accountant
Penang
LIST OF PROPERTIES
125
Details of the Group’s landed/leased properties as at the Latest Practicable Date are set out below:
Name of
registered
owner/
beneficial
owner
Postal
address
and/or
identification
Description/
Existing use
Approximate Tenure/
age of
Expiry of
building
lease
Land/
(Built-up)
Area
Date of
(square
Restrictions Land use Major
certificate
feet)
in interest conditions encumbrances of fitness
Audited
NBV as at
31.12.2015
RM
TASB
H.S. (D) 43450, Headquarters 31 years
P.T. 805, and
and Factory
H.S. (D) 27771,
P.T. 807 both in
Mukim 1,
Daerah
Seberang Perai
Tengah,
Pulau Pinang
Leasehold/
79,953/
P.T. 805 (83,504)
07.03.2042;
P.T. 807 03.10.2042
-
Industrial
Nil
07.03.2002, 2,030,402
18.10.1990,
11.11.1989,
24.1.1985
TASB
H.S. (D) 38123, Factory
P.T. 1090,
Mukim 1,
Daerah
Seberang Perai
Tengah,
Pulau Pinang
30 years
Leasehold/
07.03.2042
43,751/
(35,803)
-
Industrial
Nil
02.11.1985
1,096,875
KPTSB
H.S. (D) 36653, Commercial
P.T. 2673,
purpose
Mukim 1,
Daerah
Seberang Perai
Tengah,
Pulau Pinang
26 years
Leasehold/
05.08.2048
38,148/
(39,297)
-
Industrial
1 Charge
15.01.1990
registered in
favour of
OCBC Bank (M)
Berhad for
term loans
to KPTSB.
8,000,000
H.S. (D) 41591, Commercial
P.T. 2684,
purpose
Mukim 1,
Daerah
Seberang Perai
Tengah,
Pulau Pinang
27 years
Leasehold/
01.11.2048
36,655/
(29,125)
-
Industrial
1 Charge
15.01.1990
registered in
favour of
OCBC Bank (M)
Berhad for
term loans
to KPTSB.
H.S. (D) 44144, Factory
P.T. NO. 806,
Mukim 01,
Daerah
Seberang Perai
Tengah, Pulau
Pinang.
22 years
Leasehold/
07.03.2042
39,974/
(37,137)
-
Industrial
Nil
TASB
04.08.1993
3,025,000
126 LIST OF PROPERTIES
Name of
registered
owner/
beneficial
owner
Postal
address
and/or
identification
TASB
P.T. 1143 Seri
Tanjung Pinang
Seksyen 1,
Bandar Tanjong
Pinang
H.S (D) 15042
(2 Denai Bayu
6, Seri Tanjung
Pinang, Tanjung
Tokong, 10470
Penang)
TASB
Description/
Existing use
(CONT’D)
Approximate Tenure/
age of
Expiry of
building
lease
3 storey
3 year
Semi
Detached/
Resort
house for
management
Land/
(Built-up)
Area
Date of
(square
certificate
feet)
Audited
NBV as at
31.12.2015
RM
Freehold
5,685/
(5,040)
Nil
Nil
Assigned to
Public Bank
Berhad
28.03.2013
4,400,000
H.S.(D) 49827, Single storey 16 years
Lot 4409,
terrace house/
Mukim 16,
Staff quarters
Seberang Perai
Tengah,
Pulau Pinang
(28, Lorong
Bidara 23,
14020, Bukit
Mertajam)
Freehold
1,076/
(807)
Nil
Building
Nil
02.02.2000
80,925
TASB
Lot 4438,
terrace house/
Mukim 16,
Staff quarters
Seberang Perai
Tengah,
Pulau Pinang
(31, Lorong
Bidara 23,
14020, Bukit
Mertajam)
Freehold
1,076/
(807)
Nil
Building
Nil
02.02.2000
76,328
TASB
Lot 4437,
terrace house/
Mukim 16,
Staff quarters
Seberang Perai
Tengah, Pulau
Pinang
(33, Lorong
Bidara 23,
14020, Bukit
Mertajam)
Freehold
1,100/
(807)
Nil
Building
Nil
02.02.2000
76,328
LIST OF PROPERTIES (CONT’D)
Name of
registered
owner/
beneficial
owner
Postal
address
and/or
identification
Description/
Existing use
127
Approximate Tenure/
age of
Expiry of
building
lease
Land/
(Built-up)
Area
Date of
(square
certificate
feet)
Audited
NBV as at
31.12.2015
RM
TASB
Lot 4436,
terrace house/
Mukim 16,
Staff quarters
Seberang Perai
Tengah, Pulau
Pinang
(35, Lorong
Bidara 23,
14020, Bukit
Mertajam)
Freehold
1,100/
(807)
Nil
Building
Nil
02.02.2000
76,328
TASB
Lot 4435,
terrace house/
Mukim 16,
Staff quarters
Seberang Perai
Tengah, Pulau
Pinang
(37, Lorong
Bidara 23,
14020, Bukit
Mertajam)
Freehold
1,100/
(807)
Nil
Building
Nil
02.02.2000
76,328
TASB
Lot 4434,
terrace house/
Mukim 16,
Staff quarters
Seberang Perai
Tengah, Pulau
Pinang
(39, Lorong
Bidara 23,
14020, Bukit
Mertajam)
Freehold
1,076/
(807)
Nil
Building
Nil
02.02.2000
76,328
TASB
Lot 4417,
terrace house/
Mukim 16,
Staff quarters
Seberang Perai
Tengah, Pulau
Pinang
(44, Lorong
Bidara 23,
14020, Bukit
Mertajam)
Freehold
1,100/
(807)
Nil
Building
Nil
02.02.2000
76,328
Name of
registered
owner/
beneficial
owner
Postal
address
and/or
identification
Description/
Existing use
(CONT’D)
Approximate Tenure/
age of
Expiry of
building
lease
Land/
(Built-up)
Area
Date of
(square
certificate
feet)
Audited
NBV as at
31.12.2015
RM
TASB
Lot 4418,
terrace house/
Mukim 16,
Staff quarters
Seberang Perai
Tengah, Pulau
Pinang
(46, Lorong
Bidara 23,
14020, Bukit
Mertajam)
Freehold
1,100/
(807)
Nil
Building
Nil
02.02.2000
76,328
TASB
Lot 4419,
terrace house/
Mukim 16,
Staff quarters
Seberang Perai
Tengah, Pulau
Pinang
(48, Lorong
Bidara 23,
14020, Bukit
Mertajam)
Freehold
1,100/
(807)
Nil
Building
Nil
02.02.2000
76,328
TASB
Lot 4420,
terrace house/
Mukim 16,
Staff quarters
Seberang Perai
Tengah, Pulau
Pinang
(50, Lorong
Bidara 23,
14020, Bukit
Mertajam)
Freehold
1,100/
(807)
Nil
Building
Nil
02.02.2000
76,328
TASB
Lot 4427,
terrace house/
Mukim 16,
Staff quarters
Seberang Perai
Tengah, Pulau
Pinang
(53, Lorong
Bidara 23,
14020, Bukit
Mertajam)
Freehold
1,100 /
(807)
Nil
Building
Nil
02.02.2000
76,328
LIST OF PROPERTIES (CONT’D)
Name of
registered
owner/
beneficial
owner
Postal
address
and/or
identification
Description/
Existing use
129
Approximate Tenure/
age of
Expiry of
building
lease
Land/
(Built-up)
Area
Date of
(square
certificate
feet)
Audited
NBV as at
31.12.2015
RM
TASB
Lot 4426,
terrace house/
Mukim 16,
Staff quarters
Seberang Perai
Tengah, Pulau
Pinang
(55, Lorong
Bidara 23,
14020, Bukit
Mertajam)
Freehold
1,100/
(807)
Nil
Building
Nil
02.02.2000
76,328
TASB
Lot 4425,
terrace house/
Mukim 16,
Staff quarters
Seberang Perai
Tengah, Pulau
Pinang
(57, Lorong
Bidara 23,
14020, Bukit
Mertajam)
Freehold
1,100/
(807)
Nil
Building
Nil
02.02.2000
76,328
TASB
Lot 4424,
terrace house/
Mukim 16,
Staff quarters
Seberang Perai
Tengah, Pulau
Pinang
(59, Lorong
Bidara 23,
14020, Bukit
Mertajam)
Freehold
1,100/
(807)
Nil
Building
Nil
02.02.2000
76,328
TASB
Lot 4407,
terrace house/
Mukim 16,
Staff quarters
Seberang Perai
Tengah, Pulau
Pinang
(24, Lorong
Bidara 23,
14020, Bukit
Mertajam)
Freehold
1,100/
(807)
Nil
Building
Nil
02.02.2000
84,235
Name of
registered
owner/
beneficial
owner
Postal
address
and/or
identification
Description/
Existing use
(CONT’D)
Approximate Tenure/
age of
Expiry of
building
lease
Land/
(Built-up)
Area
Date of
(square
certificate
feet)
Audited
NBV as at
31.12.2015
RM
TASB
Lot 4411,
terrace house/
Mukim 16,
Staff quarters
Seberang Perai
Tengah, Pulau
Pinang
(32, Lorong
Bidara 23,
14020, Bukit
Mertajam)
Freehold
1,100/
(807)
Nil
Building
Nil
02.02.2000
84,235
TASB
Lot 4406,
terrace house/
Mukim 16,
Staff quarters
Seberang Perai
Tengah,
Pulau Pinang
(22, Lorong
Bidara 23,
14020, Bukit
Mertajam)
Freehold
1,100/
(807)
Nil
Building
Nil
02.02.2000
84,194
ELSB
Suite 01-01,
Menara IJM/
Menara IJM
Commercial
Land
purpose
No 1, Lebuh
Tunku Kudin 3,
11700 Gelugor
Penang
4 year
Freehold
94,413/
(4,350)
Nil
Building
(16 Storey
office and
7 storey
car park)
Assigned to
Public Bank
Berhad
31.05.2012
65,000,000
ELSB
H.S (D) 117786, Condominium 1 year
Lot No. 691,
Seksyen 8,
Daerah Timor
Laut , Penang
Freehold
129,763
Nil
Building
Assigned to
Public Bank
Berhad
22.10.2015
3,937,076
ANALYSIS OF SHAREHOLDINGS
131
AS AT 6 APRIL 2016
Authorised Share Capital
Issued and fully paid-up Share Capital
Class of Shares
Voting Rights
: RM250,000,000.00
: RM110,853,443.00
: Ordinary Shares of RM0.50 each
: On show of hands - One vote per person
On a poll - One vote for one ordinary share
ANALYSIS OF SHAREHOLDINGS AS AT 6 APRIL 2016
Size of shareholdings
1 - 99
100 – 1,000
1,001- 10,000
10,001 - 100,000
100,001 - less than 5% of issued shares
5% and above of issued shares
Total
No. of
shareholders
12
775
686
422
70
3
1,968
% of total
shareholders
0.61
39.38
34.86
21.44
3.56
0.15
100.00
No. of
shares
214
135,916
3,975,300
15,198,294
42,592,300
159,804,862
221,706,886
% of total
issued capital
0.00
0.06
1.79
6.86
19.21
72.08
100.00
SUBSTANTIAL SHAREHOLDERS AS AT 6 APRIL 2016
<__________________ Number of Shares Held _________________>
Name
Hijauwasa Sdn. Bhd.
Med-Bumikar Mara Sdn. Bhd.
Direct
93,267,909
66,536,953
300,000
%
42.07
30.01
0.14
Deemed
93,267,909#
%
42.07#
Notes:# Deemed interest by virtue of his substantial shareholdings in Hijauwasa Sdn. Bhd.
DIRECTORS’ SHAREHOLDINGS AS AT 6 APRIL 2016
<__________________ Number of Shares Held _________________>
Name
Chuah Poh Lim
Poh Chee Kwan
Ewe Lay Khim
Tan Yen Yeow
Direct
300,000
200,000
20,000
30,000
-
%
0.14
0.09
0.01
0.01
-
Note:* Deemed interest by virtue of his substantial shareholdings in Hijauwasa Sdn. Bhd.
Deemed
93,267,909*
-
%
42.07*
-
132 ANALYSIS OF SHAREHOLDINGS
AS AT 6 APRIL 2016 (CONT’D)
THIRTY LARGEST SHAREHOLDERS AS AT 6 APRIL 2016
Name of Shareholders
No. of Shares
%
1. HIJAUWASA SDN BHD
70,667,909
31.87
2. MED-BUMIKAR MARA SDN BHD
66,536,953
30.01
3. AMSEC NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR HIJAUWASA SDN BHD
22,600,000
10.19
4. 555 CAPITAL SDN BHD
8,230,000
3.71
5. SP METALTECH SDN. BHD.
5,379,100
2.43
6. WINGS LOGISTIC SDN BHD
5,000,000
2.26
7. WONG WEI KHIN
2,400,000
1.08
8. LIM SENG CHEE
1,247,000
0.56
9. KENANGA NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR LIM KIAM LAM (001)
1,230,100
0.55
10. DB (MALAYSIA) NOMINEE (TEMPATAN) SENDIRIAN BERHAD
MIDF AMANAH ASSET MANAGEMENT BERHAD FOR UNIVERSITI MALAYA
(JG488)
985,000
0.44
11. ANG SOO KWANG
946,000
0.43
12. ANG SWEE BENG
946,000
0.43
13. RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR NG L' YP-HAU
922,500
0.42
14. LEONG KAM CHEE
800,000
0.36
PLEDGED SECURITIES ACCOUNT FOR LEONG KAM CHEE (002)
700,000
0.32
133
THIRTY LARGEST SHAREHOLDERS AS AT 6 APRIL 2016 (CONT'D)
Name of Shareholders
No. of Shares
%
16. AMANAHRAYA TRUSTEES BERHAD
MIDF AMANAH STRATEGIC FUND
655,000
0.30
17. LEE SIEW PEI
638,000
0.29
18. MAYBANK NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR LIEW SENG KEE
560,000
0.25
MIDF AMANAH ASSET MANAGEMENT BERHAD FOR RENESAS
SEMICONDUCTOR (M) SDN BHD (JF290)
480,000
0.22
20. CIMB GROUP NOMINEES (TEMPATAN) SDN BHD
EXEMPT AN FOR FORTRESS CAPITAL ASSET MANAGEMENT (M) SDN BHD
460,000
0.21
21. LIANG CHEE FONG
450,000
0.20
22. YEAP KING SHING
429,000
0.19
23. QUEK SER HWA
400,000
0.18
24. FAMI TAUFEQ BIN FAKARUDIN
397,700
0.18
25. GOH CHEE HOH
380,000
0.17
26. KEE SONG SWA
365,000
0.16
27. GOOI SOON LEE
340,000
0.15
MIDF AMANAH ASSET MANAGEMENT BERHAD FOR LEMBAGA TABUNG
ANGKATAN TENTERA (JG441)
328,100
0.15
MIDF AMANAH ASSET MANAGEMENT BERHAD FOR THE MALAYSIAN
ESTATES STAFF PROVIDENT FUND (JF257)
320,000
0.14
30. CHAN WOOI KEONG
307,300
0.14
195,100,662
87.99
TOTAL
Total Number of Warrants
Total Number of Warrants Outstanding
Exercise Price Per Warrant
: 75,712,810
: 75,712,810
: RM0.61 each
ANALYSIS OF WARRANT HOLDINGS AS AT 6 APRIL 2016
Size of shareholdings
1 - 99
100 – 1,000
1,001- 10,000
10,001 - 100,000
100,001 - less than 5% of issued warrants
5% and above of issued warrants
Total
No. of
Warrant
Holders
791
76
447
509
112
1
1,936
% of total
Warrant
Holders
40.86
3.93
23.09
26.29
5.78
0.05
100.00
No. of
Warrants
58,988
49,623
2,559,695
18,635,883
29,809,632
24,598,989
75,712,810
% of
total issued
Warrants
0.08
0.07
3.38
24.61
39.37
32.49
100.00
SUBSTANTIAL WARRANT HOLDERS AS AT 6 APRIL 2016
Name
Hijauwasa Sdn. Bhd.
<_______________ Number of Warrants Held _________________>
Direct
%
Deemed
%
25,598,989
33.81
120,007
0.16
25,598,989#
33.81#
Note:# Deemed interest by virtue of his substantial warrant holdings in Hijauwasa Sdn. Bhd.
DIRECTORS WARRANT HOLDINGS AS AT 6 APRIL 2016
Name
Chuah Poh Lim
Poh Chee Kwan
Ewe Lay Khim
Tan Yen Yeow
<________________ Number of Warrants Held ________________>
Direct
%
Deemed
%
120,007
0.16
25,598,989*
33.81*
69,712
0.09
8,202
0.01
12,302
0.02
-
Note:* Deemed interest by virtue of his substantial warrant holdings in Hijauwasa Sdn. Bhd.
135
THIRTY LARGEST WARRANT HOLDERS AS AT 6 APRIL 2016
Name of Warrant Holders
No. of Warrants
%
24,598,989
32.49
PLEDGED SECURITIES ACCOUNT FOR LEONG KAM CHEE (002)
1,500,000
1.98
3. CHONG YING CHOY
1,000,000
1.32
4. HSBC NOMINEES (ASING) SDN BHD
EXEMPT AN FOR BANK JULIUS BAER & CO. LTD. (SINGAPORE BCH)
1,000,000
1.32
5. AMSEC NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR HIJAUWASA SDN BHD
1,000,000
1.32
6. LIM TIONG CHUAN
818,000
1.08
7. LIM HOON PENG
699,000
0.92
8. LIM JIT HAW
655,000
0.87
9. TANG CHEK MEN
650,000
0.86
10. NG CHUN MIN
635,800
0.84
11. CIMSEC NOMINEES (TEMPATAN) SDN BHD
CIMB BANK FOR PARVIN HARIAH NATCHIAR BINTI HJ MOHD KHAJA
HAMEED MARICAR (MY1262)
539,200
0.71
12. CHAN WOOI KEONG
535,000
0.71
13. LIM SAY OOI
528,000
0.70
PLEDGED SECURITIES ACCOUNT FOR NGU YII HIENG
474,800
0.63
15. TENG JOO LONG
430,000
0.57
1. HIJAUWASA SDN BHD
THIRTY LARGEST WARRANT HOLDERS AS AT 6 APRIL 2016 (CONT'D)
Name of Warrant Holders
No. of Warrants
%
16. MAYBANK NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR STUART SAW TEIK SIEW
400,000
0.53
17. ANG SOO KWANG
387,928
0.51
18. ANG SWEE BENG
387,928
0.51
19. PUBLIC NOMINEES (TEMPATAN) SDN BHD
PLEDGED SECURITIES ACCOUNT FOR WONG SING LEE (E-JCL)
361,900
0.48
20. LIM KOOI CHOO
355,000
0.47
21. WONG SENG MOW
353,500
0.47
22. SEH HONG PENG
340,000
0.45
23. LIM THUNG XUAN
325,000
0.43
24. NG CHOY NYEK
320,982
0.42
25. THUM WENG FAI
315,000
0.42
26. KONG YENG PHOOI
300,000
0.40
27. KONG MEE HUA
300,000
0.40
28. NG SEA YONG
300,000
0.40
29. KOGILAVANAN A/L KRISHNASAMY
300,000
0.40
30. KOMATHI LALITHA A/P VEERIAH
300,000
0.40
40,111,027
53.01
TOTAL
NOTICE OF TENTH ANNUAL GENERAL MEETING
137
NOTICE IS HEREBY GIVEN that the Tenth Annual General Meeting of the Company will be held at Langkawi & Tioman
Room, Level 1, Evergreen Laurel Hotel Penang, 53 Persiaran Gurney, 10250 Penang, on Tuesday, 31 May 2016 at
10.00 am for the following purposes :AGENDA
As Ordinary Business:
1.
To receive the Directors’ Report and the Audited Financial Statements for the financial year Please refer to
ended 31 December 2015 together with Auditors’ Report thereon.
Explanatory
Note
2.
To approve the payment of a single tier first and final dividend of 0.5 sen per ordinary share of
RM0.50 each for the financial year ended 31 December 2015.
Resolution 1
3.
To approve the payment of Director’s fee of RM145,000.00 for the financial year ended
31 December 2015.
Resolution 2
4.
To re-elect Dato’ Ewe Swee Kheng who retires in accordance with Article 114(1) of the
Company’s Articles of Association.
Resolution 3
5.
To re-elect Dato’ Khor Ah Hua @ Khor Choo Fong who retires in accordance with Article 114(1)
of the Company’s Articles of Association.
Resolution 4
6.
To re-elect Mr Tan Yen Yeow who retires in accordance with Article 118 of the Company’s
Articles of Association.
Resolution 5
7.
To re-elect Ms Ewe Lay Khim who retires in accordance with Article 118 of the Company’s
Articles of Association.
Resolution 6
8.
To consider and, if thought fit, to pass the following resolution pursuant to Section 129 of the
Companies Act, 1965:-
Resolution 7
“That Dato’ Seri Ewe Tiong Hor who retires in accordance with Section 129(2) of the Companies
Act, 1965, be hereby re-appointed as Director of the Company in accordance with Section
129(6) of the Companies Act, 1965 to hold office until the next Annual General Meeting.”
138 NOTICE OF TENTH ANNUAL GENERAL MEETING
9.
(CONT’D)
To re-appoint Messrs KPMG as auditors of the Company for the ensuing year and to authorise
the Directors to fix their remuneration.
Resolution 8
As Special Business :
To consider and if thought fit, to pass with or without modifications the following resolutions:10. ORDINARY RESOLUTION
AUTHORITY TO ISSUE SHARES
“That pursuant to Section 132D of the Companies Act, 1965, and subject to the approvals
of the relevant Governmental and/or regulatory authorities, the Directors be and are hereby
empowered to issue shares in the Company, at such time and upon such terms and conditions
and for such purposes as the Directors may, in their absolute discretion deem fit, provided that
the aggregate number of shares issued pursuant to this resolution in any one financial year
does not exceed 10% of the issued share capital of the Company for the time being and that
the Directors be and are also empowered to obtain the approval from Bursa Malaysia Securities
Berhad for the listing and quotation of the additional shares so issued and that such authority
shall continue to be in force until the conclusion of the next Annual General Meeting of the
Company.”
Resolution 9
11. ORDINARY RESOLUTION
RETENTION OF DATO’ KHOR AH HUA @ KHOR CHOO FONG AS AN INDEPENDENT
NON-EXECUTIVE DIRECTOR OF THE COMPANY
“THAT subject to the passing of Ordinary Resolution 4, approval be and is hereby given to Resolution 10
Dato’ Khor Ah Hua @ Khor Choo Fong to continue to act as an Independent Non-Executive
Director of the Company after the cumulative term of nine (9) years, in compliance with the
recommendation of Malaysian Code of Corporate Governance 2012.”
12. To transact any other business for which due notices shall have been given in accordance with
the Companies Act, 1965.
By Order of the Board,
Chee Wai Hong (BC/C/1470)
Company Secretary
Penang
Date: 29 April 2016
NOTICE OF TENTH ANNUAL GENERAL MEETING (CONT’D)
Notes: 1. A proxy may but need not be a member of the Company and the proxy need not be an advocate or an approved company
auditor or a person approved by the Registrar of Companies and the provisions of Section 149(1)(b) of the Companies Act,
1965 shall not apply to the Company. Where a member appoints two (2) proxies or more, the appointments shall be invalid
unless he specifies the proportions of his holdings to be represented by each proxy.
2. Where a Member of the Company is an exempt authorised nominee which hold ordinary shares in the Company for multiple
beneficial owner in one (1) securities account (“Omnibus Account”), there is no limit to the number of proxies which the
exempt authorised nominee may appoint in respect of each Omnibus Account its holds.
An exempt authorised nominee refers to an authorised nominee defined under the Securities Industry (Central Depositories)
Act 1991 (“Central Depositories Act”) which is exempted from compliance with the provisions of subsection 25A(1) of Central
Depositories Act.
3. The proxy form must be duly completed and deposited at the Registered Office of the Company, 51-13-A Menara BHL Bank,
Jalan Sultan Ahmad Shah, 10050 Penang not less than forty-eight (48) hours before the time appointed for holding the
meeting.
4. If the appointor is a corporation, the form must be executed under its Common Seal or under the hand of its attorney.
5. For purpose of determining who shall be entitled to attend this meeting, the Company shall be requesting Bursa Malaysia
Depository Sdn Bhd to make available to the Company pursuant to Article 81 of the Articles of Association of the Company
and Paragraph 7.16(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, a Record of Depositors
(“ROD”) as at 20 May 2016 and only a Depositor whose name appears on such ROD shall be entitled to attend, speak and
vote at this meeting or appoint proxy to attend and/or speak and/or vote in his/her behalf.
139
140 NOTICE OF TENTH ANNUAL GENERAL MEETING
(CONT’D)
Explanatory Note on Ordinary Business
The Agenda 1 is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not
require a formal approval of shareholders of the Company. Hence, Agenda 1 is not put forward for voting.
Explanatory Notes on Special Business
Resolution 9 – Authority to issue shares pursuant to Section 132D of the Companies Act, 1965
The proposed Resolution 9, if passed, primarily to renew the mandate to give authority to the Board of Directors to
issue and allot shares in the Company up to an amount not exceeding 10% of the total issued capital of the Company
for the time being, at anytime in their absolute discretion without convening a general meeting. This authority, unless
revoked or varied by the shareholders of the Company in general meeting, will expire at the conclusion of the next
Annual General Meeting.
As at the date of this Notice, the Company has not issued any new shares pursuant to Section 132D of the Companies
Act, 1965 under the general authority which was approved at the Ninth Annual General Meeting held on 27 May
2015 and which will lapse at the conclusion of the Tenth Annual General Meeting to be held on 31 May 2016. A
renewal of this authority is being sought at the Tenth Annual General Meeting under proposed Resolution 9.
This authority if granted will provide flexibility to the Company for any possible fund raising activities, including
but not limited to further placing of shares, for purpose of funding future investment project(s), working capital,
acquisition(s) and/or settlement of banking facility(ies).
Resolution 10 – Retention of Dato’ Khor Ah Hua @ Khor Choo Fong as an Independent Non-Executive
Director of the Company
Both the Nominating Committee and Board have assessed the independence of Dato’ Khor Ah Hua @ Khor Choo
Fong, who has served as an Independent Non-Executive Director of the Company since 11 January 2008 and will
reach the nine years term limit on 10 January 2017, and recommended him to continue to act as Independent NonExecutive Director of the Company after the said nine years term based on the following justifications:i.
ii.
iii.
iv.
He fulfilled the criteria under the definition of Independent Director as stated in the Main Market Listing
Requirements of Bursa Malaysia Securities Berhad.
He is able to provide independent judgment, objectively and check and balance to the Board.
He has performed his duties and responsibilities diligently and in the best interest of the Company without being
subjected to the influence of Management.
He devotes sufficient time and attention to his professional obligations for an informed and balanced decision
making.
NOTICE OF TENTH ANNUAL GENERAL MEETING (CONT’D)
STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING
(Pursuant to Rule 8.27(2) of the Listing Requirements of Bursa Malaysia Securities Berhad)
As at date of this notice, there are no individuals who are standing for election as Directors (excluding the above
Directors who are standing for re-election) at this forthcoming Annual General Meeting.
The details of any interest in the securities of the Company and its subsidiaries (if any) held by the said Directors are
stated on page 34 of the financial statements in Annual Report 2015.
ANNUAL REPORT 2015
The Annual Report 2015 is in CD-ROM format. Printed copy of the Annual Report shall be provided to the shareholder
upon request within four (4) market days from the date of receipt of the verbal or written request. A copy of the
Annual Report can also be downloaded at http://www.eweinberhad.com/.
Shareholders who wish to receive the printed Annual Report, kindly contact Mr Alfred John at telephone 603-2692 4271
ext 360 or e-mail your request to [email protected].
141
142 NOTICE OF DIVIDEND ENTITLEMENT
NOTICE IS HEREBY GIVEN that a Single Tier First and Final Dividend of 0.5 sen per ordinary share of RM0.50 each for
the financial year ended 31 December 2015, if approved, will be paid on 24 August 2016 to depositors registered in
the Record of Depositors at the close of business on 25 July 2016.
A depositor shall qualify for entitlement to the Dividend only in respect of:
a. Shares transferred into the depositor’s securities account before 4.00 p.m. on 25 July 2016.
b. Shares bought on the Bursa Malaysia Securities Berhad (“Bursa Securities”) on a cum entitlement basis according
to the Rules of the Bursa Securities.
By Order of the Board,
Chee Wai Hong (BC/C/1470)
Company Secretary
Penang
Date: 29 April 2016
PROXY FORM
* I / We
(Full Name in Block Letters)
of
(Address)
being a * member / members of the abovenamed Company, hereby appoint
of
or failing him,
(Address)
of
(Address)
as * my / our proxy to vote for * me / us on * my / our behalf at the Tenth Annual General Meeting of the Company to be held at
Langkawi & Tioman Room, Level 1, Evergreen Laurel Hotel Penang, 53 Persiaran Gurney, 10250 Penang, on Tuesday, 31 May 2016 at
10:00 a.m. and any adjournment thereof.
AGENDA
1. To receive the Audited Financial Statements for the year ended 31 December 2015 together with the Reports of the Directors and
Auditors thereon
Resolutions
For
Against
Ordinary Business:
2. To approve the payment of a single tier first and final dividend of 0.5 sen per ordinary share
Resolution 1
of RM0.50 each for the financial year ended 31 December 2015.
3. To approve the payment of Directors’ fees for the financial year ended 31 December 2015
Resolution 2
4. To re-elect Dato’ Ewe Swee Kheng as Director
Resolution 3
5. To re-elect Dato’ Khor Ah Hua @ Khor Choo Fong as Director
Resolution 4
6. To re-elect Mr Tan Yen Yeow as Director
Resolution 5
7. To re-elect Ms Ewe Lay Khim as Director
Resolution 6
8. To re-appoint Dato’ Seri Ewe Tiong Hor as Director
Resolution 7
9. To re-appoint Messrs. KPMG as Auditors and to authorise the Directors to fix the Auditors’
Resolution 8
remuneration
Special Business:
10. To authorize the Directors to issue shares pursuant to Section 132D of Companies Act, 1965
Resolution 9
11. To retain Dato’ Khor Ah Hua @ Khor Choo Fong as an Independent Non-Executive Director
Resolution
of the Company
10
Please indicate with an “x” in the appropriate spaces provided above on how you wish your vote to be cast. If no specific direction for
voting is given, the proxy may vote as he thinks fit.
No. of shares held
Signed this________day of ___________, 2016.
Notes: _____________________________
Signature of Member(s)
1. A proxy may but need not be a member of the Company and the proxy need not be an advocate or an approved company auditor or a person approved by the
Registrar of Companies and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company. Where a member appoints two (2)
proxies or more, the appointments shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.
2. Where a Member of the Company is an exempt authorised nominee which hold ordinary shares in the Company for multiple beneficial owner in one (1) securities
account (“Omnibus Account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each Omnibus Account
its holds.
An exempt authorised nominee refers to an authorised nominee defined under the Securities Industry (Central Depositories) Act 1991 (“Central Depositories Act”)
which is exempted from compliance with the provisions of subsection 25A(1) of Central Depositories Act.
3. This proxy form must be duly completed and deposited at the Registered Office of the Company, 51-13-A Menara BHL Bank, Jalan Sultan Ahmad Shah, 10050
Penang not less than forty-eight (48) hours before the time appointed for holding the meeting.
4. If the appointor is a corporation, this form must be executed under its Common Seal or under the hand of its attorney.
5. For purpose of determining who shall be entitled to attend this meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to make available
to the Company pursuant to Article 81 of the Articles of Association of the Company and Paragraph 7.16(2) of the Main Market Listing Requirements of Bursa
Malaysia Securities Berhad, a Record of Depositors (“ROD”) as at 20 May 2016 and only a Depositor whose name appears on such ROD shall be entitled to attend,
speak and vote at this meeting or appoint proxy to attend and/or speak and/or vote in his/her behalf.
Please fold across the line and close
Stamp
The Company Secretary
EWEIN BERHAD
(COMPANY NO: 742890-W)
Jalan Sultan Ahmad Shah
10050 Penang
Please fold across the line and close

Ewein Berhad Annual Report 2015

Transcription

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