weida (m) bhd.

Transcription

weida (m) bhd.

VISION STATEMENT
MISSION STATEMENT
“To be a Leading Innovative
Utilities Infrastructure Specialist”
“Committed to the
Improvement and Advancement
of Human Living Standards”
MALAYSIA
THE PHILIPPINES
www.weida.com.my
www.weida.com.ph
PENINSULAR MALAYSIA
MANILA
office:
No. 21 & 23, Jalan PJU 3/49, PJU 3,
Sunway Damansara Technology Park,
47810 Petaling Jaya, Selangor Darul Ehsan.
Tel: +603-7806 2002 Fax: +603-7806 5005
Email: [email protected]
manufacturing plant:
Lot 109, Jalan Permata,
Arab-Malaysian Industrial Park,
71800 Nilai, Negeri Sembilan, Darul Khusus.
Tel: +606-799 0990 Fax: +606-799 0949
COVER RATIONALE
This year’s cover reflects WEIDA (M) BHD’s achievements
over the years. From its humble beginning as a mere
manufacturer of storage tanks and pipelines, WEIDA today
has carved a name for itself as a key player in the water and
wastewater industry, both nationally and internationally by
offering a wide range of products and services. WEIDA is
setting itself to be a global player with one goal in mind.
From Good to Great.
SARAWAK
CONTENTS
1
Business Activities
2
Lot 11 & 13, Block 3,
Dasmarinas Technopark,
Governor’s Drive,
Dasmarinas Cavite 4114, Philippines.
Tel: +632-529 6193, 529 6195
Fax: (046) 852 2846
office:
Wisma Hock Peng, Ground - 2nd Floor,
123, Green Heights, Jalan Lapangan Terbang,
P.O. Box 2424, 93748 Kuching, Sarawak.
Tel: +6082-456 456 Fax: +6082-459 000
Lot 472, Block 8, MTLD, Sejingkat Industrial Park,
Jalan Bako, Petra Jaya, P.O. Box 1807,
93736 Kuching, Sarawak.
Tel: +6082-435 435 Fax: +6082-433 933
Corporate Structure
office:
3/F, BT & T Center,
20E. Rodriguez Jr. Avenue (C-5)
Brgy. Bagumbayan, Libis,
Quezon City 1110, Philippines.
Tel: +632-706 2002 Fax: +632-706 4966
Statutory Financial Statements
Directors’ Report
44
Notice Of Eleventh Annual General Meeting
15
Statement By Directors
48
Notice Of Dividend Entitlement And Payment
17
Statutory Declaration
48
Corporate Information
18
Independent Auditors’ Report
49
Board Of Directors
19
Balance Sheets
51
Profile Of Directors
20
Income Statements
53
Statement From Group Managing Director
22
Statement Of Changes In Equity
54
Financial Highlights
27
Cash Flow Statements
57
Statement On Corporate Social Responsibility
28
Notes To The Financial Statements
60
Statement On Corporate Governance
30
Additional Compliance Information
36
List Of Properties
120
Statement Of Directors’ Responsibilities
37
Analysis Of Shareholdings
122
Report Of The Audit Committee
38
Form Of Proxy
Statement On Internal Control
43
Jalan Maigold, Taman Desa Senadin Phase 1,
98100 Miri, Sarawak.
Tel: +6016-879 3322
SABAH
office:
2-9-1 & 2-9-2, 8th Floor, Wawasan Plaza,
88000 Kota Kinabalu, Sabah.
P.O.Box 21276, 88770 Luyang, Kota Kinabalu, Sabah.
Tel: +6088-264 555 Fax : +6088-262 525
Lot 57, SEDCO Light Industrial Estate,
Lok Kawi, 88801 Kota Kinabalu, Sabah.
Tel: +6088-752 996 Fax: +6088-752 998
TB12882 & 12883, SEDCO Light Industrial Estate,
Mile 3, Jalan Apas, 91000 Tawau, Sabah.
Tel: +6089-913 678 Fax: +6089-913 679
SYRIAN ARAB REPUBLIC
DAMASCUS
office:
Mazzeh, Eastern Villas,
Al Farabi Street, Building 55(Ground Floor),
Damascus Countryside Governorate,
Syrian Arab Republic.
P.O.Box 3407 D
Tel: +963 11-611 7449
Fax: +963 11-613 1562
CORPORATE STRUCTURE
WEIDA (M) BHD (504747-W) ANNUAL REPORT 2010
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BUSINESS ACTIVITIES
2
BUSINESS ACTIVITIES
3
BUSINESS ACTIVITIES
4
BUSINESS ACTIVITIES
5
BUSINESS ACTIVITIES
6
BUSINESS ACTIVITIES
7
BUSINESS ACTIVITIES
8
BUSINESS ACTIVITIES
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BUSINESS ACTIVITIES
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BUSINESS ACTIVITIES
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BUSINESS ACTIVITIES
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BUSINESS ACTIVITIES
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NOTICE OF ELEVENTH
ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Eleventh Annual General Meeting of the Company will be held at Four Points
by Sheraton Hotel, 3186-3187, Block 16, KCLD, Jalan Lapangan Terbang Baru, 93350 Kuching, Sarawak on
Tuesday, 28 September 2010 at 11.30 am to transact the following businesses:
AGENDA
Ordinary Business
1.
To receive the audited financial statements for the financial year ended 31 March 2010
together with the Reports of the Directors and Auditors thereon.
2.
To declare a first and final dividend of 4.0 sen per share less tax, in respect of the financial
year ended 31 March 2010 as recommended by the Directors.
Resolution 1
3.
To approve the payment of directors’ fees amounting to RM350,000.00 for the financial year
ending 31 March 2011.
Resolution 2
4.
To re-elect the following Directors who retire in accordance with Article 81 of the Company’s
Articles of Association and being eligible, offer themselves for re-election:
(i)
(ii)
5.
Mr. Jee Hon Chong
Mr. Chew Chin Choong
Resolution 3
Resolution 4
To re-appoint Messrs. KPMG as the Company’s auditors and to authorise the Directors to fix
their remuneration for the ensuing year.
Resolution 5
Special Business
6.
To consider and, if thought fit, pass the following resolutions:
(i)
Ordinary Resolution
•
Proposed renewal of authority for purchase of own shares by the Company
Resolution 6
“THAT, subject always to the Companies Act, 1965 (“the Act”), rules, regulations and
orders made pursuant to the Act, provisions of the Company’s Memorandum and Articles
of Association and the Main Market Listing Requirements of Bursa Malaysia Securities
Berhad (“Bursa Securities”) and any other relevant authority, the Company be hereby
unconditionally and generally authorised to purchase and hold on the market of Bursa
Securities such number of ordinary shares of RM0.50 each (“Shares”) in the Company
(“Proposed Share Buy-Back”) as may be determined by the Directors from time to time
through Bursa Securities upon such terms and conditions as the Directors may deem fit,
necessary and expedient in the interest of the Company provided that the total aggregate
number of Shares purchased and/or held or to be purchased and/or held pursuant to this
resolution shall not exceed ten percent (10%) of the total issued and paid-up share capital
of the Company for the time being and an amount not exceeding the Company’s retained
earnings reserve at the time of purchase be allocated by the Company for the Proposed
Share Buy-Back AND THAT, such Shares purchased are to be retained as treasury
shares and distributed as dividends and/or resold on the market of Bursa Securities,
or subsequently may be cancelled AND THAT the Directors be hereby authorised and
empowered to do all acts and things and to take all such steps and to enter into and
execute all commitments, transactions, deeds, agreements, arrangements, undertakings,
indemnities, transfers, assignments and/or guarantees as they may deem fit, necessary,
expedient and/or appropriate in order to implement, finalise and give full effect to the
Proposed Share Buy-Back with full powers to assent to any conditions, modifications,
revaluations, variations and/or amendments, as may be required or imposed by any
relevant authority or authorities AND FURTHER THAT the authority hereby given will
commence immediately upon passing of this ordinary resolution and will continue to be
in force until:
(a) the conclusion of the next annual general meeting of the Company (“AGM”) unless
by ordinary resolution passed at the next AGM, the authority is renewed, either
unconditionally or subject to conditions;
(b) the expiration of the period within which the next AGM after that date is required by
law to be held; or
(c)
revoked or varied by ordinary resolution passed by the shareholders in general
meeting,
whichever occurs first, in accordance with the provisions of the guidelines issued by
Bursa Securities or any other relevant authorities.”
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NOTICE OF ELEVENTH
ANNUAL GENERAL MEETING (continued)
(ii) Special Resolution
•
Proposed amendments to the Company’s Articles of Association
“(a) THAT the marginal note for Article 145(a) of the Company’s Articles of Association
be deleted in its entirety and replaced with the following new marginal note:
Payment by cheque or warrant or through bank
(b) THAT the following sentence be inserted immediately after the conclusion of the
existing Article 145(a) of the Company’s Articles of Association:
Where the Members or persons entitled thereto have provided to the Depository the
relevant contact details for purposes of electronic notifications, the Company shall
notify them electronically once the Company has paid the cash dividends out of its
accounts.”
7.
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To transact any other business which may properly be transacted at an annual general meeting,
due notice of which shall have been previously given in accordance with the Companies Act,
1965 and the Company’s Articles of Association.
Resolution 7
NOTICE OF
DIVIDEND ENTITLEMENT AND PAYMENT
NOTICE IS ALSO HEREBY GIVEN that the first and final dividend of 4.0 sen per share less tax, in respect of the
financial year ended 31 March 2010, if approved at the Eleventh Annual General Meeting, will be payable on 23
November 2010 to depositors whose names appear in the Record of Depositors on 4 November 2010.
A depositor shall qualify for entitlement only in respect of:
(a) shares transferred into the depositor’s securities account before 4.00 pm on 4 November 2010 in respect of
transfer; and
(b) shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of
Bursa Malaysia Securities Berhad.
By order of the Board
Voon Jan Moi (MAICSA 7021367)
Wang Tin Ngee (MIA 11670)
Joint Company Secretaries
Dated : 6 September 2010
Kuching, Sarawak
Explanatory notes on special business
(a) Ordinary resolution in relation to proposed renewal of authority for purchase of own shares by the
Company
The proposed resolution No. 6, if passed, will renew the authority for the Company to purchase and/or hold up
to ten per cent (10%) of the issued and paid-up ordinary share capital of the Company through Bursa Malaysia
Securities Berhad (“Bursa Securities”). This authority will expire at the conclusion of the next annual general
meeting, unless revoked or varied by ordinary resolution passed by shareholders at general meeting.
Please refer to the Statement to Shareholders dated 6 September 2010 for further information.
(b) Special resolution in relation to proposed amendments to the Company’s Articles of Association
The proposed resolution No. 7 is to amend the Company’s Articles of Association in line with the amendments
made to the Main Market Listing Requirements of Bursa Securities in relation to the eDividend.
Notes:
1. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the
Companies Act, 1965 shall not apply to the Company.
2. To be valid, the duly completed proxy form must be deposited at the registered office of the Company at
Wisma Hock Peng, Ground Floor to 2nd Floor, 123, Green Heights, Jalan Lapangan Terbang, 93250 Kuching,
Sarawak not less than 48 hours before the time set for holding the meeting or any adjournment thereof.
3. A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting provided
that the provisions of Section 149(1)(c) of the Companies Act, 1965 are complied with.
4. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the
proportions of his shareholdings to be represented by each proxy.
5. If the appointor is a corporation, the proxy form must be executed under its common seal or under the hand of
an officer or attorney duly authorised.
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CORPORATE INFORMATION
DIRECTORS
ADVOCATES & SOLICITORS
Tuan Haji Su’ut Bin Haji Suhaili
Independent Deputy Chairman
Alvin Chong & Partners
Sio & Ting Advocates
YBhg. Dato’ Lee Choon Chin
Group Managing Director
SHARE REGISTRAR
YBhg. Datu Voon Chen Hian @ Voon Chen Kok
Independent Director
YBhg. Datuk Dr. Stalin Hardin
Yeoh Chin Hoe
Jee Hon Chong
Executive Director
Chew Chin Choong
Executive Director
COMPANY SECRETARIES
Voon Jan Moi
(MAICSA 7021367)
Wang Tin Ngee
(MIA 11670)
AUDITORS
KPMG
Level 6, Westmoore House
Twin Tower Centre
Rock Road
93200 Kuching, Sarawak
Telephone:
082-422 699
Facsimile:
082-422 399
BANKERS
Malayan Banking Berhad
RHB Bank Berhad
United Overseas Bank (Malaysia) Bhd
Hong Leong Bank Berhad
HSBC Bank Malaysia Berhad
Export-Import Bank of Malaysia Berhad
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Symphony Share Registrars Sdn Bhd
Level 6, Symphony House
Block D13, Pusat Dagangan Dana 1
Jalan PJU 1A/46
47301 Petaling Jaya
Selangor Darul Ehsan
Telephone:
03-7841 8000
Facsimile:
03-7841 8152
E-mail: [email protected]
REGISTERED OFFICE
Wisma Hock Peng, Ground Floor to 2nd Floor
123, Green Heights, Jalan Lapangan Terbang
93250 Kuching, Sarawak
Telephone:
082-456 456
Facsimile:
082-459 000
E-mail: [email protected]
COUNTRY OF INCORPORATION
AND DOMICILE
Malaysia
STOCK EXCHANGE LISTING
Main Market of Bursa Malaysia Securities Berhad
Stock Name: WEIDA
Stock Code: 7111
BOARD OF DIRECTORS
1
2
3
4
5
6
7
1 Tuan Haji Su’ut Bin Haji Suhaili
5 YBhg. Datu Voon Chen Hian @ Voon Chen Kok
2 YBhg. Dato’ Lee Choon Chin
6 YBhg. Datuk Dr. Stalin Hardin
3 Jee Hon Chong
Executive Director
7 Yeoh Chin Hoe
4 Chew Chin Choong
Executive Director
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PROFILE OF DIRECTORS
Tuan Haji Su’ut Bin Haji Suhaili (Malaysian aged 63),
the Deputy Chairman of the Board, was appointed
as an Independent Director of the Company on 25
October 2000, before Weida Group is listed on Bursa
Malaysia Securities Berhad. He is actively serving on
all Board Committees, namely as Chairman of the
Remuneration Committee and as members of the
Audit Committee and Nominating Committee.
YBhg. Dato’ Lee Choon Chin (Malaysian aged 56), the
Group Managing Director, was appointed to the Board
on 25 October 2000.
Tuan Haji is an MBA graduate from Henley Brunel
University in the United Kingdom. His 30 years of
dedicated service with the Government took him
through to various positions such as Permanent
Secretary to Ministries as well as exposure to a wide
spectrum of industries before he retired as General
Manager of Bintulu Development Authority in 2002.
As a founding shareholder, YBhg. Dato’ actively
continues to lead the Group in the capacity of Group
Managing Director, as well as being Director in
subsidiary companies.
Jee Hon Chong
Executive Director
Chew Chin Choong
Executive Director
Jee Hon Chong (Malaysian aged 51) was appointed
to the Board as an Executive Director on 25 October
2000. He graduated from Tunku Abdul Rahman
College and subsequently obtained his degree in
Mechanical Engineering from the Engineering Council,
United Kingdom.
Chew Chin Choong (Malaysian aged 41) was appointed
to the Board as an Executive Director on 27 November
2001. He is an economics graduate holding a B. Sc
(Hons) degree from the London School of Economics
and Political Science and a Chartered Accountant with
the Institute of Chartered Accountants in England and
Wales.
Mr. Jee is one of the pioneers of the Group, being
the first factory engineer when Weida commenced
manufacturing operations in Kuching in 1988.
Subsequently, he successfully commissioned another
two factories in Kota Kinabalu and Nilai, which marked
the entry of Weida into Sabah and Peninsular Malaysia,
and later in 2009 another factory in Manila, Philippines
being Weida’s first manufacturing plant abroad.
Presently, he heads the Group’s manufacturing
operations and telecommunication infrastructures
division.
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YBhg. Dato’ graduated with a Bachelor of Science
(Hons) from University of Malaya in 1978. He first
started his career as the Sarawak Manager of 3M
(Malaysia) Sdn. Bhd., an American multinational
company. Upon leaving 3M in 1983, he incorporated
Weida which was to become the Weida Group today.
Mr. Chew has a total of more than 18 years experience
in audit, consulting, finance and accounting functions
in public listed companies and international accounting
firms. These include RHB, Arthur Anderson and
PricewaterhouseCoopers. Mr. Chew is now the head
of the finance and accounting functions of the Group.
PROFILE OF DIRECTORS (continued)
YBhg. Datuk Dr. Stalin Hardin
YBhg. Datuk Dr. Stalin Hardin (Malaysian aged
68) was appointed to the Board as an Independent
Director of the Company on 16 December 2000.
He is the Chairman of the Audit Committee as well
as members of the Nominating Committee and the
Remuneration Committee. He is also the Senior
Independent Director to whom concerns regarding the
Company may be conveyed.
YBhg. Datuk obtained his Doctor of Medicine degree
from the University Of Toronto, Canada in 1966 and
a Master of Public Health post-graduate degree from
Tulane University, United States of America in 1970.
He served with the Health Department, Sarawak
in various capacities for 29 years and retired as its
Director in 1996.
Yeoh Chin Hoe
Yeoh Chin Hoe (Malaysian aged 59) was appointed to
the Board as an Independent Director of the Company
on 1 January 2008. He is members of all Board
Committees, namely Remuneration Committee, Audit
Committee and Nominating Committee.
Mr. Yeoh is a Fellow of both Association of Chartered
Certified Accountants (UK), Institute of Chartered
Secretaries and Administrators (UK), a member of
the Malaysian Institute of Certified Public Accountants
and the Malaysian Institute of Accountants. He also
obtained a Master degree in Business Administration
(General Management) from Universiti Putra Malaysia
in 1997.
Mr. Yeoh joined Harrisons Trading (Peninsular) Sdn
Bhd (HTP) in 1980, and was appointed as Finance
Director in 1990 and subsequently Managing Director
in 1997 until he retired in 2006. He then set up a
business management consulting firm called BPI
Corptall Consulting Sdn Bhd in 2006, as a consultant
specializing in business process improvements and
general business management services.
YBhg. Datu Voon Chen Hian
@ Voon Chen Kok
YBhg. Datu Voon Chen Hian @ Voon Chen Kok
(Malaysian aged 67) was appointed to the Board as an
Independent Director of the Company on 25 October
2000. He serves as the Chairman of the Nominating
Committee and also as a member of the Remuneration
Committee.
YBhg. Datu holds a Bachelor of Engineering (Civil) from
University of Tasmania, Australia. He is a registered
Professional Engineer and a Chartered Engineer,
by virtue of being a fellow member of Institution
of Engineers Malaysia (IEM) and the Australian
Institution of Engineers (MIEAUS). He joined Sarawak
State Civil Service and was attached to Public Works
Department (PWD) of Sarawak in 1969 to 2002,
serving in various positions and was later promoted
to be the Director of the Department, Sarawak. YBhg.
Datu was appointed as Chief Executive Officer of
Sarawak Incorporated Sdn. Bhd. from 2002 to 2005.
In addition, he also served as Chairman of Sibu Water
Board, Chairman of Kuching Water Board, Board
members in several Government-Link Companies
whilst in government services. He was the Secretary
of IEM (Sarawak Branch) and the Exco member for
the past 12 years. He was a member of Malaysian
Water Association (1969 to 2000), Honour Secretary
of Senior Government Association of Sarawak (from
1980 to 1990). He has attended Management Course
at John F. Kennedy School of Government at Harward
University in 1994. He has been awarded with PPB,
PBS, DJBS (Datukship), State Senior Government
Model Officer of the year (2001) and the Malaysia
Water Association Excellent Award of Management
(2000).
Notes:
(a) The Directors have no family relationship with each
other or the major shareholders of the Company,
except for YBhg. Dato’ Lee Choon Chin, whose
spouse is one of the major shareholders of the
Company.
(b) None of the Directors have convicted any
offences for the last 10 years.
(c) None of the Directors have any conflict of interests
with the Company.
(d) None of the Directors have any other directorship
of public companies except for Mr. Yeoh Chin
Hoe.
(e) The number of Board meetings attended by the
Directors during the financial year ended 31
March 2010 is set out on page 32 of this Annual
Report.
Mr. Yeoh is also an Independent Director and the
Chairman of the Audit Committee of Voir Holdings
Berhad.
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STATEMENT FROM
GROUP MANAGING DIRECTOR
On behalf of the Board of Directors of Weida (M) Bhd., it gives me great pleasure to present to you the Annual
Report and Financial Statements of the Group and the Company for the financial year ended 31 March 2010.
FINANCIAL HIGHLIGHTS
Last year, I had reported to you that the Group had achieved new highs in both our turnover and profit before tax,
amounting to RM267.84 million and RM26.56 million respectively, for the financial year ended 31 March 2009. As
such, I am very pleased to report to you that, for the recently concluded financial year ended 31 March 2010, the
Group has managed to surpass those highs with yet another set of record financial results as follows:
●
●
●
●
●
●
Group revenue grew 3.1% from RM267.84 million to RM276.19 million;
Pre-tax profit increased 5.3% from RM26.56 million to RM27.96 million;
Profit after tax attributable to equity holders of the Company increased 14.4% from RM15.02 million to RM17.19
million;
As a result, net earnings per share increased by 14.4% from 11.84 sen to 13.55 sen;
Shareholders’ funds increased from RM133.13 million as at 31 March 2009 to RM149.50 million as at 31 March
2010; and
Finally, net assets per share attributable to ordinary shareholders of the Company rose from RM1.05 as at 31
March 2009 to RM1.18 as at 31 March 2010.
The upward march in our financial performance was achieved in spite of the global financial and economic crisis.
DIVIDENDS
Weida is committed to deliver shareholder value through a balanced approach in the distribution of dividends, taking
into account opportunities to reinvest profits to enhance earnings growth and the need to pay an attractive dividend
to shareholders.
In view of the positive performance of the Group, the Board has declared a first and final dividend of 4.0 sen per
share, less tax for the financial year ended 31 March 2010. This final dividend represents a 22% distribution of the
Group’s net earnings per share of 13.55 sen for the financial year ended 31 March 2010, and translates into a gross
dividend yield of 5.1% (based on 31 March 2010 closing share price of RM0.79). The Board believes that this is an
appropriate distribution ratio given the continuing capital expenditure needed to fund the expansion of the Group, in
particular the on-going development of its oil palm plantations.
OPERATING ENVIRONMENT
Economic Developments
In hindsight, on 1 April 2009, we embarked on the financial year under review from the abyss of the global
economy.
The full impact of the 2008 international financial crisis on the real economy was felt in the first quarter of 2009, where
a large number of economies experienced significant contractions in real GDP – notably, real GDP in advanced
economies such as the United States of America, the Euro area and Japan declined by 6.4%, 2.5% and 13.7%
respectively in the first quarter of 2009. Malaysia’s real GDP plunged by 6.2% in the first quarter of 2009, marking
the first year-on-year contraction in real GDP since the third quarter of 2001.
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STATEMENT FROM GROUP MANAGING DIRECTOR (continued)
Actions by the Government of Malaysia, including the accelerated implementation of fiscal stimulus measures,
contributed to stabilisation in the domestic economy in the second quarter and subsequent recovery in the second
half of the year. Malaysia’s real GDP contraction gradually narrowed from -3.9% in 2Q 2009 to -1.2% in 3Q 2009
before turning positive at 4.5% in 4Q 2009 and moving on to grow strongly at 10.1% in 1Q 2010, in a pattern
consistent with most East Asian countries. Malaysia’s real GDP contracted at an overall rate of -1.7% for the
calendar year 2009.
It is worth noting that the growth of the construction sector had remained positive throughout the calendar year 2009
due primarily to the implementation of construction-related projects under the Ninth Malaysia Plan and the Two
Economic Stimulus Packages worth RM67 billion (including direct fiscal injection amounting to RM22 billion) – an
achievement for which the Government of Malaysia should be applauded.
OPERATIONS REVIEW
By achieving new records in turnover and profit before tax for the second year in a row, Weida Group’s business
model has demonstrated resilience and robustness throughout the global economic crisis that started in 2008.
For the financial year ended 31 March 2010, the Group’s turnover increased by RM8.35 million or 3.1% to RM276.19
million while pre-tax margin increased slightly to 10.1% compared to 9.9% a year earlier.
The Group’s resilience to economic downturn and robust performance throughout the crisis years is partly due to the
sturdiness built into the genetics of its business portfolio whereby about half of its profits and free cash flows comes
from fixed and recurring income arising from long term contracts, in the form of share of fixed rental income arising
from telecommunication towers built by the Group and licensed to telecommunication companies (namely Celcom,
Maxis, Digi) on a long term basis, as well as income arising from the management, operations and maintenance of
the Matang Septic Sludge Treatment Plant on a long term contract.
Another factor contributing to the Group’s resilience is our wide and balanced customers base, where revenue
arising from public and private sectors projects and/or product sales is quite well balanced. In a recession, the
downturn in the private sector is offset by increased public sector spending. In the recent recession, the Group
benefited from accelerated government spending. To an extent, there is an in-built ‘automatic offset’ effect in the
Group’s varied customers base.
Meaningful revenue and profit contributions from the on-going water and wastewater treatment plants construction
project in Syrian Arab Republic constitutes another dimension of income hedging, in terms of local and foreignsourced income.
From yet another dimension, there is a further in-built natural hedge in the Group’s diversified income base, in the
sense that the Group’s total revenue comprises turnover from multiple business activities in different industries
– notably, the manufacturing of polyethylene engineering products, design-and-build construction projects in the
water industry, utilities network mapping and rehabilitation services, building and leasing of telecommunication
towers, and the management of a septic sludge treatment plant.
Going forward, the Group’s diversified business portfolio, and the varied nature of its income stream, will continue
to provide some degree of insulation against the heightened turbulence that seems to have become the new normal
in an inter-linked global economy in the foreseeable future.
INDUSTRY TRENDS AND DEVELOPMENT
Water and Wastewater Infrastructures
Weida Group is a truly integrated specialist in the water and sewerage sectors as:
(a) manufacturer of polyethylene engineering products;
(b) design-and-build turnkey specialist of water and sewerage infrastructure;
(c) service provider in trenchless mapping, investigation, repair and rehabilitation of water and sewer pipes and
other buried utility assets; and
(d) the management of septic sludge treatment plants.
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(a) Manufacturing
As a manufacturer of polyethylene engineering products, Weida Group remains the market leader in Malaysia,
with a dominant position in East Malaysia. The Group has a full presence nationwide with five manufacturing
plants strategically located in Nilai, Kuching, Kota Kinabalu, Miri and Tawau. The sixth plant was commissioned
in Manila, the Philippines, in January 2009. The barriers of entry into this industry are high: substantial capital
investment, intensive research and development programmes and specialist technological expertise developed
in-house over the years. This industry is generally capital intensive for big scale manufacturers. The main
industry players have generally remained unchanged during the year under review.
Margins were stable during the year under review. Over the longer term, prospects of the polyethylene products
industry remain bright as polyethylene water and drainage pipes, water storage tanks and prefabricated
sewage systems are superior to their metal and concrete counterparts due to their qualities of being corrosion
resistant, durable, leakage-proof, lightweight, hygienic and weather resistant.
(b) Design-and-Build Projects
Beyond manufacturing, Weida also undertakes significant design-and-build projects that involve turnkey
engineering works and/or specially designed products manufactured in-house. New water and sewerage
infrastructure and electricity power supply in both urban and rural areas will continue to be needed as the
country continues to develop. This is particularly so in Sabah and Sarawak, which is an area of focus in the
Government’s development plans and where Weida has a strong presence.
Weida manufactured products specially engineered for design-and-build projects will continue to command
higher margins than standard products due to our unique and proprietary technologies incorporated into such
products.
(c)
Mapping, Investigation and Rehabilitation of Buried Utility Assets
Through its subsidiary, UTIC Services Sdn. Bhd., Weida is a market leader in trenchless (i.e. no-dig) pipeline
mapping, investigation and rehabilitation services in Malaysia. The demand for such services is continuing
to increase in Malaysia as a significant portion of water and sewerage networks in Malaysia is more than 30
years old. Given that the country has more than 92,200 km of water pipeline (in year 2003) and 14,800 km
of sewerage network (in year 2005), the potential for no-dig pipeline rehabilitation solutions are enormous,
especially as water and sewerage expenditure rises and a maintenance culture takes hold in Malaysia.
(d) Management of Septic Sludge Treatment Plants
Septic tanks are widely used in many areas in Malaysia which are not connected by central sewerage services.
As such, there is a continuing need for septic sludge treatment plants to treat septic sludge emptied from septic
tanks through periodic desludging. We anticipate that more of such plants will be built in Malaysia, where
Weida will have the opportunity to market its expertise.
Rural Infrastructure
Our products serve the rural utilities infrastructure in the form of rural water supply through water pipes, storage
tanks and treatment plants; rural sanitation through septic tanks and rural power supply through solar photovoltaic
systems as alternative, renewable energy.
24
Telecommunication Infrastructures
The trend is for the telecommunication companies to outsource more of the construction
and ownership of telecommunication towers. Since this division was set up in 2005,
we have constructed over 240 towers in the State of Sabah under a joint venture with
Common Tower Technologies Sdn. Bhd. (CTT), the state-backed-company controlled
by the State Government of Sabah. The towers constructed by us together with CTT in
Sabah under the Malaysian Communications and Multimedia Commission’s (MCMC)
Time 2 Programme have generally been acknowledged by the industry and the client
telecommunication companies as among the best in quality among all the states in
Malaysia.
Going forward, we anticipate that MCMC will continue to rollout cellular telephony
coverage in rural areas, particularly in East Malaysia, on an accelerated basis under
its Time 3 Programme – in which we expect to participate.
PROSPECTS
Although buffetted by jitters over sovereign debts in recent months, the strengthening economic recovery appears
set to continue. In its World Economic Outlook Update in July 2010, the IMF is projecting Malaysia’s real GDP
to grow 6.7% in 2010 and 5.3% in 2011, higher than Bank Negara Malaysia’s forecast of 4.5% ~ 5.5% growth in
2010.
In an exciting new development on 10 June 2010, the Government of Malaysia released the Tenth Malaysia Plan
(10th MP), which charts the development of the nation for the next five-year period of 2011 – 2015. Themed
‘Towards Economic Prosperity and Social Justice’, it houses the aspirations of both the Government Transformation
Programme (GTP) and the New Economic Model (NEM), and is premised on high income, inclusiveness and
sustainability. In our opinion, the 10th MP, together with the GTP and NEM, is a comprehensive and targeted national
blueprint that represents a rising tide that will uplift all stakeholders in Malaysia, if implemented and executed well.
The 10th MP dual focus on both soft and hard infrastructure of the nation will benefit Weida Group directly and
indirectly.
Comprehensive soft infrastructure reform measures with wide-ranging objectives from ‘Creating the Environment
for Unleashing Economic Growth’ to ‘Transforming Government to Transform Malaysia’ creates a conducive
framework for all individuals and companies to strive for growth.
In terms of hard infrastructure development, the Group expects to participate, directly or indirectly, amongst others,
in the following initiatives planned by the Government:
●
Ensuring basic physical infrastructure is accessible to all is an objective of the Rural Basic Infrastructure NKRA,
one of the six National Key Result Areas (NKRAs) in the GTP launched by Prime Minister Datuk Seri Mohd Najib
Razak in April 2009.
Under this NKRA, the Government will upgrade the supply of water in Sabah and Sarawak. With 36% of
Malaysians living in rural areas in 2009, and rural water coverage standing at only 59% in Sabah and Sarawak
(compared to 90% in Peninsular Malaysia), there remains much to be done. The Government’s target for treated
water coverage in 2015 is 99% in Peninsular Malaysia, 98% in Sabah and 95% in Sarawak. Under the 10th MP,
the Government has planned to undertake more intensive efforts to increase the extent of treated water in rural
areas by upgrading and building new pipelines and water treatment plants. Alternative systems such as gravity
systems, tube wells, underground water and rain harvest will be used in remote and isolated areas. All these
are within the Group’s traditional core competencies. By the end of 2015, a total of 117,000 additional houses
in Peninsular Malaysia, 112,700 houses in Sabah and 87,400 houses in Sarawak will be supplied with clean or
treated water.
In addition, the Government will continue to take initiatives to provide social amenities such as sanitation facilities
to the rural population to improve the quality of their lives. Building housing for the poor and hardcore poor is
another element of the Rural Basic Infrastructure NKRA, with water and sanitation facilities being part and
parcel of such developments, as always. In the area of Information and Communications Technology (ICT), the
Government has stated its intention to establish at least one 1Malaysia telecentre in each sub-district (mukim).
This tie in with MCMC’s accelerated Time 3 Programme to build hundreds more telecommunication towers in
the rural areas.
In connection with rural development, the Government will also enhance and expedite the implementation of
Rural Growth Centres (RGCs), where rural citizens can choose to live in order to benefit from high quality public
services such as health, education, communications, public transport, utilities and other community-based
services.
25
●
In order to decouple economic growth from environmental degradation, the Government plans to strengthen
enforcement on industrial effluent and sewage discharge in line with the revisions to the regulations under
the Environmental Quality Act 1974. The Government will also implement various other measures to control
major sources of pollution to our rivers and streams (where more than 90% of Malaysia’s water supply comes
from), such as improper discharge from sewerage treatment plants, agro-based factories, livestock farming,
land clearing activities and domestic sewage. Most of these involve refurbishing, upgrading or building of new
sanitation infrastructure. The Group’s expertise in wastewater management is also applicable in many of these
areas.
●
The concentration of growth in urban conurbations and industrial clusters will give rise to development of new
urban infrastructure and properties, as well as urban re-development of old infrastructure and properties, in
which water and sewerage facilities are integral parts.
●
The launch of The National Green Technology Policy provides scopes applicable for Weida’s environmental
business activities in various sectors, such as Water and Waste Management Sector (wastewater treatment,
waste recycling, sanitary landfill), Energy Sector (waste-to-energy and renewable energy through biogas plants,
solar powers) and Building Sector (rainwater harvesting, water recycling) and others.
●
In the area of flood mitigation where the Government has proposed a budget of RM5 billion under the 10th
MP, the Group’s expertise and products such as hydro-brake flow controls, down-stream defenders, foul water
interceptor systems, polyethylene underground water retention tanks, culverts and flap-gates are applicable.
On the foreign front, the on-going project in building a number of water and sewage treatment plants in Damascus,
Syrian Arab Republic will continue to contribute positively to the Group’s turnover and profits for the financial year
ending 31 March 2011, and therefore further enhance the resilience of the Group in the face of potentially turbulent
economic conditions. Over the next decade, analysts predict that some USD120 billion will be invested in the
Middle East and North Africa to alleviate water shortages in those regions. The Group will pursue some of these
opportunities on a very selective basis.
The Group’s diversification into the oil palm plantation industry has also provided another new platform for growth
and, upon the trees maturing in stages beginning from 2012, will provide the Group with another earnings stream.
In view of the above, the Board believes that the Group’s prospects are bright and sustainable, and that Weida will
continue to achieve credible results in the financial year ending 31 March 2011 and beyond.
ACKNOWLEDGEMENTS
On behalf of the Board of Directors, I would like to place on record our appreciation to our customers and shareholders
for their support, without which our Group would not have been strong and successful.
I would also like to thank our associates, financiers, advisors, suppliers and sub-contractors for their continuing
understanding, confidence and support to the Group.
Finally, the Board and I wish to thank the management and all employees of the Group for their unwavering
commitment, contribution and hard work.
27 July 2010
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report contains forward-looking statements that are based on management’s estimates, assumptions
and projections at the time of publication. These statements reflect our current views and expectations with respect
to future events and are subject to risks and uncertainties and hence are not guarantees of future performance.
Some factors include, but are not limited to, changes in general economic and business conditions, exchange rates
and competitive activities that could cause actual results to differ materially from those expressed or forecasted in
the forward-looking statements.
26
FINANCIAL HIGHLIGHTS 2004 - 2010
2004
2005
2006
2007
2008
2009
2010
123.3
20.3
12.3
84.7
123.8
17.9
12.4
99.0
132.7
13.9
8.4
106.5
187.4
20.6
14.7
117.7
198.9
20.0
10.7
121.6
267.8
26.6
15.0
133.1
276.2
28.0
17.2
149.5
(Million)
Total Number Of Shares
40.0
133.3
133.3
131.0*
127.1*
126.9*
126.9*
(Sen)
Group Earnings Per Share
Net Assets Per Share
9.3
64.4
9.3
74.3
6.3
84.5
11.0*
89.8*
8.3*
95.7*
11.8*
104.9*
13.6*
117.8*
(RM million)
Revenue
Profit Before Tax
Net Profit After Minority Interest
Net Assets
PROFIT BEFORE TAX
28.0
26.6
2010
2009
20.0
2008
2007
2006
2005
2004
13.9
17.9
20.6
(RM million)
20.3
276.2
2010
198.9
2008
132.7
2006
187.4
123.8
2005
2007
123.3
2004
(RM million)
267.8
REVENUE
2009
* Net of treasury shares
117.8*
2010
95.7*
2008
104.9*
89.8*
2007
2009
84.5
74.3
2006
2004
2005
64.4
13.6*
2010
2009
2008
8.3*
11.8*
11.0*
2007
2006
6.3
9.3
2005
(Sen)
9.3
NET ASSETS PER SHARE
(Sen)
2004
GROUP EARNINGS PER SHARE
27
STATEMENT ON
CORPORATE SOCIAL RESPONSIBILITY
As a public listed company, one of our main purposes is to create long term value. We achieve this by providing
our clients with value-added products and services, promoting a corporate culture that adheres to high ethical
standards, and by generating superior and sustainable returns for our shareholders. We firmly believe that
sustainable growth and investment for any business is also dependent on what it does above and beyond what
laws and regulations require. It is why we are committed to creating a working environment based on the values
of meritocracy, equal opportunity and diversity. As part of our business, we have contributed immensely to the
protection of the environment. We also adhere to high social standards and contribute to the communities we are
part of. All our activities are underpinned by our governance structure, which complies with the Malaysian Code on
Corporate Governance.
In Weida, doing business in the marketplace, protecting the environment, contributing to and uplifting the communities
we are part of, and developing our people are intricately intertwined.
ENVIRONMENT AND MARKETPLACE
Protecting the natural environment, sustainable development
and living in harmony with the environment is at the heart
of Weida’s core business in the water and sewerage
sectors. As a one-stop centre for water and sewerage
solutions, our people strive to protect the environment
everyday. For instance, we have designed and built many
water and sewage treatment plants, thousands of rain
water harvesting and gravity feed water supply systems for
rural communities, and countless rural sanitation systems.
The communities we serve are far and wide, in Malaysia,
Syrian Arab Republic and the Philippines.
The engineering products that we manufacture for water
and sewerage applications are made from polyethylene
(PE). PE products are corrosion resistant, relatively
lightweight, chemically inert and seamless in construction.
These superior characteristics make them ideal substitutes
for similar products made from other materials such as
fiberglass, metals and concrete. The US Food and Drugs
Authority, an authority in the US that certifies the types
of materials that are suitable to be in contact with water
and food for the purpose of safeguarding customers/public
health, has approved polyethylene as safe for use as a
medium of storage for drinking water and food. Many
countries legislate against the use of alternative materials
such as fiberglass, asbestos concrete, and in certain
cases, PVC, for pipelines and water storage as they are
hazardous to health and/ or pollute the environment.
Our manufacturing processes entail no waste and no
effluent discharge into the drainage systems and waterways.
All rejects are fully recycled and reused.
28
STATEMENT ON
CORPORATE SOCIAL RESPONSIBILITY (continued)
COMMUNITY
Every year, we contribute back to the communities that
we are part of, in the form of donations in cash as well
as in kind. Organizations that we have supported include
orphanages, societies for autistic children, retired police
associations and religious schools.
Building new bridge for villagers
Site clearing for construction
of new longhouse along
access road
Gawai celebration with villagers
A culvert crossing for
the villagers entrance
to their kampung
Construction of new road
complete with culvert crossing
for the new kampung
WORKPLACE
Weida M & M Celebration Night for Sarawak region
In the last decade, competition for human resource has
intensified tremendously. Indeed, our people are our most
highly prized asset. In terms of career opportunities, our
practice is to promote from within where possible. This is
our first priority, to develop our people and to reward loyalty.
As a fast growing company, we are actively recruiting at all
times. Once recruited, we invest in time, effort and money
to train and develop our people. Training, both external
and internal, is provided on a focused and relevant basis.
Regular in-house training sessions are a feature of our
human resource development effort. We are also strong
believers in a conducive working environment for our
staff. Health and safety is a top priority, with due care and
attention in providing proper and sufficient tools and safety
gear to our staff in carrying out their work.
Compensation and benefits, in the form of salary
increments, bonus, sales and performance incentives are
awarded based on merit. In addition to the annual review,
staff performance is constantly monitored, and in deserving
cases, mid-year increments and promotions are given.
Sar-Alam Indah annual dinner
Fishing trip
First Aid course
Perhimpunan Belia 2010
Factory annual dinner
29
STATEMENT ON
CORPORATE GOVERNANCE
THE MALAYSIAN CODE ON CORPORATE GOVERNANCE
The Board of Directors of Weida (M) Bhd. (“the Board”) is steadfast and committed in ensuring that the highest
standards of corporate governance are observed throughout the Weida (M) Bhd. (“Weida” or “the Company”) and
its group of companies (“the Group”) through its support and application of the Principles and Best Practices of good
governance set out in Part 1 and Part 2 of the Malaysian Code on Corporate Governance (“the Code”). The Board
believes upholding good corporate governance is fundamental in discharging its fiduciary responsibilities to protect
and enhance shareholders’ value and the financial performance of the Group.
The Board is pleased to disclose the manner in which it has applied the principles of good governance and the
extent to which it has complied with the best practices as set out in the Code. These disclosures are contained in
this statement, the Statement on Internal Control and the Report of the Audit Committee.
THE BOARD
Roles and Responsibilities
An effective Board leads and controls the Group. In discharging the Board’s stewardship responsibilities, the Board
explicitly assumes the following six (6) specific responsibilities:
(a) reviewing and adopting a strategic plan for the Group;
(b) overseeing the conduct of the Group’s business to evaluate whether the business is properly managed;
(c)
identifying principal risks and ensure the implementation of appropriate systems to manage the risks;
(d) succession planning, including appointing, training, fixing the compensation of and where appropriate, replacing
Senior Management;
(e) developing and implementing an investors relations programme or shareholders communication policy for the
Group; and
(f)
reviewing the adequacy and integrity of the Group’s internal control system, management information system
and systems for compliance with applicable laws, regulations, rules, directives and guidelines.
In addition, the Board reserves for itself the following areas of strategic importance to the Group to ensure that the
direction and control of the Group is firmly in its hands:
(a) approval of strategic corporate plans and annual budgets;
(b) announcement of quarterly results;
(c)
acquisitions and disposals of business segments and properties of significant value;
(d) major investments and financial decisions;
(e) appointments to the Board; and
(f)
changes to the management and control structure within the Group.
Board Composition, Size and Balance
The Board currently consists of seven (7) members and is balanced, with three (3) Executive Directors and
four (4) Independent Directors. The Chairman position is presently vacant. The Board is currently led by the
Deputy Chairman who is an Independent Director. Together, the Directors have a wide range of entrepreneurial,
management, manufacturing, technical, financial and civil administration expertise and experience. This mix of
expertise and experience is vital to the success of the Group given its nature of business and customer base. The
profile of each Director is presented on pages 20 to 21 of this Annual Report.
The roles of the Deputy Chairman and the Group Managing Director are clearly separated to ensure a balance of
power and authority. The Deputy Chairman heads the Board and leads the planning discussion at the Board level,
while the Group Managing Director is responsible for the implementation of policies, Board decisions and executive
decision making. The Independent Directors play a significant role in corporate accountability, providing unbiased
and independent views, advices and judgements to take account of the interests, not only of the Group, but also
of all stakeholders, including employees, customers, suppliers and the many communities in which the Group
conducts business.
30
STATEMENT ON
CORPORATE GOVERNANCE (continued)
Supply and Access of Information
Prior to Board meetings, agendas and Board papers are provided to all Directors in advance to ensure they receive
sufficient relevant information and to allow sufficient time for their detailed review and consideration so as to enable
them to participate effectively in the deliberations and to make informed decisions. All Directors have the right to
make further enquiries where they consider necessary prior to Board meetings.
The Board therefore expects to receive, on a timely basis, material information about the Group, its activities and
performance, particularly any significant variances from budgets and plans. The Board papers include, among
others, the following:
(a) annual budgets and strategic plans for the Group;
(b) quarterly and annual financial reports;
(c)
reports of all committees of the Board;
(d) operational reports and business development issues;
(e) a summary of all circular Board resolutions passed for ratification;
(f)
a summary of correspondences from Bursa Malaysia Berhad/Bursa Malaysia Securities Berhad and vice
versa;
(g) a summary of announcements made to Bursa Malaysia Securities Berhad; and
(h) a summary of dealings in shares notified by the Directors and principal officers.
Every member of the Board has ready and unrestricted access to the Company Secretaries for advices and services
in carrying out their duties. In addition, the Directors also have the liberty, at the Company’s expense, to seek
independent external professional advice in the furtherance of their duties.
Appointments to the Board
The appointment of new Directors is carried out in a formal and transparent manner under the purview of the
Nominating Committee, which is responsible for making recommendations to the Board on suitable candidates for
appointment.
Re-election of Directors
In accordance with the Company’s Articles of Association, all Directors who are appointed by the Board shall retire
from office at the forthcoming Annual General Meeting (“AGM”) after their appointment but shall be eligible for reelection.
In addition, in accordance with the Company’s Articles of Association and in compliance with the Main Market Listing
Requirements (“Listing Requirements”), one-third (1/3) of the remaining Directors, including the Group Managing
Director, are required to submit themselves for re-election by rotation at each AGM. All Directors shall retire from
office at least once every three (3) years but shall be eligible for re-election.
Directors over seventy (70) years of age are required to submit themselves for re-appointment annually in accordance
with Section 129(6) of the Companies Act, 1965.
Succession Planning
The Board recognises human resource development and succession planning as critical factors in achieving the
Group’s business objectives.
The Group reviews its manpower requirements and updates its organisation charts regularly, and conducts periodic
recruitment drives to fill vacancies as they arise. The Group’s policy is to promote from within where possible.
All staff, including Directors and Senior Management, are encouraged to attend external training courses and
seminars to continuously upgrade their skills set. The Group contributes to the Human Resource Development
Fund and sets aside an amount for training in its annual budget.
31
STATEMENT ON
Board Meetings
At least four (4) regularly scheduled meetings are held annually, with additional meetings for particular matters
convened as and when necessary. Informal meetings and consultations are frequently and freely held to share
expertise and experiences. There were five (5) Board meetings held during the financial year ended 31 March 2010.
The details of attendance of each Director are set out below:
Number of
Meetings Attended
Independent Directors
Haji Su’ut bin Haji Suhaili (Deputy Chairman)
4 out of 5
Datuk Dr. Stalin Hardin
4 out of 5
Datu Voon Chen Hian @ Voon Chen Kok
3 out of 5
Yeoh Chin Hoe
4 out of 5
Executive Directors
Dato’ Lee Choon Chin (Group Managing Director)
4 out of 5
Jee Hon Chong
5 out of 5
Chew Chin Choong
5 out of 5
All proceedings, matters arising, deliberations, in terms of the issue discussed, and resolutions of the Board
meetings are recorded in the minutes by the Company Secretaries, confirmed by the Board and signed by the
Deputy Chairman or chairman of the meeting. All Board meetings were attended by one (1) or both of the two (2)
Company Secretaries.
Upon invitation, Management representatives were present at the Board meetings to provide additional insight into
matters to be discussed during the Board meetings.
Directors’ Training and Continuing Education Programme
New Board members are guided on a familiarization programme, including visits to the Group’s facilities and
meetings with Senior Management as appropriate, to facilitate their understanding of the Group and ultimately to
enable them to contribute effectively at the Board meetings.
All the Directors have attended the Mandatory Accreditation Programme within the stipulated period pursuant to the
Listing Requirements. During the financial year ended 31 March 2010, the Directors attended a full-day in-house
training on “Implementing Work Culture for Operational Excellence”.
The Directors are regularly updated and advised by the Company Secretaries on new statutory as well as applicable
regulatory requirements relating to the duties and responsibilities of Directors.
Board Committees
The Board, which is the ultimate authority in decision-making of all significant matters, delegates certain
responsibilities to Board Committees to enhance business and operational efficiency of the Group.
The Board has established an Audit Committee, a Nominating Committee and a Remuneration Committee to
assist the Board in discharging its duties. All Board Committees do not have executive powers but have authority
to examine issues at hand and report back to the Board by the respective Committee’s Chairmen on all matters
considered and their recommendations thereon.
Each Board Committee has defined function, authority and terms of reference which have been approved by the
Board and, where applicable, comply with the recommendations of the Code. These Board Committees are as set
out on page 33 tof this Annual Report.
The chairman of the Board Committees will report to the Board the outcome of the Committee meetings and such
reports are recorded in the minutes of the Board meetings.
32
STATEMENT ON
(a) Audit Committee
The Audit Committee was established on 17 May 2001. Further details of the Audit Committee are outlined in
the Report of the Audit Committee as set out on pages 38 to 42 of this Annual Report.
(b) Nominating Committee
Chairman:
Members:
Datu Voon Chen Hian @ Voon Chen Kok (Independent Director)
Haji Su’ut bin Haji Suhaili (Independent Director)
Datuk Dr. Stalin Hardin (Independent Director)
Yeoh Chin Hoe (Independent Director)
The Nominating Committee was established on 4 February 2002. One (1) meeting was held during the financial
year ended 31 March 2010. Assessment and appraisal processes have also been implemented and properly
documented, for the evaluation of the effectiveness of the Board as a whole, individual contribution of each
Board member and the Audit Committee including its members. All other Board Committees are assessed and
evaluated by the Board.
The functions of the Nominating Committee are to:
•
•
•
•
•
•
•
•
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;
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;
recommend to the Board, all candidates for directorships to be filled by the shareholders or the Board;
consider, in making its recommendations, candidates for directorships proposed by the Group Managing
Director and, within the bounds of practicality, by any other senior executive or any Director or
shareholder;
recommend to the Board, Directors to fill the seats on Board Committees;
undertake an annual review of the required mix of skills and experience and other qualities of Directors,
including core competencies which non-executive Directors should bring to the Board and to disclose this
in the annual report;
formulate and implement procedures to be carried out by the Nominating Committee annually for assessing
the effectiveness of the Board as a whole, the Board Committees and for assessing the contributions of
each individual Director; and
introduce such regulations or guidelines, procedures for the Nominating Committee to function effectively
and fulfil the Nominating Committee’s objectives.
(c) Remuneration Committee
Chairman:
Members:
Datu Voon Chen Hian @ Voon Chen Kok (Independent Director)
The Remuneration Committee (“RC”) was established on 23 March 2001. One (1) meeting was held during the
financial year ended 31 March 2010.
The RC is responsible for recommending the level and make-up of the remuneration of the Executive Directors
of Weida so as to ensure that the Group attracts and retains Directors of the necessary caliber, experience
and quality needed to run the Group successfully. It is nevertheless the responsibility of the entire Board to
approve the remuneration of these Directors.
The fees for the Non-Executive Directors are determined by the Board as a whole.
33
STATEMENT ON
Directors’ Remuneration
Contrary to the disclosure recommendations as indicated in the Code, the Board would not be providing details of
remuneration awarded to each Director as the Board is of the opinion that matters pertaining to directors’ remuneration
are of a personal nature. However, the Board wishes to confirm that the level and make-up of remuneration for
Executive Directors were reviewed and recommended by the RC and approved by the Board as a whole. Each
individual Director abstains from the Board discussion and decision-making on his own remuneration.
In compliance with the Listing Requirements, the fees and remuneration paid to the Directors during the financial
year ended 31 March 2010, in aggregation and analysed into bands of RM50,000 are as follows:
Fees
RM
Salaries
RM
EPF
RM
Other
Remuneration
RM
Total
RM
210,000
Nil
Nil
63,000
273,000
Executive Directors
108,000
660,000
79,200
2,868,210
3,715,410
318,000
660,000
79,200
2,931,210
3,988,410
Directors
Remuneration
RM
Number
Executive Directors
Number
1 – 50,000*
-
-
50,001 – 100,000
4
-
100,001 – 1,100,000*
-
-
1,100,001 – 1,150,000
-
1
1,150,001 – 1,200,000
-
1
1,200,001 – 1,350,000*
-
-
1,350,001 – 1,400,000
-
1
* No Director received any remuneration within this range
INVESTORS RELATIONS & SHAREHOLDERS COMMUNICATION
Investors Relations
The Board acknowledges the need for shareholders to be informed of all material business matters affecting the
Group and values dialogue with investors. In addition to various announcements made during the financial year,
the timely release of financial results on a quarterly basis provides shareholders with an overview of the Group’s
performance and operations.
The Group has also put in place facility to enable electronic communication with shareholders via its website www.
weida.com.my. Shareholders, investors and members of public can obtain information on the Group by accessing
its website and Bursa Securities’ website at www.bursamalaysia.com for the corporate and financial information as
well as all announcements and releases of annual reports, circular to shareholders made by the Company.
YBhg. Datuk Dr. Stalin Hardin is the appointed Senior Independent Director to whom concerns or queries concerning
the Group may be conveyed to.
34
STATEMENT ON
General Meetings
The Group uses the general meetings as a mean of communicating with shareholders. Shareholders who are
unable to attend are allowed to appoint proxies to attend and vote on their behalf. Shareholders are encouraged to
participate in the question and answer session. Members of the Board as well as the Auditors of the Company are
present to answer questions raised at the meeting. Notice of each general meeting is issued on a timely manner to
all shareholders and in the case of special business, a statement explaining the effect of the proposed resolutions
is provided for shareholders information.
Members of the Board have also had meetings with analysts and investors during the financial year.
ACCOUNTABILITY AND AUDIT
Financial Reporting
In presenting the annual financial statements and quarterly announcements of results to shareholders, the Directors
are committed to present a balanced and fair assessment of the Group’s position and prospects. The financial
reports are also reviewed by the Audit Committee to ensure adequacy of information disclosed prior to submission
to the Board for approval.
The Board considers that in preparing the financial statements, the Group has used appropriate accounting policies,
consistently applied and supported by reasonable and prudent judgements and estimates. A statement by the
Board of their responsibilities in preparing the financial statements is set out on page 37 of this Annual Report.
Internal Control
The Directors recognise their responsibility for the Group’s system of internal control, which is designed to suit
the particular circumstances of the Group and to manage the risks involved in pursuing the Group’s business
objectives. The system of internal control currently practised by the Group spans not only the financial aspect,
but also the operational and compliance aspects of the Group’s activities in order to safeguard the Group’s assets
and hence, shareholders’ investments. This system, by its nature, can only provide reasonable but not absolute
assurance against misstatement or loss.
Some of the key elements of the Group’s internal control system are outlined in the Statement on Internal Control
set out on page 43 of this Annual Report.
The Board is committed to undertake regular reviews of key commercial, operational and financial risks facing
the Group’s businesses as well as the more general risks such as those relating to compliance with laws and
regulations. In executing this commitment, the Board has established an Internal Audit Department. The scope
of the Internal Audit Department is set out in the Report of the Audit Committee set out on pages 38 to 42 of this
Annual Report.
The objectives of periodic reviews of risks and internal audit are to give reasonable assurance that the structure
of controls and operations is appropriate to the Group’s situation and that there is an acceptable level of risk
throughout the Group’s operations.
The Board has implemented a risk management framework in compliance with the guidance issued by the Task
Force on Internal Control, and will continue to enhance it.
Relationship with the External Auditors
The Group, through the Audit Committee, has established a transparent and appropriate relationship with the
external auditors. The Audit Committee has explicit authority to communicate directly with the external auditors by
way of meetings with the external auditors excluding the attendance of other Directors and employees of the Group
at least twice a year.
35
ADDITIONAL COMPLIANCE INFORMATION
The following information is presented in compliance with the Main Market Listing Requirements:
Utilisation of proceeds from corporate proposal
There were no proceeds raised from any corporate proposals during the financial year under review.
Share Buy-Back
At the Extraordinary General Meeting of Weida held on 13 February 2007, the Directors obtained the shareholders’
approval for the Company to purchase and/or hold its own shares of up to ten percent (10%) of its total issued and
paid-up share capital of the Company (“Share Buy-Back Authority”). The Share Buy-Back Authority was renewed
at the subsequent Annual General Meetings.
During the financial year ended 31 March 2010, a total of 200 ordinary shares of RM0.50 each of the Company were
purchased pursuant to the Share Buy-Back Authority. All the shares purchased are currently retained as treasury
shares. None of the share purchased has been resold or cancelled.
A monthly breakdown of the shares bought back is set out below:
Month
No. Of
Shares
Price
Highest
RM
Lowest
RM
Average Cost
RM
Total Consideration
RM
June 2009
100
0.480
0.480
0.480
48.00
November 2009
100
0.695
0.695
0.695
69.50
Options and convertible securities
There were no exercise of options and convertible securities during the financial year.
Depository receipt programme
During the financial year under review, the Company did not sponsor any depository receipt programme.
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 ended 31 March 2010.
Non-Audit Fees
The total amount of non-audit fees incurred for services rendered to the Company and its subsidiaries for the
financial year ended 31 March 2010 by the Company’s external auditors, Messrs. KPMG, and a firm or corporation
affiliated to Messrs. KPMG were amounted to RM158,110.
Variance in profit estimate, forecast or projection
There were no profit estimate, forecast or projection been announced by the Company during the financial year
under review.
Variance in results
There was no significant variance between the results for the financial year and the unaudited results previously
released by the Company.
Profit guarantee
No profit guarantee had been received by the Company in respect of the financial year under review.
36
ADDITIONAL COMPLIANCE INFORMATION (continued)
Revaluation Policy on Land and Buildings
The Group has adopted the policy to revalue its freehold land and buildings, by external independent valuers, every
five (5) years and at shorter intervals whenever the fair value of the revalued assets is expected to differ materially
from their carrying value. Additions to land and buildings in between revaluations are stated at cost.
Surpluses arising from revaluation are dealt with in the revaluation reserve account. Any deficit arising is offset
against the revaluation reserve to the extent of a previous increase for the same property. In all other cases, a
decrease in carrying amount is charged to the income statement.
Material Contracts Involving Directors/Major Shareholders’ Interests
There were no material contracts entered by the Group involving Directors’ and major shareholders’ interests
subsisting at the end of the financial year under review or entered into since the end of the previous financial year.
Recurrent Related Party Transactions (“RRPT”) of Revenue Nature
During the financial year ended 31 March 2010, no shareholder’s mandate was obtained for the RRPT.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
FOR PREPARING THE ANNUAL FINANCIAL STATEMENTS
The Directors are required by the Companies Act, 1965 (“the Act”) to prepare financial statements for each financial
year which give a true and fair view of the state of affairs of the Company and the Group at the end of the financial
year and the results and cash flows of the Company and the Group for the financial year.
As required by the Act, the financial statements have been prepared in accordance with the Financial Reporting
Standards in Malaysia and the provisions of the Act. The Directors have considered that in preparing the financial
statements for the financial year ended 31 March 2010 set out on pages 44 to 119 of this Annual Report, appropriate
accounting policies have been adopted and are consistently applied and supported by reasonable and prudent
judgements and estimates.
The Directors have responsibility to ensure the Company and the Group maintain proper accounting records which
disclose with reasonable accuracy, the financial position and performance of the Company and the Group, and to
enable them to ensure the financial statements comply with the Act. The Directors have overall responsibility for
taking such steps as are reasonably open to them to safeguard the assets of the Company and the Group and to
prevent and detect fraud and other irregularities.
37
REPORT OF THE AUDIT COMMITTEE
COMPOSITION OF AUDIT COMMITTEE
Chairman:
Members:
Yeoh Chin Hoe is a member of the Malaysian Institute of Accountants and two (2) other associations of accountants
specified in Part II of the 1st Schedule of the Accountants Act 1967. All members of the Committee are financially
literate.
The Committee members attended a full-day in-house training on “Implementing Work Culture for Operational
Excellence”.
TERMS OF REFERENCE
The terms of reference of the Committee are as follows:
Constitution
The Committee was established on 17 May 2001. The functions and authority of the Committee extend to Weida
(M) Bhd. and all its subsidiaries, collectively referred to as “the Group”.
Primary objectives
The Committee has been formed with the following objectives:
(a) enhance openness, integrity and accountability in the Group’s activities so as to safeguard the rights and
interests of the shareholders;
(b) provide assistance to the Board of Directors in fulfilling its fiduciary responsibilities relating to corporate
accounting and reporting practices;
(c)
enhance the Group’s business effectiveness and efficiency, quality of the accounting and audit functions and
strengthen the public’s confidence in the Group’s reported results;
(d) maintain, through regularly scheduled meetings, a direct line of communication between the Board of Directors
and the External and Internal Auditors; and
(e) enhance the independence of the internal audit functions.
Membership
The Committee shall be appointed by the Board of Directors from amongst their number and shall consist of not less
than three (3) members. All the Committee members must be non-executive directors, with a majority of them being
independent directors. No alternate directors shall be appointed as a member of the Committee.
At least one (1) member of the Committee:
•
must be a member of Malaysian Institute of Accountants (“MIA”); or
•
if he is not a member of the MIA, he must have at least three (3) years of working experience and:
he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act
1967; or
he must be a member of one (1) of the associations of accountants specified in Part II of the 1st Schedule
of the Accountants Act 1967; or
•
fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad (“Bursa
Securities”).
If membership of the Committee for any reason falls below three (3) members, the Board of Directors shall, within
three (3) months of that event, appoint such number of new members as may be required to fulfil the minimum
requirement.
38
REPORT OF THE AUDIT COMMITTEE (continued)
Chairman
The Chairman of the Committee shall be an independent director appointed by the Board of Directors.
Secretary
The Secretary to the Committee shall be any of the Joint Company Secretaries.
Quorum
A quorum shall consist of a majority of independent directors and shall not be less than two (2) independent
directors.
Meetings and Minutes
The Committee shall hold at least four (4) meetings a year. Additional meetings may be held as and when necessary,
upon request by any Committee member, the Management, Internal or External Auditors. Internal Audit Department
Personnel and the Group Financial Controller are normally invited to attend the meetings. Other members of the
Board of Directors, employees and representatives of External Auditors shall attend the meetings upon the invitation
of the Committee.
The Committee shall meet with the External Auditors, excluding the attendance of other Directors and employees
of the Group, at least twice a year, or whenever deemed necessary.
The Committee may also meet with the Internal Auditors, excluding the attendance of other Directors and employees
of the Group, whenever deemed necessary.
Minutes of meetings shall be kept and distributed to each member of the Committee. The Chairman of the Committee
shall report on each meeting to the Board of Directors.
Review of the Composition of the Committee
The term of office and performance of the Committee and each of the members shall be reviewed by the Board of
Directors at least once every three (3) years to determine whether the Committee and its members have carried out
their duties in accordance with their terms of reference.
Authority
The Committee is authorised by the Board of Directors to:
(a) investigate any activity within its terms of reference and shall have unrestricted access to all employees of the
Group;
(b) have the resources in order to perform its duties as set out in its terms of reference;
(c)
have full and unrestricted access to information pertaining to the Group;
(d) have direct communication channels with the Internal and External Auditors;
(e) obtain external legal or other independent professional advice as necessary; and
(f)
convene meetings with the Internal Auditors, External Auditors or both, excluding the attendance of other
Directors and employees of the Group.
Notwithstanding anything to the contrary hereinbefore stated, the Committee does not have executive powers and
shall report to the Board of Directors on matters considered and its recommendations thereon, pertaining to the
Group.
Responsibility
Where the Committee is of the view that a matter reported by it to the Board of Directors has not been satisfactorily
resolved resulting in a breach of the Main Market Listing Requirements, the Committee has the responsibility to
promptly report such matter to Bursa Malaysia Securities Berhad.
39
Functions and Duties
The functions and duties of the Committee can be summarised as follows:
Financial reporting
•
Review the annual and interim financial reports, focusing on the quality of the reported earnings and the
adequacy and fairness of the disclosures, before submission to the Board.
Risk management
•
Ensure the risk management process is comprehensive and ongoing, rather than partial and periodic.
Internal audit
•
Review the adequacy of the audit scope, functions, competency and resources of the Internal Audit team and
approve for the internal audit plans proposed by the Internal Audit team annually;
•
Review the quarterly reports prepared by the Internal Auditor, the significant findings, management’s responses
and remedy actions taken by management after the audit;
•
Approve the appointment or termination of the Internal Audit staff;
•
Assess the performance of the Internal Audit team; and
•
Ensure the Internal Audit team access to the audit committee, encouraging communication beyond scheduled
committee meetings.
External audit
•
Establish a direct reporting relationship with the external auditors and approve the scope of work of external
audit;
•
Consider the nomination, appointment and dismissal of External Auditors as well as their annual audit fee;
and
•
Discuss issues arising from interim and final audits, and any other matter that External Auditors may wish to
bring up.
Responding to management needs
•
Assist the management to address specific issues facing the business e.g. review compliance with
regulation;
•
Continually communicating with senior management regarding status, progress, and new developments, as
well as problematic areas; and
•
Review any related party transactions and any other situation whereby conflict of interest that may arise.
ACTIVITIES OF THE COMMITTEE DURING THE FINANCIAL YEAR
Meetings and Attendance
During the financial year ended 31 March 2010, the Committee held a total of five (5) meetings. The details of
attendance of each Committee member are as follows:
Number of Meetings
Attended
4 out of 5
Haji Su’ut bin Haji Suhaili
4 out of 5
Yeoh Chin Hoe
4 out of 5
The Executive Director (Finance), Group Financial Controller, External and Internal Auditors attended most of these
meetings upon invitation by the Committee. All proceedings, matters arising, deliberations, in terms of the issue
discussed, and resolutions of the Committee’s meetings are recorded in the minutes by the Company Secretaries,
confirmed by the Committee and signed by the Committee Chairman or chairman of the meeting. All the Committee
meetings were attended by one (1) or both of the two (2) Company Secretaries. The Chairman of the Committee
reports on the main findings and deliberations of the Committee’s meetings to the Board.
40
Summary of Activities
The Committee, had in line with its terms of reference, carried out the following activities in the discharge of its
functions and duties during the financial year ended 31 March 2010:
(a) review of the quarterly financial results and annual audited financial statements of the Group prior to submission
to the Board of Directors for consideration and approval;
(b) review the comparison of the Group’s actual results against budgeted results on a yearly basis;
(c)
review of the annual audit strategy and review planning memorandum of the External Auditors;
(d) review and deliberate on the External Auditors’ reports in relation to the statutory audit and issues arising from
the audit;
(e) review and approve the annual internal audit plan and updates thereof prepared by the Internal Audit
Department;
(f)
review and deliberate the internal audit reports presented by the Internal Audit Department on findings,
recommendations (incorporating Management’s response) and action plans with persons responsible and a
time frame for implementation of the recommendations;
(g) review of any related party transaction and conflict of interest situation that may arise within the Group
including any transaction, procedure or course of conduct that raises questions of Management integrity prior
to submission to the Board of Directors for ratification, consideration and approval;
(h) review the following prior to recommendation to the Board of Directors for approval:
i)
profit/cash flow projections;
ii)
credit control policies;
iii)
procurement and payment policies and procedures;
iv)
information technology policies;
v)
fixed assets policy; and
vi)
related party transaction policy;
(i)
review the adequacy of the disclosure on related party transactions entered into by the Group in the quarterly
and annual reports of the Company;
(j)
meet with the Internal and External Auditors, excluding the attendance of the other Directors and employees
of the Group;
(k)
consider the re-appointment of External Auditors, as well as their remuneration;
(l)
review the Report of the Committee and Statement on Internal Control prior to submission to the Board of
Directors for its approval; and
(m) consider the recruitment of staff(s) for internal audit department.
41
Internal Audit Functions and Activities
The Company has an Internal Audit Department (“IAD”) which assists the Committee in the discharge of its duties
and responsibilities. The Internal Audit Charter sets out the responsibility, scope and objectives, independence and
authority of the internal audit function. The principal responsibility of the IAD is to undertake regular and systematic
reviews of the system of controls based on the risks identified in the Risk Profile so as to provide reasonable
assurance to the Committee on the adequacy of internal controls and that they have been operating satisfactorily
and effectively.
In attaining these objectives, the scopes of activities of the IAD include the following:
(a) review and appraise the soundness, adequacy and application of the system of internal controls and recommend
improvements thereon;
(b) ascertain the extent of compliance with established policies, procedures and statutory requirements;
(c)
appraise the reliability, integrity and usefulness of financial and management information developed;
(d) review the controls for safeguarding assets and as appropriate, verify the existence of assets;
(e) carry out special reviews and investigations requested by the Committee, Board of Directors and Managing
Director; and
(f)
identify ways and opportunities to improve the effectiveness and efficiency of the operations and processes of
the Group.
The IAD has, during the financial year ended 31 March 2010, conducted evaluations of the system of internal controls
encompassing the Group’s governance, operations, and information systems of major areas of its operation. The
internal audit reports were deliberated on by the Committee and recommendations were duly acted upon by the
Management.
Currently, the Senior Internal Audit Executive reports directly to the Committee and is responsible for the regular
review and/or appraisal of the effectiveness of the risk management, internal control, and governance processes
within the Group.
The total costs incurred for the IAD during the financial year ended 31 March 2010 amounted to RM105,735.
42
STATEMENT ON INTERNAL CONTROL
Board Responsibility
The Board of Directors recognises the importance of maintaining a sound system of internal control and the proper
management of risks affecting the Group’s operations in order to safeguard shareholders’ investments. The Board
affirms its overall responsibility for the Group’s systems of internal control and risk management, and for reviewing
the adequacy and integrity of those systems. It should be noted, however, that such systems are designed to
manage rather than eliminate the risk of failure to achieve business objectives. Accordingly, these systems can
only provide reasonable but not absolute assurance against material misstatement or loss.
Risk Management Framework
The Board confirms that it has identified, evaluated, monitored and managed the significant risks of each functional
area (except as mentioned in the ensuing paragraph) and established a Group Risk Profile which includes, inter
alia:
(a) the principal risks faced by the Group under appropriate risk categories, levels and sub-levels;
(b) the likelihood of risks crystalising and the resulting impact; and
(c)
the internal controls put in place to address those risks.
In line with the Group’s expansion into oil palm plantations, waste tyre recycling operation and overseas operations,
the Group intends to update the Group Risk Profile to encompass these new activities in future.
In addition, the Board has established an organisational structure with clearly defined lines of accountability and
authority for each Board Committee. The responsibility of the Audit Committee includes reviewing the audit reports
prepared by the Internal and External Auditors, the major findings and management’s responses thereto. The scope
of activities of the Internal Audit Department is set out in the Report of the Audit Committee on pages 38 to 42 of
this Annual Report.
The internal audit presents an annual audit plan to the Audit Committee for approval prior to carrying out internal
audit reviews. Currently, its scope of works includes periodic reviews and evaluation of operational and financial
controls for operations within Malaysia only. The internal audit activities will encompass the overseas operations
once the Group Risk Profile is updated. The internal audit presents its report to the Audit Committee on a quarterly
basis on key audit findings, recommendations and management’s response. The internal audit follows up the
implementation of its recommendations by the management and reports the status of implementation to the Audit
Committee. The Audit Committee considers reports from the internal audit and comments from the management,
before presenting the summaries of the internal audit findings to the Board of Directors on a quarterly basis or
earlier as appropriate.
Other Principal Internal Control Features
The other principal control features established within the Group include:
•
clearly defined terms of reference, responsibilities and authorities of:
Audit Committee;
Nominating Committee; and
Remuneration Committee;
•
Nominating Committee recommends to the Board, candidates for directorship;
•
Remuneration Committee reviews the remuneration package of each Director by reference to the performance
of the Director;
•
the Audit Committee and the Board review the Group’s quarterly interim information prior to announcement to Bursa
Malaysia Securities Berhad;
•
comprehensive and detailed monthly financial reports for review by Senior Management;
•
a detailed budgeting process where operating units prepare budgets for approval by the Board on a yearly basis;
•
major capital expenditure and asset disposals are appraised and approved by the boards of directors of subsidiaries;
and
•
periodic visits to operating units by members of the Board and Senior Management.
Control weaknesses that result in material losses
During the financial year, there were no internal control weaknesses noted which have resulted in material losses,
contingencies or uncertainties that would require disclosure in the Group’s Annual Report.
43
Directors’ report
for the financial year ended 31 March 2010
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 March 2010.
Principal activities
The Company is principally engaged in investment holding and the provision of management services to its
subsidiaries while the principal activities of the subsidiaries are stated in Note 6 to the financial statements. There
has been no significant change in the nature of these activities during the financial year.
Results
Profit attributable to:
Equity holders of the Company
Minority interest
Group
RM
Company
RM
17,191,747
4,432,443
4,223,596
-
21,624,190
4,223,596
Dividend
Since the end of the previous financial year, the Company paid a final dividend of 4.00 sen per ordinary share less
tax at 25% totalling RM3,806,872 (equivalent to 3.00 sen net per ordinary share) in respect of the financial year
ended 31 March 2009 on 25 November 2009.
The Directors are recommending a first and final dividend of 4.00 sen per ordinary share less tax at 25% totalling
RM3,806,866 (equivalent to 3.00 sen net per ordinary share) in respect of the financial year ended 31 March 2010,
the payment of which is subject to approval by shareholders at the forthcoming Annual General Meeting.
Reserves and provisions
There were no material transfers to or from reserves and provisions during the financial year under review.
Directors of the Company
Directors who served since the date of the last report are:
Dato’ Lee Choon Chin
Jee Hon Chong
Chew Chin Choong
Yeoh Chin Hoe
44
Directors’ report
for the financial year ended 31 March 2010 (continued)
Directors’ interests
The interests of the Directors (including where applicable the interests of their spouses or children who themselves
are not Directors of the Company or of the related corporations, as the case may be) in the shares of the Company
and of its related corporations (other than wholly-owned subsidiaries) at financial year end as recorded in the
Register of Directors’ Shareholdings are as follows:
______Number of ordinary shares of RM0.50 each ______
At
At
1.4.2009
Bought
Sold
31.3.2010
Shareholdings in the Company
in which Directors have interests
Direct interests
Jee Hon Chong
33,334
7,074,242
40,000
33,334
3,090,776
-
-
33,334
7,074,242
40,000
33,334
3,090,776
177,966
70,000
-
-
177,966
70,000
Deemed interests
Par
value
_____________Number of ordinary shares_____________
At
At
1.4.2009
Bought
Sold
31.3.2010
Shareholdings in which
has deemed interests
The Company *
Subsidiaries
Weidaya Sdn. Bhd. **
Weida Environmental
Technology Sdn. Bhd. **
Sar-Alam Indah Sdn. Bhd. **
UTIC Services Sdn. Bhd. **
UTIC Industries Sdn. Bhd. **
Weidasar Engineering Sdn. Bhd. **
Renexus-Weida Sdn. Bhd. **
Bumi Suria Ventures Sdn. Bhd. **
Weida Water (ADRA) Sdn. Bhd. **
Weida (B) Sdn. Bhd.(“WB”) **
Weida Philippines Inc. (“WPI”) **
LIPP Biogas (Malaysia) Sdn. Bhd.
(formerly known as Budi
Serimas Sdn. Bhd.) **
*
**
RM0.50
26,048,974
-
-
26,048,974
RM1.00
350,000
-
-
350,000
RM1.00
RM1.00
RM1.00
RM1.00
RM1.00
RM1.00
RM1.00
RM1.00
BND1.00
PHP1.00
51,000
5,800
1,358,000
2
640,000
312,840
7,500,000
51,000
24,999
8,407,277
-
-
51,000
5,800
1,358,000
2
640,000
312,840
7,500,000
51,000
24,999
8,407,277
RM1.00
-
80,000
-
80,000
Deemed interest by virtue of his substantial interest in Weida Management Sdn. Bhd.
Deemed interest by virtue of his substantial interest in Weida (M) Bhd.
45
Directors’ report
Directors’ interests (continued)
The nominal value of the ordinary shares of the subsidiaries listed above is RM1.00 per ordinary share except that
in the case of WB and WPI, the nominal value of their ordinary shares is Brunei Dollar (BND) 1.00 per ordinary
share and Philippine Peso (PHP) 1.00 per ordinary share respectively.
Dato’ Lee Choon Chin, by virtue of his interests in the shares of the Company, is deemed interested in the shares
of the subsidiaries during the financial year to the extent the Company has an interest.
None of the other Directors holding office at 31 March 2010 had any interest in the shares of the Company and of
its related corporations either at the beginning and/or end of 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 of the Company or of its 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 certain Directors who have
significant financial interests in companies which traded with certain companies in the Group in the ordinary course
of business (see also Note 29 to the financial statements).
There were no arrangements during and at the end of the financial year which had the object of enabling Directors
of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any
other body corporate.
Issue of shares
There were no changes in the authorised, issued and paid-up capital of the Company during the financial year.
Options granted over unissued shares
No options were granted to any person to take up unissued shares of the Company during the financial year.
Other statutory information
Before the balance sheets and income 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.
all current assets have been stated at the lower of cost and net realisable value.
At the date of this report, the Directors are not aware of any circumstances:
46
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
Directors’ report
Other statutory information (continued)
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.
At the date of this report, there does not exist:
i.
any charge on the assets of the Group or of the Company that has arisen since the end of the financial year
and which secures the liabilities of any other person, or
ii.
any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial
year.
No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become
enforceable within the period of twelve months after the end of the financial year which, in the opinion of the
Directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as
and when they fall due.
In the opinion of the Directors, except for the gain of RM3,170,729 arising from the disposal of other investments
(see Note 20), the results of the operations of the Group and of the Company for the financial year ended 31 March
2010 have not been substantially affected by any item, transaction or event of a material and unusual nature nor
has any such item, transaction or event occurred in the interval between the end of that financial year and the date
of this report.
Auditors
The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
.....................…………............….........
................................……………..........
Kuching,
Date: 27 July 2010
47
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 51 to 119 are drawn up in accordance with
Financial Reporting Standards and the Companies Act, 1965 in Malaysia, so as to give a true and fair view of the
financial position of the Group and of the Company at 31 March 2010 and of their financial performance and cash
flows for the financial year then ended.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
.....................…………............….........
................................……………..........
Kuching,
Date: 27 July 2010
Statutory declaration
pursuant to Section 169(16) of the Companies Act, 1965
I, Chew Chin Choong, the Director primarily responsible for the financial management of Weida (M) Bhd., do
solemnly and sincerely declare that the financial statements set out on pages 51 to 119 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 abovenamed
in Kuching in the State of Sarawak
on 27 July 2010
Before me:
48
…………………………..………
Chew Chin Choong
To The Members Of Weida (M) Bhd.
Report on the Financial Statements
We have audited the financial statements of Weida (M) Bhd., which comprise the balance sheets as at 31 March
2010 of the Group and of the Company, and the income statements, statements of changes in equity and cash
flow statements of the Group and of the Company for the financial year then ended, and a summary of significant
accounting policies and other explanatory notes, as set out on pages 51 to 119.
Directors’ Responsibility for the Financial Statements
The directors of the Company are responsible for the preparation and fair presentation of these financial statements
in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia. This responsibility
includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying
appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on our judgment, including the assessment of risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we
consider internal control relevant to the Company’s preparation and fair presentation of the financial statements in
order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Opinion
In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting
Standards and the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the
Group and of the Company as of 31 March 2010 and of their financial performance and cash flows for the financial
year then ended.
49
To The Members Of Weida (M) Bhd. (continued)
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 the subsidiaries of which we have not acted as
auditors as well as the unaudited accounts of the newly incorporated subsidiary, LIPP Biogas (Malaysia) Sdn.
Bhd. (formerly known as Budi Serimas Sdn. Bhd.), which are indicated in Note 6 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 accounts of LIPP Biogas (Malaysia) Sdn. Bhd. (formerly known as Budi Serimas Sdn. Bhd.) for the period
from 22 January 2010 (date of incorporation) to 31 March 2010, have not been audited. The audit reports on
the accounts of the remaining subsidiaries did not contain any qualification or any adverse comment made
under Section 174(3) of the Act.
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
Firm Number: AF 0758
Chartered Accountants
Kuching,
Date: 27 July 2010
50
Chin Chee Kong
Chartered Accountant
Approval Number: 1481/01/11(J)
Balance sheets
at 31 March 2010
Note
2010
RM
Group
2009
RM
2010
RM
Company
2009
RM
3
4
86,029,399
58,031,205
59,325,990
58,160,258
2,321,360
2,637,371
2,980,158
1,705,732
5
6
7
8
9
10
11
18,463,813
2,842,357
338,140
337,875
34,268,682
17,000
7,097,246
3,417,701
35,019,018
427,975
27,424,923
33,000
43,416,342
16,140
81,990,437
-
43,416,342
34,697,018
60,639,338
-
200,328,471
190,906,111
130,381,650
143,438,588
43,272,799
96,277,307
926,518
40,463,734
30,145,934
86,322
74,946,649
304,389
71,615,775
9,123,952
744,253
7,871,970
28,401,352
244,870
15,597,287
Total current assets
180,940,358
177,099,069
17,740,175
44,243,509
Total assets
381,268,829
368,005,180
148,121,825
187,682,097
66,666,666
82,832,457
66,666,666
66,464,452
66,666,666
2,327,335
66,666,666
1,698,311
149,499,123
133,131,118
68,994,001
68,364,977
26,460,197
23,247,736
-
-
175,959,320
156,378,854
68,994,001
68,364,977
Assets
Property, plant and equipment
Prepaid lease payments
Oil palm plantation
development expenditure
Investment in subsidiaries
Goodwill
Other investments
Other intangible asset
Trade and other receivables
Deferred tax assets
Total non-current assets
Inventories
Properties held for resale
Current tax assets
Cash and bank balances
12
13
10
14
Equity
Share capital
Reserves
15
16
Total equity attributable
to equity holders of the Company
Minority interest
Total equity
2(a)(iii)
51
Balance sheets
at 31 March 2010 (continued)
Note
2010
RM
Group
2009
RM
2010
RM
Company
2009
RM
17
11
48,835,407
16,040,000
83,406,032
14,401,900
30,000,000
166,000
82,178,175
40,000
64,875,407
97,807,932
30,166,000
82,218,175
99,888,447
38,693,306
1,852,349
74,656,730
37,418,341
1,743,323
38,961,824
10,000,000
-
27,098,945
10,000,000
-
Total current liabilities
140,434,102
113,818,394
48,961,824
37,098,945
Total liabilities
205,309,509
211,626,326
79,127,824
119,317,120
Total equity and liabilities
381,268,829
368,005,180
148,121,825
187,682,097
Liabilities
Loans and borrowings
Deferred tax liabilities
Total non-current liabilities
Trade and other payables
Loans and borrowings
Current tax liabilities
18
17
The notes on pages 60 to 119 are an integral part of these financial statements.
52
Income statements
Note
2010
RM
Group
2009
RM
2010
RM
Company
2009
RM
19
276,193,144
267,844,419
11,590,299
14,626,591
5,051,146
(5,964,401)
6,081,004
(5,280,759)
(379,258)
(3,492,874)
(4,479,666)
3,170,729
(453,961)
(3,997,476)
(4,142,324)
-
Revenue
Other income
Changes in inventories
Raw materials and consumables used
Purchase of finished goods
Contractors’ fees
Employee benefits
Depreciation and
amortisation expenses
Plant and production overheads
Transportation charges
Other expenses
Interest expense
Gain on disposal of other investments
Reversal of:
- impairment loss on investment
in subsidiaries
- allowance for diminution in
value of a quoted investment
20
20
20
20
7,491,043
10,712,462
309,715
1,324,644
(53,049,337) (45,225,644)
(16,354,886) (12,292,459)
(112,844,632) (125,629,056)
(29,621,471) (27,435,964)
(5,940,105)
(11,548,463)
(7,587,340)
(19,910,048)
(2,347,921)
3,170,729
(5,089,810)
(10,290,515)
(5,776,954)
(20,164,047)
(3,552,503)
-
-
-
-
2,540,599
-
2,137,532
-
2,137,532
Profit before taxation
20
27,960,428
26,562,105
5,495,975
11,511,206
Tax expense
22
(6,336,238)
(5,767,671)
(1,272,379)
(1,585,162)
21,624,190
20,794,434
4,223,596
9,926,044
17,191,747
4,432,443
15,024,721
5,769,713
4,223,596
-
9,926,044
-
21,624,190
20,794,434
4,223,596
9,926,044
Profit for the financial year
Profit for the financial year attributable to:
Equity holders of the Company
Minority interest
Basic/Diluted earnings
per ordinary share (sen)
23
13.55
11.84
Dividend per ordinary share - net (sen)
24
3.00
5.62
53
Statements of changes in equity
Group
At 1 April 2008
____________________Attributable to equity
___________________ Non-distributable ______
Share
Revaluation
Merger
capital
reserve
deficit
RM
RM
RM
66,666,666
(16,833,045)
Foreign exchange translation differences
Realisation of revaluation reserve
-
(177,924)
-
Net gains/(losses) recognised directly in equity
-
(177,924)
-
-
-
(177,924)
-
-
Total recognised income and expenses for the financial year
Treasury shares acquired (Note 16)
Acquisition of minority interest (Note 30)
Dividends paid to:
- equity holders of the Company (Note 24)
- minority shareholders
At 31 March 2009/ 1 April 2009
-
-
66,666,666
7,735,426
(16,833,045)
Foreign exchange translation differences
Realisation of revaluation reserve
Revaluation of assets (Note 3)
-
(179,474)
3,388,663
-
Net gains/(losses) recognised directly in equity
-
3,209,189
-
-
-
3,209,189
-
-
-
-
-
66,666,666
10,944,615
Total recognised income and expenses for the financial year
Acquisition of a new subsidiary (Note 30)
Dividends paid to:
At 31 March 2010
(Note 15)
54
7,913,350
(Note 16)
(16,833,045)
(Note 16)
holders of the Company_____________________________________
____________________________
Distributable
Translation
Treasury
Retained
reserve
shares
earnings
Total
RM
RM
RM
RM
(38,135)
(4,481,639)
68,391,477
121,618,674
Minority
interest
RM
Total
equity
RM
18,315,730
139,934,404
(64,659)
-
-
177,924
(64,659)
-
-
(64,659)
-
(64,659)
-
-
177,924
15,024,721
(64,659)
15,024,721
5,769,713
(64,659)
20,794,434
15,202,645
-
14,960,062
(116,602)
-
5,769,713
(801,707)
20,729,775
(116,602)
(801,707)
(3,331,016)
-
(3,331,016)
-
(36,000)
(3,331,016)
(36,000)
(64,659)
(102,794)
(116,602)
(4,598,241)
80,263,106
(405,333)
-
-
179,474
-
(405,333)
-
-
179,474
17,191,747
(405,333)
-
(200)
-
(508,127)
(4,598,441)
(Note 16)
(Note 16)
133,131,118
156,378,854
(811,041)
-
(1,216,374)
3,388,663
2,983,330
17,191,747
(811,041)
4,432,443
2,172,289
21,624,190
17,371,221
-
20,175,077
(200)
-
3,621,402
18,559
23,796,479
(200)
18,559
(3,806,872)
-
(3,806,872)
-
93,827,455
(405,333)
3,388,663
23,247,736
149,499,123
(427,500)
26,460,197
(3,806,872)
(427,500)
175,959,320
55
Statements of changes in equity
Company
___________ Non-distributable ____________
Share
Treasury Revaluation
capital
shares
reserve
RM
RM
RM
At 1 April 2008
Dividend paid to equity holders of
the Company (Note 24)
(4,481,639)
-
-
(116,602)
-
9,926,044
-
9,926,044
(116,602)
-
(3,331,016)
(3,331,016)
-
6,296,552
68,364,977
212,500
-
212,500
738
-
211,762
-
738
4,223,596
212,500
4,223,596
211,762
-
4,224,334
-
4,436,096
(200)
-
(3,806,872)
(3,806,872)
211,762
6,714,014
68,994,001
-
-
66,666,666
Revaluation of assets (Note 3)
Realisation of revaluation
reserves
-
-
-
-
Net gain recognised directly
in equity
-
-
At 31 March 2010
66,666,666
(Note 15)
(4,598,241)
(200)
(738)
(4,598,441)
(Note 16)
(Note 16)
56
(298,476)
Total
RM
66,666,666
At 31 March 2009/1 April 2009
Total recognised income and
expenses for the financial year
Dividend paid to equity holders
of the Company (Note 24)
Distributable
(Accumulated
losses)/
Retained
earnings
RM
(Note 16)
61,886,551
Cash flow statements
2010
RM
Group
2009
RM
2010
RM
Company
2009
RM
27,960,428
26,562,105
5,495,975
11,511,206
Cash flows from operating activities
Adjustments for:
Net reversal of allowance for diminution in value of
other investments
Amortisation of:
- intangible asset (Note 9)
- goodwill (Note 7)
Depreciation and amortisation expenses (Note 20)
Dividend income
Loss/(Gain) on disposal of:
- property, plant and equipment
- other investments
Interest expense (Note 20)
Interest income (Note 20)
Goodwill written off (Note 20)
written off (Note 20)
Negative goodwill on
consolidation recognised (Note 20)
Unrealised foreign exchange gain (Note 20)
Reversal of revaluation deficit previously charged
to income statement (Note 20)
Reversal of impairment loss
on investment in subsidiaries
(3,411)
(2,009,532)
(3,411)
(2,137,532)
37,542
575,344
5,940,105
(760)
22,525
641,366
5,089,810
(957,391)
379,258
(6,050,760)
453,961
(9,069,391)
87,227
(3,170,729)
2,347,921
(963,278)
5,764
(22,001)
(62,574)
3,552,503
(1,656,080)
789,940
(16,750)
(3,170,729)
4,479,666
(3,629,924)
-
(38,400)
(380,047)
4,142,324
(4,392,396)
-
90,979
458
-
-
-
-
-
-
-
-
(2,540,599)
32,224,765
29,066,613
(2,425,696)
(2,450,416)
(13,064,775)
86,322
(29,461,601)
30,255,874
1,656,729
236,000
92,504,764
(6,167,457)
(3,509,628)
13,298,808
58,645,171
1,052,446
Cash generated from operations
Interest paid
Taxes paid
20,040,585
(790,098)
(6,409,939)
117,296,649
(922,460)
(5,119,444)
7,363,484
(204,000)
57,247,201
(288,879)
Net cash from operating activities
12,840,548
111,254,745
7,159,484
56,958,322
Operating profit/(loss) before
changes in working capital
Changes in working capital:
Inventories
Properties held for resale
Trade and other payables
222,836
(534,801)
(279,423)
2,365
(557,402)
(2,329,021)
57
Group
2010
RM
2009
RM
2010
RM
Company
2009
RM
Cash flows from investing activities
Acquisition of new subsidiaries (Note 30)
- consideration paid
- net of cash acquired
Acquisition of:
- property, plant and equipment [Note (i)]
- other investments
- intangible asset
Additions to prepaid lease payments (Note 4)
Increase in investment in subsidiaries (Note 30)
Incurrence of oil palm plantation development
expenditure, net of depreciation and
amortisation expenses capitalised
Increase in cash and cash
equivalents pledged with banks
Proceeds from disposal of:
- other investments
Dividends received
Interest received
(5,406,908)
-
(6,448,002)
-
(27,165,870)
(6,962)
-
(19,803,479)
(21,563,996)
(105,800)
(62,399)
(1,896,000)
(471,225)
(6,962)
-
(143,772)
(21,563,996)
(2,333,998)
(9,120,354)
(3,509,641)
-
-
(6,845,149)
(5,728,328)
-
-
37,861,980
195,595
664
963,278
531,000
885,303
708,521
1,656,080
37,861,980
28,231
4,538,164
3,629,924
531,000
44,866
6,792,521
4,392,396
(4,116,818)
(54,295,647)
45,580,112
(18,728,985)
Net repayment of other borrowings
Repurchase of treasury shares (Note 16)
Net repayment of Islamic Bonds
Dividends paid to:
Interest paid
(7,553,968)
(200)
(30,000,000)
(4,901,906)
(116,602)
(20,000,000)
(22,178,175)
(200)
(30,000,000)
(555,995)
(116,602)
(20,000,000)
(3,806,872)
(427,500)
(1,557,823)
(3,331,016)
(36,000)
(2,630,043)
(3,806,872)
(4,479,666)
(3,331,016)
(4,142,324)
Net cash used in financing activities
(43,346,363)
(31,015,567)
(60,464,913)
(28,145,937)
(34,622,633)
25,943,531
(7,725,317)
10,083,400
(3,632,749)
2,298,038
-
-
63,506,209
35,264,640
15,597,287
5,513,887
25,250,827
63,506,209
7,871,970
15,597,287
Net cash (used in)/from investing activities
-
Cash flows from financing activities
Net (decrease)/increase in cash
and cash equivalents
Effect of exchange rate fluctuations
on cash held
Cash and cash equivalents at
beginning of financial year
Cash and cash equivalents
at end of financial year [Note (ii)]
58
Notes
(i)
Acquisition of property, plant and equipment
During the financial year, the Group and the Company acquired property, plant and equipment in the following
manner:
2010
RM
Group
2009
RM
2010
RM
Company
2009
RM
Paid for in cash
In the form of finance lease assets
Deposits paid in prior years
27,165,870
4,000,116
29,100
19,803,479
1,686,600
-
471,225
-
143,772
-
Total (see Note 3)
31,195,086
21,490,079
471,225
143,772
(ii) Cash and cash equivalents
Cash and cash equivalents included in the cash flow statements comprise the following balance sheet
amounts:
2010
RM
Group
2009
RM
2010
RM
Company
2009
RM
Term deposits placed with licensed banks
22,068,785
18,394,949
32,214,989
39,400,786
7,514,036
357,934
14,830,000
767,287
Total (see Note 14)
Less: Bank overdrafts (Note 17)
Less: Cash equivalents pledged (Note 14)
40,463,734
(295,505)
(14,917,402)
71,615,775
(37,313)
(8,072,253)
7,871,970
-
15,597,287
-
25,250,827
63,506,209
7,871,970
15,597,287
59
Notes to the financial statements
Weida (M) Bhd. is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the
Main Market of Bursa Malaysia Securities Berhad (“Bursa Securities”). The addresses of its registered office and
principal places of business are as follows:
Registered office
Wisma Hock Peng, Ground Floor to 2nd Floor, 123, Green Heights, Jalan Lapangan Terbang, 93250 Kuching,
Sarawak.
Principal places of business
- Kuching branch
Wisma Hock Peng, Ground Floor to 2nd Floor, 123, Green Heights, Jalan Lapangan
Terbang, 93250 Kuching, Sarawak.
- Kota Kinabalu branch
2-9-1 & 2-9-2, 8th Floor, Wawasan Plaza, 88000 Kota Kinabalu, Sabah.
- Kuala Lumpur branch
21 & 23, Jalan PJU 3/49, PJU3, Sunway Damansara Technology Park, 47810
Petaling Jaya, Selangor Darul Ehsan.
The consolidated financial statements of the Company as at and for the financial year ended 31 March 2010
comprise the financial statements of the Company and its subsidiaries (together referred to as the Group).
The Company is principally engaged in investment holding and the provision of management services to its
subsidiaries while the principal activities of the subsidiaries are stated in Note 6 to the financial statements.
The financial statements were approved by the Board of Directors on 27 July 2010.
1.
Basis of preparation
(a) Statement of compliance
The financial statements of the Group and of the Company have been prepared in accordance with
Financial Reporting Standards, generally accepted accounting principles and the Companies Act, 1965 in
Malaysia. These financial statements also comply with the applicable disclosure provisions of the Listing
Requirements of Bursa Securities.
The Group has not applied the following accounting standards, amendments and interpretations that
have been issued by the Malaysian Accounting Standards Board (MASB) but are only effective for annual
periods beginning on or after the respective dates indicated herein:
Standard / Amendment / Interpretation
FRS 8, Operating Segments
FRS 4, Insurance Contracts
FRS 7, Financial Instruments: Disclosures
FRS 101, Presentation of Financial Statements (revised)
FRS 123, Borrowing Costs (revised)
FRS 139, Financial Instruments: Recognition and Measurement
Amendments to FRS 1, First-time Adoption of Financial Reporting Standards
Amendments to FRS 2, Share-based Payment: Vesting Conditions and Cancellations
Amendments to FRS 7, Financial Instruments: Disclosures
Amendments to FRS 101, Presentation of Financial Statements –
Puttable Financial Instruments and Obligations Arising on Liquidation
60
Effective date
1 July 2009
1 January 2010
1 January 2010
1 January 2010
1 January 2010
1 January 2010
1 January 2010
1 January 2010
1 January 2010
1 January 2010
Notes to the financial statements (continued)
1.
Basis of preparation (continued)
(a) Statement of compliance (continued)
Standard / Amendment / Interpretation
Effective date
Amendments to FRS 127, Consolidated and Separate Financial Statements:
Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate
Amendments to FRS 132, Financial Instruments: Presentation
- Puttable Financial Instruments and Obligations Arising on Liquidation
- Separation of Compound Instruments
Amendments to FRS 139, Financial Instruments: Recognition and Measurement
- Reclassification of Financial Assets
- Collective Assessment of Impairment for Banking Institutions
Improvements to FRSs (2009)
IC Interpretation 9, Reassessment of Embedded Derivatives
IC Interpretation 10, Interim Financial Reporting and Impairment
IC Interpretation 11, FRS 2 – Group and Treasury Share Transactions
IC Interpretation 13, Customer Loyalty Programmes
IC Interpretation 14, FRS 119 – The Limit on a Defined Benefit Asset,
Minimum Funding Requirements and Their Interaction
Amendments to FRS 132, Financial Instruments:
Presentation – Classification of Rights Issues
FRS 1, First-time Adoption of Financial Reporting Standards (revised)
FRS 3, Business Combinations (revised)
FRS 127, Consolidated and Separate Financial Statements (revised)
Amendments to FRS 2, Share-based Payment
Amendments to FRS 5, Non-current Assets Held for Sale and Discontinued Operations
Amendments to FRS 138, Intangible Assets
Amendments to IC Interpretation 9, Reassessment of Embedded Derivatives
IC Interpretation 12, Service Concession Agreements
IC Interpretation 15, Agreements for the Construction of Real Estate
IC Interpretation 16, Hedges of a Net Investment in a Foreign Operation
IC Interpretation 17, Distribution of Non-cash Assets to Owners
Amendments to FRS 1, First-time Adoption of Financial Reporting Standards –
Limited Exemption from Comparative FRS 7, Disclosures for First-time Adopters
Amendments to FRS 7, Financial Instruments:
Disclosures – Improving Disclosures about Financial Instruments
Amendments to FRS 1, Additional Exemptions for First- time Adopters
Amendments to FRS 2, Group Cash-settled Share-based Payments Transactions
IC Interpretation 4, Determining whether an Arrangement contains a Lease
IC Interpretation 18, Transfers of Assets from Customers
1 January 2010
1 January 2010
1 January 2010
1 January 2010
1 January 2010
1 January 2010
1 January 2010
1 January 2010
1 January 2010
1 March 2010
1 July 2010
1 July 2010
1 July 2010
1 July 2010
1 July 2010
1 July 2010
1 July 2010
1 July 2010
1 July 2010
1 July 2010
1 July 2010
1 January 2011
1 January 2011
1 January 2011
1 January 2011
1 January 2011
1 January 2011
The Group plans to apply:
•
from the annual period beginning on 1 April 2010 those standards, amendments and interpretations
as listed in the preceding pages that are effective for annual periods beginning on or before 1 March
2010, except for FRS 4, Amendments to FRS 1, Amendments to FRS 2, Amendments to FRS 132
and IC Interpretation (ICI) 9, ICI 11, ICI 13 and ICI 14 which are not applicable to the Group; and
•
from the annual period beginning on 1 April 2011 those standards, amendments and interpretations
as listed in the preceding pages that are effective for annual periods beginning on or after 1 July
2010, except for FRS 1 (revised), Amendments to FRS 2, Amendments to FRS 5, Amendments to
ICI 9, ICI 12, ICI 15, ICI 16, ICI 17 and ICI 18 which are not applicable to the Group.
61
1.
The initial application of a standard, an amendment or an interpretation, which is to be applied prospectively,
is not expected to have any material financial impact to the financial statements for the current and prior
periods upon their first adoption.
The impact of applying FRS 7 and FRS 139 on the financial statements upon first adoption as required
by paragraph 30(b) of FRS 108, Accounting Policies, Changes in Accounting Estimates and Errors, is not
disclosed by virtue of the exemption given in the respective FRSs.
FRS 8, which replaces FRS 114, Segment Reporting, requires identification and reporting of operating
segments based on internal reports that are regularly reviewed by the entity’s chief operating decision
maker in order to allocate resources to the segment and to assess its performance. As the Group’s
operating segments, namely Manufacturing, Works, Services and Plantations are the same as the
business segments on which the Group currently presents segment information (see Note 25), the
adoption of FRS 8 is not expected to have a material impact to the Group.
FRS 101 aims to improve user’s ability to analyse and compare the information given in financial statements.
It requires information in financial statements to be aggregated on the basis of shared characteristics
to enable readers to analyse transactions between a company and its shareholders separately from
transactions with external parties. FRS 101 also changes the titles of the financial statements to reflect
their functions more clearly, for example, balance sheet is renamed as statement of financial position,
amongst others.
FRS 123 (revised) requires an entity to capitalise borrowing costs directly attributable to the acquisition,
construction or production of a qualifying asset as part of the cost of that asset and removes the option
of immediately recognising the borrowing costs as an expense. As the Group’s present capitalisation
policy on borrowing costs [see Note 2(u)] is consistent with FRS 123 (revised), the adoption of FRS 123
(revised) is thus not expected to have a material impact to the Group.
IC Interpretation 10 prohibits the reversal of an impairment loss recognised in an interim period during
the financial year in respect of goodwill, an investment in an equity instrument or a financial asset carried
at cost. IC Interpretation 10 applies prospectively from the date the measurement criteria of FRS 136,
Impairment of Assets and FRS 139 respectively were first applied. The adoption of IC Interpretation 10
does not have any impact to the financial statements of the Group as no reversal of such impairment loss
has been made in the current or previous periods.
FRS 3 (revised), which is to be applied prospectively, incorporates the following changes to the existing
FRS 3:
62
•
The definition of a business has been broadened, which is likely to result in more acquisitions being
treated as business combinations.
•
Contingent consideration will be measured at fair value, with subsequent changes therein recognised
in profit or loss.
•
Transaction costs, other than share and debts issue costs, will be expensed as incurred.
•
Any pre-existing interest in the acquiree will be measured at fair value with the gain or loss recognised
in profit or loss.
•
Any minority (will be known as non-controlling) interest will be measured at either fair value, or at its
proportionate interest in the identifiable assets and liabilities of the acquiree, on a transaction-bytransaction basis.
1.
The amendments to FRS 127 require changes in group composition to be accounted for as equity
transactions between the group and its minority (will be known as non-controlling) interest holders.
Currently, changes in group composition are accounted for in accordance with the accounting policy as
disclosed in Note 2(a)(ii).
The amendments to FRS 127 further require all losses attributable to minority interest to be absorbed by
the minority interest i.e., the excess and any further losses exceeding the minority interest in the equity
of a subsidiary are no longer charged against the Group’s interest. Currently, such losses are accounted
for in accordance with the accounting policy as disclosed in Note 2(a)(iii).
The above changes in FRS 127 are not expected to have a material impact to the Group.
The amendments to FRS 138, to be applied retrospectively, clarify, inter alia, that other amortisation
methods, apart from the straight line method, may be used for intangible assets with finite useful lives.
The adoption of the amendments to FRS 138 is not expected to have a material impact to the Group.
Improvements to FRSs (2009) contain various amendments that result in changes to presentation,
recognition, measurement and/or disclosure. Among the amendments is one that allows the reclassification
of long-term leasehold land which in substance is a finance lease, presently treated as prepaid lease
payments, to property, plant and equipment and measured as such retrospectively. The improvements to
FRSs (2009) are not expected to have a material impact to the Group.
Financial Reporting Standards will be fully converged with International Financial Reporting Standards
by 1 January 2012. The financial impact and effects on disclosures and measurement consequent on
such convergence are dependent on the issuance of such new or revised standards, amendments and
interpretations by MASB as are necessary to effectuate the full convergence.
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis, except for certain classes of
property, plant and equipment which are stated at valuation as explained in Note 2(c)(i).
(c) Functional and presentation currency
These financial statements are presented in Ringgit Malaysia (RM), which is the Company’s functional
currency.
(d) Use of estimates and judgements
The preparation of financial statements 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 estimate is revised and in any future periods affected
thereby.
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1.
(d) Use of estimates and judgements (continued)
There are no significant areas of estimation uncertainty and critical judgements in applying accounting
policies that have a significant effect on the amounts recognised in the financial statements other than
those disclosed in the following notes:
•
•
•
Note 7, estimation of the recoverable amounts of cash generating units;
Note 10, valuation of trade receivables; and
Recognition of profit from construction contracts and installation works (see below).
(i)
Profit from installation and construction of sewerage and water treatment systems
The Group recognises revenue and costs from the installation and construction of sewerage and
water treatment systems in proportion to the stage of completion of transactions at the balance sheet
date. The stage of completion is measured by reference to survey of work performed.
(ii) Profit from telecommunication towers contracts
The Group recognises revenue and costs in the income statements from the telecommunication
towers contracts based on the percentage of completion method, measured by reference to the
proportion that contract costs incurred for work performed to date bear to the estimated total contract
costs.
Significant judgment is exercised in determining the stage of completion of installation/construction
contracts, accrual of costs incurred for which claims/billings have yet to be received, estimated total
revenue and costs as well as the recoverability of the carrying amount of work-in-progress. The total
revenue also includes an estimation of variations that are recoverable from customers. The Group
relies, inter alia, on the assessment of its experienced project team when making the estimations
and judgments.
2.
Significant accounting policies
The following are the significant accounting policies of the Group, which have been applied consistently to the
periods presented in these financial statements, unless otherwise specified.
(a) Basis of consolidation
(i)
Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group has the ability to
exercise its power to govern the financial and operating policies of an entity so as to obtain benefits
from its activities. In assessing control, potential voting rights that presently are exercisable are
taken into account.
Subsidiaries are consolidated using the purchase method of accounting except for three subsidiaries
(identified in Note 6) which are accounted for using the pooling-of-interests method of accounting.
These three subsidiaries and the Company were entities under common control at the time of their
combination effected on 23 October 2000.
Under the purchase method of accounting, the financial statements of subsidiaries are included
in the consolidated financial statements from the date that control commences until the date that
control ceases.
64
2.
Significant accounting policies (continued)
(a) Basis of consolidation (continued)
(i)
Subsidiaries (continued)
Under the pooling-of-interests method of accounting, the results of entities or businesses under
common control are accounted for as if the acquisition had occurred at the beginning of the earliest
comparative period presented or, if later, at the date that common control was established. The
assets and liabilities acquired were recognised at the carrying amounts recognised previously in the
Group controlling shareholder’s consolidated financial statements. The difference between the cost
of acquisition and the nominal value of the shares acquired together with the share premium are
taken to merger reserve. The other components of equity of the acquired entities are added to the
same components within Group equity.
Investment in subsidiaries is stated in the Company’s balance sheet at cost less impairment losses,
unless the investment is held for sale.
(ii) Changes in Group composition
Where a subsidiary issues new equity shares to minority interest for cash consideration and the
issue price has been established at fair value, the reduction in the Group’s interests in the subsidiary
is accounted for as a disposal of equity interest with the corresponding gain or loss recognised in
the income statement.
When the Group purchases a subsidiary’s equity shares from minority interest for cash consideration
and the purchase price has been established at fair value, the accretion of the Group’s interests in
the subsidiary is accounted for as a purchase of equity interest for which the acquisition method of
accounting is applied.
The Group treats all other changes in group composition as equity transactions between the Group
and its minority shareholders. 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.
(iii) Minority interest
Minority interest at the balance sheet date, being the portion of the net identifiable assets of
subsidiaries attributable to equity interests that are not owned by the Company, whether directly or
indirectly through subsidiaries, are presented in the consolidated balance sheets and statements
of changes in equity within equity, separately from equity attributable to the equity holders of the
Company. Minority interest in the results of the Group is presented on the face of the consolidated
income statements as an allocation of the total profit or loss for the year between minority interest
and the equity holders of the Company.
Where losses applicable to the minority exceed the minority’s interest in the equity of a subsidiary, the
excess, and any further losses applicable to the minority, are charged against the Group’s interest
except to the extent that the minority has a binding obligation to, and is able to, make additional
investment to cover the losses. If the subsidiary subsequently reports profits, the Group’s interest is
allocated with all such profits until the minority’s share of losses previously absorbed by the Group
has been recovered.
65
2.
(a) Basis of consolidation (continued)
(iv) 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 losses are eliminated in the same way as unrealised gains, but only to the extent that
there is no evidence of impairment to the underlying assets.
(b) Foreign currency
(i)
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group
entities at the exchange rates at the transaction dates.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are
retranslated to their functional currency at the exchange rates at that date. Non-monetary assets
and liabilities denominated in foreign currencies, except those measured at fair value, are translated
at the exchange rates at the transaction dates. Non-monetary assets and liabilities measured at fair
value are retranslated to the functional currency at the exchange rates at the date that the fair value
was determined. Foreign currency differences arising on retranslation are recognised in the income
statements.
(ii) Operations denominated in functional currencies other than Ringgit Malaysia (“RM”)
The assets and liabilities of operations in functional currencies other than RM, including goodwill
and fair value adjustments arising on acquisition, are translated to RM at the exchange rates at the
balance sheet date. The income and expenses of foreign operations are translated to RM at the
exchange rates at the transaction dates.
Foreign currency differences are recognised in translation reserve. On disposal, the accumulated
translation differences are recognised in the consolidated income statement as part of the gain or
loss on sale.
(c) Property, plant and equipment
(i)
Recognition and measurement
Items of property, plant and equipment are stated at cost/valuation less accumulated depreciation
and accumulated impairment losses, if any.
The Group revalues its property comprising freehold land and buildings every five (5) years and at
shorter intervals whenever the fair value of the revalued assets is expected to differ materially from
their carrying value. Prior to the adoption of FRS 117, Leases, leasehold land (now classified as
prepaid lease payments [see Note 2(d)(ii)] was similarly revalued. Additions to land and buildings in
between re-valuation are stated at cost.
Surpluses arising from revaluation are dealt with in the revaluation reserve account. Any deficit
arising is offset against the revaluation reserve to the extent of a previous increase for the same
property. In all other cases, a decrease in carrying amount is charged to the income statements.
66
2.
(c) Property, plant and equipment (continued)
(i)
Recognition and measurement (continued)
It is the Group’s policy to state the other property, plant and equipment at cost.
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 and, for qualifying
assets, borrowing costs are capitalised in accordance with the Group’s accounting policy [see Note
2(u)]. Purchased software that is integral to the functionality of the related equipment is capitalised
as part of that equipment.
The cost of property, plant and equipment recognised as a result of a business combination is based
on fair value at acquisition date.
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.
Gains and losses on disposal of an item of property, plant and equipment are determined by
comparing the proceeds from disposal with the carrying amount of property, plant and equipment and
are recognised net within “other income” or “other expenses” respectively in the income statements.
When revalued assets are sold, the amounts included in the revaluation reserve are transferred to
retained earnings.
(ii) Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying
amount of the item if it is probable that the future economic benefits embodied within the part will
flow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is
derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised
in the income statements as incurred.
(iii) Depreciation
Freehold land is not depreciated. Property, plant and equipment under construction are not
depreciated until the assets are ready for their intended use.
Save for the above, depreciation is recognised in the income statements on a straight-line basis over
the estimated useful life of each part of an item of property, plant and equipment. Leased assets are
depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain
that the Group will obtain ownership by the end of the lease term.
Infrastructure incurred on land for oil palm plantation purposes are amortised on a straight-line basis
over 25 years, the expected useful life of oil palms, upon the maturity of the oil palm plantations.
67
2.
(c) Property, plant and equipment (continued)
(iii) Depreciation (continued)
The estimated useful lives of the other assets for the current and comparative periods are as follows:
Buildings
Electrical installation and renovation
Equipment and tools
Infrastructure
Motor vehicles
Office equipment, furniture and fittings
Plant, machinery and moulds
Site equipment
50 years
5 or 10 years
3 or 8 years
20 years
5 years
3, 5 or 10 years
3, 5 or 10 years
10 years
Depreciation methods, useful lives and residual values are reassessed at the balance sheet date.
(d) Leased assets
(i)
Finance lease
Leases in terms of which the Group 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 [see Note 2(c)].
Minimum lease payments made under finance leases are apportioned between 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.
(ii) Operating lease
Leases in terms of which the Group does not assume substantially all the risks and rewards of
ownership are classified as operating leases and the leased assets, other than prepaid lease
payments, are not recognised on the Group’s balance sheet.
Leasehold land that normally has an indefinite economic life and the title for which is not expected to
pass to the lessee by the end of the lease term is treated as an operating lease. The payments made
on acquiring a leasehold interest on land are accounted for as prepaid lease payments.
Certain prepaid lease payments were revalued along with freehold land and buildings prior to 2006
[see Note 2(c)(i)]. The Group has retained the unamortised revalued amount of leasehold land as the
surrogate carrying amount of prepaid lease payments in accordance with the transitional provision in
FRS 117.67A when it first adopted FRS 117 during the financial year ended 31 March 2008.
Payments made under operating leases are recognised in the income statements on a straight-line
basis over the term of the lease.
68
2.
(e) Oil palm plantation development expenditure
New planting expenditure on land clearing, planting, upkeep of immature oil palms and borrowing
costs incurred during the pre-maturity period (pre-cropping costs) are capitalised as oil palm plantation
development expenditure. Upon maturity, all subsequent maintenance expenditure is charged to the
income statements and the capitalised pre-cropping costs are amortised on a straight-line basis over 25
years, the expected useful life of the oil palm trees.
Replanting expenditure is similarly capitalised and amortised on the above-mentioned basis.
(f)
Intangible assets
(i)
Goodwill
Goodwill arises on business combination and is tested for impairment annually and whenever there
is an indication that it may be impaired.
Goodwill with an indefinite life is stated at cost less accumulated impairment losses, if any.
Goodwill with a finite life is stated at cost less accumulated amortisation and accumulated impairment
losses, if any. It is amortised over the useful life of the asset(s) to which it is attached.
For acquisitions prior to 1 January 2006, goodwill represents the excess of the cost of the acquisition
over the Group’s interest in the fair values of the net identifiable assets and liabilities.
With the adoption of FRS 3 beginning 1 January 2006, goodwill represents the excess of the cost of
the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and
contingent liabilities of the acquiree.
Any excess of the Group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities
and contingent liabilities over the cost of acquisition is recognised immediately in the income
statements.
(ii) Other intangible assets
Intangible assets, other than goodwill, are stated at cost less any accumulated impairment losses,
and in the case of intangible assets with finite useful lives, less accumulated amortisation.
(iii) Subsequent expenditure
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the
future economic benefits embodied in the specific asset to which it relates. All other expenditure is
expensed as incurred.
(iv) Amortisation
Intangible assets with finite useful lives are amortised to the income statements evenly over their
useful lives of 5 years from the date that they are available for use.
(g) Investments in equity securities
Investments in non-current equity securities are recognised initially at fair value plus attributable transaction
costs.
69
2.
(g) Investments in equity securities (continued)
Subsequent to initial recognition, investments in non-current equity securities, other than investment in
subsidiaries, are stated at cost less allowance for diminution in value.
Where in the opinion of the Directors, there is a decline other than temporary in the value of non-current
equity securities (other than investment in subsidiaries), an allowance for diminution in value is made and
recognised as an expense in the financial year in which the decline is identified.
On disposal of an investment, the difference between net disposal proceeds and its carrying amount is
recognised in the income statements.
All investments in non-current equity securities are accounted for using the settlement date accounting.
Settlement date accounting refers to:
a)
the recognition of an asset on the day it is received by the entity, and
b)
the derecognition of an asset and recognition of any gain or loss on disposal on the date it is
delivered.
(h) Inventories
Inventories are measured at the lower of cost and net realisable value.
Raw materials, consumables and construction materials are measured using first-in first-out method.
For manufactured/trading inventories and plantation inventories, cost is determined using the weighted
average costs basis.
Cost of inventories includes expenditure incurred in acquiring the inventories and bringing them to their
existing location and condition. In the case of manufactured inventories, 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.
(i) Receivables
Receivables are initially recognised at their cost when the contractual right to receive cash or other
financial asset from another entity is established.
Subsequent to initial recognition, receivables are stated at cost less allowance for doubtful debts.
Receivables are not held for the purpose of trading.
(j)
Contract work-in-progress
Contract work-in-progress represents the gross unbilled amount expected to be collected from customers
for contract work performed to date. It is measured at cost plus profit recognised to date less progress
billings and recognised losses. Cost includes all expenditures related directly to specific projects and an
allocation of fixed and variable overheads [including borrowing costs capitalised in accordance with Note
2(u)] incurred in the Group’s contract activities based on normal operating capacity.
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2.
(j)
Contract work-in-progress (continued)
Contract work-in-progress is presented as part of trade and other receivables in the balance sheets (see
Note 10). If payments received from customers exceed the income recognised, then the difference is
shown in trade and other payables as amount due to contract customers (see Note 18).
(k) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid
investments which have an insignificant risk of changes in value. For the purpose of the cash flow
statement, cash and cash equivalents are presented net of bank overdrafts and pledged deposits.
(l)
Non-current assets held for sale
Non-current assets that are expected to be recovered primarily through sale rather than through
continuing use are classified as held for sale. Immediately before classification as held for sale, the assets
are remeasured in accordance with the Group’s accounting policy. Thereafter, generally the assets are
measured at the lower of their carrying amount and fair value less cost to sell. Impairment losses on
initial classification of the asset as held for sale and subsequent gains and losses on remeasurement
are recognised in the income statements. Gains on remeasurement are not recognised in excess of any
cumulative impairment loss.
(m) Impairment of assets
The carrying amounts of assets, other than inventories [refer Note 2(h)], assets arising from contracts
[refer Note 2(j)], deferred tax assets [refer Note 2(s)] and financial assets (excluding investments in
subsidiaries that are not classified as held for sale or included in a disposal group that is classified as held
for sale), are reviewed at each reporting date to determine whether there is any indication of impairment.
If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill that have
indefinite useful lives, the recoverable amount is estimated usually at each reporting date and whenever
there is any indication of impairment.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair
value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped
together into the smallest group of assets that generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”). Goodwill
acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating
units that are expected to benefit from the synergies of the combination.
An impairment loss is recognised in the income statements if the carrying amount of an asset or its cashgenerating unit exceeds its recoverable amount, unless if the asset is carried at a revalued amount, in
which case the impairment loss is recognised directly against any revaluation surplus for the asset to
the extent that the impairment loss does not exceed the amount in the revaluation surplus for that same
asset. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the
carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other
assets in the unit (groups of units) on a pro rata basis.
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2.
(m) Impairment of assets (continued)
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses
recognised in prior periods are assessed at each reporting date for any indications that the losses have
decreased or no longer exist. An impairment loss is reversed if there has been a change in the estimates
used to determine the recoverable amount. 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 the income statements in the year in which the reversals are recognised, unless it reverses
an impairment loss on a revalued asset, in which case it is credited directly to revaluation surplus. Where
an impairment loss on the same revalued asset was previously recognised in the income statements, a
reversal of that impairment loss is also recognised in the income statements.
(n) Share capital
All equity instruments are stated at cost on initial recognition and are not re-measured subsequently.
(i)
Shares issue expenses
Incremental costs directly attributable to the issue of equity instruments are recognised as a deduction
from equity.
(ii) Repurchase of share capital
When share capital recognised as equity is repurchased, the amount of the consideration paid,
including directly attributable costs, is recognised as a deduction from equity and is not re-valued
for subsequent changes in the fair value or market price of the shares. Repurchased shares are
classified as treasury shares and are presented as a deduction from total equity.
When treasury shares are distributed as share dividends, the cost of the treasury shares is applied
in the reduction of the share premium account or distributable reserves, or both.
When treasury shares are reissued by re-sale in the open market, the difference between the sales
consideration net of directly attributable costs and the carrying amount of the treasury shares is
recognised in equity.
(o) Loans and borrowings
Loans and borrowings are stated at amortised cost with any difference between cost and redemption
value being recognised in the income statements over the period of the loans and borrowings using the
effective interest method, other than borrowing costs capitalised in accordance with Note 2(u).
(p) Employee benefits
Short-term employee benefit obligations in respect of salaries and annual bonuses are measured on an
undiscounted basis and are expensed as the related service is provided.
A provision 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 services provided by the employees and the obligation can be estimated reliably.
Contributions to statutory pension funds are charged to the income statements in the year to which they
relate. Once the contributions have been paid, the Group has no further payment obligations.
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2.
(q) Payables
Payables are measured initially and subsequently at cost. Payables are recognised when there is a
contractual obligation to deliver cash or other financial asset to another entity.
(r)
Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be
required to settle the obligation. Provisions are determined by discounting the expected future cash flows
at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific
to the liability.
Contingent liabilities
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be
estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow
of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the
occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities
unless the probability of outflow of economic benefits is remote.
Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other
companies within its group (see Note 27), the Company considers these to be insurance arrangements,
and accounts for them as such. In this respect, the Company treats the guarantee contract as a contingent
liability until such time as it becomes probable that the Company will be required to make a payment
under the guarantee.
(s) Tax expense
Tax expense comprises current and deferred tax. Tax expense is recognised in the income statements
except to the extent that it relates to items recognised directly in equity, in which case it is recognised in
equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous
years.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between
the carrying amounts of assets and liabilities for reporting purposes and the amounts used for taxation
purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of
goodwill and the initial recognition of assets or liabilities in a transaction that is not a business combination
and that affects neither accounting nor taxable profit (or tax 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 balance sheet date.
Deferred tax liability is recognised for all taxable temporary differences.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be
available against which temporary differences can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced by the extent that it is no longer probable that the related tax benefit will
be realised.
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2.
(t)
Revenue recognition
(i)
Goods sold
Revenue from the sale of goods is measured at the fair value of the consideration received or
receivable, net of returns, allowances and trade discounts. Revenue is recognised when the significant
risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is
probable, the associated costs and possible return of goods can be estimated reliably, and there is
no continuing management involvement with the goods.
(ii) Contract income
Contract revenue includes the initial amount agreed in the contract plus any variations in contract
work, claims and incentive payments to the extent that it is probable that they will result in revenue
and can be measured reliably. As soon as the outcome of a contract can be estimated reliably,
contract revenue and expenses are recognised in the income statements in proportion to the stage
of completion of the contract.
The stage of completion is assessed by reference to the proportion that contract costs incurred for
work performed to date bear to the estimated total contract costs (for telecommunication towers
contracts) and survey of work performed (for installation and construction of sewerage and water
treatments contracts), as appropriate. When the outcome of a contract cannot be estimated reliably,
contract revenue is recognised only to the extent of contract costs incurred that are likely to be
recoverable. An expected loss on a contract is recognised immediately in the income statements.
(iii) Services rendered
Revenue from the provision of underground mapping of buried utilities, closed circuit television
survey and investigation and rehabilitation of underground sewer and pipeline networks and storm
water culverts is recognised in the income statements in proportion to the stage of completion of
the transactions at the balance sheet date. The stage of completion is assessed by reference to
the survey of work performed. Where the outcome of a transaction cannot be estimated reliably,
revenue is recognised only to the extent of the expenses recognised that are recoverable.
Revenue from the provision of sludge treatment and disposal service is recognised in the income
statements as it accrues, based on rates agreed with customers.
(iv) Dividend income
Dividend income is recognised in the income statements on the date that the right to payment is
established, which in the case of quoted securities is the ex-dividend date.
(v) Management fee
Management fee is recognised as it accrues at contracted rates.
(vi) Rental income
Rental income is recognised in the income statements on a straight-line basis over the term of the
lease.
74
2.
(u) Interest income and borrowing costs
Interest income is recognised as it accrues, using the effective interest method.
All borrowing costs are recognised in the income statements using the effective interest method in the
period in which they are incurred, except to the extent that they are capitalised as being directly attributable
to the acquisition, construction or production of an asset which necessarily takes a substantial period of
time to be prepared for its intended use.
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.
(v) Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. 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. Diluted EPS is determined
by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number
of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise
convertible notes and share options granted to employees.
(w) Segment reporting
A segment is a distinguishable component of the Group that is engaged either in providing products or
services (business segment), or in providing products or services within a particular economic environment
(geographical segment), which is subject to risks and rewards that are different from those of other
segments.
75
3.
Plant, machinery
______ and moulds ______
Outright
Under
purchase finance lease
RM
RM
Freehold
land
RM
Buildings
RM
At 1 April 2008
Additions
Disposals/Write-offs
Reclassifications
Foreign exchange translation difference
3,651,045
-
18,659,032
1,255,032
(500,000)
2,926
-
27,092,731
5,679,030
(175,499)
179,789
-
Revaluation of assets (Note 3.1)
Additions
Reclassifications
Transfer to prepaid lease payments (Note 4)
3,651,045
423,955
-
19,416,990
2,731,170
1,258,830
4,428,964
(972,000)
-
32,776,051
2,606,621
(650,104)
4,859,028
(96,300)
988,103
567,000
3,891,254
-
At 31 March 2010
4,075,000
26,863,954
39,495,296
5,446,357
Cost
Directors’ valuation
4,075,000
5,509,258
21,354,696
39,495,296
-
5,446,357
-
At 31 March 2010
4,075,000
26,863,954
39,495,296
5,446,357
Group
Cost/Valuation
62,500
988,103
(62,500)
-
Representing items at:
Depreciation
At 1 April 2008
Depreciation for the financial year
Reclassifications
-
1,072,934
445,881
(7,500)
-
15,790,440
2,695,740
(157,306)
5,058
870
5,058
73,251
(5,058)
-
Revaluation of assets
Depreciation for the financial year
Reclassifications
Transfer to prepaid lease payments
-
1,511,315
(1,714,752)
626,347
(20,876)
-
18,334,802
3,398,257
(452,898)
1,627,329
(8,170)
73,251
483,876
(23,144)
-
At 31 March 2010
-
402,034
22,899,320
533,983
At 1 April 2008
3,651,045
17,586,098
11,302,291
57,442
3,651,045
17,905,675
14,441,249
914,852
At 31 March 2010
4,075,000
26,461,920
16,595,976
4,912,374
Carrying amounts
76
Office equipment,
__furniture and fittings__
Outright
Under
purchase
finance lease
RM
RM
Equipment
and tools
RM
Subtotal
RM
6,665,895
1,143,674
(304,497)
94,670
368
85,000
183,580
-
2,706,613
532,229
(174,142)
(278,250)
-
58,837,816
9,683,068
(1,154,138)
120,215
368
7,600,110
1,702,787
(162,010)
114,464
(8,700)
268,580
56,065
(63,622)
-
2,786,450
514,434
(3,160)
2,831
(8,161)
67,487,329
3,155,125
6,705,737
(878,896)
13,296,541
(972,000)
(113,161)
9,246,651
261,023
3,292,394
88,680,675
9,246,651
-
261,023
-
3,292,394
-
63,250,979
25,429,696
9,246,651
261,023
3,292,394
88,680,675
3,843,669
912,092
(190,931)
244,342
324
45,216
13,299
-
1,806,909
229,840
(131,447)
(257,641)
93
22,519,010
4,402,020
(487,184)
1,287
4,809,496
1,048,438
(94,184)
1,856
(1,459)
58,515
54,389
(26,509)
-
1,647,754
268,583
(1,326)
(1)
(908)
26,435,133
(1,714,752)
5,879,890
(574,917)
1,606,040
(20,876)
(10,537)
5,764,147
86,395
1,914,102
31,599,981
2,822,226
-
899,704
36,318,806
2,790,614
210,065
1,138,696
41,052,196
3,482,504
174,628
1,378,292
57,080,694
77
3.
Property, plant and equipment (continued)
Group (continued)
Subtotal
RM
_____Motor vehicles_____
Under
Outright
finance
purchase
lease
RM
RM
Electrical
installation
and
renovation
RM
Cost/Valuation (continued)
At 1 April 2008
Additions
Reclassifications
58,837,816
9,683,068
(1,154,138)
120,215
368
6,792,448
1,528,787
(875,173)
279,226
873
933,623
923,936
(279,226)
-
1,646,517
488,257
(41,075)
229
Revaluation of assets (Note 3.1)
Additions
Reclassifications
67,487,329
3,155,125
6,705,737
(878,896)
13,296,541
(972,000)
(113,161)
7,726,161
1,248,288
(314,642)
316,078
(17,630)
1,578,333
633,551
(267,749)
-
2,093,928
162,500
(21,760)
(16,524)
At 31 March 2010
88,680,675
8,958,255
1,944,135
2,218,144
Cost
63,250,979
25,429,696
8,958,255
-
1,944,135
-
2,218,144
-
At 31 March 2010
88,680,675
8,958,255
1,944,135
2,218,144
At 1 April 2008
Depreciation for the financial year (Note 3.3)
Reclassifications
22,519,010
4,402,020
(487,184)
1,287
3,939,290
932,268
(743,785)
279,225
669
603,918
218,036
(279,225)
-
1,267,721
97,213
(17,105)
202
Depreciation for the financial year (Note 3.3)
Reclassifications
26,435,133
(1,714,752)
5,879,890
(574,917)
1,606,040
(20,876)
(10,537)
4,407,667
1,184,613
(168,731)
315,328
(2,460)
542,729
224,756
(267,749)
-
1,348,031
109,467
(8,332)
(2,097)
(1,294)
At 31 March 2010
31,599,981
5,736,417
499,736
1,445,775
At 1 April 2008
36,318,806
2,853,158
329,705
378,796
41,052,196
3,318,494
1,035,604
745,897
At 31 March 2010
57,080,694
3,221,838
1,444,399
772,369
Representing items at (continued):
Depreciation (continued)
Carrying amounts (continued)
78
Infrastructure
RM
Plantation
infrastructure
RM
1,621,614
(207,543)
-
3,897,555
350,320
-
-
1,336,283
8,515,711
(11,209)
(120,215)
-
75,065,856
21,490,079
(2,289,138)
1,470
1,414,071
133,986
(93,157)
-
4,247,875
345,169
292,966
(4,043)
5,035,504
-
9,720,570
13,003
21,965,855
(9,078)
(17,021,815)
-
94,268,267
3,168,128
31,195,086
(1,317,533)
1,651,525
(972,000)
(151,358)
1,454,900
4,881,967
5,035,504
14,668,535
127,842,115
1,454,900
-
4,881,967
-
5,035,504
-
14,668,535
-
102,412,419
25,429,696
1,454,900
4,881,967
5,035,504
14,668,535
127,842,115
939,396
145,910
(175,397)
-
1,089,652
209,063
93
-
-
30,358,987
6,004,510
(1,423,471)
2,251
909,909
138,694
(59,895)
-
1,298,808
243,997
3
(709)
-
-
34,942,277
(1,714,752)
7,781,417
(811,875)
1,651,525
(20,876)
(15,000)
988,708
1,542,099
-
-
41,812,716
682,218
2,807,903
-
1,336,283
44,706,869
504,162
2,949,067
-
9,720,570
59,325,990
466,192
3,339,868
5,035,504
14,668,535
86,029,399
Site
equipment
RM
Assets
under
construction
RM
Grand
total
RM
79
3.
Company
Office
equipment,
furniture
Buildings and fittings
RM
RM
Assets
Motor
under
vehicles Renovation construction
RM
RM
RM
1,772,000
-
2,042,140
127,029
(17,476)
931,047
(114,750)
1,343,558
16,743
-
229,918
-
6,318,663
143,772
(132,226)
1,772,000
2,151,693
816,297
1,360,301
229,918
6,330,209
Total
RM
Cost
At 1 April 2008
Additions
At 31 March 2009/
1 April 2009
(Note 3.1)
Additions
Reclassifications
Transfer to prepaid
lease payments (Note 4)
250,000
-
412,137
(18,158)
114,959
59,088
-
(114,959)
250,000
471,225
(183,574)
-
-
-
-
-
(972,000)
1,050,000
2,660,631
650,881
1,419,389
114,959
5,895,860
Cost
1,050,000
2,660,631
-
650,881
-
1,419,389
-
114,959
-
4,845,860
1,050,000
At 31 March 2010
1,050,000
2,660,631
650,881
1,419,389
114,959
5,895,860
4,430
1,329,427
668,942
1,036,453
-
3,039,252
69,501
-
-
436,101
(125,302)
1,105,954
-
-
3,350,051
(33,334)
48,466
-
-
359,773
(81,114)
At 31 March 2010
(972,000)
(165,416)
-
Representing items at:
Depreciation
At 1 April 2008
Depreciation for the
financial year (Note 3.3)
At 31 March 2009/
1 April 2009
Depreciation for the
financial year (Note 3.3)
Transfer to prepaid lease
payments (Note 4)
39,869
-
44,299
(33,334)
257,639
(10,552)
1,576,514
-
13,562
-
247,006
(6,676)
623,284
50,739
(74,438)
-
-
-
-
(20,876)
3,651
1,816,844
599,585
1,154,420
-
3,574,500
At 1 April 2008
1,767,570
712,713
262,105
307,105
229,918
3,279,411
At 31 March 2009/
1 April 2009
1,727,701
575,179
193,013
254,347
229,918
2,980,158
At 31 March 2010
1,046,349
843,787
51,296
264,969
114,959
2,321,360
At 31 March 2010
(20,876)
69,092
(114,750)
Carrying amounts
80
3.
3.1 Property, plant and equipment under the revaluation model
The Group and the Company revalued their freehold land and buildings (including buildings on leasehold
land) during the current financial year, the 5th year after the last revaluation exercise in 2005. The
revaluation was performed by independent professional valuers, namely Rahim & Co. (Sabah) Sdn. Bhd.,
Rahim & Co. Chartered Surveyors (Sarawak) Sdn. Bhd. and Rahim & Co. (NS) Sdn. Bhd. using the open
market value method during February 2010. Following the exercise, revaluation surplus of RM3,388,663
and RM212,500 respectively were taken up in the revaluation reserve accounts of the Group and of the
Company (see Note 16). Surplus of RM279,423 arising from the revaluation of certain freehold land and
buildings was recognised as income to the extent that it reversed a revaluation deficit of these assets
previously recognised as an expense in the income statements (Note 20).
Had the freehold land and buildings been carried under the cost model, their carrying amounts, net of
any accumulated depreciation and accumulated impairment loss where applicable, that would have been
included in the financial statements at the end of the financial year are as follows:
2010
RM
Group
2009
RM
2010
RM
Company
2009
RM
3,651,045
18,655,093
3,651,045
13,901,806
760,666
-
22,306,138
17,552,851
760,666
-
Carrying amounts
Freehold land
Buildings
3.2 Assets under construction
These comprise infrastructure and buildings under construction as well as software under installation.
Additions to the assets under construction include:
Group
2010
2009
RM
RM
Rental of machinery
Employee benefits
Interest expense
217,186
296,289
409,458
543,613
115,480
-
3.3 Allocation of depreciation
Depreciation for the financial year is allocated as follows:
Group
Income statements (Note 20)
Capitalised in:
- oil palm plantation development
expenditure (Note 5)
- amount due from contract customers
(Note 10.4)
2010
RM
2009
RM
2010
RM
Company
2009
RM
5,386,973
4,540,803
359,773
436,101
1,719,168
926,854
-
-
675,276
536,853
-
-
7,781,417
6,004,510
359,773
436,101
81
4.
Prepaid lease payments
Group
____Leasehold land____
Unexpired
Unexpired
term
term
less than
more than
50 years
50 years
RM
RM
Total
RM
Cost *
At 1 April 2008
Additions
Acquisition of a subsidiary (Note 30.1)
5,336,305
62,399
-
46,503,166
8,500,000
51,839,471
62,399
8,500,000
Transfer from property, plant and equipment (Note 3)
Reclassifications
5,398,704
12,209,290
55,003,166
972,000
(12,209,290)
60,401,870
972,000
-
At 31 March 2010
17,607,994
43,765,876
61,373,870
At 1 April 2008
Amortisation for the financial year (Note 4.3)
395,486
158,997
770,074
917,055
1,165,560
1,076,052
Reclassifications
554,483
364,280
895,295
1,687,129
715,897
20,876
(895,295)
2,241,612
1,080,177
20,876
-
1,814,058
1,528,607
3,342,665
At 1 April 2008
4,940,819
45,733,092
50,673,911
4,844,221
53,316,037
58,160,258
15,793,936
42,237,269
58,031,205
Amortisation
At 31 March 2010
Carrying amounts
At 31 March 2010
Company
Leasehold land
(Unexpired
term more
than 50 years)
RM
Cost *
82
At 1 April 2008 and 31 March 2009/1 April 2009
1,728,000
972,000
At 31 March 2010
2,700,000
4.
Prepaid lease payments (continued)
Leasehold land
(Unexpired
term more
than 50 years)
RM
Company (continued)
Amortisation
At 1 April 2008
4,408
17,860
22,268
19,485
20,876
At 31 March 2010
62,629
Carrying amounts
At 1 April 2008
1,723,592
1,705,732
At 31 March 2010
2,637,371
*
Certain prepaid lease payments were revalued along with freehold land and buildings prior to 2006 [see
Note 2(c)(i)]. The Group has retained the unamortised revalued amount of leasehold land as the surrogate
carrying amount of prepaid lease payments in accordance with the transitional provision in FRS 117.67A
when it first adopted FRS 117, Leases, in the financial year ended 31 March 2008.
4.1 Titles of land
The title(s) to one (2009: two) parcel(s) of leasehold land with carrying amount(s) of RM1,801,795 (2009:
RM2,292,325) has/have yet to be issued by the relevant authority.
4.2 Security
Leasehold land with a carrying amount of RM37,798,103 (2009: RM38,474,218) is charged to a bank as
security for a term loan facility granted to a subsidiary during the current financial year (see Note 17).
4.3 Allocation of amortisation
Amortisation for the financial year is allocated as follows:
Group
Capitalised into oil palm plantation
development expenditure (Note 5)
2010
RM
2009
RM
2010
RM
Company
2009
RM
553,132
549,007
19,485
17,860
527,045
527,045
-
-
1,080,177
1,076,052
19,485
17,860
83
5.
Oil palm plantation development expenditure – Group
RM
Cost and carrying amounts
At 1 April 2008
Additions
2,133,706
4,963,540
At 31 March 2009/ 1 April 2009
Additions
7,097,246
11,366,567
At 31 March 2010
18,463,813
Additions to oil palm plantation development expenditure incurred during the current financial year include:
Group
Amortisation of prepaid lease payments (Note 4.3)
Depreciation of property, plant and equipment (Note 3.3)
Personnel expenses (including key management personnel)
- contributions to the Employees Provident Fund
- wages, salaries and others
Rental of premises
Interest expense
6.
2010
RM
2009
RM
527,045
1,719,168
527,045
926,854
166,241
2,498,919
24,350
1,314,730
111,014
1,116,269
59,530
11,395
2010
RM
Company
2009
RM
Investment in subsidiaries
Unquoted shares, at cost
Less: Impairment loss
49,419,040
(6,002,698)
49,419,040
(6,002,698)
43,416,342
43,416,342
Details of the subsidiaries, all of which are incorporated in Malaysia except for Weida Philippines Inc. and
Weida (B) Sdn. Bhd., which are incorporated in the Philippines and Brunei Darussalam respectively, and the
Company’s interests therein are as follows:
84
Subsidiary
Weida Integrated Industries
Sdn. Bhd. (“WII”) #
Manufacture and sale of high density
polyethylene (“HDPE”) products
Effective ownership
interest
2010
2009
%
%
100.00
100.00
6.
Investment in subsidiaries (continued)
Effective ownership
interest
2010
2009
%
%
Subsidiary
Weida Works Sdn. Bhd. #
Construction of water supply and other
specialised systems involving the use of HDPE
products, construction and financing the
construction of telecommunication towers
100.00
100.00
Weida Resources Sdn. Bhd. #
Trading of HDPE products, fittings and
other engineering products
100.00
100.00
Weida Water Sdn. Bhd.
Trading of water storage tanks, chemical tanks,
fittings, other specialised technical and
engineering products, and the provision of
specialised installation services for these products
100.00
100.00
Weidaline Sdn. Bhd.
Trading of HDPE pipes, other specialised technical
and engineering products, and the provision of
specialised installation services for these products
100.00
100.00
Weida Agrotech Sdn. Bhd.
Trading of HDPE agriculture products, other
specialised technical and engineering products,
and the provision of specialised installation services
for these products
100.00
100.00
Weida Dagangan Sdn. Bhd.
Trading of HDPE products, other specialised
technical and engineering products, and the
provision of specialised installation services for
these products
100.00
100.00
Weida Oil & Gas Sdn. Bhd.
Provision of construction and engineering services
100.00
100.00
Weida Marketing Sdn. Bhd.
Trading of HDPE products and the provision
of specialised installation services for these
products
100.00
100.00
Weida International Sdn. Bhd.
(“WISB”)
Investment holding
100.00
100.00
Maju Warisanmas Sdn. Bhd.
Property holding
100.00
100.00
Weidasar Engineering
Sdn. Bhd.
Construction and installation of sewerage
treatment plants and bulk storage tanks
64.00
64.00
Weidaya Sdn. Bhd.
Trading of HDPE products and the provision
of specialised installation services for these products
70.00
70.00
Weida Environmental
Technology Sdn. Bhd. (“WET”)
Provision of sewerage treatment services
comprising the design, supply and installation,
commissioning and maintenance of sewerage
systems
51.00
51.00
85
6.
Investment in subsidiaries (continued)
Effective ownership
interest
2010
2009
%
%
Subsidiary
Bumi Suria Ventures Sdn. Bhd.
Cultivation of oil palms
51.43
51.43
Weida Water (ADRA)
Sdn. Bhd.
Dormant
51.00
51.00
Weida (B) Sdn. Bhd. ^
Trading of HDPE products
99.99
99.99
Letting of investment property
100.00
100.00
Manufacture and sale of HDPE products
99.99
99.99
Sar-Alam Indah Sdn. Bhd.
Provision of treatment and disposal of
sludge services
29.58
29.58
Renexus-Weida Sdn. Bhd.
Construction and installation of treatment
plants
40.29
40.29
UTIC Services Sdn. Bhd.
(“USSB”)
Provision of underground mapping
of buried utilities, closed circuit television
survey and investigation and rehabilitation of
underground sewer and pipeline networks and
storm water culverts
34.63
34.63
Dormant
40.80
-
Manufacture and trading of synthetic and
composite liners for sewerage, waterpipe
application and pipeline rehabilitation
34.63
34.63
Subsidiary of WII
Greenyard Corporation
Sdn. Bhd.
Subsidiary of WISB
Weida Philippines Inc. ^
Subsidiaries of WET
LIPP Biogas (Malaysia) Sdn. Bhd.
(“LBM”) [formerly known as
Budi Serimas Sdn. Bhd.] **
Subsidiary of USSB
UTIC Industries Sdn. Bhd.
86
#
Consolidated using the pooling-of-interests method of accounting.
^
Audited by other member firms of KPMG International.
**
The consolidated financial statements for the year ended 31 March 2010 include the unaudited accounts
of LBM for the period from 22 January 2010 (date of incorporation) to 31 March 2010, which are not
material to the Group.
7.
Goodwill - Group
Cost
______________Goodwill_______________
with
With
finite useful
indefinite
lives
useful lives
Total
RM
RM
RM
At 1 April 2008
Acquisition of minority interest (Note 30)
Write off (Note 20)
2,635,286
-
1,119,428
1,094,293
(789,940)
3,754,714
1,094,293
(789,940)
Acquisition of new subsidiary (Note 30)
Write off (Note 20)
2,635,286
-
1,423,781
5,764
(5,764)
4,059,067
5,764
(5,764)
At 31 March 2010
2,635,286
1,423,781
4,059,067
641,366
575,344
-
641,366
575,344
1,216,710
-
1,216,710
At 1 April 2008
2,635,286
1,119,428
3,754,714
1,993,920
1,423,781
3,417,701
At 31 March 2010
1,418,576
1,423,781
2,842,357
Amortisation
Amortisation for the 2009 financial year (Note 20) and
balances at 31 March 2009/1 April 2009
Amortisation for the 2010 financial year (Note 20)
At 31 March 2010
Carrying amounts
Impairment testing for cash-generating units containing goodwill
For the purpose of impairment testing, goodwill is allocated to the cash generating units (“CGUs”) acquired at
which the goodwill is monitored for internal management purposes.
The aggregate carrying amounts of goodwill allocated to the CGUs are as follows:
Group
With indefinite useful lives
CGU 1
Other CGUs
With finite useful lives
CGU 2
CGU 3
Total
2010
RM
2009
RM
1,349,954
73,827
1,349,954
73,827
1,423,781
1,423,781
710,396
708,180
1,244,082
749,838
1,418,576
1,993,920
2,842,357
3,417,701
87
7.
Goodwill - Group (continued)
Impairment testing for cash-generating units containing goodwill (continued)
The recoverable amounts of the above CGUs were based on value in use calculations. These calculations
use pre-tax cash flow projections based on financial budgets approved by management. Value in use was
determined by discounting the future cash flows expected to be generated from the continuing use of the
CGUs and was based on the following key assumptions:
CGU 1 and CGU 2 – Specific assumptions
a)
Existing on-going contracts (including those anticipated to be secured within the next twelve months
for CGU 1) will commence and progress as scheduled. There will be no significant deviations from the
expected physical completion and hand-over dates for all present and future contracts.
b)
Contract sum will remain at the value stipulated in the contracts, and will not be affected to a material
extent by variation orders and/or changes in market conditions.
c)
Sub-contractor costs as well as raw material prices will be maintained at the projected levels.
d)
Advance payments from customers will be received as projected for working capital purposes. These
payments will be progressively deducted against future claims to customers.
e)
For CGU 2, there will be no major change in the present legislation relating to its foreign operation.
Foreign currency exchange rates will remain at the current levels.
f)
The projections for both CGUs are for two years covering 2011 and 2012.
g)
The discount rate used to determine the recoverable amount of CGU 1 and CGU 2 is 10% per annum.
CGU 3 - Specific assumptions
a)
Services rendered are projected to remain at the same level as 2010. The rate of service charge will be
revised upwards by 10% once every five years in accordance with the service contract.
b)
Expenses are projected to increase at 3% per annum.
c)
The projections are for five years covering 2011 to 2015.
d)
The discount rate used to determine the recoverable amount of CGU 3 is 6% per annum.
General assumptions applicable to all CGUs
a)
Collections from trade receivables and settlement of trade payables will be made in accordance with the
current credit arrangements and policies.
b)
Capital expenditure on property, plant and equipment will be incurred on schedule.
c)
Repayment of borrowings and interest will be made in accordance with agreed repayment schedules.
The values assigned to the key assumptions represent management’s assessment of future trends in the
industry and are based on historical data from both external sources and internal sources.
88
7.
Goodwill – Group (continued)
Sensitivity to changes in assumptions
The above estimates are particularly sensitive to fluctuations of material prices and contract value. With a 5%
and 10% variation in the projected contract value and operational costs respectively, the projections show that
the recoverable amounts of the CGUs would still exceed the allocated goodwill.
8.
Other investments
Group
2010
RM
Quoted shares in Malaysia, at cost
Less: Allowance for diminution in value
Unquoted shares, at cost
Less: Allowance for diminution in value
Total
2009
RM
2010
RM
Company
2009
RM
23,614
(7,474)
34,707,903
(10,885)
23,614
(7,474)
34,707,903
(10,885)
16,140
34,697,018
16,140
34,697,018
450,000
(128,000)
450,000
(128,000)
-
-
322,000
322,000
-
-
338,140
35,019,018
16,140
34,697,018
The market value of other investments is shown in Note 28.
9.
Other intangible asset – Group
RM
Cost
Additions during 2009, balances at 31 March 2009/1 April 2009 and 31 March 2010
450,500
Amortisation
Amortisation for the 2009 financial year and balances at 31 March 2009/1 April 2009
Amortisation for the 2010 financial year
At 31 March 2010
22,525
90,100
112,625
Carrying amounts
427,975
At 31 March 2010
337,875
This represents the cost of an exclusive licence acquired allowing a subsidiary to use and exploit for a period
of five years certain technical information relating to the operation of specialised equipment within South East
Asia.
89
9.
Other intangible asset – Group (continued)
Allocation of amortisation
Amortisation for the financial year is allocated as follows:
Group
Capitalised into contract costs (Note 10.4)
2010
RM
2009
RM
37,542
52,558
22,525
-
90,100
22,525
10. Trade and other receivables
2010
RM
Group
2009
RM
2010
RM
Company
2009
RM
29,158,709
5,023,424
86,549
18,508,242
8,826,141
90,540
-
-
34,268,682
27,424,923
-
-
-
-
81,990,437
60,639,338
34,268,682
27,424,923
81,990,437
60,639,338
74,755,416
(4,692,239)
52,096,579
(5,899,479)
-
-
70,063,177
6,714,066
46,197,100
5,233,624
-
-
3,784,252
3,800,758
-
-
80,561,495
55,231,482
-
-
Non-current
Trade
Contract receivables (Note 10.2)
Trade receivable (Note 10.3)
Deposits
Non-trade
Subsidiaries (Note 10.7)
Non-current total
Current
Trade
Trade receivables
Less: Allowance for doubtful debts
Contract receivables (Note 10.2)
Amount due from contract customers
(Note 10.4)
90
10. Trade and other receivables (continued)
Group
Current (continued)
2010
RM
2009
RM
2010
RM
Company
2009
RM
185,961
-
171,450
-
Non-trade
Deposits (Note 10.6)
Less: Allowance for doubtful debts
9,628,037
(134,558)
13,183,346
(134,558)
Other receivables
Prepayments
Subsidiaries (Note 10.7)
9,493,479
4,353,520
1,868,813
-
13,048,788
3,688,229
2,978,150
-
185,961
27,672
199,431
8,710,888
171,450
30,304
1,175,860
27,023,738
15,715,812
19,715,167
9,123,952
28,401,352
Current total
96,277,307
74,946,649
9,123,952
28,401,352
Grand total
130,545,989
102,371,572
91,114,389
89,040,690
10.1 Assessment of doubtful receivables
The Group’s normal trade credit term ranges from 30 to 90 days. The main collectibility risk of trade
receivables is customer insolvencies. Management determines allowance for doubtful receivables based
on an on-going review and evaluation performed as part of its credit risk evaluation process. These
include asessment of customers’ past payment records, sales level, financial standing and the age of
debts. The evaluation is however inherently judgemental and requires material estimates, including
the amounts and timing of future cash flows expected to be received, which may be susceptible to
significant changes.
Specific allowance is made for debts which are considered as doubtful when the trade accounts
become inactive or when the amounts are under litigation. Write-off of debts against specific allowance
is made only when avenues of recovery have been exhausted and the amounts are considered to be
irrecoverable. Although management considers the allowance for doubtful receivables to be adequate as
at 31 March 2010 based on the information currently available, additional allowance may be necessary
when information obtained subsequent to balance sheet date indicates a change in the expected future
cash inflows from the debtors and/or change in economic and other events/conditions.
During the financial year, doubtful debts written off against allowance for doubtful debts made previously
amounted to RM113,254 (2009: RM88,686).
10.2 Contract receivables relate to the construction of telecommunication towers carried out by a subsidiary.
Pursuant to the agreement entered into between the subsidiary and its contract customer, the contract
receivables are payable over a period up to 10 years commencing from the handover date of individual
telecommunication towers.
During the current financial year, the said subsidiary sold off and received payment of RM9,650,000
(2009: RM110,550,000) out of the contract receivables claimed from the contract customer.
The remaining contract receivables bear interest at variable rates and are expected to be collected as
follows:
Group
2010
2009
RM
RM
Due within one year
Due after one year
6,714,066
29,158,709
5,233,624
18,508,242
35,872,775
23,741,866
91
10.3 The non-current trade receivable of RM5,023,424 (2009: RM8,826,141) represents an amount due from
a former associate of the Group. The amount is secured by a first fixed and floating charge over the
company’s assets and bears interest at 6.00% (2009: 6.00%) per annum. The amount is not subject to
a fixed term of repayment but is repayable in full by December 2012.
10.4 Amount due from contract customers
Group
2010
RM
Value of works performed to-date
Progress billings
Amount due to contract customers reclassified to
trade and other payables (Note 18)
Amount due from contract customers
2009
RM
200,603,309 278,479,916
(226,817,304) (281,960,450)
(26,213,995)
(3,480,534)
29,998,247
7,281,292
3,784,252
3,800,758
Additions to the value of works performed to-date include:
Group
Amortisation of intangible asset (Note 9)
Depreciation of property, plant and equipment (Note 3.3)
Personnel expenses
- contributions to the Employees Provident Fund
- wages, salaries and others
Interest expense
Foreign exchange gain
- realised
- unrealised
Rental of equipment and vehicles
Rental of premises
2010
RM
2009
RM
52,558
675,276
536,853
120,711
8,165,245
1,808,385
110,015
6,075,385
1,331,711
(5,266)
1,064,789
537,833
(21,425)
425,642
383,537
10.5 Trade receivables of the Group include retention sums of RM31,074,894 (2009: RM17,593,448).
10.6
Deposits of the Group include an amount of RM8,351,259 (2009: RM10,145,111) paid for the purchase
of materials, machinery and equipment.
10.7 The amount due from subsidiaries is unsecured and bears interest at 5.00% (2009: 6.00%) per
annum.
The non-current portion of the amount due from subsidiaries is not repayable during the next twelve
months. Nevertheless, the subsidiaries may make repayments so long as such repayments do not
adversely affect the ability of the subsidiaries to meet their liabilities when due.
Included in the current portion of the amount due from subsidiaries is a balance of RM981,118 (2009:
RM732,199), against which a provision of RM732,199 (2009: RM732,199) has been made.
92
10.8 Trade and other receivables denominated in currencies other than the functional currency comprise the
following:
Group
Renminbi (RMB)
United States Dollar (USD)
Euro
Brunei Dollar (BND)
Philippine Peso (PHP)
Syrian Pound (SYP)
2010
RM
2009
RM
2,848,942
1,921,933
39,204,057
40,960
1,657,164
980,022
2,848,942
19,781,065
26,881
669,704
1,212,328
46,653,078
24,538,920
11. Deferred tax
Recognised deferred tax
Deferred tax assets and liabilities are attributable to the following:
Assets
Group
Property, plant and
equipment and prepaid
lease payments
Revaluation reserves
Capital allowance
carry-forwards
Allowance for
doubtful debts
Tax loss carry-forwards
Tax assets/(liabilities)
Set off of tax
Net tax assets/ (liabilities)
Company
Revaluation reserves
2010
RM
-
2009
RM
Liabilities
2010
2009
RM
RM
Net
2010
RM
2009
RM
- (13,076,800) (11,950,600) (13,076,800) (11,950,600)
- (3,358,000) (2,482,000) (3,358,000) (2,482,000)
365,800
9,700
-
-
365,800
9,700
46,000
-
46,000
8,000
-
-
46,000
-
46,000
8,000
411,800
(394,800)
17,000
63,700 (16,434,800) (14,432,600) (16,023,000) (14,368,900)
(30,700)
394,800
30,700
-
-
33,000 (16,040,000) (14,401,900) (16,023,000) (14,368,900)
Liabilities
2010
2009
RM
RM
(96,000)
(70,000)
(40,000)
-
(166,000)
(40,000)
93
11. Deferred tax (continued)
Recognised deferred tax (continued)
Movements in deferred tax during the financial year are as follows:
Group
At
1 April 2008
RM
Recognised Acquisition
At Recognised Revaluation
in income
of 31 March 2009/ in income
of
At
statements subsidiaries
1 April 2009 statements
assets 31 March 2010
RM
RM
RM
RM
RM
RM
Property, plant
and equipment
and prepaid
lease payments (10,007,000)
Revaluation
reserves
(2,692,000)
Capital allowance
carryforwards
Allowance for
doubtful debts
72,000
Tax loss carryforwards
347,000
(12,280,000)
38,400 (1,982,000)
(11,950,600) (1,126,200)
-
9,700
-
9,700
356,100
-
365,800
(26,000)
-
46,000
-
-
46,000
(339,000)
-
8,000
-
-
(439,306) (1,214,794)
(16,023,000)
(14,368,900)
(Note 22) (Note 30.1)
338,794 (1,214,794)
(13,076,800)
210,000
(106,900) (1,982,000)
(2,482,000)
-
(8,000)
(3,358,000)
(Note 22)
Company
Property, plant
and equipment
Revaluation
reserves
(98,000)
(98,000)
58,000
-
-
-
58,000
-
(Note 22)
(40,000)
(40,000)
(56,000)
834
(55,166)
-
(96,000)
(70,834)
(70,000)
(70,834)
(166,000)
(Note 22)
Unrecognised deferred tax assets
Deferred tax assets of RM2,485,000 (2009: RM1,646,000) have not been recognised in respect of the following
temporary differences because it is not certain if future taxable profits will be available against which the affected
subsidiaries can utilise the benefits therefrom:
Group
2010
2009
RM
RM
Capital allowance carry-forwards
Tax loss carry-forwards
94
(16,312,000)
21,992,000
3,401,000
(6,894,000)
8,141,000
4,896,000
9,081,000
6,143,000
11. Deferred tax (continued)
Unrecognised deferred tax assets (continued)
Unabsorbed capital allowance carry-forwards and unutilised tax loss carry-forwards of entities incorporated
in Malaysia do not expire under the current Malaysian tax legislation except that in the case of a dormant
company, such allowances and losses will not be available to the company if there is a substantial change of
50% or more in the shareholdings thereof.
The unutilised tax loss carry-forwards of a foreign subsidiary amounting to RM296,000 (2009: RM3,000) can
be claimed as a deduction against future taxable income within three years of the incurrence of such losses.
12. Inventories
Group
At cost:
Construction materials
Consumables
Raw materials
Manufactured/Trading inventories
Plantation inventories
At net realisable value:
Manufactured/Trading inventories
2010
RM
2009
RM
211,425
1,503,766
24,686,807
14,996,855
1,681,444
1,003,800
664,094
8,953,471
15,776,012
3,748,557
43,080,297
30,145,934
192,502
-
43,272,799
30,145,934
13. Properties held for resale - Group
Buildings
RM
At cost
At 1 April 2008
Disposals
Disposals
At 31 March 2010
322,322
(236,000)
86,322
(86,322)
-
Properties held for resale represented properties received in exchange for settlement of trade receivables in
prior years, and were held with a view to realisation in cash.
The properties were sold off during the current financial year realising a gain of RM3,171 (2009: RM3,521)
[see Note 20].
95
14. Cash and bank balances
Group
2010
RM
2009
RM
2010
RM
Company
2009
RM
22,068,785
18,394,949
32,214,989
39,400,786
7,514,036
357,934
14,830,000
767,287
40,463,734
71,615,775
7,871,970
15,597,287
14.1 The following cash and cash equivalents are charged to licensed banks as security for banking facilities
granted to certain subsidiaries (see Note 17.2):
Group
2010
2009
RM
RM
Term deposits accounts
Cash at bank
6,821,993
8,095,409
396,514
7,675,739
14,917,402
8,072,253
14.2 Cash and bank balances denominated in currencies other than the functional currency comprise the
following:
Group
2010
2009
RM
RM
SYP
Euro
BND
PHP
USD
5,001,693
12,512,223
79,395
395,113
949
7,355,472
31,297,859
120,067
252,220
44,412
17,989,373
39,070,030
15. Share capital
______________Group and Company________________
Amount
Number of shares
2010
2009
2010
2009
RM
RM
Ordinary shares of RM0.50 each
96
Authorised:
Opening and closing balances
100,000,000
100,000,000
200,000,000
200,000,000
Issued and fully paid:
Opening and closing balances
66,666,666
66,666,666
133,333,332
133,333,332
16. Reserves
Group
2010
RM
Revaluation reserve
Merger deficit
Translation reserve
Retained earnings
Treasury shares
2009
RM
2010
RM
Company
2009
RM
10,944,615
(16,833,045)
(508,127)
93,827,455
(4,598,441)
7,735,426
(16,833,045)
(102,794)
80,263,106
(4,598,241)
211,762
6,714,014
(4,598,441)
6,296,552
(4,598,241)
82,832,457
66,464,452
2,327,335
1,698,311
Revaluation reserve
This comprises surplus from the revaluation of freehold land, buildings and prepaid lease payments (see
Notes 3 and 4). The surplus arising from the revaluation is released to retained earnings over the remaining
estimated useful lives of the revalued assets.
Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial
statements of foreign operations and foreign subsidiaries.
Retained earnings – Section 108 tax credit
Subject to agreement with the Inland Revenue Board, the Company has sufficient Section 108 tax credit at 31
March 2010 to distribute all of its retained earnings as franked dividends.
The Company may however elect for early migration to the single-tier company income tax system enacted
via the Finance Act 2007, under which retained earnings are distributable as exempt dividends. The system,
which is effective from 1 January 2008, allows for a transitional period of six years. Unless so migrated to the
system, the Section 108 tax credit will be available to the Company until such time the credit is fully utilised or
upon the expiry of the transitional period on 31 December 2013, whichever is earlier.
Treasury shares
The shareholders of the Company, at an Annual General Meeting held on 29 September 2009, approved the
Company’s plan to repurchase its own shares. The Directors of the Company are committed to enhance the
value of the Company to its shareholders and believe that the repurchase plan can be applied in the best
interest of the Company and its shareholders.
During the financial year, the Company purchased 200 (2009: 200,100) of its own shares from the open market
at an average price of RM0.59 (2009: RM0.58) per ordinary share. The repurchase transactions were financed
by internally generated funds. The shares repurchased are retained as treasury shares.
At 31 March 2010, the Company held a total of 6,437,700 (2009: 6,437,500) of its own shares of RM0.50
each.
97
17. Loans and borrowings
This note provides information about the contractual terms of the Group and the Company’s interest bearing
loans and borrowings. For more information about the Group and Company’s exposure to interest rate risk,
see Note 28.
Group
Company
2010
2009
2010
2009
RM
RM
RM
RM
Non-current
Finance lease liabilities
Islamic Bonds
Term loan
Revolving credits
denominated in Euro
Secured
Unsecured
Secured
3,535,407
30,000,000
15,300,000
1,227,857
60,000,000
-
30,000,000
-
60,000,000
-
Secured
-
22,178,175
-
22,178,175
48,835,407
83,406,032
30,000,000
82,178,175
1,268,801
295,505
27,129,000
10,000,000
538,028
37,313
26,843,000
10,000,000
10,000,000
10,000,000
Current total
38,693,306
37,418,341
10,000,000
10,000,000
Total
87,528,713
120,824,373
40,000,000
92,178,175
Non-current total
Current
Bank overdrafts
Bankers’ acceptances
Islamic Bonds
Secured
Unsecured
Unsecured
Unsecured
17.1 Terms and repayment schedules
Group
Year of
maturity
Carrying
amount
RM
Under
1 year
RM
1–2
years
RM
2–5
years
RM
>5
years
RM
2010 – 2014
2020
4,804,208
15,300,000
1,268,801
-
1,168,026
-
2,367,381
5,062,512
10,237,488
20,104,208
1,268,801
1,168,026
7,429,893
10,237,488
27,129,000
295,505
40,000,000
27,129,000
295,505
10,000,000
-
30,000,000
-
67,424,505
37,424,505
-
30,000,000
-
87,528,713
38,693,306
1,168,026
37,429,893
10,237,488
2010
Secured
Finance lease
liabilities
Term loan
Unsecured
Bankers’
acceptances
2010
Bank overdrafts
2010
Islamic Bonds 2010 - 2012
Total
98
17. Loans and borrowings (continued)
17.1 Terms and repayment schedules (continued)
Group (continued)
Year of
maturity
Carrying
amount
RM
Under
1 year
RM
1–2
years
RM
2–5
years
RM
2009 – 2014
1,765,885
538,028
500,308
727,549
2011
22,178,175
-
-
22,178,175
23,944,060
538,028
500,308
22,905,724
26,843,000
37,313
70,000,000
26,843,000
37,313
10,000,000
-
60,000,000
96,880,313
36,880,313
-
60,000,000
120,824,373
37,418,341
500,308
82,905,724
2010 – 2012
40,000,000
10,000,000
-
30,000,000
2011
22,178,175
-
-
22,178,175
2009 – 2012
70,000,000
10,000,000
-
60,000,000
92,178,175
10,000,000
-
82,178,175
2009
Secured
Revolving credits
denominated in Euro
Unsecured
Bankers’ acceptances
Bank overdrafts
Islamic Bonds
2010
2010
2009 – 2012
Total
Company
2010
Unsecured
Islamic Bonds
2009
Secured
Revolving credits
denominated in Euro
Unsecured
Islamic Bonds
Total
99
17.2 Security
Company
The revolving credits of the Company, which are not utilised at the financial year end, are secured by
a foreign operation’s assignment of contract proceeds or irrevocable payment instruction (at the sole
discretion of lender bank), a charge over its project escrow accounts and establishment of a sinking
fund account.
Subsidiaries
The bankers’ acceptances, bank overdrafts and bank guarantees facilities of certain direct and indirect
subsidiaries are covered by a negative pledge over their present and future assets and supported by a
corporate guarantee of the Company.
A bank facility comprising bank guarantees and bank overdraft facilities granted to an indirect subsidiary
is secured by:
•
•
•
•
•
•
pledge of first party charge over term deposits (see Note 14.1).
assignment of contract proceeds of the subsidiary.
corporate guarantee from the Company.
joint and several guarantees of certain directors of the subsidiary.
personal guarantee denominated in Pound Sterling by an ex-director of the subsidiary.
a negative pledge over the present and future assets of the subsidiary.
The bank overdraft facility granted to the indirect subsidiary is not utilised at the financial year end.
The term loan granted to a subsidiary during the current financial year are secured by:
•
•
a fixed charge over certain leasehold land of the Group (see Note 4), and
corporate guarantee from the Company.
The finance lease liabilities are secured on the respective finance lease assets of the Group. The
outstanding finance lease liabilities of RM2,242,117 (2009: RM1,765,885) granted to certain subsidiaries
are guaranteed by the Company.
17.3 Significant covenants for borrowings
The Group is required to maintain the following financial ratios throughout the tenor of the facilities:
Islamic Bonds
Gearing ratio not exceeding 1.50 times, and
finance service cover ratio of not less than 1.50 times.
Term loan
Gearing ratio not exceeding 1.50 times.
Revolving credits
Gearing ratio not exceeding 3.50 times.
17.4 Islamic Bonds
The Company has been given permission to issue up to RM100 million of Murabahah Underwritten
Notes/Islamic Medium Term Notes with maturities ranging from 1 to 12 months and 1 to 7 years
respectively, by the Securities Commission on 27 May 2005. This facility is unsecured and available to
the Company till 2012.
100
17.5 Finance lease liabilities - Group
Finance lease liabilities are repayable as follows:
2010
Minimum
lease
payments
RM
Interest
RM
Principal
RM
Less than one year
Between one and five years
1,551,193
3,897,605
282,392
362,198
1,268,801
3,535,407
5,448,798
644,590
4,804,208
644,233
1,352,797
106,205
124,940
538,028
1,227,857
1,997,030
231,145
1,765,885
2009
Less than one year
Between one and five years
18. Trade and other payables
2010
RM
Group
2009
RM
2010
RM
Company
2009
RM
28,327,499
29,998,247
10,969,190
7,281,292
-
-
58,325,746
18,250,482
-
-
-
-
36,042,984
24,901,324
19,410,508
19,713,073
2,439,120
31,590,649
21,747,902
3,067,697
2,803,578
115,262
2,145,433
52,188
41,562,701
56,406,248
38,961,824
27,098,945
99,888,447
74,656,730
38,961,824
27,098,945
Trade
Trade payables
Amount due to contract customers (Note 10.4)
Non trade
Subsidiaries
Advance payments received
from contract customers
Accrued expenses
Other payables
Total
101
18. Trade and other payables (continued)
18.1 Included in the trade payables of the Group are retention sums of RM740,370 (2009: RM922,095).
18.2 Trade and other payables denominated in currencies other than the functional currency comprise the
following:
Group
Euro
SYP
PHP
USD
BND
Singapore Dollar (SGD)
RMB
Australian Dollar (AUD)
2010
RM
2009
RM
27,948,418
11,560,099
11,099,155
8,529,320
197,866
21,135
786,729
53,061,526
215,247
6,446,549
572,885
264,279
4,800
-
60,142,722
60,565,286
18.3 Other payables of the Group as at 31 March 2009 included an amount due to a key management
personnel of the Group of RM1,500.
18.4 The amount due to subsidiaries is unsecured and bears interest at 5.00% (2009: 6.00%) per annum.
19. Revenue
Group
Sale of goods
Services rendered
Contract revenue
Interest income from financing of
construction of telecommunication towers
Dividend income from:
- subsidiaries (unquoted in Malaysia)
- quoted investments
Management fees
102
2010
RM
2009
RM
2010
RM
Company
2009
RM
113,876,193
25,203,125
120,906,830
101,062,685
21,991,219
130,198,902
-
-
16,206,996
14,591,613
-
-
-
-
6,050,000
760
5,539,539
8,112,000
957,391
5,557,200
276,193,144
267,844,419
11,590,299
14,626,591
20. Profit before taxation
2010
RM
Group
2009
RM
2010
RM
Company
2009
RM
-
128,000
-
-
211,000
80,462
200,000
77,117
35,000
-
35,000
-
41,000
37,542
575,344
40,500
22,525
641,366
37,000
-
35,000
732,199
-
5,386,973
553,132
5,764
4,540,803
549,007
789,940
359,773
19,485
-
436,101
17,860
-
168,521
17,792
1,389,302
772,306
222,836
42,358
36,845
2,587,685
866,895
18,720
2,365
2,768,887
1,710,779
90,979
2,587,685
1,554,639
458
87,227
1,365,193
803,450
-
1,326,911
840,800
177,812
641,807
-
649,220
-
518,433
139,224
-
-
760
957,391
6,050,000
760
8,112,000
957,391
Profit before taxation is arrived at
after charging:
Allowance for diminution in value of
unquoted investments
Auditors’ remuneration:
- statutory audit
- KPMG
- Affiliate of KPMG
- other services
- KPMG
Allowance for doubtful debts
Amortisation of intangible asset (Note 9)
Amortisation of goodwill (Note 7)
Depreciation and amortisation expenses:
- property, plant and equipment (Note 3.3)
- prepaid lease payments (Note 4.3)
Goodwill written off (Notes 7 and 30)
Interest expense on:
- finance leases
- bank overdrafts
- profit payments on Islamic Bonds
- bankers’ acceptances
- others
Property, plant and equipment written off
Loss on disposal of property, plant and
equipment
Rental of premises and equipment
Rental of land
Realised foreign exchange loss
and after crediting:
Bad debts recovered
Dividend income from:
- subsidiaries (unquoted in Malaysia)
- quoted investments
103
20. Profit before taxation (continued)
2010
RM
Group
2009
RM
2010
RM
Company
2009
RM
3,171
3,170,729
22,001
3,521
62,574
16,750
3,170,729
38,400
380,047
483,397
479,881
-
1,180,575
475,505
-
213,692
3,416,232
158,422
4,233,974
16,206,996
-
14,591,613
78,687
1,264,200
1,264,200
-
557,402
-
-
544,220
534,801
9,084
22,590
2,329,021
27,050
-
-
-
3,411
568,600
2,137,532
138,368
3,411
-
2,137,532
-
-
-
-
2,540,599
279,423
-
-
-
2010
RM
2009
RM
2010
RM
Company
2009
RM
1,927,169
1,723,786
416,821
350,702
Profit before taxation is arrived at
after crediting: (continued)
Gain on disposal of:
- property held for resale (Note 13)
- other investments
Interest income from:
- term deposits
- others
- subsidiaries
- financing of construction of
telecommunication towers
Income from rental of furnished premises
Negative goodwill on consolidation
recognised (Note 30)
Foreign exchange gain
- realised
- unrealised
Hire of equipment
Rental of premises
Reversal of:
- allowance for diminution in value
of quoted investments
- allowance for doubtful debts
- impairment loss on investment in
subsidiaries
- revaluation deficit previously charged
to income statement (Note 3.1)
Employee benefits disclosed in the income statements include:
Group
Contributions to the
Employees Provident Fund
104
21. Compensations to key management personnel
Compensations paid/payable to key management personnel are as follows:
2010
RM
Group
2009
RM
2010
RM
Company
2009
RM
318,000
3,877,909
335,500
5,517,450
300,000
2,372,600
317,500
3,164,850
4,195,909
5,852,950
2,672,600
3,482,350
240,000
8,133,638
5,263
240,000
6,548,937
9,341
807,480
-
793,824
-
8,378,901
6,798,278
807,480
793,824
12,574,810
12,651,228
3,480,080
4,276,174
Directors of the Company
- Fees
- Other short term employee benefits
Directors of subsidiaries
and other key management personnel
- Fees
- Other short term employee benefits
- Benefits-in-kind
Total
Other key management personnel comprise persons, other than the Directors, having authority and responsibility
for planning, directing and controlling the activities of the Group either directly or indirectly.
22. Tax expense
Recognised in the income statements
Group
2010
RM
2009
RM
2010
RM
Company
2009
RM
Current tax expense
Malaysian
- current year
- prior years
6,990,270
(1,093,338)
6,529,300
(868,529)
1,273,000
(55,787)
2,272,000
(628,838)
5,896,932
5,660,771
1,217,213
1,643,162
Deferred tax expense /(income) (Note 11)
- current year
- prior years
Total tax expense
345,706
93,600
209,900
(103,000)
70,166
(15,000)
12,000
(70,000)
439,306
106,900
55,166
(58,000)
6,336,238
5,767,671
1,272,379
1,585,162
105
22. Tax expense (continued)
Reconciliation of tax expense
2010
RM
Group
2009
RM
2010
RM
Company
2009
RM
Total tax expense
21,624,190
6,336,238
20,794,434
5,767,671
4,223,596
1,272,379
9,926,044
1,585,162
27,960,428
26,562,105
5,495,975
11,511,206
6,990,000
6,641,000
1,374,000
2,878,000
Income tax using Malaysian tax rate of
25% (2009: 25%)
Effect of different tax
rates in foreign jurisdiction
Income of foreign source
not subject to Malaysian tax
Effect of change in tax rates
Non-deductible expenses
/(Non-taxable income)
Reversal of accumulated depreciation from
revaluation of assets
Depreciation and amortisation expenses
capitalised
Movements in unrecognised deferred tax assets
Reinvestment allowance claimed and utilised
Reversal of revaluation deficit previously
charged to income statements
(12,100)
(127,000)
-
-
(821,500)
-
(2,323,000)
(43,000)
-
-
1,206,576
2,266,200
429,000
-
(562,000)
839,000
(663,000)
(70,000)
7,335,976
Over-provision in prior years
Total tax expense
(999,738)
6,336,238
(38,834)
(594,000)
8,000
-
-
-
-
-
-
6,739,200
1,343,166
2,284,000
(364,000)
843,000
(154,000)
(971,529)
5,767,671
(70,787)
1,272,379
(698,838)
1,585,162
23. Earnings per share - Group
Basic/Diluted earnings per ordinary share
The calculation of basic/diluted earnings per ordinary share was based on the profit attributable to ordinary
shareholders of RM17,191,747 (2009: RM15,024,721) and the weighted average number of ordinary shares
outstanding of 126,895,749 (2009: 126,895,874).
Weighted average number of ordinary shares
2010
2009
133,333,332
133,333,332
(6,437,500)
(6,237,400)
Effect of ordinary shares repurchased during the financial year
126,895,832
(83)
127,095,932
(200,058)
Weighted average number of ordinary shares
outstanding at end of financial year
126,895,749
126,895,874
Issued ordinary shares at beginning of financial year (Note 15)
Less: Cumulative effect of treasury shares
bought back in previous financial years
106
24. Dividends
Dividend recognised in the Statements of Changes in Equity for the financial year comprises:
Sen per share
(net of tax)
Total
amount
RM
Date of
payment
3.00
3,806,872
25 November 2009
2.62
3,331,016
24 October 2008
2010
Final 2009 ordinary
2009
Interim 2009 ordinary
After the balance sheet date, the Directors have proposed a first and final dividend of 4.00 sen per ordinary
share less tax at 25% totalling RM3,806,866 (equivalent to 3.00 sen net per ordinary share) in respect of
the financial year ended 31 March 2010. The dividend will be paid upon approval by shareholders at the
forthcoming Annual General Meeting and recognised in subsequent financial reports.
The dividends per ordinary share as disclosed in the income statements relate to the total dividends declared
or proposed for the financial year.
25. Segment reporting
Segment information is presented in respect of the Group’s business segments. The primary format, business
segment, is based on the Group’s management and internal reporting structure. Inter-segment pricing is
determined on a negotiated term.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that
can be allocated on a reasonable basis. Unallocated item comprises principally other corporate expenses and
investment income.
Segment capital expenditure is the total costs incurred during the financial year to acquire property, plant and
equipment, prepaid lease payments, oil palm plantation development expenditure and intangible assets other
than goodwill, where applicable.
Business segments
The Group comprises the following main business segments:
Manufacturing
-
Manufacture, marketing and sale of HDPE products and trading of other specialised
and technical engineering products.
Works
-
Installation of water treatment and sewerage treatment plants as well as construction of
telecommunication towers and bulk storage tanks.
Services
-
Sewerage treatment services, treatment and disposal of sludge services as well as
underground mapping of buried utilities, closed circuit television survey and investigation
and rehabilitation of underground sewer and pipeline networks and storm water culverts.
Plantations
-
Cultivation of oil palms.
All the business segments are operated solely in Malaysia, except those for the foreign branch of a subsidiary
set up in Syrian Arab Republic to carry out construction activities and two foreign subsidiaries (see Note 6).
107
25. Segment reporting (continued)
Manufacturing
2010
2009
RM
RM
Works
2010
RM
2009
RM
Business segments
Revenue
Total segment revenue
113,876,193
101,062,685
137,113,826
144,790,515
13,587,100
9,364,546
11,189,156
14,193,396
153,554,023
136,978,439
118,980,374
108,196,342
Segment liabilities
51,819,356
77,945,209
77,276,384
85,078,091
Capital expenditure
18,231,187
8,904,075
520,967
369,214
5,058,292
-
4,111,321
-
388,913
536,000
368,777
599,708
Segment results
Unallocated corporate expenses
Reversal of allowance for diminution in
value of quoted investments
Gain on disposal of a quoted investment
Tax expense
Segment assets
Other investments
Total assets
Depreciation and amortisation of:
- tangible assets
- intangible assets
There are no significant non cash expenses other than depreciation and amortisation expenses.
Malaysia
Middle East
2010
2009
RM
RM
2010
RM
2009
RM
Revenue from external customers
191,086,901
175,704,326
81,956,230
91,802,730
Segment assets
Other investments
320,329,981
338,140
266,623,987
35,019,018
52,185,989
-
60,575,644
-
320,668,121
301,643,005
52,185,989
60,575,644
Segment liabilities
164,470,226
182,237,042
40,184,079
29,001,640
Capital expenditure
41,550,973
23,536,603
-
-
Geographical segments
108
Services
Plantations
2010
RM
2009
RM
2010
RM
2009
RM
25,203,125
21,991,219
-
-
2,213,682
2,086,469
(450,815)
(341,965)
Consolidated
2010
2009
RM
RM
276,193,144
267,844,419
26,539,123
25,302,446
(1,752,835)
23,646,009
24,479,372
84,750,283
63,332,009
(877,873)
3,411
3,170,729
2,137,532
-
27,960,428
26,562,105
(6,336,238)
(5,767,671)
21,624,190
20,794,434
380,930,689
332,986,162
338,140
35,019,018
381,268,829
368,005,180
17,273,209
11,095,509
58,940,560
37,507,517
205,309,509
211,626,326
1,095,717
1,546,217
22,713,782
16,147,012
42,561,653
26,966,518
1,005,317
129,444
977,073
64,183
2,409,072
-
1,623,391
-
8,861,594
665,444
7,080,562
663,891
Other Countries
2010
2009
RM
RM
Consolidated
2010
2009
RM
RM
3,150,013
337,363
276,193,144
267,844,419
8,414,719
-
5,786,531
-
380,930,689
338,140
332,986,162
35,019,018
8,414,719
5,786,531
381,268,829
368,005,180
655,204
387,644
205,309,509
211,626,326
1,010,680
3,429,915
42,561,653
26,966,518
109
26. Capital expenditure commitment
2010
RM
Group
2009
RM
2010
RM
Company
2009
RM
826,000
-
-
-
5,710,000
7,000,000
-
4,000
6,536,000
7,000,000
-
4,000
Within one year
- Authorised but not contracted for
- Contracted but not provided for in the
financial statements
27. Contingent liabilities - unsecured
The Directors are of the opinion that provision is not required in respect of the following corporate guarantees,
as it is not probable that a future sacrifice of economic benefits will be required or the amount is not capable
of reliable measurement:
Group
Corporate guarantee granted:
- for banking facilities of subsidiaries
- to third parties for performance of
projects and/or banking facilities
Company
2010
2009
RM
RM
2010
RM
2009
RM
-
-
202,775,000
180,985,000
16,646,000
7,241,000
-
-
16,646,000
7,241,000
202,775,000
180,985,000
28. Financial instruments
Exposure to credit, interest rate, foreign currency and liquidity risk arises in the normal course of the Group’s
business. The objective of the Group’s financial risk management is to ensure that the Group creates value for
its shareholders by taking steps to manage the risks through review of risk exposures, internal control systems
and adherence to the Group’s financial risk management policies.
Credit risk
The Group seeks to review the creditworthiness of customers requiring credit on sales of goods and services
rendered, and where necessary takes appropriate measures to enhance credit control procedures so to
minimise its credit risk exposure.
110
28. Financial instruments (continued)
Credit risk (continued)
At balance sheet date, there are no significant concentrations of credit risk other than the following:
Group
Amount due from three
(2009: three) subsidiaries
Trade receivables:
Contract receivable due from
telecommunication towers contract
(Note 10.2) *
Trade receivable due from a former
associate of the Group (Note 10.3)
Other receivables:
Deposits paid to suppliers (Note 10.6)
*
2010
RM
2009
RM
2010
RM
Company
2009
RM
-
-
81,750,346
77,854,628
35,872,775
23,741,866
-
-
5,023,424
8,826,141
-
-
8,351,259
10,145,111
-
-
49,247,458
42,713,118
81,750,346
77,854,628
Repayable over 10 years from the handover date of individual telecommunication tower and is secured
by an assignment of rental proceeds payable by cellular telecommunication service providers leasing the
telecommunication towers constructed by the subsidiary for the contract customer.
Cash and cash equivalents are only placed with licensed banks. The maximum exposure to credit risk is
represented by the carrying amount of each financial asset.
Foreign currency risk
The Group is exposed to foreign currency risk arising mainly from purchases of raw materials and equipment,
borrowings as well as foreign operations denominated in a currency other than RM. The major currencies
giving rise to this risk are mostly Euro, Syrian Pound (SYP), Philippine Peso (PHP), Brunei Dollar (BND),
United States Dollar (USD) and Renminbi (RMB).
In addition, the foreign operation also maintains two foreign currency bank accounts denominated in Euro
and SYP into which receipts from its customer are deposited and from which payments are made to minimise
foreign exchange risk.
As it is not possible to predict with any certainty the movements of exchange rates, this risk is managed on an
on-going basis. Forward exchange contracts are occasionally used to hedge the Group’s exposure to foreign
currency risk.
The balances denominated in foreign currencies as at balance sheet date are disclosed in Notes 10, 14, 17
and 18 to the financial statements.
111
Interest rate risk
The Group’s borrowings are principally on a floating rates basis. Exposure to floating interest rates presents
the Group with a certain element of risk when there are unexpected adverse interest rate movements. The
Group’s policy is to manage its interest rate risk, working within an agreed framework, to ensure that there are
no undue exposures to such risk. The management monitors this on an ongoing basis and exercises a certain
element of discretion on whether to borrow at fixed or floating interest rates, depending on the market situation
and the outlook prevailing then.
The interest-earning assets and interest-bearing liabilities are negotiated and monitored according to changes
in the interest rate regime to ensure that the Group is exposed to minimal interest rate risk.
The world economy is gradually recovering from the global economic and financial crisis started in September
2008, exerting upward pressure on interest rates. The Group is expected to earn/pay interest at higher rates
on deposits/borrowings going forward.
Effective interest rates and repricing analysis
In respect of interest bearing financial instruments, the following table indicates their effective interest rates at
the balance sheet date and the periods in which they mature, or if earlier, reprice.
Effective
interest rate
per annum
%
Total
RM
Less than
1 year
RM
1–2
years
RM
2–5
years
RM
4.93 – 9.60
3.80 – 4.80
4,804,208
40,000,000
1,268,801
40,000,000
1,168,026
-
2,367,381
-
Floating rate instruments
Term deposits placed with
licensed banks
1.23 – 5.50
Unsecured bankers’ acceptances 2.45 – 3.50
Unsecured bank overdrafts
5.80 – 7.55
Secured term loan
7.05
22,068,785
27,129,000
295,505
15,300,000
22,068,785
27,129,000
295,505
15,300,000
-
-
4.93 – 9.60
5.00 – 6.00
1,765,885
70,000,000
538,028
70,000,000
500,308
-
727,549
-
Term deposits placed with
licensed banks
1.10 – 6.00
Unsecured bankers’ acceptances 2.48 – 4.81
Unsecured bank overdrafts
6.75
Secured revolving credits
denominated in Euro
4.26
32,214,989
26,843,000
37,313
32,214,989
26,843,000
37,313
-
-
22,178,175
22,178,175
-
-
Group
2010
Fixed rate instruments
Unsecured Islamic Bonds
2009
Fixed rate instruments
112
Effective interest rates and repricing analysis (continued)
Effective
interest rate
per annum
%
Total
RM
Less than
1 year
RM
Fixed rate instrument
3.80 – 4.80
40,000,000
40,000,000
Floating rate instrument
1.23 – 1.90
7,514,036
7,514,036
Fixed rate instrument
5.00 – 6.00
70,000,000
70,000,000
Secured revolving credits denominated in Euro
1.10 – 1.80
4.26
14,830,000
22,178,175
14,830,000
22,178,175
Company
2010
2009
Liquidity risk
The Group monitors and maintains a level of banking facilities and cash and cash equivalents deemed adequate
by management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows.
Fair value
Recognised financial instruments
The carrying amounts of cash and cash equivalents, trade and other receivables, trade and other payables
and short term borrowings approximate fair value due to the relatively short term nature of these financial
instruments.
The Company provides corporate guarantees of RM202,775,000 (2009: RM180,985,000) to banks for credit
facilities extended to certain subsidiaries (see Note 27). The fair value of such corporate guarantees is not
expected to be material as the probability of the subsidiaries defaulting on the credit lines is remote.
The carrying amount of the unsecured Islamic Bonds issued during the financial year also approximates fair
value as their profit payment rates are in line with the prevailing market rates.
It is not practicable to estimate the fair value of the investment in unquoted shares of RM322,000 (2009:
RM322,000) [see Note 8]. However, based on the latest management accounts of the investee companies
for the financial year ended 31 March 2010, the Group’s share of their net assets is RM514,000 (2009:
RM424,094).
113
Fair value (continued)
Recognised financial instruments (continued)
The fair values of other financial assets, together with the carrying amount shown in the balance sheets, are
as follows:
2010
Financial assets
Quoted shares (Note 8)
- Group and Company
(non-current portion) (Note 10)
- Group
*
2009
Carrying
amount
RM
Fair
value
RM
Carrying
amount
RM
Fair
value
RM
16,140
33,403
34,697,018
24,254,628
34,268,682
80,400,000
27,424,923
27,424,923
Included in quoted shares as at 31 March 2009 was a long-term investment of RM34,684,151. No writedown of the investment to its market value of RM24,238,000 as at 31 March 2009 was made as the
Directors were of the view that the apparent diminution in value is temporary in nature and the Group’s
share of the net assets of the investee company, amounting to RM53,594,000 based on the unaudited
financial information for the year ended 30 April 2009, was greater than its cost of investment. The
allowance of RM2,145,000 previously provided against this investment was reversed as income during
the last financial year ended 31 March 2009 (see Note 20).
The Group has disposed of this quoted investment during the current financial year and recognised a gain
of RM3,170,729 from the said disposal (see Note 20).
Fair value of quoted shares is based on quoted market prices at the balance sheet date without any deduction
for transaction costs.
Unrecognised financial instruments
Financial derivative instruments are occasionally used to hedge foreign exchange risks associated with certain
purchase transactions. The contracted principal amount of the derivatives and the corresponding fair value
changes not recognised in the balance sheet as at 31 March 2010 are analysed below:
Forward foreign exchange contracts falling due within a year
Contracted
amount
RM
Group
Fair value
changes
RM
951,788
(16,548)
There were no outstanding forward foreign exchange contracts as at 31 March 2009.
114
29. Related parties
Identity of related parties
For the purposes of these financial statements, parties are considered to be related to the Group or the
Company if the Group or the Company has the ability, directly or indirectly, to control the parties or exercise
significant influence over the parties in making financial and operating decisions, or vice versa, or where the
Group or the Company and the parties are subject to common control or common significant influence. Related
parties may be individuals or other entities.
Key management personnel are defined as those persons having authority and responsibility for planning,
directing and controlling the activities of the Group either directly or indirectly. The key management personnel
includes all the Directors of the Group, and certain members of senior management.
The Company has a related party relationship with:
(i) its subsidiaries;
(ii) key management personnel; and
(iii) companies connected to certain Directors of the Company and/or of its subsidiaries.
Significant related party transactions of the Group and of the Company, other than compensations payable to
key management personnel (see Note 21) and those disclosed elsewhere in the financial statements, are as
follows:
Transactions with subsidiaries
2010
RM
Nature of transaction
Dividends received, net of tax
Management fees receivable
Rental of motor vehicles receivable
Rental income for furnished premises, inclusive of maintenance
Interest income
Interest expense
Company
2009
RM
(4,537,500)
(5,539,539)
(2,200)
(1,264,200)
(3,416,232)
1,710,779
(6,084,000)
(5,557,200)
(4,826)
(1,264,200)
(4,233,974)
1,554,639
Transactions with members of the key management personnel of the Company
Group
2010
RM
Sales of manufactured goods
Rental of premises
2009
RM
(96,301)
(6,000)
(121,164)
(6,000)
Transactions with companies in which certain Directors have interests
Group
Rental of premises
Consultancy fees paid
2010
RM
2009
RM
2010
RM
Company
2009
RM
259,200
-
259,200
179,747
199,200
-
199,200
-
115
29. Related parties (continued)
Balances with related parties
The balances with the subsidiaries are disclosed in Notes 10 and 18 to the financial statements. The balances
with other related parties are as follows:
Group
2010
RM
Amount due from
Amount due to
78,322
(5,000)
2009
RM
178,705
(60,513)
2010
RM
Company
2009
RM
-
16,600
-
Transactions with related parties have been established under negotiated terms. None of the outstanding
balances, which are expected to be settled in cash, is secured.
30. Acquisition and disposal of subsidiaries
30.1 Acquisition of subsidiaries
(i) Acquisition of new subsidiaries
On 26 March 2010, one of its subsidiaries, Weida Environmental Technology Sdn. Bhd. (“WET”)
acquired the entire equity interest comprising 2 ordinary shares of RM1.00 each in LIPP Biogas
(Malaysia) Sdn. Bhd. (“LBM”) [formerly known as Budi Serimas Sdn. Bhd.] for a cash consideration
of RM2. LBM then issued new ordinary shares to WET and third parties on 30 March 2010, where
79,998 shares of RM1.00 each was subscribed by WET in cash. Following the acquisitions, LBM
became a 80% indirectly owned subsidiary of the Company.
During the previous financial year, the Group acquired the following subsidiaries for a total cash
consideration of RM7,090,002.
Subsidiary
Directly held by the Company
Weida International Sdn. Bhd. (“WISB”)
Maju Warisanmas Sdn. Bhd. (“MWSB”)
Effective
Date of equity interest
Purchase
acquisition
acquired consideration
(%)
RM
29.4.2008
17.6.2008
100.00
100.00
1,000,000
5,448,002
6,448,002
Held through WISB
Weida Philippines Inc.
3.6.2008
99.99
642,000
7,090,002
116
30. Acquisition and disposal of subsidiaries (continued)
30.1 Acquisition of subsidiaries (continued)
(i)
Acquisition of new subsidiaries (continued)
The effects of the above acquisitions on the Group’s assets and liabilities on the acquisition dates
are as follows:
2010
Preacquisition
carrying
amounts
RM
_________________2009_______________
Preacquisition
Recognised
carrying
Fair value
value on
amounts adjustments
acquisition
RM
RM
RM
Prepaid lease payments (Note 4)
Current assets
Current liabilities
Deferred tax liabilities (Note 11)
80,000
(5,764)
-
573,321
1,683,094
(553,690)
-
7,926,679
(1,982,000)
8,500,000
1,683,094
(553,690)
(1,982,000)
Net identifiable assets
74,236
1,702,725
5,944,679
7,647,404
Goodwill/(Negative goodwill)
on consolidation recognised
(Note 20)
Consideration paid, satisfied in cash
Cash acquired
Net cash outflow on acquisition
5,764
(557,402)
80,000
7,090,002
(80,000)
(1,683,094)
-
5,406,908
The goodwill of RM5,764 arising from the acquisitions of LBM, not identifiable to any cash-generating
unit, is written off to the income statement for the current financial year (Note 20).
The acquisition of LBM has no material impact on the results of the Group for the financial year
ended 31 March 2010 as the subsidiary has been dormant since its incorporation.
(ii) Changes in investment in existing subsidiaries
Increase in investment in non-wholly owned subsidiaries
During the previous financial year, the Company acquired the remaining 49% equity interest in
Weida Marketing Sdn. Bhd. (“WMKT”) from two related parties for a consideration of RM882,000.
Following the acquisition, WMKT became a wholly owned subsidiary of the Group.
Another subsidiary, WET also acquired an additional 338,000 ordinary shares of RM1.00 each
(representing 16.9% equity interest) in UTIC Services Sdn. Bhd. (“USSB”) from a related party on
25 June 2008, for a consideration of RM1,014,000, satisfied in cash.
117
30. Acquisition and disposal of subsidiaries (continued)
30.1 Acquisition of subsidiaries (continued)
(ii) Changes in investment in existing subsidiaries (continued)
The acquisition of the additional interests in WMKT and USSB had the following effect on the
Group’s assets and liabilities on the acquisition dates:
2009
RM
Net assets acquired
Goodwill on consolidation (Note 7)
801,707
1,094,293
Cash outflow on acquisition
1,896,000
RM739,996 out of the total goodwill of RM1,094,293 arising from the acquisition of the minority
interest during the last financial year, not identifiable to any cash-generating unit, was written off
to the income statement for the year ended 31 March 2009 (see Notes 7 and 20). The Group also
recognised a decrease in minority interest of RM801,707.
Increase in investment in wholly owned subsidiaries
The Company also, in the previous financial year, subscribed for its entitlement to new shares
issued by Weida Oil & Gas Sdn. Bhd. comprising 900,000 ordinary shares of RM1.00 each for a
cash consideration of RM900,000.
Another subsidiary, Bumi Suria Ventures Sdn. Bhd. effected a special issue of 3,500,0000 new
Class B ordinary shares of RM1.00 each to the Company during March 2009 for a consideration of
RM3,500,000, satisfied by way of set off against the amount due thereto. In the same month, the
Company also subscribed for an additional 551,998 new ordinary shares of RM1.00 each issued
by Maju Warisanmas Sdn. Bhd. at par.
31. Events subsequent to balance sheet date
Changes in group composition
Internal restructuring
On 21 June 2010, the Company acquired an additional 5,000 ordinary shares of RM1.00 each in a subsidiary,
Weida Environmental Technology Sdn. Bhd. (“WET”), for a cash consideration of RM5,000. The resultant
equity interest in WET increased from 51% to 56% following the acquisition.
118
31. Events subsequent to balance sheet date (continued)
Changes in group composition (continued)
Internal restructuring (continued)
The Company then disposed of all of its equity interest in the following companies to WET for a cash consideration
of RM691,000.
Subsidiary
Date of
disposal
Effective
equity
interest
Sales
disposed consideration
(%)
RM
Directly held by the Company
Weidasar Engineering Sdn. Bhd.
Weida Water (ADRA) Sdn. Bhd.
30.6.2010
12.7.2010
64.0
51.0
640,000
51,000
691,000
The above changes in group composition are not expected to have a material impact to the Group results.
119
List of Properties – as at 31 March 2010
Location
120
Usage
Tenure
Date of
Expiry
Land Approximate
Carrying
Date of
Area/
Age of
Amount as Acquisition/
Acres
Building
at 31.3.2010
Last
(year)
(RM)
Revaluation
7/7/2058
17.39
12
21,564,714
6/11/2009
Lot 472, Block
8, Muara Tebas
Land District,
Jalan Bako, 93050
Kuching, Sarawak
Leasehold
Office and
manufacturing
buildings and
storage yard
Lot 48, SEDCOLok Kawi
Industrial Estate,
Papar, 88801
Kota Kinabalu,
Sabah
Storage yard
Leasehold 31/12/2042
0.82
N/A
488,254
3/11/2009
Industrial Estate,
Papar, 88801
Kota Kinabalu,
Sabah
Storage yard
0.93
N/A
543,452
3/11/2009
Industrial Estate,
Papar, 88801
Kota Kinabalu,
Sabah
Office and
manufacturing
building
2.15
14
4,080,564
3/11/2009
Industrial Estate,
Papar, 88801
Kota Kinabalu,
Sabah
Manufacturing Leasehold 31/12/2042
building and
storage yard
1.03
8
2,159,408
3/11/2009
Industrial Estate,
Papar, 88801
Kota Kinabalu,
Sabah
Storage yard
1.03
N/A
859,596
3/11/2009
Lot 8, Kota
Manufacturing Leasehold 31/12/2098
Kinabalu Industrial building and
Park, 88460 Kota storage yard
Kinabalu, Sabah
2.11
N/A
4,881,064
3/11/2009
No 21 &
23, Sunway
Damansara
Technology Park,
47810 Petaling
Jaya, Selangor
Darul Ehsan
0.33
4
3,683,720
2/11/2009
Office building Leasehold
4/6/2105
List of Properties – as at 31 March 2010 (continued)
Location
Usage
Tenure
Date of
Expiry
Date of
Land Approximate Carrying
Amount as Acquisition/
Age of
Area/
Last
at 31.3.2010
Building
Acres
Revaluation
(RM)
(year)
14/8/2056
0.64
5
1,804,329
5/11/2009
Leasehold 14/8/2056
0.64
N/A
460,296
5/11/2009
N/A
3.04
13
6,222,704
6/11/2009
N/A
3.68
N/A
2,428,850
6/11/2009
Leasehold 12/11/2066 5,320.2
N/A
12,756,689
28/3/2007
Oil palm
plantation
Leasehold 12/11/2066 1,218.2
N/A
2,680,313
28/3/2007
Lot 1, Block 20, Arip
Land District, Sg.
Naong, Arip, Sibu,
Sarawak
Oil palm
plantation
Leasehold 24/11/2065 2,002.3
N/A
8,204,370
17/6/2008
Lot 1, Block 8, Anap
Land District, Sg.
Muput Kanan, Tatau
Bintulu, Sarawak
Oil palm
plantation
Leasehold 27/11/2066 5,265.8
N/A
11,057,585
28/3/2007
Lot 5, Block 16,
Oil palm
Sangan Land District, plantation
Sg. Muput Kanan,
Tatau Bintulu,
Sarawak
Leasehold 27/11/2066 2,241.7
N/A
4,692,217
28/3/2007
Lot 1969, Block 5,
Kuala Baram Land
District, Taman
Senadin, Miri,
Sarawak
Office and
Leasehold
manufacturing
building and
storage yard
Lot 1970, Block 5,
Kuala Baram Land
District, Taman
Senadin, Miri,
Sarawak
Storage yard
Lot 109, Jalan
Permata 1, ArabMalaysian Industrial
Park, 71800 Nilai,
Seremban, Negeri
Sembilan Darul
Khusus
Office and
manufacturing
building and
storage yard
Freehold
Lot 108, Jalan
Permata 1, ArabMalaysian Industrial
Park, 71800 Nilai,
Seremban, Negeri
Sembilan Darul
Khusus
Storage yard
Freehold
Land District, Sg.
Naong, Arip, Sibu,
Sarawak
Oil palm
plantation
Land District, Sg.
Naong, Arip, Sibu,
Sarawak
Note:
The revaluation policy on landed property is disclosed under Note 2(c)(i) and 2(d)(ii) to the Financial Statements
as outlined on pages 66 to 68 of the Annual Report.
121
ANALYSIS OF SHAREHOLDINGS
AS AT 13 AUGUST 2010
Authorised Share Capital
Issued and Paid-up Share Capital
Class of Shares
Voting Rights
:
:
:
:
RM100,000,000.00
RM66,666,666.00
Ordinary Shares of RM0.50 each
One vote per ordinary share
Distribution Schedule of Ordinary Shares
No. of
Holders
Total
Holdings
%*
Less than 100 shares
100 to 1,000 shares
1,001 to 10,000 shares
10,001 to 100,000 shares
100,001 to less than 5% of issued shares
5% and above of issued shares
114
430
1,643
744
89
4
4,270
220,567
9,446,819
23,265,942
42,834,720
51,123,214
0.00#
0.17
7.44
18.33
33.76
40.29
TOTAL
3,024
126,895,532
100.00
Holdings
#
*
Less than 0.01%
Excluding 6,437,800 ordinary shares of RM0.50 each bought back and retained as treasury shares as at 13 August 2010.
List of Thirty Largest Securities Accounts Holders
No. Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
122
Weida Management Sdn. Bhd.
HLG Nominee (Tempatan) Sdn. Bhd.
- Assar Asset Management Sdn. Bhd. for Assar Industri Sdn. Bhd.
Lembaga Tabung Haji
Sim Hong Swee
Lim Wei Wui
Jee Hon Chong
Mayban Nominees (Tempatan) Sdn. Bhd.
- Pledged Securities Account for Siaw Teck Siong
Amanahraya Trustees Berhad
- Skim Amanah Saham Bumiputera
Amanahraya Trustees Berhad
- Public Islamic Opportunities Fund
UOBM Nominees (Tempatan) Sdn. Bhd.
- Exempt An For Areca Capital Sdn. Bhd. (Client A/C 1)
Public Nominees (Tempatan) Sdn. Bhd.
- Pledged Securities Account for Siaw Teck Siong (E-PDG)
HLB Nominees (Tempatan) Sdn. Bhd.
- Pledged Securities Account for Goh Sin Bong
Arthur Wong Fui Onn
Lim Heng Loong
E Lee Shiuan
Kota Beras Sendirian Berhad
Tok Jiak Yong
Goo Moi
CIMSEC Nominees (Tempatan) Sdn. Bhd.
- Pledged Securities Account for An Choi Kin (W CPlant-CL)
Aluwie bin Rapa’ee
Cheong Mun Khan
No. of
shares held
%*
26,048,974
20.53
11,333,332
7,074,242
6,666,666
5,254,906
4,406,000
3,075,550
8.93
5.57
5.25
4.14
3.47
2.42
2,783,200
2.19
2,765,534
2.18
2,158,400
1.70
1,733,000
1.37
1,334,600
1.05
1,159,700
708,000
644,800
641,000
500,000
490,050
475,000
0.91
0.56
0.51
0.51
0.39
0.39
0.37
467,000
458,000
410,000
0.37
0.36
0.32
ANALYSIS OF SHAREHOLDINGS
AS AT 13 AUGUST 2010 (continued)
List of Thirty Largest Securities Accounts Holders (continued)
No. Name
23. Mah Siew Seong
24. Mayban Nominees (Tempatan) Sdn. Bhd.
- Pledged Securities Account for Yee Meng Hong
25. CIMSEC Nominees (Asing) Sdn. Bhd.
- CIMB for Teo Joo Kim (PB)
26. Ee Sheau Sheng
27. Arensi-Marley (M) Sdn. Bhd.
28. MERCSEC Nominees (Tempatan) Sdn. Bhd.
- Pledged Securities Account for Siow Wong Yen @ Siow Kwang Hwa
29. Ung Chin Seng
30. Siaw Teck Siong
*
No. of
shares held
%*
400,000
0.32
384,900
0.30
354,900
350,000
350,000
0.28
0.28
0.28
350,000
330,000
329,500
0.28
0.26
0.26
List of Substantial Shareholders
No Name
_______________ No. of shares held _______________
Direct
%(a)
Indirect
%(a)
1.
2.
3.
4.
5.
7,074,242
26,048,974
11,400,656 (d)
6,666,666
Datin Liew Kee Moi
Weida Management Sdn. Bhd.
Assar Industri Sdn. Bhd.
Lembaga Tabung Haji
5.57
20.53
8.98
5.25
26,048,974 (b)
26,048,974 (c)
-
20.53
20.53
-
Notes:
a)
b)
c)
d)
Deemed interested by virtue of his substantial shareholding in Weida Management Sdn. Bhd..
Deemed interested by virtue of her spouse’s, Dato’ Lee Choon Chin and her substantial shareholdings in Weida Management
Sdn. Bhd..
11,333,332 shares are held through Assar Asset Management Sdn. Bhd..
Directors’ Interests
No Name
1.
2.
3.
4.
5.
6.
7.
Haji Su’ut bin Haji Suhaili
Jee Hon Chong
Chew Chin Choong
Yeoh Chin Hoe
_______________ No. of shares held _______________
Direct
%(a)
Indirect
%(a)
33,334
7,074,242
40,000
33,334
3,090,776
-
0.03
5.57
0.03
0.03
2.44
-
177,966 (b)
26,048,974 (c)
70,000 (b)
-
0.14
20.53
0.06
-
The Directors by virtue of their interests in shares in the Company are also deemed to have interests in shares in
all of its related corporations to the extent the Company has an interest, pursuant to Section 6A of the Companies
Act, 1965.
Notes:
a)
b)
c)
Deemed interested by virtue of their spouses’ interests in Weida (M) Bhd..
Deemed interested by virtue of his substantial shareholding in Weida Management Sdn. Bhd..
123
This page has been left blank intentionally.
FORM OF PROXY
WEIDA (M) BHD.
(Company No. 504747-W)
(Incorporated in Malaysia)
I/We .................................................................................... (Name in full) .............................................. (NRIC No.)
of .................................................................................................................................................................. (Address)
being a member/members of the abovenamed Company hereby appoint .................................................................
(Name in full) of ........................................................................................................................................................ (Address)
or failing him/her, the Chairman of the meeting as my/our proxy to vote for me/us and on my/our behalf at the
Eleventh Annual General Meeting of the Company to be held at Four Points by Sheraton Hotel, 3186-3187, Block
16, KCLD, Jalan Lapangan Terbang Baru, 93350 Kuching, Sarawak on Tuesday, 28 September 2010 at 11.30 am
and any adjournment thereof.
Please indicate with an “X” in the appropriate box against each resolution how you wish your vote to be cast. If you
do not indicate how you wish your proxy to vote on any resolution, the proxy shall vote as he thinks fit, or at his
discretion, abstain from voting.
My/our proxy is to vote as indicated below:
No.
Resolutions
For
Against
Ordinary Business
1. To declare a first and final dividend in respect of the financial year ended 31 March 2010.
2. To approve the payment of directors’ fees for the financial year ending 31 March 2011.
3. To re-elect Mr. Jee Hon Chong as director.
4. To re-elect Mr. Chew Chin Choong as director.
5. To re-appoint Messrs. KPMG as auditors.
Special Business
6. Ordinary Resolution - Renewal of authority for purchase of own shares by the Company.
7. Special Resolution - Amendments to the Company’s Articles of Association.
Shareholding Represented by Proxy
Dated this ............. day of .......................................... 2010
..................................................................
Signature of shareholder(s)/common seal
Notes:
1.
A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965
shall not apply to the Company.
2.
To be valid, the duly completed proxy form must be deposited at the registered office of the Company at Wisma Hock Peng,
Ground Floor to 2nd Floor, 123, Green Heights, Jalan Lapangan Terbang, 93250 Kuching, Sarawak not less than 48 hours
before the time set for holding the meeting or any adjournment thereof.
3.
A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting provided that the
provisions of Section 149(1)(c) of the Companies Act, 1965 are complied with.
4.
Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he specifies the proportions of
his shareholdings to be represented by each proxy.
5.
If the appointor is a corporation, the proxy form must be executed under its common seal or under the hand of an officer or
attorney duly authorised.
FOLD THIS FLAP FOR SEALING
FOLD HERE
Affix
stamp
The Company Secretary
WEIDA (M) BHD.
(Company No. 504747-W)
Wisma Hock Peng, Ground Floor - Second Floor,
123, Green Heights, Jalan Lapangan Terbang,
P.O. Box 2424, 93748 Kuching, Sarawak.
FOLD HERE

weida (m) bhd.

Transcription

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